Health Care Law Blog

Regulators Can Sue Over Pay-for-Delay Drug Settlements Between Brand Name and Generic Drug Makers

On June 17, 2013, the U.S. Supreme Court ruled that brand name drug makers can be sued for paying generic drug makers to delay the introduction of low-cost versions of popular medicines to the marketplace. The Court's 5-3 ruling is a victory for the Federal Trade Commission (“FTC”), and reverses a lower-court ruling that shielded drug makers from liability.

So-called "pay-for-delay" or reverse payment arrangements between brand name and generic drug makers result in payments being made to generic drug makers in order delay the launch of competing generic drugs. These settlements often stem from litigation, or threatened litigation, brought by brand name drug makers against generic drug makers who try to sell products prior to the patent expiration period. In this case, the FTC argued that pay-for-delay agreements cost consumers as much as $3.5 billion per year, while the pharmaceutical industry alleged that such deals are legitimate means of settling patent disputes. Read More ›

Categories: Pharmacy, Regulatory

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New LARA Policy for Professional Services Corporations

The Michigan Department of Licensing and Regulatory Affairs (LARA) Corporations Division has recently implemented a new policy for professional service corporations requiring that the purpose clause in the articles of incorporation includes the type of license held. Previously, only the type of services provided was required.

For example, the purpose clause for a dental practice must now state that the purpose of the corporation is to provide "dental services through a licensed dentist."

This new policy is not stated in any of the LARA materials. However, Foster Swift attorneys and paralegals frequently work with LARA and can help streamline the creation of a professional services corporation by knowing these LARA policy insights.

If you have questions about the new policy or would like assistance with starting a professional services corporation, please contact an attorney at Foster Swift.

Julie C. LaVille authored this article as a Law Clerk.

Categories: Licensing, Physicians, Regulatory

Posted by: Julie LaVille Hamlet

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Large Employers Rejoice! PPACA’s Employer Mandate Delayed until 2015

On July 2, 2013, the Obama administration declared that it was delaying the effective date of the Patient Protection and Affordable Care Act’s Employer Mandate until January 1, 2015. The Employer Mandate, which was scheduled to become effective on January 1, 2014, required all large employers to offer health care coverage to their full-time employees or pay a penalty. Most importantly, this delay means that the penalties to large employers for failure to provide health insurance coverage will not be enforced for another year. You may read the full statement issued by the U.S. Department of Treasury here. Read more about his announcement ›

Categories: Employment, Health Care Reform, Insurance

Posted by: Mindi M. Johnson

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Medicaid Expansion Debate in Michigan Rages On

A key component of the Patient Protection and Affordable Care Act ("PPACA") involves expanding Medicaid to anyone who earns up to 133 percent of the poverty level. In its landmark ruling last year the Supreme Court, while upholding PPACA, ruled that states could not be compelled to expand the joint federal-state Medicaid program.

State legislatures and governors across the country have considered whether to expand Medicaid, with only 23 states and the District of Columbia implementing an expansion according to the (We have identified that the following link is no longer active, and it has been removed.) Under the PPACA, 100 percent of the cost of the Medicaid expansion will be covered by the federal government from 2014 through 2016. The federal government's contribution will gradually decline until reaching 90 percent in 2022 and beyond. What's happening in Michigan? ›

Categories: Health Care Reform, Insurance, Medicare/Medicaid, Regulatory

Posted by: Johanna M. Novak

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IRS Questioned by House Committee Following Alleged Seizure of Medical Records

On Tuesday, June 11, members of the House Committee on Energy and Commerce sent a letter to acting IRS Commissioner Daniel Werfel requesting information regarding how the IRS handles confidential medical information. The letter comes after a recent lawsuit alleging that the IRS illegally seized over 60 million medical records in 2011.

The lawsuit, a class action filed by an unnamed health care provider against 15 unnamed IRS agents, alleges that the agents improperly seized the medical records in violation of the Fourth Amendment during a search executed on March 11, 2011. According to the complaint, the agents seized more than ten million medical records despite knowing that the records were not within the scope of their warrant, (which authorized only the seizure of financial records related to a former employee). The seized records allegedly contained "intimate and private information . . . including psychological counseling, gynecological counseling, [and] sexual or drug treatment." The complaint further alleges that the agents threated to "rip out" the servers containing the medical data if the company's IT personnel did not voluntarily transfer the information to the IRS.  Read More ›

Categories: Health Care Reform, HIPAA

Posted by: Julie LaVille Hamlet

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Walgreens Agrees to Record $80 Million Settlement with DEA

On Tuesday, June 11, 2013, the Drug Enforcement Administration (“DEA”) announced that it had reached an $80 million civil settlement agreement, the largest in DEA history, with Walgreen Co. (“Walgreens”) to resolve allegations involving an “unprecedented number” of record-keeping and dispensing violations under the Controlled Substance Act (“CSA”). According to the DEA’s Press Release, Walgreens negligently allowed controlled substances, including Oxycodone and other prescription painkillers, to be diverted into the black market. Read More ›

Categories: Compliance, Fraud & Abuse, Hospitals, Pharmacy, Physicians, Regulatory

Posted by: Julie LaVille Hamlet, Johanna M. Novak

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IRS Issues New Regulations Affecting the “Blues” Under Health Reform

The Treasury Department and IRS continue to roll out new regulations related to the implementation of the Patient Protection and Affordable Care Act ("PPACA"). On May 10, 2013, the Treasury Department and IRS released the draft regulations, "Computation of, and Rules Relating to, Medical Loss Ratio", which are intended to help Blue Cross and Blue Shield ("BCBS") organizations comply with the Medical Loss Ratio (“MLR”) rules created by the PPACA. Here's the background ›

Categories: Health Care Reform, Hospitals, Insurance, Physicians, Regulatory

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Bills Call For Nurse Staffing Quotas in Michigan Hospitals

California is the only state in the country that has mandated nurse-to-patient ratio requirements for hospitals. If the Michigan Nurses Association and Democratic lawmakers are successful in their current legislative efforts, Michigan will be the second.

House Bill 4311 and Senate Bill 228 are identical bills recently introduced in each chamber by Representative Jon Switalski and Senator Rebekah Warren, respectively. The proposed legislation would require hospitals, including state-owned hospitals and state-owned facilities, to develop staffing plans that provide “sufficient, appropriately qualified nursing staff…in order to meet the individualized needs” of patients.

Significant provisions of the legislation include the following: Read More ›

Categories: Employment, Hospitals, Licensing, Regulatory

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Antitrust Lawsuit Against Blue Cross Blue Shield of Michigan ("BCBSM") Dropped by the Justice Department

On Monday, March 25, 2013 the Department of Justice along with Blue Cross Blue Shield of Michigan ("BCBSM") jointly filed a motion to dismiss the case against BCBSM regarding their "most-favored nation" contracts. This lawsuit had been going on for 2.5 years and was scheduled for trial in October. Part of the reasoning for this lawsuit being dismissed is that the Insurance Commissioner on February 1, 2013 banned hospitals or insurers from enforcing most-favored nation agreements in insurance contracts unless they are approved by the Insurance Commissioner. Also, as of January 1, 2014 most-favored nation agreements are banned completely.

Categories: Insurance

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Blue Cross Blue Shield of Michigan Conversion Bills Signed into Law

While many thought the Blue Cross Blue Shield of Michigan ("BCBSM") conversion bills would be signed into law at the end of 2012, it was not until March 18, 2013 that Governor Snyder signed the proposed legislation into law. The BCBSM conversion bills convert BCBSM from "a tax exempt charitable and benevolent institution" into a nonprofit mutual health insurance company. BCBSM has been operating as a tax-exempt nonprofit since Public Act 350 was signed into law in 1980. (This Public Act is referred to as the previous BCBSM statute.) The previous BCBSM statute made BCBSM Michigan’s “insurer of last resort,” requiring it to accept all customers regardless of their health. Read more about the new laws ›

Categories: Health Care Reform, Insurance, Regulatory

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