Government Issues

Seemingly picking up where we left off in our recent white paper and Advisory Board article, the Obama administration released a 166-page draft plan January 30th intended to drive providers and patients toward a common set of electronic clinical information and a commitment to more fully connected EHR systems by the end of 2017.

On Jan. 26, 2015, Secretary Sylvia M. Burwell announced the goals and a timeline of the U. S. Department of Health & Human Services (“HHS”) to move the Medicare program, and the healthcare system at large, toward paying providers based on quality, rather than quantity, of care they give to patients.

Brian G. Flood of Husch Blackwell LLP‘s Austin office participated in a recent forum on “Managing Fraud and Bribery Risks in the Healthcare Sector.”

The Q&A Forum forms part of a Special Report on Corporate Fraud & Corruption, which appears in the February 2015 issue of Financier Worldwide magazine.

For the Q&A Forum, Financier…

Due diligence is often perceived as a mundane part of the mergers & acquisitions (M&A) process, but its importance in healthcare transactions is critical. Due diligence is one of the first steps of any transaction and involves a buyer undertaking an in-depth examination of the target to evaluate the business and uncover potential issues or liabilities. In the healthcare industry, diligence is especially important considering the heavy regulation of the industry, the unique areas of risk, and the significant liabilities that could be imposed upon a buyer if issues and liabilities are not identified before the transaction closes.

The new Rules (for Vending Machines and Menus) are based on changes made as the result of the Affordable Care Act. These changes were made by adding two new sections to Section 403 of the Food, Drug and Cosmetics Act, which describes Mislabeled Foods. The new sections, found under FDCA §403(q)(5)(H), enables the FDA to regulate the labeling requirements for Restaurants, Retail Food Establishments and Vending Machines.

Late last year, the U.S. Food and Drug Administration finalized a new set of Rules pursuant to the new §403 governing how and where caloric content must be displayed. As a result, beginning on Dec. 1, 2015, and Dec. 1, 2016, certain restaurants and vending machine operators, respectively, will be forced to disclose the calorie content of their products to consumers.

Recent trends in the U.S. Food and Drug Administration’s (“FDA’s”) utilization of Complete Response Letters (“CRLs”) would indicate there may be a disconnect between the intended use of CRLs and the reality of how they are actually being used by the FDA. Pharmaceutical companies seeking to acquire FDA regulatory approval for their New Drug Applications (“NDAs”) or Abbreviated New Drug Applications (“ANDAs”) will often receive a CRL from the FDA instead of an approval.

The U.S. Food and Drug Administration (“FDA”) panel’s unanimous recommendation to approve Sandoz’ application for a filgrastim biosimilar of Amgen’s Neupogen® on Jan. 7, 2015, brings into sharp focus the provisions of the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) for resolving patent issues. The imminent approval by the FDA of Sandoz’ application now leaves resolution of patent issues for Sandoz to contend with as it prepares to launch its biosimilar filgrastim product. The lawsuit to resolve these issues, however, has just begun.

Despite getting a rare Writ of Mandamus from the D.C. Circuit Court of Appeals establishing that its internal investigations were covered by the attorney-client privilege, Kellogg Brown & Root must still turn them over. As predicted in our earlier posts on Barko v. Halliburton, Judge James Gwin has ruled that KBR waived the attorney-client privilege that would otherwise have shielded KBR’s internal investigation documents from discovery. His rationale is reflected in three opinions published in November and December 2014.

Last week, Judge Richard J. Leon of the Federal District Court for the District of Columbia vacated the “third-party” regulation on the federal companionship exemption, which would have prevented third-party employers from utilizing the companionship exemption from minimum wage and overtime, as well as the “live-in” exemption from overtime.

On Dec. 31, 2014, the judge temporarily stayed the regulations that would have significantly altered the duties an exempt companion could provide. The regulations, which were set to go into effect at midnight on Dec. 31, would have prevented exempt companions from providing any “general household work” at all, and would have prevented them from engaging in any “care” of the client for more than 20 percent of their working time.