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Final Episode | Markets Under Pressure Strategies for Restructuring and Risk Management

In this new video series, McDermott’s digital health team shares timely insights and strategies to help your organization stay ahead of the curve, addressing critical areas of workforce management, financing and the potential for restructuring.

Today’s market pressures increase the potential for broken financial covenants. In this episode, McDermott partners Dale Van Demark and Felicia Perlman discuss steps that digital health companies can take now to prepare for the possibility of restructuring and mitigate associated risks.


Explore the full series and their takeaways here.





Episode Two | Managing Capitalization Structures and Investor Relationships in Today’s Digital Health Market

In this new video series, McDermott’s digital health team shares timely insights and strategies to help your organization stay ahead of the curve, addressing critical areas of workforce management, financing and the potential for restructuring.

In episode two, McDermott partner and digital practice co-head Lisa Mazur joins fellow partner Brian Gordon to review important considerations for navigating today’s market realities.


Explore the full series and their takeaways here.





Episode One | Workforce Management Solutions in an Uncertain Economic Environment

In this new video series, McDermott’s digital health team shares timely insights and strategies to help your organization stay ahead of the curve, addressing critical areas of workforce management, financing and the potential for restructuring.

In episode one, Stephen Bernstein talks with McDermott partner Ellen Bronchetti about timely employment considerations for digital health companies.


Explore the full series and their takeaways here.





Navigating Volatile Markets in the Digital Health Ecosystem | Introduction – What to Consider

In this new video series, McDermott’s digital health team shares timely insights and strategies to help your organization stay ahead of the curve, addressing critical areas of workforce management, financing and the potential for restructuring.

Watch the introduction where Stephen Bernstein, Co-Head of the Digital Health Practice, kicks off the series discussing what companies should be considering as they navigate today’s complex digital health ecosystem.

Explore the full series and their takeaways here.





2021 Digital Health Year in Review


The continuation of the COVID-19 public health emergency (PHE) and consumer demand for digitally delivered healthcare not only necessitated the shift from in-person to virtual care, but also continued to drive interest, adoption, investment and transactions in digital health in 2021. Digital health funding in 2021 far surpassed 2020’s totals, with no signs of slowing down in 2022, and the potential permanence of some regulatory flexibilities beyond the PHE are charting a course for continued digital health growth in 2022 and beyond.

Access the report.




McDermott Partners Recognized As Digital Health Power Players

Washington (August 11, 2021) – McDermott Will & Emery partners Jennifer Geetter and Vernessa Pollard have been recognized within an Insider profile on the “9 behind-the-scenes players who can make or break your digital-health startup.” The pair discussed advising young companies on the regulatory hurdles they have to clear before tackling the healthcare market.

As part of the Firm’s industry-leading health practice, Jennifer advises digital health companies on the development, delivery and implementation of innovative healthcare solutions. Vernessa leads medical device and technology companies through US Food and Drug Administration (FDA) regulations to bring products to market.

Vernessa explored with Insider how more tech companies are spreading into healthcare. These companies need assistance discussing the FDA’s newest regulations, including machine learning oversights or health-data privacy rules. If businesses are not knowledgeable about their regulatory requirements, it can make or break their investments.

“We have a number of what we’d consider to be nontraditionally FDA regulated entities, such as the large tech companies and even hospitals and healthcare providers, that are entering this space because they’re developing new tools or technology that may trigger FDA requirements,” Vernessa noted.

Jennifer explained that it’s not always clear if decade old FDA laws apply, so she advises her clients to prioritize building trust with patients through an emphasis of privacy and cybersecurity protection.

“There’s something about the intimacy of the standard doctor-patient relationship when you’re sitting across the room from your doctor that breeds trust,” Jennifer said. “When you’re in a digital healthcare system with distance, you don’t necessarily have that.”

McDermott Will & Emery is the nation’s leading health law firm. The Health Industry Advisory group is the only health practice to receive top national rankings from U.S. News – Best Lawyers “Best Law Firms,” Chambers USA, The Legal 500 US and Law360. The practice was also recognized by Chambers as “Health Team of the Year” in 2010, 2013, 2017 and 2019. McDermott has also held the top spot in PitchBook’s League Tables as the most active firm for healthcare private equity since 2017.




Access To Digital Health Applications And Digital Care Applications In Germany

On 20 January 2021, the German Federal Cabinet approved the draft law on the digital modernization of healthcare and nursing care. The draft has been criticized for not taking into account lessons learned from the implementation of the 2019 digital health applications law.

The legally enforceable right of patients insured in the Germany statutory healthcare system (SHI) to be able to access digital health applications (DiGAs) was included in the German SHI code (SGB V) at the end of 2019.

DiGAs are low-risk medical devices (risk class I and IIa) that are primarily based on digital technologies and support the detection, monitoring, treatment, or alleviation of diseases, injuries, or disabilities. Under the SGB V, DiGAs have to be approved by the German Federal Institute for Drugs and Medical Devices (BfArM) and included in the DiGA List before doctors can prescribe them to their patients on an individual basis and at the SHI’s expense. Among the DiGAs listed by BfArM since the first listing in October 2020, are those that support patients with light depression, insomnia, obesity, or tinnitus.

Read more in our latest edition of International News.




Telehealth and Prescribing: What’s Permissible in Your State?

Telehealth’s state-by-state regulatory patchwork means that healthcare providers must navigate a variety of regulations that govern which types of care can be provided by virtual means, and even what modalities can be used in different care settings.

Our new interactive map explores the standards and requirements that physicians and nurse practitioners must follow when prescribing non-controlled substances or ordering tests via a telemedicine encounter in all 50 states and the District of Columbia. Key issues addressed in the survey include:

  • In what states are asynchronous solutions permitted?
  • What are state rules governing prescriptions when a physician-patient relationship does not exist prior to the telehealth encounter?
  • What are state rules on prescribing via audio-visual encounters or audio-only encounters?
  • Under what state regulations can a questionnaire be sufficient to create a physician-patient or advance practice registered nurse-patient relationship?

Click here to access the map and download the full report. 




Three Digital Health Trends Affecting Investors in 2021

Private equity deal volume hit a low in the first half of 2020 as the pandemic slowed the US and global economies. But toward the end of the year, deals began picking back up, particularly in the digital health space.

COVID-19 forced healthcare providers to shift from in-person to virtual care, and technology was the vehicle to make that switch possible. Investors noticed, and more deals focused on companies specializing in telehealth, remote patient monitoring and other technology platforms that facilitate communication among specialists.

Expect this trend to continue in 2021, and keep these three factors in mind when evaluating the digital health landscape.

Easing of Laws and Regulations Surrounding Telehealth and Digital Health

Both telehealth and digital health are highly regulated, as every state has laws and regulations that govern how care is provided virtually and how those services are billed. In response to the pandemic, we’ve seen flexibility with these laws and regulations, and the Biden administration has signaled that it might make some flexibilities permanent.

Investment opportunities will likely increase as a result of the Biden administration’s willingness to lower some of the longstanding barriers to coverage and payment for virtual services, including telehealth, remote patient monitoring and other related services. That’s a positive sign for firms looking at healthcare through the lens of a technology solution.

Reallocation of Resources Due to Vaccine Rollout

Since the onset of the pandemic, labs have conducted a huge volume of testing and have had to ramp up personnel and other resources. Plus, the vast majority of COVID-19 tests must be ordered by a physician or nurse, further straining available resources.

While testing will likely continue in some capacity for a long time, the number of tests will presumably decline steadily as more people are vaccinated. That means capacity will open up, both for healthcare providers who were ordering the tests and for lab companies that were performing them. As a result, firms should begin asking themselves:

  • Where are there opportunities to shift focus and resources previously devoted to testing?
  • What other conditions lend themselves to at-home testing?
  • Where can companies shift efforts that were previously focused on reviewing orders?

Addressing Mental Health and the Other Epidemic

COVID-19 obviously emerged as the foremost health emergency of the past year. But it’s important to remember that the United States is still in the midst of an opioid addiction epidemic.

On top of that, COVID-19 has been hard on many people’s mental health. In response, many employers have made mental health a higher priority, and that trend is likely to continue, even as employees return to the workplace. In 2021, investors are likely to continue to emphasize digital health tools and service offerings that are focused on mindfulness and behavior health.

To learn more from Lisa and other thought leaders about the healthcare investing landscape heading into 2021, you can view a recording of The Deal’s webinar here.




National Telehealth Takedown Highlights Opportunity for Providers to Enhance Compliance Efforts

The US Department of Justice and the US Department of Health and Human Services Office of Inspector General recently announced a significant healthcare fraud takedown involving $4.5 billion in allegedly false and fraudulent claims involving telehealth. The allegations involved telehealth executives paying healthcare providers to order unnecessary items and services, as well as payments from durable medical equipment companies, laboratories and pharmacies for those orders. While the alleged conduct is not representative of the legitimate and crucial telehealth services offered by the vast majority of healthcare providers, the government’s continued focus on telehealth arrangements, combined with the ongoing expansion of coverage for telehealth services, provides an important opportunity for healthcare providers to evaluate their telehealth service offerings and arrangements and to further enhance their related compliance activities.

In Depth

On September 30, 2020, the US Department of Justice (DOJ) issued a press release describing the largest national healthcare fraud and opioid enforcement action in the DOJ’s history (the Takedown). The Takedown involved coordination with the US Department of Health and Human Services Office of Inspector General (OIG) and other federal and state law enforcement agencies, and resulted in cases against more than 345 defendants in 51 judicial districts. The government charged the defendants with participating in healthcare fraud schemes involving more than $6 billion in alleged losses to federal health care programs, with the vast majority of alleged losses ($4.5 billion) stemming from arrangements involving alleged “telefraud.”

According to the DOJ press release, a recently announced National Rapid Response Strike Force led the initiative focused on telehealth. The National Rapid Response Strike Force is part of the Health Care Fraud Unit of DOJ’s Criminal Division Fraud section, and its mission is to “investigate and prosecute fraud cases involving major health care providers that operate in multiple jurisdictions, including major regional health care providers operating in the Criminal-Division-led Health Care Fraud Strike Forces throughout the United States.”

Background

In recent years, the government has increasingly focused on alleged healthcare fraud schemes involving telehealth services. In connection with the Takedown, OIG issued a fact sheet and graphic highlighting the increase in “telefraud” arrangements leveraging “aggressive marketing and so-called telehealth services.” The individuals charged in the Takedown included telehealth company executives, medical providers, marketers and business owners who allegedly used telemarketing calls, direct mail, and television and internet advertisements to collect information from unsuspecting patients.

Many of the cases involved telehealth executives who allegedly paid healthcare providers to order unnecessary durable medical equipment (DME), genetic and other diagnostic testing, and medications, either without any patient interaction or with only a brief phone call. The government alleged that the arrangements involved kickbacks to telehealth executives after the DME company, laboratory or pharmacy billed Medicare or Medicaid for items and services that the government asserts were often not provided to beneficiaries or were “worthless to patients . . . and delayed their chance to seek appropriate treatment for medical complaints.”

DOJ provided a [...]

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