Emerging Issues in Healthcare Law

Seven Major Highlights from the American Bar Association Emerging Issues in Healthcare Law Conference

BY: Jed Smith, Dorothy DeAngelis, Bo Martin, and Susan Russo 

In February, the American Bar Association Health Law Section held its 19th Annual Conference on Emerging Issues in Healthcare Law. Speakers from across the industry presented on a variety of topics, from the current policy landscape to pharmacy litigation.

Navigant provides seven major highlights from the conference on key trends emerging in the healthcare landscape. 

1. Politics and Policy
Under the Republican-majority Congress and administration, the Affordable Care Act has undergone some significant changes, including the end of payments for cost-sharing subsidies for exchange plans, repeal of the individual mandate, delays on several taxes, and flexibility for state Medicaid reforms. In February 2018, Congress enacted a two-year budget deal that provided program funding for the Children’s Health Insurance Program, opioid substance abuse and mental health programs, and community health centers. The Medicare Advantage program is expected to continue to grow, due in part to bipartisan support, increasing familiarity with managed care, and plan efficiency and profitability.

2. Cyber Risks
The definitions of cyber risks and of protected personal information are expanding. Cyber risks are more than just information theft; they now include denial-of-service attacks, destruction of information or systems, extortion, ransomware, and fund transfer fraud. The protected personal information covered by laws may now include login credentials. To help control the risks of these attacks, organizations must ensure they have the right type of insurance coverage, which may include provisions of policies for standalone cyber insurance, crime insurance, directors and officers insurance, employer liability insurance, media liability insurance, product liability insurance, and property insurance.

3. Alternative Dispute Resolution
The primary uses of alternative dispute resolution (ADR) in healthcare cases include payer/provider disputes, medical staff/hospital governing body disputes, medical malpractice, physician practice business issues, and “qui tam” fraud and abuse cases. Considerations on which ADR technique to select can include the use of nontraditional remedies and the preservation of relationships. Recently, several states, including New York and Texas, have passed or considered legislative initiatives to use independent dispute resolution or mediation for disputes involving services performed by noncontracted physicians at contracted hospitals or via referral from contracted physicians.

4. Pay-for-Performance Compensation Models
Hospitals need to align with their physicians to improve their quality scores and increase cost efficiency. Two of the top arrangement trends are co-management arrangements and hospital efficiency improvement programs. Value drivers with the biggest impact on pay-for-performance compensation include the source of funding, the level of responsibility of participants, the degree of risk for participants, and fair market value considerations.

5. Private Equity Transactions
In preparing for a private equity transaction, the target company can conduct an internal assessment prior to the transaction to identify and remedy compliance issues, such as the compliance program effectiveness, coding, and overpayment liabilities. Target companies may want to self-disclose any issues that internal due diligence reveals to avoid later liability. The effectiveness of a target company’s compliance program eventually affects the transaction, even if it is not apparent at the outset.

6. Artificial Intelligence
There are several areas of opportunity for the use of artificial intelligence in the healthcare industry, such as tackling physician shortages, finding efficiencies in the developments of new pharmaceuticals, and managing vulnerable populations. Organizations need to be cautious, though, particularly in hot topics like medical device regulation, clinical decision-making, algorithmic bias, and transparency of decision-making. The 21st Century Cures Act has begun to address some of these issues, and the Food and Drug Administration is continuously drafting and finalizing new guidance.

7. Pharmacy Enforcement and Litigation
Between 2010 and 2015, the Office of Inspector General (OIG) cases involving Medicare Part D increased 134%. Active OIG Work Plan items are focused on proper billing and opioids. In billing, areas of focus include documentation of pharmacies’ prescription drug event data, duplicate claims for hospice, invalid prescriber identifiers, and payments after patient death. In addition to the OIG increasing scrutiny of opioid oversight, state and local governments are also pursuing litigation at all levels of the supply chain , expanding from manufacturers and distributors to include pharmacies, pain clinics, and other providers. Other pharmacy enforcement risks include usual and customary pricing actions by whistleblowers and consumer class actions, as well as kickbacks and civil monetary penalties for improper patient referrals and manufacturer coupons.

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