Wednesday, August 17, 2016

Healthcare Legal News--August 2016

Aetna's CEO Threatens Obamacare Pullout during DOJ fighting the merger 
Aetna announced on Monday that it is dramatically scaling back its participation in the Affordable Care Act (ACA). Aetna CEO Mark Bertolini told federal officials last month that Aetna would retreat from Obamacare if its merger with Humana met further resistance. Thus far it has not prevented the Department of Justice (DOJ) from pursuing further action to stop the merger due to potential limitations on competition. Aetna officials stated that the company was suffering heavy losses due to its participation. The cost of maintaining the Obamacare program for its participants proved to be heavier than expected, and this has been reported by other major health insurers outside of Aetna. Bertolini has been very direct in stating that the two issues between the company's participation in the merger, and the government's opposition to the merger, are connected.

"[I]f the deal were challenged and/or blocked we would need to take immediate actions to mitigate public exchange and ACA small group losses. Specifically, if the DOJ sues to enjoin the transaction, we will immediately take action to reduce our 2017 exchange footprint .... [I]nstead of expanding to 20 states next year, we would reduce our presence to no more than 10 states .… [I]t is very likely that we would need to leave the public exchange business entirely and plan for additional business efficiencies should our deal ultimately be blocked. By contrast, if the deal proceeds without the diverted time and energy associated with litigation, we would explore how to devote a portion of the additional synergies ... to supporting even more public exchange coverage over the next few years."

Bertolini defended Obamacare and his company's participation in the exchange as recently as April. 
"We see this as a good investment, hoping that we have an administration and a Congress that will allow us to change the product like we change Medicare every year, and we change Medicaid every year. But we haven’t been able to touch this product because of the politics." 

However, financial assessments since then have showed that returns from the exchange were dimming, even though Medicare, Medicaid, and employer-provided health benefits continued to thrive.

The full article is available here. 

The Significance of Interoperability and IT Innovations for Accountable Care Organizations

Some healthcare clients are not only entrepreneurial, but are constantly looking for ways to expand their network, their reach for a broader patient population, and their overall footprint in the industry. To create an Accountable Care Organization (ACO) requires a lot of financial capital, intense marketing, and consistency in compliance with CMS guidelines and healthcare laws (i.e. Stark, Anti-Kickback, etc.). Because it is so capital intensive, it is often tempting for clients to cut costs. I tell these clients that while it is ideal to have the best everywhere, there are three fields where you absolutely cannot afford to compromise on quality to keep the business afloat: a well-versed and seasoned healthcare legal team, strong financial experts, and an industry tested information technology (IT) system. Sounds simple: legal, financial, and IT. The following article focuses on the IT aspect.    

Sharing is Caring: The Success Mantra for ACOs

The article stresses the importance of technological innovations in the components of data integration, data management, and care coordination for providers and patients in the ACO model. Cost savings form the basis of appeal for CMS when it comes to ACO participation. A model for the future, many providers (physicians and hospitals alike) are forming or joining these networks for the many benefits involved in this growing model, including next generation ACO.

Why your innovation team needs a lawyer

Last month, an article in the Harvard Business Review presented challenges as well as praise for the involvement of legal experts in a major project. 

"Then the lawyers step in, ask questions, and kill the project — or reduce it to a shadow of its potential."

One important solution stressed by the author was to involve the legal team from the beginning. For a number of reasons, including cost management, it is not unusual for the legal team to be brought in after  the wheels are set in motion and/or after the plan is solidified. Google was used as an example.
"But when the lawyer is a partner, their focus is more flexible and likely more creative. Such decisions, however, are up to company leaders. Do they want to move carefully? Or to go for it and figure things out later? The latter is a modern approach that has been linked to missteps as well as to the phenomenal success of companies such as Google and Facebook. The role a company chooses to assign its legal team — steward or business partner — often is linked to its understanding and tiering of risks."

Google refers to this as "horseback law." In some situations, it is often enough to hop on a horse, make a quick assessment, and mosey on. Google takes some risks and understands not every situation requires an in-depth legal analysis. However, this has only worked when the attorneys are an integral function of the legal and business team, and not just summoned occasionally. Even when you are hiring an attorney or firm as outside counsel, this is the importance of having them on board as de facto in-house legal counsel for your company, and part of your team. This type of innovation is not only no different in the health care arena, but arguably even more necessary.

I tell physicians that it is important to take a prophylactic approach to legal guidance. Don't wait until you are sued or until you are facing potential criminal charges or administrative roadblocks from CMS and insurance companies to hire an attorney or consult with one you already hired. The comparison I make is that a similar mentality is presented to patients. With the exception of some specialties, many physicians would not advise their patients to go a doctor only when they get sick. Preventive measures are important, not just reactions to certain events. You need to go to the lab from time to time, get your history & physical, check for cholesterol, high blood pressure, etc. Do not wait until it is too late.

Healthcare laws are constantly changing and evolving. Also, further opportunities are being presented for physicians or non-clinical professionals to be part of manny innovations in the healthcare industry. This article stresses the importance of attorney involvement, risk measurement and assessment involved in determining the proper level of attorney participation, and the risks involved in lacking innovation.