Healthcare

The Double-Helix Dilemma: Navigating Privacy Pitfalls in Direct-to-Consumer Genetic Testing

November 7, 2023
Bioethics, Data Privacy, FDA, Health, Healthcare, Privacy, Regulatory

Ethan Wold, MJLST Staffer

Introduction

On October 22, direct-to-consumer genetic testing (DTC-GT) company 23andME sent emails to a number of its customers informing them of a data breach into the company’s “DNA Relatives” feature that allows customers to compare ancestry information with other users worldwide.^[1] While 23andMe and other similar DTC-GT companies offer a number of positive benefits to consumers, such as testing for health predispositions and carrier statuses of certain genes, this latest data breach is a reminder that before choosing to opt into these sorts of services one should be aware of the potential risks that they present.

Background

DTC-GT companies such as 23andMe and Ancestry.com have proliferated and blossomed in recent years. It is estimated over 100 million people have utilized some form of direct-to-consumer genetic testing.^[2] Using biospecimens submitted by consumers, these companies sequence and analyze an individual’s genetic information to provide a range of services pertaining to one’s health and ancestry.^[3] The October 22 data breach specifically pertained to 23andMe’s “DNA Relatives” feature.^[4] The DNA Relatives feature can identify relatives on any branch of one’s family tree by taking advantage of the autosomal chromosomes, the 22 chromosomes that are passed down from your ancestors on both sides of your family, and one’s X chromosome(s).^[5] Relatives are identified by comparing the customer’s submitted DNA with the DNA of other 23andMe members who are participating in the DNA Relatives feature.^[6] When two people are found to have an identical DNA segment, it is likely they share a recent common ancestor.^[7] The DNA Relatives feature even uses the length and number of these identical segments to attempt to predict the relationship between genetic relatives.^[8] Given the sensitive nature of sharing genetic information, there are often privacy concerns regarding practices such as the DNA Relatives feature. Yet despite this, the legislation and regulations surrounding DTC-GT is somewhat limited.

Legislation

The Health Insurance Portability and Accountability Act (HIPAA) provides the baseline privacy and data security rules for the healthcare industry.^[9] HIPAA’s Privacy Rule regulates the use and disclosure of a person’s “protected health information” by a “covered entity.^[10] Under the Act, the type of genetic information collected by 23andMe and other DTC-GT companies does constitute “protected health information.”^[11] However, because HIPAA defines a “covered entity” as a health plan, healthcare clearinghouse, or health-care provider, DTC-GT companies do not constitute covered entities and therefore are not under the umbrella of HIPAA’s Privacy Rule.^[12]

Thus, the primary source of regulation for DTC-GT companies appears to be the Genetic Information Nondiscrimination Act (GINA). GINA was enacted in 2008 for the purpose of protecting the public from genetic discrimination and alleviating concerns about such discrimination and thereby encouraging individuals to take advantage of genetic testing, technologies, research, and new therapies.^[13] GINA defines genetic information as information from genetic tests of an individual or family members and includes information from genetic services or genetic research.^[14] Therefore, DTC-GT companies fall under GINA’s jurisdiction. However, GINA only applies to the employment and health insurance industries and thus neglects many other potential arenas where privacy concerns may present.^[15] This is especially relevant for 23andMe customers, as signing up for the service serves as consent for the company to use and share your genetic information with their associated third-party providers.^[16] As a case in point, in 2018 the pharmaceutical giant GlaxoSmithKline purchased a $300 million stake in 23andMe for the purpose of gaining access to the company’s trove of genetic information for use in their drug development trials.^[17]

Executive Regulation

In addition to the legislation above, three different federal administrative agencies primarily regulate the DTC-GT industry: the Food and Drug Administration (FDA), the Centers of Medicare and Medicaid services (CMS), and the Federal Trade Commission (FTC). The FDA has jurisdiction over DTC-GT companies due to the genetic tests they use being labeled as “medical devices”^[18] and in 2013 exercised this authority over 23andMe by sending a letter to the company resulting in the suspending of one of its health-related genetic tests.^[19] However, the FDA only has jurisdiction over diagnostic tests and therefore does not regulate any of the DTC-GT services related to genealogy such as 23andMe’s DNA Relatives feature.^[20] Moreover, the FDA does not have jurisdiction to regulate the other aspects of DTC-GT companies’ activities or data practices.^[21] CMS has the ability to regulate DTC-GT companies through enforcement of the Clinical Laboratory Improvements Act (CLIA), which requires that genetic testing laboratories ensure the accuracy, precision, and analytical validity of their tests.^[22] But, like the FDA, CMS only has jurisdiction over tests that diagnose a disease or assess health.^[23]

Lastly, the FTC has broad authority to regulate unfair or deceptive business practices under the Federal Trade Commission Act (FTCA) and has levied this authority against DTC-GT companies in the past. For example, in 2014 the agency brought an action against two DTC-GT companies who were using genetic tests to match consumers to their nutritional supplements and skincare products.^[24] The FTC alleged that the companies’ practices related to data security were unfair and deceptive because they failed to implement reasonable policies and procedures to protect consumers’ personal information and created unnecessary risks to the personal information of nearly 30,000 consumers.^[25] This resulted in the companies entering into an agreement with the FTC whereby they agreed to establish and maintain comprehensive data security programs and submit to yearly security audits by independent auditors.^[26]

Potential Harms

As the above passages illustrate, the federal government appears to recognize and has at least attempted to mitigate privacy concerns associated with DTC-GT. Additionally, a number of states have passed their own laws that limit DTC-GT in certain aspects.^[27] Nevertheless, given the potential magnitude and severity of harm associated with DTC-GT it makes one question if it is enough. Data breaches involving health-related data are growing in frequency and now account for 40% of all reported data breaches.^[28] These data breaches result in unauthorized access to DTC-GT consumer-submitted data and can result in a violation of an individual’s genetic privacy. Though GINA aims to prevent it, genetic discrimination in the form of increasing health insurance premiums or denial of coverage by insurance companies due to genetic predispositions remains one of the leading concerns associated with these violations. What’s more, by obtaining genetic information from DTC-GT databases, it is possible for someone to recover a consumer’s surname and combine that with other metadata such as age and state to identify the specific consumer.^[29] This may in turn lead to identity theft in the form of opening accounts, taking out loans, or making purchases in your name, potentially damaging your financial well-being and credit score. Dealing with the aftermath of a genetic data breach can also be expensive. You may incur legal fees, credit monitoring costs, or other financial burdens in an attempt to mitigate the damage.

Conclusion

As it sits now, genetic information submitted to DTC-GT companies already contains a significant volume of consequential information. As technology continues to develop and research presses forward, the volume and utility of this information will only grow over time. Thus, it is crucially important to be aware of risks associated with DTC-GT services.

This discussion is not intended to discourage individuals from participating in DTC-GT. These companies and the services they offer provide a host of benefits, such as allowing consumers to access genetic testing without the healthcare system acting as a gatekeeper, thus providing more autonomy and often at a lower price.^[30] Furthermore, the information provided can empower consumers to mitigate the risks of certain diseases, allow for more informed family planning, or gain a better understanding of their heritage.^[31] DTC-GT has revolutionized the way individuals access and understand their genetic information. However, this accessibility and convenience comes with a host of advantages and disadvantages that must be carefully considered.

Notes

[1] https://www.reuters.com/world/us/23andme-notifies-customers-data-breach-into-its-dna-relatives-feature-2023-10-24/#:~:text=%22There%20was%20unauthorized%20access%20to,exposed%20to%20the%20threat%20actor.%22

[2] https://www.ama-assn.org/delivering-care/patient-support-advocacy/protect-sensitive-individual-data-risk-dtc-genetic-tests#:~:text=Use%20of%20direct%2Dto%2Dconsumer,November%202021%20AMA%20Special%20Meeting

[3] https://go-gale-com.ezp3.lib.umn.edu/ps/i.do?p=OVIC&u=umn_wilson&id=GALE%7CA609260695&v=2.1&it=r&sid=primo&aty=ip

[4] https://www.reuters.com/world/us/23andme-notifies-customers-data-breach-into-its-dna-relatives-feature-2023-10-24/#:~:text=%22There%20was%20unauthorized%20access%20to,exposed%20to%20the%20threat%20actor.%22

[5] https://customercare.23andme.com/hc/en-us/articles/115004659068-DNA-Relatives-The-Genetic-Relative-Basics

[6] Id.

[7] Id.

[8] Id.

[9] https://go-gale-com.ezp2.lib.umn.edu/ps/i.do?p=OVIC&u=umn_wilson&id=GALE%7CA609260695&v=2.1&it=r&sid=primo&aty=ip

[10] https://www.hhs.gov/sites/default/files/ocr/privacy/hipaa/administrative/combined/hipaa-simplification-201303.pdf

[11] Id.

[12] Id; https://go-gale-com.ezp2.lib.umn.edu/ps/i.do?p=OVIC&u=umn_wilson&id=GALE%7CA609260695&v=2.1&it=r&sid=primo&aty=ip

[13] https://www.eeoc.gov/statutes/genetic-information-nondiscrimination-act-2008

[14] Id.

[15] https://europepmc.org/backend/ptpmcrender.fcgi?accid=PMC3035561&blobtype=pdf

[16] https://go-gale-com.ezp2.lib.umn.edu/ps/i.do?p=OVIC&u=umn_wilson&id=GALE%7CA609260695&v=2.1&it=r&sid=primo&aty=ip

[17] https://news.yahoo.com/news/major-drug-company-now-access-194758309.html

[18] https://uscode.house.gov/view.xhtml?req=(title:21%20section:321%20edition:prelim)

[19] https://core.ac.uk/download/pdf/33135586.pdf

[20] https://go-gale-com.ezp2.lib.umn.edu/ps/i.do?p=OVIC&u=umn_wilson&id=GALE%7CA609260695&v=2.1&it=r&sid=primo&aty=ip

[21] Id.

[22] https://www.law.cornell.edu/cfr/text/42/493.1253

[23] https://go-gale-com.ezp2.lib.umn.edu/ps/i.do?p=OVIC&u=umn_wilson&id=GALE%7CA609260695&v=2.1&it=r&sid=primo&aty=ip

[24] https://www.ftc.gov/system/files/documents/cases/140512genelinkcmpt.pdf

[25] Id.

[26] Id.

[27] https://go-gale-com.ezp2.lib.umn.edu/ps/i.do?p=OVIC&u=umn_wilson&id=GALE%7CA609260695&v=2.1&it=r&sid=primo&aty=ip

[28] Id.

[29] https://go-gale-com.ezp2.lib.umn.edu/ps/i.do?p=OVIC&u=umn_wilson&id=GALE%7CA609260695&v=2.1&it=r&sid=primo&aty=ip

[30] Id.

[31] Id.

NC Gives Medicaid Expansion a Foothold in the Southeast While Giving Many North Carolinians a Helping Hand

October 27, 2023
Health, Healthcare, Healthcare Reform, Insurance

Matt Buechner, MJLST Staffer

North Carolina is set to take a step to address structural racism in communities across the state when it begins Medicaid expansion implementation on December 1. Governor Roy Cooper championed expansion in his state and signed a bipartisan Medicaid expansion bill in March. This signaled the state’s intention to expand the government-sponsored health insurance program for low-income people to roughly 600,000 additional North Carolinians.^[1] However, the bill required the legislature to pass a separate state budget law to appropriate funds and implement the plan.^[2] The Republican-controlled state legislature passed a delayed two-year budget deal on September 22, which went into effect October 3 after Cooper declined to veto the bill.^[3]

Implementation of Medicaid expansion should help North Carolina see the reduction of uninsurance rates that other expansion states have seen since passage of the ACA.^[4] A recent study found that while Medicaid expansion helps populations across a state, the eligibility expansion disproportionately helps residents of formerly redlined^[5] neighborhoods gain access to coverage.^[6] Coverage is essential, as greater access to health insurance leads to medical care, including preventive care and management of chronic illness.^[7]

Meanwhile, recent analyses of health disparities and access to health insurance have shown that health disparities in the United States may be less tied to race itself, but rather to structural racism levied against non-white Americans.^[8] One recent study showed that states with policies that reflect and reinforce structural racism also see significantly higher rates of premature death among their populations.^[9] While these findings may not be surprising, policymakers and advocates can use this evidence to target investments and interventions, while working to disentangle the tapestry of discrimination at the state level.

Accessing Medicaid for Newly Eligible North Carolinians

The Medicaid program currently covers about 2.9 million North Carolinians.^[10] But like most states that have yet to expand their Medicaid program, the maximum income requirements for North Carolina Medicaid eligibility for adults is quite low.^[11] Adult caregivers of children or adult family members may earn a household modified adjusted gross income (MAGI)^[12] up to 37 percent of the federal poverty level (FPL) to maintain North Carolina Medicaid eligibility, while non-caregiver adults do not qualify for Medicaid at all.^[13] Medicaid expansion will increase the maximum household MAGI threshold to 138 percent^[14] FPL to qualify for Medicaid coverage, regardless of whether an adult cares for an additional family member.^[15]

North Carolina currently provides reproductive health care benefits for residents who earn up to 195 percent FPL through their Medicaid Family Planning Program (BE SMART).^[16] Nearly half of the expected 600,000 new Medicaid-eligible North Carolinians are currently enrolled in BE SMART and have a qualifying-income under the new 138 percent FPL Medicaid eligibility threshold. These people will automatically be enrolled in full Medicaid coverage.^[17] Newly qualifying individuals who do not take part in the BE SMART program must apply (online, in person, by telephone, or by mail) and await determination, which is set to take up to 45 days.^[18]

Making Sense of the Federal Dollars at Play

State Medicaid programs are traditionally paid for through a partnership with the federal government. While the state administers the program, the federal government provides the state matching funding, without limit.^[19] Matching funds are provided based on an algorithm that measures a state’s ability to pay for the program using the state’s per capita income compared to the per capita income of the nation. This rate is called the Federal Medical Assistance Percentage (FMAP).^[20] A state’s FMAP is set by statute to be at least 50 percent, but not more than 83 percent.^[21] Using FMAP allows a state with a theoretically lower tax base (relative to the size of their state population) to receive additional federal funding to offset the burden of providing for its residents.

To help states with the burden of paying for an increase in their Medicaid population after expansion, Congress established an enhanced FMAP calculation for a state’s Medicaid expansion population. Beginning with the implementation of expansion in 2014, the federal government provided states with a 100 percent FMAP for the expansion population, followed by a phased down approach.^[22] The current FMAP for the expansion population is 90 percent.^[23]

To help encourage remaining states to expand their Medicaid program, Congress included a 5 percent FMAP bump for two years post-expansion in the American Rescue Plan—not for the expansion population, but for the traditional Medicaid population.^[24] This is particularly enticing for states, because this includes all Medicaid recipients, including children, seniors, people with disabilities, and all other non-expansion groups. On average, these populations account for nearly 80 percent of all Medicaid costs in expansion states, making this benefit likely more lucrative than a 100 percent FMAP rate for expansion populations.^[25]

Looking at Health Equity Beyond Expansion

While North Carolina looks to expand its Medicaid population in the coming months, states across the country are purging Medicaid beneficiaries from their programs following the expiration of a federal disenrollment prohibition to qualify for a Covid-era enhanced FMAP.^[26] Recent reports estimate that nearly 9 million people across the country have been disenrolled from Medicaid so far, including more than 120,000 North Carolinians–more than 20 percent of North Carolina’s current Medicaid population.^[27]

While North Carolina has one of the lowest rates of churn among states across the nation, 87 percent of disenrolled North Carolinians lost coverage for procedural concerns–not eligibility concerns.^[28] This means that North Carolina Medicaid beneficiaries are losing their health insurance coverage largely because they did not fill out a form properly or the state had an incorrect address on file.

Few states publicly report the racial and ethnic demographics of their Medicaid disenrollees. For those that do, most seem to be disenrolling Medicaid recipients at even rates based on race and ethnicity.^[29] As disenrollment continues and North Carolina moves into expansion of their Medicaid program, policymakers, advocates, and observers will keep a keen eye on the state as it navigates its population’s fluctuating access to Medicaid. This expansion is but one step to ensure that people have equitable access to essential coverage and care.

Notes

[1] Gary D. Robertson, Medicaid Expansion to Begin Soon in North Carolina as Governor Decides to Let Budget Bill Become Law, Associated Press, Sept. 22, 2023, https://apnews.com/article/north-carolina-medicaid-expansion-governor-legislature-330ea1adef37a323b31a9cfe0d470a58.

[2] Id.

[3] In some states, inaction by a governor can lead to a pocket veto, however in others, inaction by a governor leads to passage of the bill. In North Carolina, a bill can become a law following inaction by a governor for ten days. Aimee Wall, The Governor’s Role in the Legislative Process, Coates’ Canons NC Gov’t Law (Jan. 11, 2017), https://canons.sog.unc.edu/2017/01/governors-role-legislative-process/.; Governor Roy Cooper, a Democrat, allowed the two-year budget bill to become law without action. See House Bill 259 / SL 2023-134, N.C. General Assembly, https://www.ncleg.gov/BillLookup/2023/H259 (last visited Oct. 15, 2023).

[4] The Far-Reaching Benefits of the Affordable Care Act’s Medicaid Expansion, Ctr. on Budget and Pol’y Priorities, https://www.cbpp.org/research/health/chart-book-the-far-reaching-benefits-of-the-affordable-care-acts-medicaid-expansion (last visited Oct. 15, 2023).

[5] Redlining occurred, beginning in the 1930s, when the federal government’s Home Owners’ Loan Corporation (HOLC) began the process of rating the investment desirability of various neighborhoods. The rating system used neighborhood racial demography to determine the grades, with the lowest grade reserved for neighborhoods that were “infiltrated with undesirable populations such as Jewish, Asian, Mexican, and Black families.” In turn, banks often refused to grant credit to prospective homeowners looking to purchase homes in those communities, or extended credit with excessive interest rates. Redlining was outlawed by the Fair Housing Act in 1968, but the impact on communities is still seen today. See Jason Semprini et al., Medicaid Expansion Lowered Uninsurance Rates Among Nonelderly Adults in the Most Heavily Redlined Areas, 42 Health Aff. 1439 (2023).

[6] Id.

[7] The Far-Reaching Benefits of the Affordable Care Act’s Medicaid Expansion, Ctr. on Budget and Pol’y Priorities, https://www.cbpp.org/research/health/chart-book-the-far-reaching-benefits-of-the-affordable-care-acts-medicaid-expansion (last visited Oct. 15, 2023).

[8] See Jason Semprini et al., Medicaid Expansion Lowered Uninsurance Rates Among Nonelderly Adults in the Most Heavily Redlined Areas, 42 Health Aff. 1439 (2023); Jaquelyn L. Jahn et al., Legislating Inequity: Structural Racism in Groups of State Laws and Associations with Premature Mortality Rates, 42 Health Aff. 1325 (2023).

[9] Jaquelyn L. Jahn et al., Legislating Inequity: Structural Racism in Groups of State Laws and Associations with Premature Mortality Rates, 42 Health Aff. 1325 (2023).

[10] Gary D. Robertson, N. Carolina Governor Signs Medicaid Expansion Bill into Law, Associated Press, March 27, 2023, https://apnews.com/article/north-carolina-medicaid-expansion-roy-cooper-legislature-f00242e5883bccf816a679a76584a5f9.

[11] The median maximum income limit for adults with family member caregiving responsibilities is 37 percent FPL in states that have not expanded Medicaid and childless adults remain ineligible in all of these states (except Wisconsin), regardless of income. Robin Rudowitz et al., How Many Uninsured Are in the Coverage Gap and How Many Could be Eligible if All States Adopted the Medicaid Expansion? Henry J. Kaiser Family Foundation. (Mar. 31, 2023), https://www.kff.org/medicaid/issue-brief/how-many-uninsured-are-in-the-coverage-gap-and-how-many-could-be-eligible-if-all-states-adopted-the-medicaid-expansion/.

[12] MAGI, as used to determine health care benefit eligibility, uses a different methodology than MAGI as used for tax purposes. For health benefit purposes, MAGI is adjusted gross income plus untaxed foreign income, non-taxable Social Security Benefits, and tax-exempt interest. Modified Adjusted Gross Income (MAGI), HealthCare.gov, https://www.healthcare.gov/glossary/modified-adjusted-gross-income-magi/#:~:text=MAGI%20is%20adjusted%20gross%20income,%2C%20and%20tax%2Dexempt%20interest (last visited Oct. 15, 2023).

[13] Medicaid Income Eligibility Limits for Adults as a Percent of the Federal Poverty Level, Henry J. Kaiser Family Foundation. (Jan. 1, 2023), https://www.kff.org/health-reform/state-indicator/medicaid-income-eligibility-limits-for-adults-as-a-percent-of-the-federal-poverty-level/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D.

[14] The Affordable Care Act established a 5 percent income disregard in determining eligibility for Medicaid and CHIP. The percent thresholds used in this blog post include the built-in income disregard used to establish Medicaid eligibility determinations. CMS Answers to Frequently Asked Questions: Telephonic Applications, Medicaid and CHIP Eligibility Policy and 75/25 Federal Matching Rate, Medicaid.gov. (Aug. 9, 2013), https://www.medicaid.gov/faq/respect-magi-conversion-how-will-5-disregard-be-applied/index.html.

[15] Questions and Answers about Medicaid Expansion, NC Medicaid Div. of Health Benefits. https://medicaid.ncdhhs.gov/questions-and-answers-about-medicaid-expansion#:~:text=Quick%20Facts%20about%20North%20Carolina%27s,%2Fyear)%20may%20be%20eligible (last visited Oct. 15, 2023).

[16] Facts About the Medicaid Family Planning “BE SMART” Program, N.C. Dept. of Health and Human Svcs. Div. of Med. Assistance and Div. of Public Health. (Sept. 16, 2016), https://files.nc.gov/ncdma/BeSmart_Fact_Sheet-Beneficiaries_2016_09_15.pdf.

[17] Questions and Answers about Medicaid Expansion, NC Medicaid Div. of Health Benefits. https://medicaid.ncdhhs.gov/questions-and-answers-about-medicaid-expansion#:~:text=Quick%20Facts%20about%20North%20Carolina%27s,%2Fyear)%20may%20be%20eligible (last visited Oct. 15, 2023).

[18] Elizabeth Williams et al., Medicaid Financing: The Basics, Henry J. Kaiser Family Foundation, April 13, 2023, https://www.kff.org/medicaid/issue-brief/medicaid-financing-the-basics/.

[19] Elizabeth Williams et al., Medicaid Financing: The Basics, Henry J. Kaiser Family Foundation, April 13, 2023, https://www.kff.org/medicaid/issue-brief/medicaid-financing-the-basics/.

[20] Id.

[21] The District of Columbia and territories have statutorily set FMAPs and the territories each have a statutorily set per capita Medicaid funding cap. Elizabeth Williams et al., Medicaid Financing: The Basics, Henry J. Kaiser Family Foundation, April 13, 2023, https://www.kff.org/medicaid/issue-brief/medicaid-financing-the-basics/.

[22] Elizabeth Williams et al., Medicaid Financing: The Basics, Henry J. Kaiser Family Foundation, April 13, 2023, https://www.kff.org/medicaid/issue-brief/medicaid-financing-the-basics.

[23] Id.

[24] Katie Keith, Final Coverage Provisions in the American Rescue Plan and What Comes Next, Health Aff: Forefront (Mar. 11, 2021), https://www.healthaffairs.org/content/forefront/final-coverage-provisions-american-rescue-plan-and-comes-next.

[25] Id.

[26] Jennifer Tolbert & Meghana Ammula, 10 Things to Know About the Unwinding of the Medicaid Continuous Enrollment Provision, Henry J. Kaiser Family Foundation, June 9, 2023, https://www.kff.org/medicaid/issue-brief/10-things-to-know-about-the-unwinding-of-the-medicaid-continuous-enrollment-provision/#one.

[27] Medicaid Enrollment and Unwinding Tracker, Henry J. Kaiser Family Foundation, Oct. 11, 2023, https://www.kff.org/medicaid/issue-brief/medicaid-enrollment-and-unwinding-tracker/.

[28] Id.

[29] Sophia Moreno et al., What Do Medicaid Unwinding Data by Race and Ethnicity Show? Henry J. Kaiser Family Foundation, Sept. 28, 2023, https://www.kff.org/policy-watch/what-do-medicaid-unwinding-data-by-race-and-ethnicity-show/.

The Policy Future for Telehealth After the Pandemic

April 14, 2023
COVID-19, Cyber Security, Data Privacy, Health, Healthcare, Healthcare Reform, Public Health

Jack Atterberry, MJLST Staffer

The Pandemic Accelerated Telehealth Utilization

Before the Covid-19 pandemic began, telehealth usage in the United States healthcare system was insignificant (rounding to 0%) as a percentage of total outpatient care visits.^[1] In the two years after the beginning of the pandemic, telehealth usage soared to over 10% of outpatient visits and has been widely used across all payer categories including Medicare and Medicaid.^[2] The social distancing realities during the pandemic years coupled with federal policy measures allowed for this radical transition toward telehealth care visits.

In response to the onset of Covid-19, the US federal government relaxed and modified many telehealth regulations which have expanded the permissible access of telehealth care services. After a public health emergency was declared in early 2020, the Center for Medicare & Medicaid Services (CMS) and the Department of Health and Human Services (HHS) modified preexisting telehealth-related regulations to expand the permissible use of those services. Specifically, CMS temporarily expanded Medicare coverage to include telehealth services without the need for in-person visits, removed telehealth practice restrictions such as expanding the type of providers that could provide telehealth, and increased the reimbursement rates for telehealth services to bring them closer to in-person visit rates.^[3] In addition, HHS implemented modifications such as greater HIPAA flexibility by easing requirements around using popular communication platforms such as Zoom, Skype, and FaceTime provided that they are used in good faith.^[4] Collectively, these changes helped lead to a significant rise in telehealth services and expanded access to care for many people that otherwise would not receive healthcare. Unfortunately, many of these telehealth policy provisions are set to expire in 2024, leaving open the question of whether the benefits of telehealth care expansion will be here to stay after the public emergency measures end.^[5]

Issues with Telehealth Care Delivery Between States

A big legal impediment to telehealth expansion in the US is the complex interplay of state and federal laws and regulations impacting telehealth care delivery. At the state level, key state differences in the following areas have historically held back the expansion of telehealth. First, licensing and credentialing requirements for healthcare providers are most often licensed at the state level – this has created a barrier for providers who want to offer telehealth services across state lines. While many states have implemented temporary waivers or joined interstate medical licensure compacts to address this issue during the pandemic, many states have not done so and huge inconsistencies exist. Besides these issues, states also differ with regard to reimbursement policy as states differ significantly in how different payer types insure differently in different regions—this has led to confusion for providers about whether to deliver care in certain states for fear of not getting reimbursed adequately. Although the federal health emergency helped ease interstate telehealth restrictions since the pandemic started, these challenges will likely persist after the temporary telehealth measures are lifted at the end of 2024.

What the pandemic-era temporary easing of telehealth restrictions taught us is that interstate telehealth improves health outcomes, increases patient satisfaction, and decreases gaps in care delivery. In particular, rural communities and other underserved areas with relatively fewer healthcare providers benefited greatly from the ability to receive care from an out of state provider. For example, patients in states like Montana, North Dakota, and South Dakota benefit immensely from being able to talk with an out of state mental health provider because of the severe shortages of psychiatrists, psychologists, and other mental health practitioners in those states.^[6] In addition, a 2021 study by the Bipartisan Policy Center highlighted that patients in states which joined interstate licensure compacts experienced a noticeable improvement in care experience and healthcare workforces experienced a decreased burden on their chronically stressed providers.^[7] These positive outcomes resulting from eased interstate healthcare regulations should inform telehealth policy moving forward.

Policy Bottlenecks to Telehealth Care Access Expansion

The presence of telehealth in American healthcare is surprisingly uncertain as the US emerges from the pandemic years. As the public health emergency measures which removed various legal and regulatory barriers to accessing telehealth expire next year, many Americans could be left without access to healthcare via telehealth services. To ensure that telehealth remains a part of American healthcare moving forward, federal and state policy makers will need to act to bring about long term certainty in the telehealth regulatory framework. In particular, advocacy groups such as the American Telehealth Association recommend that policy makers focus on key policy changes such as removing licensing barriers to interstate telehealth care, modernizing reimbursement payment structures to align with value-based payment principles, and permanently adopting pandemic-era telehealth access for Medicare, Federally Qualified Health Centers, and Rural Health Clinics.^[8] In addition, another valuable federal regulatory policy change would be to continue allowing the prescription of controlled substances without an in-person visit. This would entail modifying the Ryan Haight Act, which requires an in-person medical exam before prescribing controlled substances.^[9] Like any healthcare reform in the US, cementing these lasting telehealth policy changes as law will be a major uphill battle. Nonetheless, expanding access to telehealth could be a bipartisan policy opportunity for lawmakers as it would bring about expanded access to care and help drive the transition toward value-based care leading to better health outcomes for patients.

Notes

[1] https://www.healthsystemtracker.org/brief/outpatient-telehealth-use-soared-early-in-the-covid-19-pandemic-but-has-since-receded/

[2] https://www.cms.gov/newsroom/press-releases/new-hhs-study-shows-63-fold-increase-medicare-telehealth-utilization-during-pandemic#:~:text=Taken%20as%20a%20whole%2C%20the,Island%2C%20New%20Hampshire%20and%20Connecticut.

[3] https://telehealth.hhs.gov/providers/policy-changes-during-the-covid-19-public-health-emergency

[4] Id.

[5] https://hbr.org/2023/01/its-time-to-cement-telehealths-place-in-u-s-health-care

[6] https://thinkbiggerdogood.org/enhancing-the-capacity-of-the-mental-health-and-addiction-workforce-a-framework/?_cldee=anVsaWFkaGFycmlzQGdtYWlsLmNvbQ%3d%3d&recipientid=contact-ddf72678e25aeb11988700155d3b3c69-e949ac3beff94a799393fb4e9bbe3757&utm_source=ClickDimensions&utm_medium=email&utm_campaign=Health%20%7C%20Mental%20Health%20Access%20%7C%2010.19.21&esid=e4588cef-7520-ec11-b6e6-002248246368

[7] https://bipartisanpolicy.org/download/?file=/wp-content/uploads/2021/11/BPC-Health-Licensure-Brief_WEB.pdf

[8] https://hbr.org/2023/01/its-time-to-cement-telehealths-place-in-u-s-health-care

[9] https://www.aafp.org/pubs/fpm/issues/2021/0500/p9.html

Mental Health Telehealth Services May Not Be Protecting Your Data

March 5, 2023
Administrative Law, COVID-19, Data Privacy, Health, Healthcare, Internet, New Technology, Privacy

Tessa Wright, MJLST Staffer

The COVID-19 pandemic changed much about our daily lives, and nowhere have those changes been more visible than in the healthcare industry. During the pandemic, there were overflowing emergency rooms coupled with doctor shortages.[1] In-person medical appointments were canceled, and non-emergency patients had to wait months for appointments.[2] In response, the use of telehealth services began to increase rapidly.[3] In fact, one 2020 study found that telehealth visits accounted for less than 1% of health visits prior to the pandemic and increased to as much as 80% of visits when the pandemic was at its peak.[4] And, while the use of telehealth services has decreased slightly in recent years, it seems as though it is likely here to stay. Nowhere has the use of telehealth services been more prevalent than in mental health services.[5] Indeed, as of 2022, telehealth still represented over 36% of outpatient mental health visits.[6] Moreover, a recent study found that since 2020, over one in three mental health outpatient visits have been delivered by telehealth.[7] And while this increased use in telehealth services has helped make mental health services more affordable and accessible to many Americans, this shift in the way healthcare is provided also comes with new legal concerns that have yet to be fully addressed.

Privacy Concerns for Healthcare Providers

One of the largest concerns surrounding the increased use of telehealth in mental health services is privacy. There are several reasons for this. The primary concern has been due to the fact that telehealth takes place over the phone or via personal computers. When using personal devices, it is nearly impossible to ensure HIPAA compliance. However, the majority of healthcare providers now offer telehealth options that connect directly to their private healthcare systems, which allows for more secure data transmission.[8] While there are still concerns surrounding this issue, these secure servers have helped mitigate much of the concern.[9]

Privacy Concerns with Mental Health Apps

The other privacy concern surrounding the use of telehealth services for mental health is a little more difficult to address. This concern comes from the increased use of mental health apps. Mental health apps are mobile apps that allow users to access online talk therapy and psychiatric care.[10] With the increased use of telehealth for mental health services, there has also been an increase in the use of these mental health apps. Americans are used to their private medical information being protected by the Health Insurance Portability and Accountability Act (HIPAA).[11] HIPAA is a federal law that creates privacy rules for our medical records and other individually identifiable health information during the flow of certain health care transactions.[12] But HIPAA wasn’t designed to handle modern technology.[13] The majority of mental health apps are not covered by HIPAA rules, meaning that these tech companies can sell the private health data from their apps to third parties, with or without consent.[14] In fact, a recent study that analyzed 578 mental health-related apps found that nearly half (44%) of the apps shared users’ personal health information with third parties.[15] This personal health information can include psychiatric diagnoses and medication prescriptions, as well as other identifiers including age, gender, ethnicity, religion, credit score, etc.[16]

In fact, according to a 2022 study, a popular therapy app, BetterHelp, was among the worst offenders in terms of privacy.[17] “BetterHelp has been caught in various controversies, including a ‘bait and switch’ scam where it advertised therapists that weren’t actually on its service, poor quality of care (including trying to provide gay clients with conversion therapy), and paying YouTube influencers if their fans sign up for therapy through the app.”[18]

An example of information that does get shared is the intake questionnaire.[19] An intake questionnaire needs to be filled out on BetterHelp, or other therapy apps, in order for the customer to be matched with a provider.[20] The answers to these intake questionnaires were specifically found to have been shared by BetterHelp with an analytics company, along with the approximate location and device of the user.[21]

Another example of the type of data that is shared is metadata.[22] BetterHelp can share information about how long someone uses the app, how long the therapy sessions are, how long someone spends sending messages on the app, what times someone logs into the app, what times someone sends a message or speaks to their therapists, the approximate location of the user, how often someone opens the app, and so on.[23] According to the ACLU, data brokers, Facebook, and Google were found to be among the recipients of other information shared from BetterHelp.[24]

It is also important to note that deleting an account may not remove all of your personal information, and there is no way of knowing what data will remain.[25] It remains unclear how long sensitive information that has been collected and retained could be available for use by the app.

What Solutions Are There?

The U.S. Department of Health and Human Services recently released updated guidance on HIPAA, confirming that the HIPAA Privacy Rule does not apply to most health apps because they are not “covered entities” under the law.[26] Additionally, the FDA put out guidance saying that it is going to use its enforcement discretion when dealing with mental health apps.[27] This means that if the privacy risk seems to be low, the FDA is not going to enforce or chase these companies.[28]

Ultimately, if mental telehealth services are here to stay, HIPAA will need to be expanded to cover the currently unregulated field of mental health apps. HIPAA and state laws would need to be specifically amended to include digital app-based platforms as covered entities.[29] These mental health apps are offering telehealth services, similar to any healthcare provider that is covered by HIPAA. Knowledge that personal data is being shared so freely by mental health apps often leads to distrust, and due to those privacy concerns, many users have lost confidence in them. In the long run, regulatory oversight would increase the pressure on these companies to show that their service can be trusted, potentially increasing their success by growing their trust with the public as well.

Notes

[1] Gary Drenik, The Future of Telehealth in a Post-Pandemic World, Forbes, (Jun. 2, 2022), https://www.forbes.com/sites/garydrenik/2022/06/02/the-future-of-telehealth-in-a-post-pandemic-world/?sh=2ce7200526e1.

[2] Id.

[3] Id.

[4] Madjid Karimi, et. al., National Survey Trends in Telehealth Use in 2021: Disparities in Utilization and Audio vs. Video Services, Office of Health Policy (Feb. 1, 2022).

[5] Shreya Tewari, How to Navigate Mental Health Apps that May Share Your Data, ACLU (Sep. 28, 2022).

[6] Justin Lo, et. al., Telehealth has Played an Outsized Role Meeting Mental Health Needs During the Covid-19 Pandemic, Kaiser Family Foundation, (Mar. 15, 2022), https://www.kff.org/coronavirus-covid-19/issue-brief/telehealth-has-played-an-outsized-role-meeting-mental-health-needs-during-the-covid-19-pandemic/.

[7] Id.

[8] Supra note 1.

[9] Id.

[10] Heather Landi, With Consumers’ Health and Privacy on the Line, do Mental Wellness Apps Need More Oversight?, Fierce Healthcare, (Apr. 21, 2021), https://www.fiercehealthcare.com/tech/consumers-health-and-privacy-line-does-digital-mental-health-market-need-more-oversight.

[11] Peter Simons, Your Mental Health Information is for Sale, Mad in America, (Feb. 20, 2023), https://www.madinamerica.com/2023/02/mental-health-information-for-sale/.

[12] Supra note 5.

[13] Supra note 11.

[14] Id.

[15] Deb Gordon, Using a Mental Health App? New Study Says Your Data May Be Shared, Forbes, (Dec. 29, 2022), https://www.forbes.com/sites/debgordon/2022/12/29/using-a-mental-health-app-new-study-says-your-data-may-be-shared/?sh=fe47a5fcad2b.

[16] Id.

[17] Supra note 11.

[18] Id.

[19] Supra note 5.

[20] Id.

[21] Id.

[22] Id.

[23] Id.

[24] Id.

[25] Supra note 5.

[26] Id.

[27] Supra note 10.

[28] Id.

[29] Supra note 11.

The Apathetic Divide: Surrogacy and the Anglo-American Courtroom

February 20, 2023
Ethics, EU Law, Health, Healthcare, Reproductive Health

Kelso Horne, MJLST Staffer

The State of New York defines Gestational Surrogacy as “a process where one person, who did not provide the egg used in conception, carries a fetus through pregnancy and gives birth to a baby for another person or couple.” The process of surrogacy can be fraught with legal, technical, and moral issues, particularly when the surrogacy is paid for via contract with the surrogate, also called Compensated Gestational Surrogacy (CGS). Until 2020, this kind of contractual paid surrogacy was illegal in the state of New York. That year, it was legalized, and the regulatory regime normalized by the Child-Parent Security Act. In contrast, the state of Louisiana has one of the harshest gestational surrogacy regimes in the world, outright banning CGS, and requiring both sets of gametes to come from a couple married residing in the state of Louisiana. But these competing regulatory regimes are not replicated across the nation. To the contrary, most states have not passed any laws legalizing or banning CGS or other fertility practices, like the sale of gametes. With sparse case law and frequent legal limbo, the question of “is CGS legal for me?” can be a difficult question for many Americans.

Across the Atlantic, the question used to be an easy one to answer. In 1985 the UK Parliament Enacted the Surrogacy Arrangements Act, which made it an offense to “initiate or take part in any negotiations with the view of making a surrogacy arrangement”, along with some related activities, like compiling information to assist in the creation of surrogacy arrangements. Critically, however, the Act did not criminalize the act of looking to hire a surrogate, or looking to become one, only being a middleman, or publishing advertisements on behalf of those looking to obtain the services of a surrogate. The Human Fertilisation and Embryology Act 1990 defined the mother of a child under UK law as “[t]he woman who is carrying or has carried a child… and no other woman”. In 2001, the Lords Appeal in Ordinary, which acted as the UK’s highest court until 2009, heard the appeal in Briody v. St Helens and Knowsley Area Health Authority. The question before the Lords was one of damages. A woman, rendered infertile as a result of medical negligence, sought £78,267 in order to obtain the services of a surrogate in California, which had legalized CGS in 1993 in the landmark case Johnson v. Calvert. The Lady Justice Hale, speaking for the court, foreclosed the use of CGS in California or elsewhere, as the proposal was “contrary to the public policy of the country”. While she did not entirely dismiss the idea of providing damages to pay for surrogacy procedures, she said it would be permitted only in the case of a voluntary, unpaid surrogate.

Few appellate court judges get to issue an opinion on the same facts twice in their career. In 2020, in one of her final cases prior to retiring, the Lady Justice Hale, now sitting on the UK Supreme Court, which by then had replaced the Lords Appeal in Ordinary, did just that. In Whittington Hospital NHS Trust (Appellant) v XX, the court determined that a woman who had been rendered infertile as a result of medical negligence could claim damages, including the costs to pay a United States based surrogate to carry her children. CGS, while still entirely illegal in the UK, could now nevertheless provide the basis for damages in a UK court. The Court did note some factual differences between Whittington Hospital and Briody, notably, that the likelihood that a surrogacy arrangement would result in a child was higher in the former. However, the court’s main argument for its opposite ruling was a change in cultural attitude to surrogacy and its role in society, stating “[t]he use of assisted reproduction techniques is now widespread and socially acceptable.”

While admitting that surrogacy was now widely accepted in UK society, the dissent, authored by The Lord Justice Carnwath, nevertheless disagreed with the Court. It argued that the criminal law of the UK remained clearly averse to commercial surrogacy, and that by awarding damages for CGS in California the court misaligned the UK’s civil and criminal law. Thus, the CGS regimes of the UK and the U.S. are now bound together. UK citizens may seek surrogacy arrangements and have them compensated by the UK government through the UK’s National Health Service, but they must use an American “womb”. A financial arrangement which the UK itself deems too unethical to allow inside its own borders is nevertheless legalized and compensated when occurring in other countries. The deeply strange situation is mirrored in the opaque CGS law in the United States itself.

A quick glance at any 50-state review of laws, compiled either by supporters or opponents to commercial surrogacy, paint a similar picture. They show strange ad hoc mixes of case law which often cover ancillary issues or are at least 30 years old. Some scholars have started to publicly discuss the possible ethical pitfalls of “procreative tourism”, but without clear legal rules governing what arrangements are and are not allowed, it becomes difficult to discuss possible solutions. The dangers of this shadow regime were thrown into stark relief by the war in Ukraine, which prior to the Russian invasion was a major source of surrogate mothers. Mothers were paid on average $15,000 per child, which is considerable in a country where, prior to the invasion, the GDP per capita was less than $5,000. The United States needs to determine if it wishes to become a “destination” country for procreative tourism, as the result in Whittington would seem to suggest it is, and whether it wishes to allow its own citizens the opportunity to travel abroad to engage in CGS.

This blog has touched on only a small fraction of the issues which are faced when determining the ideal regulatory regime for surrogacy. However, a lack of discussion, and a failure to acknowledge possible risks leaves us ignorant of what the problems may be, let alone the route to potential solutions. States have largely failed to address the issue since the first CGS baby was born in their borders, usually in the late 1980’s and early 1990’s. It’s time for a serious examination of CGS regulation as it exists, as well as a meaningful discussion about safeguarding the health and wellbeing of those involved in such a transaction. The UK has now done the same, passing the buck without a serious response to the issues surrounding CGS. Regardless of one’s opinion on the results of the Louisiana and New York regulations, potential participants in a surrogacy arraignment in those two states know the boundaries. That should be the case nationwide.

Behind the “Package Insert”: Loophole in FDA’s Regulation of Off-Label Prescriptions

November 12, 2022
Agencies, Drug Policy, FDA, Healthcare, Industry, Pharmaceuticals, Public Health, Regulatory

Yolanda Li, MJLST Staffer

FDA Regulation of Drug Prescription Labeling and the “Package Insert”

Over the recent years, constant efforts have been made towards regulating medical prescriptions in an attempt to reduce risks accompanied with drug prescriptions. Among those efforts is the FDA’s revision of the format of prescription drug information, commonly known as the “package insert”.^[1]

The package insert regulation, effective since 2006, applies to all prescription drugs. The package insert is to provide up-to-date information on the drug in an easy-to-read format. One significant feature is a section named “highlights”, which provides the most important information regarding the benefits and risks of a prescribed medication. The highlights section is typically half a page in length providing a concise summary of information including “boxed warning”, “indications and usage”, and “dosage and administration”.^[2] The highlights section also refers physicians to appropriate sections of the full prescribing information. In this way, the package insert aims to draw both the physicians’ and the patients’ attention to the prescription of a drug, consequently accomplishing the ultimate purpose of managing medication use and reducing medical errors. Mike Leavitt, the Health and Human Services Secretary of the FDA commented that the package insert “help[s] ensure safe and optimal use of drugs, which translates into better health outcomes for patients and more efficient delivery of healthcare.”^[3]

FDA Regulation of Off-Label Prescription and the Emergence of a Loophole

The FDA’s regulations relating to the labeling of prescription drugs, although systematic in its form, are cut short to a certain extent due to its lack of regulation on off-label prescriptions. Off-label prescriptions do not refer to a physician prescribing non-FDA approved drugs, a common misunderstanding by the public. Rather, off-label prescriptions are those that do not conform to the FDA-approved use set out in the FDA-approved label.^[4] More specifically, off-label prescription generally refers to: “(1) the practice of a physician prescribing a legally manufactured drug for purposes other than those indicated on that drug’s FDA mandated labeling; (2) using a different method of applying the treatment and prescribing a drug, device, or biologic to patient groups other than those approved by FDA; and (3) prescriptions for drug dosages that are different from the approved label-recommended dosage or for time periods exceeding the label-recommended usage.”^[5] For example if Drug A’s use, as mandated by the FDA, is to treat chronic headaches, and a physician prescribes it to treat a patient’s sprained ankle, that is an off-label prescription. However, such practice is common as estimated by the American Medical Association (AMA).^[6]

The commonly approach is that the FDA and courts do not to interfere with physicians’ off-label uses.^[7] Thus, when the FDA regulates the labeling of approved uses but does not regulate prescriptions for off-label uses, a loophole is formed. Andrew von Eschenbach, M.D., claims that because the FDA’s package insert regulation makes it easier for physicians to get access to important information about drugs, including drug safety and benefits, this regulation helps physicians to have more meaningful discussions with patients.^[8] However, physicians’ discretion in prescribing off-label prescriptions would offset the proposed benefit of the FDA regulation because the regulation remains as guidance without force of law once physicians choose to go off from FDA’s approved uses of drugs. The easy-to-understand feature of the package insert and its benefit for a patient’s understanding of the drug becomes futile when physicians exercise discretion and prescribe drugs for uses not written on the inserts. In sum, when a patient receives an off-label prescription, the insert provides them little benefit as it addresses benefits and risks related to a different use of the drug.

It is undisputed that drug manufacturers have less discretion regarding drug labeling than physicians. If a manufacturer included an off-label use on a drug’s label, and promoted the off-label use of the drug, the drug would be considered misbranded. The manufacturer would then be subject to liability^[9] as manufacturing a misbranded product in interstate commerce is prohibited.^[10] However, the effect of regulations on manufacturers still fail to eliminate the loophole in off-label prescription: in response to the regulations, the manufacturer usually receives FDA approval for only a few drug uses and then relies on physicians prescribing off-label uses to ensure their profitability.^[11] In this way, the manufacturer avoids liability under regulation and furthers the loophole in off-label prescription by encouraging physicians to prescribe more off-label uses in order to expand the manufacturer’s market.^[12]

Why are Off-Label Prescriptions Difficult to Regulate?

One of the main reasons behind the lack of regulation of off-label prescriptions is the FDA’s objective in ensuring effective delivery of health care. Physicians are encouraged to use discretion and judgment in order to tailor prescription to patients’ individual conditions.^[13] Another reason is to increase efficiency in treatments by avoiding the lengthy FDA approval process.^[14] Aspirin was widely prescribed to reduce the risk of heart attack long before it was FDA-approved for this purpose; off-label prescriptions have also been proven effective in treatment of cancer, and off-label therapies have prolonged the lives of AIDS patients.^[15] Another concern is drug prices in the United States, and promoting off-label uses has been found to help reduce drug prices as increased sales volume enables drug companies to lower their prices.^[16] Indeed, off-label prescription has become a mainstream of medicine: “the FDA has long tolerated off-label drug use and has disclaimed any interest in regulating physicians’ prescribing practices.”^[17] Today it is unclear whether the agency even has jurisdiction to regulate off-label prescription of drugs.^[18]

In sum, there is clear guidance on the labeling of prescription drugs as a result of FDA regulation. However, because of difficulties in enforcement, the custom and widely accepted practice of off-label prescriptions and the inherent benefit of off-label prescription, the effects of the regulation are not as effective as what was firstly planned and proposed.

Notes

^[1] The FDA Announces New Prescription Drug Information Format, U.S. Food & Drug Adm’ (Dec. 04 2015) https://www.fda.gov/drugs/laws-acts-and-rules/fda-announces-new-prescription-drug-information-format.

^[2] Id.

^[3] Id.

^[4] Margaret Z. Johns, Informed Consent: Requiring Doctors to Disclose Off-Label Prescriptions and Conflicts of Interest, 58 Hastings L.J. 967, 968 https://plus.lexis.com/document?crid=35364c11-2939-4e58-bceb-dab7ae8f0154&pddocfullpath=%2Fshared%2Fdocument%2Fanalytical-materials%2Furn%3AcontentItem%3A4P0W-GY20-00CW-906B-00000-00&pdsourcegroupingtype=&pdcontentcomponentid=7341&pdmfid=1530671&pdisurlapi=true.

^[5] Lisa E. Smilan, The off-label loophole in the psychopharmacologic setting: prescription of antipsychotic drugs in the nonpsychotic patient population, 30 Health Matrix 233, 240 (2020), https://plus.lexis.com/document/?pdmfid=1530671&crid=367cf8ad-295e-4f14-97fa-737618718d61&pddocfullpath=%2Fshared%2Fdocument%2Fanalytical-materials%2Furn%3AcontentItem%3A64BT-RR31-JWBS-61KV-00000-00&pdworkfolderid=5506aeec-9540-4837-89f0-5a1acfd81d8b&pdopendocfromfolder=true&prid=1d42abd0-b66e-43af-a61a-0d1fb94180f5&ecomp=gdgg&earg=5506aeec-9540-4837-89f0-5a1acfd81d8b#.

^[6] Supra note 4.

^[7] Sigma-Tau Pharms. v. Schwetz, 288 F.3d 141, 148, https://plus.lexis.com/document?crid=7d2a2b00-13ad-4953-968e-82a28724aa00&pddocfullpath=%2Fshared%2Fdocument%2Fcases%2Furn%3AcontentItem%3A45RF-5H50-0038-X1PB-00000-00&pdsourcegroupingtype=&pdcontentcomponentid=6388&pdmfid=1530671&pdisurlapi=true.

^[8] Supra note 1.

^[9] 21 CFR 201.5, https://plus.lexis.com/document/?pdmfid=1530671&crid=e02a99fb-be65-4525-b83c-a167f3e21b93&pddocfullpath=%2Fshared%2Fdocument%2Fadministrative-codes%2Furn%3AcontentItem%3A603K-BXD1-DYB7-W30Y-00000-00&pdcontentcomponentid=5154&pdworkfolderlocatorid=NOT_SAVED_IN_WORKFOLDER&prid=ff2b7e20-9dab-49b0-8385-627c16ee0ba2&ecomp=vfbtk&earg=sr2.

^[10] 21 CFR 801.4, https://plus.lexis.com/document/?pdmfid=1530671&crid=721a586d-52a4-4228-b0c3-c464a77d6e6a&pddocfullpath=%2Fshared%2Fdocument%2Fadministrative-codes%2Furn%3AcontentItem%3A638R-X4S3-GXJ9-32FV-00000-00&pdcontentcomponentid=5154&pdworkfolderlocatorid=NOT_SAVED_IN_WORKFOLDER&prid=ff2b7e20-9dab-49b0-8385-627c16ee0ba2&ecomp=vfbtk&earg=sr6.

^[11] Supra note 4.

^[12] Id.

^[13] Supra note 7.

^[14] Supra note 4.

^[15] Id.

^[16] Supra note 4, at 981.

^[17] Kaspar J. Stoffelmayr, Products Liability And “Off-label” Uses Of Prescription Drugs, 63 U. Chi. L. Rev. 275, 279, https://plus.lexis.com/document?crid=a2181ffc-7f3e-4bce-b82e-08ba9111194f&pddocfullpath=%2Fshared%2Fdocument%2Fanalytical-materials%2Furn%3AcontentItem%3A3S3V-4CF0-00CV-K03W-00000-00&pdsourcegroupingtype=&pdcontentcomponentid=7358&pdmfid=1530671&pdisurlapi=true.

^[18] Id.

Predicted Effects of Price Transparency on Healthcare Economics

March 29, 2022
Administrative Law, Health, Healthcare

David Edholm, MJLST Staffer

In 2019, the Centers for Medicare and Medicaid Services (CMS) promulgated the Price Transparency Rule in order to allow patients to access healthcare pricing information. The stated purpose of the Price Transparency Rule is as follows:

By disclosing hospital standard charges [including payer-specific negotiated charges and discounted-cash prices], we believe the public (including patients, employers, clinicians, and other third parties) will have the information necessary to make more informed decisions about their care. We believe the impact of these final policies will help to increase market competition, and ultimately drive down the cost of healthcare services, making them more affordable for all patients.

There is significant debate whether compliance with the Price Transparency Rule will actuate its intended purpose.

On the proponent side, economic theory to support this purpose statement comes from a market advocacy perspective. In order to drive down the cost of healthcare through competition, consumers must know the prices in advance in order to bargain between providers. By giving consumers the ability to shop around and barter, the thinking goes, providers will undercut competitors by lowering their own prices, even slightly below a competitor’s rate.

Another theory that supports price transparency is that shining light onto healthcare pricing will lead to more public outcry, guilting providers to lower overinflated or unconscionable gross charges or hospital fees. Public outcry may also compel states to create global healthcare budget caps, which have been shown to have positive price-lowering effects. A recent study from Rice University found that Maryland’s all-payer global budget policy reduces costs while increasing quality of care.

Skeptics of the rule, however, including the American Hospital Association (AHA), argue that price transparency will induce institutions that currently charge less than competitors to increase their prices to match their competitors, ultimately raising costs. In litigation, the DC Circuit responded to that argument, holding that, based on available research, this result is unlikely. Secretary Azar was not required to rely on definitive rather than predictive data in writing the requirements because of the novelty of the price disclosure scheme and the unique complexity of healthcare pricing. The DC Circuit held that relying on studies of similar price disclosure schemes in other industries was sufficient to inform a stable policy judgment.

However, the healthcare service market is of a unique nature in that quality of care may be a consumer’s primary consideration before seeking treatment, trumping price considerations. Alternatively, a consumer may assume that paying more means receiving higher-quality care. Quality of care is incredibly hard to measure and report, and unless a consumer has access to quality-of-care information alongside pricing information, they are more likely to make fallacious assumptions about this correlation. Another unique factor about healthcare shopping is that many consumers have a strong relationship with their physician, thus would base their decision primarily on receiving advice from one they trust, rather than the out-of-pocket cost of care, especially if the difference is negligible.

Last is the complexity of healthcare viewpoint. Opponents of the price transparency rule emphasize the nature of healthcare as an unpredictable trade. For example, if a patient consumer undergoes surgery to fix one problem, a surgeon may discover another problem amidst the procedure. The standard of care likely prompts the surgeon to correct both problems, thus the patient consumer will be charged an amount higher than they could have reasonably predicted. The AHA brought this argument to court to support its assertion that the price transparency rule violated the Administrative Procedure Act (APA) by overstating the rule’s benefits. The DC Circuit court responded that the rule did not require hospitals to publish every potential permutation of finalized charges, rather that the baseline charges are publicized. Thus, in the surgery scenario, a patient consumer should have access to the payer-negotiated rate to fix the initial problem.

The jury is out, so to speak, on the effects that Price Transparency Rule compliance will have on healthcare economics. But from a consumer perspective, rapidly increasing healthcare costs are at the forefront of relevant political issues.

Build Back Better Act: A Request for Transparency of a Clearly Visible Issue

December 10, 2021
Healthcare, Healthcare Reform, Pharmaceuticals

Sara Pistilli, MJLST Staffer

On November 19, 2021, the House of Representatives voted to pass the “Build Back Better Act” which includes several provisions aimed at ever-rising healthcare prices. In trying to combat this concern, Congress included mandatory reporting provisions for pharmacy benefit managers (PBM) who bill Medicare and Medicaid insurance programs. PBMs will be required to provide reports every six months that include data on copays, dispensed drugs, rebates, and total out of pocket spending for patients. Speaker Nancy Pelosi states these provisions are aimed at “providing transparency regarding drug costs in private health plans” but is transparency helpful or even necessary when the effects PBMs have on healthcare costs are well known?

What is a PBM?

PBMs are third-party administrators that manage prescription drug benefits on behalf of both private and public healthcare payers. They have significant power to manipulate the healthcare market by acting as middlemen between payers (insurance companies), drug manufacturers, and dispensers (pharmacies). Originally, PBMs were meant to lower healthcare costs by streamlining transactions and attempting to create fair payment systems for dispensing pharmacies.Instead, PBMs have secretly contributed to increasing healthcare costs by inflating drug costs while concurrently decreasing pharmacy reimbursement rates leading to huge windfall profits for PBMs at the patients’ expense.

How do PBMs make millions in profits each year?

While some patients pay cash for medications, most are covered by Medicare, Medicaid, or private insurers. PBMs are paid by these insurers to determine how much a healthcare plan pays for a medication and in turn, how much the pharmacy gets reimbursed for the dispensed medication. For example, Bob receives a new prescription from his doctor for drug A. The pharmacy buys a bottle of drug A for $7. When Bob comes to pick up his prescription for drug A, his health insurer’s PBM pays $8 to reimburse the pharmacy, allowing them to gain a profit of $1. Concurrently, the PBM bills the health insurer $18 for the price of drug A, allowing them to make $10 in profit on Bob’s prescription. This practice, called spread pricing, results in PBMs making millions of dollars in profits each year.

BBBPicture1

Picture: “The Secret Drug Pricing System Middlemen Use to Rake in Millions

How does PBM spread pricing increase healthcare costs for patients?

PBM spread pricing affects healthcare costs in two distinct ways: increased insurance premiums and decreased access to care. As PBMs continue to inflate the cost of prescription drugs, insurers are billed more and more by their PBMs. These expenses directly fall on the shoulders of the government and the healthcare companies, who represent the public and private payer sector. In turn, to keep up with increased billing, public and private payers turn to their beneficiaries to help them pay the PBMs via increased healthcare plan premiums, decreased coverage, and larger copays. Concurrently, as the PBMs reimburse pharmacies less and less for medication dispensing, pharmacies, especially independent ones, try to operate on thinner profit margins. Over time, the low reimbursement rates culminate in decreased clinical services or, in the worst case, pharmacies closing permanently.

What does the Build Back Better Act do to help?

Egregious billing practices by PBMs have been in the spotlight for several years now. In 2018, Ohio’s Department of Medicaid released a report showing that PBMs charged the state of Ohio $224 million in hidden spread pricing. The audit results led to Ohio terminating all PBM contracts with the Department of Medicaid and converting to a single-PBM system where spread pricing could be monitored better. Another report, this time in Utah, showed that PBM’s received $1.5 million from spread pricing in 2018. Similarly in 2019, a Kentucky report found that PBMs retained $123 million in spread pricing in that state. Several states have enacted laws targeting PBM spread pricing as the federal government continues to skirt around the issue. For example, Louisiana prohibits all PBMs from using spread pricing unless a PBM provides written notice of the practice to the health insurer and the policy holder. Louisiana also enacted a law stating that PBMs could not reimburse pharmacies at a lower rate than they do their affiliated pharmacies. This directly targets suspicions that CVS Caremark reimburses CVS pharmacies more to eliminate competition and steer patients towards filling their medications at CVS pharmacies. Like Louisiana, Maine enacted a law stating that PBMs could not participate in spread pricing without proper notice to the state. On October 1st, 2021, North Carolina’s Senate Bill 257 will take effect. This bill requires PBMs to apply for business licenses with the Commissioner of the Department of Insurance, subjecting them to more spread pricing regulations and threats of restitution to pharmacies they reimburse unfairly. While the states’ efforts are not perfect solutions, they are necessary efforts to regulate PBMs more. The federal government’s efforts to increase transparency is unnecessary due to the public recognition of PBM spread pricing. Every state audit that shows gross spread pricing is transparent enough to alert the federal government that PBMs pose a widespread problem to our healthcare system without greater restrictions. PBMs need to be controlled directly through regulations targeted towards preventing and prohibiting spread pricing, rather than asked to report every six months just how much they profit off their deceptive billing practices.

You Wouldn’t 3D Print Tylenol, Would You?

October 12, 2021
3-D Printing, Administrative Law, Bioethics, Biotechnology, FDA, Food and Drug Law, Health, Healthcare, Healthcare Reform, Medical Devices, Personalized Medicine, Pharmaceuticals, Uncategorized

By Mason Medeiros, MJLST Staffer

3D printing has the potential to change the medical field. As improvements are made to 3D printing systems and new uses are allocated, medical device manufacturers are using them to improve products and better provide for consumers. This is commonly seen through consumer use of 3D-printed prosthetic limbs and orthopedic implants. Many researchers are also using 3D printing technology to generate organs for transplant surgeries. By utilizing the technology, manufacturers can lower costs while making products tailored to the needs of the consumer. This concept can also be applied to the creation of drugs. By utilizing 3D printing, drug manufacturers and hospitals can generate medication that is tailored to the individual metabolic needs of the consumer, making the medicine safer and more effective. This potential, however, is limited by FDA regulations.

3D-printed drugs have the potential to make pill and tablet-based drugs safer and more effective for consumers. Currently, when a person picks up their prescription the drug comes in a set dose (for example, Tylenol tablets commonly come in doses of 325 or 500 mg per tablet). Because the pills come in these doses, it limits the amount that can be taken to multiples of these numbers. While this will create a safe and effective response in most people, what if your drug metabolism requires a different dose to create maximum effectiveness?

Drug metabolism is the process where drugs are chemically transformed into a substance that is easier to excrete from the body. This process primarily happens in the kidney and is influenced by various factors such as genetics, age, concurrent medications, and certain health conditions. The rate of drug metabolism can have a major impact on the safety and efficacy of drugs. If drugs are metabolized too slowly it can increase the risk of side effects, but if they are metabolized too quickly the drug will not be as effective. 3D printing the drugs can help minimize these problems by printing drugs with doses that match an individual’s metabolic needs, or by printing drugs in structures that affect the speed that the tablet dissolves. These individualized tablets could be printed at the pharmacy and provided straight to the consumer. However, doing so will force pharmacies and drug companies to deal with additional regulatory hurdles.

Pharmacies that 3D print drugs will be forced to comply with Current Good Manufacturing Procedures (CGMPs) as determined by the FDA. See 21 C.F.R. § 211 (2020). CGMPs are designed to ensure that drugs are manufactured safely to protect the health of consumers. Each pharmacy will need to ensure that the printers’ design conforms to the CGMPs, periodically test samples of the drugs for safety and efficacy, and conform to various other regulations. 21 C.F.R. § 211.65, 211.110 (2020). These additional safety precautions will place a larger strain on pharmacies and potentially harm the other services that they provide.

Additionally, the original drug developers will be financially burdened. When pharmacies 3D print the medication, they will become a new manufacturing location. Additionally, utilizing 3D printing technology will lead to a change in the manufacturing process. These changes will require the original drug developer to update their New Drug Application (NDA) that declared the product as safe and effective for use. Updating the NDA will be a costly process that will further be complicated by the vast number of new manufacturing locations that will be present. Because each pharmacy that decides to 3D print the medicine on-site will be a manufacturer, and because it is unlikely that all pharmacies will adopt 3D printing at the same time, drug developers will constantly need to update their NDA to ensure compliance with FDA regulations. Although these regulatory hurdles seem daunting, the FDA can take steps to mitigate the work needed by the pharmacies and manufacturers.

The FDA should implement a regulatory exception for pharmacies that 3D print drugs. The exemption should allow pharmacies to avoid some CGMPs for manufacturing and allow pharmacies to proceed without being registered as a manufacturer for each drug they are printing. One possibility is to categorize 3D-printed drugs as a type of compounded drug. This will allow pharmacies that 3D print drugs to act under section 503A of the Food Drug & Cosmetic Act. Under this section, the pharmacies would not need to comply with CGMPs or premarket approval requirements. The pharmacies, however, will need to comply with the section 503A requirements such as having the printing be performed by a licensed pharmacist in a state-licensed pharmacy or by a licensed physician, limiting the interstate distribution of the drugs to 5%, only printing from bulk drugs manufactured by FDA licensed establishments and only printing drugs “based on the receipt of a valid prescription for an individualized patient”. Although this solution limits the situations where 3D prints drugs can be made, it will allow the pharmacies to avoid the additional time and cost that would otherwise be required while helping ensure the safety of the drugs.

This solution would be beneficial for the pharmacies wishing to 3D print drugs, but it comes with some drawbacks. One of the main drawbacks is that there is no adverse event reporting requirement under section 503A. This will likely make it harder to hold pharmacies accountable for dangerous mistakes. Another issue is that pharmacies registered as an outsourcing facility under section 503B of the FD&C Act will not be able to avoid conforming to CGMPs unless they withdraw their registration. This issue, however, could be solved by an additional exemption from CGMPs for 3D-printed drugs. Even with these drawbacks, including 3D-printed drugs under the definition of compounded drugs proposes a relatively simple way to ease the burden on pharmacies that wish to utilize this new technology.

3D printing drugs has the opportunity to change the medical drug industry. The 3D-printed drugs can be specialized for the individual needs of the patient, making them safer and more effective for each person. For this to occur, however, the FDA needs to create an exemption for these pharmacies by including 3D-printed drugs under the definition of compounded drugs.

I’ve Been Shot! Give Me a Donut!: Linking Vaccine Verification Apps to Existing State Immunization Registries

April 18, 2021
COVID-19, Data Privacy, Healthcare, Human Rights Law, Public Health

Ian Colby, MJLST Staffer

The gold rush for vaccination appointments is in full swing. After Governor Walz and many other governors announced an acceleration of vaccine eligibility in their states, the newly eligible desperately sought vaccinations to help the world achieve herd immunity to the SARS-CoV-2 virus (“COVID”) and get back to normal life.

The organization administering a person’s initial dose typically gives the recipient an approximately 4” x 3” card that provides the vaccine manufacturer, the date and location of inoculation, and the Centers for Disease Control (“CDC”) logo. The CDC website does not specify what, exactly, this card is for. Likely reasons include informing the patient about the healthcare they just received, a reminder card for a second dose, or providing batch numbers in case a manufacturing issue arises. Maybe they did it for the ‘Gram. However, regardless of the CDC’s reason for the card, many news outlets have latched onto the most likely future use for them: as a passport to get the post-pandemic party started.

Airlines, sports venues, schools, and donut shops are desperate to return to safe mass gatherings and close contact, without needing to enforce as many protective measures. These organizations, in the short-term, will likely seek assurance of a person’s vaccination status. Aside from the equitable and scientific issues with requiring this assurance, these business will likely get “proof” with these CDC vaccination cards. The cardboard and ink security of these cards rivals social security cards in the “high importance – zero protection” category. Warnings of scammers providing blank CDC cards or stealing the vaccinated person’s name and birthdate hit the web last week (No scammers needed: you can get Missouri’s PDF to print one for free).

With so little security, but with a business-need to reopen the economy to vaccinated folks, businesses and governments have turned to digital vaccine passports. Generically named “digital health passes,” these apps will allow a person to show proof of their vaccination status securely. They “provide a path to reviving the economy and getting Americans back to work and play” according to a New York Times article. “For any such certificate or passport to work, it is going to need two things – access to a country’s official records of vaccinations and a secure method of identifying an individual and linking them to their health record.”

A variety of sources have undertaken development of these digital health passes, both governments and private firms. Israel already provides a nationwide digital proof of vaccination known as a Green Pass. Denmark followed suit with the Coronapas. In addition, a number of private companies and nonprofits are vying to become the preeminent vaccine status app for the world’s smartphones. While governments, such as Israel, have preexisting authority to access immunization and identification records, private firms do not. Private firms would require authorization to access your medical records.

So, in the United States, who would run these apps? Not the U.S. federal government. The Biden Administration unequivocally denied that it would ever require vaccine status checks, and would not keep a vaccination database. The federal government does not need to, though. Most states already manage a digital vaccination database, pursuant to laws authorizing them. Every other state, which doesn’t directly authorize them, still maintains a digital database anyway. These immunization information systems (“IIS”) provide quick access to a person’s vaccination status. A state’s resident can make a request for their vaccination status on myriad vaccinations for free and receive the results via email. Texas and Florida, who made big hubbubs about restricting any use of vaccine passports, both have registries to provide proof of vaccination. So does New York, who has already published an app, known as the Excelsior Pass, that does this for the COVID vaccine. The State’s app pulls information from New York’s immunization registry, providing a quick, simple yes-no result for those requiring proof. The app uses IBM’s blockchain technology, which is “designed to enable the secure verification of health credentials such as test results and vaccination records without the need to share underlying medical and personal information.”

With so many options, consumers of vaccine status apps could become overwhelmed. A vaccinated person may need to download innumerable apps to enter myriad activities. “Fake” apps could ask for additional medical information from the unwary. Private app developers may try to justify continued use of the app after the need for COVID vaccination proof passes.

In this competitive atmosphere, apps that partner with state governments likely provide the best form of digital vaccination verification. These apps have direct approval from the states that are required by law to maintain these vaccination records. They provide some authority to avoid scams. And cooperation to achieve state standardization of these apps may facilitate greater use. States seeking to reopen their economies should authorize digital interfaces with their pre-existing immunization registries. Now that the gold rush for vaccinations has started, the gold rush for vaccine passports is something to keep an eye on.

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Healthcare

Ethan Wold, MJLST Staffer

Matt Buechner, MJLST Staffer

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