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Podcast | Culture Clashes: Getting Cross-Industry Collaborations Right

A Collaborative Transformation Perspective on Digital Health Healthcare is facing an age of disruption from new players and new market entrants from outside the traditional healthcare paradigm. These disruptors have varying degrees of experience in the highly regulated and closely scrutinized healthcare landscape. How can these parties work together across different cultures and regulatory environments to fashion better, faster, more accessible healthcare? In this episode of the Of Digital Interest podcast, Stephen Bernstein and Kerrin Slattery discuss: Exciting new collaborations in the healthcare space Challenges companies face as they work through cross-industry ventures, from diligence to regulatory mapping Key considerations for data sharing and the use of de-identified data in digital health solutions Navigating cultural differences between traditional providers and new non-traditional parties Best practices for companies working to enter the healthcare...

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Can We Expect to See ONC’s Final Rule on Information Blocking Soon?

A recent update to the Office of Management and Budget (OMB) website suggests that the answer is “yes”—though that depends on how one defines “soon.” According to its website, OMB received the Office of the National Coordinator for Health Information Technology’s (ONC’s) final rule, entitled 21st Century Cures Act: Interoperability, Information Blocking, and the ONC Health IT Certification Program, for review on October 28, 2019. Based on the rule title, it appears that ONC is ready to finalize its proposals concerning information blocking and related exceptions. Earlier this year, ONC issued a proposed rule that, among other things, proposed to define information blocking and establish seven exceptions to the broad prohibition for reasonable and necessary activities that should not be considered information blocking. For more information about the information blocking provisions of ONC’s proposed rule, see our On the Subjects here and here. OMB review is one...

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Is Your Software a Medical Device? FDA Issues Six Digital Health Guidance Documents

The 21st Century Cures Act, enacted in December 2016, amended the definition of “medical device” in section 201(h) of the Federal Food, Drug, and Cosmetic Act (FDCA) to exclude five distinct categories of software or digital health products. In response, the US Food and Drug Administration (FDA) issued new digital health guidance and revised several pre-existing medical device guidance documents. FDA also stated that it would continue to assess how to update and revise these guidance documents as its thinking evolved. Late last week, FDA issued five final guidance documents and re-issued a draft guidance document to better reflect FDA’s current thinking on software as a medical device (SaMD) and other digital health products: Changes to Existing Medical Software Policies Resulting from Section 3060 of the 21st Century Cures Act – Guidance for Industry and Food and Drug Administration Staff General Wellness: Policy for Low Risk Devices – Guidance for Industry...

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To Market, To Market: FDA’s Digital Health Precertification Program

In response to the rapid pace of innovation in the health and life sciences arena, the US Food and Drug Administration (FDA) is taking a proactive, risk-based approach to regulating digital health products. Software applications and other transformative technologies, such as artificial intelligence and 3D printing, are reshaping how medical devices are developed, and FDA is seeking to align its mission and regulatory obligations with those changes. FDA’s digital health software precertification program is a prime example of this approach. Once fully implemented, this voluntary program should expedite the path to market for software as a medical device (SaMD), and promote greater transparency between FDA and regulated entities. Under the program, FDA will conduct a holistic review of the company producing the SaMD, taking into account aspects such as management culture, quality systems and cybersecurity protocols, to ascertain whether the company has developed...

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Reviewing Key Principles from FDA’s Artificial Intelligence White Paper

In April 2019, the US Food and Drug Administration (FDA) issued a white paper, “Proposed Regulatory Framework for Modifications to Artificial Intelligence/Machine Learning (AI/ML)-Based Software as a Medical Device,” announcing steps to consider a new regulatory framework to promote the development of safe and effective medical devices that use advanced AI algorithms. AI, and specifically ML, are “techniques used to design and train software algorithms to learn from and act on data.” FDA’s proposed approach would allow modifications to algorithms to be made from real-world learning and adaptation that accommodates the iterative nature of AI products while ensuring FDA’s standards for safety and effectiveness are maintained. Under the existing framework, a premarket submission (i.e., a 510(k)) would be required if the AI/ML software modification significantly affects device performance or the device’s safety and effectiveness; the modification is to the...

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FDA’s Breakthrough Device Program: Opportunities and Challenges for Device Developers

As part of the 21st Century Cures Act, Congress gave the US Food and Drug Administration (FDA) the authority to establish a Breakthrough Devices Program intended to expedite the development and prioritize the review of certain medical devices that provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating disease or conditions. In December 2018, FDA issued a guidance document describing policies FDA intends to use to implement the Program. There are two criteria for inclusion in the Breakthrough Device Program: The device must provide for a more effective treatment or diagnosis of a life-threatening or irreversibly debilitating human disease or condition; and The device must (i) represent breakthrough technology, (ii) have no approved or cleared alternatives, (iii) offer significant advantages over existing approved or cleared alternatives, or (iv) demonstrate that its availability is in the best interest of patients....

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Patenting Your Digital Health Tech: When, Why and How

The digital health market is expected to grow beyond $379 billion by 2024, with a 27.7 percent compounded annual growth rate over the coming years. This activity is fueled by increasing demand for remote monitoring services, favorable government initiatives and funding, and the proliferation of mobile intelligent devices. An article by Rock Health noted that in 2018, “investors poured nearly $8.1B into the sector, surpassing 2017’s record-setting total of $5.7B by a whopping 42%.” Amidst this growth, digital health startups are seeking to make the most of their funding and protect the innovations that drive their product. To do so, they must protect their intellectual property from being copied or duplicated by others in the market. Patents offer the strongest form of protection for innovations and can lead directly lead to increased investment. For digital health startups that eventually go public, valuation can reach $1.1 million per software patent...

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McDermott Named Health Practice Group of the Year by Law360

We greatly appreciate our readers continuing to turn to us for insight on the most critical legal, regulatory and transactional developments impacting digital health, and the innovative collaborations transforming health care. Over the past year, McDermott’s Health practice made headlines for our work on several of the most high-profile collaborative transformations that took place in 2018: We were one of several law firms to advise CVS Health Corp. on its approximately $70 billion cash and stock purchase of health insurer Aetna Inc. McDermott also assisted Air Medical Group Holdings in its $2.44 billion acquisition of American Medical Response (AMR), a medical transportation company, from Envision Healthcare Corporation. It is because of our role in ground-breaking transactions like these that—for the fifth time in 10 years—McDermott was recognized by Law360 as the Health Practice Group of the Year. We’re passionate about the results our digital health...

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Expanded Telemedicine Services Presented as Means to Address Opioid Crisis in New Legislation

Last week, President Trump signed the SUPPORT for Patients and Communities Act (SUPPORT Act), a bipartisan piece of legislation designed to tackle the opioid crisis by, among other approaches, increasing the use of telemedicine services to treat addiction. Several key provisions are summarized below. The package includes provisions to expand public reimbursement for telemedicine services that focus on addiction treatment. Specifically, the legislation removes Medicare's originating site requirement for substance abuse treatment provided via telemedicine, meaning that health professionals can receive Medicare reimbursement even if the patient is not located in a rural area. In addition, the Centers for Medicare and Medicaid Services (CMS) has been directed to issue guidance to states regarding possible ways that Medicaid programs can receive federal reimbursement for treating substance abuse via telemedicine. The legislation explicitly identifies services...

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Telehealth-Related Updates Included in 2019 Medicare Physician Fee Schedule

On November 1, 2018, the Centers for Medicare and Medicaid (CMS) issued final rules for updating the 2019 Medicare Physician Fee Schedule to implement recent telehealth-related legislative reforms. As reported in our Digital Health Mid-Year Report: Focus on Medicare, these changes are expected to have a material impact on the ability of providers to receive payment for delivering telehealth services. Certain key changes are highlighted below: Qualified providers may be reimbursed when providing telehealth services for stroke and kidney disease—even when patients are located in their own homes. Qualified providers may receive a small amount of reimbursement for holding “virtual check-in[s]” with patients and when they evaluate recorded video and images from an established patient. CMS noted that these changes are aimed at allowing providers to help determine whether an in-person visit or additional follow-up is needed. Doing so “increase[s] efficiency for...

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