This is the second article in our series on Association Health Plans (AHP). This week’s discussion focuses on the potential impact of the Department of Labor’s (DOL) decision to relax some AHP requirements.

The U.S. Department of Labor (DOL) recently expanded the ability of small groups and the self-employed to obtain health coverage through AHPs. A final rule published June 21 eases certain AHP requirements and restrictions.

A new federal rule gives small employers and the self-employed an additional avenue for obtaining group health coverage.

The final rule, released by the U.S. Department of Labor (DOL) June 19 and published June 21, broadens the definition of “employer” for purposes of determining who can establish multiple employer group health plans under section 3(5) of the Employee Retirement Income Security Act of 1974 (ERISA).

On June 7, 2018 the United States Patent and Trademark Office (USPTO) issued a new Memorandum that clarifies its view of Subject Matter Eligibility, under 35 U.S.C. § 101, regarding the patentability of Personalized Medicine discoveries.

The Memorandum was prompted by the Federal Circuit’s recent Vanda decision, where the Court provided its own insights as to the Subject Matter Eligibility of Personalized Medicine patent claims. [1] The claims in Vanda recited a method of treating a patient suffering from schizophrenia with the drug, iloperidone, and included specific steps, such as administering iloperidone to the patient in an amount guided by the genotype of the patient, which can predict the rate of drug metabolism. The Court summarized Vanda by stating: “The inventors recognized the relationships between iloperidone, CYP2D6 metabolism, and QTc prolongation, but that is not what they claimed. They claimed an application of that relationship.”

With the global telehealth market projected to more than quadruple in value over the next five years, even slow-moving government payors have responded to the pressure to expand reimbursement options for telemedicine services. But reimbursement woes continue to top the list of concerns voiced by providers, and the U.S. Department of Health and Human Services, Office of Inspector General (“OIG”) is keeping a watchful eye on reimbursement-related growing pains. On April 30, 2018, OIG released a report that identifies the impact of some of these growing pains on Medicare claims payments.

The National Labor Relations Board (the “Board”) recently held that a California hospital illegally maintained a dress code policy that effectively prohibited employees from wearing pins and badge reels with union insignia.  The hospital’s policy at issue required that “[o]nly [employer] approved pins, badges, and professional certifications may be worn.” In addition, employees were only permitted to wear identification badge reels with “approved logos or text.”

For those of you who may have lost hope regarding the patentability of personalized medicine discoveries, here’s some encouragement.  Recently the Federal Circuit affirmed the validity of a patent directed to a method of treating schizophrenia, which is based on genetic testing of the patient. Vanda Pharms. Inc. v. West-Ward Pharms. Int’l Ltd., Nos. 2016-2707, 2016-2708, 2018 WL 1770273, —F.3d — (Fed. Cir. Apr. 13, 2018).  The Court found that the claims of U.S. Patent No. 8,586,610 were patent eligible and not drawn to a law of nature under 35 U.S.C. § 101.  Claim 1 is representative and is shown below:

On April 2, 2018, Colorado Governor John Hickenlooper signed Senate Bill 18-082 into law. Senate Bill 18-082 amends Colorado’s non-compete statute, C.R.S. § 8-2-113, and curtails the ability of a former employer to enforce a non-compete agreement against a departing physician by seeking damages when the physician is treating patients who have “rare disorders.” The stated purpose of this law is to protect patients with rare disorders who would otherwise not have ready access to a physician with the necessary expertise to treat the disorder.

The United States Department of Justice (“DOJ”) has intervened in a False Claims Act (“FCA”) case against a Florida compounding pharmacy, Diabetic Care Rx, LLC d/b/a Patient Care America (“PCA”), and, in an unexpected move, named PCA’s private equity sponsor and controlling shareholder, Riordan, Lewis & Haden, Inc. (“RLH”), as a co-defendant. The DOJ complaint accuses PCA, RLH and two PCA officers/directors (who were also RLH partners) of overseeing a kickback scheme which DOJ alleges induced referrals that resulted in TRICARE paying over $68 million for medically unnecessary compound drug prescriptions. DOJ alleges the illegal scheme was designed by RLH.