Health Headlines – May 15, 2023

OIG Issues Guidance for Ambulatory Surgery Center Safe Harbor’s “One-Third” Income Test

In March, OIG published a new frequently asked questions (FAQ) page, General Questions Regarding Certain Fraud and Abuse Authorities. The FAQ page, located here, includes new guidance for ambulatory surgery center (ASC) investments by physicians who fail to qualify for the single-specialty ASC safe harbor under the Federal Anti-Kickback Statute (AKS). This safe harbor, located at 42 CFR § 1001.952(r), requires, among other things, that at least one-third of each physician investor's medical practice income from all sources for the previous fiscal year or previous 12-month period be derived from the surgeon's performance of procedures included on the list of Medicare-covered procedures for ASCs. The new guidance addresses whether a single-specialty ASC may offer an investment interest to a physician who cannot meet this requirement—known as the “one-third test” or the “practice income test”—but otherwise meets all of the other elements of the safe harbor. 

For ASCs endeavoring to meet the safe harbor, the one-third test is a common point of failure due to the variable nature of physicians’ practices. If a physician’s investment in an ASC qualifies under the single-specialty ASC safe harbor, then remuneration paid by the ASC to the physician will be shielded from liability under the AKS. If the physician’s investment does not meet all of the requirements of the safe harbor, then the investment will not be protected. Failure to qualify for the safe harbor does not mean the arrangement is necessarily illegal. As a general matter, an investment that does not qualify for the safe harbor will only violate the AKS if there is an intent to induce referrals.

The FAQ notes that OIG adopted the one-third test “because physicians who meet this standard are more likely to use the ASC as an extension of their physician office space, which reduces the risk that the physician’s investment interest would induce or reward such physician to make referrals to other surgeons for ASC procedures that the physician does not personally perform.” The FAQ goes on to state that OIG evaluates arrangements that fail to qualify “based on the totality of the facts and circumstances” and “considers a number of facts and circumstances when evaluating the relative risk of fraud and abuse presented by ASC investments by physicians who do not meet the Practice Income Test (but who satisfy all of the other pertinent safe harbor conditions).” The FAQ notes that the factors considered include:

(i) whether the physician-investors will refer patients to the ASC for procedures that they will not personally perform;

(ii) whether the physician-investors will make use of the ASC for their own procedures; and

(iii) what circumstances cause the physician-investors to fail the practice income test (e.g., they perform a high volume of inpatient procedures).

Although the question presented in the FAQ addresses only the section of the ASC safe harbor relating to single-specialty ASCs, the response mentions that the one-third test is also present in the multi-specialty section of the ASC safe harbor. The guidance therefore may be helpful for multi-specialty ASC operators navigating the same risk.

To read the full FAQ document, please click here.

Reporter, J. Gardner Armsby, Atlanta, +1 404 572 2760, garmsby@kslaw.com.

HHS Announces the End of the COVID-19 Public Health Emergency

On May 9, 2023, HHS released a fact sheet announcing the expiration of the COVID-19 Public Health Emergency (PHE) on May 11, 2023. HHS also provided information on changes to the healthcare flexibilities issued during the pandemic. On May 10, 2023, HHS issued a letter to U.S. governors announcing the same. 

In the fact sheet, HHS outlined a list of public health provisions that will remain unaffected and those that will be impacted by the end of the PHE.

Below are the healthcare flexibilities and actions that will not be affected after May 11, 2023:

• Access to COVID-19 vaccinations and certain treatments will generally be unaffected.  HHS remains committed to providing COVID-19 vaccines at no cost and providing access to certain treatments, like Paxlovid and Lagevrio.  However, payment, coverage, and access may change once the federal government is no longer purchasing or distributing COVID-19 vaccines and treatments.  HHS is partnering with the U.S. government to develop a smooth transition.
• The FDA’s ability to exercise emergency use authorizations (EUAs) for COVID-19 products, including tests, vaccines, and treatments, will not be affected.
• Most of the telehealth flexibilities that people with Medicare rely on will remain in place through December 2024.
• HHS’s whole-of-government response to the long-term effects of COVID-19 will not change.

Below are the public health flexibilities and policies that will be affected by the expiration of the PHE:

• Many of the Medicare and Medicaid waivers and flexibilities will no longer be necessary.
• Coverage for COVID-19 testing will change.  However, the U.S. government is securing a stockpile of distribution channels to allow access to tests at no cost in certain communities.  Further, the requirement for private insurance carriers to cover COVID-19 tests will also end, but coverage may continue if plans choose to do so.
• Certain COVID-19 data reporting and surveillance will change.  HHS will no longer have the authority to require reporting data from labs.  However, hospitals will be required to report data to CMS until April 30, 2024.
• FDA’s ability to detect medical product shortages will be more limited, and it is seeking congressional authorization to extend the requirement for medical device manufacturers to notify FDA of any interruptions or discontinuances of critical devices to allow FDA the ability to prevent or mitigate device shortages.
• The HHS Secretary announced his intent to amend the Public Readiness and Emergency Preparedness (PREP) Act declaration to extend certain protections that will continue to facilitate access to convenient and timely COVID-19 vaccines, tests, and treatments.

The fact sheet can be found here. The HHS letter to U.S. governors can be found here.

Reporter, Kristy Lundy, Atlanta, +1 404 572 4645, klundy@kslaw.com.

HHS Announces Continuing Telehealth Flexibilities Following the End of the COVID-19 PHE

On May 10, 2023, HHS announced that many telehealth and teleprescribing flexibilities will remain in place after the end of the COVID-19 Public Health Emergency (PHE) on May 11, 2023. Congress extended many telehealth flexibilities under the Medicare program through December 31, 2024, via the 2023 Consolidated Appropriations Act. The Drug Enforcement Agency (DEA) and HHS Substance Abuse and Mental Health Services Administration (SAMHSA) also extended behavioral telehealth and prescribing flexibilities through November 11, 2023, with some opioid flexibilities through May 11, 2024, pending the issuance of new final rules. HIPAA flexibilities have expired but will be phased out through a 90-day transition period. 

Telehealth Coverage

Coverage for telehealth following the expiration of the PHE will vary by program and plan type.

• Medicare. During the PHE, individuals with Medicare had broad access to telehealth services without the application of geographic or location limits as a result of Medicare telehealth waivers issued by the HHS Secretary. Through the 2023 Consolidated Appropriations Act, Congress extended many telehealth flexibilities for Medicare patients, including waiving geographic limitations for telehealth access, allowing patients to stay in their home for telehealth visits rather than traveling to a health care facility, and permitting some visits to be conducted via audio-only technology if the patient is unable to use both audio and video. These flexibilities are set to expire on December 31, 2024, but after the expiration, some Accountable Care Organizations (ACOs) may permit participating practitioners to offer telehealth services to patients without an in-person visit, regardless of where the patient lives.
• Medicare Advantage. Medicare Advantage Organizations (MAOs) must cover, at a minimum, the telehealth benefits provided by Medicare. However, MAOs may offer additional flexibilities.
• Medicaid and CHIP. Telehealth flexibilities under Medicaid and CHIP vary by state, and states continue to have great flexibility with respect to determining the scope of coverage. HHS is encouraging states to continue to cover Medicaid and CHIP services delivered via telehealth, and CMS published a State Medicaid & CHIP Telehealth Toolkit and a Supplement that identify policies that should be addressed by states to facilitate a broader adoption of telehealth.
• Private Health Insurance. Telehealth flexibilities for private insurance plans varied by insurance plan during the PHE. The PHE’s conclusion will not change this variation between payors.

HIPAA Rules

HHS Office of Civil Rights (OCR) exercised enforcement discretion for providers using non-HIPAA compliant technologies for telehealth during the COVID-19 PHE. The discretion applied to telehealth provided for any reason, regardless of whether the telehealth service was related to the diagnosis and treatment of health conditions related to COVID–19. OCR announced that the enforcement discretion will expire with the PHE on May 11, 2023. OCR is providing a 90-calendar day transition period for covered health care providers to make any changes to their operating systems to ensure that telehealth is provided in a private and secure manner. OCR will exercise enforcement discretion and will not impose penalties on health care providers providing care in good faith during the transition period. The transition period will expire on August 9, 2023.

Tele-Behavioral Health and Prescribing

HHS also clarified a number of flexibilities specific to tele-behavioral health and prescribing of opioids.

• Opioid Prescribing without In-Person Evaluation. SAMHSA and the DEA have extended flexibilities for Opioid Treatment Programs (OTPs) through May 11, 2024.  OTPs are exempt from performing in-person physician evaluations for patients who will be treated with buprenophrine if a program physician, primary care physician, or authorized healthcare professional supervised by a program physician determines that an adequate evaluation of the patient can be accomplished via telehealth. SAMHSA has proposed to make this flexibility permanent.
• Take Home Doses. In March 2020, SAMHSA issued an exemption to OTPs that allowed a state to request a “blanket exception” for stable patients in OTPs to receive twenty-eight days of take-home doses of the patient’s medication for opioid use disorder, and for less stable patients to receive fourteen days of a take-home dose if the OTP believes that the patient can safely handle it. OTPs, states, and stakeholders have reported increased treatment engagement and improved patient satisfaction with care as a result of this flexibility, with few incidents of misuse or mediation diversion. SAMHSA released new guidance in April 2023 that will be effective on the conclusion of the PHE, and will be effective through May 11, 2024, or until HHS publishes final rules revising 42 C.F.R. Part 8. States will need to affirmatively register for this exemption for the OTPs in the state to use it. SAMHSA has proposed to make this flexibility permanent.
• Controlled Substance Prescribing via Telehealth. DEA and SAMHSA issued a temporary rule extending the controlled substance telemedicine flexibilities through November 11, 2023. Under this rule, practitioners who have established relationships with patients via telemedicine prior to November 11, 2023, may continue prescribing medications to these patients without an in-person medical evaluation regardless of whether the practitioner is registered with the DEA in the state in which the patient is located through November 11, 2024. DEA and SAMHSA plan to issue updated final rules regarding controlled medication prescribing via telehealth by November 11, 2023.
• Behavioral Healthcare Provider License Portability. HHS expressed continued support for increased licensure portability, which enables health care professionals licensed in one state to practice health care in another state through a transfer, recognition, or issuance of a license with decreased limitations or restrictions. HHS recognized a continued shortage of behavioral health providers and encouraged states to take advantage of resources to support interstate licensure, and other licensing flexibilities.

The HHS fact sheet is available here. HRSA also will continue to update guidance at www.Telehealth.HHS.gov.

Reporter, Alana Broe, Atlanta, +1 404 572 2720, abroe@kslaw.com.

Also in the News

New Disclosure Requirements for Georgia Healthcare Practitioners

On May 2, 2023, Georgia Governor Brian Kemp signed legislation into law known as the "Health Care Practitioners Truth and Transparency Act" that requires healthcare practitioners to clearly state their specific license or educational degrees when interacting with patients or in advertisements. Physician extenders, such as nurse practitioners and physician assistants, who have doctoral degrees and use the title “doctor” are required to clearly state that they are not a medical doctor or physician during patient interactions. The new law also prohibits deceptive or misleading terms or false representations in advertisements or in clinical settings. The law goes into effect July 1, 2023, and violators are subject to legal action by applicable professional licensing boards. The text of Georgia Senate Bill 197 can be found here.