Nathaniel Lacktman

Big news from The Federal Trade Commission! The FTC has finalized updates to the Health Breach Notification Rule, increasing scrutiny on digital health apps. These changes aim to enhance consumer data privacy, requiring health apps and related vendors to promptly notify individuals and authorities about any breaches of unsecured health data. The changes added a definition of healthcare services or supplies to mean "any online service such as a website, mobile application, or internet-connected device that provides mechanisms to track diseases, health conditions, diagnoses or diagnostic testing, treatment, medications, vital signs, symptoms, bodily functions, fitness, fertility, sexual health, sleep, mental health, genetic information, diet, or that provides other health-related services or tools." This update seeks to adapt to the evolving digital health landscape, ensuring protections keep pace with technological advancements. Check out the FTC's Joint Statement defending the final rule.

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While chilling, the findings of The Wall Street Journal reporters Christopher Weaver, Tom McGinty, Anna Mathews and Mark Maremont's analysis of billions of Medicare records -- that private health insurers made hundreds of thousands of questionable diagnoses no doctor had treated and pocketed $50 Billion in Medicare Advantage payments -- are eerily familiar to those of us who have spent the past 10+ years representing the many brave and tenacious whistleblowers who have helped expose the industry-wide practice known as risk adjustment fraud. (Yes, I'm talking about you, Eric Havian, Michael Ronickher, Poppy Alexander, Max Voldman, Hallie Noecker and Elizabeth "Liz" Soltan!) The allegations in our whistleblower clients' complaints are rife with examples indistinguishable from those in the WSJ article, i.e., that health insurers added diagnoses unsupported by the patients' medical records and untreated by their doctors. Where the WSJ found a pattern of insurer-driven HIV diagnoses without accompanying treatment with antiretroviral drugs, we have seen an insurer-driven practice of diagnosing major depression without any SSRIs. However, unlike the WSJ analysis, which relies on data analysis alone, our whistleblower clients, with their insiders' POV, provide the missing link DOJ prosecutors need to allege False Claims Act fraud, that is, evidence that the diagnoses were not just questionable but instead were improper and were made as a knowing part of a company-wide scheme to inflate Medicare reimbursement under Part C. For more on how risk adjustment fraud picks Medicare's pockets, check out my Whistleblower Partners LLP colleague Eric Havian's latest blog post. https://lnkd.in/gEpAmrHh. https://bitly.cx/TujL

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The #340B #ADR Rule: Missing the Forest for the Trees? At the Informa Conference, a speaker decried what he said was an overbroad scope to #HRSA’s Final ADR Rule. But what he saw as a threat to manus is actually a lifeline in the litigation challenging state laws that purport to restrict #drug maker #contractpharmacy restrictions. The Big Picture: After a bit of a rocky start in the various federal district court cases, the trendline in the CP policy cases is now quite positive for manus. Both the 3rd and the D.C. Circuits have ruled in favor of reasonable CP restrictions. The next shoe to fall, in the 7th, could strike a contrary note, but, if it does, the resulting circuit split will set the stage for SCt review, with the majority of the appellate courts already siding with the manus. Manus, pleased with the federal status, are, however, concerned about state developments. The problem is 2-fold. 1) 6 states have passed laws that reverse the manu policies, and multiple other states are lining up to do the same. 2) Though deeply flawed, an 8th Circuit opinion has upheld the first of those state laws, concluding it is not “preempted” by 340B, because, supposedly, there is no conflict between the federal and state laws. In particular, the court concluded that it did not see a conflict between the 340B dispute resolution process and the state regime. The Rule: But the ADR Rule sure seems to undercut the 8th. Where, before that rule, HRSA had disclaimed any interest in addressing any dispute that was pending in the courts, the Final Rule reverses course. It asserts that an overcharge dispute, subject to binding federal dispute resolution, shall "generally include[]" any "claims that a manufacturer has limited the covered entity's ability to purchase covered outpatient drugs at or below the 340B ceiling price". That presents a direct conflict between the ADR process and state laws and related enforcement efforts. Tree or Forest: Our Informa speaker complained that the Final Rule broadened the scope of alternative dispute resolution—worrying that this would subject manfacturers to adverse findings where they imposed CP policies. The argument here is that the ADR process should be limited to pure “overcharge” issues, not other issues. But this misses the forest—for two reasons. 1. The biggest current threat to manu efforts to limit CP transactions are these state laws. By defining federal ADR to include any claims that “a manufacturer has limited” CE purchases, HRSA has handed drug makers a strong preemption argument. 2. The concern that federal ADR, defined broadly, is a greater threat to manus than the state laws seems a bit overblown, given that the 3rd and DC Circuit opinions. On balance, if I were in a manu’s shoes, I’d be pleased where the ADR Rule leaves things at least on this particular point (though certainly not others). #lifesciences Health Resources and Services Administration (HRSAgov), HHS

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A digital health company, Sharecare, is being acquired by the PE firm Altaris for approximately $518 million. Once complete, the merger will not only be likely to result in maximized value for shareholders, but it will also allow both companies to continue to grow in the healthcare field as one entity. In terms of the merger itself, the agreement proposes that Sharecare will be acquired by Altaris for $1.43 in cash per share, which the article states is a premium of approximately 85% over the June 20, 2024 closing price. The deal is slated to close in the last half of 2024, and it will be interesting to see how it impacts the industry. #Mergers #Acquisitions #Healthcare

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#PhRMA’s Best Argument in Seeking a Rehearing on the AR Law Is Made Last—Why That Makes Sense At the end of PhRMA’s petition seeking a rehearing on the 8th Circuit’s decision upholding the Arkansas contract pharmacy law, the trade group makes its best argument. That argument is that the appeals court improperly made a decision that was supposed to be based only on undisputed facts by, instead, basing its decision on hotly debated ones. So, it was a huge mistake for PhRMA to put its best argument last, right? No, it was actually the right call. Here’s why. A Really Good Argument: As I highlighted in my post right after the 8th Circuit ruled, that decision is premised on two bitterly disputed questions: 1) contract pharmacies always act as “agents” of covered entities and 2) contract pharmacies never take “title” to #340b drugs. Why That Matters: The panel was reviewing a district court decision made by “summary judgment”, without a trial or other fact finding. SJ, because it doesn’t involve fact finding, is ONLY supposed to be based on UNDISPUTED facts—facts both sides agree are correct. But that isn’t the case with the factual premises of this decision, and that is, I think, absolutely a problem. So, Why Isn’t That the First Argument? The limitation with this argument, as good as it is, is that it’s not a basis really to ask the whole appellate court (all the judges) to rehear the case—what we refer to as an en banc rehearing. It’s really only an argument that the same 3 judges that heard the original appeal should rehear the case—what is referred to as a “panel rehearing”. That’s a much more limited ask, and it has downsides. The Meh of a Panel Rehearing: Sending the case back to 3 judges that have already decided the case against you is, pretty obviously, not as good as getting the case in front of 11 judges, 8 of whom haven’t previously considered the case. There’s also the danger that, in sending the case back to the original 3 judges, you just give them a chance to “clean up” their error by issuing a new opinion that gets to the same result, but without the dumb mistake of relying on what were clearly disputed “facts”. “Yes, we were wrong, but, no, with this rationale teak, we were right”. So, sometimes, where, as here, your second best argument would get you an en banc review, but your best argument wouldn’t, it’s best to lead with your weaker argument. Odd, but true. #apa #pharmacy #specialtypharmacy #drugpricing #federalcourts #summaryjudgment #8thcircuit #pharma

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I enjoyed speaking with Law360's Senior Bankruptcy Reporter, Vince Sullivan, on the state of the healthcare industry and the financial pressures faced by small and standalone providers. Chapter 11 bankruptcy can be an effective tool to facilitate a transaction "free and clear" of legacy liabilities, providing a clean slate for a fresh start. The article is available for free if you sign up to Law360. #bankruptcy #healthcare #transaction

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Intentionally Provocative: The “Seminal” #Healthcare Pricing Case that Was Just Plain Wrong Judge Patti Saris has been lionized for her 183 page opinion in 2007 that declared #AverageWholesalePrice “fictitious” and a violation of state law. The opinion was and is hailed by many as “seminal”, “foundational”, and “incisive”. But it was, in fact, uttlerly wrong—even embarrassingly so. There, I said it. My 2 problems with the decision are her analysis of the statute of limitations and causation issues in the case. SOL: This is, of course, the concept that a lawsuit must be brought within a statutorily fixed period of time, ot the cause of action is lost. Although Judge Saris acknowledged that AWPs was publicly known not to reflect wholesaler prices to end customers by 1997, her own recitation of the facts absolutely establishes that this was actually publicly disclosed at least 10 years earlier. The opinion provides a litany of disclosures about AWP long before the 1997 “cut off” date that Judge Saris choose, including: · A 1984 #OIG report that flatly stated AWP was not “an adequate” estimate of the prices providers pay, that it “represents” only a “list price”, and that it does not “reflect” many discounts, including an “rebates or free goods”; · A 1992 OIG report, concluding, explicitly, that “AWP is not a reliable indicator of the cost of a drug”; and · a Barron's article about AWP that described it, famously, as “Ain’t What’s Paid”, stating that “providers actually pay … [prices] that are 60%-90% below” AWP. Causation: #Fraud claims often rise or fall on whether there is proof of the alleged fraud actually causing the alleged harm. The causation premise of Judge Saris’ decision was that AWP was used by payers because, until 1997, they supposedly didn’t understand what #AWP was. But her own decision shows how banckrupt that assertion was, even then. Judge Saris wrote her decision in 2007, 10 years after the date even she acknowledged that AWP was fully understood. But, as she conceded in her opinion, payers were STILL—10 years later—using AWP. 10 years of “knowledge” about what AWP was didn’t change diddly: “[t]o date, [in 2007],” she admitted, payers have “not shifted away from the AWP benchmark”. Judge Saris was forced to herself acknowledge that payers “fail[ed] … to react [even] when [AWP] mega-spreads became well known”. She lamented that this indisputable fact was “hard to understand”. But she conceded that payers had “shut their eyes” to AWP spreads. That should have been the end of the case. The decision is all the more ridiculous 17 years on. AWP, after all, remains a mainstay in commercial insurance plan reimbursement—even today. Judge Saris was just plain wrong—that’s the long and the short of it. #Lifesciences #compliance #healthcarefraud #drugpricing

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New DOJ Task Force Targets Health Care Antitrust Violations The DOJ's Antitrust Division has launched the new Task Force on Health Care Monopolies and Collusions (HCMC) to address antitrust violations in the healthcare sector. The focus will be on vertically integrated “payviders” and entities rapidly acquiring healthcare assets. In light of these developments, companies are urged to carefully assess their recent M&A activities, books and records, and overall compliance with best practices to align with the increased DOJ scrutiny. Thanks to co-authors Lee Van Voorhis and Matthew Hickman for this alert. Womble Bond Dickinson (US) LLP Womble Bond Dickinson (UK) LLP #DOJ #AntitrustDivision #Healthcare #Compliance #TaskForce #MandA #HealthcareIndustry #LegalCompliance

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Listen Here: https://lnkd.in/e4-baq6f Discover the nuances of pharmaceutical expenses in healthcare systems with Amy Gutierrez, PharmD, CPEL, VP and Chief Pharmacy Officer at UCHealth. Amy shares insights on the overlooked rise in drug costs versus labor expenses and discusses current focuses, including GLP-1 medications' promising aspects and challenges. Tune in for a concise exploration of these crucial topics. For more information about Becker's Healthcare, please contact Jessica Cole or Scott Becker. #podcast #healthcare #womensleadership

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9 stories we are following at Becker's Healthcare. Listen at Becker's Healthcare Podcast. For information on upcoming conferences speak to Jessica Cole Allison Warner or Abbie Engel 1. 52 statistics on hospital profitability. Laura (Miller) Dyrda A key headline is that not for profit profits are much better than last year. However there seems to be a broad divide between health systems. 2. California hospital to relocate and centralize elective surgeries. Kelly Gooch 3. Return-to-paper playbook: How hospital leaders can plan for downtime. A great piece by Giles Bruce on how hospitals can try and manage during a cyber attack. 4. California hospital EHR nears restoration after cyberattack. Naomi Diaz. 5. U of Minnesota, Fairview working 'through summer' to advance hospital deal. Madeline Ashley 6. For-profit hospital M&A ramps up. Alan Condon 7. Walgreens weighs Boots sale. Molly Gamble 8. What Vandalia Health did to stay profitable. Laura (Miller) Dyrda 9. Moody's downgrades 2 health systems. Andrew Cass Overlake Medical Center & Clinics a great system and a Jackson Health in Mississippi always an important system.

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A new era in regulating the use of #AI in #healthcare has begun with the Biden Administration’s final revised rule under Section 1557. Within 300 days of the effective date of the rule (about one year from now), health systems will need to satisfy an “ongoing duty to make reasonable efforts to identify uses of patient care decision tools” that use input variables that measure race, color, national origin, sex, age, or disability. Health systems then “must make reasonable efforts to mitigate the risk of discrimination” resulting from the use of the tools that are identified pursuant to this ongoing duty. But HHS OCR is not done. In the rule, HHS OCR expressly asks for additional comments on whether it should engage in additional rulemaking to address non-clinical decision-making tools (i.e., those that do not directly impact patient care or clinical decision making) and whether those tools should also be covered under this new regime. HHS OCR specifically raises the question of automated tools for billing, scheduling, and resource allocation. The preamble to the final rule also provides critical detail on HHS OCR’s view of what constitutes “reasonable efforts” to identify risks and to mitigate those risks. To begin, HHS OCR expressly states that health systems “must exercise due diligence when acquiring and using such tools to ensure compliance” with the regulation. According to HHS OCR, a health system may satisfy this “due diligence” requirement by consulting the disclosures required by certified health IT developers, by reviewing resources published by HHS, by monitoring published academic literature, by reviewing reports through media outlets, and by participating in professional and hospital associations.   When evaluating whether a health system has adequately taken “reasonable efforts” to identify potential risks, HHS OCR states that it will consider the system’s size and resources; whether the system used the tool in a manner and under the conditions intended by the developer and approved by regulators; whether the system reviewed the product information from the developer regarding the potential for discrimination; and whether the system has a methodology or process in place for evaluating the tools it adopts (e.g., the “due diligence” concept just discussed). For mitigation, HHS OCR notes that health systems are encouraged to establish written policies and procedures for the use of these tools in decision-making, including governance measures; to monitor potential impacts and develop ways to address complaints; and to train staff on the purpose of the use of the tools in clinical decision-making. This regulation is essentially creating a new era of healthcare AI diligence by the end users of healthcare AI, and it will require a high level of ongoing collaboration between a health system’s legal counsel, chief AI officer, chief medical officer, and Section 1557 coordinator. #healthlaw #healthequity 

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Check out our latest blog post about the FTC's final rule banning non-competes, and what it means for health care providers. #noncompete #FTC #federaltradecommission #healthcare #hospitals #healthcareproviders #physicians #doctors #healthlaw #contracts

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The third edition of Foley's 50-State Survey of Telehealth Insurance Laws is now available. This report provides a detailed analysis of each state's telehealth commercial insurance coverage and payment/reimbursement laws. It also offers a comparison of these laws before and after the Public Health Emergency. #Telehealth #Insurance #Commercial

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Thomas Ferrante offers his insight on the debate over how remote patient monitoring technology will be reimbursed in this Modern Healthcare article. #HealthCare #DigitalHealth

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The FTC has recently made a groundbreaking decision to invalidate non-competition clauses in employment contracts, transforming the legal landscape for organizations and employees alike. This change, aimed at boosting job mobility and innovation, exempts senior executives but affects virtually all other levels of employees. As professionals in healthcare recruiting, where competition for top talent is fierce, it’s crucial to understand how this shift could reshape talent retention and recruiting strategies. We can expect a more dynamic job market where clinicians and professionals may feel more empowered to transition between roles without the hindrance of non-compete clauses. Click below to read the full article for a deeper dive into the implications of this ruling and how it might influence your business strategies and employment practices.

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FTC - NON-COMPETES Delayed ----As PREDICTED - from my previous post-  https://lnkd.in/e44bSpTa - there are now multiple court actions and lawsuits attempting to block enforcement of the recent FTC ban on non-compete clauses.   In the article from the firm of Holland & Knight LLP - the authors (David Santeusanio, Bryan Neal, Sara Schretenthaler Staha, Howard Sokol, Jasmine M. Tobias), first analyze a Texas district court order of Wednesday July 3rd (Ryan LLC v. Federal Trade Commission) - then discuss several other pending actions against the non-compete ruling.   MY TAKE: In HEALTHCARE - For doctors and other practitioners subject to non-compete clauses - who are trapped in abusive and toxic workplace conditions (conditions promoted by these non-compete clauses) - now with no way out except to LEAVE a city and possibly the State in which you and your family reside and have become firmly established and connected  - and MOVE to a distant local, thus profoundly DISRUPTING your financial stability, and disrupting the life, connections and relationships  you, your spouse, your children  have established throughout your living system.   Managements know this well - and uses this as leverage to keep you from leaving – as well as not feeling any need to improve abusive healthcare workplace conditions.     – Thus, such delays and a possible cancelling of the FTC’ non-compete ruling - ALLOW these non-compete-promoted healthcare workplace ABUSES to continue unchecked - further contributing to healthcare system workplace failures and sub-optimal patient outcomes. #toxicworkplace, #burnout, #healthcareworkers, #moralinjury, #doctors, American Medical Association American College of Emergency Physicians Tennessee Medical Association Gillian Schmitz Aisha Terry (formerly Liferidge) Alison Haddock, MD, FACEP Jonathan Fisher, MD, MPH Samuel A.A. Levine Lesley Fair Rahul Rao Tara Isa Koslov Lina Khan Doug Chesson Tisha Titus, MD, MPH Leon C. Adelman, MD, MBA, FACEP, FAAEM Adriana Alvarez Melissa Rudy Erika Edwards Doximity Kelley Kramer Katie Johnston Michael Arroyo Peter Stavros David Whitestone Chadd Kraus Aria Bendix Joseph Choi Ryan Stanton Sarah Owermohle Deidre McPhillips Erin Schumaker Linda Restrepo Linda Lawrence Susan Morse Thinkers360

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T.J. Ferrante, vice chair of Foley's Health Care Practice Group, is speaking during Spruce Health's upcoming webinar, "U.S. Federal and State Telehealth Law & Policy—2024 & Beyond," on June 12. This panel will examine the current regulatory landscape as it relates to digital health. Click below to learn more and register. #Webinar #Telehealth #HealthLaw

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