Hospitals & Health Systems

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We previously noted that the regulations implementing the No Surprises Act (“NSA”) appeared to be inconsistent with the NSA because they seemed to establish the qualifying payment amount (“QPA”) as the appropriate payment amount to be used in arbitrations by certified IDR entities (viz. the regulation-established independent dispute resolution (“IDR”) process) between plans and providers, and that the United States District Court for the Eastern District of Texas (“Texas District Court”) vacated portions of the NSA regulations relating to the QPA for purposes of the IDR process.  The Federal government recently responded to the Texas District Court—by removing such portions of the NSA regulations.
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Continue Reading The Saga of the No Surprises Act Continues to be … Surprising

We previously discussed the requirements of the Hospital Price Transparency Rule (“Rule”) on health care providers and health plans, as well as CMS’s proposal to increase penalties for a hospital’s failure to comply with the Rule.  About a year and a half after the Rule became effective, CMS has now imposed its first set of civil monetary penalties (“CMPs”) on Northside Hospital Atlanta and Northside Hospital Cherokee, which have been fined $883,180 and $214,320, respectively.

The Rule requires, in part, hospitals to make public a machine-readable file containing a list of all standard charges for all items and services, such as, e.g., supplies, room and board, and use of the facility, among other items.  See 45 C.F.R. § 180.40(a); id. at § 180.20.  The Rule also requires hospitals to display shoppable services in a consumer-friendly manner.  See id. at § 180.60(d)(2); id. at § 180.60(b).  The goal of these specific requirements, in addition to those set forth in the remainder of the Rule, is to provide consumers with sufficient information about the charges for certain items and services by requiring health care providers and health plans to be publicly transparent about such charges.

Based on CMS’s CMP letters, dated June 7, 2022, Northside Hospital Atlanta and Northside Hospital Cherokee were non-compliant with the aforementioned specific requirements of the Rule.  The chronology of events is important to understand how CMS ended up issuing its CMP letters.…

Continue Reading Health Care Providers on Alert: Two Hospitals Penalized for Continuous Noncompliance with the Hospital Price Transparency Rule

Recently, in Siegel v. Snyder, Slip.Op. 07624, New York’s Appellate Division, Second Department interpreted New York’s peer review/quality assurance confidentiality statute in a manner that may require modifications to the standard documentation of such meetings.  New York’s Education Law 6527(3) shields from disclosure “the proceedings [and] the records relating to performance of a medical or a quality assurance review function or participation in a medical . . . malpractice prevention program,” as well as testimony of any person in attendance at such a meeting when a medical or quality assurance review function or medical malpractice prevention program was performed (see Logue v Velez, 92 NY2d 13, 16-17).  Public Health Law 2805-m(2) affords similar protection from disclosure for “records, documentation or committee actions or records” required by law, which includes peer review activity.…

Continue Reading Failure to Disclose Speakers at Protected QA Meeting Loses Protection for All Speakers

In a November 12, 2021 revision of its prior draft guidelines for hospital co-location compliance with Medicare conditions of participation (COP) for hospitals (QSO-19-13), CMS has apparently softened its approach to co-location. The modified guidance is less prescriptive and appears more practical and supportive of co-location where appropriate. In July 2019, CNS issued draft QSO-19-13…

Earlier this month, the Centers for Medicare and Medicaid Services (CMS) released its final rules for the 2022 Medicare Physician Fee Schedule (PFS Final Rule) and 2022 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System (OPPS Final Rule).  Both rules take effect January 1, 2022.  This post is the first in a series covering the myriad Medicare-related changes set forth in those rules.  We turn first to an area addressed extensively in the PFS Final Rule—the amendments to the Physician Self-Referral Law (Stark Law) regulations.

Those amendments correct inadvertent omissions in a previous CMS rulemaking and clarify the reach of the prohibition related to “indirect compensation arrangements.”  As the tale unfolded, within a matter of months of publishing its Modernizing and Clarifying the Physician Self-Referral Regulations Final Rule (MCR Final Rule), which went into effect January 19, 2021, and which made significant changes to the Stark Law, CMS identified certain crucial omissions related to the regulatory calculus for analyzing indirect compensation arrangements, and sought to correct those oversights through its 2022 Medicare Physician Fee Schedule Proposed Rule (PFS Proposed Rule).  85 Fed. Reg. 77492 (Dec. 2, 2020); 86 Fed. Reg. 39104 (July 23, 2021).  After a short notice-and-comment period, on November 2, 2021, CMS announced that it had taken care of the issues through the PFS Final Rule, which is scheduled to be published in the Federal Register on November 19, 2021.

As explained in more detail below, the import of the PFS Final Rule for physicians, their immediate family members, and entities furnishing designated health services (DHS) is that, while indirect compensation arrangements still must satisfy the requirements of an applicable exception to avoid the Stark Law’s referral and billing prohibitions, the number of indirect compensation arrangements subject to those prohibitions, currently enforceable under the law set forth in the MCR Final Rule, is now reduced.  More specifically, CMS’s corrections to that rule ultimately reduce the number of arrangements that satisfy the definition of “indirect compensation arrangement” and, thus, decrease the number of arrangements that fall within the prohibitions’ purview.  To CMS’s credit, the changes appear to be consistent with its long-standing policy of ensuring program integrity against the risk of program or patient abuse.  To better understand the significance of CMS’s clarifications, we provide a chronological-based history of the amendments to the definition of “indirect compensation arrangement.”…

Continue Reading CMS Corrects Inadvertent Omissions in Recent Stark Law Regulatory Amendments, Clarifies Reach of the Prohibition Related to Indirect Compensation Arrangements

This post reviews Part II of the federal No Surprises Act regulations.  In previous publications, we have commented upon the No Surprises Act, and Part I of the regulations.

The “Requirements Related to Surprise Billing; Part II” (the “Part II Rule”), published on October 7, 2021, is the second interim final rule (IFR) implementing the No Surprises Act, following a prior No Surprises Act IFR (the “Part I Rule”) published on July 13, 2021.  Both of these regulations are generally set to take effect on January 1, 2022.

In this post, we outline how the Part II Rule addresses: (A) the independent dispute resolution (IDR) and open negotiation processes for health plans and other payers (“Plans”), (B) patient-provider dispute resolution processes for uninsured individuals, and (C) the expansion of the federal external review provisions of the Affordable Care Act to cover disputes regarding the application of the No Surprises Act.…

Continue Reading The Devil may be in the Details of the Part II No Surprises Act IFR

Although the COVID-19 pandemic is still active worldwide, health care industry leaders and regulators have already begun to think about how to implement post-pandemic changes to health care delivery based on lessons learned during the global emergency of the past year and a half. We have reported on some such post-pandemic changes to the health care industry in previous blog posts. For instance, some temporary solutions to challenges presented by COVID-19 are being made permanent due to their proven efficiency or effectiveness. The expansion of telehealth is a primary example of this. We have seen the Centers for Medicare and Medicaid Services (“CMS”), as well as state governors and legislators, expand and extend certain regulatory waivers that were initially designed as temporary solutions to allow for greater access to patient care during the pandemic, but that are becoming permanent fixtures due to their usefulness in innovative patient care delivery generally.

Other post-pandemic changes to the health care delivery landscape will be borne out of sheer necessity rather than innovation. …
Continue Reading Lessons from the COVID-19 Pandemic: Planning for Disaster Preparedness and Emergency Management in Hospitals

In a FAQ published on August 20, 2021, the Departments of Labor, Health and Human Services, and the Treasury (collectively, the “Departments”) significantly delayed implementation of statutory requirements on surprise billing and price transparency, which we had previously summarized in a series of blog posts throughout this past year:

Specifically, the FAQs focus on the implementation of certain provisions of the Affordable Care Act’s (the “ACA’s”) Transparency in Coverage Final Rules (the “TiC Final Rules”) and certain provisions of title I (the No Surprises Act) and title II (Transparency) of Division BB of the Consolidated Appropriations Act, 2021 (the “CAA”).
Continue Reading The Surprises Continue: The Biden Administration Delays Implementation of Certain Provisions of the No Surprises Act and Transparency in Coverage Final Rules Applicable to Providers and Insurers

As discussed in a prior post, the Hospital Price Transparency Rule at 45 C.F.R. § 180.10 et. seq. (the “Rule”), requires all hospitals to provide clear, accessible pricing information about the items and services they provide by publicizing (1) the prices for 300 of their most “shoppable services” or services that can be scheduled by a consumer in advance; and (2) total charges, payor-specific negotiated rates, and discounted cash prices for individuals paying out-of-pocket. …
Continue Reading Proposal to Increase Penalties for a Hospital’s Failure to Comply with Price Transparency Rule

Given the current political dynamic within Congress, the chances of the Biden Administration enacting significant, substantive health care legislation appear slim in the short-term. Thus, the Biden Administration has sought alternative routes to advance its policy priorities, mainly through budget reconciliation (see here for a comprehensive explainer from the Congressional Research Service) and agency regulation. For example, we have previously written here and here about the “No Surprises Act”, enacted through the legislative short-cut of budget reconciliation as part of the 2021 Consolidated Appropriations Act, and the Biden Administration’s new regulations implementing consumer protections against surprise medical bills. In this mold, President Biden’s July 9 Executive Order on Promoting Competition in the American Economy (the “Order”) appears to lay out an aspirational, yet somewhat more practical agenda to implementing reforms in the health care sector, as compared to relying on new legislation coming through Congress.

The Order tasks federal agencies across the “whole-of-government” to “protect competition in the American economy” by acting on 72 regulatory initiatives, to be coordinated by a newly established “White House Competition Council” with representatives from key federal agencies. While the “whole-of-government” is involved and the entirety of the U.S. economy is targeted, there is a distinct focus among these initiatives on “improving health care” by addressing “overconcentration, monopolization, and unfair competition” in the sector. The Order specifically cites four areas in the health care sector ripe for renewed enforcement and regulatory attention with the goal of lowering prices, promoting competition, and benefiting consumers.
Continue Reading Pass Go and Collect Regulatory Scrutiny: The Biden Administration Takes Aim at Consolidation & Anti-Competitive Business Practices in Health Care