Nebraska Legislature Adopts Stronger Prescription Drug Monitoring System

by M. Tom Langan, II

A recently adopted law in Nebraska calls for the state to create a prescription drug monitoring system designed to help prevent the misuse of controlled substances, namely prescription pain medicine.  The system will require physicians and pharmacists to enter into a database patient information when prescribing and dispensing certain medications. Patients are not allowed to opt out of the database. A goal is to help prevent so-called “doctor-shopping” – or when a patient visits multiple doctors to obtain multiple prescriptions.

Physicians and pharmacists should be aware that the system is required to be implemented by January 1, 2017.

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Delay Announced in CMS Star Rating System for Hospitals

Originally, the Centers for Medicare and Medicaid Services (CMS) intended to release a star rating system on hospitals, beginning April 21, 2016. However, CMS recently announced plans to delay the rating system until July, or potentially later. The exact timing will depend upon the development of the methodology for rating a hospital.

When the star rating system was designed, the purpose was to create a simple tool for consumers to evaluate hospitals. This system largely incorporated the previous, more complicated, performance measures that follows more than 100 quality measures. While the new star system will not replace the more complicated system, it will be in addition to the prior measures and make the review process simpler for consumers. The new star system incorporates factors such as readmission rates, mortality rates, timeliness of care, safety of care, and other patient driven statistics.

The delay is largely attributed to hospital and lawmaker complaints that the new rating system will impact consumer perceptions, when it may not have a direct bearing on the specific services sought. Moreover, a concern regarding the quality of the data, including the methodology for ensuring accuracy, remained a significant worry for the hospitals. It is unclear when the star rating system will be implemented, but hospitals and consumers should expect further information, if not the unveiling of the star rating system, this summer.

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New Nebraska Law Creates Mandatory Reporting of Controlled Substance Prescriptions for 2017

The over-prescribing of an opioid drug can create significant criminal and civil liability for a prescriber, as illustrated in the recent People v. Tseng decision and the proposed $1.1 billion White House initiative to combat prescription opioid and heroin abuse. To aid physicians and prescribers in controlling prescription opioids, every state, with the exception of Missouri, authorized a prescription drug monitoring program (PDMP).

The PDMP collects information on the prescription of controlled substances, but the specific substances monitored will vary state by state. Usually, however, it will be a mix of drugs considered controlled substances under state and federal law. The information stored in the database is accessible only by certain individuals, such as pharmacists, physicians, and other prescribers. The goal is to provide information about patient prescriptions to those with prescribing power, to ensure that over-prescribing of drugs, such as opioid drugs, does not occur.

In Nebraska, the PDMP was established by law in 2011, but the system was not truly implemented at that time. Until a February 2016 law, prescriber participation was not required and, regardless, the system was not truly operational. Moreover, until the 2016 law, patients that paid via Medicare or cash could opt-out of participation, removing a significant population of patients. However, the new law requires that all prescriptions of controlled substances be reported by the prescriber, starting January 1, 2017. Similarly, all prescription information, including patient information, must be reported to the PDMP starting January 1, 2018. The new law also eliminates the previous loopholes for patients to opt-out of the reporting requirements. Notably, however, the prescriber does not have an obligation to check the system prior to prescribing a controlled substance, such as an opioid drug, but they will have free access to check the PDMP. Of course, the Dr. Tseng decision highlights the potential for either criminal or civil liability for over-prescribing.

To see further information on the Dr. Tseng decision, please visit: https://vwhealthlaw.wordpress.com/2016/02/19/new-criminal-precedent-for-physicians-over-prescribing-opioid-drugs/

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Public Policy in Physician Non‐Competition Agreements

Non‐competition agreements take many forms and arise in virtually every industry, but many will encounter these agreements in employment contracts. Generally, in Nebraska, should the employer draft the non‐competition agreement properly, a court is likely to enforce it. For a physician, however, a non‐competition agreement with a practice group or similar entity can raise public policy concerns.

The purpose of a non‐competition agreement in an employment context is to protect trade secrets and customers. In the physician context, the effect of a non‐compete agreement is that a patient cannot see the physician of their choice. In most industries, a similar public policy issue will not arise, but for healthcare providers, this creates a unique problem.

For employers of physicians in Nebraska, the state has not addressed the public policy concern arising with physicians. Other states, for example, have enacted laws that address the policy concern in the physician context and how a non‐compete must be drafted, including specific provisions protecting the patients. In Nebraska, the limited law on the issue upholds the non‐competition agreement against physicians, if the agreement is reasonable. However, as with any law, it is subject to change and potential evolution to keep up with the modern practice of medicine. For a physician or a practice group, prior to drafting or signing a non‐competition agreement, it may be wise to discuss the implications with an attorney.

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Moratorium on Health Insurance Tax

As part of the omnibus budget bill passed by Congress and signed by the President in December of 2015, Congress implemented several delays for pending taxes under the Patient Protection and Affordable Care Act (PPACA). These delays impact the medical device tax, the “Cadillac” tax on high-cost employer health plans, and tax on health insurers.

The tax on health insurers has been delayed for one year and this moratorium is aimed at reducing the potential premium increases to consumers. This delay is for the tax due in 2017, but will have no impact on either the amount or the timing of the tax due in 2018, for calendar year 2017. The “Cadillac” tax and the medical device tax were both delayed for two years.

The health insurance industry reported that the insurer tax could have forced the health insurers to raise premiums by 3% to 4% every year. However, this delay should temporarily help keep premiums relatively stable for those receiving plans from the health exchanges, employer-based insurance, and Medicare advantage plans.  The Centers for Medicaid and Medicare Services issued a Frequently Asked Questions Memorandum on the delay, which can be found at the following link: https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FINAL_9010_FAQ_2-29-16.pdf

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New Criminal Precedent for Physicians Over-Prescribing Opioid Drugs

In October of 2015, a jury convicted a physician of second degree murder for over-prescribing a drug that resulted in a fatal overdose for three patients. People v. Tseng is the first conviction of a physician for murder due to over-prescribing, but the Centers for Disease Control and Prevention note that physicians are a significant contributor to the 17,000 plus opioid overdose deaths a year.

After the conviction, in February of 2016, Dr. Tseng was sentenced to 30 years to life in prison for the fatalities due to over-prescription. Although this was the first conviction of its kind, the prosecution of physicians for reckless or intentional over-prescription of certain types of drugs is significantly increasing. An example of the new focus, early in 2016, the White House proposed a $1.1 billion initiative to combat the prescription opioid and heroin use problem.

In the Tseng conviction, the physician had prior incidents of over-prescribing and all three individuals purposefully sought her out for the prescriptions. While she maintains that she was relatively untrained in opioid based prescriptions, thus leading to the over-prescribing, she is not eligible for parole for 30 years.

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Final rule on Medicaid Prescription Drug Programs

In January of 2016, the Centers for Medicare and Medicaid Services (CMS) issued a final rule on covered outpatient drugs. The rule changes the Medicaid Drug Rebate Program by the Patient Protection and Affordable Care Act (PPACA) and the overall Medicaid drug reimbursement program.  These changes have several goals, including reducing the cost to the federal and state governments and improving beneficiary access to covered outpatient drugs.

CMS claims the changes implemented will help the government save money in the Medicaid Drug Rebate Program, which had been subject to sustainability issues. One key change in the final rule is a definition of the Average Manufacture Price, which in turn gets used to determine rebates and pharmacy reimbursements subject to the federal upper limit. Similarly, the changes to the federal upper limit formula will incentivize pharmacies to use certain generic drugs. The final rules clarify many of the ambiguous sections of the Medicaid Drug Rebate Program by the PPACA, including the manufacturer reporting requirements. The rule also aligns the pharmacy reimbursement system with the actual acquisition cost of the drug.

Overall, the new incentives and changes should improve the reimbursement system and help manage drug costs. This rule becomes effective April 1, 2016, although CMS is allowing comment for 60 days after publication on certain elements of the rule. The new rule can be found at the following link:

https://www.gpo.gov/fdsys/pkg/CFR-2014-title42-vol4/pdf/CFR-2014-title42-vol4-part447.pdf

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Changes Coming to Meaningful Use

The government program providing incentives to health providers for meaningful use of electronic health records continues to be troubled as the final rule for stage 3  has been delayed until 2018. Coupled with recent comments by the Centers for Medicare and Medicaid Services (CMS), it appears that the entire program will undergo substantive changes in the year ahead. However, CMS notes, it is important to continue under the old program until the changes start being unveiled in the spring of 2016.

When meaningful use started in 2009, the intent was to induce medical providers to use the new technology purchased with the help of the federal government. By providing incentive payments to the physicians that showed they were using the new technology in a meaningful way, the government believed it would improve quality, safety, and efficiency of care through electronic health records. However, CMS has found that the program did not operate as envisioned, resulting in the forthcoming changes to the program, expected to start in the spring of 2016.

While the new program has guiding themes that were issued by CMS, it is unclear what the new program will ultimately look like. However, many of the themes are to focus on the outcome of patient care, with less focus on the use of the new technology, in hopes that complaints by all stakeholders about the meaningful use program will be alleviated. For health providers, the pending changes will take time implement and until such time, the meaningful use program is still the operative requirements. To read more about the changes, please visit the official blog of CMS at: http://blog.cms.gov/2016/01/19/ehr-incentive-programs-where-we-go-next/

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IRS issues final regulations on employer sponsored health insurance

In December of 2015, the Internal Revenue Service (IRS) issued final regulations that addressed some of the questions pertaining to whether employer sponsored health insurance meets the Patient Protection and Affordable Care Act minimum value requirements.  Amongst a variety of miscellaneous items pertaining to minimum value, the final regulations clarify the impact of a health reimbursement arrangement (HRA) on affordability. The regulations also clarify some of the rules regarding eligibility for the health insurance premium tax credit.

Under the final regulations, the new amounts made available by an employer to an employee in a HRA that can be used to pay health insurance premiums, when the employer also offers qualifying health coverage, will be counted towards affordability. Similarly, if the new amounts are available to an employee in a HRA integrated with qualified employer coverage, and the new amount can only be used to reduce cost-sharing, that new amount will be counted for minimum value purposes.

The health insurance premium tax credit had rules finalized in the same regulations. One rule includes the eligibility of a household that has income from a child. The premium tax credit is based on household income and when a parent includes a child’s income on their income tax return for tax credit eligibility purposes, the amount used is the child’s modified adjusted gross income, not the gross income reported on the child’s tax return.

The final regulations also addressed the impact of wellness incentives on the health insurance premium tax credit. The regulations clarify that wellness incentives that reduce the cost of health insurance premiums to an employee will not be included in the calculation for minimum value or affordability, instead the regulations assume the employee will not qualify for the incentive. This rule has one exception, which is if the incentive is based on tobacco use. If so, the regulations assume that the employee will qualify for the incentive and the incentive can be used in the minimum value and affordability calculation. Thus, only tobacco use wellness incentives can be used in the minimum value and affordability calculation for purposes of premium tax credit eligibility.

Overall, a variety of miscellaneous rules regarding health insurance were finalized in the regulation. The entirety of the IRS regulation can be found at the following link: https://www.federalregister.gov/articles/2015/12/18/2015-31866/minimum-value-of-eligible-employer-sponsored-plans-and-other-rules-regarding-the-health-insurance

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