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Late yesterday, the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) released a proposed rule to amend the anti-kickback safe harbors[1] in response to perceived risks that rebates paid by pharmaceutical manufacturers to payors and pharmacy benefit managers (PBMs) may contribute to pharmaceutical list price inflation and not benefit patients and payors.  The proposed rule would (i) remove safe harbor protection for drug manufacturer rebates to Part D…
The Department of Health and Human Services (HHS) has issued a proposed rule that would modify the current HIPAA transaction standard for retail pharmacy transactions (the August 2007 revision of NCPDP telecommunications standard D.0) with respect to claims and similar transactions for Schedule II drugs.  HHS states that the change would enable covered entities to clearly distinguish whether a prescription fill for a Schedule II drug is a “partial fill” (i.e., less than the full…
The Centers for Medicare & Medicaid Services (CMS) has announced a new Medicare Part D Payment Modernization Model (Part D Model), which will be tested by the CMS Center for Medicare and Medicaid Innovation.  CMS unveiled the Part D Model on January 18, 2019, at the same time the agency released details on extensive revisions to its current Medicare Advantage Value-Based Insurance Design (VBID) model. On January 31, 2019, CMS provided additional detail on…
The Centers for Medicare & Medicaid Services (CMS) is making extensive revisions to its Medicare Advantage (MA) Value-Based Insurance Design model in order “to contribute to the modernization of Medicare Advantage through increasing choice, lowering cost, and improving the quality of care for Medicare beneficiaries.” By way of background, the VBID innovation model was launched in 2017 to test how MA plans in seven states can use health plan design elements (e.g., supplemental benefits, disease…
Last week, California Governor Gavin Newsom signed an Executive Order creating a program to lower prescription drug costs throughout the state. This initiative could significantly impact pharmaceutical manufacturers, managed care companies, pharmacies and other industry participants, as well as prescription drug consumers. Reed Smith’s health care and antitrust teams summarize Newsom’s Executive Order and address consequent legal and policy issues in this client alert.…
The Office of Inspector General (OIG) recently gave the green-light on a medical device manufacturer’s proposed warranty program, wherein the company would provide a refund to the hospital at which a patient underwent joint replacement surgery using the company’s knee or hip implant and related products, if the patient was readmitted within 90 days because of a surgical site infection or need for implant replacement surgery. Advisory Opinion No. 18-10 concluded that although the suggested…
The Office of Inspector General (OIG) of the Department of Health Human Services (HHS) is seeking input on Medicare and State Health Care Programs: Fraud and Abuse; Request for Information Regarding the Anti-Kickback Statute and Beneficiary Inducements CMP. The OIG describes this request for information (RFI) as part of HHS’s endeavor “to transform the health care system into one that better pays for value.” The RFI looks to identify ways to amend or add…
The newly-enacted Bipartisan Budget Act of 2018 includes numerous Medicare, Medicaid, and other policy and payment provisions impacting health providers and manufacturers. Of particular note, the new law:  increases Medicaid rebate obligations with respect to line extension drugs; changes manufacturer discount obligations in the Medicare Part D “donut hole”; repeals the Independent Payment Advisory Board (IPAB); makes Stark Act revisions; and significantly increases penalties for violations of various anti-fraud statutes.  A Reed Smith Client Alert…
In March 2017, the Public Company Accounting Oversight Board, or PCAOB, released a white paper detailing certain characteristics and trends of emerging growth companies, or EGCs, based on its review of available data through November 15, 2016.  The White Paper highlights the following notable trends: A Sizeable Number of Companies Identified Themselves as an EGC. There were 1,951 companies that identified themselves as EGCs in at least one SEC filing since 2012. This number excludes companies…
On April 3, 2017, the District Court for the District of Columbia (the “District Court”) entered a final judgment (the “Final Judgment”) in the case of National Association of Manufacturers, et al., v. SEC. The Final Judgment affirms the prior holding of the U.S. Court of Appeals for the District of Columbia in National Association of Manufacturers that Exchange Act Section 13(p)(1) and Rule 13p-1 (together, the “Conflict Minerals Rule”) violate the First Amendment to…