Life Science Compliance Update

August 15, 2017

President Trump Declares Opioid Crisis a National Emergency


Working off of the recent recommendations in the interim report issued by the President’s Commission on Combating Drug Addiction and the Opioid Crisis, President Donald Trump has issued a directive to his administration to use all “appropriate emergency and other authorities to respond to the crisis caused by the opioid epidemic.”

Some of the immediate actions the Trump administration could take to address the opioid crisis include: (1) approve state waivers to remove the Medicaid Institutions for Mental Diseases (IMD) exclusion, which prohibits the use of federal Medicaid funds for care provided to most patients in mental health and substance use disorder residential treatment facilities larger than 16 beds; (2) negotiate lower prices for naloxone (the drug that reverses opioid overdoses) as suggested by the Commission; and (3) distributing some of the $45 million in the Public Health Emergency Fund. Earlier this week, President Trump suggested the administration would combat the epidemic by focusing on law enforcement and security on the southern border to stop illegal drugs from entering the country.

The emergency declaration may allow the government to deploy the U.S. Public Health Service, a uniformed service of physicians and other staffers that can target places with little medical care or drug treatment, said Andrew Kolodny, co-director of opioid policy research at the Heller School for Social Policy and Management at Brandeis University. He said the DEA might be able to use the emergency to require prescriber education for doctors and others who dispense opioids.

This comes after several states (Arizona, Florida, Maryland and Virginia) have already declared emergencies. And in recent months, the Centers for Disease Control and Prevention, the Food and Drug Administration, Congress, physician groups and the insurance industry have taken institutional steps to address the crisis. At the street level, police, firefighters and paramedics now routinely carry naloxone.

Health and Human Services Secretary Tom Price, M.D. issued the following statement on President Donald Trump’s instruction to his Administration to use all appropriate authority to respond to the nation’s opioid emergency:

President Trump is taking strong, decisive action in directing the Administration to use all appropriate emergency and other authorities to respond to the crisis caused by the opioid epidemic. Today’s announcement demonstrates our sense of urgency to fight the scourge of addiction that is affecting all corners of this country.

Traveling the country, we have seen firsthand the devastation this crisis is inflicting on individuals, families, and communities. President Trump’s announcement further punctuates his clear commitment to combating this epidemic and I thank him for his leadership.

Attorney General Jeff Sessions also released a statement,

I applaud President Trump for his leadership in taking this drastic and necessary measure to confront an opioid crisis that is devastating communities around the country and ripping families apart. The death toll of this horrific epidemic reached 60,000 people in 2016, but as horrible as it is to think of that number, it is worse when we look past the staggering statistic and see our children, our moms and dads, sisters and brothers, friends and co-workers. This nation has never seen overdose deaths anywhere close to these numbers, and for each death, many more suffer debilitating addictions.

Just last week the Department of Justice announced its new Opioid Fraud and Abuse Detection Unit and we continue to follow the President’s lead and use every tool we have to combat this deadly crisis.

August 14, 2017

Sunshine Act Takes Effect in South Korea


In early 2017, South Korea joined the global transparency movement and enacted a “Sunshine Act” similar to others found around the world. The law requires pharmaceutical and medical device companies operating in South Korea to prepare an aggregated expenditure report if they have provided economic benefits to healthcare professionals and others employed at medical institutions during a fiscal year.

Interestingly, while the scope of the Korean Sunshine Act is broader than the United States law, it does not require companies to submit the aggregated report and any supporting documents to the government unless it is determined to be necessary by the Minister of the Ministry of Health and Welfare of Korea. Therefore, it follows that the collected data will not be made public.

The covered recipients for Korean Sunshine Act can be categorized into four groups: (1) pharmacists; (2) herbalists (including persons working for the relevant pharmacy); (3) “medical personnel”, which includes physicians, dentists, acupuncturists, midwives, nurses); and (4) medical institution founders (including the representative, director and other employees of a juristic person) or persons working for the relevant medical institution for the purpose of sales promotion, such as adoption of drugs or inducement of prescription.

Types of reportable economic benefits include:

  • Product samples;
  • Academic conference sponsorships;
  • Honorarium provided to a covered recipient for conducting post-marketing surveillance (PMS) (equivalent to phase 4 clinical trials in US);
  • Funding of clinical trials;
  • Food and beverages and other “freebies” (such as pens, notepads, etc.) provided at the product presentations; and
  • Discounts on drug or medical device sales made with certain payment methods.

The Ministry released seven templates for the Report for all reporting categories:

  • Provision of samples – including institution, product information, and date of provision;
  • Sponsorship to academic conferences – including conference info and support funds amount;
  • Support for clinical trials – including trial information, contact, joint investigator’s info, and support details (TOV amount, number/volume of product supported, contracting date);
  • Product presentations
  • Presentations held formultiple medical institutions: product info, HCP name and medical institution, TOV amount including travel, lodging, food and beverages, and other “souvenirs” or giveaways (e.g. pens, notepads, etc.)
  • Presentations held at a single medical institution: product info, medical institution info, HCP name, TOV amount (food and beverages) and date;
  • Post-market surveillances (PMS) – including product info, HCP info, and support details; and
  • Price discounts based on payment conditions – including medical institution info, contracting date, and discount rate

For the product presentations, the reporting threshold for food and beverages, as well as other “souvenirs” or giveaways is 10,000 won (roughly $9). For all other types of transfers of values, there is no minimum threshold amount triggering the reporting obligation, and they should all be recorded in the applicable reporting template.

The reports must be kept for five years, along with supporting documentation. Companies are required to start collecting expenditure information on January 31, 2018. The report and supporting documentation must then be prepared within three months following the end of the company’s 2018 fiscal year. For example, if Company A’s 2018 fiscal year ends December 2018, then the report must be prepared by March 2019. If Company B’s 2018 fiscal year ends in March 2019, then the report must be prepared by June 2019.

A reporting template was issued in June 2017, and can be found here. Life sciences companies operating in South Korea will need to create a clear and efficient process and system to ensure they meet these difficult reporting requirements.

August 11, 2017

MACRA Categories and Codes in CMS Proposed Fee Schedule


In the 2018 proposed Medicare Fee Schedule rule, CMS reviews MACRA patient relationship categories and codes, their development and timelines, and provides details for the initial claims-based reporting of the relationship categories and codes to CMS.


Section 101(f) of MACRA added a new subsection (r) to section 1848 of the Act entitled Collaborating with the Physician, Practitioner, and Other Stakeholder Communities to Improve Resource Use Measurement. Section 1848(r)(2) requires the development of care episode and patient condition groups plus group classification codes. To satisfy the purpose of patient and/or episode attribution to one or more clinicians, it further requires:

  • The categories and codes must define and distinguish an applicable practitioner’s relationship to and responsibility for each patient when an item or service is furnished to the patient by that practitioner.
  • The categories shall include different potential practitioner-patient relationship types.
  • The categories shall reflect various potential responsibility types.
  • The categories shall capture the frequency with which the practitioner delivers care to the

Patient Relationship Categories

CMS posted and solicited public comment upon a draft relationship categories list and the list’s foundational principles in April 2016. Potential category modifications were developed based upon comments received. In December 2016, CMS sought comments about such modifications and about operational approaches for reporting the categories on Medicare claims. After comment review, CMS posted the first operational list of patient relationship categories on May 17, 2017:

  • Continuous/Broad Services,
  • Continuous/Focused Services,
  • Episodic/Broad Services,
  • Episodic/Focused Services, and
  • Only as Ordered by Another Clinician.

Patient Relationship Reporting Using Modifiers

Section 1848(r)(4) of the Act specifies that claims for services furnished beginning January 1, 2018, shall include, as determined appropriate by the Secretary, the following:

  • Any applicable codes for care episode groups,
  • Any applicable codes for patient condition groups,
  • Any applicable codes for patient relationship categories, and
  • The NPI of the ordering physician or applicable practitioner.

CMS describes having planned to use procedure code modifiers for patient relationship code reporting via claims. In December 2016, commenters indicated a preference for CPT modifier codes rather than HCPCS Level II modifiers. CMS submitted a CPT code application that was rejected in June 2017, as the CPT Editorial Panel preferred to wait until the proposed modifiers were finalized before issuing Category I CPT codes. CMS is therefore proposing HCPCS modifiers as shown in Table 26 reproduced from the proposed rule:

Proposed Patient Relations HCPCS Modifiers and Categories


Proposed HCPCS Modifier

Patient Relationship Categories



Continuous/Broad Services



Continuous/Focused Services



Episodic/Broad Services



Episodic/Focused Services



Only as Ordered by Another Clinician

CMS proposes that claims for services furnished beginning January 1, 2018, shall include the appropriate modifier selected from Table 26 and the NPI of the ordering practitioner. CMS proposes that modifier reporting will be voluntary. Modifier use would not be a condition of payment, affect payment, change the meaning of a reported procedure code(s), or be tied to any reported E/M service(s) intensity. The duration of the voluntary HCPCS modifier reporting period is not specified by CMS. Finally, CMS notes that the relationship codes may be incorporated into future QPP measures. CMS seeks comment on the proposed modifier list, the plan to resubmit the modifiers for CPT code assignments, and the initial voluntary reporting of the proposed modifiers.


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