|
February
10, 2012
Deadline Upcoming for Submitting Comments on
Proposed Rules for the Sunshine Act
The
Centers for Medicare & Medicaid Services (“CMS”) has published
27 comments it has received on its long-awaited proposed regulations
for the physician payment and ownership transparency provisions of
the Patient Protection and Affordable Care Act (“PPACA”), commonly
referred to as the "Sunshine Act." CMS will continue to accept
comments until the deadline of February 17.
So far,
a number of the comments have praised the Sunshine Act and the
proposed rules for their goal of promoting transparency in physician
relationships with the drug and device industry. Several of
the longer comments have pushed for expansions of the laws beyond
what the statute requires (in keeping with the commenters'
understanding of the "spirit" of the law), rather than proposing
restrictions based on industry practice and the letter of the
law. The recent comments that address the substance of the
proposed rules have, among other suggestions:
•
Recommended
exclusions for certified CME activities, including supporting
educational material;
•
Suggested
raising the annual limit for penalties above
$1,000,000;
•
Protested
the likely disruption of the Sunshine Act on normal sales and
promotional activities;
•
Noted
the enormous increase in cost to manufacturers and to the government
based on reporting;
•
Recommended
excluding indirect payments (such as educational grants to
accredited CME providers) to covered
recipients;
•
Suggested
using the physician’s state license number instead of the
physician’s NPI number;
•
Proposed
an expansion of the types of recipients included in the reporting
requirement; and
•
Requested
clarification of how to report indirect payments when the specific
amounts received by individual recipients are
unknown.
To
review the currently posted comments, click here,
and to review the proposed rules, click here.
For an overview of the key points in the proposed rules, please
click here
for Fulbright’s briefing. Ben Koplin and Selina
Spinos
CMS
Posts Updates on Settlements Under Self-Referral Disclosure
Protocol
CMS has
been posting information on its website about settlements made under
the Medicare Self-Referral Disclosure Protocol, which provides a
method for providers and suppliers to disclose actual or potential
violations of the physician self-referral law (the Stark Law), 42
U.S.C. § 1395nn. Under the Affordable Care Act, which created
the SRDP, the Secretary of Health and Human Services has discretion
to reduce penalties based on factors including the nature of the
violation, the timeliness of the disclosure, and additional
cooperation by the disclosing party. To read the SRDP, which
was released on September 23, 2010 and revised on May 6, 2011, click
here.
The
four posted settlements describe:
•
A
general acute care hospital in Massachusetts disclosed that it
failed (1) to satisfy the requirements of the personal services
arrangements exception for arrangements with certain hospital
department chiefs and the medical staff for leadership services, and
(2) to satisfy the requirements of the personal services
arrangements exception for arrangements with certain physician
groups for on-site overnight coverage for hospital patients.
All violations disclosed were settled for $579,000.00.
•
A
critical access hospital in Mississippi disclosed that it failed to
satisfy the requirements of the personal services arrangements
exception for arrangements with certain hospital and emergency room
physicians. All violations disclosed were settled for
$130,000.00.
•
A
hospital located in California disclosed that it exceed the calendar
year non-monetary compensation limit for a physician. All
violations disclosed were settled for $6,700.
•
A
hospital located in Georgia disclosed that it exceeded the calendar
year non-monetary compensation limit for two physicians. All
violations disclosed were settled for $4,500.
The
Self-Referral Disclosure Protocol Settlement page is located here,
which CMS has stated that it will update quarterly. Ben
Koplin and Selina Spinos
CMS
Issues Guidance Covering Aortic Valve and Lung
Procedures
On
February 2, 2012, CMS issued a proposed decision memorandum
providing temporary coverage for transcatheter aortic valve
replacement (“TAVR”) procedures for Medicare beneficiaries enrolled
in an outcomes-tracking program. In part, beneficiaries will be
covered for TAVR procedures when furnished for an FDA-approved
indication, and upon the approval of two cardiac surgeons for each
respective patient’s suitability for open valve replacement surgery.
In order to be covered, facilities and professionals must meet
certain volume-based requirements with respect to prior performance
of cardiac procedures. Further, covered patients must be “enrolled
in, and the treating physician team [must be] participating in a
prospective national registry that consecutively enrolls TAVR
patients and tracks [certain] outcomes at the patient data level for
a period of at least five years from the time of the TAVR
procedure.”
At the
same time, CMS issued a proposed decision memorandum providing
coverage for extracorporeal photophoresis (“ECP”), which, in part,
requires that clinical research studies “assess[ing] the effect of
ECP for the treatment of [Bronchiolitis Obliterans Syndrome (“BOS”)]
following lung allograft transplantation” may be covered by
Medicare. The clinical study must
address whether “Medicare beneficiaries who have received
lung allografts, developed BOS refractory to standard
immunosuppressive therapy, and received ECP, experience improved
patient-centered health outcomes.”
CMS has
requested comments on the two memoranda before rendering final
coverage determinations. CMS’s memorandum regarding TAVR
coverage may be found here;
CMS’s ECP memorandum may be found here.
Mark Faccenda
Federal
Agencies Issue Final Rule on Disclosures Required by Health
Plans
On
February 9, 2012, the Departments of Health and Human Services,
Labor, and the Treasury issued the final rule implementing the
disclosure requirements for health plans established by section 2715
of the Public Health Service Act. Section 2715, which was
added by the Patient Protection and Affordable Care Act, required
these federal agencies to develop standards for the summary of
benefits and coverage (“SBC”) provided by health plans to their
enrollees. According to HHS Secretary Kathleen Sebelius, the
final rule is designed to ensure that consumers receive a “short,
easy-to-understand” SBC. The final rule establishes a total of
12 required content elements for SBCs, including uniform standard
definitions of medical and health coverage terms; a description of
the coverage including the cost sharing requirements such as
deductibles, coinsurance, and co-payments; and information regarding
any exceptions, reductions, or limitations under the coverage.
The final rule also requires health plans to include “coverage
examples” that illustrate coverage for common benefits
scenarios. To read the HHS press release, click here.
To read the final rule, click here.
Peter Leininger
OIG
Alerts Physicians About Potential Legal Pitfalls Resulting from
Reassigning Rights to Medicare Payments
Medicare-participating
physicians may properly reassign to hospitals, physician groups, and
other entities their right to receive Medicare payments for services
they perform, provided the physicians satisfy certain
requirements. On February 8, 2012, the Department of Health
and Human Services’ Office of Inspector General (“OIG”) issued an
Alert advising physicians to exercise caution when reassigning their
Medicare payments. The OIG explained that physicians who
reassign their Medicare payments may be liable for false claims
submitted by entities to which they reassigned their benefits.
The OIG described that it had recently reached settlements with
eight physicians who violated the federal Civil Monetary Penalties
(“CMP”) Law by causing the submission of false claims to Medicare
from physical medicine companies. The OIG determined that
these physicians reassigned their Medicare payments to these
companies in exchange for medical directorship positions.
While serving as medical directors, the physicians did not
personally perform or directly supervise any services.
The OIG stated that there was evidence that the services the
companies claimed the physicians performed were not actually
furnished or not provided as billed. The OIG determined that
the companies falsely billed Medicare using the physicians’
reassigned provider numbers as if the physicians personally
furnished the services or directly supervised a technician
performing the services. The OIG concluded that the physicians
were an integral part of the scheme and pursued their liability
under the CMP Law. The OIG Alert is available here.
Tom Dowdell
FDA
Releases Guidance on Biosimilar Approvals
Yesterday,
the U.S. Food and Drug Administration (“FDA”) issued three draft
guidance documents on biosimilar product development to assist
industry in developing such products in the U.S. The Patient
Protection and Affordable Care Act amended the Public Health Service
Act to create an abbreviated approval pathway under section 351(k)
for biological products that are demonstrated to be highly similar
(biosimilar) to, or interchangeable with, an FDA-licensed biological
product (a “reference product”). Biological products are
therapies used to treat diseases and health conditions and include
vaccines, blood and blood components, gene therapies, tissues, and
proteins. A biosimilar is a biological product that is highly
similar to an already approved biological product, notwithstanding
minor differences in clinically inactive components, and for which
there are no clinically meaningful differences between the
biosimilar and the approved biological product in terms of the
safety, purity, and potency. Biologics, usually derived from animal
or human tissue, are more complex than traditional pharmaceuticals,
and the guidance outlines a process heavy on interaction between FDA
and the sponsors of proposed biosimilars.
The
three guidance documents, which you can view by clicking on each
one, are as follows:
•
Scientific
Considerations in Demonstrating Biosimilarity to a Reference
Product – This guidance will assist companies in demonstrating
that a proposed therapeutic protein product is biosimilar to a
reference product for the purpose of submitting a 351(k) application
to FDA.
•
Quality
Considerations in Demonstrating Biosimilarity to a Reference Protein
Product – This guidance provides an overview of analytical
factors to consider when assessing biosimilarity between a proposed
therapeutic protein product and reference product for the purpose of
submitting a 351(k) application.
•
Biosimilars:
Questions and Answers Regarding Implementation of the Biologics
Price Competition and Innovation Act of 2009 – This guidance
provides answers to commonly asked questions from people interested
in developing biosimilar products.
Rachel
Sherman, the director of medical policy in FDA’s Center for Drug
Evaluation and Research, told reporters that FDA expects a
biosimilar approval process to take approximately ten months from
the time an application is officially submitted. No
applications have been filed but 35 sponsors have requested meetings
with the agency. FDA will seek public comment on its three
guidance documents. FDA will publish in the Federal Register
instructions on how to submit comments. Cori Annapolen
Goldberg
New
Bipartisan Bill Would Require Drug Companies to Fund Generics
Reviews
On
February 8, 2012, a bill was
introduced to U.S. House of Representatives that aims to expedite
the regulatory approval process for generic pharmaceuticals by
requiring drug companies to fund FDA’s review process. The
Generic Drug and Biosimilars User Fee Act of 2012 (H.R. 3988) is
co-sponsored by Reps. Frank Pallone Jr., D-N.J.; Tim Murphy, R-PA;
Joseph Pitts, R-PA; and Henry Waxman, D-CA and was developed, in
large part, by FDA, which issued to Congress last month
recommendations that the agency thought would improve its
performance. The bill mandates that generic pharmaceutical
manufacturers provide funding that will enable FDA to handle its
backlog of generic new drug applications and streamline the approval
process. If passed, beginning in fiscal year 2013, generic
drug makers will provide such funding through a variety of fees
including application costs, facility costs, and a one-time backlog
fee for each new drug application currently awaiting the agency’s
attention. Cori Annapolen Goldberg
Fourteen
Hospitals Pay $12M to Settle Kyphoplasty
Allegations
This
week, fourteen hospitals in seven states paid a total of $12 million
to settle False Claims Act allegations relating to Medicare billing
for kyphoplasty procedures performed between 2000 and 2008.
The government alleged that kyphoplasty---a minimally invasive
treatment for osteoporotic vertebral fractures---can safely be
performed on an outpatient basis. Accordingly, DOJ sought to
recover FCA damages from hospitals that billed Medicare for
inpatient stays for kyphoplasty patients. These settlements
follow several earlier waves of hospital settlements over
kyphoplasty that began in 2009. In all, DOJ has recovered $39
million from 40 hospitals in these settlements.
These
cases arose from a False Claims Act suit filed in 2008 by two former
employees of the manufacturer of the kyphoplasty devices, Kyphon,
which was later acquired by Medtronic. DOJ settled with
Medtronic for $75 million in 2008 over Kyphon’s alleged marketing
practices, which allegedly urged hospitals to bill kyphoplasty as an
inpatient procedure. Ben
Wallfisch
Smith
& Nephew Agrees to Pay $22 Million to Resolve Alleged Violations
of the FCPA
On
February 6, 2012, the Department of Justice announced that it
reached a settlement with UK medical device manufacturer Smith &
Nephew Inc. to resolve allegations that the company and certain
affiliates made improper payments to government officials in
violation of the Foreign Corrupt Practices Act (“FCPA”). The
Department of Justice alleges that Smith & Nephew paid cash
incentives and other things of value to publicly employed Greek
health care providers to induce the purchase of the company’s
products. As a part of the settlement, Smith & Nephew will
pay $16.8 million and retain a compliance monitor for 18
months. In a related matter, Smith & Nephew also reached a
settlement with the Securities and Exchange Commission wherein the
company will pay $5.4 million in disgorgement of profits.
Smith & Nephew reported that it “and other medical device
companies were asked by the SEC and DOJ in late 2007 to look into
possible improper payments to government-employed doctors and
voluntarily report any issues.” The company explained that it
“found and reported evidence of improper payments by a distributor
in Greece that had been appointed by Smith & Nephew subsidiaries
and was terminated in 2008.” The individuals implicated are
reportedly no longer associated with the company. Olivier
Bohuon, Chief Executive Officer of Smith & Nephew noted that
“[t]hese legacy issues do not reflect Smith & Nephew
today. But they underscore that we must remain vigilant every
place we do business and let nothing compromise our commitment to
integrity.” To read the DOJ press release, click here.
To read Smith & Nephew’s press release, click here.
Peter Leininger
If
you would like to be removed from this mailing list, reply to this
email and place "Unsubscribe" in the subject line and you will be
immediately removed from our mailings. If you have a problem
receiving this e-mail or for more information, you may contact
Fulbright & Jaworski L.L.P., Attn.: Client Relations (clientrelations@fulbright.com),
Client Relations, Fulbright Tower, 1301 McKinney, Suite 5100,
Houston, Texas 77010. Our toll-free number is
1-866-385-2744. | 
