Theres little concrete guidance on this complex issue, but heres what we do know about common areas of concern: The provider agreements, pursuant to which hospitals and other health care providers receive reimbursement for services covered under Medicare Parts A and B, and the provider agreements that hospitals and other health care facilities have entered into with State Medicaid agencies, are not covered Government contracts under the laws enforced by OFCCP. Regardless of how small a deal is, the parties need to understand the competitive implications. 0000014828 00000 n Under Section 503, however, all government contracts must meet the dollar threshold amount of $50,000 for coverage. /content/aba-cms-dotorg/en/groups/health_law/publications/aba_health_esource/2020-2021/december-2020/sta-enf, http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200SB977, https://leg.colorado.gov/sites/default/files/2020a_064_signed.pdf, https://www.nysenate.gov/legislation/bills/2019/s8700/amendment/a, https://www.cga.ct.gov/2014/ACT/pa/pdf/2014PA-00168-R00SB-00035-PA.pdf, https://portal.ct.gov/AG/General/Notice-of-Physician-Acquisition, https://app.leg.wa.gov/RCW/default.aspx?cite=19.390&full=true, https://oag.ca.gov/sites/all/files/agweb/pdfs/charities/publications/nonprofithosp/new_statutes.pdf, https://oag.ca.gov/news/press-releases/attorney-general-becerra-and-senator-monning-announce-legislation-reduce, https://www.justice.gov/atr/statements-antitrust-enforcement-policyin-health-care. This deal analysis should include talking to business personnel, reviewing relevant documents, and potentially, analyzing patient draw data. Dennie Zastrow is an Associate in the Business Litigation practice group at Troutman Pepper. .cd-main-content p, blockquote {margin-bottom:1em;} 00-234, (January 31, 2003), which involved the question of whether the hospital was covered under the laws enforced by OFCCP by virtue of its agreement with an insurance carrier that had contracted with the U.S. Office of Personnel Management (OPM) to provide federal employees a fee-for-services health benefits insurance policy. Further, except for universities and medical facilities, a state or local government agency, instrumentality, or subdivision that has a government contract is exempt from the requirement to develop and maintain a written affirmative action program. Which entity has jurisdiction over health care coverage providers? All contractors and subcontractors who hold a federal or federally-assisted construction contract in excess of $10,000 will be subject to regulatory requirements under one or more of the laws enforced by OFCCP depending upon the amount of the contract. Yes. This article first describes the legislation in Connecticut, Washington, California, Colorado and New York in more detail and then offers guidance for those entities considering entering into healthcare-related deals. Reinsurance entities that have subcontracted with the prime contractor to FEGLI are considered to be government subcontractors within the meaning of the regulations implementing Executive Order 11246, as amended, the Vietnam Era Veterans Readjustment Assistance Act of 1974 (VEVRAA), as amended, 38 U.S.C. P.A. Before sharing sensitive information, make sure youre on a federal government site. Local Coverage Determinations are administered by whom? When selling a long term care insurance rider to an applicant, a life agent must take into consideration all of these factors, EXCEPT. 0000048160 00000 n lock Even if not reportable to federal or state regulators, a deal can be challenged, and the parties should be prepared to advocate for their transaction. ol{list-style-type: decimal;} Long-term care is covered by Medicare Part C. CMS will also conduct targeted market conduct examinations, as necessary, and respond to consumer inquiries and complaints to ensure compliance with the health insurance market reform standards. Saving Bonds and savings notes; therefore, are we required to comply with Affirmative Action Program (AAP) obligations under Executive Order 11246, VEVRAA, and Section 503? It would make it unlawful under state law: for any person or persons to monopolize, or attempt to monopolize, or combine or conspire with any other person or persons to monopolize any business, trade or commerce or the furnishing of any service in this state.33. States and CMS have worked closely to ensure compliance with the health insurance accountability and consumer protections in federal law. What entities are subject to the requirements of Executive Order 11246? The term nonpersonal services includes, but is not limited to, the following services: utilities, construction, transportation, research, insurance, and fund depository. Moreover, if this Blog in any way seems to contradict advice of counsel, counsel's opinion should control over anything written herein. 0000016173 00000 n 0000035585 00000 n 0000008002 00000 n 0000035742 00000 n Health care system consolidation: Attorney General approval and enforcement, California Senate Bill 977 (2020). 18(a). Yes. What is Pete guilty of? lock OFCCP will use the insurance premium to determine if the covered insurance contract meets the $50,000 threshold requirement necessary to obligate the federal contractor to develop and maintain an Executive Order 11246 AAP, not the face value of the policy. Which entity has jurisdiction over health care coverage providers? Is my company covered by the Scheduling Moratorium for Veterans Affairs Health Benefits Program (VAHBP) Providers? 1974). Similarly, under federal antitrust policy, rural hospital transactions would often, if applied, fall within the FTC and DOJ Antitrust Divisions small hospital safety zone criteria: The Agencies will not challenge any merger between two general acute-care hospitals where one of the hospitals (1) has an average of fewer than 100 licensed beds over the three most recent years, and (2) has an average daily inpatient census of fewer than 40 patients over the three most recent years, absent extraordinary circumstances. Like the Executive Order regulations, these regulations also state that the term "nonpersonal services" includes, but is not limited to the following services: Therefore, financial institutions with federal share and deposit insurance are considered to be government contractors. 0000035052 00000 n According to PPACA, what is a health benefits exchange? After collection and review of policy forms for compliance with the respective market reform provisions, CMS will notify issuers of any concerns. Heres how you know. Each regional MAC. There are circumstances where explaining the benefits of and reasons for a transaction before an agency formulates its independent view can streamline and shorten the timeline of a likely inevitable investigation as well as providing greater certainty to the parties. Covered entities taking reasonable steps to limit use or disclosure of PHI . Colorado is another state that is taking merger control into its own hands. Generally speaking, any business or organization that: Yes, if the contracts meet the threshold for coverage. Secure .gov websites use HTTPSA The vast majority of states are enforcing the Affordable Care Act health insurance market reforms. We dont do any government work here. This document is intended only to provide clarity to the public regarding existing requirements under the law or agency policies. What if my health care entity does fall under the jurisdiction of OFCCP? The legislation only applies to mergers commenced on or after the applicable effective date of this act.31 0000001980 00000 n ) My company has contracts with the U.S. Department of Veterans Affairs to provide non-medical services. These efforts show that states are taking a more active role in the investigation and enforcement of the antitrust laws, especially in the healthcare sector. The Patient Protection and Affordable Care Act, enacted on March 23, 2010, and the Health Care and Education Reconciliation Act of 2010, enacted on March 30, 2010, (collectively known as the Affordable Care Act)(ACA) reorganized, amended, and added to the provisions of Part A of title XXVII of the PHS Act. If you have any doubts about your entitys status, be sure to ask your Brouse attorney for assistance in evaluating whether you need to comply with affirmative action requirements. Heres how you know. -Doctors' services are covered by Medicare Part B. 0000015627 00000 n This blog is intended to provide information generally and to identify general legal requirements. Therefore, federal contractors in the State of California must comply with the Executive Order and its affirmative action requirements. The contents of this document do not have the force and effect of law and are not meant to bind the public in any way. For guidance on this topic, please consult OFCCPs FAQs on the Single Entity Test at https://www.dol.gov/agencies/ofccp/faqs/single-entity-test. Like the TRICARE Exemption, a health care provider providing services to beneficiaries of a VAHBP that also holds another covered contract outside the scope of VAHBP would still need to comply with all of OFCCPs requirements. This antitrust safety zone will not apply if that hospital is less than 5 years old. Statements of Antitrust Enforcement Policy in Health Care. However, these time frames could be extended if the attorney general decided to hold a public meeting about the transaction or if the parties substantially changed the deal.24 Parties could appeal the attorney generals determination to deny approval for a transaction via writ of mandate to a California superior court.25 0000001401 00000 n The Affordable Care Act has given Americans new rights and benefits, by helping more children get health coverage, ending lifetime and most annual limits on care, allowing young adults under 26 to stay on their parents' health insurance, and giving patients access to recommended preventive services without cost. 41 CFR 60-741.40(a). A Member of TAGLaw a Worldwide Alliance of Independent Law Firms. For example, Washingtons reporting statute requires that the notice be submitted 60 days prior to close, which is 30 days longer than the federal HSR waiting period. If a request for additional information was issued, then the attorney general had 45 days from substantial compliance with the request to grant or deny approval of the transaction. Even if the parties carry their burden of demonstrating such benefits, the attorney general would still have the discretion to deny his or her consent if he or she finds there is a substantial likelihood of anticompetitive effects that outweigh the benefits of anticipated clinical integration and/or increased services to an underserved population. 42 U.S.C. Although Washington has not challenged a healthcare transaction since the implementation of the reporting requirement earlier this year, the state has done so in the past. Perhaps equally concerning, the proposed amendments appear to permit criminal penalties for violations of the abuse of dominance prohibition.35 This is puzzling given that federal law technically provides for criminal penalties for monopolization claims, but as a matter of policy, the Department of Justice Antitrust Division does not seek criminal penalties for monopolizing conduct. website belongs to an official government organization in the United States. The Colorado attorney general is now authorized to challenge transactions when the effect of such acquisition may be to substantially lessen competition or may tend to create a monopoly regardless of whether the Federal Trade Commission (FTC) or the Department of Justice (DOJ) challenged the transaction within the HSR waiting period.32 Importantly, the legislation merely gives the attorney general the authority to challenge proposed acquisitions it neither imposes any additional filing requirements on parties nor creates a standard that differs from that applied under federal law -- Section 7 of the Clayton Act. 62 0 obj << /Linearized 1 /O 64 /H [ 1401 579 ] /L 114966 /E 50989 /N 8 /T 113608 >> endobj xref 62 48 0000000016 00000 n .usa-footer .container {max-width:1440px!important;} div#block-eoguidanceviewheader .dol-alerts p {padding: 0;margin: 0;} .manual-search-block #edit-actions--2 {order:2;} This definition thus explicitly includes agreements for insurance, which would cover FEGLI contracts. An official website of the United States government A representation may be altered or withdrawn, state program that offers health coverage to California residents who are not able to obtain coverage due to pre-existing conditions. Although the extent of the states future role in antitrust and healthcare affiliations, and, whether a change in the federal administration will affect that role, remains unclear, there is no doubt that a number of states have added or are considering adding to their available enforcement tools, giving them more opportunities to intervene. The site is secure. A TRICARE provider that holds another covered contract, such as a prime contract or a subcontract apart from the TRICARE provider contract, would still need to comply with OFCCPs requirements. The South Carolina Lifeand Accident and Health Insurance Guaranty Association(SCLAHIGA) may cover certain direct life insurance policies, accident and health insurance policies, annuity contracts, and contracts supplemental to life, accident, and health insurance policiesand contracts under South Carolina law. In addition to identifying the parties, the notice must include the locations where healthcare services are provided by each party, the anticipated effective date, and a brief description of the nature and purpose of the material change.14 Washingtons attorney general can also request additional information (including documents, interrogatory responses, and oral testimony) within 30 days of the notice being submitted.15 Any party that fails to submit the requisite notice faces penalties of up to $200 per day.16, Californias proposed SB 977 would have required healthcare systems, private equity firms, and hedge funds to provide notice to and receive approval from the states attorney general before closing acquisitions or changes of control with other healthcare facilities and providers.17 The proposed bill covered a wide range of healthcare affiliations, including: (1) the direct or indirect purchases through leases, transfers, exchanges, options to acquire assets, or creation of a joint venture by a healthcare system, private equity group, or hedge fund of a material amount of the assets of a healthcare facility or provider; or (2) any agreement, association, partnership, joint venture, or other arrangement that results in a change of governance or control at a provider or facility by a healthcare system.18 The legislation would have expanded the existing notification requirements, which apply only to transactions with nonprofit health providers.19 The California attorney general announced that the legislation was needed to combat anticompetitive behavior in the healthcare sector, which he claimed is a growing concern and responsible for higher rates and decreased quality of care in California.20 The Office for Civil Rights (OCR) enforces Section 1557 of the Affordable Care Act (Section 1557), which prohibits discrimination on the basis of race, color, national origin, age, disability, or sex (including pregnancy, sexual orientation, gender identity, and sex characteristics), in covered health programs or activities. 41 CFR 60-741.2(i)(4). The term "health care providers," as used in the TRICARE Exemption and VAHBP Moratorium, is easily interpreted to include providers like blood banks, diagnostic labs, or ambulance services. Some states lack the authority, the ability to enforce these provisions, or both. lock website belongs to an official government organization in the United States. The State Flexibility Cycle I Grant program will provide $8.6 million in grant funds and the State Flexibility Cycle II Grant program will provide $19.6 million in grant funds to assist States in implementing and/or planning the following provisions of Part A of Title XXVII of the PHS Act: Sign up to get the latest information about your choice of CMS topics. Our business operates as a fund depository, and an issuing and paying agent for U.S. 0000009634 00000 n which entity has jurisdiction over health care coverage providers HHS Argues Covered Entities Cannot Intervene in 340B Drug Pricing Case. Part 60-250.5(a) and Part 60-300.5(a), and 41 C.F.R.
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