State Council Release Draft 2016 Certificate of Need Plan

There has been a lot of discussion about major changes to North Carolina’s Certificate of Need law.  As these legislative discussions continue, the State Health Coordinating Council continues its work on next year’s State Medical Facilities Plan (“SMFP”).  The draft plan is available on the N.C. Division of Health Service Regulation’s website.  Public hearings on this proposed SMFP were held in July.  Several petitions have been submitted seeking adjustments to the new determinations in the proposed 2016 SMFP.

A summary of the need determinations in the proposed 2016 SMFP is set forth below. Petitions submitted to adjust the need determinations also are listed.

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Renee Montgomery

Renee Montgomery

Renee Montgomery focuses her practice in the health law area and has extensive experience in regulatory and administrative law. For more than 25 years, Ms. Montgomery has represented health care providers and other organizations in administrative proceedings and litigation matters. Ms. Montgomery frequently lectures on health law and administrative law issues.

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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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Cloud Computing Contracts Top Issues for Healthcare Providers

An increasing number of health care providers are outsourcing the hosting and maintenance of software applications, the storage of data, and related support services.  Outsourcing can provide cost savings, rapid deployment, system scalability, other efficiencies, and appropriate data security.  It also introduces additional issues into the provider’s risk management analysis, largely based on the fact that a third party rather than the provider has possession and control of vital and sensitive assets and information.  Before you enter into a contract that includes a cloud computing component, you should consider some of the following:

  • No business decision or activity is risk free.  Risk management is a balancing process based on the particular facts and circumstances.  For example, a provider may be less concerned about its inability to access its web-based job application submission portal than its electronic health record application.  Not all risks are the same, and a provider should devote more attention and resources to managing its greatest risks.
  • Risk management is a team sport.  Effective risk management requires the participation and interaction of representatives of the intended user group, financial analysts, compliance officers, information technology and data security experts, and legal counsel experienced in advising on and negotiating the particular type of contract.

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Steve Hunting

Steve Hunting

Steve has successfully guided health care providers, electric utilities and other clients through complex information technology, transmission, generation and other commercial projects and contract negotiations for more than 25 years. His experience as in-house counsel helps him provide seasoned, practical advice and have a better understanding of the daily challenges his clients face. His objective is to help his clients achieve their business goals effectively and efficiently.

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Look Out for Meaningful Use Audits by the Office of Inspector General

The Medicare and Medicaid Electronic Health Care Record (“EHR”) Incentive Program (commonly referred to as “Meaningful Use”) provides incentive payments to eligible physicians and hospitals for adopting, implementing, upgrading, or demonstrating meaningful use of certified EHR technology.  Medicare incentive payments are authorized over a 5-year period (2011 through 2016).  As of February 2015, total EHR incentive payments exceeded $29.5 billion.

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Supreme Court Holds that Medicaid Providers Do Not Have Right to Challenge Medicaid Reimbursement Rates under Supremacy Clause

Yesterday, the United States Supreme Court issued an opinion that denies providers the right to challenge low Medicaid reimbursement rates by suing state agencies in federal court.

In Armstrong v. Exceptional Child Center (No. 14-15), several residential care providers in Idaho sued on the grounds that its Medicaid program failed to pay providers increased Medicaid rates that had been approved by the federal government.  The providers were initially successful in convincing the district court and Court of Appeals for the Ninth Circuit that the State should be forced to pay the higher rates because federal Medicaid law requires states to pay rates that are sufficient to ensure access to care.  The providers contended that they had the right to sue Idaho in federal court under the United States Constitution’s Supremacy Clause—which provides that federal law trumps State law.

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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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Proposed Exclusive Arrangement Between Lab and Physician Practices May Violate Federal Law

A laboratory proposing to enter into an exclusive relationship with physician practices has been advised that the arrangement may violate federal law.  The laboratory sought advice from the Office of Inspector General (“OIG”) of the Department of Health and Human Services on an arrangement in which the laboratory would contract with physician practices to provide all laboratory services to the practices’ patients, without regard to the patients’ health insurance coverage.  The requesting laboratory would not bill those patients whose health plans — so-called “exclusive plans” — require them to use other laboratories (nor would the lab bill the practices themselves).  In its Advisory Opinion posted on March 25, 2015, the OIG concluded that the arrangement may violate the Anti-Kickback Statute and subject the laboratory to administrative sanctions, including exclusion from federal health care programs (e.g., Medicare and Medicaid).
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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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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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Office of Civil Rights Delays Phase 2 Audits

The Office of Civil RIghts (“OCR”) recently announced that Phase 2 of the HIPAA audits would be further delayed because the audit portals and project management tools that are needed to initiate the audit process are not ready and available for usage. Phase 2 of the HIPAA audits was initially slated to begin in the fall of 2014 and was subsequently moved to late 2014 or early 2015. Currently, no timeline has been provided as to when the next round of audits will officially begin.

A delay in Phase 2 of the OCR HIPAA Audits does not mean that covered entities and business associates should not continue to make sure they are in compliance with all HIPAA regulations. The potential consequences for failure to comply with HIPAA regulations are significant. While the audit portals are still under development, it is a good time for covered entities to (i) make sure their HIPAA policies and procedures are up to date and meet the latest privacy and security requirements, (ii) create a list of all business associates that provide services to the covered entity, and (iii) conduct an internal risk assessment to identify potential risks and vulnerabilities to the confidentiality, integrity, and availability of electronic protected health information held by the covered entity.

Among other things, Parker Poe’s healthcare attorneys advise our healthcare clients about (i) compliance with HIPAA’s privacy requirements as they affect healthcare information, including preparing employee and patient notices, plan policies and procedures, plan amendments and authorization and other forms, and (ii) HIPAA compliance requirements for business associates.

Chara O'Neale

Chara O'Neale

Chara O’Neale focuses her practice primarily on the representation of hospitals, physician groups and other health care providers in the resolution of legal, regulatory and business issues for entities involved in the health care industry.

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FTC Successful Challenge to Hospital Acquisition of Physician Group

In March 2013, the Federal Trade Commission, together with the Idaho Attorney General, filed a complaint seeking to block St. Luke’s Health System’s planned acquisition of Saltzer Medical Group P.A., a multi-specialty physician practice group,  According to the complaint, the combination of St. Luke’s and Saltzer would provide St Luke’s with sufficient market power to demand higher rates for health care services in Nampa, Idaho and surrounding areas, ultimately leading to higher costs for health care consumers.   According to the findings of facts for the case, St. Luke’s and Saltzer combined practices accounted for almost 80 percent of the primary care physicians in the relevant market.  The federal district court ordered St. Luke’s to divest Saltzer’s physicians and assets.

Today (February 10, 2015), the Ninth Circuit upheld the ruling from the lower court and ordered St. Luke’s to unwind its purchase of the practice group.   The court was not swayed by St. Luke’s argument that the acquisition would lead to greater efficiency and quality of care and would help the hospital meets its obligations under healthcare reform.

History of the case is available here.

Parker Poe’s healthcare attorneys advise our healthcare clients regarding a wide range of antitrust matters, including guidance afforded to the healthcare industry as set forth in the Statements of Antitrust Enforcement Policy in Health Care.

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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Is Sunlight the Best Disinfectant?

Earlier today, CMS released data revealing financial ties between physicians and other sectors of the healthcare industry.  This August—December 2013 data is now available to the public on CMS’ website and includes 4.4 million transactions amounting to $3.5 billion in payments, involving 546,000 doctors and 1,360 teaching hospitals.  The payments disclosed on the website include:  consulting fees, speaking fees, research payments, gifts, meals, entertainment, travel, educational items, royalties, honoraria, and charitable contributions.

The release of this data was mandated by the Physician Payment Sunshine Act, part of the Patient Protection and Affordable Care Act, which aims to improve transparency of financial relationships and expose conflicts of interest between physicians and the health care industry.  Rules were promulgated requiring manufacturers to disclose certain payments and items of value given to physicians and teaching hospitals.

Starting August 1, 2013, drug and device manufacturers have been required to track all of the following: any “transfer of value” of $10 or more to physicians; transfers of value under $10 that add up to more than $100 a year; and physicians’ ownership stakes in drug and device companies.  Once reported to CMS, physicians have the opportunity to review and challenge these disclosures.

Industry and physician groups have criticized this first data release, stating that it raises more questions than answers.  Before the data was released, life science trade associations sent a letter to CMS Administrator Marilyn Tavenner expressing concern that the data will be misleading since the public will not understand the context of payments.   In August, the American Medical Association requested a delay in the release, stating that physicians were not provided adequate time to confirm the accuracy of the reported payments.  CMS ultimately decided to withhold about one-third of reported payments due to suspected inaccuracies.

The press has also been critical of CMS’ data.  Although the goal of the release is increased transparency, the website is not user-friendly.  The Wall Street Journal summarizes the problems: there is no search box; there are multiple databases; there are no bottom-line numbers; the chart has numerous columns, making it difficult to peruse.  In spite of these shortcomings, various news outlets and organizations, including Policy & Medicine, have analyzed and aggregated the data for the public.

The next release of data covering the 2014 calendar year will occur in the summer of 2015.  In the meantime, we will be watching to see if this new transparency leads to any changes in the relationships between physicians and drug and device manufacturers.

Varsha Gadani

Varsha Gadani

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.

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