August 22, 2024

The Health Record - Healthcare Law Insights, Issue 4, August 2024

Hon. Tom Corbett, Matthew Georgitis, Ralph (Joe) Hagy, Anthony Huber, Joel Jones, Jr., Brienne Marco, Alexander Turner

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Issue 4, 2024

Welcome to our fourth issue of The Health Record - our healthcare law insights e-newsletter. In this edition, we address a variety of topics including a recent SCOTUS ruling and the potential impact on CMS, issues of patient satisfaction, a new law that will benefit independently owned Pennsylvania pharmacies, HRSA investment impacting interstate licensing, the precarious position for many rural hospitals, and bipartisan healthcare cybersecurity legislation. Speaking of the rural hospital issue, our own Honorable Tom Corbett recently addressed this topic in an op-ed, which we have included below. Finally, Eric Gadd of our Wheeling office looks at the unique challenges facing non-profit healthcare entities and the actions you can take to get ahead of potential issues.

We also want to alert you to breaking news regarding a hot topic in labor and employment law. A federal district court in Texas has set aside the Federal Trade Commission’s (FTC) final rule that bans most noncompetition agreements. The final rule was scheduled to go into effect on September 4, 2024, but the court’s order indefinitely sets aside the rule and prohibits the FTC from enforcing it. Click here to read our complete reporting on this topic.

We hope you enjoy this issue of The Health Record. Thank you for reading!

SCOTUS Ruling could Shake Up CMS Approach to Civil Monetary Penalties, Invite Litigation at Nursing Homes

“The ruling comes a day before another Supreme Court ruling, Loper Bright Enterprises v. Raimondo, which rolled back Chevron doctrine, or judicial deference to rulemaking decisions in court.”

Why this is important: With the rollback of the Chevron doctrine by the United States Supreme Court, there is uncertainty throughout all federal agencies, including the Centers for Medicare and Medicaid Services (CMS). This uncertainty includes how will the CMS pursue civil monetary penalties against nursing homes that violate the billing guidelines or other regulations set in place by CMS. This article discusses the uncertainty and the possible future of civil monetary penalties. Given this uncertainty, it is critical to have an attorney who can properly advise your organization. --- Matthew W. Georgitis

What’s Keeping Healthcare CIOs Up at Night: How to Improve Patient Satisfaction by Handling Calls More Efficiently

“Health systems have spent billions on portals while investments in modernizing the voice channel — the dominant preference of healthcare consumers — have taken a backseat.”

Why this is important: Everyone has been in this situation; trying to find the correct phone number to contact a healthcare provider, listening to a recording that may or may not be relevant, trying to decide the correct extension or dial option, and hoping beyond reasonable hope that there will be a person on the other side of the line in the correct office to schedule an appointment or answer an immediate concern. Of course, using the provider’s healthcare portal is an option, but setting up log in credentials takes time, can be difficult to navigate, and one cannot help but wonder whether the appointment time chosen is truly available.

A simple phone call to a provider’s office can cause significant patient frustration and lead to poor patient satisfaction. In competitive healthcare markets, this can lead to patients electing to leave a practice or choose alternative providers that patients perceive as being more responsive or patient-oriented. From a risk management perspective, unhappy or dissatisfied patients are far more likely to make complaints to licensing boards or provider compliance programs. Thus, for the sake of both patient care and business operations, something as simple as fielding patient phone calls can take on great importance.

If only, however, it were so simple. Large, complex organizational structures of modern healthcare facilities and astonishingly high patient call volumes make answering a phone call no small task. Technology developed to address this logistical obstacle remains both expensive and imperfect. Balancing the need to facilitate patient communications with the efforts to implement effective communications systems remains a challenge facing many providers, though one that, for the sake of patient care, continues to be developed. --- Joel P. Jones, Jr.

A Win for Community Health, New Pa. Law Levels Playing Field for Local Pharmacies

“This act addresses the anti-competitive behaviors of PBMs that have previously restricted pharmacy networks, imposed retroactive fees, and steered patients towards PBM-owned pharmacies, often resulting in higher drug prices for patients and lower reimbursements for pharmacies.”

Why this is important: Last month, Pennsylvania Governor Josh Shapiro signed into law House Bill 1993 (now known as Act 77 of 2024), which increases transparency and accountability in the practices of Pharmacy Benefit Managers (PBMs). PBMs are third-party companies that contract with health insurance plans to administer pharmacy benefits. They negotiate on behalf of the plan with pharmaceutical manufacturers to develop the plan’s formulary (i.e., what drugs are covered by the plan) and with pharmacies to develop the plan’s pharmacy network. Their involvement in the supply chain, and a lack of transparency into their practices, have raised concerns regarding their role in contributing to the rising cost of prescription drugs and the closure of numerous local independent pharmacies across the Commonwealth. The new law, which received bipartisan support, grants the Pennsylvania Insurance Department (PID) regulatory oversight of PBMs and increases transparency by requiring PBMs to submit multiple reports to the PID. These reports will be posted on the PID’s website in 2026 when a full year of data is available. The law also prohibits “patient steering” practices that require insured individuals to purchase their prescription medications through a mail order pharmacy or at a pharmacy affiliated with the PBM. The law also bans claw backs by the PMB that result in artificially inflated copays. The law is viewed as a win for patients as well as local independently owned pharmacies. --- Brienne T. Marco

HRSA Awards $2.5M to Help Expand Interstate Licensing Compacts for Providers, Social Workers

“Under state licensure compacts, states agree to license providers from other compact states in a streamlined way.”

Why this is important: In an effort designed to expand the reach of professional interstate licensure compacts, the Association of Social Work Boards is among the recipients of significant funding recently awarded by the Health Resources and Services Administration (HRSA). These agreements represent cooperation among states to facilitate the licensing process for professionals licensed in another state pursuant to the compact. Other recipients include the Association of State and Provincial Psychology Boards, the Federation of State Medical Boards of the United States, Inc., and the Federation of Podiatric Medical Boards.

Importantly, as a consequence of the $750,000 awarded to the Social Work Compact, the behavioral health services provided by social workers will be further expanded across the country to meet an ever-increasing list of demands, which includes the opioid epidemic and substance use disorder, and children’s mental health needs. In particular, these efforts are anticipated to benefit rural and underserved communities. --- Ralph "Joe" J. Hagy

More than 700 Rural Hospitals, About 1 in 3 Nationwide, could Shut Their Doors

“Nationwide, 360 rural hospitals, or 16% of all rural hospitals, are considered at immediate risk of closure, according to the report.”

Why this is important: Rural hospitals have been facing serious challenges on various fronts, and as a result, it is estimated by the Center for Healthcare Quality & Payment Reform that over 700, or almost a third of America’s rural hospitals, are in danger of closing down. Approximately half of those, or 360 rural hospitals, are at immediate closure risk. More than half of the rural hospitals in nine states are facing the risk of closure.

There are multiple factors contributing to the dire situation. Rural hospitals are losing money on patient care, citing low government reimbursements, but also to a greater extent, losses on private insurance, which creates the largest portion of overall losses.

In addition to insufficient government and private insurance reimbursements, rural hospitals face unique staffing challenges. The local employment pool is limited, especially considering some of the specialty skills and education required, which are more readily available in urban populated areas. Inconsistent patient and care volume contribute to staffing predictability issues. Due to the inherent relatively remote location of rural hospitals, patient, as well as employee access, is considerably more difficult compared to urban locations. A simple procedure or appointment can take half a day or more due to the increased commuting and travel.

Another complicating factor is that as rural hospitals are acquired by larger hospital systems, specialty care tends to concentrate in the more highly populated urban areas served by the hospital system, resulting in a focus of resources on urban areas.

In its reporting, the Center for Healthcare Quality & Payment Reform calls for improved reimbursements from government and private insurers, and says a federal investment of $5 billion, which is roughly one-tenth of one percent of national healthcare spending, would be enough to prevent the closure of the most vulnerable rural hospitals. --- Anthony L. Huber

Senators Introduce Bipartisan Healthcare Cybersecurity Legislation

“The bill would create a special liaison within the Cybersecurity and Infrastructure Security Agency to help coordinate the government’s response during cyber incidents.”

Why this is important: The healthcare industry is one of the largest targets for cyber-criminals. U.S. Senators Jacky Rosen (D-Nev.), Todd Young (R-Ind.), and Angus King (I-Maine) have introduced a bill, the Healthcare Cybersecurity Act, that seeks to boost the implementation of stronger cybersecurity in the healthcare industry. The proposed bill would create a special liaison to the Department of Health and Human Services (HHS) within the federal Cybersecurity and Infrastructure Security Agency (CISA). This is intended to accelerate the sharing of intelligence and information so that cyberattacks in the healthcare industry can be averted. This bill was proposed as a result of recent cyberattacks that targeted medical claims processor Change Healthcare. Additionally, in an attempt to avoid future interruptions of the delivery of healthcare as the result of a cyberattack, this bill is intended to work in conjunction with HHS’s voluntary cybersecurity goals geared toward raising cybersecurity standards in the industry. --- Alexander L. Turner

Our Rural Hospitals Need Help

By The Honorable Tom Corbett

Originally published in the Pittsburgh Post-Gazette

Access to high-quality healthcare is a necessity for all Pennsylvanians. Basic healthcare should be non-negotiable regardless of where a person lives or how much money they make.

Some of us are lucky enough that daily, we can take this for granted. We simply assume that if we get sick or have an emergency, we’ll be able to access medical attention when and where we need it.

But for Pennsylvania’s 3.4 million rural residents — more than a quarter of our state, the third-largest rural

population in the country — access to care can be hard to come by. And it could become even harder if Congress moves forward with legislation that would cut hospital reimbursements for patient care.

Click here to read the entire article.

Feature Attorney Question & Answer

We are excited to introduce you to our large healthcare law team. To help you get to know our team a little better, we are highlighting an attorney in each issue by asking them a healthcare-related question. We hope their response will be insightful for you.

There are unique legal challenges facing non-profit healthcare entities. As someone who advises and represents non-profit and tax-exempt organizations on a wide variety of matters, what are some of your best recommendations when it comes to non-profit healthcare organizations and their special issues?

W. Eric Gadd, Member, Wheeling, WV Office

"When it comes to non-profit healthcare organizations, there are several factors that need to be taken into account because they can impact operations, finances, and legal relationships. Regulatory compliance, funding, tax-exempt status, board governance, patient privacy, data security, quality of care, and employment issues are just a few of the items we as attorneys look at for non-profit organizations. A very well-versed attorney advising non-profit healthcare organizations should have their finger on the pulse of a variety of issues that can impact their clients and have access to a legal team with a variety of specializations such as tax, healthcare, labor and employment, and environmental law. Number one, having a comprehensive compliance program is absolutely vital. And, make certain that you are evaluating that program regularly and that your staff knows the ins and outs of that program. Two, your board should be familiar with all facets of the operation and have ongoing training to ensure they understand their legal and fiduciary duties. Three, have you engaged in a legal audit recently? If not, you need to do so. Legal audits can help identify issues before they become problems. Four, out of those legal audits, risk management plans can and should be developed to give your organization a clear path forward. Five, clear and concise communication are pillars of any great organization. From patient care to employee conduct to data security, all policies must be in writing and easily understandable. Six, communication doesn’t stop within the walls of your organization. Communicating and engaging with the community lets everyone know your mission and helps maintain your tax-exempt status. Seven, the white elephant in the room is data security. Healthcare facilities are some of the most targeted organizations and that cybersecurity threat is growing. Having a robust data security plan and team are some of the best ways to get ahead of those threats. And finally, you need legal expertise as it pertains to the special issues faced by healthcare facilities. Make sure your legal team has the experience you need on a 24/7 basis.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.