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Growing Antitrust Scrutiny of Healthcare Mergers: What Healthcare Executives Need to Know

How can healthcare executives navigate the growing antitrust scrutiny of healthcare mergers, and what are some of the key issues facing executives in the current regulatory environment? In this conversation with The Chartis Group, McDermott Partner Katharine O’Connor discusses the legal considerations for healthcare executives seeking to navigate mergers.

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The Inflation Reduction Act of 2022: Healthcare Provisions

After almost a year of negotiations among congressional Democrats and the White House, the Inflation Reduction Act of 2022 (IRA) was signed into law by President Biden on August 16, 2022. It passed in the US Senate by a vote of 50–50, with the vice president breaking the tie, on August 7, 2022. The bill passed the US House of Representatives August 12, 2022, by a party-line vote of 220-207. This McDermott+Consulting article summarizes the key healthcare provisions of the IRA, including prescription drug reform, inflationary rebates, a cap on insulin costs, a Medicare Part D benefit redesign and a new pharmacy benefit manager rebate rule.

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HHS Issues Proposed Rule Under Section 1557 of the Affordable Care Act: Nondiscrimination in Health Programs and Activities

On August 4, 2022, the US Department of Health and Human Services (HHS) issued a Notice of Proposed Rulemaking (NPRM or proposed rule) to reinterpret section 1557 of the Affordable Care Act (ACA), which prohibits discrimination on the basis of race, color, national origin, sex, age or disability in a health program or activity, any part of which is receiving federal financial assistance. The proposed rule restores and strengthens certain civil rights protections under federally funded health programs and HHS programs which were limited following the 2020 Trump-era version of the rule, specifically regarding discrimination on the basis of sex, including sexual orientation and gender identity, and returns certain protections for individuals with limited English proficiency (LEP). Additionally, the proposed rule bolsters protections against discrimination in healthcare by clarifying that funds received under several federal healthcare programs, including Medicare Part B, are included in the definition of federal financial assistance under the law. As such, under the proposed rule, the list of entities expected to comply with the nondiscrimination measures outlined in Section 1557 of the ACA is significantly expanded, in many ways aligning with the 2016 Obama-era version of the rule. The NPRM also proposes to expand the applicability of the post-Bostock interpretation of “on the basis of sex” to Medicaid, Children’s Health Insurance Programs (CHIP) and Programs of All-Inclusive Care for the Elderly (PACE). For now, portions of the 2020 Final Rule not discordant with Bostock continue to apply.

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Manchin Agrees to Expanded Reconciliation Deal

Senators Schumer and Manchin announce a bill that includes drug pricing and an extension of the advance premium tax credits, the amount individuals pay for monthly health insurance premiums when they buy health insurance on the Marketplace.

On July 27, 2022, Senate Majority Leader Schumer and Senator Manchin announced a surprise agreement to move forward with an expanded reconciliation bill titled the Inflation Reduction Act (summary here). The tentative deal includes drug pricing and expands upon a previous “healthcare-only” version of the reconciliation package that focused solely on drug pricing and a two-year extension of the advance premium tax credits (APTCs). The deal would raise an estimated $739 billion, with revenues going toward climate and healthcare initiatives, as well as reducing the federal deficit.

Leader Schumer and Senator Manchin released a joint statement outlining the agreement, which contains two key healthcare policy items: allowing Medicare to negotiate prescription drug prices and a three-year extension of APTCs. The three-year extension is one year longer than had been widely expected and reported in the previous version of the bill. The Biden-Harris Administration has also announced support for the bill. The package must go before the Senate Parliamentarian for Byrd Rule challenges before it can go to the Senate floor. It is expected to garner the Democratic support necessary to pass both the House and the Senate, and will move quickly from this point. The caveat to this is the impact of COVID-19. Several senators are already out, and Senator Dick Durbin (D-IL) announced July 28 that he has COVID-19 as well.

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Fired for Having an Abortion? Unlikely, but It’s Complicated

Could a worker be fired for having an abortion? According to this Insider article, workplace laws would likely protect pregnant people from discrimination. McDermott’s Sarah Raaii said employers should make sure abortion health plan coverage does not conflict with federal laws.

“Incorporating abortion benefits into an employer’s existing health plan might help mitigate worker privacy concerns,” Raaii said, “since health plans are subject to the Health Insurance Portability and Accountability Act (HIPAA).”

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Abortion Questions Swirl Over Health Lawyers in Post-Roe World

Following the US Supreme Court’s decision to overturn Roe v. Wade, health lawyers have been busy making sense of the legal implications of the court’s landmark ruling. In this Law360 article, McDermott Partners Stacey Callaghan and David Gacioch offer insight into the myriad of questions they’ve received from hospitals, pharmacies, telemedicine platforms, investors and other players in the industry.

“The field against whom [abortion restrictions] can be enforced becomes so much broader,” Gacioch said. “It’s such a sea change.”

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Workers’ Abortion Privacy at Risk as Texas Targets Employer Aid

A group of conservative Texas lawmakers is warning employers of potential civil or criminal consequences if they offer out-of-state abortion access to their employees. In this Bloomberg Law article, McDermott Partner Scott Weinstein said many companies offering reproductive healthcare benefits are making sure such benefits aren’t tied to a particular procedure.

“The goal is not to know,” Weinstein said.

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Complex Patchwork of Laws Await Companies Offering Out-of-State Abortion Travel

Employers seeking to provide their employees with abortion services are facing a dizzying patchwork of laws that differ from state to state, according to this Corporate Counsel article. McDermott’s Sarah Raaii said companies with employees in multiple states “would really need to do a state-by-state analysis of what the abortion laws are, whether and under what circumstances abortion is legal in most states.”

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State Abortion Bans Signal Chaos for Providers

The US Supreme Court’s decision to overturn Roe v. Wade will generate a minefield of legal and criminal implications for healthcare providers, according to this Healthcare Dive article. McDermott Partners Stacey Callaghan and David Gacioch offer insight into what these restrictive state laws could mean for providers.

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Preparing for the Demise of Roe v. Wade and the Criminalization of Abortion in Some US States: Practical Considerations for a Post-Roe World

Sometime in the next several weeks, the Supreme Court of the United States will issue its decision in Dobbs v. Jackson Women’s Health Organization (Dobbs). Based on the draft majority opinion authored by Justice Samuel Alito that was leaked to Politico in early May, there is a significant chance that the Court will overrule Roe v. Wade (Roe) and Planned Parenthood v. Casey (Casey) by holding that there is no federal constitutional right to obtain an abortion and leaving individual states free to substantially restrict abortion or prohibit abortion altogether.

The effect of this likely decision on US companies would be substantial. Every US healthcare provider whose services include any aspect of family planning should give serious thought to how this likely new post-Roe reality will affect its offerings and operations. This includes not only those that provide pregnancy termination services (via surgical or pharmaceutical means, whether brick-and-mortar or telehealth/virtual), but also potentially those providing in vitro fertilization services, and conceivably even some contraceptive providers at some point down the line.

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