The Weekly Scan

December 7, 2018

Last Updated: 1:00 PM EST

Litigation

  • On Tuesday, the Department of Justice announced that Minnesota-based medical device manufacturer ev3 Inc. agreed to plead guilty to charges related to its neurovascular medical device, Onyx Liquid Embolic System, and pay $17.9 million. Covidien LP, whose parent acquired ev3, separately paid $13 million to resolve False Claims Act allegations resulting from its alleged payment of kickbacks in connection with another medical device, the Solitaire mechanical thrombectomy device. According to the plea agreement, Onyx was approved by the U.S. Food and Drug Administration (FDA) as a liquid embolization device that is surgically injected into blood vessels to block blood flow to arteriovenous malformations in the brain. The FDA has approved Onyx only for use inside the brain. Despite the FDA’s limited approval of Onyx, from 2005 to 2009, ev3 sales representatives encouraged surgeons to use Onyx in large quantities for unproven and potentially dangerous surgical uses outside the brain. The company’s sales force continued to tout unapproved and potentially dangerous uses of Onyx even after FDA officials told ev3 executives that they had specific safety concerns regarding uses of Onyx outside the brain at a 2008 meeting. (Justice.gov)

 

  • The Idaho Supreme Court has agreed to hear an Idaho Freedom Foundation (IFF) challenge to voter-approved statewide Medicaid expansion this January. In November, voters approved Proposition 2 by more than 60 percent, signing off on Medicaid expansion in the state, which opted out of the expansion when the Affordable Care Act first took effect. The measure is intended to close a health care gap for more than 60,000 low-income Idahoans who right now actually make too little money to qualify for subsidies, but too much to qualify for pre-expansion Medicaid. (Inlander.com)

 

  • On Thursday, pharmaceutical company Actelion Pharmaceuticals US, Inc., based in San Francisco, California, agreed to pay $360 million to resolve claims that it illegally used a foundation as a conduit to pay the copays of thousands of Medicare patients taking Actelion’s pulmonary arterial hypertension drugs, in violation of the False Claims Act. Actelion sells a number of pulmonary arterial hypertension drugs, including Tracleer, Ventavis, Veletri, and Opsumit (the “Subject Drugs”). The government alleged that Actelion used a foundation, which claims 501(c)(3) status for tax purposes, as an illegal conduit to pay the copay obligations of thousands of Medicare patients taking the Subject Drugs and to induce those patients to purchase them, because it knew that the prices Actelion set for the Subject Drugs could otherwise pose a barrier to those purchases. From 2014 to 2015, Actelion made donations to the foundation, which, in turn, used those donations to pay copays of patients prescribed the Subject Drugs. The government alleged that Actelion routinely obtained data from the foundation detailing how much the foundation had spent for patients on each Subject Drug; it then used this information to decide how much to donate to the foundation and to confirm that its contributions were sufficient to cover the copays of only patients taking the Subject Drugs. The Government further alleged that Actelion engaged in this practice even though the foundation had warned the company against receiving such information. The Government also alleged that, meanwhile, Actelion had a policy of not permitting Medicare patients to participate in its free drug program, which was open to other financially needy patients, even if those Medicare patients could not afford their copays for the Subject Drugs. Instead, to generate revenue from Medicare and induce purchases of the Subject Drugs, the government alleged that Actelion referred such Medicare patients to the foundation, which allowed the patients copays to be paid and resulted in claims to Medicare for the remaining cost. (Justice.gov)

 

  • Advanced Care Hospitalists PL (ACH) has agreed to pay $500,000 to the Office for Civil Rights (OCR) of the U.S. Department of Health and Human Services (HHS) and to adopt a substantial corrective action plan to settle potential violations of the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules. ACH provides contracted internal medicine physicians to hospitals and nursing homes in west central Florida.  ACH provided services to more than 20,000 patients annually and employed between 39 and 46 individuals during the relevant timeframe. Between November 2011 and June 2012, ACH engaged the services of an individual that represented himself to be a representative of a Florida-based company named Doctor’s First Choice Billings, Inc. (First Choice). The individual provided medical billing services to ACH using First Choice’s name and website, but allegedly without any knowledge or permission of First Choice’s owner. On February 11, 2014, a local hospital notified ACH that patient information was viewable on the First Choice website, including name, date of birth and social security number.  In response, ACH was able to identify at least 400 affected individuals and asked First Choice to remove the protected health information from its website.  ACH filed a breach notification report with OCR on April 11, 2014, stating that 400 individuals were affected; however, after further investigation, ACH filed a supplemental breach report stating that an additional 8,855 patients could have been affected. OCR’s investigation revealed that ACH never entered into a business associate agreement with the individual providing medical billing services to ACH, as required by HIPAA and failed to adopt any policy requiring business associate agreements until April 2014. (HHS.gov)

Legislation

  • Today, the Centers for Medicare & Medicaid Services (CMS) issued the final rule, “Patient Protection and Affordable Care Act; Methodology for the HHS-operated Permanent Risk Adjustment Program for 2018,” which reissues, with additional explanation, the HHS-operated risk adjustment methodology previously established for the 2018 benefit year. Issuing this rule allows CMS to continue normal operations of the Risk Adjustment program for the 2018 benefit year after a federal judge vacated the use of statewide average premium under the HHS methodology earlier this year. “Today’s final rule continues our commitment to provide certainty regarding this important program, to give insurers the confidence they need to continue participating in the markets, and, ultimately, to guarantee that consumers have access to better coverage options,” says CMS Administrator Seema Verma. (Press Release: CMS.gov; Final Rule: FederalRegister.gov)

Research

  • In a letter sent to President Trump this week, Secretary of the Department of Health and Human Services Alex Azar wrote: "On October 12, 2017, through Executive Order 13813, you directed the administration, to the extent consistent with the law, to facilitate the development and operation of a health care system that provides high-quality care at affordable prices for the American people by promoting choice and competition. We are pleased to provide you with this report, prepared by the Department of Health and Human Services (HHS) in collaboration with the Departments of the Treasury and Labor, the Federal Trade Commission, and several offices within the White House. This report describes the influence of state and federal laws, regulations, guidance, and polices on choice and competition in health care markets and identifies actions that states or the Federal Government could take to develop a better functioning health care market." (HHS.gov: Letter, Full Report)

Finance

  • Overall national health spending grew at a rate of 3.9% in 2017, almost 1.0 percentage point slower than growth in 2016, according to a study conducted by the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS) and published online yesterday ahead of print by Health Affairs. Medicare spending grew at about the same rate in 2017 as in 2016, while Medicaid spending grew at a slower rate in 2017 than in 2016. According to the report, overall healthcare spending growth slowed in 2017 for the three largest goods and service categories – hospital care, physician and clinical services, and retail prescription drugs. (CMS.gov: Press Release, Report)

Private Sector

  • On Thursday, Walgreens and FedEx Corp. announced the nationwide launch of next-day prescription delivery service, bringing together Walgreens extensive network of neighborhood pharmacy locations with the FedEx air-and-ground delivery network to enhance convenience for patients to fill prescriptions. Walgreens is now the fastest choice for next-day prescription delivery across the nation. Same-day delivery is currently available in select markets and will be expanded in 2019. (Walgreens.com)

 

  • Starting on Thursday, the ECG app on Apple Watch Series 4 was made available for download. The app marks the first direct-to-consumer product that enables customers to take an electrocardiogram right from their wrist, capturing heart rhythm in a moment when they experience symptoms like a rapid or skipped heart beat and helping to provide critical data to physicians. The irregular rhythm notification feature on Apple Watch can now also occasionally check heart rhythms in the background and send a notification if an irregular heart rhythm that appears to be atrial fibrillation (AFib) is identified. Apple worked with the Food and Drug Administration (FDA) for a number of years to receive De Novo classification for the ECG app and the irregular heart rhythm notification, making the features available over the counter. Available as part of a free update to watch OS 5.1.2, the ECG app and irregular heart rhythm notification feature will help users identify signs of AFib, the most common form of irregular rhythm. (Apple.com)

 

  • On-demand rideshare Uber has added two industry insiders to its healthcare team, signaling the company's intention to grow its role in the non-emergency medical transport business. Aaron Crowell, a long-time healthcare consultant, has joined the company as head of Uber Health. For the past year, he also serviced as vice president of healthcare development at One Call Care Management, providing strategic leadership for the NEMT program, according to his LinkedIn page. Uber also hired Dan Trigub, a regional vice president for Lyft's healthcare team. He will head up business development at Uber. (HealthcareDive.com)

 

 

 

 

 

 

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