Providing Insight on March 30: ACA-Related Litigation and Impact of New Administration at AHLA Institute on Medicare and Medicaid Payment Issues

Join the American Health Lawyers Association in Baltimore for the Institute on Medicare and Medicaid Payment Issues. Parker Poe’s Matt Wolfe will be providing an overview of ACA-Related Litigation and Impact of New Administration at a joint luncheon sponsored by AHLA’s Behavioral Health Task Force and AHLA’s Health Care Reform Task Force on March 30.

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Matt Wolfe

Matt Wolfe

Matt Wolfe concentrates his practice in the areas of administrative litigation, government relations, and other regulatory matters. Matt formulates comprehensive political and public relations strategies on a broad range of federal and state policies. He drafts and monitors legislation, intervenes directly with legislative, executive, and local officials, and appears before state and federal executive agencies. Within his administrative litigation practice, Matt advises and counsels health care providers subject to federal and state regulatory actions.

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Portions of Section 1557 of the Affordable Care Act Enjoined by Texas Federal Court – Majority of Regulation Remains Intact

In May 2016, the Office of Civil Rights (“OCR”) of the U.S. Department of Health and Human Services (“DHHS”) issued a Final Rule implementing Section 1557 of the Affordable Care Act (“ACA”).  Section 1557 prohibits “covered entities” from discriminating on the basis of race, color, national origin, sex, age, or disability.  The term “covered entities” includes all health care providers that receive payments from the federal government (e.g.,. Medicare, Medicaid, Veterans Affairs, TRICARE).

The requirements of the Section 1557 Regulation are sweeping.  The law requires providers to adopt nondiscrimination policies, provide free language assistance to individuals with limited English proficiency, and accommodate individuals with disabilities.  Under the law, providers must also post a specific notice of their nondiscrimination policies and inform patients that they will provide language assistance free of charge to patients with limited English proficiency.  Health care providers with more than fifteen employees are required to adopt a patient discrimination grievance policy and appoint a civil rights coordinator who will oversee implementation of the law’s requirements and investigate and issue decisions relating to patients’ allegations of discrimination.

The Section 1557 Regulation also for the first time creates binding rules that define sex discrimination to include discrimination on the basis of gender identity.  These rules require providers to treat patients based on the patient’s preferred gender.  These new rules also require providers to amend their policies on the boarding of transgendered patients and the use of public facilities, such as bathrooms, to ensure equal treatment to transgendered patients based on their stated gender identity.

In addition to these new requirements, the Section 1557 Regulation requires nondiscrimination in the treatment of female patients including treatment and coverage decisions based on pregnancy status.  One notable requirement of the law precludes providers from treating female patients differently on the basis of the patient’s decision to terminate a pregnancy.

On December 31, 2016, Judge Reed O’Connor of the United States District Court for the Northern District of Texas issued a nationwide injunction halting the implementation of the portions of the law that govern the treatment of transgendered patients as well as rules that would bar discrimination in treatment and coverage of female patients on the basis of their decision to terminate a pregnancy.  Until the court determines whether DHHS had the authority to create these legal requirements, these portions of the Regulation are not enforceable.  You can read the entire decision here.

Providers that have read the news coverage of this recent decision should be aware that all of the other requirements of the law remain intact.  Violations of the remaining provisions of the regulation continue to be subject to investigation and regulatory action by the  Office of Civil Rights, which has the authority to terminate a provider’s participation in Medicare, Medicaid, and TRICARE for violations of the law.  Providers also continue to be subject to private discrimination lawsuits filed by patients for alleged violations of Section 1557.

If you are a health care provider and are not familiar with the requirements of Section 1557 or have not taken steps to comply with the law, you should quickly take steps to ensure that you become compliant with the law as soon as possible to avoid the risk of an OCR investigation or a lawsuit being filed by current patient.

If you have any questions please feel free to reach out directly to Robb Leandro at RobbLeandro@parkerpoe.com  or 919.835.4636.

Robb Leandro

Robb Leandro

Robb Leandro assists his client with a broad range of legal issues relating to health care, administrative law and public policy. His legal practice focuses on helping health care providers navigate the minefield of regulations that they face in their practices. Robb routinely assists his clients with issues including Medicaid and Medicare regulations; Medicaid and Medicare audits; Certificate of Need Applications and litigation; licensure, surveys, and certification issues; and HIPAA and privacy laws. Robb also provides counsel to health care providers with complex government contract procurement issues.

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OIG Releases 2017 Work Plan

On November 10, 2016, the Office of Inspector General (“the OIG”) of the U.S. Department of Health and Human Services (“DHHS”) released its 2017 Work Plan.  Published annually and updated throughout the year, the Work Plan identifies the OIG’s key areas of focus as it carries out its mission of protecting the integrity of programs within DHHS.  The OIG is charged with ensuring the integrity of more than 100 programs administered by DHHS, including those within the Centers for Medicare and Medicaid Services, Center for Disease Control and Prevention, the Food and Drug Administration, and the National Institute of Health. The OIG Work Plan summarizes the OIG’s current activities – comprised of both new and revised activities — along with information regarding previously identified activities that have been completed, postponed, or cancelled.

The Work Plan highlights new and continuing priorities applicable to various provider types, including hospitals, nursing homes, hospices, home health, clinical laboratories, physicians and other health professionals, medical equipment suppliers and manufacturers, pharmaceutical manufacturers and other providers and suppliers.

The 2017 Work Plan is available here.

The following is a sampling of some of the new and ongoing efforts highlighted in the Work Plan:

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Amanda Hayes

Amanda Hayes

Amanda Hayes counsels clients in connection with mergers and acquisitions, divestitures and other business matters, with a particular focus on the health care industry. She regularly serves as lead counsel on acquisitions and divestitures, guiding the client through deal structuring, due diligence, drafting, negotiation and closing. In addition to health care, Ms. Hayes’ mergers and acquisition experience includes a variety of industries, such as manufacturing, retail, automotive, contract research, environmental remediation, engineering and construction supply.

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CMS Releases Hospital Quality Star Ratings

On July 27, 2016, the Overall Hospital Quality Star Ratings were released on Medicare’s Hospital Compare website.  The Star Ratings represent a summary compilation of individual hospital performance on 64 measures designated by CMS to represent the quality of care delivered at over 4,000 Medicare-certified hospitals. Star ratings are on a scale of one to five, with a five-star rating being the best.

Medicare’s instructions to patients regarding how to use the Hospital Compare website describe the ratings as one factor to be taken into account by patients when determining where to seek non-emergent care.

According to Medicare, the purpose of the star ratings is to not only provide a tool to consumers, but also to encourage hospitals to improve the quality of care that they provide.  Industry groups and others have criticized the rating system for a lack of transparency, as well as failure to take into account different hospital types for purposes of compiling the comparative information.  CMS delayed release of the information in Spring 2016 following letters signed by 60 Senators and 225 members of the House of Representatives urging reconsideration of the ratings system.  CMS was not convinced to extend the delay, however, despite a bill introduced on July 26, 2016 to prevent release of the Star Ratings for another year.

The CMS Compare sites are the official sites for information published by Medicare regarding the quality of health care providers. Quality of care ratings for nursing homes, home health, dialysis facilities, group practices, and other health professionals have previously been issued by CMS on the Compare websites and can be accessed here.

Parker Poe’s healthcare practice group works closing with the firm’s government relations team to represent our client’s interests on the federal and State levels.  Our government relations and lobbying practice encompasses activities such as formulating strategy, drafting legislation, appearing before legislative committees and study commissions, and intervening directly with legislative officials.

Joy Hord

Joy Hord

Joy Hord focuses her practice on regulatory and compliance matters specifically related to the health care industry. Her clients include hospitals, physicians, pharmacies and other health care providers. Ms. Hord also has significant experience representing health care professionals and organizations with business law and transactional issues, such as mergers, acquisitions and joint ventures. Ms. Hord leads Parker Poe’s Health Care Practice, which includes attorneys from the firm’s North Carolina and South Carolina offices.

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CMS Finalizes Rule on Reporting and Returning Medicare Overpayments

The Affordable Care Act (sometimes referred to as Obamacare) included a requirement for providers to report and return all Medicare and Medicaid overpayments within 60 days of identification.  Although this requirement has been in effect since 2010, the Centers for Medicare and Medicaid Services (“CMS”) has proposed but failed to promulgate rules serving to further clarify this requirement. On February 12, 2016, CMS published a final rule, which went into effect March 14, 2016.  The final rule applies to Part A and Part B of Medicare.

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Varsha Gadani & Matt Wolfe

Varsha Gadani focuses her practice on the health care industry. Her clients include hospitals, physicians, behavioral health care providers, long-term care facilities, and other providers. Prior to joining Parker Poe, Ms. Gadani served as Assistant Counsel at the North Carolina Medical Society (NCMS). In this role, she performed a variety of legal functions for the NCMS. She monitored and analyzed emerging state and federal health law issues and advised physicians on health policy matters. Matt Wolfe concentrates his practice in the areas of administrative litigation, government relations, and other regulatory matters. Matt formulates comprehensive political and public relations strategies on a broad range of federal and state policies. He drafts and monitors legislation, intervenes directly with legislative, executive, and local officials, and appears before state and federal executive agencies. Within his administrative litigation practice, Matt advises and counsels health care providers subject to federal and state regulatory actions.

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Managed Care Narrow Networks

Narrow networks (managed care provider networks that include a limited choice of participating healthcare providers and suppliers) have been widely criticized by consumers and consumer-rights groups, particularly in light of the number of narrow network products that are included in the ACA exchange marketplace.  Use of narrow networks by self-insured businesses is also growing more prevalent.  For consumers who have multiple options for insurance coverage, the question is often one of choice – am I willing to pay more in premiums in order to continue to see my existing doctor, go to the hospital of my choice, or have a wider range of options if I need to see a specialist?

From the doctor’s perspective, however, narrow networks are very confusing.  In many cases, it is unclear why a particular doctor is, or is not, allowed to participate in the network.  In some cases, only certain physicians are invited to participate in the network, leaving other physicians without knowledge that the plan even exists until a patient calls to find out why the physician does not participate.

While willingness by the physician or physician group to accept the reimbursement rates offered by the payor is one criterion for participation in the narrow network plans, other criteria come into place as well.  An invitation to participate in a narrow network may be based upon the payor’s rating of the ability of the physician to offer quality of care and to provide care efficiency (a cost-based rating system).  The tier and rating systems, however, are not consistent among payors and often criticized for producing inaccurate, irrelevant and unreliable results.  Physicians also worry that there may be a loss of professional autonomy if physicians are pressured, in the course of providing care, to meet the tier and rating criteria developed by the payors in order to participate in the narrow networks rather than to exercise independent medical judgement.

A number of measures have been recently introduced to address consumer-driven concerns with narrow networks.   The Patient Protection and Affordable Care Act – HHS Notice of Benefit and Payment Parameters for 2017 (available here: https://www.federalregister.gov/articles/2015/12/02/2015-29884/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2017) proposes that states should be required to develop rules to test the adequacy of provider participants in payor networks.  In addition, the National Association of Insurance Commissioners has been working to update model legislation regarding plan network access and adequacy.  Finally, legislation regarding network adequacy has been adopted or proposed in a number of states.  Typically, state laws incorporate rules regarding maximum travel distances for a patient to see a participating provider, maximum wait-times and/or acceptable provider-to-beneficiary ratios.

If you have questions regarding your relationship with third-party payors, such as managed care contracting, billing audits, or inclusion in narrow networks, Parker Poe has a number of experienced attorneys able to assist.

Joy Hord

Joy Hord

Joy Hord focuses her practice on regulatory and compliance matters specifically related to the health care industry. Her clients include hospitals, physicians, pharmacies and other health care providers. Ms. Hord also has significant experience representing health care professionals and organizations with business law and transactional issues, such as mergers, acquisitions and joint ventures. Ms. Hord leads Parker Poe’s Health Care Practice, which includes attorneys from the firm’s North Carolina and South Carolina offices.

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Parker Poe Hosts Health Care Symposium on Supreme Court Decisions


Raleigh, NC –  On July 16, 2015, Parker Poe hosted a Health Care Symposium co-sponsored by the North Carolina Society of Health Care Attorneys, the Federal Bar Association’s Health Law Section, and the Federal Bar Association’s Eastern North Carolina Chapter.

The Symposium was a review of the United States Supreme Court’s decisions impacting health care in the 2015 term. Panelists reviewed the Court’s opinions and their legal and practical implications. The Symposium was designed for health care providers, lawyers, policy makers, and others interested in health law and policy.

Matt Wolfe, an attorney  in Parker Poe’s Raleigh office, moderated the Symposium’s panels.  Matt was joined by Kimberly Cogdell Boies of NCCU Law; Catherine Dunham, Elon Law; Mark Hall, Wake Forest Law; Joan Krause, UNC Law; Jane Perkins, National Health Law Project; Barak Richman, Duke Law; Richard Saver, UNC Law; and Don Taylor, Duke Public Policy. Click here for a link to the video of the session.

If you would like further information about topics discussed, please contact Matt Wolfe at 919-835-4647 or mattwolfe@parkerpoe.com.

Matt Wolfe

Matt Wolfe

Matt Wolfe concentrates his practice in the areas of administrative litigation, government relations, and other regulatory matters. Matt formulates comprehensive political and public relations strategies on a broad range of federal and state policies. He drafts and monitors legislation, intervenes directly with legislative, executive, and local officials, and appears before state and federal executive agencies. Within his administrative litigation practice, Matt advises and counsels health care providers subject to federal and state regulatory actions.

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Health Insurance Premium Subsidies Upheld by Supreme Court

On June 25, 2015, the United States Supreme Court issued the much anticipated decision in King v. Burwell and concluded that the tax credits allowed to eligible taxpayers for premiums paid under a Marketplace health insurance plan are available irrespective of whether a taxpayer enrolled in a state-operated exchange or a federal exchange. By doing so, the Supreme Court rejected the challengers’ literal reading of the applicable provision in the Affordable Care Act (the “Act”), which provides that tax credits are allowed if enrollment occurs though “an Exchange established by the State.”

The Supreme Court expressly acknowledged that the tax credits are a key component of the Act and are meant to make health insurance affordable for households with incomes between 100% and 400% of the federal poverty line. The Supreme Court also noted that the literal reading suggested by the challengers would render many provisions of the Act inapplicable. The Act would then be mostly ineffective in its attempt to require most individuals to obtain health insurance. The Court decided that the language at issue could not be read in isolation, but had to be interpreted in the context of the Act read in its totality. The Court stated that “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.” It then concluded that tax credits are allowed to all eligible taxpayers, even if they enrolled through a federal exchange.

This decision constitutes the second rejection by the Supreme Court of a major challenge to the Affordable Care Act. It is a clear indication that employers should continue to take appropriate steps in their implementation of health care reform.

Jonathan Crotty

Jonathan Crotty

Jonathan Crotty has been a successful counselor and problem solver for large and small employers in the Carolinas and beyond for over 20 years. He heads Parker Poe’s Employment and Benefits practice group and represents employers in all aspects of the employment relationship, from hiring to discharge. Mr. Crotty provides guidance to employers as they navigate the complex array of laws and regulations applicable to the employment relationship, including employment discrimination laws, OSHA compliance, FMLA, and wage and hour matters. If employers face legal or administrative claims resulting from their employees and employment practices, he defends and resolves those disputes in line with the client’s goals and expectations.

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OIG Releases Health Reform Oversight Plan

Last week, while many of us were digging out from one snowstorm and bracing for another, the United States Department of Health and Human Services (“HHS”) was keeping busy. HHS lawyers were preparing to defend a key regulation under the Affordable Care Act (“ACA”) before the U.S. Supreme Court, and HHS’ Office of Inspector General (“OIG”) released its Health Reform Oversight Plan (“the Oversight Plan”) for the 2015 fiscal year. The OIG is charged with protecting the integrity of HHS programs and the welfare of program beneficiaries. It carries out this mission through a variety of initiatives, including audits, investigations, evaluations and enforcement activities.

The Oversight Plan identifies the OIG’s four key strategic goals in overseeing ACA programs: (1) fighting fraud, waste and abuse; (2) promoting value, safety and quality; (3) securing the future; and (4) advancing excellence and innovation. With these goals in mind, the Oversight Plan highlights two key areas of focus for the OIG: health insurance marketplaces and other ACA-related reforms.Read More

Amanda Hayes

Amanda Hayes

Amanda Hayes counsels clients in connection with mergers and acquisitions, divestitures and other business matters, with a particular focus on the health care industry. She regularly serves as lead counsel on acquisitions and divestitures, guiding the client through deal structuring, due diligence, drafting, negotiation and closing. In addition to health care, Ms. Hayes’ mergers and acquisition experience includes a variety of industries, such as manufacturing, retail, automotive, contract research, environmental remediation, engineering and construction supply.

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Supreme Court Case Does Not Directly Challenge Obamacare, But Could Lead to Its Implosion.

The media coverage in the run-up to today’s Supreme Court oral arguments in King v. Burwell has described King as an attack on Obamacare. That isn’t quite right. Understandably, some of the imprecise language is due to the need to make the “news fit.” But some of the media descriptions create confusion about what the action is and what the implications to the federal health law would be were the Supreme Court to decide in the challengers’ favor.

The King plaintiffs are not challenging the constitutionality of the Affordable Care Act (“ACA”) or Obamacare. In the last Supreme Court case grappling with the ACA, National Federation of Independent Business v. Sebelius, 132 S. Ct. 2566 (2012) (“NFIB”), the challenger was directly challenging the ACA. In NFIB, the main issue was whether Congress had the authority to mandate that individuals purchase health insurance or pay a penalty.  Because the provision was enacted as part of the ACA, there was no dispute that Congress intended to impose the individual mandate when enacting the ACA. Ultimately, in an opinion authored by Chief Justice Roberts and joined by a majority of the justices, the Supreme Court determined that Congress had the authority to impose individual mandates under Congress’ taxing power.

In the King case, the challengers are not attacking the constitutionality of the ACA. The challengers are not attacking the ACA itself. Instead, the challengers are questioning the IRS’ implementation of the ACA in extending tax subsidies to individuals who have purchased health insurance plans in States that have not set up their own health insurance exchanges and instead rely upon the default federal exchange. The King plaintiffs point to the ACA’s language authorizing subsidies only to individuals who buy insurance on an “Exchange established by the State.”

If the Supreme Court agrees with the challengers’ argument that the ACA limits subsidies to State-run health insurance exchanges, the ACA will remain intact. Nothing about the law itself would directly be impacted. The implications for such a ruling, however, would be significant. If the Supreme Court were to side with the plaintiffs, the Obama administration would not have any ability to extend subsidies to the affected individuals. According to the federal government, more than 8.5 million of the 11.4 million people who have acquired health insurance through the exchanges would no longer be eligible for subsidies.

One solution would be for the affected States to set up their own exchanges.  In some States, however, this solution would be politically or logistically challenging.  Another potential solution would be for President Obama and Congress to “fix” the law to extend subsidies to individuals in States that use the federal exchange. This statutory change could be made by simply amending the language of the ACA.

Given that both the U.S. House of Representatives and the U.S. Senate are now controlled by Republican majorities, it is unlikely that Congress would change the law without demanding more significant and fundamental reforms to the ACA. This would set up a showdown between President Obama and Congressional Republicans to see who blinks first. If the Congress and the President could not reach a compromise, it could create what some of have called a “death spiral,” wreaking havoc on the insurance markets and potentially the ACA. Even though the Supreme Court would not have struck down the ACA, the federal health law could collapse under its own weight. Today’s oral arguments contained some drama, and all signs point to it being a close case.  If the Supreme Court sides with the plaintiffs, the high drama may be yet to come.

Matt Wolfe

Matt Wolfe

Matt Wolfe concentrates his practice in the areas of administrative litigation, government relations, and other regulatory matters. Matt formulates comprehensive political and public relations strategies on a broad range of federal and state policies. He drafts and monitors legislation, intervenes directly with legislative, executive, and local officials, and appears before state and federal executive agencies. Within his administrative litigation practice, Matt advises and counsels health care providers subject to federal and state regulatory actions.

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