Cost sharing, consumerism, price transparency, patient engagement, value-based purchasing, affiliations, consolidation, access, community partnerships, narrow networks, cost containment, post-acute care, talent stewardship—this was an exciting year for the health care industry to say the least.
If 2014 didn’t present you with enough issues to keep you up at night, the Drinker Biddle Health Care Team has prepared a list of the top nine legal trends to watch in 2015. You can view the list here or read below.
1. King v. Burwell
The Supreme Court has agreed to decide how far the federal government can extend its program of subsidies to buyers of health insurance. In a recent Law360 article, Jesse Witten examines why the Supreme Court decided to hear the case and highlights the billions of dollars of federal subsidies at stake for residents of the 34 states that have not established exchanges. Oral arguments are expected to be held in March 2015, and a decision is expected by late June or early July 2015.
2. ACA Repeal Efforts
As our District Policy Group reported following last month’s election, even though the Republicans will hold the majority in both the House and the Senate, the House Republicans do not have the votes to override a veto by President Obama. We expect attempts to repeal or to modify provisions of the ACA to continue in an effort to score some “anti-Obamacare” wins, although we do not expect those efforts to be successful in repealing the measure in its entirety.
3. Digital, Mobile and Telehealth
Thanks to the health tech boom and the widespread use of smartphones, patients are transforming into savvy health care consumers. They can request a quote for an MRI, order free on-demand flu shots and connect with providers from the comfort of their cubicles, and it won’t be long before they can send personal health data to their providers through their contact lenses. In the next five years, the telehealth market is expected to reach $1.5 trillion, driven by the use of 7 billion smartphones, which will allow health care providers to deliver and improve health care and wellness like never before.
4. Privacy & Data Security
2014 was a big year for embarrassing and expensive health information data breaches, and striking the right balance between privacy and convenience will continue to be a challenge in 2015. PWC estimates that more than 5 million patients had their personal data compromised in health system privacy breaches during the summer of 2014. As federal, state, and private actions related to data privacy and security increase, complying with HIPAA is more important than ever.
5. Vertical and Horizontal Consolidation and Provider Alignment
Expect 2015 to be a healthy year for M&A activity for health care providers and payers. While full asset mergers are expected to continue, nontraditional alliances will become increasingly popular as providers strive to balance the benefits of scale with their desire to remain independent and to navigate antitrust enforcement obstacles.
6. FTC Antitrust Enforcement
Antitrust laws have substantial impact on critical decisions concerning affiliations, mergers, and provider alignment initiatives. The Federal Trade Commission’s well-publicized victory in its challenge to St. Luke’s Health System’s acquisition of the Saltzer Medical Group is a reminder that antitrust scrutiny will continue to be a factor in health systems’ integration efforts with physicians. In his two-part series on Minimizing the Risk of Antitrust Liability, Rob McCann sheds light on the antitrust risks associated with physician integration, exclusive contracts, clinical integration, and bad documents.
7. Fraud and Abuse Enforcement
A renewed focus on fraud prevention and improper payments is evident in the HHS FY2015 Budget. In addition to $428 million in new Health Care Fraud and Abuse Control Program and Medicaid program integrity funds, the Budget also proposes legislative changes to help HHS enhance program integrity oversight and to cut fraud, waste, and abuse in Medicare, Medicaid, and the Children’s Health Insurance Program.
8. Evolving Payment Models
The transition to value-based reimbursement has only just begun. Bundled payments, shared savings, gain sharing, readmission penalties, quality performance targets, risk-based payments, and value-based purchasing are just variations on how to pay providers for efficient, high-quality care and cost-effective outcomes. In his recent insight, Matt Amodeo summarized several changes to the Medicare Shared Savings Program that CMS issued in their Proposed Rule on December 1, 2014—a sign of more to come in the evolution of provider reimbursement.
9. Network Adequacy
As providers pursue integration and seek to increase volume in a payment-restricted environment, narrow-network health plans are important strategic options. Public and private insurance exchanges have shown that consumers will buy narrow-network products if the price is right. However, state network adequacy laws are a potential obstacle to this strategy. The National Association of Insurance Commissioners (NAIC) released a draft model law in November to update the Managed Care Network Adequacy Model Act, which has remained unchanged since it was originally introduced in 1996. CMS has stated that it will revise its own network adequacy laws on the basis of what the NAIC recommends. The NAIC is accepting comments on their draft until January 12, 2015.
If you have questions about any of these legal matters, please contact Doug Swill, Rob McCann or any member of our Health Care Industry Team. We hope that your holiday season is bright, and wish you much success in 2015.