YEAR-END REPORT - 2020 Published 21-Dec-2020 HPTS Issue Brief 12-21-20.4 Health Policy Tracking Service - Issue Briefs Business of Health Business of Healthcare This Issue Brief was written by Melissa D. Berry, a principal attorney editor on the Publisher's Staff and a member of the Ohio bar. 12/21/2020 I. INTRODUCTION Many in U.S. Worry About Affording Healthcare in Retirement (Reuters Health) - Nearly half of Americans aged 50 to 64 worry they won't be able to afford healthcare when they retire, while more [FN2] than two-thirds are concerned that federal policy changes will affect their current health insurance, a new survey finds. Survey participants who worried about the cost of health insurance now or during retirement were nearly three times more likely to avoid medical care or filling a prescription than those with more confidence in their ability to pay for healthcare, researchers report in JAMA Network Open. “Many individuals, 45% in their 50s and 60s, are not confident they can afford healthcare in retirement,” said lead author Dr. Renuka Tipirmeni of the University of Michigan in Ann Arbor. “They are also three times as likely to avoid healthcare services. This is huge compared to what we were expecting.” Part of what inspired this study was seeing many patients struggling with the costs of prescriptions, Tipirmeni said. “This is concerning to me as a physician since getting regular medical care is so important, especially as people get into their 50s and 60s and beyond.” To study healthcare concerns among people approaching retirement, Tipirmeni and colleagues turned to data from the National Poll on Healthy Aging, a nationally-representative survey of U.S. households conducted online two to three times a year among U.S. adults ages 50 to 80. Tipirmeni and colleagues focused on the responses of 1,028 men and women aged 50 to 64 when they were surveyed in October 2018. Slightly over one quarter of participants, 27.4%, said they had little or no confidence in being able to afford health insurance over the next year, while nearly half, 44.9%, said they had little or no confidence in their ability to afford health insurance when they retire. For 14.1%, fear of losing health insurance kept them from leaving a job, and for 11.4%, it led them to postpone retirement. Most participants, 67.7%, said they were very or somewhat concerned about the impact changes in federal policy might have on their health insurance. In the past year, 13.2% had skipped getting medical care and 11.9% had avoided filling a prescription. Tipirmeni advises people who are worried about being able to afford a prescription to talk to their doctors, since there are sometimes cheaper alternative medications. The new findings are “troubling,” said Dr. Albert Wu, an internist and professor of health policy and management at the Johns Hopkins School of Public Health in Baltimore. “They suggest that nearly half of workers in the prime years of their working life doubted their ability to afford or maintain health insurance,” Wu said in an email. “Many know from direct experience what they are talking about as a third had already retired or stopped working. Those who were most worried were also likely to report skimping on needed visits and medications.” While the Affordable Care Act was supposed to give workers more flexibility in changing jobs, recent attacks on it may result in workers feeling they can't leave the job they've got, Wu said. “This should be a wakeup call to policymakers,” he said. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -1- The concerns about healthcare costs after retirement are “realistic,” said Dr. John Rowe, a professor of health policy and management at Columbia University's Mailman School of Public Health in New York City. “While Medicare is a generous and affordable benefit, current estimates show that out-of-pocket healthcare costs - co-pays, deductibles, out-of-network fees, costs related to long term care - may outstrip the capacity of low-middle-income elders to pay,” Rowe said in an email. U.S. Health Agencies, Industry Brace for Disruptive Spread of Coronavirus (Regulatory Intelligence) - U.S. health officials and providers have picked up the pace in preparing for a wider domestic spread of coronavirus, which is now considered inevitable. Officials expressed confidence at being able to manage any outbreak, but there could [FN3] be ‘severe’ disruptions and strains, including in the treatment of uninsured victims of the illness. Government officials including President Donald Trump addressed the issue on several fronts on Tuesday, trying to play down fears while facing an increasing prospect of a greater spread of cases in the country. There were a total of 53 cases of the virus known as COVID-19 in the United States as of Tuesday, according to the U.S. Centers for Disease Control and Prevention (CDC). Of these cases, 14 have been diagnosed in the United States and 39 cases occurred in people repatriated from high-risk areas. To date there have been no reports of community transmission -- person to person transmission between those already infected -- in the United States. Trump tweeted this week that the ‘Coronavirus is very much under control in the USA.’ Others in his administration asserted that the country is well prepared if the virus begins to spread more quickly. “The immediate risk to the general American public remains low,' Department of Health & Human Services (HHS) Secretary Alex Azar said. Nevertheless, he said, ‘we are realistic that we will see more cases and as we see more cases we might have to take community mitigation efforts.’ Said Dr. Nancy Messonnier, director of the CDC's National Center for Immunization and Respiratory Diseases, ‘It's not so much a question of if this will happen anymore but rather more a question of exactly when this will happen and how many people in this country will have severe illness.’ 'Ultimately we expect we will see community spread in this country,' she said. ‘Disruption to everyday life might be severe.’ At a congressional hearing on Tuesday, acting U.S. Homeland Security Secretary Chad Wolf struggled for answers as he faced a grilling from Republican U.S. Senator John Kennedy about the department's awareness of and preparations for the disease. ‘You're supposed to keep us safe, and you need to know the answers to these questions,’ Kennedy told Wolf. The city of San Francisco declared a local emergency to boost awareness and preparedness, although it has yet to record any cases of infection. COVID-19 first surfaced in the Wuhan, Hubei Province, China in December. China has reported more than 77,000 cases with approximately 2,600 deaths. The virus has also spread to 31 other countries and territories, which are reporting an additional 1,875 cases with approximately 23 deaths. The World Health Organization (WHO) has declared the coronavirus outbreak a global health emergency, but it has stopped short of declaring it a pandemic. WHO defines a pandemic as the worldwide spread of a new disease. For comparison with COVID-19, the CDC estimates that there have been between 29 million and 41 million influenza cases in the U.S. from Oct. 1, 2019 - Feb. 15, 2020 with an estimated 16,000 to 41,000 deaths. According U.S. officials, influenza typically has a 0.1% fatality rate while the coronavirus is closer to 2% overall. WHO estimates the coronavirus has been between 2% and 4% fatal in Wuhan, China and less than 1% fatal outside of that area. U.S. containment and preparation efforts The Trump administration attributes the slow domestic progression of COVID-19 to aggressive containment strategies, including travel restrictions, quarantine for those known to have the virus and voluntary self-quarantine for individuals who have traveled to areas with a high risk of exposure. Additionally, the administration asked Congress this week to make at least $2.5 billion in new and reallocated funding available for preparedness and response to COVID-19. Democratic leaders in Congress called that amount inadequate and too late, and vowed to push for a stronger package. The money sought by the administration would go to five major priorities, including expanded surveillance for COVID-19. This would include adding coronavirus screening to flu testing that is already being done for individuals presenting to healthcare providers with symptoms that could be flu or coronavirus related. The funds would also include additional support for state and local government public health preparedness and response to any spread of the coronavirus. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -2- The federal government would help pay for the development of therapeutics and vaccines. Existing therapeutics are being tested for efficacy against the virus and at least one vaccine is in Phase 1 testing. HHS has already announced a partnership with Regeneron to develop antibody treatments for COVID-19. HHS and Regeneron previously partnered on an experimental drug cocktail to treat the Ebola virus. The final spending priority is the purchase of personal protective equipment for the Strategic National Stockpile. Officials denied there was any shortage of such gear, but indicated they were closely monitoring the supply chain. Discussing the potential for major disruptions in the United States, Messonnier noted that when community spread of the coronavirus began in other countries, it ‘moved rapidly.’ As a result, the CDC has urged businesses and families to begin preparing for the possibility of a larger domestic outbreak. This includes asking about school closure procedures, telecommuting for businesses and even telehealth options for hospitals to expand services. Impact on health insurers and providers There have been reports that the coronavirus outbreak would have little long-term impact on health insurers in China. The impact on U.S. insurers has also been minimal so far, said Brad Ellis, senior director at Fitch Ratings, but there was scope for a rapid change in that scenario. 'In this case (of COVID-19 infections), the vast majority have very minor symptoms and are quarantined to be kept out of the general population to avoid the spread. In the U.S., health insurance companies would only have to cover treatment when a person is admitted for healthcare services in the hospital. They're not required to cover quarantine costs when the government screens or brings people back and leaves them in quarantine for two weeks - that's not the health insurers' responsibility,' said Ellis. However, Ellis noted that a lack of insurance could cause an uninsured individual with symptoms to delay seeking medical attention then go to the emergency room only when the virus is much more advanced. That could increase the risk of transmission from infected individuals. For others in the healthcare industry, COVID-19 can have different results. Earlier this month, the Food & Drug Administration (FDA) announced it was ‘surveilling the medical product supply chain for potential shortages or disruptions' so that it could mitigate any impacts. Reuters reports that about 14% of the active pharmaceutical ingredients used in drugs for the U.S. market were manufactured in China in 2018 according to the FDA. Axios reports that as many as 150 prescription drugs are at risk of shortages if the coronavirus, citing an FDA list of at risk drugs. The FDA has also said it will ‘aggressively monitor’ the market for any companies marketing products with fraudulent COVID-19 prevention and treatment claims. Healthcare providers may also feel the impact if the coronavirus spreads, including hospitals incurring additional overtime and unexpected staffing costs, according to Moody's Investor Service. Providers could also be hurt if they are forced to cancel more profitable procedures such as cardiac or orthopedic surgeries. However, healthcare companies such as Cardinal Health or Vyaire Medical that supply medical products such as hospital gowns, masks, gloves and other infection prevention equipment could see increased demand. Similarly, medical staffing companies such AMN Healthcare or CHG Healthcare Services, and Envision Healthcare could also see increased demand for temporary staffing and emergency physicians. For now, government at every level as well as the markets are keeping a close eye on the spread of the virus, until it is clear whether the U.S. containment will hold and the coronavirus impact will be minimal. As Coronavirus Chaos Spreads Globally, Trump Declares U.S. Emergency (Reuters) - President Donald Trump declared a U.S. national emergency over the quickly spreading coronavirus on Friday, opening the door to more government aid to combat a pathogen that has infected more than 138,000 people worldwide and left over 5,000 dead. [FN4] The impact of the coronavirus on everyday life deepened around the world. It was detected for the first time in several countries, with the World Health Organization (WHO) calling Europe the pandemic's current epicenter. More schools and businesses closed, the global sporting calendar was left in tatters, and people faced greater restrictions on where they could go. ”To unleash the full power of the federal government to this effort today, I am officially declaring a national emergency - two very big words,” Trump said in remarks at the White House Rose Garden, adding that the U.S. situation could worsen and “the next eight weeks are critical.” © 2021 Thomson Reuters. No claim to original U.S. Government Works. -3- Trump, whose action makes available $50 billion in federal aid to states and localities, had faced criticism from some experts for being slow and ineffective in his response to the crisis and playing down the threat. The latest steps came two days after Trump announced travel restrictions blocking U.S. entry for most people from continental Europe. While Britain was among the countries exempted, Trump said on Friday that might change because infections there had risen “precipitously.” The president, who was photographed last Saturday at his private Florida club with a Brazilian official who has tested positive for the coronavirus, said he himself likely would be tested “fairly soon,” a reversal of his previous stance. But Trump, 73, said he did not plan to isolate himself, noting he was suffering no symptoms. Travel bans have hammered airlines and travel companies worldwide, while financial markets have been hit by panic selling this week. The three major U.S. stock indexes rallied more than 9% on Friday, rebounding from Wall Street's biggest daily drop since 1987. But the indexes were still about 20% below record highs hit in mid-February. WHO Director-General Tedros Adhanom Ghebreyesus said Europe now had more reported cases and deaths than the rest of world combined, apart from China, where the coronavirus originated but where new cases have slowed to a trickle. The WHO called the death toll reaching 5,000 globally “a tragic milestone.” The WHO's top emergency expert, Mike Ryan, said social distancing was a “tried and tested method” to slow the spread of a virus but “not a panacea” that would stop transmission. “Blanket travel measures in their own right will do nothing to protect an individual state,” Ryan said. CULTURAL LANDMARKS More cultural landmarks were shuttered to try to stop the spread of the virus. In Paris, the Eiffel Tower, the Louvre museum and the Moulin Rouge cabaret closed their doors. The Smithsonian museums in Washington were preparing to do so on Saturday and Broadway theaters in New York went dark. The kissing of the Blarney Stone, one of Ireland's oldest tourist traditions, was suspended. Central banks worldwide acted to shore up money markets after cratering share prices drove a rush for cash, hitting many regional currencies and threatening a surge in short-term borrowing costs. In China, which bore the brunt of the economic fallout from the coronavirus in the first few months of 2020, authorities late on Friday cut banks' reserve requirements for the second time this year. The U.S. Federal Reserve followed suit with $37 billion of Treasury bond purchases, accelerating the enhanced market liquidity measures announced on Thursday. Japan's central bank pledged to buy 200 billion yen ($1.90 billion) of five- to 10-year Japanese government bonds and also inject an additional 1.5 trillion yen in two-week loans. The European Union proposed a 37 billion euro ($41 billion)investment initiative as part of a package to cushion the bloc's economies from the coronavirus impact. In Italy, which after China has been hardest hit by the respiratory illness, the death toll jumped by 250 to 1,266 in the last 24 hours, authorities said. The total number of cases also rose to 17,660 from a previous 15,113, despite draconian measures to restrict the movement of people. In the northern region of Lombardy, at the heart of Italy's coronavirus epidemic, authorities asked for even stricter steps. In hard-hit Iran, security forces will empty the streets in cities across the country, state television reported. NEW COUNTRIES RECORD CASES The virus continued its persistent march across the globe. Kenya, Ethiopia, Sudan and Guinea all confirmed their first cases, giving the disease a foothold in 18 countries on the African continent. Kosovo, Venezuela and Kazakhstan also confirmed their first cases, and Spain declared a state of emergency. World leaders, sports stars and actors were among the tens of thousands of people hit by the virus. Golf's crown jewel, The Masters, England's top-flight soccer Premier League, and the Boston and London marathons joined the long list of elite sporting events to be canceled or postponed. But sport's biggest showpiece, the Olympics, will proceed as planned, according to Tokyo organizers. U.S. Stimulus Bill Includes Billions of Dollars for Coronavirus Healthcare Efforts (Regulatory Intelligence) - A $2 trillion coronavirus relief bill passed by the U.S. Senate late on Wednesday includes billions of dollars [FN5] for health-related measures in response to the pandemic. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -4- The bill passed unanimously and now heads to the House of Representatives, where Democratic leaders hope to pass it on Friday. U.S. President Donald Trump has said he would sign the measure as passed by the Senate. The bill, called the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), will provide $330 billion in new funding, according to a summary by the senior Democrat on the Senate Appropriations Committee, Patrick Leahy of Vermont. The summary does not include additional authorization measures not in the committee's jurisdiction. The most significant portions of the CARES Act appropriations go to support healthcare providers and researchers in their fight against the spread of COVID-19 in the United States. According to the Centers for Disease Control and Prevention (CDC) the United States had nearly 54,500 cases of COVID-19 on Wednesday with 737 total deaths. The coronavirus had spread to all 50 states, the District of Columbia, as well as Puerto Rico, Guam and the U.S. Virgin Islands. Under its commitment to the Centers for Disease Control (CDC) and Prevention, the bill includes $4.3 billion to support federal, state and local public health agencies to respond to the coronavirus, including: • $1.5 billion to states, locals, territories and tribes for public health activities, including the purchase of personal protective equipment, surveillance for the coronavirus, testing to detect positive cases, contact tracing, infection control and other public health preparedness and responses; • $1.5 billion in flexible funding to support the CDC's continuing efforts to contain and combat the virus, purchase and distribution of diagnostic testing, support of laboratory testing, public education and other efforts; • $500 million for global disease detection and emergency response; • $500 million for public health data surveillance and analytics infrastructure modernization; and • $300 million for the Infection Diseases Rapid Response Reserve Fund. The CARES Act includes $127 billion to the Assistant Secretary for Preparedness and Response for response efforts including: • $100 billion for a new program to provide grants to hospitals, public entities, not-for-profits entities and Medicare and Medicaid enrolled suppliers and institutional providers to cover unreimbursed healthcare related expenses or lost revenues attributable to the coronavirus pandemic. • $27 billion for the Biomedical Advanced Research and Development Authority (BARDA) to support the research and development of vaccines, treatments and diagnostics, including: • $16 billion for the Strategic National Stockpile for critical medical supplies, personal protective equipment and medicine; $3.5 billion to advance construction, manufacturing and purchase of vaccines and therapeutics; • $250 million for the Hospital Preparedness Program and • Other measures to improved U.S.-based supply chain and manufacturing, increase medical surge capacity, workforce modernization and telehealth access. • The bill also includes $945 million to the National Institutes of Health to support research and understanding of the novel coronavirus as well as develop countermeasures for the prevention and treatment of the virus. Other highlights of the healthcare spending provisions include funding in the following areas. Disaster Relief Fund $45 billion for the immediate needs of state, local, tribal and territorial governments to reimburse for medical response, personal protective equipment, National Guard deployment, coordination or logistics, safety measures and community services relating to the coronavirus pandemic. Funding for healthcare providers and care facilities • $1.5 billion to expand military hospitals to nearly triple the 4,300 beds available in military treatment facilities. • $185 million to support rural critical access hospitals, rural tribal health and telehealth programs and poison control centers. • $100 million to the ReConnect program to help ensure rural Americans have access to broadband. • $25 million to help improve distance learning and telemedicine in rural areas of the country. Funding for personal protective and medical equipment • $1 billion under the Defense Production Act to allow the Department of Defense to invest in manufacturing to increase the production rate of personal protective equipment and medical equipment to meet the demand of healthcare workers. • $100 million for personal protective equipment for first responders. • $178 million for the Department of Homeland Security to provide personal protective equipment to front line federal employees. Other research and development © 2021 Thomson Reuters. No claim to original U.S. Government Works. -5- • $10 million for the National Institute for Innovation in Manufacturing Biopharmaceuticals to support the development and manufacture of medical countermeasures and biomedical supplies to combat the coronavirus. • $6 million for the National Institute of Standards and Technology to provide continuity of operations and to support testing and treatment of coronavirus. • $75 million for the National Science Foundation (NSF) to support research to better understand coronavirus. • $415 million for military medical research programs to develop vaccines, anti-viral pharmaceuticals and related testing. Additional appropriations It also includes more than $19.5 billion to the Department of Veterans Affairs to support the increased demand for services specific to the coronavirus and provide other services to reduce the risk of coronavirus spread in the veteran population. The CARES Act also provides more than $1 billion in funding to the Indian Health Services for medical services, equipment, supplies and public health education. The bill provides $200 million for the Centers for Medicare & Medicaid Services (CMS) to assist nursing homes with infection control and support state efforts to control the spread of the coronavirus in nursing homes. $80 million to the Food and Drug Administration to continue it work related to shortages of critical medicines, enforcement work on counterfeit and misbranded products, emergency use authorizations as well as pre- and post-market work on coronavirus therapies, vaccines and research. An additional $55 million will go to assist U.S. Territories and Freely Associated States to prevent and mitigate the coronavirus outbreak, including medical supplies and equipment, services and facilities. African-Americans Dying of Coronavirus at Higher Rates, Preliminary Data Shows (Reuters) - The new coronavirus is killing African-Americans at a higher rate than the U.S. population at large, according to preliminary [FN6] numbers from Louisiana, Michigan and Illinois that officials say point to disparities in health and healthcare access. The figures were reported by state and city leaders at briefings on the coronavirus, including Louisiana Governor John Edwards who said more than 70% of the 512 people killed by the coronavirus in Louisiana as of Monday were black, a much larger percentage than the state's population that black people represent, about 33 percent. Michigan officials also said that the coronavirus took a disproportionate toll on African-Americans with 40% of the reported deaths in the state, whose population is 14% African-American. As of Tuesday, confirmed cases in Michigan were 18,970 with 845 deaths. The data is preliminary and not national and does not explain what is causing the disparities. However, community leaders and public health officials said it could reflect both higher levels of underlying illnesses that make African-Americans more vulnerable as well as possibly lower levels of access to healthcare. U.S. Surgeon General Jerome Adams, acknowledging the early data, said on Tuesday that black Americans were more likely to have heart disease, diabetes and high blood pressure. Diabetes, heart disease and long-term lung problems are the most common underlying conditions among Americans hospitalized with COVID-19, the respiratory illness caused by the new coronavirus, the U.S. Centers for Disease Control and Prevention (CDC) said in a report https://www.reuters.com/article/us-health-coronavirus-usa-study/diabetes-lung-and-heart-disease-common-in-u-s-coronavirus- patients-cdc-idUSKBN21I3HM published on March 31. One in five people requiring intensive care had no such health issues, it said. QuanTez Pressley, a 33-year-old preacher at the Third New Hope Baptist Church in Detroit, said that issues such as lack of access to fresh foods and people crowded into small living quarters ‘make those individuals in marginalized communities more vulnerable to the worst outcomes of pandemics.’ Some officials at the CDC and various state health departments over the past week have privately said the data they are receiving from hospitals is inconsistent, which they attributed to the chaos of trying to keep people alive amid a pandemic. They said there were instances where health care providers did not check the boxes that provide demographic information on the patients. 'If you end up in a situation where you are on a ventilator, and that ventilator is keeping your lungs working and your body is fighting off the infection, if your heart or your kidneys or your lungs are already weaker, you have a harder time fighting off that infection,' Detroit Mayor Mike Duggan said at a briefing on the coronavirus on Monday. Civil rights groups and some lawmakers have criticized the CDC and some state health departments for not publicly releasing details on the racial breakdown of those dying or becoming critically ill from COVID-19. The CDC has not responded to requests for comment on the topic. Chicago Mayor Lori Lightfoot on Monday stood before charts at a briefing showing the inequalities between white and black coronavirus victims in her city. African-Americans account for 72% of coronavirus deaths despite representing just about one-third of Chicago's population of 2.7 million. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -6- 'Those numbers take your breath away,' said Lightfoot. ‘This is a call to action moment for all of us.’ Lightfoot demanded that doctors and other hospital staff take the time to fill out paperwork so that leaders could better understand the pandemic. 'It starts out with the disparity that has already existed in health care provision for people of color. We already started out with an unequal system of healthcare,' Illinois Governor J.B. Pritzker said on Monday. ‘It gets massively exacerbated when you bring on something like COVID-19.’ Overall in the United States, there were at least 397,000 confirmed coronavirus cases with more than 12,819 deaths as of Tuesday night, according to a Reuters tally of state and local government sources. U.S. Plans to Distribute COVID-19 Vaccine Immediately After Regulators Authorize It (Reuters) - The U.S. government on Wednesday said it will start distributing a COVID-19 vaccine within one day of regulatory [FN7] authorization as it plans for the possibility that a limited number of vaccine doses may be available at the end of the year. Officials from the Department of Health and Human Services and the Department of Defense on Wednesday held a call with reporters and then released documents on the distribution plans that it is sending to the states and local public health officials. “Our goal at Operation Warp Speed, is that 24 hours after (regulatory authorization) is issued, we have vaccine moving to administration sites,” one of the officials said. The federal government will allocate vaccines for each state based on the critical populations recommended first for vaccination by the U.S. Centers for Disease Control and Prevention. The guidelines suggest that the government is likely to broadly follow guidelines generated by an independent expert panel tapped by U.S. health officials to lay out which Americans to prioritize while vaccine supplies are limited. The document, called the COVID-19 Vaccination Program Interim Playbook, said limited COVID-19 vaccine doses may be available by early November 2020 if one is authorized by then, but that supply may increase substantially in 2021. Officials also said they were working to make sure there was no cost to patients for the vaccine. ON-SITE VACCINATIONS Pharmacies and hospitals are the primary vaccination points, and the CDC document said the agency is working directly with pharmacies to develop on-site vaccination in long-term care facilities. During a press call, officials said they were also looking to reach other groups of people in close contact, such as those that work in meatpacking plants or are in homeless shelters. Officials said they were working with states on how to track vaccination through state immunization databases and pharmacy records. U.S. Health Agency Enforcement Cases Show Focus on Patient Access to Records (Regulatory Intelligence) - The U.S. Department of Health and Human Services Office of Civil Rights (OCR) has increased its enforcement efforts against healthcare providers who violate patients' rights to access their medical information under the Health [FN8] Insurance Portability and Accountability Act of 1996 (HIPAA). Increasing patient access to their medical records became a priority under the Trump administration when it announced the right-of- access as an enforcement initiative in 2019. “For far too long, electronic health information has been stuck in silos and inaccessible for healthcare consumers,” said Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma when new rules were proposed to improve access. “Our proposals help break down existing barriers to important data exchange needed to empower patients by giving them access to their health data.' In the last 5 weeks, the HHS Office of Civil Rights has settled 7 investigations into violations of the HIPAA Privacy Rule's right of access provision. Dignity Health, doing business as St. Joseph's Hospital and Medical Center, agreed to pay $160,000 to settle allegations that it had violated HIPAA's right of access provision, the civil rights office announced on October 7. The Arizona-based medical center is a large, acute care hospital that provides a wide range of services. A mother made multiple requests for her son's medical records, according to the allegations. Although the medical center provided some of the records, it was only after the mother filed a complaint with the OCR and it initiated an investigation that the medical center provided all of the requested records to the mother, ‘more than 22 months after her initial request.’ ”It shouldn't take a federal investigation to secure access to patient medical records, but too often that's what it takes when health care providers don't take their HIPAA obligations seriously. OCR has many right of access investigations open across the country, and will continue to vigorously enforce this right to better empower patients,” said Roger Severino, OCR Director. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -7- The same week, HHS announced NY Spine Medicine agreed to pay $100,000 to settle allegations that it did not provide all records to a woman who made multiple requests for her medical records, including diagnostic films. Although the neurology and pain management clinic provided other records, it took more than a year to provide her with the diagnostic films. “No one should have to wait over a year to get copies of their medical records. HIPAA entitles patients to timely access to their records and we will continue our stepped up enforcement of the right of access until covered entities get the message,” said Severino. Both providers agreed to corrective action plans in addition to the payments to resolve the investigations. The HHS Office of Civil Rights also announced the settlement of 5 investigations on September 15: Housing Works Inc., New York City based non-profit that provides services for individuals living with and affected by HIV/AIDS, agreed to pay $38,000 to OCR to resolve allegations that it failed to provide an individual with his medical records. All Inclusive Medical Services, Inc., a California multi-specialty family medicine clinic, agreed to pay $15,000 to OCR after denying a patient's request to inspect and receive a copy of her medical records. Beth Israel Lahey Health Behavioral Services, the largest network of mental health and substance use disorder services in eastern Massachusetts, agreed to pay $70,000 to ORC to resolve allegations that it had failed to respond to a request from a personal representative seeking access to her father's medical records. King MD, a small provider of psychiatric services in Virginia, agreed to pay $3,500 to ORC after it failed to respond to an individual's request for records. Wise Psychiatry, PC, a small provider of psychiatric services in Colorado, agreed to pay $10,000 to OCR to resolve allegations it failed to provide a personal representative with access to his minor son's medical records. All 5 covered entities also adopted corrective action plans as part of their settlement. 'Patients can't take charge of their health care decisions, without timely access to their own medical information,' said Severino when announcing the settlement. U.S. Strikes Deal with Lilly for Potential COVID-19 Antibody Drug (Reuters) - The U.S. government will pay as much as $1.19 billion to Eli Lilly and Co to secure nearly 1 million doses of its experimental [FN9] COVID-19 antibody treatment, a drug similar to a treatment that U.S. President Donald Trump received. Lilly will start delivering 300,000 doses of the treatment, for which it is being paid $375 million, within two months of receiving an emergency use authorization from the U.S. health regulator, the company said. After that, the government has an option to buy an additional 650,000 vials for $812.5 million, the U.S. Department of Health and Human Services said in a statement. The price per dose amounts to $1,250 as per the contract, but the vials purchased by the government will be free to the American public. The U.S. has also signed deals with AstraZeneca and Regeneron Pharmaceuticals for their antibody therapies, under Trump administration's Operation Warp Speed program. The deal with Regeneron covers the cost of manufacturing, while the deal with AstraZeneca also includes support for development. While vaccines are seen critical to ending the pandemic, governments are increasingly looking at other effective treatments to slow the spread of the virus and kick-start economic activity. The company submitted a request to the U.S. Food and Drug Administration earlier this month for emergency use authorization of the drug to treat mild to moderate COVID-19 patients. The drug had a recent setback after it failed to show benefits in hospitalized patients. In addition, Reuters reported that U.S. drug inspectors uncovered serious quality control problems at an Eli Lilly plant that is ramping up to make its antibody therapy. The antibody therapy is similar to a drug from Regeneron that was given to Trump during his bout with COVID-19. The treatments belong to a class of drugs called monoclonal antibodies that are manufactured copies of antibodies created by the body to fight against an infection. II. MERGERS AND ACQUISITIONS Large Employers Push Back on U.S. Healthcare Mergers During Coronavirus Crisis (Reuters) - A group representing some of the largest U.S. employers has asked Congress for a year-long ban on mergers and acquisitions among hospitals and doctors groups that received government money to cope with the effects of the COVID-19 pandemic. [FN10] © 2021 Thomson Reuters. No claim to original U.S. Government Works. -8- The Pacific Business Group on Health, whose members include Boeing, Salesforce, Tesla, and Walmart, said in a letter addressed to congressional leaders this week that it feared that further consolidation in the healthcare industry could lead to higher costs. Physician practices' revenues have plummeted across the United States since shutdowns were imposed to stop the spread of the coronavirus, as patients stay home except for emergencies. Even before the pandemic, well-funded hospital systems were taking over smaller doctors groups and hospitals to increase market share. PBGH said it fears these larger players will be even better positioned to buy struggling practices coming out of the crisis, raising healthcare prices for employers. The group asked for a year-long M&A ban for any healthcare provider receiving any of the $170 billion government relief approved for the industry. “Anti-competitive practices are increasingly concerning to large employers. What we're seeing happening right now is the collapse of independent primary care,” Elizabeth Mitchell, chief executive officer of PBGH, told Reuters. Politicians and regulators have already been scrutinizing mergers in the hospital industry. The Federal Trade Commission moved to block a merger between two Pennsylvania hospitals in February, on the grounds that consolidation would mean the systems would have fewer incentives to keep costs down. Bristol Myers Expands Heart Drug Business with $13 billion Deal for MyoKardia (Reuters) - Bristol Myers Squibb Co said on Monday it would buy MyoKardia Inc for about $13 billion to bolster its portfolio of heart [FN11] disease treatments, ahead of the potential loss of sales exclusivity of some of its blockbuster drugs. The deal comes close on the heels of Bristol Myers' $74 billion acquisition of Celgene last year, which was aimed at creating an oncology giant and shielding itself from fierce competition for its cancer immunotherapy, Opdivo, from Merck & Co's Keytruda. Shares of MyoKardia, which have nearly doubled in value this year, surged another 57.8% to $220.31, just shy of the offer of $225 per share. The deal will also help Bristol Myers reduce some of its dependence on cancer drugs and give it access to Myokardia's lead heart drug candidate with blockbuster potential, mavacamten, adding to its existing portfolio of heart drugs that includes blood thinner Eliquis. Eliquis, which made up about 21% of the company's total sales in the latest reported quarter, faces U.S. market exclusivity loss after 2026. The company's top-selling cancer drug, Revlimid, will also lose some of its U.S. patent exclusivity in 2022. Bristol Myers said it expects mavacamten to be a “multi-billion dollar asset” and drive significant growth through 2025 and the second half of the decade. “I think it is a typical acquisition premium for our sales expectations for mavacamten as we had estimates in the initial (and lowest risk) indication of obstructive hypertrophic cardiomyopathy (HCM) of about $2.5 billion by 2026,” said Wedbush analyst David Nierengarten, referring to the 61% premium offered by Bristol Myers. Mavacamten is being developed to treat obstructive and non-obstructive forms of a condition called hypertrophic cardiomyopathy - estimated to affect one in every 500 people globally. MyoKardia expects to submit marketing application to the U.S. health regulator for obstructive HCM in the first quarter of 2021 after the drug met the main goal of a late-stage study. The company said the MyoKardia purchase would add to its earnings beginning in 2023. III. HEALTHCARE SPENDING AND COST ISSUES More Drugmakers Hike U.S. Prices as New Year Begins (Reuters) - Drugmakers including Bristol-Myers Squibb Co., Gilead Sciences Inc., and Biogen Inc. hiked U.S. list prices on more than 50 drugs on Wednesday, bringing total New Year's Day drug price increases to more than 250, according to data analyzed by [FN12] healthcare research firm 3 Axis Advisors. Reuters reported on Tuesday that drugmakers including Pfizer Inc., GlaxoSmithKline PLC and Sanofi SA were planning to increase prices on more than 200 drugs in the United States on Jan. 1. Nearly all of the price increases are below 10% and the median price increase is around 5%, according to 3 Axis. More early year price increases could still be announced. Soaring U.S. prescription drug prices are expected to again be a central issue in the presidential election. President Donald Trump, who made bringing them down a core pledge of his 2016 campaign, is running for re-election in 2020. Many branded drugmakers have pledged to keep their U.S. list price increases below 10% a year, under pressure from politicians and patients. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -9- The United States, which leaves drug pricing to market competition, has higher prices than in other countries where governments directly or indirectly control the costs, making it the world's most lucrative market for manufacturers. Drugmakers often negotiate rebates on their list prices in exchange for favorable treatment from healthcare payers. As a result, health insurers and patients rarely pay the full list price of a drug. Bristol-Myers said in a statement it will not raise list prices on its drugs by more than 6% this year. The drugmaker raised the price on 10 drugs on Wednesday, including 1.5% price hikes on cancer immunotherapies Opdivo and Yervoy and a 6% increase on its blood thinner Eliquis, all of which bring in billions of dollars in revenue annually. It also raised the price on Celgene's flagship multiple myeloma drug, Revlimid, 6%. Bristol acquired rival Celgene in a $74 billion deal last year. Gilead raised prices on more than 15 drugs including HIV treatments Biktarvy and Truvada less than 5%, according to 3 Axis. Biogen price increases included a 6% price hike on multiple sclerosis treatment Tecfidera, according to 3 Axis. Gilead and Biogen could not be immediately reached for comment. 3 Axis advises pharmacy industry groups on identifying inefficiencies in the U.S. drug supply chain and has provided consulting work to hedge fund billionaire John Arnold, a prominent critic of high drug prices. 'List Price' for Healthcare Treatments in the U.S. May Be Misleading (Reuters Health) - The “list price” for healthcare treatments can vary wildly and may not reflect what will appear on a patient's bill, a new [FN13] study finds. After reviewing listed prices for a particular therapy ? radiation treatments for prostate cancer ? researchers concluded that publicly- available price lists for cancer treatment may not help patients who want to shop around for the best deal. Since 2019, hospitals have been required by the U.S. Centers for Medicare and Medicaid Services (CMS) to post prices online for the services they offer, in what is called a chargemaster. “The prices we found were all over the map,” said Dr. Trevor Royce, an assistant professor of radiation oncology at the University of North Carolina at Chapel Hill and the study's senior author. “And they were much higher than what Medicare typically pays.” The point of making hospitals create a chargemaster was to facilitate comparison shopping and to foster competition, Royce said. The problem with the system is that the list prices may not reflect what insurance companies are actually paying for services, Royce said. “They are not the true negotiated rates that the hospitals and insurance companies agree upon,” he explained. “Those numbers might be more meaningful, but that is not what is listed publicly because they are considered to be proprietary.” While the CMS has tried to fix the problem by issuing a new rule that would force hospitals to post negotiated rates, that change may not be implemented any time soon, Royce said. “Several hospital groups have filed lawsuits in federal court to prevent it from becoming a reality,” he added. To get a sense of whether the CMS rule mandating hospitals post prices would help patients, Royce and colleagues concentrated on a common treatment, radiation therapy for prostate cancer, and checked prices listed at National Cancer Institute designated cancer centers. As reported in JAMA Oncology, of the 63 designated hospitals, 52 listed a price for the treatment the researchers were looking for. “We found prices were hard to find on websites and not at all uniform,” Royce said. In fact, prices varied wildly, with the highest price 20 times that of the lowest: $399,056 versus $18,368. The average cost was $111,728.80, which is more than 10 times the $11,091 that Medicare pays. The wide variation in prices didn't surprise Amanda Starc, an associate professor of strategy at the Kellogg School of Management at Northwestern University in Chicago. What you'll pay generally depends on the deal your insurance company negotiated, said Starc, who wasn't involved in the study. But there is a group of consumers for whom the numbers may have more meaning: those without insurance. Without an insurance company to negotiate, consumers can end up with a bill for the amount shown in the chargemaster, Starc said. As for shopping around, that's not something everyone can do, Starc said. “If you're looking at MRIs, you might be willing to travel a little further to get a less expensive MRI,” she added. “But that's a little different from traveling for cancer services.” The new study highlights the difficulty patients face trying to find out how much their care will cost, despite efforts by the CMS to make pricing more transparent, said Dr. Akila Viswanathan, interim director in the department of radiation oncology and molecular radiation sciences at Johns Hopkins Medicine in Baltimore. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -10- “Royce and Colleagues' article shows how much “mis' informative price transparency can be for patients,” Viswanathan said in an email. “Information on price does not reflect the true cost of care, nor does it reflect the charges sent to a patient on a bill. Obtaining the true cost of care and the potential financial impact on a patient remains elusive despite price transparency.” SCOTUS Stays Discovery in Sweeping Antitrust MDL v. Generic Drugmakers [FN14] (Reuters) - Is the U.S. Supreme Court about to get involved in a messy dispute about electronic discovery? On Friday, the court granted a stay to nearly three dozen generic pharmaceutical companies that are defendants in a vast antitrust case alleging that they rigged the market for more than 175 drugs. The stay postpones a March 9 deadline for the companies to produce millions of documents that contain such seemingly innocuous search terms as “call me”; “offer”; “heads up”; “speak”; “spoke” and “in person,” without prior screening for relevance. The drug companies argued in their stay application that they would suffer irreparable harm if they were forced to disclose sensitive corporate documents that may turn out to have nothing to do with the price- fixing allegations in the multidistrict litigation. On the same day that they filed the stay application, the defendants also filed a petition for Supreme Court review of the decision in which the 3rd U.S. Circuit Court of Appeals refused to halt the discovery order. Plaintiffs in the generics price-fixing MDL ? including 54 states, territories and commonwealths as well as dozens of name healthcare funds, drug cooperatives, wholesale pharmacy chains acting as named plaintiffs in class actions ? opposed the drugmakers' stay request, arguing (among other things) that the Supreme Court should not slow down this highly complex litigation by involving itself in a fact-specific discovery dispute. In an email, a spokeswoman for the Connecticut Attorney General, whose office was counsel of record for the plaintiffs opposing a stay, said Friday's stay is just temporary and “does not relate to the merits of our case.” The drugmakers' counsel of record at the Supreme Court, Michael McConnell of Wilson Sonsini Goodrich & Rosati, did not respond to my email request for comment. U.S. Supreme Court Lifts Stay on Generic Drug Price-fixing Discovery (Reuters) - The U.S. Supreme Court on Friday cleared the way for states and private plaintiffs to obtain millions of pages of records from Teva Pharmaceutical Industries Ltd and other generic drugmakers to support lawsuits claiming the companies fixed drug prices. [FN15] The court lifted a temporary stay on discovery that Justice Samuel Alito imposed last week in the federal multidistrict antitrust litigation, which had delayed a deadline for the drugmakers to turn over a broad swath of sensitive records. The records were sought by state attorneys general and lawyers for drug purchasers who accuse the companies of engaging in a wide- ranging antitrust scheme to collude and fix prices for 175 drugs. The companies largely deny wrongdoing. Elizabeth Benton, a spokeswoman for Connecticut Attorney General William Tong, who has led the litigation for the states, welcomed the ruling. Steffen Johnson, a lawyer at Wilson Sonsini Goodrich & Rosati who led the defendants' bid for a stay and whose firm represents Mylan NV, did not respond to a request for comment. Lawyers for Teva, Mylan and 21 other drugmakers had asked for the stay on discovery while they prepared to ask the justices to overturn the ‘extraordinary order’ that required them to turn over records without reviewing them for relevance first. The companies said U.S. District Judge Cynthia Rufe in Philadelphia in October wrongly ordered them to produce records containing a broad list of keywords, only allowing them try to claw back irrelevant, competitively sensitive ones later. But lawyers for the plaintiffs countered that Rufe had broad discretion to manage discovery. The 3rd U.S. Circuit Court of Appeals in December refused to overturn the discovery order. The case is Actavis Holdco US Inc. et al v. State of Connecticut, et al., U.S. Supreme Court, No. 19-1010. U.S. Health Expenditures Again Expected to Rise 5.5% Annually, Agency Projects (Regulatory Intelligence) - As the U.S. presidential campaign heats up heading into Super Tuesday, a recent POLITICO-Harvard poll [FN16] found nearly 80% of those surveyed ranked ‘taking steps to lower the cost of health care’ as ‘extremely’ or ‘very’ important. The issue crossed political parties with 89% of Democrats and 76% of Republicans surveys ranking the issue of healthcare costs as an important concern. The concern about rising healthcare costs is certainly justified. The U.S. Centers for Medicare and Medicaid Services (CMS) projects U.S. health expenditure growth to average 5.5% annually over 2018-2027. CMS projects spending to reach nearly $6 trillion by 2027. This 5.5% increase for U.S. healthcare expenditures is more than double the current annual inflation rate of 2.5% for the 12 months ending January 2020. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -11- The growth in U.S. health spending is projected to outpace overall U.S. economic growth by 0.8% over 2018-2027. As a result, the report projects the health share of Gross Domestic Product (GDP) to increase from 17.9% in 2017 to 19.4% by 2027. According to CMS, the federal government (28.3%) and households (28.4%) covered the largest shares of total health spending. Private business health spending accounted for nearly 20% of the total, state and local governments accounted for 16.5% and other private revenues accounted for 6.9% of spending. CMS projects the insured population to remain stable at around 90% throughout 2018-27. The U.S. Census Bureau reported nearly 27.5 million people (8.5%) did not have any health insurance at any point during 2018. Government spending on healthcare increased at a higher rate for Medicare due to the projected demographic changes of an aging population, while Medicaid will increase at a slower pace. In 2018, Medicare spending grew 6.4% to $750.2 billion or 21 percent of total national health expenditures (NHE). Medicaid spending grew 3.0% to $597.4 billion in 2018, or 16 percent of total NHE. Although it is unclear how much “Medicare for All” or public options as proposed by Democratic presidential candidates would impact government spending on healthcare, those plans would definitely increase the government share of NHE significantly. On the other hand, an increase in government-funded programs would almost certainly significantly decrease the private healthcare expenditures. In 2018, private health insurance spending increased 5.8% to more than $1.243 trillion or 34% of NHE. During the same time, individual out-of-pocket spending increased 2.8% to $375.6 billion or 10% of total NHE. Both the Trump administration, Congress and Democratic presidential candidates have all focused attention on the increasing costs of prescription drugs. Although increasing at near the current rate of inflation in 2018 at 2.5% to $335.0 billion, prescription drugs spending grew at a faster rate than the 1.4% growth in 2017. As healthcare spending increases, slowing the increase of costs and finding ways to help individuals pay those costs will continue to be a priority in the U.S. Congresswomen Urge Jaguar Health to Reverse Price Hike on Drug that May Be Used in COVID-19 Patients (Reuters) - Two congresswomen wrote a letter Monday urging drugmaker Jaguar Health Inc to reverse recent price hikes on its drug [FN17] Mytesi, which could be used to alleviate side effects in patients being treated for COVID-19. The letter, signed by House Oversight Committee Chairwoman Carolyn Maloney and U.S. Representative Jackie Speier, criticized Jaguar for what it said was a nearly threefold price increase on the drug, from $688.52 to $2,206.52 per bottle of pills, earlier this month. The letter asked the company to provide all communications pertaining to the price increases to the Committee on Oversight and Reform by May 18. ”We are concerned that the nearly three-fold price increase your company imposed ... may prevent Americans from accessing Mytesi if it is approved for use during the current coronavirus outbreak,” the letter said. Jaguar did not immediately respond to a request for comment. San Francisco, California-based Jaguar's Mytesi is currently approved for use in addressing diarrhea and other gastrointestinal symptoms in patients being treated for HIV or AIDs with antiretroviral drugs. In March, Jaguar applied for Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration to use Mytesi to treat similar symptoms in coronavirus patients, who are also sometimes being treated with antiretroviral drugs, which reduce the severity of viral infections. The application was denied by the FDA last month, but Jaguar Health has reportedly been in ongoing talks with the National Institute of Allergy and Infectious Diseases about the effectiveness of Mytesi for coronavirus patients, the letter said. “The timing of Jaguar's price increase raises questions about whether this decision was connected with the company's expectation that it eventually could market Mytesi to treat coronavirus patients,” the letter said. Gilead Science Inc's remdesivir was recently given FDA authorization to be an antiviral treatment for COVID-19, making it the first drug to be approved by U.S. regulators as a treatment for the illness, which has infected more than 1 million people in the United States and killed more than 65,000. Remdesivir was originally developed as a treatment for the Ebola virus. Other antiviral drugs, such as hydroxychloroquine, have also been used off-label to treat patients with the coronavirus. U.S. Hospitals Lose Legal Challenge to Trump Price Transparency Rule (Reuters) - A federal judge on Tuesday dismissed a challenge by hospital groups to a federal rule requiring them to disclose prices they [FN18] quietly negotiate with insurers, in a victory for White House efforts to make healthcare pricing more transparent to patients. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -12- U.S. District Judge Carl Nichols in Washington, D.C. said the rule was reasonably related to the government's interest in lowering healthcare costs and giving consumers more pricing data to help them decide on treatment. He rejected a claim by the American Hospital Association and other hospital groups that the rule would force them to disclose private negotiations with insurers, undermining competition and violating their First Amendment free speech rights. “Plaintiffs are essentially attacking transparency measures generally, which are intended to enable consumers to make informed decisions,” wrote Nichols, who was appointed to the bench by President Donald Trump. The rule is scheduled to take effect on Jan. 1, 2021. In a statement, the AHA said it plans an expedited appeal. It said the rule does not help patients understand their true costs, and imposes heavy burdens on hospitals “when resources are stretched thin and need to be devoted to patient care.” Alex Azar, the U.S. secretary of health and human services, in a statement called the decision “a resounding victory” in the Trump administration's push for lower healthcare costs. “Especially when patients are seeking needed care during a public health emergency, it is more important than ever that they have ready access to the actual prices of healthcare services,” Azar said. Patients have long complained about being blindsided with surprise medical bills after undergoing treatment. Administration officials have said hospitals should be upfront with patients about treatment costs. But the hospital groups have said requiring disclosure of negotiated charges “would create confusion about patients' out-of-pocket costs, not prevent it.” The case is American Hospital Association et al v Azar, U.S. District Court, District of Columbia, No. 19-03619. Long-term Complications of COVID-19 Signals Billions in Healthcare Costs Ahead (Reuters) - Late in March, Laura Gross, 72, was recovering from gall bladder surgery in her Fort Lee, New Jersey, home when she [FN19] became sick again. Her throat, head and eyes hurt, her muscles and joints ached and she felt like she was in a fog. Her diagnosis was COVID-19. Four months later, these symptoms remain. Gross sees a primary care doctor and specialists including a cardiologist, pulmonologist, endocrinologist, neurologist, and gastroenterologist. “I've had a headache since April. I've never stopped running a low-grade temperature,” she said. Studies of COVID-19 patients keep uncovering new complications associated with the disease. With mounting evidence that some COVID-19 survivors face months, or possibly years, of debilitating complications, healthcare experts are beginning to study possible long-term costs. Bruce Lee of the City University of New York (CUNY) Public School of Health estimated that if 20% of the U.S. population contracts the virus, the one-year post-hospitalization costs would be at least $50 billion, before factoring in longer-term care for lingering health problems. Without a vaccine, if 80% of the population became infected, that cost would balloon to $204 billion. Some countries hit hard by the new coronavirus - including the United States, Britain and Italy - are considering whether these long- term effects can be considered a “post-COVID syndrome,” according to Reuters interviews with about a dozen doctors and health economists. Some U.S. and Italian hospitals have created centers devoted to the care of these patients and are standardizing follow-up measures. Britain's Department of Health and the U.S. Centers for Disease Control and Prevention are each leading national studies of COVID-19's long-term impacts. An international panel of doctors will suggest standards for mid- and long-term care of recovered patients to the World Health Organization (WHO) in August. YEARS BEFORE THE COST IS KNOWN More than 17 million people have been infected by the new coronavirus worldwide, about a quarter of them in the United States. Healthcare experts say it will be years before the costs for those who have recovered can be fully calculated, not unlike the slow recognition of HIV, or the health impacts to first responders of the Sept. 11, 2001 attacks on the World Trade Center in New York. They stem from COVID-19's toll on multiple organs, including heart, lung and kidney damage that will likely require costly care, such as regular scans and ultrasounds, as well as neurological deficits that are not yet fully understood. A JAMA Cardiology study found that in one group of COVID-19 patients in Germany aged 45 to 53, more than 75% suffered from heart inflammation, raising the possibility of future heart failure. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -13- A Kidney International study found that over a third of COVID-19 patients in a New York medical system developed acute kidney injury, and nearly 15% required dialysis. Dr. Marco Rizzi in Bergamo, Italy, an early epicenter of the pandemic, said the Giovanni XXIII Hospital has seen close to 600 COVID-19 patients for follow-up. About 30% have lung issues, 10% have neurological problems, 10% have heart issues and about 9% have lingering motor skill problems. He co-chairs the WHO panel that will recommend long-term follow-up for patients. “On a global level, nobody knows how many will still need checks and treatment in three months, six months, a year,” Rizzi said, adding that even those with mild COVID-19 “may have consequences in the future.” Milan's San Raffaele Hospital has seen more than 1,000 COVID-19 patients for follow-up. While major cardiology problems there were few, about 30% to 40% of patients have neurological problems and at least half suffer from respiratory conditions, according to Dr. Moreno Tresoldi. Some of these long-term effects have only recently emerged, too soon for health economists to study medical claims and make accurate estimates of costs. In Britain and Italy, those costs would be borne by their respective governments, which have committed to funding COVID-19 treatments but have offered few details on how much may be needed. In the United States, more than half of the population is covered by private health insurers, an industry that is just beginning to estimate the cost of COVID-19. CUNY's Lee estimated the average one-year cost of a U.S. COVID-19 patient after they have been discharged from the hospital at $4,000, largely due to the lingering issues from acute respiratory distress syndrome (ARDS), which affects some 40% of patients, and sepsis. The estimate spans patients who had been hospitalized with moderate illness to the most severe cases, but does not include other potential complications, such as heart and kidney damage. Even those who do not require hospitalization have average one-year costs after their initial illness of $1,000, Lee estimated. “HARD JUST TO GET UP' Extra costs from lingering effects of COVID-19 could mean higher health insurance premiums in the United States. Some health plans have already raised 2021 premiums on comprehensive coverage by up to 8% due to COVID-19, according to the Kaiser Family Foundation. Anne McKee, 61, a retired psychologist who lives in Knoxville, Tennessee and Atlanta, had multiple sclerosis and asthma when she became infected nearly five months ago. She is still struggling to catch her breath. ”On good days, I can do a couple loads of laundry, but the last several days, it's been hard just to get up and get a drink from the kitchen,” she said. She has spent more than $5,000 on appointments, tests and prescription drugs during that time. Her insurance has paid more than $15,000 including $240 for a telehealth appointment and $455 for a lung scan. “Many of the issues that arise from having a severe contraction of a disease could be 3, 5, 20 years down the road,” said Dale Hall, Managing Director of Research with the Society of Actuaries. To understand the costs, U.S. actuaries compare insurance records of coronavirus patients against people with a similar health profile but no COVID-19, and follow them for years. The United Kingdom aims to track the health of 10,000 hospitalized COVID-19 patients over the first 12 months after being discharged and potentially as long as 25 years. Scientists running the study see the potential for defining a long-term COVID-19 syndrome, as they found with Ebola survivors in Africa. “Many people, we believe will have scarring in the lungs and fatigue ... and perhaps vascular damage to the brain, perhaps, psychological distress as well,” said Professor Calum Semple from the University of Liverpool. Margaret O'Hara, 50, who works at a Birmingham hospital is one of many COVID-19 patients who will not be included in the study because she had mild symptoms and was not hospitalized. But recurring health issues, including extreme shortness of breath, has kept her out of work. O'Hara worries patients like her are not going to be included in the country's long-term cost planning. “We're going to need ... expensive follow-up for quite a long time,” she said. Trump Administration Can Cut Drug Subsidies to Hospitals: U.S. Court (Reuters) - A divided U.S. appeals court on Friday ruled the Trump administration had the authority to reduce subsidies Medicare pays [FN20] certain hospitals to obtain discounted pharmaceutical medications. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -14- The U.S. Court of Appeals for the District of Columbia Circuit by a 2-1 vote overturned a judge's decision that the administration lacked authority to cut such payments by $1.6 billion in 2018. The cuts reduced subsidies for purchases by nonprofit hospitals of outpatient drugs bought through the 340B Drug Pricing Program, which allows them to buy medications at steep discounts and seek reimbursement. A 2017 rule by the U.S. Department of Health and Human Services sought to address a gap between the discounted drug prices and the reimbursement rate that gave hospitals a substantial profit margin. The American Hospital Association and hospitals sued, arguing HHS' 28.5% rate cut rested on an impermissible interpretation of the statute governing Medicare, the government healthcare program for people aged 65 and older. U.S. Circuit Judge Sri Srinivasan, writing for the majority, said “HHS's decision to lower drug reimbursement rates for 340B hospitals rests on a reasonable interpretation of the Medicare statute.” U.S. Circuit Judge Cornelia Pillard dissented, saying the statute did not allow HHS to “take a major bite” out of funding for “financially strapped, public and nonprofit safety-net hospitals serving vulnerable populations.” HHS Secretary Alex Azar called the ruling a “major victory for President Trump's agenda of lower drug prices and better healthcare for all Americans.” The American Hospital Association called on the administration to reverse the “harmful policy.” Republican President Donald Trump's administration has argued the payment system in place before the rate cuts led to unnecessarily high Medicare spending on prescription drugs. It again cut the reimbursement rate for 2019, though U.S. District Judge Rudolph Contreras last year held that the change, like the 2018 ones, was unlawful. Trump Order Requires ‘Most-Favored-Nation’ Drug Pricing for Medicare (Regulatory Intelligence) - U.S. President Donald Trump has released his latest executive order targeting prescription drug pricing. The order establishes a policy that the Medicare program, which provides health insurance for most people aged 65 or older, will no longer [FN21] pay more than the ‘most-favored-nation price’ for prescription drugs or biological products in its Part B and Part D programs. The order defines the most-favored-nation price as “the lowest price, after adjusting for volume and differences in national gross domestic product, for a pharmaceutical product that the drug manufacturer sells in a member country of the Organization for Economic Co-operation and Development (OECD) that has a comparable per-capita gross domestic product.” The order issued Monday directs the Secretary of Health and Human Services to take immediate steps to develop and test a payment model that ensures Medicare would pay no more than the most-favored-nation price for prescription drugs and biological products covered under Parts B and D. It is unlikely that implementing regulations will be released prior to the November 3 presidential election. Medicare Part B covers primarily outpatient services such as physician and other provider office visits, home health care, durable medical equipment and some preventive care services. Medicare Part D helps cover the costs of prescription drugs. Medicare Part D insurance plans are offered to the public by insurance companies. The latest executive order revokes a July 24 order that Trump signed but did not release. The administration had anticipated that the July 24 order would encourage pharmaceutical manufacturers to agree to negotiate lower prices. However, industry leaders refused to attend a previously scheduled meeting with the administration after Trump released three other executive orders targeting the industry. According to the latest order, “Americans pay more per capita for prescription drugs than residents of any other developed country in the world.” The order attributes the pricing disparity to single-payer systems in other countries that negotiate drug prices for the entire country. In the United States, Medicare is prohibited from negotiating drug prices. The Government Accounting Office projects that Medicare will spend $88 billion in Part D benefits in 2020. The fact the United States often pays significantly more, means ‘U.S. taxpayers are effectively subsidizing the socialist healthcare systems' of other countries, according to previous Trump statements. “My Most Favored Nation order will ensure that our Country gets the same low price Big Pharma gives to other countries. The days of global freeriding at America's expense are over,” Trump said in a Twitter post announcing his latest order. In contrast, industry representatives see the order as “a reckless attack on the very companies working around the clock to beat COVID-19,” according to Pharmaceutical Research and Manufacturers of America President and CEO Stephen J. Ubl. Ubl further described the order as “an irresponsible and unworkable policy that will give foreign governments a say in how America provides access to treatments and cures for seniors and people struggling with devastating diseases.” Trump Announces Healthcare Plan as U.S. Election Nears © 2021 Thomson Reuters. No claim to original U.S. Government Works. -15- (Regulatory Intelligence) - U.S. President Donald Trump announced a healthcare plan for his re-election campaign aimed at reducing drug costs and increasing the availability of affordable insurance options. Critics said the plan lacks details and policy measures to [FN22] achieve that goal. The president announced his proposal, dubbed “America First Healthcare Plan” during a campaign rally in North Carolina on Thursday and described the Democratic plan as a ‘social nightmare.’ Trump said he had a ‘vision for a healthcare system that puts patients first, families first, and -- perhaps most importantly for all of us -- America first.’ Trump described his plan as one that ‘expands affordable insurance options, reduces the cost of prescription drugs, will end surprise medical billing, increases fairness through price transparency, streamlines bureaucracy, accelerates innovation, strongly protects Medicare, and always protects patients with preexisting conditions.’ America First Healthcare Plan overview The White House released an outline of Trump's plan that presents broad headings, but stops short of providing details about how it would be carried out. Under ‘more choice for patients,’ the plan highlights that the administration has repealed the Affordable Care Act's individual mandate and expanded individual control over health savings accounts and health reimbursement arrangements. The repeal of the individual mandate is at the heart of a pending Supreme Court case that could effectively end the Affordable Care Act (ACA). Oral arguments in the case are scheduled for one week following the U.S. presidential election. The court could be then have a new member, Amy Coney Barrett, Trump's third nominee to the Supreme Court, selected to succeed Justice Ruth Bader Ginsburg, who died earlier this month. Trump's plan also notes the administration's expansion of health plans ‘tailored to your individual needs.’ Although short-term, limited- duration plans may have much lower premiums, they can also have higher deductibles and exclude coverage for preexisting conditions. The Trump administration also extended the time consumers can rely on these plans. Under the ‘more choices' prong, the plan also notes the expansion of telehealth in response to the coronavirus public health emergency and the granting of waivers to states from some ACA requirements. Under ‘lower costs for patients' the plan notes the administration's actions to increase approvals of generic drug approvals, lower the cost of insulin for seniors and efforts to allow the importing of lower cost drugs from Canada. Trump has also signed multiple executive orders intended to reduce the costs of prescription drugs under the Medicare. In addition to his plan, Trump also announced that he would send a $200 card to 33 million Medicare beneficiaries to help them pay for prescription drugs. This idea follows a failed effort to get pharmaceutical manufacturers to fund and send $100 cards to Medicare beneficiaries, according to media reports. Although no details regarding timing or funding were provided, the administration has said the plan is possible under demonstration project rules. The plan also notes action Trump took through executive action to require hospitals and insurers to make standard charges public and increase transparency in plan coverage. The Centers for Medicare & Medicaid Services (CSM) issued rules to implement the executive order in Nov. 2019. Under its ‘better care for patients' section, the plan includes specific reference to protections for individuals with pre-existing conditions. This appears intended to mitigate the impact of the administration's efforts to repeal the Affordable Care Act. The pre-existing condition protection provisions of the Affordable Care Act are widely supported and would be lost if the bill is found unconstitutional as the administration has repeated claimed. To bolster the protections, Trump also included a provision to ‘ensure Americans with pre-existing conditions can obtain the insurance of their choice at affordable rates' in an executive order on his healthcare plan. The plan highlights the resources the Trump administration has invested for COVID-19 therapeutics and vaccines, substance use disorder, HIV/AIDS, pediatric cancer, kidney disease, Sickle Cell Disease, Alzheimer's disease and that terminally ill patients now have the right to try. Responses to Trump's healthcare approach Democratic presidential candidate Joe Biden said in response to the announcement that Trump's policies would leave Americans uninsured. ‘President Trump is currently trying to get the U.S. Supreme Court to take us back to the days where as many as 4.1 million North Carolinians with preexisting conditions could be charged more or denied health care coverage entirely,’ Biden said in addressing residents of that state. Health policy experts and patient advocates point a lack of specifics in the plan. “It's not a plan, it's a mirage. It's a series of aspirations with no specific policy proposals to back them up,” Larry Levitt, Executive Vice President for Health Policy with Kaiser Family Foundation, said in a tweet Said Jen Taylor, senior director of federal relations at Families USA, a consumer rights advocacy group. ‘Yesterday's announcement reinforces what we have known for a while, that this urgent issue needs Congressional action,’ said Jen Taylor, Senior Director of Federal Relations at Families USA. ‘There are bipartisan, bicameral solutions on the table. Policymakers should put the needs of © 2021 Thomson Reuters. No claim to original U.S. Government Works. -16- consumers above the frustrations of internal politics and special interests. It is past time. The thousands of families who are at risk of being hit by these bills every day that goes by cannot wait.” Of particular concern is the threat to pre-existing conditions and the Trump administration's ongoing effort to overturn the Affordable Care Act. Mike Kreidler, Insurance Commissioner of Washington state, called ‘dishonest’ Trump's assertion that his plan would protect people with pre-existing conditions. ‘The awful truth is this: He and his Republican Party filed a case now pending before the U.S. Supreme Court to overturn the Affordable Care Act and the very protections he claims to support. If successful, this challenge would eliminate other vital protections and leave tens of millions of people without the critical coverage they need, especially now.’ Missing from the plan Trump's plan does not address providing comprehensive health insurance those who have never had insurance or who have lost their insurance due to coronavirus job losses. In 2018, 27.5 million people lacked health insurance at any time during the year, an increase of more than 2 million uninsured from 2017, according to the U.S. Census Bureau. The number of uninsured increased to 29.2 million, according to the Kaiser Family Foundation. The number of individuals signing up for coverage on the federal health insurance exchange during the April special enrollment period increased 139% over the same period last year. The federal health insurance exchange was established under the Affordable Care Act. IV. OTHER BUSINESS REPORTS Bayer Asks U.S. Appeals Court to Reverse $25 million Roundup Verdict (Reuters) - Bayer AG on Monday said it has asked a U.S. federal appeals court to throw out a $25 million judgment it was ordered to [FN23] pay to a California man who blamed the company's Roundup weed killer for his cancer. In a filing in the U.S. Court of Appeals for the 9th Circuit dated Friday, Bayer said the verdict defied regulatory findings and sound science, adding that the “speculative case” should never have made it before a jury. Bayer in a statement said it stood behind the safety of Roundup and its active ingredient glyphosate and planned to vigorously defend the more than 42,700 U.S. Roundup cancer lawsuits it faces. In its court filing, Bayer said the Hardeman appeal had the potential to shape how every subsequent Roundup case is litigated. The widely-used weed killer is made by Monsanto, which Bayer acquired last year for $63 billion. Bayer stock has lost about 23% in value since the first Roundup verdict for plaintiffs in August 2018. The case on appeal before the 9th Circuit involved the claims of Edwin Hardeman, which was the third Roundup case to go to trial in a U.S. court. A jury in March ordered Monsanto to pay $80 million in damages, saying Roundup had caused the man's non-Hodgkin's lymphoma. The trial court judge in July reduced that verdict to $25 million. Lawyers for Hardeman on Monday did not immediately respond to a request for comment on Bayer's appeal. The lawyers during the trial argued Monsanto had failed to warn consumers of Roundup's cancer risk and said the company concealed damaging evidence from public and regulatory view. Bayer rejects those allegations. The German company's main appeal argument in Hardeman's case centers on repeated findings by the U.S. Environmental Protection Agency that glyphosate is not a carcinogen and not a risk to public health when used in accordance with its current label. Bayer argued it would be impossible to comply with the Hardeman verdict, a lawsuit brought under state law, because any warning label would be in conflict with guidance from a federal agency. Some legal experts consider this preemption defense a “silver bullet” because it would stop claims across the board, but said the argument faced big hurdles on appeal. The company also said the trial judge had committed “a host of errors” by allowing jurors to hear unreliable expert testimony. New York Drug Distributor Exits Opioids after Admitting Role in Crisis (Reuters) - A New York company that was the first drug distributor to face U.S. felony charges for its role in fueling the opioid crisis said [FN24] on Tuesday it will stop distributing controlled pharmaceuticals, which include opioids. Rochester Drug Co-Operative Inc (RDC) announced the decision after agreeing last April to settle the charges by paying a $20 million fine and accepting independent monitoring, under a five-year deferred prosecution agreement. RDC, one of the 10 largest U.S. drug distributors, said controlled pharmaceuticals represent a relatively small percentage of its sales but “significant legal and compliance expenses,” and that those costs are “simply not sustainable.” © 2021 Thomson Reuters. No claim to original U.S. Government Works. -17- The Rochester, New York-based company will keep distributing non-controlled, generic and private label drugs, as well as healthcare supplies. It said it serves 1,300 retail pharmacies, long-term care pharmacies and home healthcare stores. In settling with the government, RDC admitted to having distributed oxycodone, fentanyl and other controlled substances to pharmacies despite internal “red flags” that they would be used improperly. Opioids have contributed to more than 400,000 deaths since 1997, according to the U.S. Centers for Disease Control and Prevention. Federal prosecutors have opened a criminal probe of whether several drug companies intentionally allowed large quantities of opioids to be shipped, contributing to the nationwide crisis. At least two distributors, AmerisourceBergen Corp and McKesson Corp, have said in regulatory filings that they have been in communications with prosecutors' offices. RDC's former chief executive, Laurence Doud, pleaded not guilty last April to criminal charges of conspiring to both distribute illegal drugs and defraud the government. Jeff Eller, an RDC spokesman, said it is premature to discuss implementation of the deferred prosecution agreement. Judge Slashes $8 billion Risperdal Award Against Johnson & Johnson to $6.8 million (Reuters) - A Pennsylvania judge on Friday slashed to $6.8 million from $8 billion a punitive damages award against Johnson & [FN25] Johnson to a man who said it failed to warn that boys using its antipsychotic drug Risperdal could grow breasts. Judge Kenneth Powell of the Philadelphia Court of Common Pleas reduced the payout that a jury awarded Oct. 8 to the plaintiff Nicholas Murray, a Maryland resident. No reason was given for the reduction, which was disclosed in court records. Lawyers for Murray have said the punitive damages award was the first in thousands of lawsuits against Johnson & Johnson's Janssen Pharmaceuticals unit over Risperdal. Murray claimed he had been prescribed the drug in 2003, when he was 9, to treat symptoms related to autism. He had previously been awarded $680,000 in compensatory damages. Both sides pledged to appeal. “The ruling is wrong (and) provides essentially no punishment for the worst of the worst of corporate misconduct,” Murray's lawyer Thomas Kline said in an email. “We believe that when the merits are reviewed that the $8 billion will be reinstated.” Johnson & Johnson said that while Powell “appropriately reduced the excessive punitive damages award,” he wrongly excluded evidence that Risperdal's label “clearly and appropriately” outlined the risks of use. The U.S. Food and Drug Administration approved Risperdal in 1993 to treat schizophrenia and bipolar mania in adults, and in 2006 for irritability associated with autism in children. Plaintiffs suing over the drug have said Johnson & Johnson concealed the link between Risperdal and excessive growth of female breast tissue in boys, known as gynecomastia. While doctors may prescribe many drugs as they see fit, including for off-label uses, Murray said Johnson & Johnson should have warned his doctors about Risperdal's side effects. Johnson & Johnson said in October it faced lawsuits by 13,600 people over Risperdal. The New Brunswick, New Jersey-based company agreed separately in 2013 to pay $2.2 billion to settle U.S. criminal and civil probes into its marketing of Risperdal and two other drugs. In late afternoon trading, Johnson & Johnson shares were up 74 cents at $148.94. CMS Directs Survey and Accrediting Agencies to Focus Attention on Infection Control (Regulatory Intelligence) - The Centers for Medicare & Medicaid Services (CMS) announced new measures focused on infection [FN26] control procedures in an effort to limit the spread of COVID-19 in the United States on March 4. Effective immediately, CMS is requiring state survey agencies and accrediting organizations to focus inspections at Medicare- participating facilities exclusively on issues related to infection control and other serious health and safety threats beginning with nursing homes and hospitals. This change in CMS survey priorities follows a cluster of 5 nursing home deaths in Washington state related to COVID-19. In its most recent survey in April 2019, Life Care Center of Kirkland, Washington was citated for multiple infection control violations that posed a ‘minimal’ level of harm, only one of which involved a respiratory infection, as reported on the Medicare Nursing Home Compare website. These deficiencies were reported as corrected. CMS relies on a network of approximately 8,200 state survey agency surveyors to perform statutorily-required inspections in the country's 15,000 nursing homes. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -18- According to a Kaiser Health News analysis since 2017, 9,372 nursing homes have been cited for one or more infection-control deficiencies. CMS Administrator Seema Verma state, ‘All health care providers must immediately review their procedures to ensure compliance with CMS' infection control requirements, as well as the guidelines from the Centers for Disease Control and Prevention (CDC).’ The new directive prioritizes ongoing surveys to focus on ‘immediate jeopardy complaints first, followed by complaints alleging infection control concerns, including facilities with potential COVID-19 or other respiratory illnesses. Surveyors are also required to prioritize surveys of facilities and hospitals that have a history of infection control deficiencies at the ‘immediate jeopardy level’ in that last three years, as well as surveys of facilities, hospitals and dialysis centers that have a history of infection control deficiencies at lower levels than immediate jeopardy. Beyond the surveys focused on infectious control, only surveys for statutorily-required recertification, re-visits necessary to resolve current enforcement actions and initial certifications will be conducted. All other surveys outside the new priorities are suspended. CMS also includes protocols for the inspection process in situations where COVID-19 is identified or suspected, including the need to coordinate with government agencies. Additionally, CMS provides guidance to nursing homes and hospitals about screening staff and facility visitors. It also addresses when hospitalization should be considered instead of self-isolation. It further details the process for transferring patients between nursing homes and hospitals when COVID-19 is suspected or diagnosed. The CMS survey protocol for infection prevention, control and immunizations' includes determining whether the facility has properly implemented an infection prevention and control program, as well as specific areas, including: hand hygiene for staff and residents, proper use of personal protective equipment, appropriate transmission-based precautions, laundry service precautions, infection surveillance, antibiotic stewardship and influenza and pneumococcal immunization. Other illnesses such as influenza and antibiotic-resistant infections are prevalent in nursing homes and can also lead to severe illnesses and deaths. Opioid Distributors Propose $1 billion Legal Fee Fund - Bloomberg (Reuters) - McKesson Corp , Cardinal Health Inc and AmerisourceBergen Corp have proposed paying more than $1 billion in legal fees [FN27] for states, cities and counties suing over the companies' handling of opioids, Bloomberg reported on Thursday, citing sources. The companies are hoping the legal fee overture will garner more support among governmental entities for their offer to pay $18 billion to resolve more than 2,000 lawsuits accusing them of ignoring suspiciously large opioid orders to reap billions in profits, Bloomberg reported. Reuters reported last week that 21 states rejected an $18 billion settlement proposal from the drug distributors to resolve lawsuits over their alleged role in the opioid crisis, but discussions are still active. Some 400,000 U.S. overdose deaths between 1997 and 2017 have been linked to opioids, according to government data. The lawsuits accuse drugmakers of deceptively marketing opioids in ways that downplayed their risks and drug distributors of failing to detect and halt suspicious orders. The companies have denied any wrongdoing. Shares of AmerisourceBergen and McKesson rose nearly 1%, while Cardinal Health's shares also rose marginally. Tired of Delays, U.S. Labs Ask FDA to Develop Their Own Coronavirus Tests (Reuters) - U.S. state and local public health laboratories are seeking permission from the Food and Drug Administration to create their [FN28] own tests for the new coronavirus as manufacturing and regulatory issues continue to delay access to testing capabilities. As of Monday, only five U.S. states - California, Illinois, Nebraska, Nevada and Tennessee - have the capability to test for the virus, according to the Association of Public Health Laboratories (APHL). The group, which represents state and local public health labs, sent a letter to FDA Commissioner Dr. Stephen Hahn seeking permission to develop tests for the virus. The request follows continued delays in getting access to a test developed by the U.S. Centers for Disease Control and Prevention, which was granted an Emergency Use Authorization by the FDA earlier this month. The FDA grants such approvals in the event of public health emergencies to speed access to needed tests or drugs. The CDC said in a news briefing last week that the agency is still handling the bulk of testing for the coronavirus as it works out issues with test kits sent to states. After receiving the tests, some labs discovered they produced inconclusive results, and they have been waiting for replacement tests as the CDC has been trying to work out those issues, said Scott Becker, APHL chief executive officer. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -19- The CDC and FDA did not immediately respond to emails seeking comment. Becker said it is not clear when the new test kits will arrive. “We're weeks and weeks into this response and the desire is to begin community-based surveillance and make sure we have the diagnostics as close to the population as possible, and we're not there,” he said. The World Health Organization has cited expanded diagnostic capacity as a critical component to containing the fast-spreading virus, which has spread to some 29 countries and territories outside of China, killing about two dozen, according to a Reuters tally. Mallinckrodt Faces ‘Existential Threat’ After Losing Medicaid Drug Rebate Case (Reuters) - Drugmaker Mallinckrodt Plc on Monday warned that a judge's ruling allowing the federal government to force it to pay higher [FN29] rebates to state Medicaid programs after raising its top-selling drug's price posed an “existential threat to the company.” Mallinckrodt said the late Friday ruling by U.S. District Judge Thomas Hogan in Washington, D.C., would force it to pay $650 million to cover retroactive rebates and would cut sales of the drug, H.P. Acthar Gel, by up to $100 million. In a motion, it urged Hogan to reconsider his decision and to keep in place an injunction that has barred the U.S. Centers for Medicare & Medicaid Services from taking action against the company while it appeals his ruling. Its lawyers, led by Catherine Stetson of Hogan Lovells, said absent further action from the courts, CMS could not declare Mallinckrodt out of compliance with the rebate program's rules and lock it out of the key data reporting system tied to it. The company said allowing the injunction to expire would be ‘catastrophic for Mallinckrodt,’ as the $650 million it will owe state Medicaid programs if Hogan's ruling stands is ‘a significant cash-flow problem for the company.’ The U.S. Justice Department on CMS' behalf responded later on Monday, telling the court it had decided to voluntarily not lock Mallinckrodt out of the reporting system for 60 days, which will keep it from being suspended from Medicaid until Aug. 31. The ruling came just after the Justice Department on March 3 launched a separate lawsuit accusing Mallinckrodt of knowingly underpaying Medicaid rebates for Acthar, which is used to treat spasms in infants as well as multiple sclerosis. Acthar's per-vial price has risen from about $50 in 2001 to $38,892 in 2019, prompting government scrutiny amid broader concerns about sky-rocketing drug prices. The drug generated about 30% of Mallinckrodt's $3.16 billion of net sales last year. Friday's ruling came in a lawsuit that Mallinckrodt filed in May seeking an injunction to prevent CMS from imposing a new approach to calculating rebates for Acthar in light of the price increases. The Medicaid Drug Rebate Program shields Medicaid, the joint federal-state healthcare program for the poor, when the prices of drugs covered by the program rise faster than inflation by calculating rebates based on a drug's price in 1990 or when it was first marketed, whichever is later. Mallinckrodt said it had been relying on CMS guidance in 2012 that Achtar, which has been on the market since 1952, was eligible for a new base date of 2013, as if it were a new drug, after the U.S. Food and Drug Administration approved a new use for it. But Mallinckrodt said CMS in 2016 began claiming the company should be using 1990, the year the rebate program launched, which would cause the rebates to be much higher due to the drug price increases. CMS in a letter in May threatened to find Mallinckrodt ‘out of compliance’ with the rebate program's requirements. It maintains its 2012 position was based on a faulty premise. Mallinckrodt argued that CMS' current position violates the Administrative Procedure Act and Mallinckrodt's due process rights, since CMS twice before told the company it could use the 2013 date. Hogan on Friday ruled against Mallinckrodt. His written opinion is currently sealed pending a review for redactions. The case is Mallinckrodt ARD LLC v. Verma, U.S. District Court for the District of Columbia, No. 19-cv-1471. Medtronic Wins U.S. Approval for Ventilator, Plans Launch in May (Reuters) - Medical device maker Medtronic Plc said on Wednesday it has won the U.S. Food and Drug Administration's approval to [FN30] immediately market its ventilator, which it plans to launch by May, to meet increased demand due to the coronavirus outbreak. The ventilator, PB560, is currently sold in 35 countries at an average selling price of under $10,000, the company said. As U.S. demand for ventilators skyrockets due to the fast-spreading pandemic, the government is pushing makers to boost their production capacities and has mandated carmakers to use their facilities to produce the device. The U.S. Health and Human Services Department on Wednesday awarded here two contracts worth more than $1 billion to General Motors Co and Philips, and plans to announce five additional contracts later this week. Medtronic said it expects to ramp up production by nearly five-fold to more than 1,000 ventilators per week by June-end, and make over 25,000 devices available over the next six months. (reut.rs/2UTAYpZ) © 2021 Thomson Reuters. No claim to original U.S. Government Works. -20- It said it was currently testing a new feature for its PB980 ventilator with two U.S. hospitals that would allow clinicians to adjust settings remotely, reducing physicians' exposure to patients suffering from COVID-19, the disease caused by the coronavirus. Three U.S. Local Governments to Adopt Coronavirus Contact Tracing App: MIT (Reuters) - Three U.S. local governments plan to sign deals this week to become the first to adopt a location tracking app aimed at preventing new outbreaks of the novel coronavirus, a spokesman for the Massachusetts Institute of Technology-led project said [FN31] Thursday. An additional 17 state and municipal governments are considering introducing the app in their communities as soon as in the next two weeks, said Ramesh Raskar, an associate professor at MIT, in an email exchange. “These span all over the country, and include some of the largest U.S. cities to more remote vacation communities looking to protect themselves,” he said. Raskar declined to specify the states, counties or cities nearing agreements but said they were expected to advocate for residents to voluntarily download the app, known as Private Kit. He described the expected deals as a “letter of intent” for collaboration, training and support. Two Massachusetts cities plan to compare the performance of Private Kit with health officials asking patients to recall recent contacts from memory, he said. “There are specific communities where a human-based approach will have benefits and others where the technology enabled platform will provide greater efficiency and accuracy,” Raskar said. Governments worldwide are evaluating Private Kit or similar technologies meant to aid the otherwise labor-intensive process of contact tracing, in which health officials must ask recent contacts of a person who has tested positive for the virus to self-quarantine or get tested. Effective contact tracing will need to be in place before widely lifting stay-at-home orders that have crippled the global economy, health experts have said. European countries have partnered on the Pan-European Privacy Preserving Proximity Tracing initiative, following the successful use of app-based systems in some Asian countries. But privacy concerns and technical limitations are among several hurdles the app-based systems face among Americans. MIT researchers and their collaborators said Private Kit can log an individual's movements without jeopardizing their privacy. Their system relies on Bluetooth signals dubbed “chirps,” which are communicated between phones of Private Kit users. Healthcare officials would ask users who test positive for the coronavirus to anonymously publicize their phones' recent “chirps.” Any Private Kit user whose phone was close enough to infected users to register their phones' chirps would be alerted about their potential coronavirus exposure. Researchers at Stanford University and the University of Southern California are among others developing location tracking apps, and some of the projects are being designed to work with the Private Kit app. New York City Hospitals Cancel Temporary Workers as Coronavirus Cases Stabilize (Reuters) - Staffing agencies, which have deployed thousands of healthcare workers in recent weeks to jobs at hospitals in New York [FN32] City and other areas hit hard by the coronavirus, say some of those temporary workers are no longer needed. The trend, coupled with a flattening in the number of New Yorkers hospitalized with coronavirus infection, reinforces the sense that New York may have reached the peak of the health crisis. “We have had to reassign some of our travelers who were going to New York,” San Diego-based staffing firm Aya Healthcare said in an emailed statement. Demand for “travel nurses” jumped during March and early April in cities like New Orleans, and especially New York, which saw the nation's largest spike in cases of COVID-19, the deadly respiratory disease caused by the novel coronavirus. But New York, which ramped up its hospital bed capacity to around 90,000, has had only about 18,000 patients hospitalized for the past several days. “We are seeing contracts in New York get cancelled,” Lindsey Scott, a spokeswoman for staffing agency Trusted Health, said in an email. “The hospitals in New York hired a ton of travelers as the crisis started to ramp up, and then either had more nurses than they needed, or in some cases, more than they could ingest into the system.” She said Trusted Health had “multiple nurses who left their families and in some cases full-time jobs,” to travel to New York, only to find that they were no longer needed. Karla Guerra, 27, an emergency room nurse from Arizona, said her contract at New York's Mount Sinai hospital system was abruptly canceled on Monday, the day she completed her onsite orientation. She had expected to earn $32,000 for eight weeks' work. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -21- Now, she is $3,000 out of pocket for her travel and first month's rent, and is trying to find a new contract as soon as possible. “Every day I am here I am losing money,” she said. “It's disappointing because I came out here with the intention to help but unfortunately things didn't pan out.” Mount Sinai did not immediately respond to a request for comment. Northwell Health, a 23-hospital system in New York, said it was still hiring temporary nurses, and planned to bring in about 100 next week. Trusted Health said it was doing everything it could to redeploy canceled nurses to new contracts, particularly if they are willing to go to another state like Michigan, where job openings have surged. CALL FOR HELP New York Governor Andrew Cuomo called last month for medical workers across the country to come to New York and help out in caring for the growing numbers of COVID-19 patients. To date, around 93,000 medical professionals have signed up through New York's online volunteer portal, some 81,000 have had their credentials vetted and about 12,000 have been referred to hospitals, according to Cuomo spokesman Jason Conwall. Those efforts are separate from the short-term employment contracts facilitated by agencies like Aya and Trusted Health, which routinely operate to provide hospitals with licensed professionals to fill short-term staffing needs. Cuomo said on Tuesday the total number of people hospitalized with COVID-19 in the state fell for the first time since the onset of the outbreak, a sign the state at the epicenter may be at the peak of its crisis. He said that a total of 18,697 people were hospitalized across New York, down from 18,825 a day earlier and the first tick lower since the crisis began. U.S. deaths from the virus topped 25,300 on Tuesday, doubling in one week, according to a Reuters tally. So far this week, deaths have increased by about 7% per day on average compared with 14% last week and 30% many days in March. Cases this week are up an average of 5% per day compared with 7.8% last week and 30% per day in March. In March, many U.S. hospitals were looking to augment their staff in preparation for a surge of coronavirus patients at the same time some healthcare workers were having to be quarantined after being exposed to the virus. Trusted Health said at that time that nurses were being offered contracts at nearly double their typical pay rates. 3M Sues Distributor for Alleged Price Gouging of N95 Respirators in New York (Reuters) - 3M Co said it filed a lawsuit against Performance Supply LLC on Friday, alleging that the New Jersey-based company had posed as an authorized vendor of 3M-branded N95 respirators and offered millions of them for sale to New York City officials at prices [FN33] as much as 600% over the list price. N95 respirators, which are designed to filter 95% of airborne particles, are among the personal protective equipment most needed now by medical professionals as they battle the coronavirus outbreak. New York City has become the epicenter of the global pandemic. The lawsuit, filed in federal court in Manhattan, said Performance Supply “offered to sell $45 million in N95 respirators to New York City officials at prices 500-600% over 3M's list price.” According to the lawsuit, Performance Supply offered about 7 million 3M masks to city procurers on March 30 at over $6, up to 600% of 3M's list price. Performance Supply did not immediately respond to a request for comment. 3M said in a statement that it seeks injunctive relieve and damages and will donate any damages recovered to COVID-19-related nonprofit organizations. 3M said last week it expects to ramp up U.S. monthly production of N95 respirator masks to 50 million in June, and is also looking to produce 2 billion N95 respirators globally within the next year. CMS Issues Guidance on Allowing Elective Procedures in Areas with Lower Incidents of COVID-19 (Regulatory Intelligence) - With parts of the United States beginning to see a decline in the number of new COVID-19 cases, the Centers for Medicare & Medicaid Services (CMS) released guidance on April 19 for facilities on when to resume providing essential non-COVID-19 care to patients. The guidance applies to elective surgeries on an outpatient basis at facilities that adhere to the CMS [FN34] guidelines. As the public health emergency began, at least 35 states ordered the suspension of non-essential elective surgeries on order to preserve resources for COVID-19 treatment and allow for surge capacity in hospitals when there were spikes in COVID-19 admissions for emergency treatment. Targeted to communities that are in Phase 1 of the federal Guidelines for Opening Up America Again, the CMS recommendations recommend a gradual transition and coordination with local and state public health officials. Healthcare providers considering restarting © 2021 Thomson Reuters. No claim to original U.S. Government Works. -22- or increasing in-person care should review of the availability of personal protective equipment (PPE) and other supplies, workforce availability, facility readiness and testing capacity. According to the Trump Administration and Centers for Disease Control (CDC) before a state considers entering Phase 1, it must meet gating criteria, including: Downward trajectory of influenza-like illnesses and COVID-like cases reported within a 14-day period; Downward trajectory of documented cases or of positive tests as a percentage of total tests within a 14-day period; and Hospitals must be treating all patients without crisis care and have a robust testing program in place for at-risk healthcare workers, including antibody testing. CMS makes clear that the new guidance is not meant to be implemented in every location now and that the ultimate decision on when to allow elective surgeries in their communities. CMS encouraged healthcare facilities and providers in areas still experiencing a higher number of COVID-19 cases to continue following earlier guidance from CMS. Three states - Alaska, Oklahoma and Texas - had already relaxed restrictions that suspended elective surgeries when CMS issued its guidance. In Alaska, Governor Mike Dunleavy (R) issued a COVID-19 Health Mandate on April 15 that would allow non-urgent ore non-emergent elective services that cannot be delayed beyond 8 weeks ‘without posing a significant risk to quality of life’ to resume on May 4. In Oklahoma, Governor Kevin Stitt (R) issued the Second Amended Executive Order 2020-13 on April 16 that allows elective surgeries to resume on April 24. In Executive Memorandum 2020-02, Gov. Stitt sets out an Elective Surgery Acuity Scale (ESAS) for facilities to use in determining allowable procedures. In Texas, Governor Greg Abbott (R) issued an order on April 17 that allows procedures that will not deplete the ‘hospital capacity or the personal protective equipment needed to cope’ with the COVID-19 public health emergency or that is performed in a facility that certifies it has reserved 25% of its hospital capacity for the treatment of COVID-19 patients and that it will not request any PPE from a public source for the duration of the COVID-19 crisis. Other states, including Ohio and Oregon, are considering whether to allow elective surgeries as they move toward reopening businesses in early May. UnitedHealthcare Says COVID-19 Costs to Be Considered in 2021 Rates (Regulatory Intelligence) - UnitedHealthcare Group on Wednesday said it is closely monitoring the claims experience from customers infected by the new coronavirus, higher testing costs and the potential cost of a vaccine, among other factors to formulate its pricing for [FN35] the 2021 benefit year. The country's largest health insurer said the impact of COVID-19 infections on its first-quarter business was limited but it expects the toll from medical procedure deferrals, premium payments delays, and unemployment among its members to fully play out in the coming months. The insurer said it was concerned about individuals with exacerbated health conditions as it expects some of the deferred care may return in the second half of the year. “Missed treatments can aggravate health status, resulting in initially more intense care needs as the system reopens,” Chief Financial Officer of UnitedHealthcare Group, John Rex, said. The higher cost of serologic tests -- which can tell if an individual has been infected by the respiratory virus and recovered -- will also be a factor considered in pricing for the following year, the company said. Dirk McMahon, CEO of UnitedHealthcare, said the insurance unit has had to extend grace periods on premiums or offer payment plans to about 3% of its customers for their April 1 payment. This is several times higher than the average 0.4 percent of their customers that typically receive an extension. UnitedHealthcare, however, said its customer losses in the commercial market were alleviated by the enrollment gains in its Medicare supplement programs during the first quarter. The company expects the sharp spike in unemployment to continue to dampen its growth in its group benefits business while increasing membership in individual lines and Medicaid coverages. “We do expect to see — increases in Medicaid and our individual products to ultimately offset some of the losses we experienced in the commercial group business,” McMahon said. The company is continuing to evaluate its re-entry into the Affordable Care Act marketplace and expects to make a decision at the end of the second quarter. In response to the COVID-19 outbreak, the company has offered additional enrollment opportunities to those who previously declined employer-sponsored offerings, eliminated all COVID-19 related cost-sharing and removed prior authorizations to expedite patient transitions. The company also said it accelerated payments worth nearly $2 billion to care providers whose clinical operations have been impacted. Humana Defeats Illinois Hospital's $20 million Lawsuit on Appeal © 2021 Thomson Reuters. No claim to original U.S. Government Works. -23- (Reuters) - An Illinois appeals court has upheld a verdict in favor of Humana Inc in a lawsuit alleging the health insurance company [FN36] cheated a hospital out of $20 million by improperly reimbursing it for services at less-than their agreed up rates. The Illinois First District Appellate Court on Friday ruled a trial judge did not err by determining Palos Community Hospital's contracts were so ambiguous that a jury should hear the case and that it should be sanctioned for evidence destruction. The hospital had argued Cook County Circuit Judge Diane Shelley wrongly declined to rule as a matter of law that a decades-old contract did not apply to services it provided to people participating in Humana's preferred provider organization network. Humana had countered the contract unambiguously governed the rates. Justice Sheldon Harris, writing for the three-judge panel, said it was unclear whether the contract, which was with a health maintenance organization, or HMO, that Humana acquired, applied, creating a factual question for a jury to resolve. Palos had also argued Shelley wrongly sanctioned it for destroying electronic records by instructing a company it hired to monitor whether insurance companies were paying the hospital to delete all of its data when Palos ceased working with it. The judge after learning of the data deletion ordered Palos to pay Humana's attorneys fees and costs and, as an additional sanction, instructed jurors that they could infer ‘the information that was destroyed would be adverse to Palos.’ Palos argued Shelley should not have sanctioned it as it had a reasonable excuse to have its former contractor destroy the records, since it was trying to protect patients' privacy. But Harris said, ‘nothing in the record supports that the complete destruction of the data was reasonable or that it was the only way to protect patient privacy,’ noting it also failed to initially disclose the contractor's identity to Humana. 'The trial court found the adverse inference instruction ‘appropriate under the facts of this case,’‘ Harris wrote. ‘We find no abuse of discretion here.’ The appeals court also rejected other arguments by Palos, including that the trial court incorrectly dismissed fraud claims it initially asserted in its 2013 lawsuit as barred by a five-year statute of limitations. The panel's other members were Justices Joy Cunningham and Maureen Connors. 'We respectfully disagree with the Appellate Court's decision and will ask the Illinois Supreme Court to take up the case,' Everett Cygal, a lawyer for Palos Heights, Illinois-based Palos at Schiff Hardin, said in a statement. Humana, represented by William Chittenden of Chittenden, Murday & Novotny, did not respond to a request for comment. In 1985, Palos entered into a contract with an HMO called Michael Reese Health Plan (MRHP), in which Palos agreed to discount its medical fees in exchange for the HMO steering patients to the hospital. Humana later acquired MRHP. Palos later entered into a separate agreement with a different Humana subsidiary, ChoiceCare, which would compensate the hospital at higher discounted-rates than those in the MRHP agreement. The hospital alleged that despite that agreement, Humana inappropriately reimbursed the hospital not at the ClearChoice rates but the lower ones applicable to the MRHP contract, resulting in an under-payment of more than $20 million. The case is Palos Community Hospital v. Humana Inc, et al, Illinois First District Appellate Court, No. 1-19-0633. Lack of Adequate Insurance Puts Healthcare Workers at Risk of Malpractice Lawsuits (Regulatory Intelligence) - Healthcare workers on the frontlines of the new coronavirus outbreak face increased risks not only of stress and infection but also malpractice litigation, for which many lack insurance coverage at a time when they are working across specialties [FN37] and state lines to provide care. Some states like New York and New Jersey have granted temporary legal immunity to healthcare professionals, with few exclusions such as gross negligence and criminal misconduct, for the duration of the public health emergency. The Coronavirus Aid, Relief, and Economic Security (CARES) Act similarly provides restricted immunity to volunteers assisting crisis response, but it does not include immunity for hospital systems or compensated healthcare providers. Representatives of healthcare workers are asking the federal government to establish a similar nationwide immunity during the public health emergency, as some healthcare professionals are now working out of their usual practice area to support service in COVID-19 hotspots. In addition, healthcare workers in emergency rooms are operating under severe mental and physical stress with a huge shortage of personnel and personal protective equipment such as masks and gowns. They are forced to make clinical decisions and administer care with limited access to life-saving equipment such as ventilators. More than half a dozen emergency room doctors and nurses told Reuters they are concerned about liability in this crisis. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -24- The American Academy of Emergency Medicine called on the federal government to provide immunity from malpractice litigation for medical care that occurs during the period saying, “patient care decisions that may be best for an individual patient may not be feasible or appropriate when viewed in context of the entire population.” Even in states that have granted legal immunity to medical professionals, many healthcare workers facing litigation could incur charges in retaining an attorney to fight off the gross negligence or criminal misconduct claim. While physicians may hold some form of liability insurance because of the greater risk of litigation associated with their practice, nurses are more at risk of incurring legal expenses during this COVID-19 crisis as they are now practicing across specialties, facilities and states with different codes of conduct, Edie Brous, a nurse attorney said. “The biggest problem with nurses is too many don't have professional liability insurance because they've been told by their employers that they don't need it - which is a mistake,” Brous said. “It doesn't occur to them that the coverage they've got through their employer is very limited in what it covers.” Nurses are also much likely to get disciplined by their nursing boards, and employer insurance options would not cover costs associated with that, Brous added. Physicians typically have some kind of professional liability insurance which covers expenses associated with defending and settling a malpractice lawsuit and may also pay damages if the insured is found guilty. Premiums, however, can be priced higher or lower depending on the risk associated with the specialty of the practitioner and the scope of the plan. These plans may also carry exclusions for practicing in a clinic or facility not named in the policy or different specialty associated with a higher risk than that priced in the plan. Medtronic Warns of Sales Hit as People Delay Non-emergency Surgeries (Reuters) - Medical device maker Medtronic Plc warned of a significant hit to current-quarter sales on Thursday as Americans are [FN38] forced to delay less urgent surgeries because of the COVID-19 pandemic, sending its shares down 2%. Medical device makers have borne the brunt of the coronavirus outbreak as federal and state guidelines ask for elective surgeries such as hip and knee replacements and certain heart procedures to be delayed, sapping the demand for devices used in the surgeries. The company expects a slow recovery in its restorative therapies unit, which houses neuro-stimulation implants to treat chronic pain, and heart device unit, which sells valves. 'We currently expect first quarter revenue growth to be modestly worse than the fourth quarter,' said Chief Financial Officer Karen Parkhill. However, the world's largest standalone medical device maker added that it was seeing early signs of a recovery in some parts of the world and expects a return to more normal revenue growth by the end of fiscal year 2021. Medtronic said sales of products that are more urgently needed by patients, such as pacemakers used to control abnormal heart rhythms, have started to recover. Revenue across the company's segments fell in the fourth quarter, with its heart devices unit taking the biggest hit as customers lowered bulk purchases. Sales in the unit fell 34.3% to $2 billion in the quarter, while net sales declined 26.4% to $6 billion, missing estimates of $6.17 billion. Medtronic did not give a forecast for full-year 2021, citing uncertainties surrounding the coronavirus outbreak, but said the company had ample liquidity and increased its quarterly dividend by 7.4% to 58 cents per share. Excluding items, Medtronic earned 58 cents per share, missing analysts' expectations of 68 cents. U.S. Awards New $628 million Contract to Boost Output of Potential COVID-19 Vaccine (Reuters) - The U.S. government on Monday entered into a $628 million contract with drugmaker Emergent BioSolutions to boost [FN39] manufacturing capacity for a potential COVID-19 vaccine. As drugmakers race to develop vaccines, tests and therapies for the disease, the United States is looking to secure manufacturing capacity under its “Operation Warp Speed” program announced in May to accelerate vaccine development. “Securing more manufacturing capacity here in America for candidates that make it to the final stages of Operation Warp Speed will help get a vaccine to American patients without a day wasted,” Department of Health and Human Services (HHS) Secretary Alex Azar said in a statement. The HHS task order with Emergent falls under an existing contract with the Biomedical Advanced Research and Development Authority (BARDA), a U.S. federal agency that funds disease-fighting technology. Under the contract, Emergent will commit its manufacturing facilities, valued at $542.7 million, to produce COVID-19 vaccine candidates through 2021. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -25- The BARDA award secures capacity for drug manufacturing at the company's Baltimore Bayview facility, established in 2012 with HHS, and designed for rapid manufacturing of large quantities of vaccines and treatments during public health emergencies, the company said in a statement. The task order also includes an investment of $85.5 million to expand Emergent's viral and non-viral drug manufacturing capacity. So far, BARDA has invested more than $2 billion in COVID-19 vaccines and funded over 30 projects, including for diagnostics and treatments. The agency has awarded grants to Moderna Inc (MRNA.O), the first in the United States to begin human trials of a coronavirus vaccine, Sanofi, Johnson & Johnson (JNJ.N) and British drugmaker AstraZeneca Plc. Emergent has been working with Johnson & Johnson, Novavax Inc and Vaxart Inc to develop and manufacture their COVID-19 vaccine candidates. U.S. Government Offers $25 billion in COVID-19 Relief to Some Hospitals (Reuters) - The U.S. Department of Health and Human Services (HHS) said on Tuesday it would distribute about $25 billion to hospitals [FN40] that have not previously received relief funds as they grapple with a rise in COVID-19 cases. The agency said it would provide about $15 billion of the total to hospitals serving patients covered by federal Medicaid program for low-income individuals and children's health insurance program, and $10 billion to safety net hospitals that treat patients regardless of their insurance status. The U.S. government has earmarked $175 billion for hospitals and medical providers to meet the increased expenses from rising COVID-19 cases and cover lost revenues due to suspension of medical procedures and routine visits. The largest for-profit U.S. hospital chains such as HCA Healthcare Inc and Tenet Healthcare Corp appear to be benefiting disproportionately from the relief funds, while smaller hospitals struggle to stay afloat as they await aid, Reuters reported on Tuesday. The latest funding would include hospitals that did not receive aid from the government's initial payout of $50 billion, the agency said. “HHS is using funds from Congress, secured by President Trump, to provide new targeted help for America's safety-net providers and clinicians who treat millions of Medicaid beneficiaries,” HHS Secretary Alex Azar said in a statement. HHS has been under media scrutiny for its prior relief fund allocation and the bar has moved higher on the new distributions, wrote Stephens analyst Scott Fidel. Safety net hospitals will receive between $5 million and $50 million, which will be sent directly to the hospitals via direct deposit. The fund distribution would occur this week, according to the agency. Walgreens Partners with VillageMD to Open Primary Care Clinics at Drug Stores (Reuters) - Walgreens Boots Alliance Plc said on Wednesday it had partnered with primary care provider VillageMD to open doctor [FN41] offices attached to its drugstores across the United States, as the pharmacy chain looked to expand its healthcare services. Walgreens would open 500 to 700 physician-led primary care clinics in more than 30 U.S. markets over the next five years, it said in a statement. With this deal, Walgreens increases its focus on creating clinics that meet essential health needs under one roof, as it faces competition from rival CVS Health Corp , which first launched a handful of stores with expanded health services called ‘health hubs' in Houston earlier this year. In June, CVS said it would expand these health services to include nutrition counseling and blood pressure screenings at 1,500 stores by the end of 2021, following through on plans announced during its 2018 acquisition of health insurer Aetna. Walgreens will invest $1 billion in equity and convertible debt in VillageMD over the next three years, including a $250 million equity investment to be completed Wednesday, for a 30% ownership interest in the privately held company. The clinics would accept a wide range of health insurance options, and offer telehealth and at-home visits, it added. Siemens Healthineers Expands into Cancer Care with $16.4 billion Deal for Varian (Reuters) - German health group Siemens Healthineers (SHLG.DE) said on Sunday it was buying Varian Medical Systems Inc (VAR.N) [FN42] of the United States for $16.4 billion in a deal that seeks to create the global leader in cancer care solutions. The deal is the first major growth move by Healthineers since it was spun off and floated in 2018 by Siemens (SIEGn.DE), which is undertaking a broader shakeup of its conglomerate structure to create room for its business units to do their own deals. Siemens, which will retain control over Healthineers, will provide bridge financing for the deal that will be partly refinanced by a rights issue by the medical technology unit later this year. Under the agreed transaction, Healthineers will acquire all shares in Varian for $177.50 each in cash, representing a 24% premium to the U.S. company's closing price on Friday and 42% above its 30-day weighted average. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -26- “With this takeover, we are significantly strengthening our position - in addition to cardiology and neurology - in the field of oncology,” Chief Financial Officer Jochen Schmitz told Reuters in an interview. CEO Bernd Montag rejected suggestions that Healthineers had overpaid for Varian. “This is an icon in our industry,” he told reporters on a conference call. “If you put it into perspective we achieved a sensible price.” Through the deal to buy Varian, Healthineers acquires the leader in radiation therapy with a market share of over 50%. Healthineers highlighted a long-term rise in the incidence of cancer - from 14 million cases worldwide in 2010 to a forecast 25 million in 2030. That translates into an addressable market of $20 billion that is forecast to grow at an annual rate of between 6% and 10%, the company said in a presentation on the deal. The transaction, first reported by Bloomberg, is subject to approval by Varian shareholders and regulators. It is expected to close in the first half of 2021 and be accretive to Siemens Healthineers' adjusted basic earnings per share within 12 months of that. “With Siemens Healthineers, we will transform care for a greater number of patients worldwide, as well as broaden opportunities for our employees as part of a larger and more global organization,” Varian President and Chief Executive Officer Dow Wilson said. BALANCE SHEET SUPPORT Conglomerate Siemens is effectively putting its balance sheet to work to fund the deal, providing a bridging loan of 15.2 billion euros ($17.9 billion) to Healthineers. The medical technology unit aims to replace 50% of that through a rights issue this year, subject to market conditions. Siemens said in a statement that it expressly welcomed the deal and would raise the money for the bridging loan by issuing bonds. It will not participate in the rights issue, meaning its stake in Healthineers will be diluted to about 72% from 85%. Siemens aims to maintain its A+ debt ratings, which put it firmly in investment grade. Healthineers also pre-released fiscal third quarter results instead of on Monday due to the acquisition announcement. They showed its revenue declined 6.9% year-on-year on a comparable basis to 3.3 billion euros due to the impact of the coronavirus pandemic. Its adjusted operating margin was 13.9%, down 1.2 percentage points from the same period a year earlier, while adjusted basic earnings per share fell 21% to 30 euro cents. The company said it expects revenue to be flat in fiscal 2020 while adjusted basic earnings per share are seen at between 1.54 and 1.62 euros, compared to 1.70 euros last year, assuming the business environment does not deteriorate further. AmerisourceBergen Must Face Derivative Suit Over Contaminated Chemo Drugs (Reuters) - Drug wholesaler AmerisourceBergen Corp and some of its executives and directors must face a shareholder lawsuit over its sale of unsterile chemotherapy drugs and payments of kickbacks to doctors, which have already resulted in $885 million in criminal and [FN43] civil penalties, a Delaware judge has ruled. Vice Chancellor Sam Glasscock of the Delaware Chancery Court said that the 2019 lawsuit was the ‘rare’ derivative case in which shareholders successfully pleaded that it would have been futile to demand that the board sue on their behalf, because board members themselves could be liable. Ned Weinberger of Labaton Sucharow, a lawyer for the shareholders, and Stephen Norman of Potter Anderson & Corroon, a lawyer for the defendants, did not immediately respond to requests for comment. Chesterbrook, Pennsylvania-based AmerisourceBergen is one of the largest U.S. drug distributors. It has recently drawn attention as the sole distributor of the antiviral drug remdesivir, which is used to treat COVID-19, and is expected to be a major distributor of a vaccine for the disease once one is approved. The shareholders' allegations centered on a scheme in which AmerisourceBergen subsidiary, Oncology Supply Pharmacy Services, harvested excess liquid from single-dose vials of drugs used to treat chemotherapy side effects and packaged them in new vials in an unsterile environment. Such ‘overfill’ is included in single-dose vials to allow air bubbles to be removed before injecting the drug, and is not intended for patient use. Even vials with contaminants visible to the naked eye were simply filtered and resold, according to court documents. The company allegedly paid kickbacks to doctors, in the form of rebates, to induce them to buy the repackaged drugs. Oncology Supply Pharmacy's parent entity within AmerisourceBergen pleaded guilty to a criminal charge stemming from the scheme in 2017, agreeing to pay $260 million in fines and forfeitures. AmerisourceBergen reached a $625 million civil settlement with the federal government in 2018. The shareholders, a group of employee benefit plans, accused current and former AmerisourceBergen directors and executives, including chief legal and business officer John Chou, of breach of fiduciary duty for allowing the scheme to occur. The defendants moved to dismiss, arguing the shareholders had not shown it would have been futile to demand that the board sue. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -27- Glasscock, however, said the shareholders had cleared the bar of alleging that the directors themselves would be liable. 'It is true that directors are not omniscient, that their eyes cannot be on every sparrow, and that not every failure of oversight is the result of bad faith,' he wrote. ‘Here, however, (AmerisourceBergen) operated a criminal enterprise. The directors ignored such red flags as did exist, and, in addition, permitted a woefully inadequate reporting system with respect to the business line in which (Oncology Supply Pharmacy Services) operated.’ The case is Teamsters Local 443 Health Services & Insurance Plan et al v. Chou et al, Court of Chancery of the State of Delaware, No. 2019-0816. Becton Dickinson Reaches $60 million Settlement Over Pelvic Mesh Devices (Reuters) - Becton Dickinson and Co agreed to pay $60 million to resolve allegations by the attorneys general of 48 U.S. states and [FN44] Washington D.C. that its CR Bard unit concealed the risks of its now-discontinued transvaginal pelvic mesh devices. In related court papers, New York Attorney General Letitia James said CR Bard misrepresented or failed to disclose risks associated with the devices, including chronic pain, vaginal scarring, pain during intercourse, infection and inflammation. The devices contained synthetic, multi-strand, knitted, or woven mesh intended to be implanted in the pelvic floor to treat stress urinary incontinence or pelvic organ prolapse, which are both common, non-life-threatening conditions. The U.S. Food and Drug Administration over several years issued several notices about the devices' safety, and in 2016 reclassified transvaginal pelvic organ prolapse devices as “high risk.” CR Bard stopped selling the devices in the United States in 2016, one year before it was acquired by Becton Dickinson for about $25 billion. “While CR Bard was putting income before the health of customers in need of care, women were put in danger,” James said in a statement. Becton Dickinson is based in Franklin Lakes, New Jersey. The company said it settled to avoid the time and expense of further litigation, has fully reserved for the payout, and complies with all laws governing its medical products. According to a regulatory filing, Becton Dickinson was defending against approximately 575 product liability claims involving its pelvic mesh devices as of June 30. Cardinal Health, AmerisourceBergen Book Billions in Opioid Settlement-related Charges (Reuters) - Drug distributors AmerisourceBergen Corp and Cardinal Health Inc on Thursday reported $7.62 billion in new charges [FN45] between them related to talks to resolve thousands of lawsuits alleging they helped fuel the U.S. opioid epidemic. The news came after rival McKesson Corp on Tuesday disclosed it and the other two distributors could be expected to pay up to $21 billion over 18 years under a new settlement proposal by state attorneys general. AmerisourceBergen recorded a $6.6 billion charged related to the litigation. Cardinal said it took a pre-tax charge of $1.02 billion, which was on top of a $5.63 billion charge it incurred last year following an earlier settlement proposal. The three drug distributors in October 2019 proposed paying a combined total of $18 billion to resolve the roughly 3,200 lawsuits, with drugmaker Johnson & Johnson paying another $4 billion. That proposal, part of a settlement framework negotiated with four state attorneys general, met resistance from lawyers for local governments and several states, leading to further talks. J&J said last month it would now pay $5 billion. 'We take comfort from our belief that settlement funds will be used in support of initiatives to combat the opioid epidemic, to increasing rehabilitation, mental health and other important efforts,' AmerisourceBergen CEO Steven Collis told analysts. The lawsuits, largely filed by states, counties and cities, seek to hold the companies responsible for an opioid addiction epidemic that according to U.S. government data resulted in 450,000 overdose deaths from 1999 to 2018. The lawsuits accuse drugmakers of deceptively marketing opioids and distributors of ignoring red flags indicating the prescription painkillers were being diverted for improper uses. They deny wrongdoing. Paul Hanly, a lawyer for many local governments, said the plaintiffs' executive committee that is steering the federal opioid lawsuits ‘fully supports' the proposed settlement. V. HEALTHCARE FRAUD Sanofi to Pay $11.9 million to Resolve U.S. Drug Kickback Probe (Reuters) - Sanofi SA has agreed to pay nearly $11.9 million to resolve allegations that it used a charity that helps Medicare patients [FN46] cover out-of-pocket drug costs as a way to pay kickbacks aimed at encouraging the use of a high-priced multiple sclerosis drug. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -28- The U.S. Justice Department on Friday said Sanofi was the latest company to settle claims stemming from an industry-wide probe of drugmakers' financial support of patient assistance charities. Sanofi did not admit wrongdoing as part of the settlement. Justice Department Asks for Coronavirus “Informants' (Reuters) - The US Justice Department on Monday urged people who know of price-fixing, bid-rigging or other illegal moves to profit off [FN47] coronavirus fears to contact government officials. A task force aimed at stopping collusion in government procurement is on “high alert,” the agency said in a statement. ”The Department of Justice stands ready to make sure that bad actors do not take advantage of emergency response efforts, healthcare providers, or the American people during this crucial time,” said Attorney General William Barr. More than 110,000 people have been infected in 105 countries and territories, and 3,800 have died, the vast majority in mainland China, according to a Reuters tally. A slowing in travel caused by the fast-spreading disease was behind an oil price crash on Monday. Washington State Nursing Home on Lockdown after Two Cases of Coronavirus Found; Two Other Cases Confirmed (Reuters) - A nursing home near Seattle is locked down after a resident and a worker were found to have the coronavirus, officials at [FN48] the home said, and two other cases in the area were confirmed on Sunday. Officials with King County Public Health said the two latest cases involved men in their 60s with underlying medical issues. Both were listed in critical condition, one at Valley Medical Center, and the other at Virginia Mason Medical Center. Separately, officials at the Life Care Center of Kirkland said in a statement late on Saturday that it was not accepting new patients or allowing visitors, family or vendors into the facility while officials focus on the health of the current residents and staff. The two cases, announced on Saturday by Washington state officials, involved a worker who is in her 40s and in satisfactory condition and a 70-year-old woman who lived there and is in serious condition. State officials said an additional 27 residents of the nursing home and 25 staff members were reporting symptoms of the virus, which can be similar to that of the common flu. “Concerned family members or responsible parties may call our facility,” the statement said. “The facility is currently placing a hold on admissions as well to fully focus on our current residents and associates.” A representative for the nursing home could not be reached by Reuters on Sunday for further comment. The nursing home said members of its corporate clinical team were on site to provide assistance and that the home was in contact with the U.S. Centers for Disease Control and Prevention and the Washington Health Department. On Saturday, officials said a Washington state man in his 50s with underlying health issues became the United States' first fatality from the coronavirus. The patient, who was chronically ill before contracting COVID-19, died at EvergreenHealth Hospital in Kirkland, near Seattle, and officials are unsure how he was exposed to the virus, said Jeffrey Duchin, head of the Washington state Health Department's communicable disease unit. The fast-spreading virus has infected around 83,000 people in more than 50 countries, with about 70 cases in the United States. U.S. Says Website Offered Phony Coronavirus Vaccines (Reuters) - The U.S. Justice Department on Sunday said it cracked down on a website that was fraudulently offering to sell vaccines for [FN49] warding off the deadly coronavirus. The department said the case marked its first action to fight fraud related to the coronavirus outbreak, which has killed more than 400 Americans and disrupted the lives of millions across the country. The coronavirus causes the respiratory illness COVID-19. The website claimed to offer access to World Health Organization vaccine kits for a shipping charge of $4.95. “In fact, there are currently no legitimate COVID-19 vaccines and the WHO is not distributing any such vaccine,” the Justice Department said in a statement. At the department's request, U.S. District Judge Robert Pitman issued a temporary restraining order requiring that public access to the website be blocked, the department said. U.S. States Accuse 26 Drugmakers of Generic Drug Price Fixing in Sweeping Lawsuit (Reuters) - Twenty-six drug manufacturers were sued on Wednesday by the attorneys general of most U.S. states and several [FN50] territories, which accused them of conspiring to reduce competition and drive up generic drug prices. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -29- The lawsuit accused Novartis' Sandoz unit, Teva Pharmaceuticals' Actavis unit, Mylan, Pfizer Inc and other drugmakers of conspiring to rig the market between 2009 and 2016 for more than 80 drugs. Attorneys general from 46 states, the District of Columbia and four U.S. territories said the defendants prioritized profit over the public interest, depriving millions of consumers of lower prices for needed medication. Ten executives, including many sales and marketing directors, are also defendants in the 543-page complaint filed in a federal court in Connecticut. Novartis spokesman Eric Althoff said the instances of misconduct related to its $195 million settlement with the U.S. Department of Justice in March “do not support the vast, systemic conspiracy the states allege.” The settlement resolved allegations Novartis fixed generic drug prices between 2013 and 2015. Pfizer spokeswoman Sally Beatty said the drugmaker did not believe it engaged in unlawful conduct. Mylan spokeswoman Lauren Kashtan said her company had found no evidence of price fixing. Teva did not immediately respond to requests for comment. The lawsuit follows similar cases over generic drug prices brought in 2016 and 2019, and which remain pending. Brand names of some of the drugs at issue include glaucoma drug Xalatan, acne drug Differin, anti-seizure medicine Dilantin, anti- fungal medicine Lotrimin AF Cream, and Ritalin for attention deficit disorder. “Through phone calls, text messages, emails, corporate conventions, and cozy dinner parties, generic pharmaceutical executives were in constant communication, colluding to fix prices and restrain competition,” Connecticut Attorney General William Tong said. “They took steps to evade accountability.” VI. DATA BREACHES U.S. Health Department Hit by a Cyberattack - Bloomberg (Reuters) - The U.S. Department of Health and Human Services (HHS), a key part of the federal response to the fast-spreading [FN51] coronavirus outbreak, was hit by a cyberattack on Sunday night, a Bloomberg reporter said on Twitter. The reporter, in a tweet on Monday, cited unnamed sources who said there were multiple hacking incidents that appeared aimed at slowing down the department's systems. Representatives for HHS could not be immediately reached for comment on the report. Magellan Health Says Targeted by Ransomware Attack (Reuters) - Pharmacy benefits manager Magellan Health Inc said on Friday it was the target of a ransomware attack in which customer [FN52] information such as physical addresses and health insurance account details may have been affected. The company, which discovered the attack on April 11, said it had no evidence that any personal data had been misused. Rhode Island Health System Agrees to Pay $1 million Over Breach Lifespan Health System Affiliated Covered Entity (Lifespan ACE), a non-profit health system based in Rhode Island, has agreed to pay $1,040,000 to the Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services (HHS) and to implement a corrective action plan to settle potential violations of the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules related to the theft of an unencrypted laptop. Lifespan ACE includes many healthcare provider affiliates in Rhode Island, and has designated itself as a HIPAA affiliated covered entity. HHS announced the settlement on July 27, 2020. On April 21, 2017, Lifespan Corporation, the parent company and business associate of Lifespan ACE, filed a breach report with OCR concerning the theft of an affiliated hospital employee's laptop containing electronic protected health information (ePHI) including: patients' names, medical record numbers, demographic information, and medication information. The breach affected 20,431 individuals. OCR's investigation determined that there was systemic noncompliance with the HIPAA Rules including a failure to encrypt ePHI on laptops after Lifespan ACE determined it was reasonable and appropriate to do so. OCR also uncovered a lack of device and media controls, and a failure to have a business associate agreement in place with the Lifespan Corporation. “Laptops, cellphones, and other mobile devices are stolen every day, that's the hard reality. Covered entities can best protect their patients' data by encrypting mobile devices to thwart identity thieves,” said Roger Severino, OCR Director. In addition to the monetary settlement, Lifespan has agreed to a corrective action plan that includes two years of monitoring. VII. TRUMP ADMINISTRATION Trump Wants to End Requiring U.S. Religious Welfare Groups to Tell Clients of Options © 2021 Thomson Reuters. No claim to original U.S. Government Works. -30- (Reuters) - Religious social service providers receiving funds from the U.S. government would no longer have to tell their clients about [FN53] other, possibly secular organizations that offer similar help under changes the Trump administration proposed on Thursday. Conservative Christians, a key bloc in President Donald Trump's Republican party, have pushed to lift the requirement that religiously affiliated service groups must tell clients about alternative providers if they receive federal money. They also must post information on referrals and track the referrals they make. The requirement has been a flashpoint in the national fight over abortion. Supporters say it ensures women understand the availability of safe and legal abortions in their areas. Some Christian-affiliated pregnancy centers opposed to abortion say that supplying information about abortion providers compromises their beliefs. The Trump administration argues that the requirement puts an undue burden on groups linked to churches and treats them unfairly, presuming that because of their religious affiliation they will provide inferior, ideologically-driven care or lie to clients. It says there is no similar requirement for secular organizations. To end the requirement, the administration is pursuing a rule changes for the government's health and labor agencies. With national headlines on Thursday focused on Trump's impeachment trial, the White House dedicated the day to actions it said would protect religious freedom, capped by an afternoon event on prayer in public schools. But unraveling the alternative provider requirement is likely to receive the most attention. It is also sure to anger advocates for patients', women's, civil rights. They say that individuals should be able to receive treatment from government-funded groups aligned to their personal beliefs or that do not have a religious affiliation. They also say people should have clear and accurate information about all the taxpayer-backed options for assistance in their area, and that the government needs to ensure that in providing money to non-profits it is not funding Christian proselytizing. In Political Speech to Congress, Trump Pokes at Democrats' Divide on Healthcare (Reuters ) - Democrats campaigned on healthcare when they won control of the U.S. House of Representatives in 2018. President [FN54] Donald Trump made plain on Tuesday that he would try to use the issue to his advantage in the 2020 presidential election. In the annual State of the Union speech, Trump promised to lower health costs for Americans and slammed Democratic plans as a ‘socialist takeover’ that would bankrupt the country and cut benefits by providing care to illegal immigrants. 'I want you to know: We will never let socialism destroy American healthcare,' he said. The line drew loud applause from Trump's fellow Republicans in the House chamber. Without naming them, Trump was referring to ambitious plans outlined by Democratic presidential candidates Bernie Sanders and Elizabeth Warren that would replace private health insurance with a government-run plan that covers all Americans, based on the Medicare program for older Americans. hose proposals have divided Democrats seeking their party's presidential nomination to face Trump in the November election and have highlighted differences between the progressive and moderate sides of the party in an election year. Candidates such as former South Bend, Indiana, Mayor, Pete Buttigieg, former Vice President Joe Biden and Senator Amy Klobuchar favor building on former President Barack Obama's signature Affordable Care Act, popularly known as Obamacare, rather than dramatically rebuilding the system. Trump signaled his intent to take advantage of the divide among Democrats and usurp their appeal on an issue that resonates with millions of Americans. He accused Democrats of funding programs that would pay for healthcare for immigrants in the country illegally, at the expense of older Americans. 'If you believe that we should defend American patients and American seniors, then stand with me and pass legislation to prohibit free government healthcare for illegal aliens,' he said. Democrats do not intend to cede the issue to Trump. When Trump said he would have a plan to lower drug costs, Democrats in the chamber responded by chanting: ‘H.R. 3,’ referring to their own cost-cutting legislation. Democratic lawmakers invited some 80 doctors, patients and advocates to the State of the Union address as guests to highlight Trump's efforts to dismantle Obamacare. Trump's Republicans tried unsuccessfully to repeal Obamacare in 2017 and his Justice Department is now backing an effort to dismantle the law in court. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -31- 'Democrats are trying to make your healthcare better,' said Michigan Governor Gretchen Whitmer, who gave the Democratic Party's televised response. ‘Republicans in Washington are trying to take it away.’ CMS Announces Relief for Clinicians, Providers, Hospitals and Facilities Participating in Quality Reporting Programs in Response to COVID-19 On March 22, the Centers for Medicare & Medicaid Services (CMS) announced relief for the clinicians, providers, and facilities participating in Medicare quality reporting programs including the 1.2 million clinicians in the Quality Payment Program and on the front lines of America's fight against the 2019 Novel Coronavirus (COVID-19). Specifically, CMS announced it is granting exceptions from reporting requirements and extensions for clinicians and providers participating in Medicare quality reporting programs with respect to upcoming measure reporting and data submission for those programs. The action comes as part of the Trump Administration's response to 2019 Novel Coronavirus (COVID-19). MIPS eligible clinicians who have not submitted any MIPS data by April 30, 2020 will qualify for the automatic extreme and uncontrollable circumstances policy and will receive a neutral payment adjustment for the 2021 MIPS payment year. CMS is evaluating options for providing relief around participation and data submission for 2020. If Q4 is submitted, it will be used to calculate the 2019 performance and payment (where appropriate). If data for Q4 is unable to be submitted, the 2019 performance will be calculated based on data from January 1, 2019 ? September 30, 2019 (Q1-Q3) and available data. CMS will not count data from January 1, 2020 through June 30, 2020 (Q1-Q2) for performance or payment programs. Data does not need to be submitted to CMS for this time period. If Q4 is submitted, it will be used to calculate the 2019 performance and payment (where appropriate). For those programs with data submission deadlines in April and May 2020, submission of those data will be optional, based on the facility's choice to report. In addition, no data reflecting services provided January 1, 2020 through June 30, 2020 will be used in CMS's calculations for the Medicare quality reporting and value-based purchasing programs. This is being done to reduce the data collection and reporting burden on providers responding to the COVID-19 pandemic. CMS recognizes that quality measure data collection and reporting for services furnished during this time period may not be reflective of their true level of performance on measures such as cost, readmissions and patient experience during this time of emergency and seeks to hold organizations harmless for not submitting data during this period. CMS will continue monitoring the developing COVID-19 situation and assess options to bring additional relief to clinicians, facilities, and their staff so they can focus on caring for patients. CMS Announces Findings at Kirkland Nursing Home and New Targeted Plan for Healthcare Facility Inspections in light of COVID-19 On March 23, the Centers for Medicare & Medicaid Services (CMS) is announcing the preliminary results of a recent inspection of the Life Care Center nursing home in Kirkland, Washington ? the epicenter of the 2019 Novel Coronavirus (COVID-19) outbreak in that state. The inspection, which the Agency conducted with the Washington Department of Social & Health Services, has helped inform CMS's national strategy for keeping patients safe in nursing homes and other healthcare facilities. In keeping with the Trump Administration's aggressive moves to combat further spread of COVID-19, CMS is also utilizing flexibilities allowed by President Trump's Emergency Declaration to announce an enhanced, focused inspection process, informed in part by the Agency's experiences on the ground in Kirkland, and close coordination and input from the Centers for Disease Control and Prevention (CDC). This focused inspection process will be provided to all inspectors and facilities, and used on a national scale. Critically, this focused inspection process includes a self-assessment tool for providers to employ. This new focused inspection process includes existing components of CMS's infection control inspection process, but adds actions based on the latest guidance from the CDC and CMS. CMS and state inspectors will use this new process to target and assess if certain facilities are prepared to meet CMS's expectations for preventing the spread of COVID-19. When gaps are identified, facilities will be required to take corrective actions to close the gaps. For those facilities that aren't initially inspected, CMS urges them to use this as a tool to self-assess their own ability to prevent the spread of COVID-19. CMS also encourages residents and families to join the Agency in being proactive about nursing home safety. Residents and families should ask facility staff how the facility performed on its self-assessment. COVID-19 has already begun to hit our most vulnerable citizens hard. On March 16, 2020, CMS and the Washington Department of Social & Health Services State Survey Agency concluded an inspection of the nursing home facility at the epicenter of the COVID-19 situation in Washington. Two federal surveyors conducted the onsite inspection, including observations of patient care, while Washington State staff assisted offsite by reviewing documents. The inspectors found three “Immediate Jeopardy” situations, which are situations in which a patient's safety is placed in imminent danger. Specifically, the facility's failure to rapidly identify and manage ill residents, notify the Washington Department of Health about the increasing rate of respiratory infection among residents, and failure to possess a sufficient backup plan following the absence of the facility's primary clinician, who fell ill. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -32- The Washington nursing home is far from the only nursing home affected by COVID-19. According to CDC data shared with CMS, 147 nursing homes across 27 states have at least one resident with COVID-19. Although 147 is a small fraction of the over 15,000 nursing homes across the country, given the disproportionate effect on our nation's older population, this is a cause for concern. Therefore, CMS and CDC are collaborating in real-time about nursing homes with active cases of COVID-19 and CMS is using this information to identify areas the virus is likely to strike next, and target inspections accordingly. This targeting will be in full effect beginning immediately. This announcement builds on previous CMS guidance issued on March 4, 2020, which directed statutorily required inspections to focus on infection control and Immediate Jeopardy. CMS is now temporarily postponing routine inspections, to focus solely on infection control and Immediate Jeopardy. This action ensures that all CMS resources are focused on combatting COVID-19 and allows clinicians to do the same, focus on patient safety, not routine paperwork. In this effort, CMS is not seeking to be punitive, but rather to respond to urgent issues while proactively ensuring providers are compliant with federal health and safety standards. Under CMS' focused survey process, only the following types of federal inspections will be prioritized and conducted over the next few weeks: Complaint inspections: State survey agencies will continue to conduct inspections related to complaints and facility-reported incidents that are triaged at the Immediate Jeopardy level. Inspectors will use a streamlined Infection Control review tool, regardless of the Immediate Jeopardy allegation. Targeted Infection Control inspections: Federal and state inspectors will conduct targeted infection control inspections of providers identified through CMS collaboration with the Centers for Disease Control and Prevention (CDC). These inspectors will use a streamlined targeted review checklist to minimize the impact on provider activities, while ensuring providers are implementing actions to protect health and safety. This will consist of both onsite and offsite inspections. Self-Assessments: The Infection Control checklist referenced above will also be shared with providers and suppliers, to allow for self- assessment of their Infection Control plans. This may be the best solution in some cases when there is a lack of personal protective equipment or state surveyors available. During this time, CMS will prioritize Immediate Jeopardy investigations over recertification surveys for Clinical Laboratory Improvement Amendment (CLIA) laboratories. CMS will use enforcement discretion, unless Immediate Jeopardy situations arise. Finally, initial inspections will be conducted in accordance with current guidance and prioritization. The new focused inspection tool for inspectors ? one for long-term care and one for other providers ?operationalize the latest guidance from CMS and CDC to control and prevent the transmission of the virus. During the three-week period during which inspectors will conduct only the immediate jeopardy inspections, CMS will work with providers and inspectors to provide additional training related to infection control. CMS Announces Expansion of Accelerated and Advance Payments for Medicare Providers (Regulatory Intelligence) - The U.S. Centers for Medicare & Medicaid Services (CMS) has expanded its accelerated and advance payment program for Medicare participating healthcare providers and suppliers. This move was authorized under the CARES Act passed by Congress last week and is intended to help ensure providers and suppliers have the resources necessary to operate during [FN55] the COVID-19 crisis by quickly addressing cash flow issues. The COVID-19 crisis disrupting the healthcare system in unprecedented ways not only because of the increased demand for services in response to the crisis but also because providers have been asked to delay non-essential surgeries and procedures, are dealing with healthcare staffing shortages as well as the facing disruptions to their billing processes. CMS made nearly $415 billion in direct payments to Medicare providers in 2019 under its Fee for Service (FFS) program. The accelerated and advance Medicare payments, announced March 28, will provide emergency funding to providers based on historical payments when there has been a disruption in claims submission and/or claims processing. Although typically offered during natural disasters to speed payments to healthcare providers in the disaster areas, CMS is now expanding the program to include all Medicare providers in the country during the COVID-19 public health emergency. Hospitals, doctors, durable medical equipment suppliers and other Medicare Part A and Part B providers and suppliers can request the payments under the program. Most providers and suppliers can request up to 100% of their Medicare payment for a three-month period. Acute care hospitals, children's hospitals and certain cancer hospitals can request up to 100% of their Medicare payment for a six-month period. Critical access hospitals can request up to 125% of their payment for a six-month period. To qualify for accelerated or advance payments, the healthcare provider or supplier must: Have billed Medicare for claims within 180 days immediately prior to the date of the signature on the request form, Not be in bankruptcy, © 2021 Thomson Reuters. No claim to original U.S. Government Works. -33- Not be under active medical review or program integrity investigation, and Not have any outstanding delinquent Medicare overpayments. Medicare Administrative Contractors (MACs) will accept and process the Accelerated/Advance Payment Requests beginning immediately. CMS anticipates that payments will be issued within seven days of the request. The CMS Fact Sheet also includes guidance on repayment, recoupment and reconciliation of overpayments after the crisis. New Requirements for Hospital Reporting of COVID-19 Infection Rates in the U.S. (Regulatory Intelligence) - U.S. Vice President Mike Pence is asking hospital administrators to report their COVID-19 testing data to [FN56] federal agencies, in addition to their state-level reporting. Pence said in a letter making the request that accurate reporting is necessary to ensure appropriate supplies and support from the Centers for Disease Control and Prevention (CDC) and FEMA during the coronavirus public health crisis. The CDC was reporting 163,539 COVID-19 cases in the U.S. with 2,860 deaths as of March 31. The CDC site updates once each day at 4 pm. Other sources are reporting higher numbers. For example, Reuters reports 187,625 COVID-19 cases in the U.S. and 3,883 deaths for March 31. These numbers highlight the challenges of assembling accurate data, with reporting lapses and lag times for coronavirus cases. Pence requested that all hospitals report all data on COVID-19 testing performed in academic, university and hospital ‘in-house’ laboratories to the National Healthcare Safety Network (NHSN) by 5:00 p.m. Eastern time via email. Testing results from certain commercial labs does not need to be reported. The NHSN is a part of the CDC. In addition to testing results data, the NHSN COVID-19 Module allows hospitals to report daily counts of patients with suspected and confirmed COVID-19 diagnoses and the current use and availability of hospital inpatient and ICU beds and mechanical ventilators. State and local health departments will have immediate access to COVID-19 data for hospitals in their jurisdictions through NHSN. Pence's letter comes in response to reports that some hospitals are only reporting new positive test results but are not reporting negative results. Many hospitals are not currently reporting on patient bed or ventilator availability. Having a more complete understanding of the disease spread and the available supplies would give the federal government better information in responding appropriately to the resource needs in each area. Governors in hard hit states have complained about the federal government's failure to distribute ventilators and other critical supplies from the national stockpile. Trump Administration Announces Expanded Coverage for Essential Diagnostic Services Amid COVID-19 Public Health Emergency On April 11, the Centers for Medicare & Medicaid Services (CMS) and the Departments of Labor and the Treasury, issued guidance today to ensure Americans with private health insurance have coverage of 2019 Novel Coronavirus (COVID-19) diagnostic testing and certain other related services, including antibody testing, at no cost. As part of the effort to slow the spread of the virus, this guidance removes financial barriers for individuals to receive necessary COVID-19 tests and health services, as well as encourage the use of antibody testing that may help to enable health care workers and other Americans to get back to work more quickly. In March, representatives of major health insurance companies met with President Trump, where they voluntarily committed to covering COVID-19 testing without cost sharing such as copays and coinsurance. Building on this commitment, today's guidance implements the recently enacted Families First Coronavirus Response Act (FFCRA) and Coronavirus Aid, Relief, and Economic Security (CARES) Act, which require that private health issuers and employer group health plans cover COVID-19 testing and certain related items and services furnished during the COVID-19 pandemic, with no out-of-pocket expenses. Specifically, the announcement implements the requirement for group health plans and group and individual health insurance to cover both diagnostic testing and certain related items and services provided during a medical visit with no cost sharing. This includes urgent care visits, emergency room visits, and in-person or telehealth visits to the doctor's office that result in an order for or administration of a COVID-19 test. Covered COVID-19 tests include all FDA-authorized COVID-19 diagnostic tests, COVID-19 diagnostic tests that developers request authorization for on an emergency basis, and COVID-19 diagnostic tests developed in and authorized by states. It also ensures that COVID-19 antibody testing will also be covered. Once broadly available, a COVID-19 antibody test could become a key element in fighting the pandemic by providing a more accurate measure of how many people have been infected and potentially enabling individuals to get back to work more quickly. To see the guidance, visit: https://www.cms.gov/files/document/FFCRA-Part-42-FAQs.pdf. U.S. Secures 300 million Doses of Potential AstraZeneca COVID-19 Vaccine (Reuters) - The United States has secured almost a third of the first 1 billion doses planned for AstraZeneca's experimental COVID-19 [FN57] vaccine by pledging up to $1.2 billion, as world powers scramble for medicines to get their economies back to work. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -34- While not yet proven to be effective against the coronavirus, vaccines are seen by world leaders as the only real way to restart their stalled economies, and even to get an edge over global competitors. After President Donald Trump demanded a vaccine, the U.S. Department of Health and Human Services (HHS) agreed to provide up to $1.2 billion to accelerate British drugmaker AstraZeneca's vaccine development and secure 300 million doses for the United States. “This contract with AstraZeneca is a major milestone in Operation Warp Speed's work toward a safe, effective, widely available vaccine by 2021,” U.S. Health Secretary Alex Azar said. The first doses could be available in the United States as early as October, according to a statement from HHS. The vaccine, previously known as ChAdOx1 nCoV-19 and now as AZD1222, was developed by the University of Oxford and licensed to AstraZeneca. Immunity to the new coronavirus is uncertain and so the use of vaccines is unclear. The U.S. deal allows a late-stage, or Phase III, clinical trial of the vaccine with 30,000 people in the United States. Cambridge, England-based AstraZeneca said it had concluded agreements for at least 400 million doses of the vaccine and secured manufacturing capacity for 1 billion doses, with first deliveries due to begin in September. Now the most valuable company on Britain's blue-chip FTSE 100 Index, AstraZeneca has already agreed to deliver 100 million doses to people in Britain, with 30 million as soon as September. Ministers have promised Britain will get first access to the vaccine. VACCINE SCRAMBLE With leaders across the world surveying some of the worst economic destruction since at least World War Two and the deaths of more than 327,000 people, many are scrambling for a vaccine. The U.S. government has struck deals to support vaccine development with Johnson & Johnson (J&J), Moderna and Sanofi, sparking fears the richest countries will be able to protect their citizens first. Sanofi's chief angered the French government earlier this month when he said vaccine doses produced in the United States could go to U.S. patients first, given the country had supported the research financially. “We have a lot of things happening on the vaccine front or the therapeutic front,” Trump told reporters at the White House when asked about the AstraZenca announcement. “You're going to have a lot of big announcements over the next week or two” on therapeutics. Trump, during a Thursday visit to a Ford Motor Co plant in Michigan, said the U.S. military is “in gear so we can give out 150 to 250 million shots quickly.” AstraZeneca said it was in talks with governments and partners around the world - such as the Serum Institute of India - to increase access and production and is speaking to various organizations on fair allocation and distribution. “We would like to thank the U.S. and UK governments for their substantial support to accelerate the development and production of the vaccine,” AstraZeneca Chief Executive Pascal Soriot said. The Serum Institute of India, the world's largest maker of vaccines by volume, has dedicated one of its facilities with a capacity to produce up to 400 million doses annually to producing the Oxford vaccine. “We are scaling up on a conservative basis of about 4 to 5 million doses a month to begin with,” Chief Executive Adar Poonawalla told Reuters, adding the company was in discussions with AstraZeneca. COVID-19 PROTECTION? A Phase I/II clinical trial of AZD1222 began last month to assess safety, immunogenicity and efficacy in over 1,000 healthy volunteers aged 18 to 55 across several trial centers in southern England. Data from the trial is expected shortly. There are currently no approved treatments or vaccines for COVID-19. U.S. Health Agency Rolls Back ACA Protections for Transgender Patients (Regulatory Intelligence) - The U.S. Department of Health and Human Services (HHS) announced final regulations under Section 1557 [FN58] of the Affordable Care Act (ACA) that will eliminate protections for transgender individuals under federal law. In Section 1557 of the ACA, Congress prohibited covered health programs or activities from discriminating on the basis of race, color, national origin, disability, age and sex. An Obama administration regulation had clarified sex discrimination to include termination of pregnancy and gender identity. The regulation defined gender identity as ‘an individual's internal sense of gender, which may be male, female, neither, or a combination of male and female.’ The new interpretation from President Donald Trump's administration returns to a definition of sex as ‘male or female and as determined by biology.’ HHS further states that the 2016 rule did not recognize sexual orientation as a protected category under the ACA and that it would leave that judgment undisturbed. “HHS respects the dignity of every human being, and as we have shown in our response to the pandemic, we vigorously protect and enforce the civil rights of all to the fullest extent permitted by our laws as passed by Congress. We are unwavering in our commitment © 2021 Thomson Reuters. No claim to original U.S. Government Works. -35- to enforcing civil rights in healthcare,” Roger Severino, Director of the Office for Civil Rights at HHS, said in the announcement for the rule. Severino was previously chief operations officer and legal counsel for the Becket Fund for Religious Liberty, according to his HHS profile. The Becket Fund has represented parties opposing the ACA and filed briefs in support of efforts to repeal the ACA. Beyond the changes to Section 1557, HHS notes that 10 provisions in CMS regulations have ‘in recent years' included language that prohibits discrimination on the basis of sexual orientation and gender identity that HHS is amending to delete those provisions. Although citing prior appellate court decisions that suspended enforcement of the 2016 regulation, HHS also states it ‘believes that various policy considerations support this action.’ Among these considerations is that the provisions would have ‘potentially burdened [providers] consciences.’ HHS asserts that under the new rule each state ‘may balance for itself the various sensitive considerations relating to medical judgment and gender identity’ within the limits of federal law as read according to their ‘plain meaning.’ In response to concerns that the new regulations would allow healthcare providers to discriminate against LGBTQ people, HHS responded that the underlying statutes do not prohibit discrimination on the basis of sexual orientation or gender identity. The new rule is scheduled for publication in the Federal Register on June 19 and will be effective 60 days after its publication. Washington Says New COVID-19 Data Site Is Better than CDC Program it Replaced (Reuters) - U.S. officials defended a move to take collection of hospital data on COVID-19 cases away from the U.S. Centers for [FN59] Disease Control and Prevention, saying a new data system launched on Monday is more expansive and robust. Senior Department Health and Human Services officials told a briefing that the new HHS program has data from 4,500 hospitals while the CDC system had data from 3,000 hospitals. The group said that the program uses the same methods that the CDC used to make the government's COVID-19 projections. Last week, the health agency asked states to start reporting hospitalization data to the new system instead of the longstanding system the CDC used. News reports suggested the Trump administration move was aimed at bypassing the CDC, speculation the CDC director rejected last week. CDC head Robert Redfield said then that the new reporting process was streamlined and modernized, allowing the United States to quickly expand the types of data hospitals are collecting. The data was taken down from the CDC site late last week prompting concerns about transparency with the public. The data was reinstated on the CDC site before the week ended, and the new data system's dashboard launched on Monday. CMS Announces New Resources to Protect Nursing Home Residents (Regulatory Intelligence) - The U.S. Centers for Medicare & Medicaid Services (CMS) announced on Wednesday several new initiatives [FN60] designed to protect nursing home residents. 'As caseloads continue to increase in areas around the country, it has never been more important that nursing homes have what they need to maintain a sturdy defense against the virus. These measures will help them do exactly that,' CMS Seema Verma said in a prepared release. The U.S. Department of Health and Human Services (HHS) will commit $5 billion of the provider relief fund authorized under the CARES Act to Medicare-certified long-term care facilities and state veterans' homes to build nursing home skills, enhance their response to COVID-19 and enhance infection control. Nursing homes must participate in online, on-demand nursing home COVID-19 training that was also announced in order to qualify for the funding. This funding is in addition to the previously announced $4.9 billion to offset revenue losses and assist nursing homes with increased costs due to COVID-19. CMS also announced that it will require nursing homes in states with a 5% coronavirus positivity rate or greater to test all nursing home staff each week. This is in addition to the 15,000 rapid point-of-care diagnostic testing devices HHS announced it would be delivering to nursing homes over the next few months. CMS also described its recently deployed federal task force teams that are providing onsite technical assistance and education to nursing homes that are experiencing outbreaks to help reduce the transmission and spread of COVID-19 in the facilities. There were 18 deployments to nursing homes in 6 states last week. Coronavirus cases increased 11% in long-term care facilities in 35 states during the two-week period ending on July 10, according to a newly published Kaiser Family Foundation brief. In 11 hot-spot states, the number of cases increased by 18% during the same period. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -36- Through July 9, long-term care facility deaths represented 44% of deaths in the 42 states where Kaiser could confirm data. In some states, where overall death rates remain relatively low, nursing home deaths represent more than 70% of the total state deaths. U.S. Orthopedic Clinic Agrees to Pay $1.5 million to Settle HIPAA Violations (Regulatory Intelligence) - Athens Orthopedic Clinic PA has agreed to pay $1.5 million to U.S. Department of Health and Human Services and to adopt a corrective action plan to settle alleged violations of the Health Insurance Portability and Accountability Act [FN61] (HIPAA) Privacy and Security Rules that resulting from a data breach effecting more than 208,000 individuals. On June 26, 2016, a journalist from www.databreaches.net notified Athens Orthopedic that a database of their patient records appeared to be posted online for sale. Two days later, a hacker group, The Dark Overlord, contacted the clinic and demanded money in exchange for a complete copy of the database it had stolen without sale or further disclosure. Dark Overlord had used a vendor's credentials to access Athens Orthopedic's patient records system. Although the clinic terminated the compromised credentials on June 27, 2020, the hacker's continued access was not effectively blocked until July 16, 2016. This clinic reported the data breach to OCR on July 29, 2016. Hacking is the number one source of large health care data breaches. Health care providers that fail to follow the HIPAA Security Rule make their patients' health data a tempting target for hackers,' said HHS Office of Civil Rights Director Roger Severino in a release. Because of the scope of the hacking in the clinic's systems, the protected health information (PHI) from 208,557 individuals was exposed, including patient names, dates of birth, social security numbers, medical procedures, test results, health insurance and payment information. An investigation by the civil rights office into the data breach “discovered longstanding, systemic noncompliance with the HIPAA Privacy and Security Rules by Athens Orthopedic.” In addition to paying $1.5 million, Athens Orthopedic agreed to several corrective actions, including: An accounting of business associates with copies of all business associate agreements. An enterprise-wide analysis of security risks and vulnerabilities for all electronic equipment, data systems, programs and applications controlled, administered, owned or shared by the clinic or its affiliates that involve electronic PHI. Review and revision of its written policies and procedures to comply with the Privacy, Security and Breach notification Rules. Providing additional training to all workforce members on revised policies and procedures. The clinic will also be subject to two years of monitoring by the civil rights office. Athens Orthopedic is located in Georgia. The clinic made no admissions or concessions of liability in the settlement agreement. Suspected Ransomware Attack Keeps Universal Health Systems Shut Down (Regulatory Intelligence) - One of the largest U.S. hospital and healthcare providers reported on Tuesday that its operations remained [FN62] disrupted after an ‘information technology security incident’ that happened two days earlier. Universal Health Systems Inc said that as a result of the attack it had ‘suspended user access to it information technology applications related to operations located in the United States.’ UHS said it had ‘no evidence that patient or employee data was accessed, copied or misused.’ UHS said the attack, which media reports attributed to a malicious ‘ransomware’ computer program, could result in temporary disruptions to its operations. It said it had ‘implemented extensive information technology security protocols and is working diligently with its security partners to restore its information technology operations as quickly as possible.’ Various media outlets are reporting that prior to the system shutdown, UHS employees saw files that had been renamed with the .ryk file extension, which is associated with what is known as Ryuk ransomware. Other employees reported seeing a ransom note on their computers referencing ‘Shadow of the Universe,’ also associated with Ryuk ransomware. Ransomware programs freeze computer systems until their operator pays the attackers, typically in hard-to-trace digital currency. Previously used against financial services firms, Ryuk has recently begun appearing in attacks against other markets, including healthcare. Ryuk ransomware reportedly is used against large organizations because it can be used to demand very high ransoms. Ryuk appears to have been named for a fictional character in a Japanese comic book and cartoon series. Reuters reported that ‘the corporate network remains offline’ on Tuesday, but some UHS hospitals had said that they would resume elective surgeries on Wednesday. © 2021 Thomson Reuters. No claim to original U.S. Government Works. -37- UHS is one of the country's largest providers of hospital and health services with 400 acute care hospitals, behavioral health facilities and ambulatory care centers across the United States, Puerto Rick and the United Kingdom. UHS is based in King of Prussia, Pennsylvania. A Fortune 500 company, UHS has 90,000 employee and services 3.5 million people per year. It reported annual revenue of $11.4 billion for 2019. U.S. Authorities Warn Healthcare Industry of Increasing, ‘Imminent’ Cybercrime Threat (Regulatory Intelligence) - The threat of crippling computer attacks on the U.S. healthcare system is imminent and increasing, U.S. [FN63] health and security authorities warned this week. The warning came in an advisory jointly issued by the federal Cybersecurity and Infrastructure Security Agency (CISA), the Federal Bureau of Investigation (FBI) and the Department of Health and Human Services (HHS). It describes the tactics, techniques and procedures cybercriminals use against targets in the healthcare and public health sector to infect systems with ‘ransomware,’ which freezes computer systems until the targets pay the attackers, who seek financial gain. The advisory was prompted by ‘credible information of an increased an imminent cyber-crime threat to U.S. hospitals and healthcare providers,’ the authorities said. The advisory follows recent high profile ransomware attacks and is intended to ‘provide warning to healthcare providers to ensure that they take timely and reasonable precautions to protect their networks from these threats. Technical threat descriptions The cyber-criminal enterprise behind malicious software TrickBot, which is likely also the creator of BazarLoader ‘malware,’ has continued to develop new functionality and tools that increase the ease, speed and profitability of victimization, according to the advisory. Cyber criminals disseminate loaders - such as TrickBot or BazarLoader - via phishing campaigns that contain either links to malicious websites that host the malware or attachments with the malware. The loaders start the infection chain by distributing the payload, deploy and execute the backdoor from the command and control server and install it onto the target's machine. TrickBot provides its operators with a full suite of tools to conduct myriad illegal cyber activities, including credential harvesting, mail exfiltration, cryptomining, point-of-sale data exfiltration, and the deployment of ransomware, such as Ryuk and Conti, the warning said. Beginning in early 2020, actors believed to be associated with TrickBot began using BazarLoader and BazarBackdoor to infect victim networks, according to the advisory. Such campaigns represent a new technique for cybercriminals to infect and monetize networks and have increasingly led to the deployment of ransomware, including Ryuk. BazarLoader has become one of the most commonly used vectors for ransomware deployment, typically via phishing email that contain the following: Phishing emails are typically delivered by commercial mass email delivery services. Email received by a victim will contain a link to an actor-controlled Google Drive document or other free online file-hosting solutions, typically purporting to be a PDF file. This document usually references a failure to create a preview of the document and contains a link to a URL hosting a malware payload in the form of a misnamed or multiple extension file. Emails can appear as routine, legitimate business correspondence about customer complaints, hiring decision, or other important tasks that require the attention of the recipient. Some email communications have included the recipient's name or employer name in the subject line and/or email body. The advisory also provides details relating to how Ryuk actors use off-the-shelf products to steal system credentials allowing them to read, write and execute permissions. Once the criminals have control of the system, Ryuk encrypts files and attempts to delete all backup files in order to prevent the victim from recovering encrypted files without the decryption program. Ryuk users then tell the victim how much to pay to a specified Bitcoin wallet and is provided a sample decryption of two files. Provider cyberattack mitigation and response The advisory encourages the healthcare and public health sector organizations to maintain business continuity plans to minimize service interruptions. It also recommends they review or establish vulnerability patching plans, security policies, user agreements, and business continuity plans to ensure they address current threats posed by malicious cyber actors. CISA, FBI and HHS do not recommend that providers pay ransoms, saying payment ‘does not guarantee files will be recovered.’ Furthermore, paying ransom may ‘embolden adversaries to target additional organizations, encourage other criminal actors to engage in the distribution of ransomware, and/or fund illicit activities.’ © 2021 Thomson Reuters. No claim to original U.S. Government Works. -38- The advisory strongly recommends that victims of ransomware respond by using the Ransomware Response Checklist in the CISA and MS-ISAC's Joint Ransomware Guide, which contains steps for ‘detection and analysis as well as containment and eradication.’ © Copyright Thomson/West - NETSCAN's Health Policy Tracking Service [FN2] . Linda Carroll, Many in U.S. worry about affording healthcare in retirement, Reuters (Feb. 10, 2020). [FN3] . Antonita Madonna and Melissa D. Berry, U.S. health agencies, industry brace for disruptive spread of coronavirus, Thomson Reuters Regulatory Intelligence (Feb. 26, 2020). [FN4] . Jeff Mason and Stephanie Nebehay, As coronavirus chaos spreads globally, Trump declares U.S. emergency, Reuters (March 12, 2020). [FN5] . Melissa D. Berry, U.S. stimulus bill includes billions of dollars for coronavirus healthcare efforts, Thomson Reuters Regulatory Intelligence (March 26, 2020). [FN6] . Catherine Koppel, Grant McCool, Michael Martina, Brad Brooks and Scott Malone, African-Americans dying of coronavirus at higher rates, preliminary data shows, Reuters (April 8, 2020). [FN7] . Michael Erman, Caroline Humer and Mrinalika Roy, U.S. plans to distribute COVID-19 vaccine immediately after regulators authorize it, Reuters (September 16, 2020) at: https://www.reuters.com/article/us-health-coronavirus-usa-vaccine/u-s-plans-to-distribute-covid-19- vaccine-immediately-after-regulators-authorize-it-idUSKBN2672CU. [FN8] . Melissa D. Berry, U.S. health agency enforcement cases show focus on patient access to records, Thomson Reuters Regulatory Intelligence (October 19, 2020). [FN9] . U.S. strikes deal with Lilly for potential COVID-19 antibody drug, Reuters (October 28, 2020) at: https://www.reuters.com/article/us- health-coronavirus-lilly/u-s-strikes-deal-with-lilly-for-potential-covid-19-antibody-drug-idUSKBN27D1I5. [FN10] . Rebecca Spalding, Large employers push back on U.S. healthcare mergers during coronavirus crisis, Reuters (May 22, 2020) at https://www.reuters.com/article/us-health-coronavirus-hospital-m-a/large-employers-push-back-on-u-s-healthcare-mergers-during- coronavirus-crisis. [FN11] . Manojna Maddipatla, Bristol Myers expands heart drug business with $13 billion deal for MyoKardia, Reuters (October 5, 2020). [FN12] . Michael Erman, More drugmakers hike U.S. prices as new year begins, Reuters (Jan. 1, 2020). [FN13] . Linda Carroll, ‘List price’ for healthcare treatments in the U.S. may be misleading, Reuters (Jan. 16, 2020). [FN14] . Allison Frankel, SCOTUS stays discovery in sweeping antitrust MDL v. generic drugmakers, Reuters (March 2, 2020). [FN15] . Nate Raymond, U.S. Supreme Court lifts stay on generic drug price-fixing discovery, Reuters (March 6, 2020). © 2021 Thomson Reuters. No claim to original U.S. Government Works. -39- [FN16] . Melissa D. Berry, U.S. Health Expenditures Again Expected to Rise 5.5% Annually, Agency Projects, Thomson Reuters Regulatory Intelligence (Feb. 20, 2020). [FN17] . Carl O'Donnell, Congresswomen urge Jaguar Health to reverse price hike on drug that may be used in COVID-19 patients, Reuters (May 4, 2020) at: https://www.reuters.com/article/us-health-coronavirus-drug-prices-jaguar/congresswomen-urge-jaguar-health-to- reverse-price-hike-on-drug-that-may-be-used-in-covid-19-patients-idUSKBN22G25C. [FN18] . Jonathan Stempel, U.S. hospitals lose legal challenge to Trump price transparency rule, Reuters (June 23, 2020). [FN19] . Caroline Humer, Nick Brown and Emilio Parodi, Long-term complications of COVID-19 signals billions in healthcare costs ahead, Reuters (August 3, 2020) at: https://www.reuters.com/article/us-health-coronavirus-fallout-insight/long-term-complications-of-covid-19- signals-billions-in-healthcare-costs-ahead-idUSKBN24Z1CM. [FN20] . Nate Raymond, Trump administration can cut drug subsidies to hospitals: U.S. court, Reuters (July 31, 2020). [FN21] . Melissa D. Berry, Trump order requires ‘most-favored-nation’ drug pricing for Medicare, Thomson Reuters Regulatory Intelligence (September 15, 2020) at: http://go-ri.tr.com/gUXjB3. [FN22] . Melissa D. Berry and Antonita Madonna, Trump announces healthcare plan as U.S. election nears, Thomson Reuters Regulatory Intelligence (September 28, 2020) at: http://go-ri.tr.com/wuUDyW. [FN23] . Tina Bellon, Bayer asks U.S. appeals court to reverse $25 million Roundup verdict, Reuters (Dec. 16, 2019). [FN24] . Jonathan Stempel, New York drug distributor exits opioids after admitting role in crisis, Reuters (Jan. 14, 2020). [FN25] . Jonathan Stempel, Judge slashes $8 billion Risperdal award against Johnson & Johnson to $6.8 million, Reuters (Jan. 17, 2020). [FN26] . Melissa D. Berry, CMS directs survey and accrediting agencies to focus attention on infection control, Thomson Reuters Regulatory Intelligence (March 6, 2020). [FN27] . Trisha Roy, Opioid distributors propose $1 billion legal fee fund - Bloomberg, Reuters (Feb. 20, 2020). [FN28] . Julie Steenhuysen, Tired of delays, U.S. labs ask FDA to develop their own coronavirus tests, Reuters (Feb. 24, 2020). [FN29] . Nate Raymond, Mallinckrodt faces ‘existential threat’ after losing Medicaid drug rebate case, Reuters (March 16, 2020). [FN30] . Saumya Sibi Joseph, Medtronic wins U.S. approval for ventilator, plans launch in May, Reuters (April 8, 2020). [FN31] . Paresh Dave, Three U.S. local governments to adopt coronavirus contact tracing app: MIT, Reuters (April 9, 2020). [FN32] © 2021 Thomson Reuters. No claim to original U.S. Government Works. -40- . Deena Beasley and Kristina Cooker, New York City hospitals cancel temporary workers as coronavirus cases stabilize, Reuters (April 14, 2020) at: https://www.reuters.com/article/us-health-coronavirus-newyork-staffing/nyc-hospitals-cancel-temporary-workers-as- coronavirus-cases-stabilize-idUSKCN21X00X. [FN33] . Shanti S. Nair, 3M sues distributor for alleged price gouging of N95 respirators in New York, Reuters (April 10, 2020). [FN34] . Melissa D. Berry, CMS issues guidance on allowing elective procedures in areas with lower incidents of COVID-19, Thomson Reuters Regulatory Intelligence at: http://go-ri.tr.com/g9FRDs. [FN35] . Antonita Madonna, UnitedHealthcare says COVID-19 costs to be considered in 2021 rates, Thomson Reuters Regulatory Intelligence (April 16, 2020) at: http://go-ri.tr.com/slstF2. [FN36] . Nate Raymond, Humana defeats Illinois hospital's $20 million lawsuit on appeal, Reuters (April 20, 2020). [FN37] . Antonia Madonna, Lack of adequate insurance puts healthcare workers at risk of malpractice lawsuits, Thomson Reuters Regulatory Intelligence (April 22, 2020) at: http://go-ri.tr.com/k89Axz. [FN38] . Trisha Roy, Medtronic warns of sales hit as people delay non-emergency surgeries, Reuters (May 21, 2020). [FN39] . Vishwadha Chander, U.S. awards new $628 million contract to boost output of potential COVID-19 vaccine, Reuters (June 1, 2020) at: https://www.reuters.com/article/us-health-coronavirus-usa-vaccine/u-s-awards-new-628-million-contract-to-boost-output-of-potential- covid-19-vaccine-idUSKBN2382DO. [FN40] . Saumya Sibi Joseph, U.S. government offers $25 billion in COVID-19 relief to some hospitals, Reuters (June 9, 2020) at: https://www.reuters.com/article/us-health-coronavirus-hhs/u-s-government-offers-25-billion-in-covid-19-relief-to-some-hospitals- idUSKBN23G2O5. [FN41] . Vishwadha Chander, Walgreens partners with VillageMD to open primary care clinics at drug stores, Reuters (July 8, 2020). [FN42] . Jorn Poltz and Douglas Busvine, Siemens Healthineers expands into cancer care with $16.4 billion deal for Varian, Reuters (August 2, 2020). [FN43] . Brendan Pierson, AmerisourceBergen must face derivative suit over contaminated chemo drugs, Reuters (August 24, 2020). [FN44] . Jonathan Stempel, Becton Dickinson reaches $60 million settlement over pelvic mesh devices, Reuters (September 24, 2020). [FN45] . Nate Raymond and Ankure Banerjee, Cardinal Health, AmerisourceBergen book billions in opioid settlement-related charges, Reuters (November 5, 2020). [FN46] . Nate Raymond, Sanofi to pay $11.9 mln to resolve U.S. drug kickback probe, Reuters (Feb. 28, 2020). [FN47] . Justice Department asks for coronavirus ?informants', Reuters (March 9, 2020). © 2021 Thomson Reuters. No claim to original U.S. Government Works. -41- [FN48] . Rich McKay, Washington state nursing home on lockdown after two cases of coronavirus found; two other cases confirmed, Reuters (March 1, 2020). [FN49] . Jason Lange, U.S. says website offered phony coronavirus vaccines, Reuters (March 22, 2020). [FN50] . Diane Bartz and Jonathan Stempel, U.S. states accuse 26 drugmakers of generic drug price fixing in sweeping lawsuit, Reuters (June 10, 2020). [FN51] . Susan Heavey and Caroline Humer, U.S. Health Department hit by a cyberattack - Bloomberg, Reuters (March 16, 2020). [FN52] . Manas Mishra, Magellan Health says targeted by ransomware attack, Reuters (June 12, 2020). [FN53] . Lisa Lambert, Trump wants to end requiring U.S. religious welfare groups to tell clients of options, Reuters (Jan. 16, 2020). [FN54] . Peter Cooney, Andy Sullivan and Jeff Mason, In political speech to Congress, Trump pokes at Democrats' divide on healthcare, Reuters (Feb. 5, 2020). [FN55] . Melissa D. Berry, CMS announces expansion of accelerated and advance payments for Medicare providers, Thomson Reuters Regulatory Intelligence (March 31, 2020) at http://go-ri.tr.com/1R8Z6v. [FN56] . Melissa D. Berry, New requirements for hospital reporting of COVID-19 infection rates in the U.S., Thomson Reuters Regulatory Intelligence (April 2, 2020) at http://go-ri.tr.com/7xNWCx. [FN57] . Aakash B, Guy Faulconbridge and Kate Holton, U.S. secures 300 million doses of potential AstraZeneca COVID-19 vaccine, Reuters (May 21, 2020) at https://www.reuters.com/article/us-health-coronavirus-astrazeneca/u-s-secures-300-million-doses-of-potential- astrazeneca-covid-19-vaccine-idUSKBN22X0J9. [FN58] . Melissa D. Berry, U.S. health agency rolls back ACA protections for transgender patients, Thomson Reuters Regulatory Intelligence (June 15, 2020) at: http://go-ri.tr.com/6yDNAn. [FN59] . Caroline Humer, Washington says new COVID-19 data site is better than CDC program it replaced, Reuters (July 20, 2020) at: https://www.reuters.com/article/us-health-coronavirus-usa-data/washington-says-new-covid-19-data-site-is-better-than-cdc-program-it- replaced-idUSKCN24L2PF. [FN60] . Melissa D. Berry, CMS announces new resources to protect nursing home residents, Thomson Reuters Regulatory Intelligence (July 23, 2020) at: http://go-ri.tr.com/cNM9Zj. [FN61] . Melissa D. Berry, U.S. orthopedic clinic agrees to pay $1.5 million to settle HIPAA violations, Thomson Reuters Regulatory Intelligence (September 23, 2020). [FN62] . Melissa D. Berry, Suspected ransomware attack keeps Universal Health Systems shut down, Thomson Reuters Regulatory Intelligence (September 30, 2020). © 2021 Thomson Reuters. No claim to original U.S. Government Works. -42- [FN63] . Melissa D. Berry, U.S. authorities warn healthcare industry of increasing, ‘imminent’ cybercrime threat, Thomson Reuters Regulatory Intelligence (October 30, 2020). Produced by Thomson Reuters Accelus Regulatory Intelligence 14-Mar-2021 © 2021 Thomson Reuters. No claim to original U.S. Government Works. -43-