Is NwHIN going from "Free" to "For Fee"?

Notable news late last week included ONC Coordinator Dr. Fazad Mostashari publishing a blog post stating that ONC has decided NOT to pursue promulgating regulations to govern the NwHIN. The decision was made in part after his OfficeNot Free.png considered comments to the RFI it released in the early summer seeking public input on a potential regulatory approach for the NwHIN and its participants, including the possibility of requiring accreditation and certification to validate organizations seeking to participate in the NwHIN.  Mostashari explains in his post that many RFI responders expressed concern that issuing new regulations to set governance standards for the NwHIN could actually slow the development of trusted exchange. In light of this, Mostashari indicates that his Office has decided to allow the HIE and HIT markets to continue evolving organically, at least for now. 

The NwHIN website currently posts a list of 27 organizations that are already approved NwHIN Participants. Other organizations seeking to become a NwHIN Participant have to "on board" to the Exchange by following the (painfully detailed) process on the NwHIN website, which you can review here

But buyer beware...   

While current NwHIN Participants may have "on boarded" and be using the NwHIN for free, it looks like subscription and/or use fees for the NwHIN are coming soon .....

On August 20th, the HealtheWay Exchange Transition Update was published, which summarizes some of the "transitions" to expect with regard to the NwHIN.  To start, it's helpful to know that HealtheWay is the nonprofit organization now chartered to support the NwHIN Exchange. The entity's Articles of Amendment and Restatement of the Articles of Incorporation were recently filed in the Commonwealth of Virginia and made effective July 30, 2012. Bylaws for HealtheWay are posted there as well. The Update notes a list of changes to how the NwHIN will be operating, including:

  • Currently, NwHIN Exchange is an ONC initiative, but as of October 2012 it will transition to the public-private initiative called the eHealth Exchange;
  • Currently, NwHIN operations are supported and funded by ONC, but going forward, operations will be supported and funded by HealtheWay;
  • Currently, all services are provided to NwHIN Participants for free, but very soon Participants are going to be asked to pay for the NwHIN's services being supported through HealtheWay.

It is probably not a huge surprise that, going forward, Participants will be charged fees to connect through the NwHIN Exchange because "free" is not a viable model for financial sustainability. However, it will be interesting to see how organizations respond and whether paying fees to utilize the NwHIN was something that such organizations, and States for that matter, have factored in to their HIE models.

In light of all this, it is important for organizations, providers and even State governments looking to join the NwHIN to have a solid understanding of how the DURSA works, especially with regard to how "material terms" can be changed (i.e., like imposing new fees), and how a Participant can terminate its participation with the NwHIN if it cannot meet (or does not agree with) a material change.  

If NwHIN Participants are going to be charged fees to use the NwHIN Exchange, then organizations should be considering this as part of their evaluation of whether the NwHIN Exchange is the best solution to meet its organization's primary needs.  Organizations will also want to evaluate whether the NwHIN delivers sufficient value in exchange for the fee that they will be charging (an amount which we don't yet know). In addition, the integration and on-boarding process is extremely time-consuming and resource intensive, and so organizations will not necessarily want to "go through" this process with two different HIE vendor solutions. Finally, for those that were expecting to connect to the NwHIN for "free", they should update their plan (and budgets) to reflect the transition of the NwHIN Exchange to a "for fee" model.

To review the provisions of the DURSA that pertain to "changes" to material terms, click "Continue Reading".


Continue Reading

BCBS Plans Defend against Antitrust Class Actions

Back at the end of July, a class action lawsuit was filed against Blue Cross Blue Shield of Alabama (BCBS Alabama), the Blue Cross Blue Shield Association (the "Association"), and multiple BCBS Plans for antitrust violations.  The lawsuit was filed on behalf of a retired chiropractor, Jerry L. Conway, by Whatley Kallas, a Birmingham-based health law firm. 

This isn't by far the first time that a BCBS entity has been targeted for anticompetitive practices.  There have been several other complaints on different grounds, the more recents triggered by Department of Justice and state investigations concerning BCBS Michigan's use of "most-favored nation clauses", a practice not uncommon among insurers.  This triggered several additional suits against BCBS Plans on the same grounds. In addition, BCBS Tennessee settled potential HIPAA violations with HHS this past March. 

However, this class action is much different: the Conway complaint alleges that the defendants, 45 Blue Cross Plans, as well as the Association, completely dominate their respective geographic market to the complete lack of meaningful competition. The argument presented by this class action, and a novel one, is essentially that the very nature of the license agreements and other rules and regulations of membership in BCBS is a deliberate conspiracy to reduce competition and allocate market shares in violation of federal antitrust laws. With antitrust law, the issue isn't just whether a particular entity or group of entities dominates a given market, but rather, whether they are doing so through improper means.  Without these horizontal agreements to not compete and implement other anticompetitive practices, the complaint alleges, the individual plans would not have dominant market shares in their states or areas of a state to begin with and would be potential competitors of each other.  The class of allegedly affected health care providers would therefore then have better rates and better terms but for this restraint on competition.

Other similar class-actions were filed against BCBS North Carolina and the Association, as well as BCBS Alabama, earlier this year, alleging similar conduct, in addition to challenges to most-favored-nation clauses.  However, the previous class actions were filed on behalf of companies and beneficiaries of BCBS Plans, not heath care providers, making this the first filed on behalf of providers.

The BCBS Plans and the BCBS Association will undoubtedly do everything in their power to have this new complaint dismissed for any number of reasons.  The plaintiff must additionally prove that a class action is appropriate and be granted class certification before the action can proceed. Class action certification in and of itself is a time-consuming and lengthy process, and if denied, would be difficult for this lawsuit to go forward due to the number of defendants named and their considerable resources, as well as the more limited resources of the individual plaintiff health care providers seeking to establish themselves as a class.

Given the previous suits filed against BCBS Alabama on similar grounds, it is possible that the Conway class action will be consolidated with them.  In addition, given the fact-specific nature of antitrust suits in general as well as the novel nature of the argument being presented, the class action(s) will undoubtedly present a variety of additional hurdles for the plaintiffs, as well as defendants, to navigate.

Even though the Conway complaint alleges harm to rival health plans as well as individual consumers as a result of the alleged anticompetitive practices, the more immediate benefits if the plaintiffs are successful would likely be to health care providers themselves, presumably in the form of their increased ability to negotiate better terms for rates and increased access to patients in a more competitive market.  Given that these license agreements have been in operation for some time, it is remarkable that there has not been a challenge to these practices earlier. 

The Birmingham Business Journal reports BCBS Alabama spokesperson Koko Mackin has stated the BCBS Alabama Conway and other class action suits have "no merit."  However, at the very least, the complaints are a far-cry from being frivolous or ill-conceived and represent, at least on the surface, potentially valid antitrust concerns, with reputable attorneys and the companies and individuals they represent buying into these arguments. 

August Goes Out with a Bang: Stage 2 Final Rule & HIPAA Arrest

August ended in a whirlwind of federal activity, with CMS and OCR publishing the long-awaited Meaningful Use Stage 2 Final Rule and its accompanying Standards & Certification Criteria.  And, as if Stage 2 wasn't enough excitement, the FBI arrested a former hospital employee for a solicitation scheme involving improper access to and sale of emergency department patient records.

Much dissected since their release on August 22 by CMS and OCR, the Meaningful Use Stage 2 Rules brought few surprises to those familiar with the Notices of Proposed Rulemakings (NPRMs) released back in March. In addition to formally delaying Stage 2 to 2014, the Final Stage 2 Rule limits the reporting period to 90-days for 2014 for ALL providers REGARDLESS of the Stage they are in.

While CMS took into consideration, and incorporated some revisions as a result of, public comment, the majority of the NPRMs carried over into the Final Rules (see my previous post on the Stage 2 NPRMs).  EPs now must report on 17 core and 3 out of 6 menu objectives, while hospitals and CAHs must report on 16 core and 3 out of 6 menu objectives.  Likewise, EPs must report on 9 out of 64 CQMs, and hospitals and CAHs report on 16 out of 29 CQMs.   The majority of Stage 1 menu objectives and measures became core, and several Stage 1 core objectives and measures were consolidated into a single objective and measure(s), or eliminated (for example, "exchange of key clinical information" eliminated in favor of a new and more robust "transitions of care summaries" objective). 

Public comments highlighted the concerns many providers had with new Stage 2 patient engagement requirements: those requiring patients utilize secure messaging with their providers (EPs) and online access to, viewing, and downloading of health information (EPs, hospitals and CAHs).  Although the requirements were not eliminated, CMS reduced the associated measure thresholds from 10% to 5%.  In addition, CMS reduced the measure thresholds of certain other objectives, including for electronic exchange of summary care records.  Another area of concern reflected in the public comments, the electronic exchange of summary care records objective was also modified by CMS in response to such concerns to require at least one successful electronic exchange to a different EHR technology or a successful test with a CMS designated test EHR during the applicable EHR reporting period. 

CMS has released several tipsheets and guidance documents to help EPs, hospitals and CAHs participating in the Medicare and Medicaid EHR Incentive Programs in understanding the new requirements for Stage 2, as well as those amendments to certain Stage 1 requirements. Additional information regarding Stage 2 can be found on CMS' new Stage 2 webpage.   

To add to August's excitement, a former employee at Florida Hospital's Celebration Health was arrested by the FBI for accessing patient emergency department records and selling those related to motor vehicle accidents.  According to the FBI criminal complaint, the former employee was fired back in July 2011, but for an unrelated incident involving accessing without authorization the medical records of a physician who had been shot and killed in a Florida Hospital parking garage.

However, prior to his termination with Celebration Health, the former employee, Dale Munroe (along with his wife and a co-worker) improperly accessed over 750,000 patient emergency department records at the various Florida Hospital locations, allegedly then selling those records that related to a car accident to an entity, S.K.  In turn, S.K. would sell the information to an entity or entities that solicited and referred patients for chiropractors and attorneys.  Patients whose information was allegedly sold would receive a phone call shortly after their emergency department visit. 

After Munroe was terminated, his wife and co-worker continued to access patient records.  After the hospital was notified by an employee who had received a solicitation call, the wife and co-worker were also fired, and a breach reported in 2011.  While the hospital was conducting audits in response to the breach, it discovered the depth of Munroe's actions prior to his termination.  Since then, the actions of these three individuals have been under investigation. 

Munroe is the only one who has been arrested so far. The complaint alleges violations of the criminal provisions of HIPAA at 1320d-6(a) and 1320d-6(b)(3) for intent to sell, transfer, or use individually identifiable health information for commercial advantage, personal gain, or malicious harm, which carries with it a fine of not more than $250,000, imprisonment of not more than 10 years, or both.  While over 750,000 records were improperly accessed, only approximately 12,000 records are believed to have been viewed in depth and sold.