The Centers for Medicare & Medicaid Services (“CMS”) issued its Final Rule on Nov. 16 for the Comprehensive Care for Joint Replacement (“CJR”) model, which mandates that CMS pay providers a bundled payment per episode of care for a Medicare beneficiary undergoing a hip or knee replacement, also referred to as lower extremity joint replacement or LEJR. This marks the first mandated episode-based bundled payment by CMS; all other episode-based bundled payments programs (e.g., Bundled Payment for Care Improvement, or BPCI, initiatives) are voluntary with regard to provider participation. The CJR model will require hospitals in 67 markets to participate in the program initially. A list of the participant hospitals in the selected markets is available here.

In the 2016 Physician Fee Schedule Final Rule published on Nov. 16, 2014, the Centers for Medicare & Medicaid Services (CMS) finalized the proposed exception for timeshare arrangements that we discussed in our earlier blog post [80 Fed. Reg. 70,886, 71,300 (Nov. 16, 2015)]. As we stated in our earlier post, a timeshare or part-time “space use” arrangement typically provides a physician with the use of office space during scheduled time periods. The space usually includes furnishings with basic medical office equipment, supplies and support personnel so that the physician is able to use the space, on a turn-key basis, to see patients during scheduled times. Prior to the implementation of the new timeshare exception, these types of arrangements needed to be structured to comply with the Rental of Office Space Exception, which includes “exclusive use” requirements that many hospitals and physicians found burdensome [42 C.F.R. § 411.357(a)].

The Office of the Inspector General (OIG) for the U.S. Department of Health & Human Services recently published its Fiscal Year 2016 Work Plan, which summarizes OIG’s priorities over the coming year. Notably, the 2016 Work Plan demonstrates the OIG’s expanded focus on delivery system reform and the effectiveness of alternate payment models, coordinated care programs, and value-based purchasing.

There were also noteworthy areas of new focus for several provider types, including skilled nursing facilities, hospice organizations, ambulatory surgical centers, and physician practices.  Below we have highlighted a few key areas from the FY 2016 Work Plan that will likely impact these providers. Please note this is not intended to be a comprehensive summary of the 2016 Work Plan and is focused only on the new OIG focal areas for these certain providers.

The Wall Street Journal is reporting  that the Department of Labor’s new overtime regulations are not likely to be final and implemented until late 2016. As we discussed in prior posts, in June of this year the DOL proposed regulations that would significantly increase the salary basis test for most FLSA exemptions. The proposed change would make several million more employees eligible for overtime payments, which could have a significant impact on an employer’s bottom line. Many commentators and employers were anticipating the new regulations would go into effect either late this year or early 2016. According to the WSJ report, however, the DOL’s Solicitor of Labor, Patricia Smith, recently commented at a labor and employment law conference that the new regulations are not likely to be final before late 2016. According to the report, Ms. Smith noted the DOL received approximately 270,000 comments in response to the proposed regulations and that this, along with the complex nature of the changes, warranted additional time to complete the regulations.

Abbott Labs recently obtained a preliminary injunction prohibiting numerous pharmacies, wholesalers, and other distributors from importing or otherwise using in the U.S. Abbott’s FreeStyle® blood glucose test strips that are intended for sale internationally. Chief Judge Amon of the Eastern District of New York found that Abbott is likely to succeed on the merits of its Lanham Act claim that consumers will likely be confused by the sale of “gray market” FreeStyle test strips in the U.S.

The patentability of genes is under scrutiny all over the world.

Several weeks ago, the High Court of Australia shed light upon the patentability of nucleic acids (D’Arcy v. Myriad Genetics Inc.). Similar to the situation in the U.S. for 35 U.S.C. §101, the High Court found that an isolated nucleic acid coding for a mutant BRCA1 protein was not patentable subject matter.

Attorneys, compliance officers, accountants, and other professionals who advise clients in the healthcare industry may want to consider attending a coming event next month in Chicago. Featuring Husch Blackwell attorneys Cori Turner and Bill Hopkins, the Fundamentals of Health Law will be held Nov. 15-17.

The American Health Lawyers Association’s event will offer continuing education credits.

3D printing continues to transform the medical field. Recently, doctors in Spain produced the world’s first 3D-printed rib cage and sternum, which is made entirely of titanium. The doctors surgically implanted the metal rib cage and sternum in a cancer patient. Last month, the FDA approved the first 3D-printed drug. The drug, which Aprecia Pharmaceuticals has named Spritam, is for treating patients with epilepsy. Aprecia Pharmaceuticals’ ZipDose® Technology utilizes 3D printing that overlays multiple layers of powdered medication on top of one another until the correct dosage is reached. This type of technology can lead to easier-to-take medication that is individualized in nature with precise dosages based on a patient’s needs.

Effective Sept. 1, 2015, there are significant changes to Texas Guardianship laws. For the first time, probate courts must consider alternatives to guardianship, and supports and services available to the proposed ward before a guardianship is created. Two new alternatives to appointing a guardian now exist: Designation of Guardian Before the Need Arises and Alternate Forms of Decision-Making Based on Person-Centered Planning; and Supported Decision Making Agreement. Tex. Est. Code §§ 1002.0015 & 1357.001.

The Office of Inspector General (OIG) for the U.S. Department of Health & Human Services (HHS) issued a fraud alert on June 9, 2015, targeting physician compensation agreements that potentially violate the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b). The Anti-Kickback Statute prohibits remuneration of payment in exchange for referrals of patients receiving aid from federally funded healthcare programs (i.e. Medicare and Medicaid). The OIG alert references 12 recent settlements with individual physicians who entered into “questionable” medical directorship and office staff arrangements. The key concern in those cases centered on individual physicians entering into arrangements where the compensation did not “reflect [the] fair market value for bona fide services the physicians actually provide[d].”