Articles Posted in Health Law

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On October 22, 2020, Michigan Governor Gretchen Whitmer signed legislation reducing the liability of businesses and governmental agencies as it relates to COVID-19 exposure. There were three Acts passed that dealt with responding to COVID-19 risks and liabilities, all three of which retroactively apply beginning March 1, 2020.

Public Act 236 of 2020, or rather, “COVID-19 Response and Reopening Liability Assurance Act,” protects persons and entities from liability as long as they have complied with all federal, state, and local laws, as well as any regulations, executive orders, or agency orders. The protection is against any “COVID-19” claim, which is “a tort claim . . . for damages, losses, indemnification, contribution, or other relief arising out of, based on, or in any way related to exposure or potential exposure to COVID-19.” The Act grants employers the ability to claim immunity from COVID-19 claims where there was an isolated deviation from strict compliance with COVID-19 laws that was unrelated to the plaintiff’s claims. The Act is does not create a private cause of action.

Public Act 237 of 2020 is specific to employees and amends the Michigan Occupational Safety and Health Act. Much like Public Act 236, this Act grants liability protection to employers for employee exposure to COVID-19 so long as the employer followed all relevant rules and regulations.

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On November 16, 2020, the Centers for Medicare & Medicaid Services (CMS) released its 2020 Estimated Improper Payment Rates. Under the 2019 Payment Integrity Act, CMS is required to review Medicare Fee-For-Service (FFS), Medicare Part C, Medicare Part D, Medicaid, and the Children’s Health Insurance Program (CHIP) and estimate the amount of improper payments made under each program.

The reported improper payment data for CMS FY 2020 represents claims submitted July 1, 2018 through June 30, 2019. Due the COVID-19 pandemic, CMS temporarily halted all data requests to providers and state agencies regarding incorrect payments from March to August 2020. To compile the report, CMS adjusted calculation methods for reporting improper payment rates for the 2020 Agency Financial Report (AFR), using data already available at the time of the COVID-19 pandemic or data voluntarily provided. The calculated rates still meet national precision requirements.

The FY 2020 improper payment rate for Medicare FFS, which includes Part A and Part B, was estimated to be 6.27% or $25.74 billion. This represents a notable decrease from FY 2019, for which the improper payment rate was estimated as 7.25%, or $28.91 billion. The result of this decrease is likely due to reductions in the improper payment estimates for home health and skilled nursing facilities, which saw a $5.90 billion and $1 billion decrease, respectively. These decreases are likely due to several policy clarifications by CMS.

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A change in the White House means changes to healthcare policy and changes to healthcare regulatory actions taken by the Department of Health and Human Services (“HHS”) and other federal agencies. Although a changing healthcare landscape, COVID-19 pandemic, and political wrangling are likely to alter the goals and actions of the incoming administration, here are some of the healthcare policy priorities currently articulated by President-Elect Biden that providers may see.

Health Insurance Public Option

While foregoing the “Medicare-for-all” approach and leaving the commercial health insurance industry intact, a health insurance public option could increase competition for commercial insurers and exert downward pressure on rates. A new health insurance public option would also seek to use its bargaining power to negotiate lower prices. The increased public option would also provide Medicaid-like coverage for low income individuals who live in states that have not expanded Medicaid, but who would otherwise be eligible for Medicaid.

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On November 9, 2020, the Centers for Medicare & Medicaid Services (“CMS”) released the 2020 Medicaid and Children’s Health Insurance Program (“CHIP”) managed care final rule. The previous rule was released in 2016 and was extremely strict with its requirements, causing some states to struggle to comply. Since 2016, CMS’s goal has been to reduce the financial and administrative burden of the program, as well as reducing any federal regulatory barriers.

When the 2016 rule was released, many commenters wished for greater state-to-state flexibility to establish Medicaid and CHIP payments because every state had different needs for its enrollees. The 2020 final rule took note of that concern and now allows states much greater flexibility to set up payment schedules. CMS expects that the final rule will increase state flexibility in administering the program without having to cut off anyone’s access to the program—This would not have been possible based on the 2016 final rule.

Specifically, the final rule significantly revised eight areas of the regulatory framework:

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A Medicare license revocation can drastically affect a provider or practice; for example, more than 90% of primary care providers accept Medicare, and Medicare beneficiaries account for at least 50% of primary care physicians’ patient population. A revocation can jeopardize providers’ livelihood and lead to other consequences, including loss of hospital staff privileges, bars on reenrollment, and harm to a provider’s reputation within the medical community. Despite these penalties, as Medicare revocation rules evolved, CMS broadened the language permitting the agency to revoke a license, without much guidance or specificity, leaving providers with little information on the exact behavior they must avoid to prevent a revocation.

Since 2008, CMS has significantly expanded the instances in which a provider’s Medicare license can be revoked. In 2008, CMS added a new reason for revocation, 42 C.F.R. § 424.535(a)(10), which allows CMS to revoke a provider’s Medicare license if the provider does not document or does not provide CMS access to certain documentation. In 2014, CMS added a new section to 424.535(a)(8), section (a)(8)(ii).

Under an (a)(8) revocation, CMS can revoke a provider’s enrollment in Medicare if the provider commits certain abuses related to billing. Prior to 2014, under the original rule, an (a)(8) revocation was limited to specific circumstances in which the provider submitted claims for services that could not have been provided to the individual on a the date of those services. These circumstances could include, the beneficiary is deceased, the physician or beneficiary is not in the location where the service were provided, or when the necessary equipment for the service were not in the location where the services occurred.

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On November 5, 2020, the Federal Communications Commission (“FCC”) released a public notice of the new “Connected Care Pilot Program” (hereinafter, “pilot program”). This pilot program has been allotted $100 million by the Universal Service Fund to promote telehealth services, particularly to low-income Americans and veterans. The period for healthcare providers to apply for grants under the program opened on November 6, 2020, and it closes on December 7, 2020 at 11:59 pm. Applicants are encouraged to apply as soon as possible.

For a three-year period, the program will fund $100 million to not-for-profit and public healthcare providers who qualify for the pilot. The program will cover 85% of the cost of implementing telehealth at a provider’s office. Specifically, the pilot program covers: (1) patient broadband Internet access services; (2) health care provider broadband data connections; (3) connected care information services; and (4) certain network equipment. The pilot program does not cover purchases of devices or medical equipment used for patients. The remaining 15% of the costs are to be covered by the pilot recipients.

In order to apply, all applicants must have an approved FCC Form 460 and send both that form as well as other supporting documentation to the Universal Service Administrative Company (“USAC”). This verifies eligibility for the program. Once eligibility has been established, the provider must submit their proposal to the FCC explaining how they would use funds to meet the criteria of the program and implement telehealth. The FCC will give greater consideration to providers who anticipate working with a significant number of low-income or veteran patients. The Report and Order by the FCC goes into greater detail as to what should be included in every application.

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On November 4, 2020, the Department of Health and Human Services (“HHS”) proposed a new rule that would require HHS to review many of its regulations every ten years. HHS proposed the new rule pursuant to the Regulatory Flexibility Act (“RFA”), which was enacted under President Carter in 1980. Under the proposed rule, every ten years, HHS would review a regulation to determine whether it is still needed, whether it is having the appropriate impacts, and whether it ought to be revised or rescinded. Regulations that are not timely reviewed would expire.

Nearly all regulations would undergo a two-step review. HHS would first determine whether the RFA applies to a regulation by assessing whether they have a significant economic impact on a substantial number of small entities. If the RFA applies, HHS will then conduct a more detailed review of the regulation and consider: (1) the continued need for the rule, (2) complaints about it, (3) the rule’s complexity, (4) the extent to which it duplicates or conflicts with other rules, and (5) whether technological, economic, and legal changes favor amending or rescinding the rule. Public comments will be accepted as part of this review process.

The following regulations will not be subject to this review: regulations that are jointly issued with other agencies, regulations that legally cannot be rescinded, and regulations issued with respect to a military or foreign affairs function or addressed solely to internal management or personnel matters. Regulations that affect the regulations of other agencies will be reviewed in conjunction with those agencies.

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The Department of Health and Human Services (HHS) announced on Wednesday, October 28, 2020, that an additional $333 million in performance payments will be granted to nursing homes that reduced their COVID-19 death and infection rates during August and September of the COVID-19 pandemic. HHS will allocate these payments to more than 10,000 nursing homes that successfully addressed the COVID-19 pandemic and continue to incentivize infection control, training, safety improvements, and protection of the vulnerable elderly population.

These payments represent phase one of the Nursing Home Quality Incentive Program, a five phase, $2 billion incentive program, announced by HHS and the Trump Administration in September 2020. For a nursing home to qualify for payments under the incentive program, current certification as a nursing home or skilled nursing facility (SNF) is required, and the facility must receive reimbursement from CMS. Nursing facilities are also required to submit a minimum of one of three types of data sources to check eligibility and collect important provider information. These data sources include: Certification and Survey Provider Enhanced Reports (CASPER), Nursing Home Compare (NHC), and Provider of Services (POS).

The incentive program will be divided into five phases, with nursing homes receiving September payments early in November and an additional four opportunities to receive incentive payments in the following months. The five phases of the program correspond with five successive monthly periods in which nursing homes can receive incentive payments for reaching certain goals. Specific goals will vary based on local COVID-19 statistics.

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In late October 2020, the Department of Health and Human Services (“HHS”) released guidance on use of Provider Relief Fund (“PRF”) payments to cover costs associated with a potential COVID-19 vaccine. Also, in late October, HHS Office of the Inspector General (“OIG”) announced a review of the Health Resource and Services Administration’s (“HRSA”) administration of the PRF. The PRF is a $175 billion fund created by Congress in the CARES Act and administered by HHS, through HRSA, to provide financial relief to healthcare providers during the COVID-19 pandemic.

A provider who retains a payment from the PRF must agree to certain restrictions on use of the payment. For example, the payment may only be used to prevent, prepare for or respond to coronavirus; to reimburse the recipient for health care related expenses or lost revenues that are attributable to coronavirus; and cannot be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. These restrictions led to speculation about how the payments could be used with regard to a potential COVID-19 vaccine, especially in light of both the required cold-storage and other logistical challenges of the vaccines currently under development as well as the Center for Medicare & Medicaid Services’ (“CMS”) promises to cover the cost of the vaccine.

After CMS announced that it would cover the cost of the vaccine, HHS clarified its position regarding the PRF. Because Medicare, Medicaid, and CHIP will pay for the doses and administration of the vaccine, providers cannot use the PRF payment to reimburse themselves for these expenses. However, PRF payments may be used for COVID-19 vaccine distribution and logistics, including purchase of additional refrigerators, personnel costs to provide vaccinations, and acquiring doses of a vaccine (including transportation costs not otherwise reimbursed). Moreover, funds may be used before an FDA-licensed or approved vaccine becomes available.

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On October 29, 2020, the Office of Civil Rights (“OCR”) of the Department of Health and Human Services (“HHS”) announced that pursuant to credible information by HHS, the FBI, and the Cybersecurity and Infrastructure Security Agency (CISA), hospitals and healthcare providers are at an imminent risk of a cybersecurity attack. As a response to this looming threat, law enforcement is advising healthcare entities to implement best practices to avoid a cyberattack.

Specifically, CISA, HHA, and the FBI are predicting ransomware attacks. Ransomware is a type of malicious software that denies users access to targeted data. Hackers encrypt the data and hold it hostage until a random is paid. If the ransom is not paid, the hackers will permanently destroy all the data. Unfortunately for healthcare providers, the Department of Treasury recently announced that any entity that pays a ransom to get their data returned will be in violation of the International Emergency Economic Powers Act and will thus be subject to paying steep civil monetary penalties, not to exceed $250,000.

This puts providers in a precarious position, so CISA, the FBI, and HHS have come out with various references and guides to help prevent healthcare providers’ systems from being susceptible to a ransomware attack in the first place. Some of these preventive measures include: regularly backing up data, keeping data backups offline from the network, regularly changing passwords and avoid using the same password for different accounts, using two-step verification where available, regularly updating operating systems as soon as updates are available, and always having antivirus and anti-malware programs regularly scanning and updating.

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