Life Science Compliance Update

June 26, 2015

Massachusetts Governor Orders Review of All State Regulations; Opportunity For Healthcare Industry Comment

Mass government

Earlier this year, the Governor of Massachusetts, Charles Baker, signed an executive order initiating a “comprehensive review’ for all regulations enforced by the Executive Department. Only those regulations which are mandated by law or essential to the health, safety, environment, or welfare of the Commonwealth’s residents will be retained or modified, the order states. The measure is aimed at reducing “burdensome regulations to increase efficiency and competitiveness.”

To meet the standard set forth in the order, agencies must show:

  1. There is a clearly identified need for governmental intervention that is best addressed by the Agency and not another Agency or governmental body;
  2. The costs of the regulation do not exceed the benefits that would result from the regulation;
  3. The regulation does not exceed federal requirements or duplicate local requirements;
  4. Less restrictive and intrusive alternatives have been considered and found less desirable based on a sound evaluation of the alternatives;
  5. The regulation does not unduly and adversely affect Massachusetts citizens and customers of the Commonwealth, or the competitive environment in Massachusetts;
  6. The Agency has established a process and a schedule for measuring the effectiveness of the regulation; and
  7. The regulation is time-limited or provides for regular review.

Perhaps most notably is the prong that the regulation not “exceed federal requirements."  This is an important announcement for life sciences companies—Massachusetts has long been one of the more complicated and challenging states to do business in based on several regulatory requirements that require time and resources above and beyond an already complex legal landscape. For example, Massachusetts instituted a physician payment disclosure law before the Federal Physician Payments Sunshine Act requirements set in during 2013.  While the Federal law preempts much of the Massachusetts measure, the state’s law includes more expansive definitions as to who constitutes a “covered recipient,” requiring additional resources and fees to comply.  

Furthermore, the state’s Pharmaceutical and Medical Device Manufacturer Code of Conduct is largely parallel to the PhRMA and AdvaMed codes that the respective industries follow.

“[C]onfusing, unnecessary, inconsistent and redundant government regulations inconvenience individuals, encumber cities and towns, stress resources of non-profit organizations, including our health care and educational institutions, inhibit business growth and the creation of jobs, and place Massachusetts for profit enterprises at a competitive disadvantage relative to their out-of-state and foreign competitors,” states the Order. In its assessment of the announcement the National Review noted:

For the citizens and businesses of Massachusetts, where state agencies have a long history of expansive regulatory programs, aggressive rule development, expansive regulatory programs, and sweeping administrative authority, this is an extraordinary measure, and it will undoubtedly reshape state government programs for many years to come.

This will be an important measure to follow and stakeholders should take advantage of the opportunity to participate in this regulatory review process. 

June 25, 2015

High Prescribing Connecticut APRN Charged With Accepting Kickbacks; Comes On Heels Of Connecticut Sunshine Law Targeting APRNs

CT

The U.S. Attorney’s Office of the District of Connecticut has announced that an Advanced Practice Registered Nurse (APRN) practicing in the state has admitted to receiving $83,000 in kickbacks—mostly as a speaker at dinner programs—by an unnamed drug manufacturer. The press release states that Heather Alfonso was a “heavy prescriber” of a drug used to treat cancer pain. They noted that a review of Medicare Part D prescription drug events for prescribers of the drug showed that Alfonso was responsible for more than $1 million in claims and was the highest prescriber of the drug in Connecticut. However, the government found through interviews with Alfonoso’s Medicare Part D who were prescribed the drug, revealed that most of them did not have cancer, but were taking the drug to treat their chronic pain.

This latest press release is notable for several reasons:

First, Connecticut recently passed a law requiring manufacturers to report their transfers of value made to APRNs practicing in Connecticut. This group includes nurse practitioners, clinical nurse specialists, nurse anesthetists, and nurse midwives. APRNs are excluded from the reporting obligations under the Federal Physician Payments Sunshine Act, but Connecticut passed this disclosure requirement as part of a new initiative allowing APRNs to practice and prescribe independently of physicians. This law was originally supposed to go into effect July 1, 2015, but was recently pushed back to 2017. This latest enforcement action illustrates that the reporting law may have been passed with kickbacks to APRNs in mind.

Second, this announcement is the latest of many in the last week alone by the government targeting Medicare Part D. Last week, the Department of Health and Human Services announced the largest ever Medicare Fraud Strike Force sweep, with charges brought against 243 individuals for approximately $712 million in billings. More than 44 of the defendants arrested were charged with fraud related to Part D. The HHS Office of Inspector General a couple of days ago also released two reports that similarly target Part D fraud. “OIG has seen an increase in Part D fraud complaints,” the agency states. “As such, OIG has made Part D fraud a top priority.” The roll-out of several Medicare Part D related enforcement actions over the last few days clearly indicates that fact. 

Third, the government's focus on the prescriber side of the kickback equation signals their increasing likelihood to bring enforcement actions against individuals, rather than (or in addition to) the traditional focus on companies. While the Department of Justice and state attorneys have long said that the increased data streams allow for more targeted enforcement actions, we are now seeing the fruits of their data analysis. 

Fourth, this announcement targets speaker programs--arrangements the DOJ has noted are "prone to abuse." The Connecticut U.S. Attorney's Office reveals that Alfonso was paid $83,000 by a drug manufacturer, which she admitted influenced her prescribing of the drug. The press release states that she was a speaker for more than 70 dinner programs at a rate of approximately $1,000 per event.  "In many instances, the dinner programs were only attended by Alfonso and a sales representative for the drug manufacturer," the release states. "In other instances, the programs were attended by individuals, including office staff and friends, who did not have licenses to prescribe controlled substances.  For the majority of these dinner programs, ALFONSO did not give any kind of presentation about the drug at all."

Finally, the government's focus on pain meds--and looking to stem their abuse--is another notable trend. 

  

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