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New California Medical Waste Law Impacts Out-of-State Manufacturers and Distributors with Costly Compliance Mandates

In late 2018, California passed a new law that will, in the near future, present sweeping changes to the pharmaceutical industry and certain medical device manufacturers.  The new law amends the existing California Integrated Waste Management Act and is expected to be a boom for medical waste disposal companies who stand to obtain significantly more business.  While the law was signed by the California Governor nearly two years ago, the regulations will go into effect in a few months (by January 1, 2021).  The original bill, dubbed the “California Sharps and Drug Takeback Bill”, requires a manufacturer of covered drugs or home-generated sharps waste, to offer safe disposal methods for their customers’ used and unused products.  The law has potentially sweeping affect because it encompasses all covered drugs and home generated sharps waste that are sold or offered for sale in California.

OSHA Fines Healthcare Facilities for Improper Use of N95 Respirators

Employers beware, particularly those in healthcare sectors.  If you provide a NIOSH-approved N95 “respirator” to protect employees from COVID-19, there are a number of OSHA respiratory protection standards that must be followed in a comprehensive Respiratory Protection Program.  The Department of Labor OSHA’s July 21, 2020, national press release makes clear that OSHA will seek the maximum possible penalties for serious violations against companies that do not fully satisfy the respiratory protection standards.

Re-Opening Medical Practices Following COVID-19 Outbreak

Over the last couple of weeks, a great deal has been written about the steps hospitals should take as they begin to provide elective procedures again as the COVID-19 outbreak slowly subsides in some parts of the US.  Lurking in the shadow of this issue is the question of what steps medical practices and outpatient clinics (“Medical Practices”) should take as they begin the process of returning to normal operations.

Retroactive Change in Distribution Methodology for Provider Relief Funds May Trigger Refunds

As I am sure you know, the U.S. Department of Health and Human Services (HHS) began distributing approximately $50 billion in Provider Relief Funds provided under the CARES Act between April 10 and April 17.  The initial distribution of Provider Relief Funds (consisting of approximately $30 billion) was distributed among healthcare providers based on their “proportionate share of Medicare fee-for-service reimbursement for 2019”.  For example, a provider with $15 million of Medicare FFS revenue in 2019 and $22 million in net patient revenue for 2018 would have received approximately $930,000 of Provider Relief Funds in the initial distribution:  ($15,000,000/$484,000,000,000 (Total Medicare FFS Revenue for 2019) x $30,000,000,000).

Is Your Hospital Ready to Re-Open for Elective Medical Services?

On April 19, 2020, the Centers for Medicare and Medicaid Services (“CMS”) provided its initial guidance to hospitals and other healthcare facilities (collectively, “Hospitals”) as they begin to consider the timing for re-commencing normal operations as the COVID-19 outbreak begins to subside in some parts of the United States (the “Re-Opening Recommendations”).[1]  In a sense, the Re-Opening Recommendations are the bookend to the guidance CMS provided on March 18, 2020 recommending that Hospitals discontinue the provision of non-emergent and elective medical services and treatments during the COVID-19 outbreak.[2]  In each case, the guidance provided by CMS is neither legally mandated nor enforceable.  Instead, the guidance merely provides a framework or frame of reference for use by Hospitals as they consider these decisions.

Public Health and Social Services Emergency Fund Payments

Many healthcare providers received an unanticipated cash infusion on or around April 10, 2020 (“Emergency Fund Payment”).  Accompanying the payments was a list of terms and conditions attached to the funds.  The U.S. Department of Health and Human Services (HHS) has stated that forms and additional information will be forthcoming; but in the meantime, the only available guidance is a letter to providers and the list of terms and conditions.

State Disaster Management Plans Impact Hospital Response to COVID-19 Outbreak

One of the most heavily-debated legal and ethical issues to arise during the current COVID-19 outbreak is what methodology a hospital should use to allocate ventilators when the number of patients who need a ventilator exceeds the hospital’s supply of ventilators.  Even more heavily discussed is whether a hospital should disconnect a patient from a ventilator against the wishes of the patient and his/her family in order to use that ventilator for another patient with a statistically greater chance of survival.

The CARES Act and Substance Use Disorder Records: Confidentiality Updates

Section 3221 of the CARES Act, signed into law on March 27, 2020, sets the stage for HHS to make significant changes to 42 C.F.R. Part 2, governing the confidentiality of Substance Use Disorder (“SUD”) records. Under the Act, HHS has 12 months to work with appropriate Federal agencies to make revisions to 42 C.F.R. Part 2 consistent with Section 3221’s mandates.

Prohibition on Beneficiary Inducements Hinders Rural Hospital Efforts to Aid Communities During COVID-19 Outbreak

During times of national or local crisis, people often look to the pillars of their communities, local employers, charities and other publicly-supported institutions, to provide much needed resources and stability.  In many rural communities, the local hospital fits into all three categories being one of the largest (if not they largest) local employer, charity and publicly-supported institution in the community (other than the local government).  As a result, people often look to hospitals during times of crisis, not just for healthcare services but also for the other resources needed in their lives (e.g., food, housing, financial assistance, etc.).

It’s Time to Establish (or Re-Constitute) an Ethics Committee

With the potential of scarce resources resulting from the COVID-19 virus, rural hospitals should consider taking immediate action to establish or reconstitute a hospital ethics committee. Although relatively common in large urban hospitals, in our experience ethics committees are relatively rare in rural hospitals. In rural settings, “typical” ethics issues such as end-of-life decisions are often resolved through informal interactions among patients, families, physicians, and administration. However, the COVID-19 pandemic is likely to (if it has not already) raise not-so-typical issues for hospitals that will require a more structured approach. It is likely that hospitals will face issues never before considered about how to ethically apportion scarce resources such as masks, gowns, respirators, ICU beds, and ventilators.

New Blanket Waivers of the Stark Law During COVID-19 Outbreak

On March 30, 2020, Alex M. Azar II, the Secretary of the Department of Health and Human Services, under the authority given to him under Section 1135(b) of the Social Security Act (42 U.S.C. §1320b-5)[1], issued a series of waivers of the Stark Law (42 U.S.C. §1395nn).[2] Unlike the case-by-case waivers of the Stark Law that Secretary Azar previously gave the Centers for Medicare and Medicaid Services (“CMS”) authority to issue to individual designated health services providers based on their specific request[3], the Stark Law waivers issued by the Secretary on March 30 apply to all designated health services providers.  As a result, these Stark Law waivers are referred to as blanket waivers.

DC Federal Court Limits Former OCR Guidance on Medical Record Fees

The DC Federal District Court issued an opinion in Ciox Health, LLC v. Azar, et al., Case No. 18-CV-00040 (D.D.C. January 23, 2020) that reverses portions of guidance issued by the Office for Civil Rights (“OCR”) in 2016 related to the fees that a healthcare provider may charge for medical records that are requested by a patient and directed to a third party.  The original HIPAA Privacy Rule included provisions that a “covered entity” (1) must provide patients the right to access his or her protected health information (“PHI”) within a designated record set and (2) could only charge a reasonable cost-based fee for such access. In 2009, the HITECH Act amended HIPAA to provide that a patient could request that the patient’s access to PHI maintained in an electronic health record (“EHR”) be directed to a third party.  In 2013, the Omnibus Rule further broadened the third party directive and allowed patients to make this third party directive for access to PHI contained in any format.  Lastly, in 2016, OCR issued guidance that applied the fee limitation from the original HIPAA Privacy Rule to situations in which the patient directs the PHI to a third party.

Updated Tools for Your HIPAA Toolkit: Medical Record Fees

A Missouri federal court granted a motion to dismiss this week in a case against a provider and medical record processing company.  In the case, a patient alleged that a “search and retrieval” fee imposed in response to a patients request for access to medical records violated the Missouri Merchandizing Practices Act.  In dismissing the claim, the court only addressed Missouri law as the allegations did not involve alleged violations of HIPAA.  The outcome in this Missouri case is similar to the outcome in an unrelated  Tennessee case against the same medical records company that was dismissed earlier this summer.  The Tennessee case alleged multiple violations of Tennessee law relating to the fees imposed for access to medical records, using HIPAA as the standard for medical records fees.  In dismissing the case, the Tennessee court found that neither HIPAA nor Tennessee law provide a private cause of action for excessive medical record fees.  The Tennessee case is pending appeal.

Updated Tools for Your HIPAA Toolkit: Security Risk Assessment

In the wake of the record setting $16 Million dollar settlement and resolution agreement with Anthem, Inc, the Office for Civil Rights (OCR) and Office of the National Coordinator for Health Information Technology (ONC) released a new version of their Security Risk Assessment tool.  The new tool and recent settlement agreement renew the emphasis of OCR on the performance of HIPAA Security Risk Assessments by covered entities and their business associates.  

Ramifications for Missouri Physicians of Enhanced Mo HealthNet OPI Program

Effective March 1, 2018, the Missouri Department of Social Services (“MDSS”) – Mo HealthNet Division (“Mo HealthNet”) began working collaboratively with the Missouri Department of Mental Health and the Missouri Department of Health and Senior Services to enhance the Mo HealthNet Opioid Prescription Intervention (“OPI”) Program. 

Pass Through Deduction in New Tax Bill Unlikely to Slow Trend Toward Industry Consolidation

The Tax Cuts and Jobs Act of 2017 signed into law on December 22, 2017 by President Trump added a new deduction for noncorporate taxpayers (i.e. S corporations, partnerships, sole proprietorships, and trusts) who have qualified business income.  This deduction, found in section 199A of the Internal Revenue Code, is also referred to as the “business pass-through income deduction.” 

No Good Deed…: Allowing Part-Time Employees to Make Health FSA Contributions May Trigger ACA Penalties

When it comes to health coverage, many employers draw a distinction between full-time and part-time employees. To be eligible to enroll in the employer’s health plan, an employee must work a minimum number of hours per pay period. But many of those same employers then allow even part-time employees to contribute to a health flexible spending account (“health FSA”). After all, doing so costs the employer nothing (and even saves a modest amount in employment taxes), and why not at least give those employees an opportunity to pay some of their medical expenses on a pre-tax basis? Unfortunately, this paternalistic approach may now subject an employer to substantial daily penalties under the Affordable Care Act (“ACA”).