Holland & Hart Healthcare Law Blog

VIRGINIA HEALTHCARE REFORM DECISION: TAX OR PENALTY, INDIVIDUAL RIGHTS OR COLLECTIVE RESPONSIBILITY?

      One of the interesting components of the evisceration of the the “Minimum Essential Coverage” provision in the health care reform bill, (“ACA”) by Virginia Federal District Court Judge Henry E. Hudson, recently is his rejection of the government’s assertion that the “penalty” contained in Section 1501 of the ACA for the failure to purchase health insurance was not a viable “excise tax” under the Constitution.  The Taxation Power of the Congress is as broad as any of its enumerated powers.  Article I, Section 8, Cause 1 gives the Congress the power to lay and collect taxes and judicial review of the Congressional power to lay and collect taxes is narrow and limited.

 

VIRGINIA HEALTHCARE LAW DECISION: CAN CONGRESS REGULATE ECONOMIC INACTION?

      Judge Hudson’s decision invalidating Sec. 1501 of the recent health reform bill, the “Accountable Care Act” or “ACA” in Commonwealth of Virginia v. Sebelius, in the U.S. District Court for the Eastern District of Virginia, addresses the key question as to whether Congress can regulate “economic inactivity” under the provisions of the Commerce Clause of the Constitution. The inactivity is of course the action by individuals in not obtaining mandated health insurance under the ACA and the regulation is the imposition of excise taxes upon those who fail to obtain the required insurance. There are no specific precedents that directly address this issue although logical arguments can be made on both sides.

 

YELPING DENTIST BIT BY FEDERAL COMPUTER DECENCY LAW.

Glen Reit, D.D.S. a dentist practicing in Manhattan received a number of favorable reviews from the online consumer reviewing service, “Yelp.”  All was well until an anonymous post by a “Michael S.” described his office as “small,” “old,” and “smelly.”   Judging from the name of the web site, there was an expected short, sharp, painful cry by either the reviewer or perhaps the reviewed. The post described Dr. Reit’s office equipment as “old” and “dirty.”  Dr. Reit leaped to the courts to obtain an injunction requiring the removal by Yelp of the offending review.  He claimed a substantial reduction in patient appointments. Yelp appFarently removed the good reviews and kept the unfavorable review posted for a while. 

OKLAHOMA FEDERAL JUDGE AUTHORIZES SUBSTITUTE USE OF NEMBUTOL TO AID IN EXECUTIONS.

 

There has been a shortage of thiopetal sodium recently, the anesthetic of choice in executions by lethal injections, which has temporarily halted executions in a number of jurisdictions that unlike, Texas,  have not stocked up on the drug. The manufacturer of the drug Hospira, Inc. of Illinois has indicated that it has had manufacturing issues with the drug and replacement supplies would not be available until early 2011.  Hospira, which markets its drugs, under the tag line of “Advancing Wellness” has indicated that it does not favor the “off-label” use of its drug in state sponsored executions. Death penalty opponents have been objecting to the substitution of other drugs because of the potential for pain and suffering by the prisoner in potential violation of the Eighth Amendment prohibition against cruel and unusual punishment.

 

Physician Rebates on Pharmaceuticals Inducements or Volume Discounts?

 

    Can physicians be swayed in the prescription of drugs by volume purchase discounts that return substantial rebates to them on highly expensive drugs?  In an article in the New York Times this week, (Pollock, “Secret Rebates Offered on Costly Eye Drug, November 3, 2010”) a Times Reporter explored the practice of pharmaceutical companies providing “rebates” to physicians who purchase and use the drugs they sell on their patients.  Oncologists have long engaged in the purchase and resale of toxic agents used in the treatment of cancer. Recently  opthamologists have been provided the opportunity as well. Genetech’s Lucentis is a case in point.

 

BRING ENOUGH “CHARITY” IN HUNT FOR HOSPITAL TAX EXEMPTION?

 

Robert Ruark, the novelist and big game hunter, used to encourage his fellow hunters to “use enough gun” when hunting dangerous animals.  If the reasoning of the Illinois Supreme Court recently in Provena Covenant Medical Center V. Department of Revenue 2010 WL966858 (2010) gains traction beyond the state court ruling on local property tax exemptions and spills over into the analysis of federal and state income tax exemptions, not-for-profit hospitals may be in for some rough sledding with the Internal Revenue Service and Sen. Charles Grassley (R) Iowa.  Senator Grassley who inserted the enhanced “community benefit” requirements into the Patient Protection and Affordable Care Act enacted last fall has been anxious to hold non-for profit hospitals accountable for the very lucrative tax exemptions that they receive under the Internal Revenue Code.

 

HOSPITAL/PHYSICIAN INTEGRATION: CAN THEY GET IT RIGHT THIS TIME?

    Healthcare is one of the trendiest industries in the nation. It is always in a state of flux. During the advent of the deep push into managed care in the 90s there was a feeding frenzy of hospitals trying to gobble up physician primary care practices to control the “gatekeepers” and provide hospital leverage with insurance companies. Hospitals paid huge sums to acquire physician practices before competitors beat them to it.

    

HEALTH CARE REFORM BILL (II): MEDICAL DEVICE TAX - CONTROLLING COSTS OR STIFLING INNOVATION

There were not any easy choices in the Patient Protection and Affordable Care Act  (“PPACA”)as amended by the Health Care and Education Affordability Reconciliation Act (“HCEAR”), except perhaps the opportunity to stick it to the perpetually tanned Rep. John Boehner (R.Ohio), by imposing a 10 percent excise tax on tanning salons using ultraviolet lamps.  The Congress did impose a 2.9 percent excise tax on the sales of medical devices which is expected to raise $2OB in revenues to fund the expanded coverage of health care reform.  (The  original proposal was for $40B.) (See section 9009 of the PPACA and section 1405 of the HCEAR)  In addition new rules on proof of safety first and the implementation of “effective research” requirements are expected to further raise the cost of doing business in  the Medical Device field.

HEALTH REFORM BILL EASES INTENT REQUIREMENT IN ANTI-KICKBACK STATUTE.

    One of the relatively unheralded changes in the Patient Protection and Affordable Health Care Act (the “Act”) passed by Congress recently is the change to the “intent” requirement of proof by the government or plaintiffs attempting to impose liability for federal program related kickbacks under the federal anti-kickback statute (“AKS”). The statute, pre-amendment, was very broad and raised legitimate concerns that it would implicate inadvertent conduct. 

NEW MEXICO BODY PARTS CAPER.

It came up “heads” when an employee at a medical waste disposal facility called Stericycle in Kansas noticed a partially burned head and torso at disposal site.  Stericycle normally disposes of dead tissue, but this was more like raisins in the oatmeal and he quickly perceived something was wrong.  Further investigation led to the discovery of 6 additional roughly severed heads and a number of torsos in a truck outside of the facility. Shades of Alistair Cook! Cook you will remember as the genial host of Masterpiece Theater on PBS whose body was dismembered and proliferated by a gang of New Jersey body snatchers a couple of years ago.