The Orphan Drug Act aims to incentivize treatment of rare disorders or conditions affecting fewer than 200,000 persons in the United States through: (1) federal funding of grants and contracts to perform clinical trials of orphan products; (2) a tax credit of 50 percent of clinical testing costs; and (3) an exclusive right to market the orphan drug for approved orphan indications for 7 years from the date of marketing approval. While these financial incentives certainly make the business decision to engage in orphan drug development more palatable, the FDA does not approve orphan drugs on a separate pathway, despite the limited understanding of the diseases in question that presents developers of these drugs with problems stemming from small sample size and lack of well-defined efficacy endpoints.

A New York district court issued the first judicial opinion Monday, Aug. 3 on the Affordable Care Act’s “60-day rule,” which requires that a Medicare or Medicaid overpayment be reported and returned within 60 days of the date on which the overpayment was “identified.” The decision by Judge Edgardo Ramos provided a definition of what it means to “identify” an overpayment and thus begin the 60-day time period in which overpayments must be reported and returned. Given that the 60-day rule maintains that any person who knowingly fails to comply with this obligation within the 60-day timeframe has violated the False Claims Act (“FCA”), the potential implications of Judge Ramos’s decision are significant.

On Thursday, July 16, 2015, the Texas Health and Human Services Commission (HHSC) held a public meeting regarding its request to seek an extension of its Section 1115 Medicaid Transformation Waiver. The current waiver covered a five year period ending September 30, 2016. Under the waiver Texas has expanded Medicaid managed care, created a funding pool to offset uncompensated care and provided incentives for hospitals and other providers to develop delivery system infrastructure in Texas. Over the waiver period, Texas will commit $29 Billion to the uncompensated care and delivery system payment pools (approximately 58% or $16.82 Billion represent federal funds).

After missing several self-imposed deadlines to release new FLSA wage and hour regulations called for by President Obama, the DOL released proposed rules on Monday that will dramatically increase the number of employees eligible for overtime payments. As expected, the proposed changes focus primarily on the salary threshold for the “white-collar” exemptions to the overtime provisions of the FLSA.

National healthcare publication Modern Healthcare yesterday announced Husch Blackwell LLP is the seventh-largest healthcare law firm in the U.S. according to its 2015 rankings, up from No. 12 last year. Utilizing differing measurement techniques, American Health Lawyers Association also ranked healthcare practices, placing Husch Blackwell as fifth-largest in the country in its 2015 list, released…

The District of Columbia reached a settlement agreement with Children’s Hospital, Children’s National Medical Center Inc. and its affiliates (collectively, “CNMC”) on June 15, 2015, to resolve allegations that CNMC violated the False Claims Act by submitting false cost reports and other applications to the U.S. Department of Health & Human Services (“HHS”) as well as to the Virginia and District of Columbia Medicaid programs. Further details can be found in the Department of Justice’s press release announcing the settlement.

The U.S. Department of Health & Human Services Office of Inspector General (OIG) issued a special fraud alert on June 9, 2015, stating that physician compensation arrangements may result in significant liability. Hopefully this is not a surprise to any physician or entity that treats federal health plan beneficiaries. However, given that, historically, OIG regulatory actions largely (although not exclusively) focused on the entity from which a physician received compensation, such as hospitals, laboratories, durable medical equipment suppliers, pharmacies, etc., the June 9, 2015, fraud alert highlights the potential for physician liability in these arrangements.

New Texas Medical Board (TMB) rules effective June 3, 2015, limit the ability to prescribe drugs based only on telephonic consults. The rules also raise questions about the viability of some call-coverage arrangements. Specifically, for a physician prescribing medication, Tex. Admin. Code tit. 22 §190.8 now requires, among other things, a “defined physician-patient relationship” that must include a physical examination performed by the provider face-to-face or in accordance with Tex. Admin. Code tit. 22 ch. 170 rules for telemedicine. Significantly, the limitations do not apply to mental health services, except in cases of behavioral emergencies.

On May 7, 2015, Governor Jay Nixon signed Senate Bill 239 into law and reinstated damage caps for Missouri medical malpractice cases. While Missouri law previously limited damages in wrongful death actions, healthcare providers faced limitless verdicts in all other medical malpractice lawsuits. Not anymore.

Under the new law, plaintiffs cannot recover more than $400,000 for non-economic damages in medical malpractice actions. If the case involves claims of catastrophic personal injury or wrongful death, the cap is increased to $700,000. The term “catastrophic personal injury” is defined by statute to include cases of quadriplegia, paraplegia, loss of 2 or more limbs, brain injuries involving permanent cognitive impairment, irreversible major organ failure, or severe vision loss.