Exploring Critical Business and Legal Issues across the Healthcare and Life Sciences Industries
Exploring Critical Business and Legal Issues across the Healthcare and Life Sciences Industries
Hospitals & Health Systems
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Departments Release Update on No Surprises Act Independent Dispute Resolution Process

On April 27, 2023, The Departments of Health and Human Services (HHS), Labor, and the Treasury (the Departments) released a status update on the Federal Independent Dispute Resolution (IDR) Process, which covers the period from April 15, 2022 through March 31, 2023, as well as the initial report on the fourth quarter of 2022. Below are some of the key statistics shared.

Status Update

  1. Between April 15, 2022 and March 31, 2023, 334,828 disputes were initiated through the Federal IDR portal. This caseload is 14 times greater than what the Departments initially anticipated.
    • Non-initiating parties challenged the eligibility of 122,781 of the disputes and nearly 40,000 were deemed ineligible and closed.
  2. IDR entities have rendered payment determinations in 42,158 disputes to date.
  3. Initiating parties have been the prevailing party in ~71% of the disputes.

Fourth Quarter Report

  1. During Q4 2022, disputing parties initiated 110,034 disputes through the Federal IDR process. This represented a 53% increase over Q3.
  2. IDR entities made over three times more payment determinations in Q4 compared to Q3. IDR entities also closed fewer disputes as ineligible during Q4. Non-initiating parties challenged 40% of the disputes initiated.
  3. Over two-thirds of the disputes submitted to the Federal IDR portal involved items or services furnished in bifurcated states (i.e., states where some items/services may be subject to a specified state law or All-Payer Model Agreement).
  4. The report includes a summary of the Top 10 Initiating and Non-Initiating Parties.
  5. [...]

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McDermott and EY at the 2022 J.P. Morgan Healthcare Conference: Hospitals and Health Systems Forum

A series of panels co-hosted by EY and McDermott Will & Emery during the 2022 J.P. Morgan Healthcare Conference examined how hospitals and health systems continue to weather the pandemic. Leaders from the health system perspective looked at heightened cost pressures, resource strains and demands for better technology experiences, as well as innovative and collaborative responses to challenges. Policy experts spoke to the needs of providers, the antitrust landscape, and what Congress and the Biden administration might try to accomplish in the year ahead.

Below are the top takeaways for McDermott and EY at the 2022 J.P. Morgan Healthcare Conference: Hospitals and Health System Forum

Download the PDF here.

Speaking about the current state of the pandemic, H. Mallory Caldwell, US health leader at EY, reflected on the earlier days of the pandemic. At that time, the common sentiment among health system leaders was that the arrival of a vaccine would upend the trajectory of the virus. However, availability of the vaccine hasn’t fulfilled that expectation, and the effects of COVID case waves have been reflected in health systems, specifically with increases in deferred elective procedures. Still, health services are hovering around pre-pandemic levels. The major crisis health systems are confronting is staffing. Although healthcare generally builds in a 3% wage inflation, in light of the “great resignation,” Caldwell said it is costing hospitals and health systems three [...]

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Five Reasons You Can’t Miss HPE New York 2021

McDermott’s signature HPE New York event is right around the corner on October 15, 2021. This year more than ever, it’s a must-attend for private equity investors, healthcare executives, lenders, consultants and leaders across the industry.

Here are the top five reasons you don’t want to miss this exclusive event:

  • To help you navigate the current market’s unprecedented deal volumes and stiff competition, we’ll equip you with the latest analysis of the hottest investment sectors and game-changing deal strategies.
  • We’ve gathered the best and brightest minds in healthcare private equity to share their real-world insights into today’s market and the trends shaping tomorrow’s opportunities. Click here to view our roster of elite speakers.
  • Early risers have an opportunity to start their day right with our bonus Big Bankers Breakfast Discussion, where leading investment bankers will examine the current state of play and the dealmaking outlook for 2022.
  • This premier event is ultra-convenient. In light of ongoing safety and logistics challenges posed by COVID-19, we’re simplifying matters by streaming this year’s event right to your personal computer or device.
  • Registration is complimentary. In response to those continued challenges around COVID-19, we’re happy to offer complimentary registration this year and hope many of you are able to join us for this timely slate of sessions.

We look forward to virtually welcoming you to HPE New York in just a couple weeks. Click here to register today.

5 Questions with a Health Lawyer: Travis Jackson

Travis Jackson
Practice Focus Area: Hospital and Health System M&A
Office: Los Angeles
Years at Firm: Joined in May 2021

  1. What is your favorite part about practicing healthcare law at McDermott? 

The people are my favorite part of being at McDermott. I am not just repeating some “corporate speak” I learned in orientation when I say that. Each person recognizes that we are part of the same team. Our collective success depends on our ability to meet and exceed our clients’ goals. Doing that consistently takes a selfless approach that we exemplify. As a firm, McDermott has unique capabilities across the healthcare industry, regardless of what the issue might be; we work with a commitment of being prepared to assist one another whenever necessary to bring that collective experience to bear on a unique transaction question or regulatory issue. I think that shared philosophy distinguishes us from many of our peers.

  1. What is the biggest opportunity and greatest challenge facing clients in your area of focus today?


340B in 2021: What Covered Entities and Their Partners Need to Know Now

Since March 2010, increased growth in the 340B Program has been accompanied by increased scrutiny from state and federal governments and conflicts between various 340B Program stakeholders. A transition in U.S. Department of Health & Human Services (HHS) and Health Resources & Services Administration (HRSA) leadership may lead to changes in 340B Program policy, but the ongoing conflicts, particularly around contract pharmacies, will not likely be resolved quickly.

In this webinar, we discussed the current issues affecting 340B Program stakeholders, the tools (and their limitations) that may be employed by stakeholders and government agencies to resolve those issues, and what covered entities can expect in future developments affecting the 340B Program.

  1. Covered entities will likely be unable to resolve contract pharmacy issues quickly through either the current litigation or the ADR panels. While there are a number of pending cases related to the 340B Program, litigation can be inherently slow process. The Administrative Dispute Resolution (ADR) Final Rule that was published in December 2020 was recently enjoined and additional injunctions may follow. While HHS appears to be moving forward with operationalizing the ADR process, the ADR Panel members who would hear the disputes remain under review by the Biden Administration. If and when the ADR panels are finally implemented, decisions of those panels may be litigated too.
  2. Covered entities should review and monitor their state Medicaid program’s billing requirements for 340B drugs. State Medicaid programs must have a mechanism to identify 340B drugs when required to exclude them from [...]

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CDC Issues Guidance for Employer-Operated Vaccination Sites

As states across the US expand COVID-19 vaccine eligibility, employers are well-positioned to facilitate vaccine access and improve distribution efficiency. One critical way for employers to achieve these goals is through the operation of workplace vaccination sites, sometimes called closed points of dispensing (CPODs).

On March 16, 2021, the Centers for Disease Control and Prevention (CDC) issued updated guidance on workplace vaccination programs. Among other recommendations, the CDC encourages some employers to implement workplace COVID-19 vaccination sites and outlines best practices for doing so.

According to the CDC, employers with (1) a large number of workers on predictable schedules, (2) the ability to enroll as a vaccination provider or engage an already enrolled vaccination provider, and (3) enough space to operate a vaccination clinic that allows for social distancing should consider operating an on-site vaccination program. Conversely, the CDC recommends an off-site vaccination program for small- or medium-sized employers with a mobile workforce on variable schedules.

The CDC provides several options for employers that choose to operate an on-site vaccination program, including existing occupational health clinics, employer-run temporary vaccination clinics, and mobile vaccination clinics brought to the workplace. Regardless of the model, the CDC advises employers to contact their local health department for guidance. Many jurisdictions have already embraced the CPOD model (e.g. Chicago, IL) and provide extensive information on their websites.

The updated CDC guidance makes clear workplace vaccination clinics should [...]

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McDermott Will & Emery and EY during the 2021 J.P. Morgan Healthcare Conference: Hospital and Health Systems: Legal and Financial Trends

Leading professionals Gary Burke (Partner, Forensics, EY), Sandy DiVarco, and Jennifer Geetter (Partners, McDermott Will & Emery), Mike J. India (Managing Director, EY-Parthenon) and Matthew Weiss, MD (EY-Parthenon Managing Director, Health care, Ernst & Young LLP) discussed critical legal, regulatory and financial trends facing hospitals and health systems with moderator, Charlie Buck (Partner, McDermott Will & Emery).

Below are the top takeaways for McDermott Will & Emery and EY during the 2021 J.P. Morgan Healthcare Conference: Hospital and Health System: Legal and Financial Trends, click here to access the full webinar.

Access the PDF here.

Many regulatory requirements were relaxed in respond to the COVID-19 public health emergency. There has been much discussion regarding the extent to which these restrictions will “snap back” after the end of the public health emergency, because the public health emergency has highlighted the value of certain delivery models.
“I think there is going to be streamlining in some of these regulatory structures. So when we look at what’s going to be durable, hopefully we will see changes in the process that will make it easier for hospitals and other providers to respond and to remain on top of things,” said Sandy DiVarco, Partner, McDermott Will & [...]

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Managed Care Spotlight: 2020 Year in Review and 2021 Outlook

The past year saw significant developments in managed care regulation at the federal and state levels and we anticipate the rapid pace of change will continue through 2021. In this webinar, we analyzed the most significant legal developments affecting health plans in 2020 and explored what to expect in 2021. Our thought leaders discussed the impact of managed care regulations on a broad range of industry subsectors, from plans and providers to vendors and pharmacy benefit managers.


  • The Biden administration seeks to set a tone of order and predictability in its COVID-19 relief and response efforts. These efforts include a swath of executive orders on topics such as data aggregation, support for the National Guard and strategies for vaccine distribution. The acting secretary of Health and Human Services also recently sent a letter to state governors stating that the agency will likely extend the public health declaration—and its attendant regulatory flexibilities—through 2021.
  • The direct contracting model is the next step in the evolution of the Medicare accountable care organization portfolio. The model allows participating organizations to take on a greater level of financial risk, including the Centers for Medicare & Medicaid Services’ version of global capitation. The direct contracting global or professional options may be particularly attractive to managed care organizations, because these options allow new entrants with low or no fee-for-service beneficiaries.
  • The coming year will likely see a continued trend toward financial risk assumption in value-based contracting. Within this trend, there are two common variations. [...]

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McDermott Will & Emery and EY during the 2021 J.P. Morgan Healthcare Conference: Hospital and Health System CEO Panel: Strategic Business Priorities

Our panel included a discussion on what is ahead for 2021 and how the challenges of COVID-19 will lead to lasting changes for hospitals and health systems, with Lloyd Dean (CEO, CommonSpirit), Melinda Estes, MD (President and CEO, St. Luke’s Health System) and Jaewon Ryu, MD (President and CEO, Geisinger). These top healthcare leaders discussed the short- and long-term impact of COVID-19 on hospitals and health systems and their strategic business priorities in 2021 and beyond with moderator Kerrin Slattery (Partner, McDermott Will & Emery).

Below are the top takeaways for McDermott Will & Emery and EY during the 2021 J.P. Morgan Healthcare Conference: Hospital and Health System CEO Panel: Strategic Business Priorities, click here to access the full webinar.

Access the PDF here.

For hospitals and health systems, 2020 began and was primarily focused on issues like cost and payment models, Medicaid expansion and the wellbeing of clinical providers, including physicians, where statistics cite 40% are burned out. SinceCOVID-19, hospitals instantly pivoted to healing their communities and their staff, as well as rejuvenating the delivery system. “I was very pleased to chair a task force on COVID-19 pathways to recovery that produced a dynamic document that [...]

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