Jamie McCarty

California has long maintained one of the country’s more developed prohibitions on the Corporate Practice of Medicine (“CPOM”) and the Corporate Practice of Dentistry (“CPOD”). Recent activity from California Attorney General Rob Bonta suggests that these doctrines are increasingly used as enforcement tools in arrangements involving management services organizations (“MSOs”), dental service organizations (“DSOs”), professional corporations (“PCs”), and other health care businesses in California. In the span of roughly three months, Attorney General Bonta took three notable actions in this area: he filed an amicus brief in Art Center Holdings, Inc. v. WCE CA Art, LLC; announced a settlement with Aspen Dental Management, Inc. involving California’s ban on the CPOD; and announced a “first-of-its-kind” settlement with Carbon Health Technologies, Inc., affiliated medical groups, and Carbon’s co-founder and former CEO, Eren Bali, involving California’s CPOM doctrine. This blog post provides a general overview of these recent California developments and what they may signal for regulated professional organizations operating in California. Art Center: The Attorney General Targets Captive PC Replacement Rights The Attorney General’s Art Center amicus brief is a forceful restatement of California’s CPOM doctrine as applied to “friendly PC” or “captive PC” structures. The brief identifies the relationship that “poses the greatest risk” as one in which an MSO has the sole authority to select a so-called “friendly” physician to serve as the PC’s nominal owner, while the MSO retains contractual tools that allow it to control the friendly physician-owner and, by extension, the PC. The brief focuses on a common set of provisions often described as continuity agreements, succession agreements, assignable options, or stock transfer agreements. Under the arrangements described by the Attorney General, the physician-owner could not sell the physician’s interest in the PC without first obtaining the MSO’s approval. The MSO also retained the unilateral right to terminate its contract with the physician-owner. If the contract were terminated, the physician-owner’s ownership interest would transfer to another licensed physician selected by the MSO. According to the Attorney General, these provisions run the risk of giving the MSO “near complete control” over the PC. The Attorney General’s core argument is that agreements giving a nonprofessional corporation the right to replace a PC’s physician-owner with a physician of its choosing violate California’s CPOM prohibition by giving the corporation undue control over a medical practice. The brief reasons that the ability to replace the physician-owner gives the nonprofessional corporation direct control over physician hiring and firing, and indirect control over all other aspects of the practice. That concern is heightened where the physician-owner has no corresponding right to replace the MSO without losing ownership of the PC. Importantly, the brief does not state that every MSO-PC relationship is per se unlawful. It expressly notes that not all MSO-PC relationships give the MSO an impermissible degree of control and that, absent the problematic contractual terms at issue in this specific case, the legality of an MSO-PC relationship requires a totality-of-the-circumstances analysis. But the brief leaves little doubt that contractual rights allowing an MSO to replace a physician-owner are, in the Attorney General’s view, among the highest-risk features in a California MSO-PC structure. Aspen Dental: Corporate Practice of Dentistry Enforcement On May 7, 2026, the California Attorney General announced a settlement with Aspen Dental Management, Inc. for alleged violations of California’s ban on the CPOD and alleged false and misleading advertising. The settlement, which remained subject to court approval at the time of announcement, included $2 million in penalties and $300,000 in restitution funds for certain patients. The Attorney General alleged that Aspen Dental, a private equity-owned DSO, exceeded its role as a provider of business management and administrative services by interfering with and unlawfully directing the practice, ownership, and management of dentistry in California. The Attorney General’s press release also noted that Aspen Dental entered California in 2019 and opened 19 offices in the state, and alleged that Aspen selected, purchased, staffed, and advertised offices without clearly identifying independent dentist-owners. The Aspen settlement is not Aspen Dental’s first corporate practice-related enforcement matter. In 2015, the New York Attorney General announced a settlement requiring Aspen Dental Management to overhaul its New York business practices so that it would not dictate care provided by dentists and hygienists, split patient fees with clinics, or hold itself out to consumers as a provider of dental services. The California Aspen Dental settlement includes a broad set of injunctive terms. Among other things, Aspen Dental agreed to restrictions including: Not replacing any practice owner with another dentist of its choosing. Not requiring practice owners to effectively give up ownership of any dental practices if they decide to terminate their contractual relationship with Aspen Dental. Not owning the property for any practice. Not practicing dentistry, including but not limited to owning or managing any dental office. Not basing service fees on revenue, sales, or profits. Not suggesting, directing, or encouraging any licensed clinician, other than a practice owner, to sell or increase revenue for any service or product. Not compensating any of its employees based on the sales or revenue of practices. Not paying any practice employees incentives based on practice sales, revenue, or profit, including the sale of a particular service or product. Discontinuing the use of and not enforcing any existing contractual provision that restricts where any licensed clinician may practice or be employed. Providing a written fee schedule for products and laboratory services. Registering with the Dental Board of California as a Dental Group Advertising and Referral Service. Clearly and conspicuously identifying the practice owner’s name when creating, publishing, or disseminating advertisements. Carbon Health: CPOM Enforcement Applied to the Friendly PC Model On June 26, 2026, Attorney General Bonta announced a “first-of-its-kind” settlement with Carbon Health Technologies, Inc., affiliated medical groups, and Carbon’s co-founder and former CEO, Eren Bali. The settlement, which remains subject to court approval, resolved allegations that Carbon Health violated California’s prohibition on the CPOM, used unlawful consumer contracts, engaged in false advertising, and improperly billed patients and insurers. According to the Attorney General, Carbon Health used a “friendly PC” model in which Carbon Health Technologies, a MSO, controlled clinic operations by contract. The challenged contracts allegedly allowed the MSO to replace the physician-owner with a physician of its choosing, while preventing the physician-owner from replacing the management company without risking loss of ownership. The Attorney General also alleged that the structure allowed unlicensed officers to direct staffing, advertising, and insurance negotiations. The proposed Carbon judgment would permanently enjoin the defendants from engaging in CPOM, including through: A management services agreement granting the MSO complete authority over advertising, payor negotiations, selection of medical equipment, and the hiring, firing, and compensation of licensed medical professionals; Granting an MSO any ownership interest in a professional corporation, including through an assignable option agreement giving the MSO the right to acquire such ownership interests for its own account; and A revolving credit agreement requiring affiliated professional corporations to seek financing exclusively from the MSO at an above-market rate, subject to certain conventional lender restrictions. The judgment also addresses significant billing and consumer-protection issues, including automatic payment disclosures, overcharges to patients with health maintenance organization coverage, collection of amounts not owed, incorrect billing codes, and misrepresentations about clinics’ in-network status. The proposed judgment imposes a $4.4 million civil penalty claim against the Carbon Health entities in their bankruptcy cases and a separate $100,000 civil penalty against Mr. Bali. The proposed judgment does not state that every succession or continuity arrangement is unlawful by itself. Rather, it focuses on the specific combination of ownership, option, financing, and operational-control rights described above. The Big Picture California’s recent activity fits within a broader state-level trend toward increased scrutiny of private investment and lay-entity influence in clinical care, including recent developments in Oregon and Vermont. California’s approach is notable because the Attorney General is using existing professional practice and consumer protection authorities to challenge MSO-PC arrangements, rather than relying only on newly enacted legislation. The takeaway is not that MSOs, DSOs, or private capital are categorically prohibited in California. Rather, California operators should assess whether their arrangements preserve genuine professional ownership and clinical independence, particularly where contract terms allow the management entity to influence who owns the practice, how the practice exits the relationship, or how clinical and patient-facing decisions are made. Please contact the authors or your primary Dorsey attorney with any questions about how these developments could affect your current business model or any contemplated transactions. Summer Associate Shen Wang provided substantial assistance with the drafting of this blog post/article.

On June 15, 2026, Vermont Governor Phil Scott signed H.583 (“Act 133”) into law, making Vermont the most recent state to reinforce their Corporate Practice of Medicine doctrine by restricting private equity and hedge fund influence over clinical decision-making. The legislation follows a flurry of interest from states inspired by similar legislative action in both Oregon and California. This blog post provides a general overview of Vermont’s new restrictions and places them in the context of the broader national trend toward scrutiny of private investment in health care. Act 133 has three operative sections: § 9772 codifies Vermont’s common-law prohibition on corporate involvement in clinical decision-making as it relates to private equity and hedge fund investments; § 9773 requires disclosure of private equity and hedge fund ownership and control interests in certain health care entities; and § 9774 provides for public transparency and sharing of such ownership information. Restrictions on Private Equity Influence Over Clinical Decision-Making Section 9772 is the substantive heart of Act 133. It establishes that clinical decision-making and other core functions affecting patient care must remain under the control of licensed health care professionals, effectively codifying, at least in part, Vermont’s Corporate Practice of Medicine doctrine. This section specifically prohibits private equity groups or hedge funds from: interfering with providers’ clinical judgment, including by determining appropriate diagnostic tests, referrals to other providers, patient treatment options, work schedules, and patient loads; and exercising control over, or being delegated the power to set: (i) clinical standards or policies; (ii) access to and control of patient medical records; (iii) hiring or firing of medical professionals based on clinical competency or proficiency; (iv) parameters for contracting with third-party payers or other providers; (v) prices or rates for a provider’s services; (vi) coding and billing decisions; and (vii) selection or approval of medical equipment and supplies. Section 9772 does not prohibit private equity firms and hedge funds from investing in health care entities. Nor does it ban unlicensed individuals or entities from providing non‑clinical management, administrative, or business services, so long as a licensed health care professional retains ultimate responsibility for or approval of any decisions affecting patient care. Finally, § 9772 creates a private right of action for health care providers to seek equitable relief, actual damages, costs, and attorney’s fees against a private equity group or hedge fund (or entity controlled directly, in whole or part, by one). New Ownership and Control Disclosure Requirements Section 9773 establishes a mandatory disclosure and data sharing regime to ensure transparency around private equity and hedge fund involvement in health care. It requires defined health care entities and management services organizations (“MSO”), which are owned at least in part by private equity groups or hedge funds (“Applicable  Entities”), to report specific ownership and control information (enumerated below) to Vermont’s state health regulatory board, the Green Mountain Care Board (the “State Board”). Certain entities are exempted, including nursing homes, health care staffing companies, organizations whose services are delivered exclusively through telehealth, and federally qualified health centers. Notably, health care entities and MSOs with no private equity or hedge fund ownership or investment must still attest to no such ownership or investment. Under this section, Applicable Entities must report to the State Board: the name, business address, and business identification numbers for each person that has an ownership, investment, or controlling interest, has a significant equity investment, or is an MSO of a health care entity; a current organizational chart showing the business structure of the health care entity or MSO, including affiliates and subsidiaries; and the health care entity’s or MSO’s most recent fiscal year’s profit and loss statement and balance sheet. Additionally, the State Board must work with the Agency of Human Services and relevant stakeholders to develop data reporting processes pursuant to these requirements. Information shared pursuant to this section shall be public information and not considered confidential, proprietary, or a trade secret, except for specified personal identifying information and certain confidential financial information. Lastly, § 9773 institutes financial penalties of up to $10,000 per year for failing to report required information and up to $25,000 for each material misrepresentation reported. Public Reporting and Transparency Requirements Section 9774 promotes transparency by requiring the State Board to report all ownership and control disclosures made under § 9773. It authorizes interagency sharing of that information for oversight and enforcement and provides that, except for specified personal identifiers, the information is public. Lastly, the section permits the State Board to share reported information with the Attorney General, Secretary of State, and other state agencies and officials to prevent duplicative reporting requirements and facilitate oversight and enforcement pursuant to Vermont law. The Big Picture Act 133 is one example of the larger national trend toward increased scrutiny of health care ownership and control. While Vermont’s new law appears to specifically focus on control over clinical decision-making by private equity and hedge funds, numerous other states, including Oregon, Massachusetts, Indiana, New Mexico, and Washington, passed broader ownership transparency-related laws in 2025 and 2026 (with other additional states at least considering such bills). Collectively, these measures reflect a broad national movement toward increased scrutiny of lay-investor influence in the health care sector. Please contact the authors or your regular Dorsey attorney with any questions about how these restrictions could affect your current business model or any contemplated transactions.    

Oregon’s sweeping new corporate practice of medicine (“CPOM”) law, Senate Bill 951 (“SB 951”), has already faced its first major courtroom test. As discussed in our prior post, SB 951 significantly expands Oregon’s restrictions on healthcare management services organization (“MSO”) structures and so-called “friendly PC” models. Among other things, SB 951 limits overlapping MSO/PC ownership, control, or employment and traditional friendly PC governance arrangements between MSOs and physician practices, restricts operational control by non-clinicians, and creates private enforcement rights allowing physicians to challenge allegedly unlawful arrangements. Most provisions applicable to new friendly PC arrangements took effect on January 1, 2026, while certain existing Oregon organizations have until 2029 to comply. This new legal framework is now at the center of Eugene Emergency Physicians, P.C. v. PeaceHealth. The dispute arose after PeaceHealth announced in March 2026 that it would not renew its long-standing emergency department staffing arrangement with Eugene Emergency Physicians (“EEP”), a local physician-owned group. Instead would transition services to ApolloMD, a national emergency medicine management company. EEP filed suit shortly thereafter against PeaceHealth, ApolloMD, ApolloMD Business Services, and Lane Emergency Physicians LLC (the friendly medical practice managed by ApolloMD in Oregon), seeking a preliminary injunction blocking the transition. According to the complaint and preliminary injunction filings, EEP alleged that the proposed structure utilized by ApolloMD violates SB 951 and Oregon’s CPOM doctrine by authorizing impermissible corporate control over a professional medical practice through a friendly PC arrangement. The litigation quickly attracted significant attention in Oregon and nationally, in part because it appears to be the first private enforcement action brought under SB 951, which itself is arguably the strictest CPOM law in the country. During preliminary injunction proceedings held in early May 2026, the federal court expressed skepticism regarding aspects of the defendants’ testimony and operational structure, with the presiding judge stating that certain ApolloMD officials had been “dishonest under oath.” Reportedly, the court called into question ApolloMD’s reference to a “playbook” they had for emergency room staffing, suggesting that ApolloMD was practically functioning as the clinical staffing shot-caller and Lane Emergency Physicians was only established to shield liability. Before the court issued a ruling on the injunction request, however, the parties privately reached a settlement. PeaceHealth subsequently announced plans to renew its relationship with EEP rather than proceed with the ApolloMD transition. Although the case did not produce a merits ruling interpreting SB 951, the litigation underscores several key points for healthcare investors, MSOs, hospitals, and physician groups operating in Oregon: Oregon stakeholders appear willing to aggressively test and enforce SB 951; Traditional friendly PC structures may face increased scrutiny under Oregon law; and Courts and regulators are likely to focus on operational realities, not merely formal ownership documents, when evaluating CPOM compliance. Healthcare organizations with Oregon operations should continue reviewing governance arrangements, management agreements, compensation structures, and operational control provisions in light of SB 951’s broad restrictions and evolving enforcement landscape. Please contact the authors or your regular Dorsey attorney with any questions about how these restrictions could affect your current business model or any contemplated transactions.  

For the first time in more than two decades, the U.S. Department of Health and Human Services, Office of Inspector General (OIG) released new Industry Segment-Specific Voluntary Compliance Program Guidance (ICPG) for Medicare Advantage Organizations (MAOs). This new Medicare Advantage ICPG broadens the scope of the guidance’s application and serves as a key resource for the Medicare Advantage (MA) industry directly and for related entities. This guidance represents CMS’s acknowledgment of the ever-growing Medicare Advantage program and OIG’s possible enforcement priorities. The ICPG details risks for Medicare Advantage providers and provides practical considerations for mitigation. This voluntary, nonbinding guidance is intended to complement CMS regulations to “further focus and enhance compliance.” The ICPG identifies seven key risk areas for Medicare Advantage Organizations: Access to Care (Network Adequacy and Prior Authorization) MAOs should ensure that enrollees can access all covered services and applicable supplemental services through 1) provider networks adequacy and directory accuracy; and 2) proper use of utilization management tools like prior authorization. Provider Network Adequacy: The ICPG states that “MAOs must maintain and monitor provider networks that are sufficient to provide their enrollees with adequate access to covered services to meet their needs.” As part of this duty, MAOs should proactively make sure provider networks meet enrollees’ needs. MAOs should make timely updates to provider directories to avoid inadvertently submitting false information to CMS. By taking such proactive measures, providers may avoid misleading possible enrollees into enrolling into an MA plan without sufficient provider access based on “false, outdated, or incomplete” provider information. Utilization Management Tools: MAO should evaluate where utilization management tools, like prior authorization, could inappropriately limit access to medically necessary services. MAOs must “make medical necessity determinations based on the individual patient’s circumstances.” If an algorithm is used to support medical necessity determinations, MAOs should not determine “coverage based on a larger data set instead of the individual patient’s medical history, the physician’s recommendations, or clinical notes.” Recommended compliance steps include reviewing trends in claim and prior authorization denials (including denials overturned on appeal), pulling sample claims for individualized medical necessity reviews, and reviewing algorithm-based tools to ensure “decisions on claims and prior authorization focus on patients’ individualized circumstances.” Marketing and Enrollment Medicare Advantage Organizations must ensure their marketing and enrollment activity 1) does not create improper financial incentives; and 2) avoids deceptive marketing practices. Improper Financial Incentives: Marketing and enrollment practices should avoid efforts “that may not be in the best interests of enrollees and potential enrollees.” Enrollment and marketing programs should avoid agent and broker payments for steering patients, meeting enrollment volume targets, not offering plans that competitors offer, or that are tied to enrollee health. Payments for MA marketing and enrollment “should not create incentives for agents and brokers to enroll individuals in MA plans that may not best meet the individuals’ health care needs.”  Improper financial incentives also risk administrative sanctions, False Claims Act civil liability, or Federal Anti-Kickback liability. Deceptive Marketing Practices: MAO compliance programs should oversee third parties conducting marketing on behalf of it. Under CMS regulations, MAOs may not “mislead, confuse, or provide materially inaccurate information to current or potential enrollees.” To mitigate this risk, MAOs should establish a process to review and approve marketing materials, ensure they are clear certain benefits may not be available to all enrollees, periodically audit and require attestations from third party marketers, track and investigate complaints against agents or brokers, and monitor problematic outlier enrollment trends (especially outside the annual enrollment period). Risk Adjustment MAOs may be paid on a capitated per member per month rate, which are in part based on the person’s health risk score. Since higher risk scores result in higher payment rates to MAOs, OIG has raised concerns about risk-assessment scores generated by in-home assessments and chart reviews. MAOs should make sure diagnoses are supported by medical records, as this area is a frequent target for audits and enforcement by OIG. Quality of Care A portion of MAO reimbursement may be tied to quality of care based on a 5-star quality rating system. OIG suggests that MAOs monitor their contracted providers to make sure that no providers have been excluded by the CMS Preclusion List and requiring providers to be enrolled in Medicare to maintain Star Rating data integrity. Oversight of Third Parties Relationships between MAOs and supporting entities are essential to keeping MA programs running efficiently. However, OIG stated that “CMS regulations emphasize that MAOs maintain the ultimate responsibility for fulfilling the obligations of their contracts with CMS.” OIG provided guidance on the relationships between MAOs and First Tier, Downstream, or Related Entities (FDRs). MAOs can only outsource certain compliance functions to FDRs and may be required to audit and monitor the FDRs. Before delegating anything to an FDR, OIG recommends that MAOs conduct a thorough review of risk evaluation to determine the possible “level of compliance or fraud and abuse risk presented by working with a particular third party.” Additionally, MAOs’ contacts with FDRs should be drafted to explicitly secure compliance-related rights and obligations. Compliance Programs with Vertically Integrated Organizations and Other Ownership Structures Vertical integration of entities in the MA industry presents distinct compliance challenges. OIG emphasizes that compliance officers should have sufficient experience, empowerment at their subsidiary MAO, and access to organization-wide leadership. OIG particularly flagged that investors who are less familiar with Medicare Advantage programs may not be familiar with the pitfalls inherent in Medicare Advantage program compliance. It suggested that investors new to the health care industry and MA industry consult the General Compliance Program Guidance and ensure robust training and communications. Submission of Accurate Claims MAOs must certify that the data they submit is accurate to receive payment or else face liability under the False Claims Act or other statutes. OIG recommends robust internal controls, regular audits, and prompt corrective action to promote organization-wide data accuracy at MAOs. The ICPG is an opportunity for MAOs and MA-participating organizations to enhance their current compliance frameworks. It represents OIGs enforcement priorities and offers practical guidance for managing risk. If you have any questions on this Dorsey Health Law blog post, please contact the authors or your regular Dorsey attorney with any questions about how this new guidance document could affect your current or contemplated business practices.

On May 23, 2025, Minnesota Governor Tim Walz signed the Human Services omnibus policy bill into law, which included in part, the addition of a new statutory provision in the state’s criminal code, Chapter 609. Effective August 1, 2025, Section 609.542 of the Minnesota Statutes will essentially inscribe the federal Anti-Kickback Statute (United States Code, title 42, section 1320a-7b(b)) into state law, so that state prosecutors may address fraud against Human Services programs, including without limitation, the state Medical Assistance and Child Care Assistance programs as well as state-funded substance use disorder treatment programs. The new statute makes it a crime for an individual or entity to “intentionally” solicit, receive, offer, or provide “money, a discount, a credit, a waiver, a rebate, a good, a service, employment, or anything else of value” in exchange for (i) referring another individual for the furnishing or arranging to furnish any item or service; (ii) purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing or ordering any good, facility, service, or item; or (iii) applying for or receiving any item or service which is payable in whole or in part under a federal health care program (as defined in United States Code, title 42, section 1320a-7b(f), including without limitation Medicare, Medicaid, and TRICARE), state behavioral health program (see Chapter 254B of the Minnesota Statutes), or state child care assistance program (see Chapter 142E of the Minnesota Statutes). Like the federal analog, a violation of the state-level anti-kickback statute constitutes a false or fraudulent claim for purposes of the state-level false claims act (see Section 15C.02 of the Minnesota Statutes). But, at the same time, the same exceptions, or Safe Harbors, to the federal Anti-Kickback Statute also apply to Chapter 609.542. In addition to the adoption of the federal Safe Harbors, the statute adds an exception for employers enrolled in the Child Care Assistance program. The new statute does not apply to payment from an employer to an employee who provides covered items or services under Chapter 142E in the scope of their employment or to childcare provider discounts, scholarships, or to other financial assistance to families allowable under Section 142E.17, subdivision 7 of the Minnesota Statutes. The criminal sentence for a violation of this statute varies depending on the value of the kickback at issue. For a kickback that is not more than $5,000, the sentence may include imprisonment for not more than five years or payment of a fine of not more than $10,000, or both. For a kickback that is more than $5,000 and not more than $35,000, the sentence may include imprisonment of not more than ten years or payment of a fine of not more than $20,000, or both. And for a kickback that exceeds $35,000, the sentence may include imprisonment of not more than 20 years or payment of a fine of not more than $100,000, or both. The dollar amounts of any kickbacks provided within a six-month period may be aggregated for the purposes of charging and sentencing under this statute. In comparison, criminal penalties for a violation of the federal Anti-Kickback Statute may include imprisonment of not more than ten years or payment of a fine not more than $100,000, or both. The federal statute does not discuss aggregation of claims. But note that a violation of the federal Anti-Kickback Statute may also be subject to civil monetary penalties up to $50,000 per kickback plus three times the amount of the kickback (also known as treble damages). The new Minnesota statute does not contemplate the collection of state-level civil monetary penalties in connection with a violation of Chapter 609.542. We note, however, that pursuant to Section 62J.23 of the Minnesota Statutes, the state commissioner of health separately may levy a fine against any individual or entity that violates the federal Anti-Kickback Statute in the amount of $1,000 or 110 percent of the estimated kickback, whichever is greater. Legislative Background Section 609.542 appears to be, at least in part, a direct reaction to the recent indictment of Evergreen Recovery and the recent $18.5 million settlement between the United States Department of Justice and NUWAY Alliance. Both Evergreen and NUWAY are substance use disorder treatment program providers in Minnesota that allegedly provided free or subsidized housing for patients in exchange for patients’ attendance at counseling sessions payable by federal healthcare programs. These state investigations serve as a good reminder that prosecutable kickbacks do not always take the form of cash, but can be anything of value, including discounted or in-kind services. Expected Impact Unlike state-level anti-kickback statutes in other states and unlike Section 62J.23 (discussed above), the new Minnesota statute notably does not expand the scope of state kickback enforcement to commercial arrangements. The expected impact of this statute is that, as of August 1, 2025, state prosecutors will be able to file anti-kickback claims that previously were the purview of only federal prosecutors and may ask for additional jail time (20 years instead of ten years) during sentencing for violations. We will have to wait for additional guidance, or new enforcement actions, to fully understand how broadly Minnesota prosecutors and, ultimately, the courts will interpret the mens rea term “intentionally,” as it is used in Chapter 609.542. If a violation of the state statute merely requires intentional action, rather than intentional wrongful action, the requisite mens rea under the state-level anti-kickback statute may be a lower threshold than under the federal Anti-Kickback Statute.[1] Overall, it remains to be seen whether this new statute will indeed significantly increase healthcare fraud enforcement in Minnesota, particularly against individuals and entities that do business with the state. Please contact the authors or your regular Dorsey attorney with any questions about how this new statute could affect your current or contemplated business practices. [1] At least under Eighth Circuit precedent. There currently is a significant federal Circuit split regarding the requisite mens rea under the Anti-Kickback Statute.

On May 26, 2023, the Governor of Minnesota signed into law Minnesota bill HF 402 to increase government oversight of health care transactions that occur in Minnesota or involve Minnesota-based health care entities. A general overview of the new law’s oversight provisions can be found in a previous Dorsey Health Law blog post. The new law also contains provisions specific to nonprofit health care organizations, including additional transaction requirements and extension of the moratorium on certain conversion transactions. Given the prevalence of nonprofit health care organizations in Minnesota, we expect this new legislation to materially impact both payors and providers in the State. This blog post summarizes those provisions, all of which have already gone into effect. Additional Transaction Requirements for Nonprofit Health Care Entities In addition to the general notice requirements now effective under this new law and summarized in our previous post, HF 402 imposes further requirements on (1) nonprofit health care entities that are either incorporated under the Minnesota Nonprofit Corporation Act or organized as a Minnesota nonprofit limited liability company, and (2) the subsidiaries of such nonprofit entities, regardless of their incorporation or organizational status. These entities are now required to ensure the following before proceeding with a transaction: The transaction complies with the Minnesota Nonprofit Corporation Act, the charitable trusts statutes, and other applicable laws; The transaction does not involve or constitute a breach of charitable trust; The transferring nonprofit entity will receive the full and fair value for its public benefit assets, unless the discount between the full and fair value of the assets and the value received for the assets will further the nonprofit purposes of the entity or is in the public interest; The value of the public benefit assets to be transferred has not been manipulated in a manner that causes or has caused the value of the assets to decrease; The proceeds of the transaction will be used in a manner consistent with the public benefit for which the assets are held by the nonprofit health care entity; The transaction will not result in a breach of fiduciary duty; and There are procedures and policies in place to prohibit any officer, director, trustee, or other executive of the nonprofit health care entity from directly or indirectly benefiting from the transaction. Currently, it is not entirely clear how or to what extent these additional transaction requirements for nonprofit health care entities will be reviewed in conjunction with the general notice requirements for health care entities. Moratorium on Conversion Transactions A moratorium on conversion transactions involving nonprofit health plan entities operating under the Minnesota Nonprofit Health Service Plan Corporations Act or Health Maintenance Act that was set to expire July 2023 has been extended through July 2026. The moratorium was initially enacted in response to concerns of some lawmakers that nonprofit assets could be transferred to for-profit carriers in a merger or acquisition. These nonprofit health plan entities “may only merge or consolidate with; convert; or transfer, as part of a single transaction or a series of transactions within a 24-month period, all or a material amount of its assets to” an entity that is incorporated under the Minnesota Nonprofit Corporation Act; “or to a Minnesota nonprofit hospital within the same integrated health system as the health maintenance organization.” A “material amount” is defined as the “lesser of ten percent of an entity’s total admitted net assets as of December 31 of the previous year, or $50,000,000.” The moratorium does not apply if the nonprofit health plan entity files an intent to dissolve due to insolvency of the corporation or if insolvency proceedings are commenced. Related Study and Recommendations HF 402 requires that the Minnesota commissioner of health study and develop recommendations on the regulation of conversions, mergers, transfers of assets, and other transactions primarily affecting Minnesota-domiciled nonprofit health maintenance organizations (HMOs). These recommendations must address the following: Monitoring and regulation of Minnesota-domiciled for-profit HMOs; Issues related to public benefit assets held by a nonprofit HMO, including identifying the portion of the organization’s assets that are considered public benefit assets to be protected, establishing a fair and independent process to value the assets, and determining how public benefit assets should be stewarded for the public good; Providing a state agency or executive branch office with authority to review and approve or disapprove a nonprofit HMO’s plan to convert to a for-profit organization; Establishing a process for the public to learn about and provide input on a nonprofit HMO’s proposed conversion to a for-profit organization; and Issues, including statutory language and regulatory implementation, related to a potential statutory requirement that nonprofit HMOs licensed under Minnesota Statutes chapter 62D, and health systems organized as a charitable organization, upon the sale or transfer of control to an out-of-state or for-profit entity, return to the state’s general fund an amount equal to the value of any charitable assets the HMO or health system received from the state. The commissioner is required to seek public comment on the regulation of conversion transactions involving nonprofit HMOs no later than October 1, 2023. A final recommendations report must be submitted to the appropriate legislative committees by June 30, 2024. If you have any questions regarding HF 402 and how your organization or transaction may be impacted, please contact the authors or your regular Dorsey attorney. Summer Associate Lindsey VerMurlen provided substantial assistance researching and drafting this blog post.

On May 26, 2023, the Governor of Minnesota signed into law Minnesota bill HF 402 to increase government oversight of health care transactions that occur in Minnesota or involve Minnesota-based health care entities. Minnesota joins a growing number of states considering or enacting similar measures, including New York, Connecticut, Delaware, Massachusetts, Nevada, New Jersey, Oregon, Rhode Island, Washington, and California. The following is a general overview of this new law, many portions of which have gone into effect already. General Prohibition and Key Definitions HF 402’s purpose is to prohibit transactions by any health care entity that would “substantially lessen competition or tend to create a monopoly or monopsony.” In order to enforce this prohibition, HF 402 institutes a number of transaction notification requirements and grants the Minnesota attorney general with the power to review, enjoin, or unwind any applicable transaction in violation of HF 402. Here are key definitions from HF 402 that outline the law’s scope: “Health care entity” is defined as hospitals, hospital systems, captive professional entities, medical foundations, health care provider group practices, entities organized or controlled by one of the above entity types, and entities that own or exercise control over one of the above entity types. “Transaction” is defined as a single action or a series of actions that occur within a five-year period in Minnesota or involving a health care entity formed or licensed in Minnesota, that constitutes: A merger or exchange of a health care entity with another entity; The sale, lease, or transfer of 40 percent or more of the assets of a health care entity to another entity; The granting of a security interest of 40 percent or more of the assets of a health care entity to another entity; the transfer of 40 percent or more of the shares or other ownership of a health care entity to another entity; An addition, removal, withdrawal, substitution, or other modification of one or more members of a health care entity’s governing body that transfers control, responsibility for, or governance of the health care entity to another entity; The creation of a new health care entity; An agreement or series of agreements that results in the sharing of 40 percent or more of a health care entity’s revenues with another entity, including affiliates of such other entity; An addition, removal, withdrawal, substitution, or other modification of the members of a health care entity formed under the Minnesota Nonprofit Corporation Act that results in a change of 40 percent or more of the membership of the health care entity; or Any other transfer of control of a health care entity to, or acquisition of control of a health care entity by, another entity. “Control,” along with “controlling,” “controlled by,” and “under common control with” is defined as the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a health care entity, whether through the ownership of voting securities, membership in an entity formed under the Minnesota Nonprofit Corporation Act, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with, corporate office held by, or court appointment of, the person. Control is presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing 40 percent or more of the voting securities of any other person, or if any person, directly or indirectly, constitutes 40 percent or more of the membership of an entity formed under the Minnesota Nonprofit Corporation Act. Furthermore, the attorney general may determine that control exists in fact, notwithstanding the absence of a presumption to that effect. If a transaction meets the definition above (noting that certain transactions are excluded from the definition, including, for example, those involving only nursing homes and home care providers), such transaction may be subject to certain reporting requirements as outlined further below. Reporting Requirements Now effective, HF 402 requires notice to the attorney general and the Minnesota commissioner of health at least 60 days before the proposed closing date of any transaction where either “(i) the health care entity involved in the transaction has average revenue of at least $80,000,000 per year; or (ii) the transaction will result in an entity projected to have average revenue of at least $80,000,000 per year once the entity is operating at full capacity.” The notice to the attorney general and the commissioner of health must include a number of disclosures, including the following non-exhaustive list of items: The entities involved in the transaction; The leadership of the entities involved in the transaction, including all board members, managing partners, member managers, and officers; The services provided by each entity and the attributed revenue for each entity by location; The primary service area for each location; The proposed service area for each location; The current relationships between the entities and the affected health care providers and practices, the locations of affected health care providers and practices, the services provided by affected health care providers and practices, and the proposed relationships between the entities and the affected health care providers and practices; The terms of the transaction agreement or agreements; All consideration related to the transactions; Markets in which the entities expect post-merger synergies to produce a competitive advantage; Potential areas of expansion, whether in existing markets or new markets; Plans to close facilities, reduce workforce, or reduce or eliminate services; The brokers, experts, and consultants used to facilitate and evaluate the transaction; The number of full-time equivalent positions at each location before and after the transaction by job category, including administrative and contract positions; The current governing documents for all entities involved in the transaction and any amendments to these documents; The transaction agreement or agreements and all related agreements; Any collateral agreements related to the principal transaction, including leases, management contracts, and service contracts; All expert or consultant reports or valuations conducted in evaluating the transaction, including any valuation of the assets that are subject to the transaction prepared within three years preceding the anticipated transaction closing date and any reports of financial or economic analysis conducted in anticipation of the transaction; Copies of all filings submitted to federal regulators, including any filing the entities submitted to the Federal Trade Commission under the Hart-Scott-Rodino Act in connection with the transaction; A certification sworn under oath by each board member and chief executive officer for any nonprofit entity involved in the transaction; Audited and unaudited financial statements from all entities involved in the transaction and tax filings for all entities involved in the transaction covering the preceding five fiscal years; and Any other information or documents relevant to evaluating the transaction that are requested by the attorney general or the commissioner of health.   Effective January 1, 2024, HF 402 requires data reporting of certain smaller transactions to the commissioner of health at least 30 days before the proposed closing date of the transaction or within 10 business days of the date the parties first reasonably anticipate entering into the transaction if the expected completion is within less than 30 days, where either “(i) the health care entity involved in the transaction has average revenue between $10,000,000 and $80,000,000 per year; or (ii) the transaction will result in an entity projected to have average revenue between $10,000,000 and $80,000,000 per year once the entity is operating at full capacity.” This data reporting includes disclosure of much of the same type of information as outlined above. Please note that HF 402 imposes additional requirements on nonprofit health care entities not identified above. Attorney General Enforcement Powers HF 402 grants the attorney general broad enforcement powers. It permits the attorney general to extend the notice and waiting period for the $80,000,000+ transactions for an additional 90 days by notifying the health care entity in writing of the extension or to waive all or any part of the waiting period or disclosure requirements, including requirements for disclosures to the commissioner of health. Additionally, the attorney general is permitted to bring an action in district court to compel compliance with the notice, waiting period, disclosure and submission requirements, or to enjoin or unwind a transaction or seek other equitable relief necessary to protect the public interest if a health care entity or transaction violates HF 402 or is contrary to the public interest. Failure of the entities involved in a transaction to provide timely information to the attorney general or the commissioner of health is an independent and sufficient ground for a court to enjoin or unwind the transaction or provide other equitable relief, however the attorney general must notify the entities of the deficiency and provide a reasonable opportunity to remedy it. If you have any questions regarding HF 402 and how your organization or transaction may be impacted, please contact the authors or your regular Dorsey attorney.

The COVID-19 pandemic required health care providers of all sizes to make drastic changes to the mode of patient care delivery. Telehealth quickly emerged as a safe alternative to in-person patient visits, and many providers quickly transitioned to virtual services. The pandemic-initiated expansion of telehealth was rapid and significant, but the pandemic likely accelerated existing trends more than creating new ones. The increased availability of telehealth has offered patients greater access levels and types of care that would otherwise be difficult to obtain due to geography, limited appointment availability, or affordability. Despite the increased access to care and positive experiences with telehealth over the past year and a half, many regulatory actions temporarily enabling the use of telehealth services have expired or will end in the coming months. What does the post-COVID future hold for tele health? Health care industry leaders are tracking the following developments: Licensing State professional licensure laws are major obstacles for telehealth providers wanting to offer telehealth services as an option for patients who reside or are otherwise located in other states. State laws governing the practice of medicine, nursing, social work, and other health professions generally require the provider furnishing care to be licensed in the state where the patient is located. At the beginning of the pandemic, the spike in demand for virtual care led states to quickly take action to loosen or waive professional licensure requirements. Many states allowed out-of-state health care providers of all types to provide telehealth services to their residents, including Hawaii, Idaho, and Vermont. States such as Illinois and Maryland permitted telehealth practice only where a provider had a pre-existing relationship with the patient, and others only relaxed requirements for physicians or mental health providers, such as in Minnesota. Post-pandemic, we expect to see continued efforts to remove licensing barriers faced by telehealth providers. Several states have enacted the Interstate Medical Licensure Compact or have entered into cross-border licensure waiver agreements with neighboring states, but these waiver agreements may only apply to certain practitioners or involve slow, costly application processes. Some states may follow the approach taken in Florida and Georgia, where health care providers can obtain a “telemedicine license” with less burdensome requirements. Action on the federal level is also possible. In response to COVID-19, the Centers for Medicare & Medicaid Services (“CMS”) temporarily waived the Medicare requirement that providers be licensed in the state they are delivering telemedicine services when practicing across state lines, subject to certain conditions. While this waiver does not exempt providers from licensure requirements under state law, subsequent action taken at the federal level may set a trend followed by state governments. Providers should also be aware of existing state laws permitting the practice of telehealth across state lines when an existing patient is on vacation or attending college in another state. For example, in Minnesota, out-of-state physicians are exempt from licensure requirements if only providing telehealth services on an “irregular or infrequent basis” as defined in Minn. Stat. § 147.032. And Colorado allows non-Colorado-licensed health care providers to provide occasional services or consultation via telehealth to patients in Colorado as long as they meet certain requirements, such as maintaining certain levels of insurance, not maintaining an office in the state, and not informally or formally agreeing to provide care on a regular or routine basis. See Colo. Rev. Stat. § 12-240-107. Reimbursement Before the pandemic, reimbursement options for telehealth were limited and low payment rates were a significant financial burden for providers seeking to provide telehealth services. As we described in a previous blog post, CMS implemented sweeping changes to Medicare reimbursement and coverage requirements at the start of the COVID-19 outbreak. Dozens of new services were added to the list of telehealth services covered by Medicare, restrictions on geography and originating sites were removed, and payment rates for telehealth services were raised to match the rates for the same in-person service. On July 13, CMS released its annual proposed rule for payments under the Medicare Physician Fee Schedule, which would make many temporary Medicare flexibilities for mental and behavioral health services permanent. If finalized, the rule would allow beneficiaries to receive such telehealth services from home, reimburse providers for audio-only services, and keep certain recently added services on the Medicare telehealth list through December 31, 2023. The rule would require an in-person visit within six months prior to an initial telehealth service and at least once every six months thereafter, but CMS is seeking input on whether a different interval may be necessary or appropriate. The agency is also soliciting comment on: Whether additional documentation should be required in the patient’s medical record to support the clinical appropriateness of audio-only telehealth; Whether or not audio-only telehealth for particular high-level services should be covered; and What additional guardrails should be put in place in order to minimize concerns about program integrity and patient safety. Several states have passed or proposed payment parity legislation that would permanently require insurance coverage and/or reimbursement for certain telehealth services at a level equal to in-person visits. For example, legislation was recently enacted in Oklahoma requiring payment parity for all telemedicine services. In states like Georgia and California, laws require equal coverage for both virtual and in-person services, but allow payers and providers to negotiate alternate payment rates. A recent Connecticut law requires payment parity for telehealth services under its state Medicaid program, and a Massachusetts law mandates payment parity for behavioral health services. Privacy In response to the pandemic, the Office for Civil Rights (“OCR”) announced several telehealth flexibilities to allow providers to care for patients remotely during the pandemic. OCR announced it would not impose penalties on providers for noncompliance with certain HIPAA obligations in connection with their “good faith provision of telehealth” using any non-public communication platform, such as FaceTime or Zoom. Given increasing concerns about cybersecurity and privacy risks, we expect continued discussions at the federal and state level about how to safeguard patient’s health information while allowing continued access to telehealth services. Providers should conduct a comprehensive risk assessment of its privacy and security protections and vendor agreements to ensure all telehealth technologies and IT systems comply with HIPAA standards. Conclusion The COVID-19 pandemic has profoundly changed the health care delivery landscape. As emergency orders end and regulatory flexibilities expire, policymakers at the state and national level are considering how best to regulate telehealth post-pandemic. Telehealth services ease the burden of obtaining quality healthcare services for medically underserved populations, including communities of color, people with disabilities, and residents of rural areas.  Telehealth also gives patients the opportunity to conveniently obtain routine and preventative care, which could positively impact health outcomes and improve health equity. Dorsey attorneys are closely monitoring federal and state actions regarding telehealth. For more information on how to navigate the existing legal landscape and prepare for future developments, contact the authors or your regular Dorsey attorney.

The Centers for Medicare and Medicaid Services (“CMS”) published an Interim Final Rule in the Federal Register on September 2, 2020 to supplement and strengthen the agency’s enforcement of COVID-19 reporting requirements.  The final rule also modifies various aspects of Medicare reimbursement methodologies for health plans, physicians, and other providers.  This post summarizes each of these regulatory changes, which are effective as of September 2, 2020. New Enforcement Requirements for COVID-19 Related Data Reporting To assist public health officials in detecting and tracking COVID-19 outbreaks and save lives, CMS is adding new reporting requirements for healthcare facilities along with expanded CMS enforcement authority to ensure compliance with such reporting requirements. The Interim Final Rule addresses reporting and related enforcement for three general categories of healthcare entities: long term care (LTC) facilities, hospitals and critical access hospitals (CAHs), and laboratories. A. LTC Facilities Under CMS regulations issued in May, LTC facilities are required to electronically report COVID-related data to the Centers for Disease Control and Prevention (CDC) on a weekly basis. Facilities must report a variety of information, including suspected and confirmed COVID-19 infections among residents and staff, the number of COVID-19 resident and staff deaths, the personal protective equipment and hand hygiene supplies in the facility, and more. The Interim Final Rule allows CMS to impose civil money penalties (“CMPs”) if a LTC facility fails to submit its weekly report.  CMS may impose a minimum of $1,000 for an initial violation. For every subsequent time the facility fails to report the required data, the CMP imposed will increase by $500, up to a maximum of $6,500.  For example, a facility that fails to report for two consecutive weeks will be subject to a minimum CMP of $2,500: $1,000 for the first week and $1,500 for the second week. CMS waived the normal notice-and-comment process due to the urgent need to track and contain COVID-19 infection outbreaks. LTCs are subject to these new penalties for reporting failures effective September 2, 2020, and the penalties will continue to be in effect for up to one year beyond the end of the COVID-19 public health emergency (“PHE”). B. Hospitals and CAHs The Interim Final Rule also makes daily reporting of COVID-related data a Condition of Participation in the Medicare and Medicaid programs for hospitals and CAHs. To support broader surveillance of the spread of COVID-19, CMS will require hospitals and CAHs to report certain COVID-related information to the Department of Health and Human Services (“HHS”) daily, through a standardized format specified by HHS, set forth here. CMS does not have authority to impose CMPs on hospitals or CAHs who fail to provide this reporting. However, should a hospital or CAH fail to consistently report test results throughout the duration of the PHE, it will be non-compliant with the hospital and the CAH Conditions of Participation set forth at 42 CFR §§ 482.42(e) and 485.640(d), respectively, and consequently subject to CMS termination of its Medicare provider agreement. C. Laboratories Additionally, the Interim Final Rule modifies the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) to require all laboratories to report SARS-CoV-2 test results within 24 hours of a positive test result. Reports must be made throughout the PHE, as specified here.  If a laboratory fails to submit SARS-CoV-2 test results as required under the CLIA modifications, the Department of Health and Human Services may impose CMPs or other penalties on the laboratory. CMS states that CMPs for reporting violations will be $1000 for the first day of noncompliance, and $500 for each subsequent day the laboratory fails to report SARS-CoV-2 test results. The applicable statute allows for the imposition of CMPs of up to $10,000 for each violation. LTCs Must Test Residents and Staff for COVID-19 In addition to reporting COVID-related data, LTCs are required under the new rule to test their facility residents and staff for COVID-19.   Testing includes not only staff employees, but volunteers and those providing services under arrangements at the facility.  Testing must be conducted in a manner consistent with current professional standards of practice for COVID testing.   Documentation of testing and resulting must be provided in staff personnel records, and in resident medical records. CMS has published additional guidance here that addresses testing frequency, types of testing that should be conducted, and guidance on handling staff who refuse testing, among other topics. Limitation on Medicare Coverage of COVID-19 Testing Without an Order In a prior Interim Final Rule with Comment Period, CMS expanded coverage for COVID-19 testing for Medicare beneficiaries by eliminating the need for an order from a treating physician or other practitioner. CMS has now revised this policy, citing fraud and abuse concerns and clinical concerns that beneficiaries are receiving too many COVID-19 tests without medical attention and oversight.  Consequently, beginning September 2 and continuing for the duration of the PHE, Medicare will cover only one (1) COVID-19 diagnostic test without the order of a physician or other practitioner.   A single otherwise covered laboratory test each for influenza or a similar respiratory condition needed to obtain a final COVID-19 diagnosis, when performed in conjunction with a COVID-19 test, will also be covered.  Medicare will cover additional COVID-19 tests only with the order of a physician or other practitioner. Any COVID-19 test(s) that a beneficiary received prior to September 2, 2020 is disregarded for purposes of this new single COVID-19 test coverage rule. CMS points out that this coverage rule applies to the Medicare program only; COVID-19 testing coverage policies for group health plans, health insurance issuers, and other public programs must comply with applicable law. CMS is also allowing pharmacists and other practitioners allowed to order laboratory tests in accordance with state scope of practice and other laws to fulfill the requirements related to orders for covered COVID-19 tests for Medicare patients. Quality Reporting: Updates to the Extraordinary Circumstances Exceptions (ECE) Granted for Four Value-Based Purchasing Programs in Response to the PHE for COVID-19, and Update to the Performance Period for the FY 2022 SNF VBP Program Early in the PHE, CMS granted several “Extraordinary Circumstances Exceptions” (“ECEs”) which relieved facilities of certain data collection and reporting obligations so that more time and resources could be directed to patient care. CMS used such data reporting to score certain program performance, resulting in adjustments of Medicare payments pursuant to certain value-based and quality-related features of Medicare reimbursement methodologies.  CMS states that, although it was gathering data on these programs, it has concerns about the national comparability of data due to the geographic differences of COVID-19 incidence rates and hospitalizations and the impacts of varying state and local laws and policy changes implemented in response to COVID-19. Therefore, the Department proposes updating the ECEs it granted for the following value-based purchasing programs: The End-Stage Renal Disease Quality Incentive Program (ESRD QIP); The Hospital-Acquired Condition (HAC) Reduction Program; The Hospital Readmissions Reduction Program (HRRP); and The Hospital Value-Based Purchasing (HVBP) Program. Under the updated ECEs, CMS will only score data that was voluntarily reported for the fourth quarter of calendar year 2019. Further, CMS will exclude all data reported for the first or second quarter of calendar year 2020, due to the significant and variable impacts COVID-19 had on facilities during this period. In addition, the Interim Final Rule updates the performance period for the fiscal year 2022 SNF VBP Program, because CMS believes that the current measurement periods would not produce reliable results for measuring SNF quality of care as determined by hospital readmission rates.  The measurement periods are changing from October 1, 2019 through December 31, 2019 and July 1, 2020 through September 30, 2020 to April 1, 2019 through December 31, 2019 and July 1, 2020 through September 30, 2020. NCD Procedural Volumes for Facilities and Practitioners to Maintain Medicare Coverage The Interim Final Rule acknowledges that, because of the PHE, far fewer non-essential procedures have been performed over the past several months. As a result, hospitals and practitioners may not be able to meet certain procedural volume requirements that are set forth in certain national coverage determinations (“NCDs”), including: NCD 20.34 Percutaneous Left Atrial Appendage Closure (LAAC). NCD 20.32 Transcatheter Aortic Valve Replacement (TAVR). NCD 20.33 Transcatheter Mitral Valve Repair (TMVR). NCD 20.9.1 Ventricular Assist Devices (VADs). Typically, failure to meet the procedural volume requirements would prevent Medicare payment for those categories of procedures.  However, CMS will not enforce the procedural volume requirements contained in the four above-noted NCDs because of disruptions caused by the PHE. This waiver of enforcement only applies to facilities and practitioners that had met the volume requirements prior to the PHE for COVID-19. All other non-volume based coverage requirements under these NCDs remain in effect. Merit-Based Incentive Payment System (MIPS) Updates CMS is making changes to the Merit-Based Incentive Payment System (“MIPS”) for physicians and other clinicians, to reflect the manner in which Medicare beneficiaries are receiving primary care services during the PHE.  For the 2020 MIPS performance year and any subsequent performance year that starts during the PHE, CPT and HCPCS codes for communications technology-based services and telephone evaluation and management services are to be included in the definition of primary care services under MIPS.  This will allow those remote services to be included in CMS determinations of where Medicare beneficiaries receive a plurality of their primary care services for purposes of MIPS beneficiary assignment to physicians and other clinicians. CMS is also modifying one of the Improvement Activities in MIPS relating to COVID-19 clinical trial participation, so that clinicians can receive credit under this Improvement Activity not only for participating in a COVID-19 clinical trial, but also for participating in the care of patients diagnosed with COVID-19 and simultaneously submitting relevant clinical data to a clinical data registry for ongoing or future COVID-19 research. Recognizing Temporary Premium Credits as Premium Reductions CMS previously adopted policies allowing health insurance issuers offering health insurance coverage in the individual and small group markets on the American Health Benefit Exchanges established under The Patient Protection and Affordable Care Act (Pub. L. 111-148) to grant temporary premium credits for individuals and small businesses that may be struggling to pay premium during the PHE.  In this Interim Final Rule, CMS makes a number of technical changes and clarifications to ensure that health plan premium reporting takes into account any premium credits granted, including for purposes of medical loss ratio (MLR) reporting and rebates. Part C and Part D Health Plan Star Ratings Finally, CMS made changes to the Star Rating system for Medicare Part C and Part D health plans.  The Star Rating system allows CMS to publish comparative information to beneficiaries about Medicare Advantage and Medicare Part D health plans, and is the basis for determining quality bonus payments to Medicare Advantage plan, as well as beneficiary rebates. CMS currently excludes certain scores within the Stark Rating system if a plan has 60 percent or more of its enrollees living in a Federal Emergency Management Agency (FEMA)-designated Individual Assistance area.  Because of the PHE, the maintenance of this rule would remove almost all plans from those scoring metrics.  Consequently, CMS is removing that 60 percent rules for the 2022 Star Ratings (for which 2020 is the measurement year) to avoid having to exclude the vast majority of plans from the methodology. This recent Interim Final Rule clearly indicates that CMS wants to ensure consistent reporting of COVID-19 related data from laboratories, hospitals and long term care facilities.  It also illustrates the profound and widespread degree to which the PHE continues to impact Medicare reimbursement methodologies and systems. If you have any questions about the Interim Final Rule or any of the topics addressed in this post, please contact the authors or any member of the Dorsey & Whitney Health Transactions & Regulations Practice Group.

On March 30, 2020, the Centers for Medicare & Medicaid Services (“CMS”) published a compilation of COVID-19 Emergency Declaration Blanket Waivers for Health Care Providers (each, a “Blanket Waiver”). Section 1135 of the Social Security Act gives CMS the authority to issue waivers that ease requirements for providers affected by an emergency if: (1) the President makes an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121-5207 (the “Stafford Act”); and (2) the Secretary of the Department of Health and Human Services declares a Public Health Emergency (“PHE”), both of which have now occurred in light of COVID-19. CMS is permitted to issue both blanket waivers and provider/supplier requested waivers on a case-by-case basis. Blanket waivers apply to all applicable providers and suppliers, while individual waivers apply only to the requesting provider or supplier. A provider or supplier need not request a provider/supplier-specific waiver of a requirement if CMS has issued a blanket waiver addressing the same requirement. It is important to note that 1135 waivers apply solely to federal requirements and do not apply to state licensure or other requirements. Any applicable state requirements (e.g., licensure) must also be addressed with the relevant state agency. Another important note of caution is that these 1135 waivers often include specific details and requirements. It is critical for health care providers to review the waivers carefully before taking action under them. To that end, providers should visit the CMS Coronavirus Waivers & Flexibilities website, here, to locate the specific guidance and requirements from CMS about the type of program waiver(s) being sought. CMS has provided numerous Frequently Asked Questions (“FAQ”) documents and provider-specific fact sheets that detail the details about and limits of the available waivers and flexibilities for each type of provider (hospital, skilled nursing facility, physicians, laboratories, home health providers, etc.). Additionally, this website contains links to all of the waivers provided in each state. The following is a summary of the Blanket Waivers CMS has made available to providers and suppliers on March 30, 2020. These Blanket Waivers are retroactively effective back to March 1, 2020 and will continue through the end of the emergency declaration. I. Hospital Waivers The Blanket Waivers include significant regulatory relief for hospitals. The following is a summary of the hospital-specific Blanket Waivers, and here is a CMS Fact Sheet that was published for hospitals to further explain these specific Blanket Waivers: a. Temporary Expansion Sites (a.k.a. Hospitals Without Walls) Under this Blanket Waiver, hospitals are permitted to offer health care services in locations that are not currently part of the hospital. Previously, hospitals would have been required to meet Life Safety Code and other regulatory provisions and obtain approvals to provide services in a new location. This waiver will help hospitals set up temporary expansion sites to offer inpatient services (e.g., nursing, room and board) in locations such as shell space in a hospital, parking structures, dormitories and the like – as long as the hospital exercises control and oversees the services provided at the location, and as long as the location is approved by the state (to ensure safety and comfort for patients and staff). CMS is also allowing currently enrolled ambulatory surgery centers (“ASCs”) to temporarily enroll as hospitals by calling the COVID-19 Provider Enrollment Hotline to complete and sign an attestation form in order to enroll and provide services during the PHE as a hospital. CMS also encourages other entities (e.g., freestanding emergency departments which are not currently allowed to enroll in Medicare) to call the COVID-19 Provider Enrollment Hotline to complete and sign an attestation form in order to enroll and provide services during the PHE. Further, CMS is allowing hospitals to change their provider-based locations to address patient needs, as well as allowing additional flexibilities related to inpatient services furnished under arrangements. Moreover, hospitals are permitted to screen patients at locations off of a provider’s campus, in order to avoid the spread of COVID-19. Further, for surge facilities in off campus departments, CMS is waiving the requirements to have policies and procedures for evaluating emergencies so these facilities do not need to focus time on drafting policies and procedures but rather can focus on patient care needs. b. Relaxed Paperwork, Policies, Cost Reporting, Filing Deadlines and Enrollment Requirements For hospitals that are impacted by a widespread outbreak of COVID-19, the timeframes for providing patients a copy of their medical records are waived, as are the requirements related to visitation and seclusion. Additionally, CMS is granting a 30-day post-discharge requirement to complete medical records, CMS is waiving medical records department staffing requirements, and also waiving specific requirements for the form and content of the medical record and the medical record completion requirements. Further, verbal orders can be authenticated more than 48 hours after the fact (although read-back verification is still required). CMS is also waiving requirements to provide information about advanced directives to patients. Further, To ensure that hospitals and critical access hospitals focus on patient care and ensuring patients are discharged in an appropriate setting, as opposed to focusing on the paperwork and other regulatory obligations, CMS is waiving the detailed regulatory paperwork and other requirements related to discharge planning. For example, CMS recognizes that during the PHE, hospitals may not be able to use specific quality metrics and other data, or a comprehensive list of nursing homes in the area, to select a nursing home or home health agency. However, hospitals are still required to work with families to ensure that the discharge meets patients’ care needs. Further, CMS is waiving the entire condition of participation related to utilization review plans and committees, nursing care plans, having available a current therapeutic diet manual, developing and implementing emergency preparedness policies and procedures and communication plans, as well as waiving the detailed provisions governing a hospital’s quality assessment and performance improvement program (although hospitals must still have such a program in place). CMS has established a toll-free hotline for all providers as well as significant flexibilities in provider enrollment. See here for additional information from CMS on provider enrollment relief, as well as our previous blog post on this topic, available here. Further, CMS is waiving the signature and proof of delivery requirements for Part B drugs and durable medical equipment (although the delivery and the fact that a signature could not be obtained due to COVID-19 should be documented in the record). Additionally, CMS is delaying the cost-report filing deadlines until June and July, and CMS is extending the data submission deadlines for hospitals on the reporting of occupational mix of employees until August 3, 2020. Further, Medicare Administrative Contractors (“MACs”), Qualified Independent Contractors (“QICs”), and Independent Review Entities (“IREs”) are allowed to grant extensions to providers on appeals and are permitted to offer other flexibilities on filings and deadlines. c. Critical Access Hospitals (“CAHs”) Without Walls CAHs are now permitted to exceed their 25 bed limit and the 96 hour length of stay limit. CMS is also permitting CAHs to treat patients in urban areas (they typically must be located in a rural area) as needed in order to establish surge locations. Further, CMS is waiving the restrictions on CAHs’ ability to establish off campus provider based locations, and to establish the normally restricted co-location arrangements with other providers. CMS is waiving the minimum personnel qualification requirements at CAHs for clinical nurse specialists, nurse practitioners and physician assistants, and CMS is deferring to the state for the requirements of staff licensure, certification or registration, which will allow more flexibility to CAHs in states where federal requirements are more stringent. d. Distinct Part Units CMS is also now allowing hospitals to house acute care patients in excluded distinct part units (as long as the unit’s beds are appropriate for acute inpatients). Hospitals are permitted to bill for the care provided in the distinct part unit under the Inpatient Prospective Payment System. Providers should annotate in the medical record to explain that the care was provided in the distinct part unit due to capacity issues related to the PHE. Hospitals are also now permitted to provide care in acute care beds and units for patients who would normally be treated in distinct part psychiatric units or distinct part rehabilitation units, as long as the acute beds and units are appropriate for such patients. Hospitals should continue to bill under the Inpatient Psychiatric or Inpatient Rehabilitation Prospective Payment System for those patients, and annotate in the medical record to explain that the care was provided in the acute care unit due to capacity issues or other exigent circumstances related to the PHE. e. Telemedicine CMS is waiving telemedicine restrictions on hospitals and CAHs to make it easier for these providers to provide telemedicine for their patients through agreements with off-site hospitals, in order to improve access to specialty care. f. Workforce CMS is waiving the sterile compounding requirements to allow the re-use of face masks. CMS is also waiving the 2-year reappointment period for medical staff re-credentialing, the requirement that patients in a hospital be under the care of a physician (to allow other practitioners like physician assistants and APRNs to be used to the fullest extent possible), and CMS is waiving the requirement for CRNAs to work under the supervision of a physician. Further, CMS has stated that Hospitals do not have to designate in writing the personnel qualified to perform specific respiratory care procedures or the amount of supervision required for personnel to carry out those procedures. II. Long-Term Care, Skilled Nursing Facilities, and Nursing Facility Waivers The Blanket Waivers provide a number of flexibilities related to nursing services. See here for the CMS fact sheet published specifically for long term care facilities. CMS is waiving the 3-day prior hospitalization requirement for coverage of a skilled nursing facility (“SNF”) stay, waiving the timeframe requirements for certain data submission for SNFs and long-term care (“LTC”) facilities, and allowing nursing homes to suspend pre-admission screening and annual resident review assessments. Certain physical environment requirements are now waived, allowing for expanded use of non-SNF buildings or non-resident rooms in a LTC facility for patients in certain emergency circumstances. To promote social distancing: requirements that residents participate in-person in resident groups are waived; requirements related to room-sharing and moving a resident’s room are waived for the purpose of grouping or separating residents with respiratory illness symptoms and/or residents with a confirmed COVID-19 diagnosis from residents without these symptoms or diagnosis; and physicians and non-physician practitioners may conduct visits through telehealth options when previously the visits were required to be in-person. CMS is also partially waiving training and certification requirements required for nurse aids employed for longer than four months at a facility in order to assist with potential staffing shortages. CMS has waived certain resident transfer and discharge requirements in particular circumstances, though advance notification and receiving facility agreements are generally still required, and related care planning requirements are also waived in certain circumstances. Additionally, CMS is delaying the cost-report filing deadlines until June and July, and CMS is extending the data submission deadlines for hospitals on the reporting of occupational mix of employees until August 3, 2020. Further, Medicare Administrative Contractors (“MACs”), Qualified Independent Contractors (“QICs”), and Independent Review Entities (“IREs”) are allowed to grant extensions to providers on appeals and are permitted to offer other flexibilities on filings and deadlines. III. Home Health, Hospice, ESRD, and DMEPOS Waivers CMS has provided FAQ documents on these waivers for home health, here; for hospice, here; for ESRD Facilities, here; and for DME Suppliers, here. Under the Blanket Waivers, CMS provided extensions for home health, hospice, and ESRD providers to complete certain assessment required for Medicare reimbursement. CMS also waived certain home health, hospice and ESRD in-person assessment, visit, and supervision requirements to reduce the need for ordinary course check-ins and to allow for greater use of telehealth. In addition, hospices are relieved of the requirement to provide non-core hospice services, such as physical therapy, occupational therapy, and speech-language pathology. In providing additional flexibility in timing and in-person visits, CMS’s goal is to support containment efforts for at-risk populations and to free up professional resources to focus on treatment of those infected with coronavirus and to focus on operations related to the pandemic. In addition, CMS is waiving certain routine audits, maintenance, and certification requirements for ESRD Facilities and ESRD Facility staff. Again, CMS is attempting to free up resources and provide flexibility to support providers’ focus on pandemic-related efforts. CMS authorized the establishment of Special Purpose Renal Dialysis Facilities (“SPRDF”) to mitigate transmission among the at-risk population. Such facilities do not require a federal survey to be completed before providing services. CMS is allowing physicians that are appropriately credentialed at a certified dialysis facility to provide care at a “designated isolation location” such as a SPRDF without separate credentialing. Dialysis services may now also be provided in nursing homes and SNFs, so long as the services and necessary equipment and supplies are provided by personnel of the resident’s usual Medicare-certified dialysis facility. In an effort to expedite supply of and reimbursement for DMEPOS, CMS is waiving the replacement requirements (such as the face-to-face requirement, a new physician’s order, and new medical necessity documentation) for DMEPOS that are lost, destroyed, irreparably damaged, or otherwise rendered unusable. DMEPOS suppliers must still provide a narrative description about why the equipment must be replaced. IV. Practitioner Licensure, Provider Enrollment, Appeals, and Medicaid/CHIP Waivers CMS has provided a specific fact sheet describing the waivers and flexibilities available for physicians and other clinicians, available here. The Blanket Waivers are intended to ease the burden on the health system in order to allow providers to focus on patient care. To that end, CMS is temporarily waiving the Medicare reimbursement requirements that out-of-state practitioners be licensed in the state in which they are providing services when they are licensed in another state when the following four conditions are met: The practitioner must be enrolled in Medicare; The practitioner must have a valid license to practice in the state which relates to his or her Medicare enrollment; The services must be furnished, whether in-person or remote via telehealth, in a state in which the emergency is occurring in order to contribute to relief efforts in his or her professional capacity; and The practitioner must not be excluded in any state that is part of the PHE. Please note that the foregoing Medicare reimbursement waiver for licensure does not waive state or local licensure requirements. As a result, providers must review the state licensure requirements in each jurisdiction prior to delivering telehealth to patients in that location. Please see the blog post we published on this topic of telehealth opportunities here. Additionally, CMS has taken a number of steps to ease the provider enrollment requirements. See here for additional information from CMS on provider enrollment relief, as well as our previous blog post on this topic, available here. CMS has set up a hotline for physicians and non-physician practitioners to enroll and receive temporary Medicare billing privileges. Additionally, CMS has taken the following steps to facilitate the enrollment of providers in the wake of the COVID-19 outbreak, including: Waiver of certain screening requirements, including application fees, background checks, and site visits; Postponement of revalidation actions; Allowing licensed providers to render services outside their state of enrollment;  Expediting pending or new applications;  Easing telehealth restrictions; and Allowing physicians and non-physician practitioners to terminate opt-out status early and enroll in Medicare. Regarding appeals, the new waivers grant broad powers to MACs, QICs, and IREs to relax the requirements of federal regulations regarding the appeals process in FFS, and Parts C and D. MACs, QIEs, and IREs are instructed to allow extensions to file an appeal and to permit the waiver of requests for timeliness requirements for additional information to adjudicate appeals. MACs, QICs, and IREs are now allowed to process an appeal even with incomplete Appointment of Representation forms as outlined in federal regulations. Additionally, MACs, QICs, and IREs can now process appeals that do not meet the required elements of those same federal regulations. MACs, QICs, and IREs are given broad flexibility with respect to other parts of the appeals process so long as good cause requirements are satisfied. Finally, regarding Medicaid and CHIP, the new waivers permit states to request approval that certain statutes and implementing regulations be waived under section 1135. To request such an approval, states may submit an 1135 waiver request directly to their Center for Medicaid and CHIP Services (CMCS) state lead or Jackie Glaze, Acting Director, Medicaid and CHIP Operations Group, Center for Medicaid and CHIP Services at CMS by e-mail (Jackie.Glaze@cms.hhs.gov) or by letter. CMS sets forth a number of examples of the kinds of requests that states can make under this waiver, including: Waiver of prior authorization requirements for FFS programs; Waiver of out-of-state requirements for providers to provide care to another state’s Medicaid enrollees impacted by COVID-19; Temporary suspension of provider enrollment and revalidation requirements to increase access to care; Temporary waiver of state licensure requirements; Temporary suspension of requirements for pre-admission and annual screening requirements for nursing home residents. CMS encourages states to assess their needs and take advantage of these waivers. To assist states with the waiver request process and provide additional guidance, CMS released the Medicaid and CHIP Disaster Response Toolkit, which can be found here. Further, the CMS Coronavirus Waivers & Flexibilities website, here, contains a link to each state’s request for waivers and the responses from CMS. V. Stark Waivers On the same date, CMS also issued much-anticipated Blanket Waivers of sanctions under the federal physician self-referral law, or “Stark Law,” for “COVID-19 Purposes.” These Blanket Waivers are set forth here. Please see our separate post, available here, with detailed information about these Stark Law Blanket Waivers. * * * If you have questions about the new CMS waivers, please contact the authors or your regular Dorsey & Whitney LLP attorney. Dorsey is closely monitoring the rapidly evolving legal landscape related to the COVID-19 pandemic. You can access Dorsey’s health law blog related to health law updates, available here. You can also access Dorsey’s coronavirus resource center, which contains a wide variety of legal resources related to the coronavirus outbreak, available here.

On March 27, 2020, the President signed into law the “Coronavirus Aid, Relief, and Economic Security Act’’ (“CARES Act”). The CARES Act is the third phase of the federal government’s response to the coronavirus following two other laws to support American families and address health sector needs that were approved on March 6, 2020 (Phase I here) and March 18, 2020 (Phase II here). The CARES Act includes provisions which provide cash payments and other resources to help individuals, small businesses, state and local governments and hospitals/healthcare providers. The CARES Act includes four sections (called “Titles”) and each title addresses a different topic. This e-update summarizes Title III of the CARES Act titled “Supporting America’s Health Care System in the Fight Against the Coronavirus”. Title III provides much needed financial assistance to the health care industry, as well as additional guidance and other provisions which provide information on waivers and other benefits to help hospitals and others who are on the front lines of fighting the COVID-19 pandemic. The following is a summary of the major provisions of Title III, organized in order by section numbers under the CARES Act but does not address subtitle B – Education Provisions and subtitle C – Labor Provisions. We will provide links to summaries of other provisions in the CARES Act prepared by our colleagues throughout the firm as they become available. Click here to read the summary.

On Monday, March 23, 2020, the Center for Medicare and Medicaid Services (“CMS”) released Frequently Asked Questions on Medicare Provider Enrollment Relief related to COVID-19 (“FAQs”), available here. The recent Public Health Emergency declaration by the Secretary of the Department of Health and Human Services provided a broad 1135 waiver on enrollment screening requirements, application fees, criminal background checks, site visits, and certain licensure requirements. The FAQs provided guidance to providers on how CMS is exercising its authority under the 1135 waiver and on how to navigate enrollment during this emergency period. Expedited Enrollment; Revalidation Included in the FAQs were toll-free hotlines available to provide expedited enrollment. The applicable Medicare Administrative Contractor has the authority to screen and enroll physician and non-physician practitioners in Medicare on a temporary basis telephonically, and, if approved, to provide follow-up documentation of such approval. The effective date of the physician or non-physician practitioner’s billing privileges may be as early as March 1, 2020. Upon the lifting of the Public Health Emergency declaration, those who received temporary billing privileges through the expedited process will be asked to resubmit through the appropriate CMS-855 application. Note that this expedited telephonic enrollment process is only for physician and non-physician practitioners; all other providers and suppliers, including DMEPOS suppliers, must enroll and submit changes of information via the traditional CMS-855 application. Those applications will be expedited if received after March 1, 2020 with processing times of 7 business days for web applications and 14 business days for paper applications. Any applications received prior to March 1, 2020 are being processed in accordance with existing timelines; web applications processed within 45 days and paper applications processed within 60 days. CMS is temporarily ceasing revalidation efforts for all Medicare providers or suppliers. Upon the lifting of the Public Health Emergency, CMS will resume revalidation activities. CMS also is currently postponing DME accreditation and reaccreditation timetables and deadlines. A DME supplier should still comply with accreditation requirements; however, formal accreditation from an accrediting organization will be postponed. CMS still plans to monitor billing activity during the emergency period. Licensure The FAQs clarified that, although the 1135 waiver allowed CMS to waive, on an individual basis, the Medicare requirement that a physician or non-physician practitioner must be licensed in the state in which he or she is practicing, the waiver is not available unless all of the following four conditions are met: 1) the physician or non-physician practitioner must be enrolled in Medicare; 2) the physician or non-physician practitioner must possess a valid license to practice in the state which relates to his or her Medicare enrollment; 3) the physician or non-physician practitioner is furnishing services – whether in-person or via telehealth – in a state in which the emergency is occurring in order to contribute to relief efforts in his or her professional capacity; and 4) the physician or non-physician practitioner is not affirmatively excluded from practice in the state or any other state that is part of the 1135 emergency area. CMS clarified that the 1135 waiver does not have the effect of waiving state or local licensure requirements or any requirement specified by a state or a local government as a condition for waiving its licensure requirements. Those separate state requirements would continue to apply unless waived by the state. If you have any questions about this alert please contact the author or your regular Dorsey attorney.

In light of the COVID-19 pandemic, the Food and Drug Administration (“FDA”) issued recent non-binding guidance (“Guidance”) on the conduct of ongoing clinical trials of medical products. The FDA acknowledges that the public health emergency may result in unavoidable protocol modifications and/or deviations. Quarantines, site closures, travel limitations, interruptions in the supply chain for the investigational product, and infection of site personnel and trial subjects can all disrupt  protocol-specified procedures, such as mandatory visits, administration of the investigational product, or laboratory testing.  The Guidance provides FDA’s thinking on how sponsors, clinical investigators, and Institutional Review Boards/Independent Ethics Committees (“IRBs”) should, notwithstanding the current challenges, approach trial participant safety, compliance with good clinical practices (GCP) and risks to trial integrity. Highlights from the Guidelines include: Trial Participant Safety It is clear that for each changed circumstance necessitated by the COVID-19 emergency, trial sponsors (together with investigators and IRBs) should first consider the impact on participant safety.  Decisions regarding continued participant recruitment, continued use of an investigational product, changing patient monitoring practices, discontinuing the trial, or other modifications should be considered with trial participant safety as the paramount factor. FDA considers it critical that trial participants be informed of all changes that could impact them. Participants may not be able to travel to investigational sites for protocol-mandated visits.  Sponsors should evaluate whether alternative methods for safety assessments, such as delayed patient visits, phone calls, or virtual visits, are sufficient to assure trial participant safety. If any trial participants are unable to access the investigational product or the investigational site, they may need additional safety monitoring. Sponsors may also consider whether there are alternative means to administer the investigational product when scheduled site visits are impracticable.  However, FDA states that regulatory requirements regarding investigational product accountability remain in effect and should be addressed and documented. COVID-19 Screening; Changes to Study Protocol The FDA states that COVID-19 screening procedures mandated by the investigational site do not need to be reported as an amendment to the protocol (even if performed during clinical study visits), unless the sponsor is incorporating the data collected as part of a new research objective. In addition, although sponsors are encouraged to engage with IRBs as soon as possible about urgent or emergent protocol changes, such changes to study protocols or informed consent as a result of COVID-19 that are intended to minimize or eliminate immediate hazards or to protect the life and well-being of trial participants may be implemented without IRB approval or amendment, or before filing an IND or IDE with FDA, but must be reported after such implementation. Documenting and Analyzing Study Changes and Impact In addition to trial participant safety, the other key takeaway from the Guidance is that FDA expects sponsors to document and explain all efforts to minimize the impact of any protocol modifications or deviations on the safety of trial participants and study data integrity.  This documentation should include: (1) what contingency measures were implemented to manage study conduct (including their duration and how they were necessitated by COVID-19); (2) a listing of all affected participants by unique study identifier, and a description of how the individual’s participation was affected; and (3) analysis and discussions addressing the impact of such contingency measures on the safety and efficacy results reported for the study. Importantly, if there are missed visits, changes in visit schedules, or other facts that result in missing information, then each affected case report form should include specific information that explains the missing data and its relationship to COVID-19.  This information should also be summarized in the clinical study report. If changes in the study protocol lead to changes to efficacy assessment methods, amendments in data management or statistical analysis plans, the FDA requests that the sponsor consult with the applicable FDA review division. The FDA states that sponsors, investigators, and IRBs should all consider adopting policies and procedures (or revisions to existing policies) to address potential disruption as a result of COVID-19. The FDA provided examples of potential changes: impact on the informed consent process, study visits and procedures, data collection, study monitoring, adverse event reporting, changes to investigations, site staff, and monitoring resulting from regional or nationally imposed travel restrictions or quarantine measures or illness. Depending on the nature of revisions to the policies and procedures, applicable regulations may require a protocol amendment. Undoubtedly, the current public health emergency will impact ongoing clinical trials.  The extent and nature of that impact will vary depending on the trial, the investigational product, the disease being studied in the trial, the ability to conduct safety monitoring, and other factors.  The FDA recognizes these facts, and the Guidance stresses two fundamental points.  First, all trial activity, and each modification or deviation to a trial protocol, should be assessed with trial participant safety as the principal consideration.  Second, all changes necessitated by COVID-19 should be carefully documented and analyzed in the clinical trial report to explain their connection to COVID-19 and their impact on participant safety and trial data integrity. A copy of the full guidance issued by the FDA can be found at: https://www.fda.gov/regulatory-information/search-fda-guidance-documents/fda-guidance-conduct-clinical-trials-medical-products-during-covid-19-pandemic If you have further questions, please contact the authors or any member of Dorsey & Whitney’s health care transactions and regulations practice group.