Healthcare

As the novel coronavirus outbreak continues, the federal government and commercial health insurers have taken significant steps to increase Americans’ access to treatment and testing. In the past week, the federal government and private insurers have issued a number of guidance documents expanding coverage and payment requirements in an effort to minimize the spread of the virus. As with any changes in coverage and reimbursement, healthcare providers offering telehealth services should carefully review these changes and take steps to ensure that all regulatory and coverage requirements are met prior to submitting claims for reimbursement.

I. Medicare

On March 6, 2020, the bipartisan Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020 (“Coronavirus Appropriations Act”) was signed into law authorizing federal spending to combat the ongoing coronavirus outbreak in the United States. This Act, among other things, gives the United States Department of Health and Human Services’ (“HHS”) secretary the authority to temporarily waive certain Medicare requirements for telehealth services.

The Centers for Medicare and Medicaid Services (“CMS”) currently reimburses a limited set of telehealth services provided to Medicare beneficiaries subject to certain criteria under section 1834(m) of the Social Security Act. Generally, the patient receiving telehealth services must be located at one of eight “originating sites”, which include hospitals, physicians’ offices, and rural health clinics. In addition, the originating site must meet certain geographic requirements which have essentially limited the availability of telehealth to patients in rural areas. These requirements have long posed a hurdle to the expansion of telehealth despite the industry’s demand for lessened restrictions. However, with the rapid spread of the coronavirus and the possibility of facing large scale isolations and quarantines, lawmakers have signaled their willingness to expand access to telehealth to fight against this public health crisis.

Within the Coronavirus Appropriations Act is the Telehealth Services During Certain Emergency Periods Act of 2020, which sets forth the waiver authority for the secretary of HHS regarding the certain telehealth requirements. Under the Telehealth Services During Emergency Periods Act, the secretary is authorized to temporarily waive the originating site and geographic requirements for telehealth services provided to Medicare beneficiaries located in an identified “emergency area” during an “emergency period” when provided by a qualified provider. To qualify for the waiver, the provider must have treated the patient within the previous three years or be in the same practice (i.e., as determined by tax identification number) of a practitioner who has treated the patient in the past three years. The bill also lessens the telecommunications requirements by allowing Medicare beneficiaries to receive telehealth services via their smartphones (i.e., telephones that allow for real time, audio-video interaction between the provider and the beneficiary). Because the federal government has declared a nationwide public health emergency as a result of the coronavirus, the waiver will apply across the country until there is no longer a nationwide public health emergency.

In this “Hospice Insights: The Law and Beyond” episode, the hospice team shares insights on how to manage and succeed in responding to additional documentation requests (“ADR”) stemming from Targeted Probe and Educate (“TPEs”) projects. We discuss the unique features of TPE and winning strategies for responding. Check out the Hospice Resource Library for tips…

We are thrilled both to welcome four new hospice attorneys to Husch Blackwell and for the launch of their new podcast “Hospice Insights: The Law and Beyond.”

In this first episode, Meg Pekarske, Bryan Nowicki,  Erin Burns and Andrew Brenton discuss the exciting opportunities resulting from their move to Husch Blackwell. The episode is available…

There is a trend in healthcare toward customer-centrism—placing the interests of the consumer before all other considerations.  The trend may be slow in its growth, but for those healthcare organizations that embrace the idea and obsess over improving the consumer’s experience throughout their healthcare journey, there can be a payoff.  But improving consumer experience in healthcare takes a commitment and courage to venture outside of traditional comfort zones.

For years, the polarized debate over healthcare policy has included advocacy for a more consumer-directed healthcare system.  The argument in favor says consumers and providers alike must have more skin in the game—financial responsibility—and better information with which to make more consumer-like decisions.  For providers, the “skin” means risk-based contracts.  For consumers, it means higher deductibles and other out-of-pocket cost exposure.  There has been significant movement in this direction. 

The Texas Comptroller issued an advisory opinion reversing a longstanding policy relating to Texas sales taxation of medical billing services that will impact all Texas medical management and medical billing companies. Originally set to be effective January 1, 2020,  the Comptroller last week delayed the implementation of the new position until April 1, 2020. However, the opportunity exists to work with the Comptroller to amend Texas’ tax law in the 2021 session of the Texas Legislature and prevent the new position from being implemented.

The potential impact of this policy cannot be understated. For both third-party medical billing companies and Texas medical management companies (even those wholly-controlled by the physicians, dentists, and other medical professionals it manages), the scope of “medical billing services” and the extent to which consideration flows for such services needs to be analyzed and a determination made, if required, to begin withholding and charging Texas sales tax on the required component next year. For example, the need to separately account for and state the taxable versus nontaxable component of any agreement that provides for a lump-sum fee is important (the “separately stated” strategy for sales tax compliance). With many management agreements, a fixed amount is paid to cover a broad spectrum of services.

In this short recording, Healthcare attorneys Wakaba Tessier and Erica Ash discuss a recent Department of Justice (DOJ) settlement involving a specialty pharmacy and its private equity owner. This case is significant because – not only did the DOJ name the compounding pharmacy and its two executives – but it also named the private equity firm that owned

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The Centers for Medicare and Medicaid Services (CMS) recently issued a final rule that includes several anti-fraud measures and significantly enhances the agency’s authority to exclude new and current providers and suppliers that are identified as posing an undue risk of fraud, waste or abuse. The new measures require providers and suppliers to disclose to CMS upon its request and upon application for initial enrollment or revalidation any “affiliations” or parties who have one or more defined “disclosable events.” The rule went into effect November 4, 2019.

The new rule requires all providers to disclose any current or prior affiliations within the past five years that the provider—or any of its owning or managing employees or organizations—has or had with a current or former Medicare provider with a “disclosable event,” which is triggered by any of the following:

  • an uncollected debt to CMS
  • current or previous payments suspension from a federal health care program
  • current or previously exclusion from healthcare programs
  • previous denial, revocation or termination of Medicare, Medicaid or CHIP billing privileges

Part V: Material Deal Terms to Negotiate in Private Equity Transactions

This is the fifth article in our series on “Closing a Private Equity Transaction.” In Part I, the benefits of preparing for a transaction were explained, along with how best to prepare. In Part II, the letter of intent was discussed, and key terms were identified. In Part III, we walked through what to expect during the due diligence process. In Part IV, we outlined the various healthcare regulatory issues that arise in private equity transactions. Here, we highlight some of the more material terms typically negotiated in the definitive transaction documents.

The primary definitive document will be the purchase agreement (which will either be an asset purchase agreement or a stock purchase agreement, depending on the structure of the transaction). The first step will be to confirm the agreement contains the various terms negotiated in the letter of intent. (See Part II for a discussion of the terms that should be negotiated.) While the LOI will cover the major deal terms, the purchase agreement will expand upon those terms in more detail, and include other provisions necessary to effectuate the transaction.

Part IV: Healthcare Regulatory Issues that Arise in Private Equity Transactions

This is the fourth article in our series on “Closing a Private Equity Transaction.” In Part I, the benefits of preparing for a transaction were explained, along with how best to prepare. In Part II, the letter of intent was discussed, and key terms were identified and explained. In Part III, we walked through what to expect during the due diligence process. Here, we identify the various healthcare regulatory issues that arise in private equity transactions.

The Healthcare industry is heavily regulated at both the federal and state levels, and regulatory issues will be the greatest area of concern for a buyer. The buyer will review the information disclosed through the due diligence process to confirm both pre- and post-closing regulatory compliance.

No business is perfect, and it’s not uncommon for areas of past non-compliance to be uncovered. A buyer needs to understand what they will be potentially inheriting in terms of risk. This gives the parties a chance to correct deficiencies, which may include a self-disclosure or refund, and make improvements going forward.

Part III: Due Diligence

This is the third article in our series on “Closing a Private Equity Transaction.” In Part I, the benefits of preparing for a transaction were explained, along with how best to prepare. In Part II, the letter of intent (LOI) was discussed, and key terms were identified and explained. Next, we walk through the due diligence process, which begins immediately after the parties execute the LOI.

Due diligence is used by both the buyer and seller to confirm the decision to proceed with an ultimate closing. Typically, the buyer’s examination of the seller’s business will be comprehensive and include information covering the past three to five years. This is necessary in order for buyer to understand what it will be purchasing, in terms of profitability, operations, business relationships, and potential liabilities.