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Volume 2, Issue 1, 2025

Welcome


Welcome to our second volume and first issue of 2025 of The Health Record - our healthcare law insights e-newsletter. We hope you enjoyed our Volume 1 issues in 2024 and look forward to continuing to provide information about healthcare industry news and why it is important for our readers.

 

Before we dive into this issue, we encourage you to check out the National Labor and Employment Law Symposium being held January 26-29 in Steamboat Springs, Colorado. This is an exclusive gathering of top national and international labor and employment lawyers to discuss the latest legal updates in a close-knit, collegial atmosphere. More than a dozen sessions, in a roundtable format, will cover cutting-edge labor and employment topics including leave and accommodation concerns, AI, litigation tactics, and much more! In between sessions, participants will have plenty of time to enjoy skiing in Steamboat Springs or networking over drinks or dinner. You can learn more about the event and register here.

 

In this edition, we look at new laws that go into effect this year and will impact the healthcare industry, the effect of needed bed capacity on CON laws throughout the country, top hospice trends anticipated for 2025, efforts to address the rural healthcare crisis in Virginia, healthcare security and how the proposed HIPAA amendments can help, what challenges pharmacies are facing, seniors and caps on pharmacy costs, and an update on the CTA. Finally, Member David Amsbary takes a look at healthcare billing, collections, and best practices and guidance.

 

We hope you enjoy this issue and will let us know if you have any questions or suggestions.


Brienne T. Marco

Member, Chair of the Corporate Department, and Editor of The Health Record

New Laws for 2025: AI Safeguards, Legacy Admissions and Transgender Health Care

“The coming year’s laws also include measures to enhance data privacy and consumer protections, as well as regulate IDs nationwide.”

 

Why this is important: With a new year comes new laws. This includes new laws to increase protections for data privacy and the regulation of AI. There are also new laws regarding transgender healthcare. New Hampshire is the most recent state to ban minors from receiving transition surgery. The new law also bans New Hampshire doctors from referring minor patients to out-of-state doctors for these procedures. The law does not ban the prescription of puberty-blockers or other hormone replacement therapy to minors. New Hampshire is now one of 26 states that have laws limiting or banning transgender surgery for minors. There is currently a case challenging Tennessee’s law that restricts gender transition treatments for minors pending in front of the U.S. Supreme Court. The Supreme Court’s decision on that case will have an impact on the enforceability of the 25 other state laws that limit gender-affirming care for minors. --- Alexander L. Turner

States Curb CON Laws to Boost Bed Capacity

“The COVID-19 pandemic and population growth have led many states to scale back or eliminate Certificate of Need laws.”

 

Why this is important: This article discusses how the Certificate of Need laws (CON laws) throughout the country are changing as a result of the pandemic and the increased demand for hospital and nursing home beds. CON laws vary widely from state to state and the enforcement of those laws within the state can vary from region to region, as more rural areas may be treated differently than more urban areas. Given the ever-growing need for hospital beds with the aging baby boomer population, states are either repealing or modifying the CON laws so that hospitals and nursing homes can more easily gain approval. Navigating the certification process in a given state can be difficult and fraught with legal landmines. Therefore, it is always advisable to have legal counsel involved at every step of the process. --- Matthew W. Georgitis

Top Hospice Trends to Watch in 2025

“Hospice leaders will need to keep their eyes on five key trends in the new year when it comes to compliance, business operations and finance.”

 

Why this is important: As hospice utilization reaches 51.7 percent among Medicare recipients, providers face both opportunities and challenges in adapting to an evolving healthcare landscape as new regulations emerge while also maintaining quality care standards.

 

The Centers for Medicare & Medicaid Services (CMS) is implementing its new Special Focus Program (SFP) in 2025, representing the most significant regulatory development in years. The program aims to enhance quality oversight but has drawn industry concern over its methodology for identifying facilities for increased scrutiny. More than half of hospices nationwide underwent multiple simultaneous audits in 2023, with particular focus on General Inpatient Care (GIP) claims.

 

The merger and acquisition environment shows signs of revival after a two-year slowdown, bolstered by the Federal Reserve's interest rate reduction and stabilizing inflation rates. Private equity firms currently hold more than $800 billion in investable capital, while publicly traded hospice companies are seeing improved financial performance.

 

A wave of consolidation is reshaping the industry landscape, particularly in the nonprofit sector. Organizations are increasingly seeking partnerships and affiliations to combat rising operating costs and build the scale needed to compete in value-based payment systems. These arrangements can help providers maintain bargaining power with Medicare Advantage plans, which typically seek to negotiate lower rates. Adding urgency to this trend, many founding leaders who established their organizations in the 1980s during the creation of the Medicare Hospice Benefit are approaching retirement age and seeking sustainable exit strategies.

 

Technology adoption continues accelerating, with providers leveraging artificial intelligence for functions ranging from clinical documentation to resource allocation. Many organizations are also expanding their service offerings beyond traditional hospice care, particularly into Programs for All-Inclusive Care of the Elderly (PACE) and disease-specific programs for conditions like dementia.

 

The industry is also seeing a shift toward more personalized care models, combining traditional person-centered hospice philosophy with modern predictive analytics to better anticipate and meet individual patient needs. --- Hikmat N. Al-Chami

In Bipartisan Push, Virginia Lawmakers Target Rural Healthcare Crisis

“Report recommends workforce investments, maternal care expansion, and transportation solutions to address growing challenges.”

 

Why this is important: Virginia is making efforts to tackle a critical shortage of healthcare workers in rural parts of the Commonwealth along with associated transportation challenges. In December, the bipartisan House Select Committee on Advancing Rural and Small Town Health issued its budgetary recommendations in order to address these crucial deficits in citizens’ access to medical care. Some of the recommendations by the House Select Committee include implementing incentive-based recruitment of qualified medical professionals; increasing investments in nursing education programs to expand the size of the healthcare workforce; providing free transportation to free clinics and federally qualified health centers using as the example Virginia’s non-emergency transportation program for Medicaid patients run by the Department of Medical Assistance Services; and having insurers expand coverage to include audio-only telehealth services. This article also highlights the House Select Committee’s particular focus on appropriate access to maternal care in rural regions as 30 percent of Virginians live in areas with minimal or no access to such services, and who often have to travel great distances to access such care. Some of the initiatives recommended by the House Select Committee specific to maternal healthcare include investing in doula education and training programs and increased Medicaid reimbursement rates for midwives. While Governor Glenn Youngkin has committed to continuing funding for OB-GYN and family practice medical residencies, the House Select Committee’s report calls for broader investment in medical residencies statewide. In their bipartisan push to address Virginia’s rural healthcare crisis, House Select Committee members reported a strong spirit of collaboration they hope carries through into the 2025 legislative session. --- Jennifer A. Baker

Proposed HIPAA Amendments will Close Healthcare Security Gaps

“Changes to the healthcare privacy regulation, including technical controls for network segmentation, multifactor authentication, and encryption, would strengthen cybersecurity protections for electronic health information and address evolving threats against healthcare entities.”

 

Why this is important: The increased use of technology in healthcare has created new and increased vulnerabilities for patients' protected health information (PHI). Even though the use of technology in the healthcare industry has grown exponentially, the HIPAA Security Rule was last revised in 2013. To try and close these gaps in data privacy, the U.S. Department of Health and Human Services is now planning an overhaul of the HIPAA Security Rule. The proposed new rules include:

  • All policies, procedures, plans, and analyses must be in writing;
  • Facilities must create and maintain up-to-date technology asset inventory along with a network map to track the movement of PHI through the network;
  • More specifics regarding how to conduct a security risk analysis; and
  • The implementation of multi-factor authentication.

 

The proposed rules will be published in early March 2025. Industry stakeholders will have 60 days after the publication of the proposed rules to submit comments. Thereafter, HHS will issue the final version of the rules, but the exact date is currently unknown. Spilman’s Healthcare Practice Group will monitor the publication of the proposed rules and provide an update when they are published. --- Alexander L. Turner

The "Amazon Effect" on Pharmacy isn't About Medicine

“Pharmacies' core business faces challenges too, including reductions in drug reimbursement, recent legislation to break up pharmacy-benefit managers, and ongoing pharmacist shortages.”

 

Why this is important: As online retailers such as Amazon enter the pharmacy space, brick and mortar pharmacies such as those owned by CVS and Walgreens are seeing declining sales, but not just prescription pharmacy sales. The availability of online retailers is also impacting the retail sales of these pharmacies as fewer customers are passing through the aisles of the store to pick up their prescriptions at the pharmacy located at the back of the store and grabbing retail items along the way. With declining sales, the retail chain pharmacies have announced plans to close a significant number of stores. It is unlikely that the availability of online pharmacies will have a significant negative impact on the availability of medications; in fact, it may make prescription medications more available for individuals who are unable to get a physical pharmacy location. But the rise of the online pharmacy could impact the accessibility of other important services that are delivered at pharmacies, such as immunizations and education on the administration of medications, which cannot be delivered online or by mail. --- Brienne T. Marco

Seniors won’t Pay More Than $2,000 for Drugs at the Pharmacy Starting in January

“The limit is one of the 2022 Inflation Reduction Act’s most consequential provisions to lower prescription drug prices for Medicare enrollees.”

 

Why this is important: The implementation of this cost cap represents one of the most significant changes to Medicare drug coverage in recent years, potentially providing financial relief to millions of seniors who face high prescription medication costs.

 

Starting in 2025, Medicare beneficiaries will no longer face unlimited pharmacy costs for prescription medications, thanks to a new $2,000 annual cap on out-of-pocket expenses for drugs purchased at pharmacies or through mail order. The measure, part of the 2022 Inflation Reduction Act, comes after an interim ceiling of approximately $3,500 was established for 2024.

 

The reform addresses a longstanding gap in Medicare coverage where beneficiaries previously had to pay 5 percent of their drug costs in the "catastrophic coverage phase," which began after reaching $7,400 in out-of-pocket spending in 2023. More than 3 million enrollees who don't receive Medicare's low-income subsidy are expected to benefit from the new cap, with that number projected to rise to over 4 million by 2029. According to AARP, about 40 percent of beneficiaries reaching the limit between 2025 and 2029 will save $1,000 or more annually.

 

However, the restructuring of Medicare Part D has led some insurers to propose significant premium increases for standalone drug plans. In response, the Biden administration has offered carriers new subsidies that could total approximately $5 billion next year to prevent these increases. The provision also introduces changes to cost-sharing responsibilities, with insurers covering 60 percent of drug costs above the cap, while Medicare and drug manufacturers split the remaining 40 percent for brand name drugs, and Medicare covers the full 40 percent for generics.

 

Awareness of the new benefit remains relatively low, with a KFF poll showing only about one-third of voters age 65 and older knew about the provision. The cap applies specifically to pharmacy-dispensed medications and not to drugs administered in doctors' offices, such as certain chemotherapy treatments covered under Medicare Part B. --- Hikmat N. Al-Chami

Corporate Transparency Act Nationwide Injunction Reinstated

By Brienne T. Marco


Originally published December 27, 2024



If you are feeling a bit of whiplash today, you are not alone. The United States Court of Appeals for the Fifth Circuit has reinstated a preliminary nationwide injunction of the Corporate Transparency Act (“CTA”).


Let’s recap how we got here. The CTA, enacted on January 1, 2021, requires most business entities to file a Beneficial Ownership Information (“BOI”) report to the U.S. Treasury’s Financial Crimes Enforcement Network (“FinCEN”), unless the entity is exempt from reporting under one of the CTA’s exemptions. The CTA imposed deadlines on companies to file their BOI reports, with a significant deadline for many companies being January 1, 2025.


On December 3, 2024, the United States District Court for the Eastern District of Texas issued a preliminary injunction prohibiting the enforcement of the CTA. The District Court’s decision was appealed to the Fifth Circuit Court of Appeals, and on December 23, 2024, a motions panel of the Appeals Court granted a stay of the injunction, causing the preliminary injunction to be lifted and the deadlines reinstated. In the order granting the stay, the motions panel ordered that the appeal be expedited to the next available argument panel (also called the merits panel). On December 23, 2024, following the motions panel’s decision, FinCEN extended some of the filing deadlines to account for the period during which the preliminary injunction was in effect.


On December 26, 2024, the merits panel vacated a portion of the decision of the motions panel “to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments.” This means the preliminary injunction has been reinstated pending resolution of the appeal. The appeal is now pending with the merits panel, and the appeal remains expedited with a briefing schedule to follow.


While the preliminary injunction remains in effect, FinCEN cannot enforce the CTA and its reporting deadlines. Businesses that already filed an initial BOI report need not file any additional reports, including any amended or updated reports, until a final resolution is reached in the matter. Businesses that have not yet filed an initial BOI report should monitor for further updates and be prepared to file a report quickly should the injunction be ultimately lifted by the Fifth Circuit Court of Appeals or overturned on appeal to the United States Supreme Court.



We have a team of attorneys who are prepared to assist with any questions you may have regarding the CTA and the preliminary injunction. If you have questions regarding the impact of the Fifth Circuit’s latest decision on your business, please contact us.

Featured Attorney Question & Answer

We are continuing our series of Featured Attorney Q&A to introduce you to our large healthcare law team. To help you get to know our team a little better, we are highlighting an attorney in each issue by asking them a healthcare-related question. We hope their response will be insightful for you.

David D. Amsbary

Member

Huntington, WV

304.697.8568

damsbary@spilmanlaw.com



Q: By any measure, efforts related to billing and collecting medical debt are a challenging enterprise. The survival of a healthcare provider can often depend on understanding the issues and nuances in this unique area of practice. As someone who has worked with clients in this arena for many years, what are some suggested best practices for healthcare organizations facing this increasingly important and, sometimes, difficult part of the business?


A. Issues related to billing and collection of medical services debt can be one of the most challenging obstacles a healthcare provider faces year in and year out. The healthcare providers that are more likely to be successful are those who understand the value of strict compliance with the ever-evolving laws, rules and regulations that govern medical debt collection practices, and also the importance of building positive relationships with the customer base through clear, accurate and timely communications during the debt recovery process.


Best practices begin with compliance. Healthcare entities must make staying current with developments in the law related to billing and collections a high priority. The costs associated with providing staff continuing education through industry newsletters and quality periodic trainings far outweigh the risks of being uninformed. Moreover, in order to capture the benefit of training, workflows should be developed such that compliance issues identified through trainings are quickly and correctly identified and resolved.     


Best practices also revolve around relationship building. Healthcare entities should strive to develop positive relationships with patients in all aspects of the service line, including when it comes time to collect a debt. As disputes arise, the degree to which a patient is met with accurate, clear and courteous customer service can often determine whether medical debt gets resolved in a timely manner, or, alternatively at the end of a long, expensive, time-consuming process, if at all. Staff that have been properly oriented to view their role as problem-solvers in collaboration with patients will find greater success at resolving medical billing disputes than those who have not.


When either compliance or relationships break down over the resolution of medical debt, collecting medical debt becomes increasingly difficult to collect and, at times, expensive litigation follows. Having a firm as a partner who understands the benefits and challenges of medical debt collection can be of great value. If you need assistance with your billing and collections processes, please do not hesitate to give us a call.

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