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An Overhaul for Medicare’s Pay Transformation Program

The Biden administration recently finalized an overhaul of an initiative known as the Medicare Shared Savings Program that seeks to pay health providers based on patient outcomes instead of the number of services they perform. In this Axios article, McDermott+Consulting’s Mara McDermott offers insight into providers’ Congressional push to extend a 5% pay increase for participants in advanced alternative payment models.

“If the bonus is not continued, it will soften or dampen the momentum toward alternative payment models, because it would create this mentality, or the view, that we’re not serious about that transformation,” McDermott said.

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New California Law Requires Open Payments Notice to Patients

On September 29, 2022, California Governor Gavin Newsom signed Assembly Bill 1278, which requires physicians and their employers to provide patients with notices about the Open Payments database starting January 1, 2023.

The federal Open Payments program is designed to promote transparency by requiring applicable manufacturers of drugs, devices, and biological or medical supplies to annually report to the Centers for Medicare & Medicaid Services certain payments and other transfers of value made to physicians, certain advanced practice providers (e.g., nurse practitioners) and teaching hospitals. Currently, pharmaceutical companies in California must disclose their compliance program, including information related to the annual dollar limits on gifts, promotional materials or incentives provided to medical or health professionals (California Health & Safety Code § 119402). The enactment of this new legislation will impose new disclosure requirements specifically onto physicians and their employers regarding physicians’ financial relationships with pharmaceutical and medical device manufacturers.

Read more here.




Employers Seek Clarity on Reproductive Healthcare Benefits Litigation Following EEOC Commissioner Filing

Following the US Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization, many employers extended travel benefits to women residing in states where abortion or reproductive health procedures may now be unlawful. Recently, US Equal Employment Opportunity Commission (EEOC) Commissioner Andrea Lucas filed a Commissioner’s Charge against at least three companies alleging that doing so violates Title VII of the Civil Rights Act of 1964 (Title VII) and the Americans with Disabilities Act of 1990 (ADA). Although these charges are not public, it’s believed they mirror a letter that Sharon Fast Gustafson, the former EEOC General Counsel, recently sent en masse to employers around the country also alleging such travel programs violate federal anti-discrimination laws. The EEOC has since issued a statement that Gustafson’s views are her own and do not necessarily reflect those of the EEOC.

When Title VII was amended in 1978 by the Pregnancy Act amendments, language was added requiring pregnancy, childbirth and related medical conditions be treated equally with other medical conductions under an employer’s “fringe benefit programs.” Lucas asserts that providing travel benefits for those seeking abortions provides preferential treatment to women, thus constituting gender discrimination. Her contention is also that travel benefits further implicate religious discrimination by favoring those who terminate pregnancies over those who, for religious reasons, carry a child to term. Her final contention is that the provision of travel benefits violates the ADA, which she claims requires parity of benefits for those with physical disabilities.

Employers are now asking whether Lucas’ and Gustafson’s position may be the beginning of litigation by the EEOC or private plaintiffs and whether they can take measures to address the legal arguments being raised.

First, it is doubtful the EEOC will be suing. While Title VII and the ADA authorize a single commissioner to file a Commissioner’s Charge, that Charge will be investigated like any other Charge of Discrimination. If cause is found, EEOC procedure requires in cases garnering public attention (which this most certainly is) that litigation may only be commenced if a majority of the Commissioners (minus the Commissioner who brought the Charge) vote in favor of doing so. In the absence of a quorum, then only the General Counsel of the EEOC may initiate suit. At this time, Lucas would not appear to have such votes.

Second, employers can and should draft around these contentions to prepare for private suits. Specifically, such travel benefits should cover not only abortion and/or reproductive health, but also all covered services or procedures that are unavailable within a covered individual’s state of residence or area, regardless of the individual’s gender, pregnancy or childbirth status, or disability status. This would make the benefits “available” to everyone.

Finally, there is a suggestion that, even with such drafting, this travel benefit will still be utilized primarily by non-Christian women, thus supporting a disparate impact claim based on religious discrimination. This is an overreach. Title VII claims require an adverse employment action such as an employee who requests but is denied a travel benefit due [...]

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Senate Approves Resolution to End COVID-19 National Emergency Declaration

On November 15, the Senate approved a resolution to end the national emergency concerning COVID-19 declared by the president on March 13, 2020. The resolution was approved by a bipartisan vote of 62–36, with 13 Democrats joining all present Republicans in voting for the resolution.

While ending the national emergency is different than ending the public health emergency (PHE), which is declared by the US Department of Health and Human Services (HHS), the two are related, as the PHE must be tied to another declaration. Should the national emergency declaration end (as intended in this Senate resolution), most current waivers would terminate. There are notable exceptions, however, where other pieces of legislation have enacted additional flexibility (including telehealth waivers), and where policy changes in HHS rulemakings specified that policy changes are tied to the PHE. Should the national declaration end but the PHE stand, such policies would continue until the end of the PHE. Should both the national emergency declaration and the PHE end, all waiver authority would cease. Please see this +Insight for additional information.

The COVID-19 PHE, which is extended in 90-day increments, was most recently extended in mid-October, until mid-January 2023. The Biden administration has maintained a commitment to provide 60 days’ advance notice of any plans to end the PHE, and that 60-day mark recently passed with no indication that the PHE will end in mid-January. This indicates that the PHE is likely to be extended at least once more, through mid-April 2023.

Senate passage of this resolution will not have a tangible impact, as it is unlikely to be taken up by the Democratic-controlled House this year, and the president has threatened to veto it. However, the vote in the Senate demonstrates “pandemic fatigue” as well as significant bipartisan support for ending COVID-19 declarations, which suggests that the next presumed PHE extension through mid-April 2023 could be the last.




Way Too Early Preview: What the Midterm Election Results Might Mean for Health Policy in 2023

Although we are still awaiting final results of the November 8, 2022, midterm elections, the US House of Representatives appears likely to flip to Republican control, while the US Senate will remain in Democratic hands. Changes from one party to another in Congress, even in just one chamber, can mean big changes in policy progress and direction. This article provides an early look into how those in the healthcare sector should view these outcomes and plan for new dynamics from Capitol Hill and health policy priorities.

Download the Full Way Too Early Preview for 2023




Legal Risks Loom For Employers Protecting Abortion Access

US employers are taking steps to provide abortion access to workers despite threats from anti-abortion activists and conservative lawmakers. In this Law360 article, McDermott’s Sarah Raaii said that “we’re certainly continuing to monitor” threats against employers.

“And we’re now in the position — really an unprecedented position for employers — of having to potentially look at 50 different states’ very specifically written laws regarding reproductive health care,” Raaii said. “Some states require some type of coverage, some states prohibit it. So it’s become a lot more burdensome for employers.”

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Post-Election Committee Membership Tracker

This document serves as a tool to track key congressional positions, as well as potential and pending changes that are relevant to health policy on Capitol Hill. It covers US House of Representatives and US Senate leadership and membership of the healthcare committees of jurisdiction. This tracker will be updated after the election when Congress returns, to determine the answers to the speculation below.

Click here to view tracker.




COVID and a Cloud of Dust

The COVID-19 pandemic forced lawmakers to respond with an array of legislation to help Americans, such as the No Surprises Act, the Families First Coronavirus Responses Act and the Coronavirus Aid, Relief and Economic Security Act. Now, however, pandemic-related litigation involving the Employee Retirement Income Security Act of 1974 (ERISA) is becoming more common. In this Best Lawyers article, McDermott Partner Ted Becker highlights the major types of pandemic-related litigation, including out-of-network provider litigation, the Racketeer Influenced and Corrupt Organizations Act (RICO) and antitrust claims, and COVID-19-related litigation against ERISA health plans.

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