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Top Health Law Issue in 2012

January 10, 2012

The advisory board members for BNA's The Health Law Reporter released their list of the most critical issues facing providers in 2012 and tabbed health care reform as the health law industry's biggest concern. The full report is available here.

Wiley Rein's Privacy Practice chair and Health Care Practice co-chair Kirk Nahra, a Health Law Reporter board member, took part in the survey.  In his comments for the survey, he highlighted The Patient Protection and Affordable Care Act's (PPACA)  as a top priority for health law clients.  "If the reform legislation is permitted to proceed without Supreme Court intervention, we will see over the next few years a fundamental change to the overall health care system, mainly on the payment side," said Mr. Nahra.  "Payers face tremendous challenges in evaluating these new programs and transforming their business to meet these new competitive challenges and administrative requirements. In addition, we will see a tremendous blurring of the lines between payers and providers."

Mr. Nahra added that "the administration has been faithfully churning out new regulations for these programs, but there is a real tension between developing appropriate regulations and not creating substantial disincentives to participate from the regulatory complexity.  Companies will face the choice between spending time and money now-often large amounts with significant time pressures-on programs that may not exist or that may change significantly."

Fraud and Abuse

With respect to issues surrounding fraud and abuse, Mr. Nahra told The Health Law Reporter that one reason fraud enforcement remains a focal-point is that it is an economic issue for the government, especially provided that federal budget calculations project large amounts of fraud savings.  "Fraud has taken an increased place in the overall policy discussions, particularly the questions about how much health care costs and where savings can be found."  In the coming months, Mr. Nahra said he "will be watching carefully (1) how the government prosecutes and settles cases over the next year; develops, (2) implements and promotes regulations that protect the programs while still permitting and encouraging participation and (3) whether these approaches will be maintained over time."  Mr. Nahra added that regulators should be aware that "if companies are scared off by fraud and abuse risks, they will not participate, or will not participate as fully."

New Privacy, Security Regulations

The Health Law Reporter also addressed the expected release of the long-delayed final Health Insurance Portability and Accountability Act (HIPAA)/Health Information Technology for Economic and Clinical Health (HITECH) privacy and security rules as a critical issue for the health care industry going forward.  The issuance of these new rules "will be coupled with increased enforcement," said Mr. Nahra, while warning that "it remains to be seen whether the government will issue realistic and reasonable regulations (as were largely set forth in the proposed HITECH rules), or will veer towards enormously burdensome rules with little privacy benefit (as they did with the proposed rule on the accounting provisions of HIPAA)."

An extension of the new privacy and security regulations is the expected increase in the risk of private litigation over data breaches, including health information exchanges.  Mr. Nahra warned of  2012 potentially being a "make or break year.  To date, enormous sums of money and tremendous time expenditures have been spent with very little to show for it.  Moreover, while health information exchanges present the real possibility of both improved care and decreased costs, the developments to date point towards a situation where these networks are being built with little chance of success. In particular, the front end development costs are far exceeding expectations, there is little in the way of a business model for these networks, and the privacy restrictions that are being imposed on virtually all of these networks seem to guarantee that the information in the networks will be fragmentary and unreliable, thereby defeating much of the core purpose."

Health Plan Regulation

The Health Law Reporter reported that health insurers, states and employers all will face significant challenges because of PPACA.  Mr. Nahra noted that "health plans obviously were a major target of health care reform that, unlike many health care providers, seem to generate little sympathy from Congress or regulators in dealing with their current business challenges."

Mr. Nahra added that the success of health care reform as a whole "could hinge on whether the new developments allow for reasonable and reasonably priced health insurance products that still permit an appropriate business marketplace for health plans.  This may translate quickly into whether insurance opportunities outside of health plans and the employer based health insurance system will develop. This is very much an open issue.  The challenge for the government is how to design and protect these programs while still permitting reasonable insurer participation. There is little indication to date, however, that the government is acting in a way that is designed to reduce or minimize the regulatory burdens on health plans from these new programs.''

In conclusion, Mr. Nahra stated that "health plans face enormous challenges in the years ahead in dealing with all of these new programs, and the government's focus on regulatory detail is making this challenge even more complicated."

Kirk Nahra is a partner with Wiley Rein LLP, where he specializes in healthcare, privacy, information security and overall compliance litigation and counseling. He is chair of the firm's Privacy Practice and co-chair of its Health Care Practice.  Mr. Nahra assists companies in a wide range of industries in analyzing and implementing the requirements of privacy and security laws across the country and internationally.  A member of the Board of Directors of the International Association of Privacy Professionals, he is the editor of Privacy Advisor, the monthly newsletter of the IAPP.  He is also a Certified Information Privacy Professional.