Category: Blog Posts

States Place Bans on Vaping Products: Let the Litigation Begin

Anthony Huber, Belmont Law, Class of 2021

On September 24, Massachusetts Governor Charlie Baker ordered a four-month ban on the sale of all vaping products in the state. The ban was approved by the Public Health Council and took immediate effect.  “The purpose of this public health emergency is to temporarily pause all sales of vaping products so that we can work with our medical experts to identify what is making people sick and how to better regulate these products to protect the health of our residents,” Baker explained in a statement released on September 24.

As of September 24, 2019, the CDC announced that “805 confirmed and probable patient cases of lung injury associated with e-cigarette product use, or vaping were reported by 46 states and the U.S. Virgin Islands.”  The CDC also estimated that 27% of teenagers have used e-cigarettes, double the amount who have tried regular cigarettes.

The Massachusetts ban follows on the heels of recent decisions made by New York and Michigan.  New York was the first state to ban flavored e-cigarettes on September 17, 2019.  In support of the ban, New York Governor Andrew Cuomo stated: “New York is not waiting for the federal government to act, and by banning flavored e-cigarettes we are safeguarding the public health and helping prevent countless young people from forming costly, unhealthy and potentially deadly life-long habits.”

Michigan banned the sale of flavored e-cigarettes on September 18, 2019.  The ban went into effect immediately and is set to remain until January 2020.  Retailers and online sellers were given two weeks to comply with the ban.  On September 28, Michigan Governor Gretchen Whitmer stated: “For too long, companies have gotten our kids hooked on nicotine by marketing candy-flavored vaping products as safe.  That ends today.”

No doubt, these recent developments have set the table for a flurry of litigation disputes. In fact, a number of retailers have already filed civil suits arguing that there is no justification for using an emergency rule instead of proceeding through a process such as the Administrative Procedures Act. Retailers argue that their businesses will suffer irreparable harm, and that the states should not enact an emergency ban when there is still plenty of speculation toward what exactly is causing these deaths and lung injuries.

Retailers and critics of the vaping bans claim that states do not have the authority to ban vaping products by these emergency rules. They argue that the emergency bans are arbitrary and capricious, and that the states should have given them sufficient notice and an opportunity to be heard through a public hearing. As a result, the retailers argue that the emergency bans disregard the legislative process by not allowing the business to have a voice.

Drug Resistant Infections in Skilled Nursing Facilities and Long-Term Care Hospitals

Ryland Close, Belmont Law, Class of 2020

Skilled nursing facilities and long-term care hospitals are struggling to control the spread of Candida auris, a drug resistant fungus that causes serious infections, particularly in vulnerable patients with pre-existing illnesses.[1]

Candida auris poses an especially serious threat as it is difficult to identify, spreads easily and quickly, and is difficult to treat.[2] Candida auris is one of the hundreds of different species of the common Candida fungus.[3] Candida is a type of yeast that regularly exists in the gastrointestinal tract, mucus membranes, and skin without causing any issues.[4] While Candida typically exists in our bodies without causing problems, an overgrowth of Candida causes infection known as candidiasis.[5] Historically antifungal medications have been successful at treating candidiasis; however the over-use of these medications is being blamed for the proliferation of drug-resistant pathogens such as Candida auris, for which most common antifungal medications are ineffective.[6]

Dr. Tom Chiller, the chief of CDC’s Mycotic Disease Branch, has called skilled nursing facilities “the dark underbelly of drug-resistant infection.”[7] So what makes these facilities prime breeding grounds for a drug-resistant fungus like Candida auris? One major challenge that skilled nursing home facilities face is that they are often understaffed and ill-equipped.[8] Without adequate staffing, nurses and orderlies fail to strictly adhere to protocols designed to control the spread of the infection, such as washing hands, wearing gloves, wearing protective masks, and maintaining up-to-date lists of infected patients.[9] Many skilled nursing facilities are ill-equipped to identify and remedy outbreaks of drug-resistant germs such as the Candida auris fungus.[10] Identifying Candida auris is difficult because specialized laboratory methods are needed to identify it.[11] Use of conventional laboratory testing methods can lead to Candida auris being misidentified as other types of yeast or other more common Candida species.[12] Misidentification in turn leads to mismanagement of the infection with antibacterial medication that is ineffective at treating Candida auris.[13]

Another factor that contributes to the spread of the infection in skilled nursing facilities and nursing homes is that the patients in these facilities are simply more vulnerable to infection.[14] Patients that have ventilators, breathing tubes, feeding tubes, central venous catheters, diabetes, or who have had surgery or broad-spectrum antibiotic and antifungal use are at higher risk of Candida auris infection.[15] Another troubling factor that contributes to the spread of the infection is that skilled nursing facilities frequently cycle their infected patients in and out of hospitals and back to the skilled nursing facilities, thus spreading the infections into hospitals.[16]

Although Candida auris is still rare in the United States, over the past four years nearly 800 people in the U.S. have been infected, half of whom have died within ninety days of being infected.[17] The CDC is working to control the spread of the infection by advising healthcare workers on ways to stop the spread of the infection, working with state and local agencies, healthcare facilities, and clinical microbiology laboratories to ensure that laboratories are using proper methods to detect Candida auris, and studying Candida auris strains to better understand the fungus and how it can be controlled.[18]

[1]  Matt Richtel & Andrew Jacobs, Nursing Homes Are a Breeding Ground for a Fatal Fungus, N.Y. Times, Sept. 11, 2019. Available at: https://www.nytimes.com/2019/09/11/health/nursing-homes-fungus.html.

[2] “Candida auris, General Information about Candida auris,” Last updated 9/23/2019. Available at: Centers for Disease Control and Prevention, https://www.cdc.gov/fungal/candida-auris/candida-auris-qanda.html.

[3] “Fungal Diseases, Candidiasis,” Last updated 4/12/2019. Available at: Centers for Disease Control and Prevention, https://www.cdc.gov/fungal/diseases/candidiasis/index.html.

[4] “Fungal Diseases, Candidiasis,” supra note 3.

[5] “Fungal Diseases, Candidiasis,” supra note 3.

[6] Richtel & Jacobs, supra note 1.

[7] Id.

[8] Richtel & Jacobs, supra note 1.

[9] Id.

[10] Id.

[11] “Candida auris,” supra note 2.

[12] “Candida auris,” supra note 2.

[13] Id.

[14] Richtel & Jacobs, supra note 1.

[15] Id.

[16] Richtel & Jacobs, supra note 1.

[17]  Id., See also, “Candida auris: A drug-resistant germ that spreads in healthcare facilities,” Available at: Centers for Disease Control and Prevention, https://www.cdc.gov/fungal/diseases/candidiasis/pdf/Candida_auris_508.pdf.

[18] “Candida auris: A drug-resistant germ that spreads in healthcare facilities,” supra note 15.

 

CMS expands disclosure requirements and increases enforcement powers in affiliation rule

Ryland Close, Belmont Law Class of 2020; Patsy Powers and Justin Hickerson, Attorneys at Waller

The Centers for Medicare and Medicaid Services (CMS) is expanding its authority to revoke or deny providers’ and suppliers’ Medicare, Medicaid and Children’s Health Insurance Program (CHIP) enrollment based upon their affiliation with a sanctioned entity.

The rule will go into effect on November 4, 2019, and comments will be accepted until 5 p.m. on that day.

Under the new rule, providers and suppliers will be required to disclose in enrollment applications any current or previous, direct or indirect, affiliation (defined below) with a provider or supplier that:

  1. has uncollected debt;
  2. has been or is subject to a payment suspension under a federal health care program;
  3. has been or is excluded by the Office of Inspector General (OIG) from Medicare, Medicaid, or CHIP; or
  4. has had its Medicare, Medicaid, or CHIP billing privileges denied or revoked. CMS refers to these four categories as “disclosable events.”

The rule broadly defines “affiliation” as:

  • a 5 percent or greater direct or indirect ownership interest that an individual or entity has in another organization;
  • a general or limited partnership interest (regardless of the percentage) that an individual or entity has in another organization;
  • an interest in which an individual or entity exercises operational or managerial control over, or directly or indirectly conducts, the day-to-day operations of another organization, either under contract or through some other arrangement, regardless of whether or not the managing individual or entity is a W–2 employee of the organization;
  • an interest in which an individual is acting as an officer or director of a corporation; and,
  • any reassignment relationship.

The rule defines “uncollected debt” as:

(i) Medicare, Medicaid or CHIP overpayments for which CMS or the state has sent notice of the debt to the affiliated provider or supplier; (ii) Civil money penalties imposed under this title; (iii) Assessments imposed under this title. Uncollected debt must be disclosed regardless of: (i) the amount of the debt;

(ii) whether the debt is currently being repaid (for example, as part of a repayment plan); or

(iii) whether the debt is currently being appealed.

The Secretary will soon be allowed to revoke or deny enrollment based on such an affiliation when the Secretary determines that the affiliation poses an “undue risk” of fraud, waste or abuse. The rule identifies factors that CMS will use to determine whether an “undue risk” exists. Those factors are:

  • The duration of the disclosing party’s relationship with the affiliated provider or supplier;
  • Whether the affiliation still exists and, if not, how long ago it ended;
  • The degree and extent of the affiliation (for example, percentage of ownership); and,
  • If applicable, the reason for the termination of the affiliation.

CMS will also look into the affiliate’s disclosable event when determining whether the affiliation poses an undue risk. The government will examine:

  1. the type of action;
  2. when the action occurred or was imposed;
  3. whether the affiliation existed when the action (for example, revocation) occurred or was imposed;
  4. if the action is an uncollected debt — (a) the amount of the debt; (b) whether the affiliated provider or supplier is repaying the debt; and (c) to whom the debt is owed (for example, Medicare); and,
  5. if a denial, revocation, termination, exclusion, or payment suspension is involved, the reason for the action (for example, felony conviction; failure to submit complete information).

Fortunately for providers, CMS determined that it would be unduly burdensome for all providers to submit any applicable affiliation information as of the time this rule takes effect. Therefore, under the rule, a provider or supplier will be required to report any and all affiliations upon initial enrollment or revalidation or when CMS specifically requests such information from the provider.

With regard to Medicaid, CMS has adopted a “phased-in” approach to implementing affiliate disclosure requirements. This phased-in approach is aimed at achieving “a more targeted approach” that will be expanded with future rulemaking. With regard to Medicaid and CHIP providers and suppliers, each state will choose from one of two options for implementing the new affiliate disclosure requirements.

Under the first option, disclosures must be submitted by all newly enrolling or revalidating Medicaid and/or CHIP providers that are not enrolled in Medicare, while under the second option disclosures are only necessary if the state, with the consultation of CMS, determines that a disclosure is necessary and requests the disclosure from the provider.

Through this rule, CMS also expanded some of its current enforcement tools. For example, CMS plans to increase the maximum re-enrollment bar from three years to 10 years (with certain exceptions), and if a provider or supplier is revoked from Medicare for a second time, CMS may place a re-enrollment bar on that provider of up to 20 years.

Although the affiliation disclosures will be required only upon initial application, revalidation, or when specifically requested by CMS, individuals and entities that are affiliated with a number of providers and suppliers should begin the process of collecting or confirming information about its affiliates. The information required may be extensive, as the rule applies equally to for-profit and non-profit entities, and CMS has specifically stated that non-health care investors such as private equity sponsors, large mutual or pension funds will not be exempt from the affiliation disclosure requirements.

Federal appeals court backs injunction against religious, moral exemptions from contraceptive mandate

Amy Zink, Class of 2021; Kim Harvey Looney, Partner at Waller

The Court of Appeals for the Third Circuit has upheld a lower court ruling in Commonwealth of Pennsylvania v. President United States of America et al., which granted a nationwide preliminary injunction against religious and moral exemptions for employers to the Affordable Care Act’s (ACA) contraceptive mandate.

In the opinion written by Circuit Judge Patty Shwartz, the panel found that states had standing to bring the suit because they could establish a concrete and particularized injury from the exemptions. The panel found that the states would suffer concrete financial injury from the increased use of state-funded services due to women turning to state-funded services for their contraceptive needs. Further, the states would also see increased costs from the unintended pregnancies that may result from the loss of coverage due to the religious and moral exemptions.

The Third Circuit also determined the District Court correctly concluded that the states have a reasonable probability of showing that the Final Rules violate the Administrative Procedure Act (APA). The federal government argued that HIPAA allows the Secretary of Health and Human Services to issue interim final rules without notice and comment. The applicable section of HIPAA states that the Secretary “may promulgate any interim final rules as the Secretary determines are appropriate to carry out” certain provisions of HIPAA. The Third Circuit rejected that argument, holding that HIPAA did not excuse the agencies from APA procedures and therefore did not provide a basis for issuing interim final rules without notice and comment. The panel was also unconvinced that the Religious Freedom Restoration Act required a religious exemption from the Final Rules. The Third Circuit could not find infringement on the religious exercise of covered employees nor could they find a basis to conclude the accommodation process infringes on the religious exercise of any employer.

This decision is unlike the ruling in The Little Sisters of the Poor Jeanne Jugan Residence v. California, et al. in the Ninth District, which affirmed the preliminary injunction but rejected the injunction’s nationwide scope, ruling that the preliminary injunction was overbroad and that district judges must require a showing of nationwide impact to foreclose litigation in other districts. The Third Circuit found that the District Court did not abuse its discretion in concluding that a nationwide injunction is necessary because it was not more burdensome to the defendant than necessary, and the nationwide injunction was required to provide relief to the states.

VIDEO: Sanders says birth control limitation is ‘all about’ freedom of religion

Pennsylvania AG takes hard stance on nonprofit healthcare providers in the name of consumer protection

Clay Brewer, Class of 2019; Neil B. Krugman, Partner at Waller

The rise in healthcare costs and public concern about accessing adequate care has caught the eye of many government officials across the country, some of whom have increased their enforcement of consumer protection laws in response.

The Attorney General of Pennsylvania, Josh Shapiro, provides a recent example.

In 2012, the University of Pittsburgh Medical Center (UPMC), an integrated nonprofit hospital, announced that it would no longer contract with Highmark, a health insurer, due to Highmark’s recent affiliation with a large UPMC rival, Allegheny Health Network. In 2014, despite continuing disagreements, UPMC and Highmark entered into a consent decree with the Attorney General, the Pennsylvania Insurance Department and the Pennsylvania Department of Health. With the aim of protecting consumers, the decree permitted in-network access for certain groups of Highmark members (such as senior citizens) to certain unique or exception UPMC hospitals and providers.

The decree expires on June 30, 2019. With that date nearing and no resolution in sight to UPMC’s dispute with Highmark, in February 2019, General Shapiro filed a petition in Pennsylvania state court against UPMC, contending that UPMC has failed to meet its charitable purpose and seeking to require “that all charitable, nonprofit health systems contract with all health insurers who want to do business with them.”

In a recent counterclaim filed in federal district court, UPMC has labeled General Shapiro’s actions as unprecedented and illegal because they usurp the rights of nonprofit healthcare providers. Not only does the petition essentially force nonprofit providers to contract with insurers, UPMC claims, but it also allows the state to infringe upon federal government programs such as Medicare Advantage, the Patient Protection and Affordable Care Act (ACA), the Sherman Act and the Employee Retirement Income Security Act of 1974 (ERISA).

On April 3, Shapiro witnessed a setback with a Pennsylvania state court ruling that the court lacks authority to extend a consent decree without an allegation of fraud, accident or mistake or mutual consent by the parties, despite the impact the Attorney General claims it may have on the greater population. Interestingly, the court declined to rule on most of the primary issues such as whether the Attorney General has the power to regulate nonprofits and whether UPMC, in fact, violated its charitable mission.

Although an initial victory for nonprofits, this case will continue to be closely monitored for the impact it may have not only in Pennsylvania but also in the national discussion on the intersection between healthcare costs and consumer protection laws.

Shapiro says he will continue to fight for consumer protection, and submitted an appeal of the trial court’s decision to the Pennsylvania Supreme Court in early April.

The latest on Affordable Care Act litigation at the Fifth Circuit

By Philip FitzGerald, Class of 2019; Colin H. Luke, Partner at Waller

In late March, the Department of Justice (“DOJ”) issued a letter to the U.S. Court of Appeals for the Fifth Circuit supporting the holding by District Court Judge Reed O’Connor that the Affordable Care Act’s (“ACA’s”) individual mandate is unconstitutional and therefore the entire ACA should be repealed.

The DOJ’s letter states that it “is not urging that any portion of the district court’s judgment be reversed.”  We have addressed Judge O’Connor’s decision in a previous blog post. The DOJ’s letter is a departure from its original argument that, although the individual mandate was unconstitutional, it was severable from the rest of the unrelated provisions in the ACA.

At issue before the Court is whether the removal of the individual mandate’s penalty by the Tax Cuts and Jobs Act has invalidated the mandate. If so, does that mean the entire ACA is unconstitutional or is the mandate and its dependent provisions (such as the protections for pre-existing conditions) severable from the rest of the ACA?

Although the DOJ will no longer be supporting the severability argument, Ohio Attorney General Dave Yost, a Republican, filed a friend-of-the-court brief arguing that the unconstitutionality of the individual mandate does not invalidate the rest of the ACA. In support of his argument is the fact that Congress essentially removed the individual mandate in 2017 by reducing the penalty to zero for not having health insurance, while keeping the rest of the ACA’s provisions, such as protections for pre-existing conditions.

A friend-of-the-court brief in support of the Democrat-led states defending the ACA was filed on April 1 by the American Hospital Association, the Federation of American Hospitals, the Catholic Health Association of the United States, America’s Essential Hospitals and the Association of American Colleges. In their brief, they claim that the wholesale judicial repeal of the ACA will remove millions from the insurance rolls, which will hurt not only patients but also hospitals that will be burdened with providing a greater amount of uncompensated care. Additionally, the brief argues that the ACA established numerous programs to address pressing health care needs, such as the opioid crisis and providing more support for the country’s aging population, which would indicate that Congress could not have intended for the entire ACA to be repealed with the elimination of the individual mandate.

On April 10, the Fifth Circuit agreed to expedite the case, setting oral arguments for July. However the Court rules, there is a good probability that the decision will be appealed to the Supreme Court, and the ACA will likely remain in effect as it winds its way through the judicial process.

Several Southeastern states seek to eliminate or relax Certificate of Need laws

Philip FitzGerald, Class of 2019; Kim Harvey Looney, Partner at Waller; Zachary D. Trotter, Associate at Waller

State certificate of need (“CON”) programs regulate the building and expansion of health care facilities and the acquisition of health care equipment. In our region, the states of Tennessee, Georgia, South Carolina, and North Carolina have bills working their way through the legislative process that would amend, limit or repeal CON laws.

Tennessee’s Legislature is currently considering a bill (SB 1291/HB 1085) to repeal the CON requirement for healthcare facilities and to terminate the Tennessee Health Services and Development Agency, the agency responsible for administering the CON program. The bill has passed on second consideration and both the House and Senate bills have been referred to their respective Government Operations Committees. A second bill (SB 0547/HB 0672) would eliminate the CON requirement for home care organizations or satellite emergency departments. That bill also passed on second consideration in the Senate and has been referred to the Senate Commerce and Labor Committee. In the House, this second bill has been assigned to the Facilities, Licensure & Regulations Subcommittee.

Georgia’s Legislature has introduced a bill (HB 198) which proposes to revise the CON program by the following:

  • Increase the amount existing healthcare facilities can spend on expansion and equipment acquisition without requiring a CON.
  • Eliminate the health strategies council, which advises Georgia’s Department of Community Health on the CON program.
  • Allow destination cancer hospitals granted CONs prior to July 1, 2019, to convert to a hospital without obtaining any additional CON.
  • Ease restrictions on CON exemptions for continuing care retirement communities.
  • Add CON exemptions for private psychiatric hospitals, mental health or substance abuse facilities or programs, or mental health or substance abuse services.
  • Add CON exemptions for freestanding ambulatory surgical centers.
  • Add requirements for modifying or acquiring a CON that includes providing indigent care, and participating as a provider for Medicaid and PeachCare for Kids beneficiaries.
  • Limit which providers may oppose a CON application to existing health care facilities of the same type proposed, or which offer substantially similar services located within a 35-mile radius of the proposed project.

This bill was favorably reported by the House Special Committee on Access to Quality Health Care on March 1.

In South Carolina, a bill (H 3823) proposes eliminating the CON program completely, which would leave licensure approval as the only requirement for building or modifying medical facilities or acquiring medical equipment. The bill was referred for review to the Committee on Ways and Means on January 31.

Although in previous years North Carolina has considered bills proposed to completely repeal its CON program, the only CON bill presented so far this year proposes to exempt ocular surgery from CON laws (H173).

It is too soon to tell whether any or all of these bills will be passed, however, their passage could have a substantial impact on the healthcare landscape throughout the Southeast. We will provide updates as these bills progress through the legislative process in each state.

HHS launches innovative payment model for ambulance providers

Curtis Campbell, Class of 2019; Kim Harvey Looney, Partner at Waller

The United States Department of Health and Human Services (HHS) recently announced a new payment model for emergency ambulance services that will permit Medicare patients to be transported to healthcare facilities other than hospital emergency departments.

The Emergency Triage, Treat and Transport (ET3) model was announced on February 14 with the objective of allowing Medicare Fee-for-Service beneficiaries to receive the most appropriate level of care, while simultaneously reducing out-of-pocket costs. Under the model, HHS will allow ambulance suppliers and providers to transport Medicare beneficiaries to areas besides the emergency room, such as a doctor’s office or urgent-care facility, or use telemedicine, with the goal of reducing unnecessary trips to the hospital.

The ET3 model will run for five years and is expected to start in early 2020. This model was introduced to create a new set of incentives for emergency transport and care while ensuring patients get convenient and appropriate treatment in the correct setting. One concern with the existing model is that the payment system only pays ambulance providers when they take beneficiaries to the hospital emergency department, which HHS argues may lead to unnecessary emergency room visits or hospitalizations that may harm the patients.

The ET3 model will test two new payment models while still paying for emergency transport when a Medicare beneficiary is transported to a hospital emergency department or other destination covered under current regulations. The two new payment models are:

  • payment for treatment in place with a qualified healthcare practitioner, either on-the-scene or connected using telehealth; and,
  • payment for unscheduled, emergency transport of Medicare beneficiaries to alternative destinations, such as 24-hour care clinics.

The ET3 model will reward participating ambulance suppliers or providers by providing the opportunity to earn up to a 5% payment adjustment in later years of the model if they meet certain quality measures. The quality measurement strategy aims to avoid adding additional burdens to participants, while also seeking to minimize new reporting requirements. The model will be phased in with multiple application periods in order to maximize participation throughout the country. HHS anticipates it will start accepting applications from Medicare-enrolled ambulance suppliers and providers in Summer 2019.

The proposed ET3 model illustrates the willingness of HHS to develop and evaluate new cost-containment strategies while ensuring that Medicare patients receive the appropriate levels of care in the right settings.

The HHS press release announcing the program can be found here.

The Amazon-Berkshire Hathaway-JPMorgan Chase healthcare venture remains a mystery

Seth Carver, Class of 2020; Neil B. Krugman, Partner at Waller

In early 2018, Amazon announced a joint healthcare venture with Berkshire Hathaway and JPMorgan Chase to build an independent, nonprofit healthcare company targeted at improving care and reducing costs for its employees.

Since then, the joint venture has continued to form and develop, hiring surgeon and author Dr. Atul Gawande as its chief executive.  Outside of the joint venture, Amazon has also recently acquired PillPack, an online pharmacy, and now offers its own line of over-the-counter medical products, under the Basic Care brand.

These moves by Amazon, and a general lack of information about the joint venture’s ultimate goals, and, in particular, whether those plans include bringing healthcare services and products to the general public, make some segments of the health care industry nervous.

Recently the joint venture has encountered some headwinds in the form of a lawsuit filed against it by UnitedHealth. The latter company is seeking a temporary restraining order to block the joint venture from employing a former executive of UnitedHealth Optum, which is in the pharmacy benefit management business.

In her recent article in the New York Times, Reed Abelson described the suit as “a stark example of aggressive tactics that health companies have taken to protect their turf from technology powerhouses like Amazon and Apple,” and to pry open secrets about the joint venture’s ultimate plans.

The joint venture and Amazon’s moves in the health care space are especially pertinent to the Nashville healthcare industry with the recent announcement of Amazon’s “Operation Center of Excellence,” which will be located in Nashville Yards, just blocks away from Waller’s offices and the offices of such healthcare giants as HCA.  Regardless of the joint venture’s or Amazon’s ultimate plans, Nashville’s local healthcare community is bound to be impacted by the influx of approximately 5,000 new Amazon employees, with an average salary of $150,000.

New access standards for veterans to receive community care

Philip FitzGerald, Class of 2019; Colin H. Luke, Partner at Waller

Last month, the Department of Veterans Affairs (“VA”) proposed new access standards for community care as part of the implementation of the MISSION Act, which President Trump signed into law last June. One goal of the MISSION Act is to provide veterans with greater access to medical care by allowing them to use private care outside the VA system.

Although several confusing avenues currently exist for veterans to qualify for outside care, the new access standards would consolidate and simplify the process by basing eligibility on average drive times and appointment wait times. For primary care, mental health and non-institutional extended care services, the VA is proposing that veterans who must drive an average of 30 minutes for services, or who must wait longer than 20 days for an appointment, may seek care with an eligible community provider. For specialty care, the VA is proposing more stringent standards – a 60-minute drive time or a longer than 28-day wait to obtain an appointment. Veterans will also have access to urgent care that gives them the choice to receive certain services when and where they need it. The new access standards are set to go into effect in June.

According to the VA’s Fiscal Year 2019 Budget Submission, community care accounted for around $9.7 billion in 2018. Under the new access standards, the VA expects the number of veterans eligible for community care to almost triple. Of the $66 billion the VA spent on health care services in 2018, excluding community care, $38.5 billion went to ambulatory services, $14 billion went to inpatient care and $8 billion went to mental health care. The remainder went to prosthetics, dental care, and rehabilitation. With the expansion of access for veterans, a larger portion of these services will likely be supplied by community care providers.

Under the MISSION Act, the VA is required to establish networks to ensure veterans get access to community care from eligible providers. Eligible community care providers include providers who participate in Medicare, aging and disability resource centers, federally qualified health centers, and centers for independent living. Unlike prior community care programs which failed to make timely payments to providers (e.g., Veteran’s Choice Program (“VCP”)), the VA will be required to reimburse services under a prompt payment standard (i.e., within 45 calendar days upon receipt of a clean paper claim, or 30 calendar days upon receipt of a clean electronic claim).

Providers who wish to provide services for veterans must contract with their region’s Community Care Network (“CCN”) administrator. The CCN is a set of contracts awarded to as many as four private sector contractors who are tasked with developing and administering six regional networks of high-performing licensed health care providers. To date, contracts for regions 1-3, which include the East, South, and Midwest, have been awarded to Optum Public Sector Solutions, Inc., a subsidiary of UnitedHealth. Following the deployment of the CCN, the selected contractor in each region will begin contracting with providers.

However, until the CCN is deployed nationwide, providers who meet certain eligibility requirements can partner with TriWest Healthcare Alliance’s community care network, the VCP administrator during the transition. Under the VCP, community providers must meet these eligibility requirements:

  • Accept Medicare rates;
  • Meet Medicare Conditions for Coverage and Conditions of Participation or other criteria established by the VA;
  • Be in compliance with all applicable federal and state regulatory requirements;
  • Have same or similar credentials as VA staff;
  • Submit a copy of the medical records to the TPA for medical care and services provided to Veterans for inclusion in the VA record; and,
  • Be eligible according to the U.S. Department of Health and Human Services Office of Inspector General Exclusion Program.

The Veteran’s Choice Program will statutorily sunset after June 6, 2019, so providers should be cognizant of potential changes in provider eligibility standards as the MISSION Act takes effect.