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2019 Health Law Issues Crystalizing



As we approach the second half of 2019, the biggest health law issues facing health care professionals and providers have crystalized during the first half of this year. With the 2020 elections on the horizon, and nearly every poll listing health care as one of the top three issues on the minds of the American voters, health care professionals and providers must be aware of health law issues which will be driven by and will drive seismic changes in the health care delivery and reimbursement systems.

We all know that the U.S. health care system is a mess, but most of us don't fully understand how all of the pieces interact with one another, or the forces which shape the relationships between what I like to refer to as the three Ps, which are patients, providers and payors. Currently, 4 major changes are driving the health care sector and significant trends and changes in health law. Those 4 changes are technology and innovation, health insurance and payment models, alternative therapies, and in particular medical marijuana, and disruption in the health care delivery and payment systems including increasing penetration and ownership by private equity interests and strategic mergers and consolidations such as the Amazon, Berkshire Hathaway and J.P. Morgan Chase joint venture. Here's a look at the resulting top 10 health law issues facing providers and professionals as a result of these 4 major factors causing seismic shifts in the health care delivery and reimbursement systems.

  1. The Opioid Crisis

In 2018 and the beginning of 2019, the opioid epidemic has dominated news headlines and resulted in increasing government fraud and abuse enforcement activities, rapid legislative developments at both the federal and Florida levels, and the formation of a federal Opioid Fraud and Abuse Detection Unit as a new DOJ pilot program. That program utilizes data to identify and prosecute individuals who are contributing to the prescription opioid epidemic, and the pilot program funds 12 experienced Assistant U.S. Attorneys in opioid "hot-spots" for a 3-year term to the end of 2020 to investigate and prosecute health care fraud related to prescription opioids. One of those "hot-spots" is Florida, and we have seen a significant increase in the investigation and prosecution of prescribing physicians and pharmacies/pharmacists over the past 12-18 months. And make no mistake, even well-intentioned and honest physicians who prescribe opioids for their patients could be under scrutiny. The collateral effects of these investigation and prosecutions include State licensure investigations, potential medical malpractice lawsuits, peer review actions and third-party payor/managed care company scrutiny.

It is critical for Florida prescribing physicians to be aware of and comply with new laws that have gone into effect such as the 3-day limit on opioid prescriptions which went into effect in March 2018. The totality of the new federal and Florida laws and regulations going into effect are too numerous to list in this article, but are certainly something that physicians should focus on when structuring opioid prescribing compliance programs, policies and procedures for their practices and also selecting and taking continuing medical education courses particularly in the required areas of laws and rules and prevention of medical errors. If you are an opioid prescriber, it is imperative that you know and understand the regulatory and legal framework for prescribing these medications in a compliant manner in order to protect yourself from legal and regulatory liability.

  1. Value-Based Payment Models/Clinically Integrated Networks

CMS has been revamping the Medicare Shared Savings Program since August 2018. In doing so, it has not only proposed a new direction for accountable care organizations ("ACOs"), but also renewed its focus on the development of clinically integrated networks ("CINs"). While CMS delayed the start of new ACO participants from January 1 until July 1 of this year, it has been aggressively pursuing value-based payment systems such as MIPS and encouraging the development and implementation of provider-driven, patient-centered models with significant opportunity for innovation. CINs provide an excellent model for provider-driven, patient-centered models driven by clinical integration and improvement in communication and coordination of care between multiple treating providers across the spectrum of a patient's treating professionals and providers. However, it is important to note that with its renewed commitment to these types of models, CMS is recognizing that the move to value-based payment models has not occurred and expanded at CMS' expected and hoped for pace. The obstacles which have slowed it down include anti-trust, federal Anti-Kickback Statute, federal Stark Law, and HIPAA laws and regulations that are in need of reform in order to facilitate the growth and expansion of value-based payment models and CINs. Consequently, we will continue to see a major push to reform these laws, and in particular the federal Stark Law and the federal anti-trust regulatory framework as they apply to value-based payment models, CINs and ACOs. Providers and professionals considering joining these types of payment-models and networks must be aware of the application of these health care regulatory laws to them and how to properly structure their relationships with a CIN, ACO or value-based payment model so as to comply with these laws and avoid the risks and penalties which accompany violations of them.

  1. Technology Innovation Continues to Outpace the Law

Artificial intelligence, the internet of things, and innovations in medical devices and surgical procedures such as robotics and remote monitoring of patient information and data are rapidly maturing and being adopted and implemented in the health care delivery system. However, federal and Florida health care regulatory laws are not keeping pace in areas such as cybersecurity risk management, privacy, accountability features and safety. As providers and professionals continue to turn more to technology innovations and the care and treatment of their patients, they need to be aware of such security and safety risks and ensure that they have proper insurance coverage for these risks and potential liabilities such as cyberliability insurance and riders for amendment to their professional liability insurance policies to cover advanced health care technological innovations such as artificial intelligence and the internet of things. It is critical for health care professionals and providers to have a thorough review of their insurance coverage and policies and procedures (in particular their cybersecurity, HIPAA, and risk management policies and procedures) as they continue to expand their use of such health care technological innovations in the care and treatment of their patients. Health care professionals and providers need to be aware that multiple federal and Florida agencies such as the FDA, FTC, HHS/OCR, AHCA, and DOH, as well as the applicable licensing boards in Florida, will all be scrutinizing and regulating the use of advanced technological innovations and potential cybersecurity, privacy and safety risks and breaches. The confusing jumble of laws, jurisdictions, and standards are not easy to navigate, and therefore, health care professionals and providers must assemble a team of legal counsel, risk management, insurance professionals and privacy/security/IT system experts to advise them on these areas. Ultimately, the risks versus reward of using these health care technological innovations will tilt highly in favor of the rewards and benefits outweighing the risks for both patients and providers/professionals. Additionally, patients, and frankly their third-party payors, will be demanding increased use of these health care technological innovations at a rapid pace. Thus, the time to analyze and prepare for this wave of innovative change is now.

  1. Pricing and Transparency

As I am writing this article, the Trump Administration announced the promulgation of an Executive Order establishing criteria for transparency in the pricing of health care goods and services including procedures and pharmaceuticals. At first glance this Executive Order appears to place another overwhelming compliance burden on health care professionals and providers, it also presents a tremendous opportunity for them. Specifically, transparency and pricing presents an opportunity for health care professionals and providers to connect with their patients and discuss the costs and benefits of a recommended procedure, drug therapy, course of treatment, etc. This in and of itself is a tremendous marketing opportunity for health care professionals and providers to distinguish themselves from the competition, and a keen understanding of a patient's health insurance/third-party payor programs, goals and desires for their care and treatment, and ability to pay represents a chance to build stronger physician-patient relationships and foundations for trust by eliminating surprise bills and obtaining a clear understanding of the patients desired goals and outcomes and achieving them within their ability to pay. It also presents an opportunity for the development of innovative fee schedules and payment structures. However, providers and professionals must be aware of applicable federal and Florida laws and regulations including the advertising and marketing rules promulgated by the licensing boards, consumer protection laws, and balance-billing and transparency laws and regulations when developing their marketing materials, fee schedules and payment structures. This will require not only a keen awareness and understanding of those laws and regulations, but also an ability to implement them, and by necessity the retention of qualified legal counsel, marketing consultants and billing staff and personnel to advise on them.

  1. Medical Marijuana/Alternative Therapies

While both applauded and criticized, medical marijuana is certainly here to stay and increasingly becoming part of the health care landscape in Florida. Recent federalized legislation such as the STATES Act and the SAFE Act have gained support and will provide more freedom for States to regulate cannabis and medical marijuana use and also permit banks to allow medical marijuana businesses to open accounts and use them as depositories for their banking and cash transactions. Patients are becoming more aware of the advantages of medical marijuana and CBD products and will be demanding and requesting them on a regular basis in the future. The potential uses of medical marijuana spans multiple medical conditions including pain management, epilepsy, cancer, and other severely debilitating and potential life-threatening diseases. Florida has established a regulatory framework for medical marijuana practitioners, and for any provider or professional looking to enter that space it is critical for them to understand that framework and comply with it. While in its infancy, medical marijuana has the potential to grow to one of the largest and most disruptive health care sectors not only in Florida but across the nation. Getting in on this tidal wave in advance and doing so in a compliant manner will present tremendous clinical, professional and business opportunities for health care professionals and providers, but doing so will require a strong working knowledge and application of the Florida legal and regulatory framework. Failure to comply with that framework could result in not only professional licensure risk and penalties, but also legal and criminal action and enforcement.

  1. Florida House Bill 843

While the Florida Senate indefinitely postponed its consideration of Florida House Bill 1243, which would impose certain reporting requirements when a Florida hospital or group practice contemplated a transaction that would result in a material change to the health care market, the Senate did pass Florida House Bill 843. This legislation includes provisions which would invalidate certain restrictive covenants, and in particular non-competes, in certain situations. It becomes effective July 1, 2019, and has the potential to invalidate certain non-compete provisions in physician employment agreements between physicians and hospital-owned physician group practices and/or mega-group practices. This could present a seismic shift and disruption in the physician employment landscape and affect the ability of physicians to leave mega-group practices and/or hospital-owned group practices and remain in their geographic area and continue practicing. However, this new law is complex and untested, and like all the non-compete matters will be very fact sensitive and require careful analysis. So, physician employers and physician employees facing transitional issues involving non-competes would be wise to seek legal counsel when evaluating the application and potential enforcement of a non-compete provision in an existing employment contract. And, House Bill 1243 will be on the Florida legislator's agenda again in the future. The intent of these laws is clear - to increase the ability of physicians to practice independently and prevent market actors such as large health care systems, hospitals and mega-groups from obtaining too much control of and power over the health care delivery system and marketplace.

  1. Disruptor and Disruption

Following the passage of the ACA, financial capital was readily available to fund health care start-ups. Many entrepreneurs, including physician entrepreneurs, sought alternative delivery and payment models in the years following the ACA's passage. In 2019 and 2020 disruptors will again seek to reform the health care marketplace through new delivery models, structures and services. Driving these disruptors are a renewed focus on technology and the consumer experience. The most visible disruptor on the horizon is the Amazon, Berkshire Hathaway and J.P. Morgan Chase joint venture. In recognizing and preparing for these disruptors, health care providers and professionals are well served to ask the question of what do these disruptors have in common? The answer to that question is that the disruptors view the current health care delivery system as one of "disorganized care" and are seeking to redefine it into more organized care through alternative delivery systems, value-based payment models, patient-centric and consumer-satisfaction driven focus and the implementation of technology such as artificial intelligence, blockchain, robotics surgery and the internet of things. Like it or not, these disruptive forces are definitely needed within our broken health care system and present tremendous opportunity for those health care professionals and providers who embrace it and understand how to implement it in a compliant manner. Federal and Florida health care regulatory laws such as HIPAA, the federal Stark Law, the Florida Patient Self-Referral Act, the Florida Health Care Clinic Act, and federal and Florida anti-trust laws, among others will all apply to these disruptions and must be understood and complied with by those health care professionals and providers seeking to adopt and implement these disruptive changes in their practices.

  1. Private Equity Investment in Health Care

Since the enactment of the ACA, private equity companies have increasingly become interested in the health care industry. We have seen a large influx of private equity investment in healthcare, and in particular in physician and provider practices. However, when considering a potential private equity transaction, it is highly advisable to be aware of state law restrictions in Florida such as the Florida Health Care Clinic Act, the Florida Patient Self-Referral Act, Florida anti-trust laws, and applicable rules for the various licensing boards including the Florida Board of Medicine. Ownership of physician and provider practices implicates all of these laws and must be assessed well in advance of any substantive discussions, much less any transaction documents being finalized and executed, and transactions being closed by the parties. Failure to do so can result in severe penalties including professional licensure actions against health care providers and professionals. Additionally, health care providers and professionals must be aware of the fact that they will be relinquishing much of their ability to govern and direct the business and scope of their practices once they complete a private equity transaction and turnover the governance and ownership of those practices to the private equity investors' management and administrative team. Consequently, Florida health care professionals and providers considering private equity transactions should carefully evaluate them with the assistance of health care legal counsel, tax and accounting consultants and business/financial consultants prior to entering into a private equity transaction.

  1. Fraud and Abuse Activity and Enforcement

Thus far, 2019 has seen a continued escalation of fraud and abuse enforcement efforts including those designed to address the opioid epidemic and CMS program integrity activity such as the Targeted Probe and Educate Program being implemented by CMS. This escalated enforcement activity has included expansion into targets beyond just traditional professionals and providers such as hospitals and physician groups including Medicare Advantage plans, electronic health record companies, and private equity owners. For the foreseeable future, both federal and Florida health care regulatory agencies will continue to closely monitor potential fraud and abuse matters in the federal Medicare program, the Florida Medicaid program and opioid prescribing. Additionally, we are seeing an increased amount of pseudo-enforcement activity by third-party payors such as commercial and private health care insurers, PIP insurers and managed care entities. Thus, health care providers and professionals will be well served to ensure that they have active monitoring and auditing policies, procedures and processes in place to help ensure that their providers' and professionals' quoting, documentation, billing and claims submission are complaint with not only the applicable federal and Florida health care regulatory laws, but also managed care and third-party payor contracts. If you have not performed a recent compliance and billing audit within your facility, group practice or provider entity, doing so is strongly recommended as third-party payor government regulatory agencies and entities continue to increase their scrutiny and seek recoupment of perceived overpayments and improperly paid or fraudulent claims.

  1. HIPAA FIPA, Privacy & Security

Hardly a day goes by without another headline about a cybersecurity breach, many of which have been occurring in the health care sector. Both federal and Florida health care regulatory agencies are increasing not only their investigation of reported breaches but also their audits of health care professionals and providers under HIPAA and FIPA (the Florida Information Protection Act). If your entity or practice does not have a privacy and security compliance program, cyberliability insurance, and regular training on cybersecurity, privacy and security issues, you need to implement all of these as soon as possible. Privacy and security in the health care industry will continue to be top ten issues for the foreseeable future, in compliance with them must permeate all aspects of your practice or entity. Failure to implement appropriate privacy and security compliance measures could result in disciplinary action by your licensing board, HHS/OCR, and the Florida Attorney General's Office. Cyberliability insurance is still relatively inexpensive, and the development and implementation of an effective HIPAA/Privacy/Security compliance program can be done relatively quickly and inexpensively.

Michael R. Lowe, Esquire is a Florida board-certified health law attorney at Lowe & Evander, P.A. Mr. Lowe regularly represent providers, physicians and other licensed health care professionals, and facilities in a wide variety of health care law matters. For more information visit

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