Companies looking to enter the digital health field face myriad legal implications unique to doing business in this sector. Whether emerging or established, companies exploring health care opportunities benefit from careful planning around complex issues such as pace of development, reimbursement systems, strategies for responsible data collection and use, and effective corporate compliance programs. In this podcast, McDermott partners Sarah Hogan, Lisa Schmitz Mazur and Dale Van Demark take a closer look at these and other important factors companies should review when contemplating a move into the digital health ecosystem.

Q. What issues should companies consider before they enter today’s digital health care market?

DV: The first and perhaps most important thing to focus on is the business plan. A lot of business plans that may work in other service sectors may not work in the health care industry because of the way that it is structured or because of consumer expectations.

Beyond that, there are real cultural differences that we see technology companies come up against when they enter into the health care market. Frequently, technology companies are used to a very fast pace. They are used to making mistakes and learning from them, and evolving and developing to move forward. The health care industry has traditionally been much slower and more deliberative, with the goal of getting it right the first time being predominant. That cultural difference can cause problems in building relationships and setting expectations for both pace and service levels.

Finally, understanding the complexity of health care infrastructure is very important. Understanding how the health care system works and how your product, service and business plan work within that ecosystem is critical to establishing the relationships you want and really selling into that marketplace. Continue Reading Breaking into Digital Health: Factors Companies Must Consider

In an effort to address the need for increased access to behavioral health services, Illinois has passed a series of bills that meaningfully expand the reimbursement of telehealth services delivered to its Medicaid patients. Illinois’ legislators, telemedicine advocates, healthcare providers and patient advocacy groups collaborated in an impressive effort to develop focused and targeted legislative solutions that effectively balance the need to get critical behavioral health services to patients in need with long-standing concerns that increasing access via telehealth will result in greater health care costs to a state already experiencing severe financial challenges.

Governor Bruce Rauner advised that these “initiatives work together to improve the quality of care and hopefully the quality of life for so many Illinoisans suffering from mental health and substance use disorders.” Supporters of the legislation are optimistic that these changes will further expand telehealth programs in Illinois, continuing the growth experienced in the past several years.

As a result of changes to the Illinois Public Aid Code (305 ILCS 5/5-5.25), the following will receive reimbursement from the Department of Healthcare and Family Services (“Department”) for delivering telehealth services that meet applicable requirements:

  • Clinical psychologists
  • Clinical social workers
  • Advanced practice registered nurses certified in psychiatric and mental health nursing
  • Mental health professionals and clinicians who are authorized by Illinois law to provide mental health services to recipients via telehealth (in addition to psychiatrists and federally qualified health centers)

The Department is also required to reimburse any Medicaid certified eligible facility or provider organization that acts as the originating site (i.e., the location of the patient at the time a telehealth service is rendered), including substance abuse centers licensed by the Department of Human Services’ Division of Alcoholism and Substance Abuse.

In addition to these changes, the Illinois Telehealth Act’s definition of a “Health care professional” (225 ILCS 150/5) has been revised to include dentists, occupational therapists, pharmacists, physical therapists, clinical social workers, speech-language pathologists, audiologists, and hearing instrument dispensers. As a result of this change, these professionals are now explicitly subject to the Illinois Telehealth Act’s requirements.

Finally, the Illinois Insurance Code (215 ILCS 5/356z.22) has been amended to require that any individual or group policy of accident or health insurance that provides coverage for telehealth services also provide coverage for telehealth services provided by licensed dietitian nutritionists and certified diabetes educators to senior diabetes patients. The amended section clearly states that this change is intended to “remove the hurdle of transportation for senior diabetes patients to receive treatment.” While this change is a step in the right direction, Illinois remains in the minority as one of the states without a telehealth coverage and/or payment parity law. The vast majority of states have parity laws that, at a minimum, include a coverage requirement, mandating certain types of payors to approve and reimburse certain telehealth encounters the same as they would in-person medical encounters.

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The Illinois legislators who sponsored the passed legislation will be recognized for their efforts at the 2018 Telehealth Awards Luncheon organized by the Partnership for a Connected Illinois scheduled at the Chicago office of McDermott Will & Emery on November 13, 2018. Please contact Laura Lewandowski for additional details on registration.

The author thanks McDermott Summer Associate Emily Edwards for her research contributions to this article.

The interest in leveraging the value of big data in digital health has become a focus of health care industry mainstays and newcomers alike. Within a challenging regulatory landscape, it is critical for those looking to play in this space to be proactive in planning their data strategy, with an eye towards compliance planning and solid due diligence to maximize its value. In this Q&A, big data thought leaders Bernadette Broccolo and Sarah Hogan, both partners in McDermott Will & Emery’s Health Industry Advisory group, discuss the challenges and opportunities that health industry stakeholders face when stepping into the world of big data.

For information on this topic and to hear the full Q&A with Bernadette and Sarah, listen to the newest episode of the Of Digital Interest podcast. You can access the full episode at here or subscribe to the podcast on iTunesPocket Casts or Soundcloud.

Q. Where is the value in big data in digital health? Who is seeing value today and what are their motivations?

BB: The best short answer is that everybody is seeing value – both long standing industry players and newcomers. The real value in big data comes not from raw data or just having a lot of data, but in the ability to use it and mine it, to have it in a form that’s analyzable. What’s very surprising too, in addition to the speed with which the interest in big data has escalated, is who is interested. In the past, one certainly expected academic medical centers and universities that have major research initiatives and clinical trial initiatives to be interested. But now others like molecular lab testing organizations, CLIA regulated laboratories and entrepreneurs are interested in capturing data.

SH: I think one of the surprising players is actually the pharma companies. It may sound odd to say that, but they have a lot of data – including a lot of clinical data – that they’re looking at mining to determine how they can target their therapeutics in a way that helps patients more efficiently. They are looking at themselves and asking “What does the 21st century pharma company look like?” Continue Reading Maximizing the Value of Big Data in Digital Health

It has been only a little over six months, and already 2018 has been a busy year for digital health, particularly in the area of Medicare reimbursement. The Centers for Medicare and Medicaid Services (CMS), Congress, the Medicare Payment Advisory Commission, and the US Department of Health and Human Services (HHS) Office of Inspector General (OIG) have all contributed to make 2018 extraordinary.

This Special Report includes:

  • An up-to-date review of 2018 Medicare reimbursement highlights
  • A discussion of Congressional and CMS expansion of telehealth reimbursement
  • Notes of caution about the future of Medicare reimbursement

Read the Mid-Year Digital Health Report: Focus on Medicare.

California’s Senate and Assembly unanimously approved AB 375 (also known as the California Consumer Privacy Act of 2018), on June 28, 2018. This new consumer privacy bill will be the most progressive and comprehensive privacy law in the United States, reaching far beyond California’s borders to give California consumers more visibility and control over their personal information.

Continue Reading.

Across the health care sector, telemedicine is naturally and strategically being integrated into health care delivery and treatment plans as targeted and efficient solutions to specific health issues by hospitals, medical groups and drug-to-consumer telemedicine companies.

Telemedicine is no longer viewed as a secondary option for care—it is a new standard of care that is both expected by patients and popular with providers. Consumers expect to see health care adapt—like many other industries already have—to fit within their daily lives and schedules. Whether it’s electronic check-in procedures or better automated systems, health care providers are beginning to treat their patients a little bit more like customers, and see telemedicine and patient engagement tools as a means of improving customer loyalty and engagement while reducing costs.

However, complex billing structure and payor and reimbursement issues can create significant hurdles for health care providers looking to advance telemedicine programs. Telemedicine billing requires special attention, and if not enough consideration is given on the front end of programs, organizations may be surprised to find that that something they thought was a billable service is, in fact, not.

The Bipartisan Budget Act, which provided for the reimbursement of the distance provider, significantly increased the telemedicine use cases that are approved under the Medicare reimbursement structure. However, because Congress will now pay for it, there is a new expectation that hospitals that do not have particular areas of expertise available on-site will investigate opportunities to incorporate a telehealth programs that ensure adequate patient care.

The standard of care continues to improve as patients have greater access to  nationwide physicians and  as new technology like telestroke and clinical decision support tools become more widely available. For example, a stroke neurologist in one New York can now diagnose a stroke patient in Florida, and then facilitate an emergency room physician to treat that stroke. Telestroke programs check off all of the right boxes: better quality care, better access to care, and overall lower cost of care.

As use cases like this continue to be integrated into health care delivery and familiarity builds around how telemedicine can be used effectively, expectations shift around the standard of care and new questions arise around the risks of integrating—or failing to integrate—telehealth programs. If the tools are available and easily accessible, and if there is a supportive reimbursement model, how much a part of the standard of care does telemedicine become and what is the risk of failing to embrace these tools? If hospitals choose not to implement telehealth programs, and then patients suffer harm as a result, for example a delayed diagnosis and treatment of a stroke, could that lead to increased medical malpractice suits or other types of liability?

In the newest episode of the Of Digital Interest podcast, McDermott Digital Health partners, Lisa Schmitz Mazur and Dale Van Demark, share their perspectives on these questions and the various barriers, risks and opportunities associated with the rise of telemedicine and other technological advancements in health care delivery. Access this episode at www.mwe.com/mcdermottdigitalhealth or subscribe to the podcast on iTunes, Pocket Casts or Soundcloud.

As the health industry evolves to meet consumer expectations for better quality, lower-cost and more convenient health care options, the demand for technology-driven innovation is accelerating as is the level of interest and investment among stakeholders or all sorts.

Health systems and other institutional providers are playing a more active investment role in the commercialization of biomedical, digital health, and other important health care discoveries in order to remain competitive, secure their positions as industry leaders and generate growth opportunities. This more active role also affords their internal innovators (e.g., physicians and scientists) to play a meaningful role in accelerating the commercialization of home-grown discoveries that may otherwise be left in “the valley of death” between government-funded basic research and later stage, industry-funded commercialization. Drug and medical device manufacturers, venture capital, private equity firms, large donors and other investors are injecting significant capital into fueling research, development and commercialization of health care technology innovation. On the one hand, health care systems and providers welcome such external co-investors who bring sophisticated expertise in product and market research, technology innovation, valuation and strategy capabilities, as well as access to networks of potential co-investors. For such external co-investors, on the other hand, joining forces with health care institutions affords much needed access to the expertise and thought leadership of clinicians, scientists and health technology innovation; a ready‑made proving ground and “anchor customer” for the product; and the halo effect of the health care provider around the co-investor’s clinical care and research reputation. The theory and the hope is that the combined capital and the different, but complementary, expertise, experience and perspectives of such co‑investors provides a formula for financially successful innovation that is transformative and not merely disruptive. Continue Reading Blazing New Trails in Health Care and Technology Innovation Ventures

Join McDermott next Wednesday for a live webinar on the unique considerations in developing and procuring AI solutions for digital health applications from the perspective of various stakeholders. We will discuss the legal issues and strategies surrounding:

  • Research and data mapping essential to the development and validation of AI technologies
  • Protecting and maintaining intellectual property rights in AI solutions
  • Technology development
  • Risk management and mitigation for various contractual arrangements, including contracts with customers, vendors and users

We will also focus on the trends in US law for AI solutions in the digital health space, and present actionable advice that will help you develop an effective strategy for developing and procuring AI solutions for digital health applications.

Developing and Procuring Digital Health AI Solutions: Advice for Developers, Purchasers and Vendors
Wednesday, June 13, 2018 | 11:00 am CT | 12:00 pm ET
Register Here

 

The digitization of health care and the proliferation of electronic medical records is happening rapidly, generating large quantities of data with potential to provide valuable insights into disease and wellness and help solve challenging public health problems.

There is tremendous enthusiasm over the possibilities of leveraging this data for secondary use–i.e., a use of data that is distinct from the purpose for which it was originally collected. However, such secondary use is often subject to intersecting legal and regulatory regimes–including HIPAA, the Common Rule, and the Federal Food, Drug, and Cosmetic Act and its implementing regulations–that are not fully harmonized.  This lack of harmonization in requirements, coupled with the wide range of industry players involved–including regulators, academic medical centers, health systems, payers, technology companies, manufacturers and industry entities, research institutions, registries, and professional societies, to name a few– presents challenges that require careful planning and implementation. While regulators have recently taken significant steps to reconcile the differences among these laws and provide a path forward for harnessing the potential of big data, some specific requirements within these individual regulations continue to present challenges.

It is critical for academic medical centers and teaching hospitals, which stand at the intersection of government-funded research and industry-sponsored research, and are also paving the way in partnerships with non-traditional health care players—to understand the evolving legal framework and business and compliance imperatives behind the quest for digital health information.

During the AHLA Annual Meeting on Tuesday, June 26, McDermott partner Jiayan Chen will review trends and the value proposition relating to secondary use, with a particular focus on challenges presented by secondary use in the precision medicine and digital health context.  Along with co-presenter Leah Voigt, she will explore key regulatory and sub-regulatory developments relating to the secondary use of data under FDA regulations, the Common Rule, and HIPAA, and will also use case studies to explore, in a practical context, the challenges and ambiguities that remain when pursuing internal secondary use initiatives and external collaborations, including implementation and contracting tips, insights, and strategies.

Recycle, Recycle, Recycle: Key Considerations for Research, Medical Education, and Other Secondary Uses of Data
AHLA Annual Meeting, Chicago, IL | June 26, 2018 | 9:45 – 10:45 am | Registration and program details.

McDermott’s Cocktail Reception during the AHLA Annual Meeting
The Art Institute of Chicago | June 26, 2018 | 6:00 – 8:00 pm
Following the programming on Tuesday, we invite you to join us for our annual cocktail reception at The Art Institute of Chicago. We look forward to an evening of networking, cocktails and private gallery tours with our colleagues, friends and fellow AHLA members. RSVP today!

As Europe’s General Data Protection Regulation (GDPR) takes effect, companies around the world are racing to implement compliance measures. In parallel with the GDPR’s development, China’s new data protection framework has emerged over the past year and is in the final stages of implementing the remaining details. With similar and often overlapping obligations, full compliance with the GDPR and China’s data protection framework presents a significant new challenge for companies with operations in China.

Does the GDPR Apply to Companies in China?

The GDPR applies to the processing of personal data of people who are in the European Union, even for a controller or processor in China, where the processing of the data is related to:

  • The offering of goods or services to the data subjects in the European Union, regardless of whether a payment is required; or
  • The monitoring of people’s behavior in the European Union.

As a result, even if a Chinese company does not have any formal establishments in the European Union, the GDPR will nonetheless apply if it is conducting either of these two types of activities.

What Are the Requirements for Companies in China Subject to the GDPR?

The GDPR primarily focuses on two categories of entities: “controllers” and “processors.” These two types are similar to concepts in the Chinese rules.  “Controllers” are entities that, alone or jointly with others, determine the purposes and means of the processing of personal data. “Processors” are entities that carry out the processing of personal data on behalf of the controllers.

Key requirements for most controllers under the GDPR: Continue Reading The GDPR’s Effects in China: Comparison with Local Rules and Considerations for Implementation