THIS ISSUE'S HEADLINES

The Increasing Sweep of Opioid Litigation

CMS, OIG Release Highly-Anticipated Stark, AKS Proposed Rules

Is a Carpool a Meeting Under the Open Meetings Act?


THE INCREASING SWEEP OF OPIOID LITIGATION

States are now one step closer to holding the Sackler family individually liable for the role they and their pharmaceutical corporation, Purdue Pharma, played in creating and facilitating the nation’s opioid epidemic. In a decision issued on October 8, 2019, Massachusetts Superior Court Justice Janet L. Sanders denied a motion to dismiss individual claims against 17 individuals who worked at Purdue Pharma in high level positions or served on its Board of Directors, finding that “[t]he Commonwealth has met its burden of producing evidence showing that each of the named defendants participated in making or approving false representations, knowingly sent to Massachusetts with the intent that Massachusetts residents rely on those misrepresentations, resulting in injury to them.”

This decision comes as state agencies continue to be split on accepting a proposed settlement agreement with Purdue that would result in Purdue declaring bankruptcy and establishing a “public benefit trust” with its profits going toward settlement. It has been estimated that the fund could total $12 billion. 26 states, including Connecticut, Massachusetts, and Rhode Island are on record as rejecting the deal, citing concerns that the settlement would not hold the Sackler family individually liable or accountable for their role in the opioid crisis that has claimed more than 400,000 lives in the U.S. since 2000.

Rhode Island Attorney General Peter F. Neronha defended his decision to reject the proposed settlement, stating that “[f]ar too many lives have been lost or devastated in Rhode Island as a result of the opioid crisis. We have not agreed to the proposed settlement framework with Purdue Pharma. Before we could responsibly reach any agreement, we would need much more information about the financial holdings of Purdue Pharma and the Sacklers to be confident that this resolution adequately compensates Rhode Island and, equally as important, holds the company and its owners accountable for the enormous destruction they have caused.”

Connecticut Attorney General William Tong echoed Neronha’s sentiments that the settlement agreement is insufficient. “Our position remains firm and unchanged. The scope and scale of the pain, death and destruction that Purdue and the Sacklers have caused far exceeds anything that has been offered thus far.”

For its part, Brown University has announced its plans to redirect more than $1 million in donations from the Sackler family, in light of the growing concerns that the pharmaceutical giant contributed to the nation’s opioid epidemic. University spokesman Brian E. Clark stated that Brown and representatives from The Sackler Foundation “have agreed to work toward redirecting this gift to one or more charitable organizations in Rhode Island in support of medicine-assisted treatment for opioid use disorder and opioid addiction research.”

The wave of litigation related to the opioid crisis continues to build, and can be expected to impact many entities and individuals as it does, from manufacturers and distributors to health care providers and pharmacies and beyond. Those seeking to understand the current status and potential direction of opioid litigation should contact PLDO Attorney Meagan L. Thomson at 401-824-5100 or mthomson@pldolaw.com.

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On October 9, 2019, The Centers for Medicare & Medicaid Services (CMS) and the Department of Health and Human Services Office of Inspector General (OIG) issued two proposed rules that would reform the Physician Self-Referral Laws (Stark Law) and the Anti-Kickback Statute (AKS). The proposed rules come in recognition of the need to reform these laws to facilitate innovative arrangements that would improve patient coordination and care, as well as facilitate the transformation to a value-based health care system.

The Stark Proposed Rule
The Stark Proposed Rule – to be issued in conjunction with the Centers for Medicare & Medicaid Services’ (CMS) Patients over Paperwork initiative and the Department of Health and Human Services’ (the Department or HHS) Regulatory Sprint to Coordinated Care – aims to create exceptions for value-based compensation arrangements between and among physicians, suppliers, and providers. Highlights of the Proposed Rule include:

• Creating an exception that would permit physicians to receive limited remuneration for items or services actually provided by the physician;

• Creating an exception for donations of cybersecurity technology and related services;

• Amending the existing exception for electronic health records (EHR) items and services;

• Promulgating critical guidance for physicians, health care providers, and suppliers whose financial relationships are governed by the physician self-referral statute and regulations.

The AKS Proposed Rule
If implemented, the AKS Proposed Rule would create three new safe harbors for remuneration exchanged by and between eligible participants for certain coordinated care and associated value-based arrangements with either substantial downside or full financial risk.

Additionally, the Proposed Rule would create a safe harbor for donating cybersecurity technologies, and would simultaneously amend existing safe harbors for electronic health records (EHR) arrangements, warranties, local transportation, and personal services and management contracts. Further, an additional safe harbor would be created related to beneficiary incentives under the Medicare Shared Savings Program and a new CMP exception for certain telehealth technologies offered to patients receiving in-home dialysis.

The Proposed Rule would also add protections against civil monetary penalties (CMP) for certain patient engagement and support arrangements – previously prohibited as inducements – that improve quality of care, health outcomes, and efficiency of care delivery.

CMS is specifically seeking commentary related to price transparency and whether to require cost-of-care information at the point of referral. Those seeking to comment on either Proposed Rule should be mindful of its publication in the Federal Register, expected in the near future, which will trigger the 75-day comment period. PLDO assists interested parties in commenting on notices of proposed rulemaking published by HHS and its offices and agencies. Those interested in submitting comments, or seeking further guidance on opportunities inherent in the proposed rulemaking should contact PLDO attorneys Joel K. Goloskie or Meagan L. Thomson at 401-824-5100 or email jgoloskie@pldolaw.com or mthomson@pldolaw.com.

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The Rhode Island Attorney General recently issued a decision that the Planning Commission for the City of Cranston violated Rhode Island’s Open Meetings Act (RIAG OM 19-25). After a December 8, 2018 meeting, the Planning Commission conducted a site visit to a proposed solar power installation. Members of the commission, commission staff, and the site owner traveled together in a 12-passenger van owned by the City. However, there was not enough room for the members of the public who had attended the meeting. The City Solicitor argued that the site visit “was not a continuation of a public hearing” and that the Commission did not conduct any deliberations or votes. However, the record reflected that the Commission members asked several questions about the soil conditions, whether there was appropriate buffering, and other matters. Accordingly, the Attorney General held that the site visit constituted a “meeting” subject to the Open Meetings Act and that the Planning Commission violated the Act by denying access to the public.

The Open Meetings Act, Rhode Island General Laws Chapter 42-46, requires every “meeting” of a public body to be open to the public unless closed pursuant to specifically enumerated exceptions. The Act defines a meeting as “the convening of a public body to discuss and/or act upon a matter over which the public body has supervision, control, jurisdiction, or advisory power.” In practice, this is a very low bar. Whenever there is a quorum of the public body and two members start discussing something related to the public body’s business—¬which will inevitably happen—the Open Meetings Act kicks in. This is regardless of the location or circumstances surrounding how the members ended up in the same place. Members of a public body should be mindful that Open Meetings Act requirements will likely be triggered as soon as a quorum is present. Otherwise, the public body may be subject to a complaint from the public or the Attorney General. For more information about this law or other legal issues, contact PLDO Attorney Joshua J. Butera at 401-824-5100 or email jbutera@pldolaw.com.

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