2008 UMMER 5 S 5 VOLUME The Boston A PUBLICATION OF THE BOSTON BAR ASSOCIATION HEALTH LAW SECTION SUMMER 2008 VOLUME 5 1 Section Co-Chairs’ Corner Summer 2008 It is already starting out as an exciting summer Inside this Issue: for the health care bar and the BBA’s Health Law Section! Several significant pieces of Massachusetts Senate Passes Biotech Industry Gift legislation with meaningful impact on the health Ban Bill care community are in the works. As this issue Page 3 is going to press, the Governor is signing a $1 billion Life Sciences bill. Major changes to The Stark Reality of Physician-Industry Relationships regulation of ambulatory surgery centers and Page 6 imaging ventures are in the works in another bill pending in the General Court. The Department Medicaid: Focus on Cost Growth Can Obscure the of Public Health is fi nalizing new Determination of Need regulations with far-reaching signifi cance. Growing Role of the Program and Divert Attention Minute clinics are challenging traditional provider from an Imminent Federal Assault markets. The Commonwealth’s largest payor is Page 8 proposing to return to a payment model that looks like capitation. The most recent fi gures released Policymaker Profi le: Daniel Bosley, Massachusetts show that our Health Reform Initiative has cut State Representative (D-North Adams) almost in half the number of uninsured persons in the Commonwealth. And these are just a few Page 10 of the major changes that health lawyers need to keep up with. BBA Presents Three Panels on Health Care Fraud Page 13 Among all the resources available to you to keep up with these developments, we hope the Health Local Health Law Briefs Law Section is providing valuable content and Page 15 perspective to help your practice, clients, and you. This issue of The Boston Health Law Reporter alone covers a number of other pressing issues for the health care industry and consumers, Section Co-Chairs including legislation on gifts from pharmaceutical companies, Medicaid cuts, stem cell legislation, Larry Vernaglia, Esq. and medical malpractice premiums. We are also including a review of a new book on physician- Foley & Lardner LLP industry relationships, and hope to provide other 111 Huntington Avenue book reviews in the future. Our editors, writers, Boston, MA 02199 and peer reviewers all contribute substantial time and judgment to select topics and points of view (617) 342-4000 that present you with a unique resource - I hope [email protected] you fi nd it as essential as I do. This is my last Co-Chairs’ Corner, as my term Matthew Herndon, Esq. as Co-Chair shortly will be over. It has been an Harvard Pilgrim Health Care honor to work with an unbelievably dedicated 93 Worcester Street and talented group of professionals from the HLS Steering Committee, committee members, BBA Wellesley, MA 02481 staff, and, most important, you the members of the (617) 509-3077 Health Law Section. Over the past two years, you [email protected] participated in meetings, lunches, and receptions. You submitted articles to our Reporter. You volunteered to speak at brown bag lunches or CLEs. You called and offered your time to our committees and service projects. In each of these encounters with the Health Law Section, you broadened the We would like to extend our congratulations to Health experience for us all, and you demonstrated what Law Section member Tom Barker, who was named Acting it means to be a professional in a very small family of lawyers - truly members of the bar. Thank you for General Counsel for the Department of Health and Human your many contributions - and please stay involved. Services by Secretary Mike Leavitt on May 8, 2008. It’s what keeps the Health Law Section a vibrant community of colleagues and friends. Study of Note: Rodwin MA, Chang HJ, Ozaeta MM, Omar Larry Vernaglia, Co-Chair RJ. Malpractice Premiums in Massa- chusetts, A High-Risk State: 1975-2005. Health Law Section Health Aff airs, 27, no. 3 (2008): 835-844. 2 SUMMER 2008 VOLUME 5 Massachusetts Senate Passes Biotech Industry Gift Ban Bill By Robert Driscoll, Esq. Introduction prison for each offense. In debate The broad language of the Bill would on the fl oor of the Massachusetts not only ban continuing medical On March 3, 2008, Massachusetts Senate, the Bill was amended and education (“CME”) payments, Senate President Therese Murray resubmitted as Massachusetts honoraria, consulting, and travel (D-Plymouth) introduced into the Senate Bill 2660. The amendments payments, but would also bar Massachusetts Senate the Health removed the criminal provision of the focus groups, consulting, dinner Care Cost Control Bill (the “Bill”). Bill and added a section requiring meetings, board fees, stock options, The Bill contains dramatic health reporting to the Massachusetts promotional events, journal reprints, care reform legislation intended Department of Public Health and medical books. There is concern to control rising health care (“DPH”) by pharmaceutical or in the health care community that costs. Perhaps the most dramatic medical device manufacturers of all the wide ban of Section 26(1) would legislative reform contained within payments or benefi ts given to health lead to such a hostile regulatory the Bill is a provision which would care providers, including research, environment in Massachusetts that make Massachusetts the fi rst state scientifi c discovery, stock payments, both pharmaceutical and medical to ban gifts to health care providers and investigator expenses. On April device manufacturing companies from pharmaceutical or medical 17, the amended Bill passed the as well as physicians would seek device manufacturing companies.1 Senate by a vote of 36-0, and the more favorable conditions in other The gift ban provision, contained in House of Representatives referred states, substantially impairing the Section 26 of the bill, was added the Bill to the House Ways and Massachusetts biotech industry. by Senator Mark Montigny (D-New Means Committee on April 24. Bedford). The Bill was passed Section 26(2) of the Bill would unanimously by the Senate and is Section 26(1) of the Bill broadly forbid agents of pharmaceutical currently being considered by the defines the term “gift” as a and medical device manufacturing House Ways and Means Committee. payment, entertainment, meals, companies from offering or giving The Bill has spurred debate on travel, honorarium, subscription, a gift of any value to a health care whether physicians require such advance, services or anything of practitioner, a member of a health drastic legislation to ensure that value, unless consideration of care practitioner’s immediate patients are not damaged by undue equal or greater value is received family, a health care practitioner’s influence of pharmaceutical or and for which there is a contract employee or agent, a health care medical device manufacturing with specifi c deliverables which are facility or an employee or agent companies. A summary of the Bill not related to marketing and are of a health care facility. As stated and its potential impact follows. restricted to medical or scientifi c above, the defi nition of gift is so issues. The Bill carves out from the broad as to include everything from Section 26 of Senate Bill 2660 defi nition anything of value received de minimis gifts of pens and coffee – Chapter 268C by inheritance, a gift received to the provision of CME programs The apparent intent of the Bill is from a member of the health care by pharmaceutical and medical to prevent undue infl uence on the practitioner’s immediate family device manufacturers. There are prescribing pattern of physicians by or from a relative within the third certain exemptions in Section pharmaceutical or medical device degree of consanguinity of the 26(2) including an exemption manufacturing companies.2 In its health care practitioner or of the for the provision, distribution, original form3, the Bill would have health care practitioner’s spouse or dissemination, or receipt of peer proscribed both the giving of gifts by from the spouse of any such relative, reviewed academic, scientific or pharmaceutical or medical device or prescription drugs provided to a clinical information and for the manufacturers and the acceptance health care practitioner solely and purchase of advertising in such of gifts by physicians, and provided exclusively for use by the health care journals. for punishment by fines of up to practitioner’s patients. The amended form of the Bill added $5,000 and up to two years in SUMMER 2008 VOLUME 5 3 Massachusetts Senate Passes Biotech Industry Gift Ban Bill Robert Driscoll, Esq. public disclosure and licensing Coalition (“MPRC”) 4. MPRC cites the unintended consequence of limiting requirements to all transactions cost of prescription drugs as among support for legitimate physician between health care providers and the fastest growing segments of continuing medical education representatives of pharmaceutical health care spending. According to programs and potentially even and medical device manufacturing MPRC, between 2000 and 2007 the the distribution of scientifically companies. By July 1 of each year, price of many of the most commonly accurate information in medical every pharmaceutical or medical prescribed brand name drugs rose and scientifi c publications.”10 MMS device manufacturing company in excess of inflation, creating a advocates for a more measured would have to disclose to DPH significant hurdle to individual approach tailored closely to the the value, nature, purpose and access to medications.5 The group American Medical Association’s recipient of any fee, payment, has also expressed concern that ethical guidelines, such as the subsidy or other economic benefi t gifts from pharmaceutical and language of Massachusetts House which the company provided to medical device manufacturing Bill 2251 instituting “sunshine any health care provider.