Health Highlights

Like It or Not, Obamacare Is Reshaping the Healthcare Industry

Author: Kathleen Brown, Partner, Manatt, Phelps & Phillips, LLP

Editor’s Note: As we approach the one-year anniversary of Obamacare’s launch, the pundits continue to argue over whether or not it’s working. Meanwhile, something much bigger is happening. Whatever you think of its merits, the Affordable Care Act (ACA) is reshaping American healthcare, radically altering business models that hadn’t changed in decades. In a new Forbes post, summarized below, Manatt’s Kathleen Brown explores how the ACA is reinventing the healthcare landscape. Click here to read the full post.


Ever since before the U.S. Supreme Court declared the ACA constitutional two years ago, healthcare executives have been busy re-creating their businesses as if their livelihoods depend on it—which they do. They know that very soon they will be compensated not just for filling hospital beds but for keeping patients out of the hospital altogether. That shifting of incentives, from patient volumes to patient outcomes, is already having profound effects on our health system—and presenting intriguing opportunities for investors.

The old pay-for-service framework is giving way to a pay-for-performance model—creating new revenue streams for companies that previously weren’t directly involved in care delivery. For example, in Los Angeles County, every CVS Minute Clinic is now a UCLA Minute Clinic, connected to UCLA’s medical records system. Meanwhile, the UCLA health system now operates three urgent care clinics in West L.A. and has stationed more than 150 community offices around the county. The new model is a direct response to the primary care incentives that are threaded throughout Obamacare. It now pays to keep patients healthy.

This could tie directly to significant cost reductions for major employers. One important experiment in the new pay-for-performance incentive system is the accountable care organization, in which provider reimbursements are contingent upon achieving both care metrics and cost reductions. Earlier this month, Boeing announced that it would offer its Seattle employees the option to join an accountable care organization that will, among other things, guarantee next-day visits to the doctor.

Just as providers are changing their models and methods for reaching patients, they’re also changing the ways they receive payment. More and more are adopting initiatives like bundled payments (one-time fees for a single service that encompass the entirety of the procedure) and capitation, which pays providers a flat fee per patient no matter how many times the patient is treated, creating an incentive for preventive care.

Investors also should keep a keen eye on publicly traded health systems. That sector is being transformed by a tsunami of mergers and acquisitions. Transactions among hospitals are up more than 200% over last year and have accounted for one in every six dollars spent on all corporate deals in 2014.

Many health systems are now also seeking deals that help them expand into high-growth businesses, like long-term care and home care. In addition to pursuing horizontal integration, health systems are trying to break into the insurance business, usually by forming partnerships with existing insurers. Of the health system leaders who responded to a recent Advisory Board Accountable Care Payment Survey, 64% said they either currently own a health plan or plan to in the next five years.

We’ve all lamented for decades the perverse incentives that made it more profitable to treat very sick patients than to educate them, so they can avoid becoming ill. At last, that system is being replaced with one that encourages the alignment of outcomes, wellness and profits. Plenty of work remains—but the last thing we should do is allow the talking heads to convince us that the success or failure of the ACA depends on reading this week’s tea leaves. Ask any hospital administrator: Obamacare has already reshaped the way they do business. That’s beyond debate.

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DSRIP 101: Understanding Delivery System Reform Incentive Payment Waivers

Authors: Alexandra Gates, Policy Analyst, Kaiser Family Foundation | Jocelyn Guyer, Director, Manatt Health Solutions | Robin Rudowitz, Associate Director, Kaiser Family Foundation

Editor’s Note: The overarching goal of DSRIP initiatives is transforming the Medicaid payment and delivery system to achieve measurable improvements in care quality and population health. Originally narrowly focused on providing funds to safety net hospitals, DSRIP waivers are increasingly being used to support a broad array of providers—both hospitals and nonhospitals—in pursuing delivery system reforms. In a new report, summarized below, Manatt Health and the Kaiser Family Foundation examine and compare key elements of DSRIP waivers in six states: California, Texas, Kansas, New Jersey, Massachusetts and New York. Click here to download a free copy of the full report.


States are engaged in a wide array of delivery system reform efforts. Some are long-standing, such as efforts to expand the quality and value of managed care contracts. Others are new options that emerged from the Affordable Care Act (ACA), including health homes for chronically ill patients and new payment and delivery models for those dually eligible for Medicaid and Medicare.

In addition, half of all states are working with the Centers for Medicare & Medicaid Services (CMS) Innovation Center on State Innovation Model (SIM) initiatives. Finally, CMS and the National Governors Association (NGA) recently announced the new Medicaid Innovation Accelerator Program that will invest more than $100 million over the next five years to help states speed the development and testing of state-led payment and service delivery innovations.

Delivery System Reform Incentive Payment or DSRIP programs are another key piece of the dynamic and evolving Medicaid delivery system reform landscape. DSRIP initiatives are part of broader Section 1115 waiver programs, providing states with significant funding to support hospitals and other providers in changing how they provide care to Medicaid beneficiaries.

Section 1115 Medicaid waivers provide states with an avenue to test new Medicaid approaches that differ from federal program rules. Section 1115 waivers allow for “experimental, pilot or demonstration projects” that, in the view of the HHS Secretary, “promote the objectives” of the Medicaid program. They historically have been used for a variety of purposes, including expanding coverage to previously ineligible populations, changing benefits packages and instituting delivery system reforms.

The Origin and Goals of DSRIP

Often growing out of negotiations between states and the Department of Health and Human Services (HHS) over the appropriate way to finance hospital care, DSRIP initiatives originally were more narrowly focused on funding for safety net hospitals. Now, however, they are increasingly being used to promote a far more sweeping set of payment and delivery reforms. At the highest level, DSRIP waivers are designed to advance the “Triple Aim” of improving the health of the population, enhancing the experience and outcomes of the patient and reducing the per capita cost of care.

The first DSRIP initiatives were approved and implemented in California and Texas in 2010 and 2011, followed by New Jersey, Kansas and Massachusetts in 2012. Most recently, New York approved a DSRIP plan in 2014 and will implement the program in 2015.

With the prospect of hundreds of millions of dollars in federal Medicaid funding and the opportunity to promote a delivery system reform agenda, more states now are stepping forward to pursue DSRIP waivers. For example, Alabama, Illinois and New Hampshire are all in various stages of developing DSRIP waivers. In addition, a number of other states, including Florida, New Mexico and Oregon, operate initiatives that share key elements with DSRIP waivers but are not included as DSRIP waivers for the purposes of our analysis.

DSRIP Funds Are Tied to Performance Metrics

Under DSRIP initiatives, funds to providers are tied to meeting performance metrics. To obtain funds, eligible entities—such as hospitals and other providers, including provider coalitions—must achieve certain milestones.

While the exact structure and requirements of each DSRIP initiative differ, there is a focus on meeting process-type metrics in the early years of the waiver, such as system redesign or infrastructure development. In later years, the focus shifts to meeting more outcomes-based metrics, such as clinical health or population-based improvements.

To support meeting key milestones and metrics, the DSRIP waivers impose robust data collection and reporting requirements on providers. Most recently, the New York DSRIP plan ties state DSRIP funds to meeting performance metrics in year 3 of the waiver.

DSRIP Funding Varies Across States

Funding for DSRIP initiatives varies across states but can be significant. California, New York and Texas each expect to have several billion dollars for their DSRIP initiatives over a five-year period. Kansas, Massachusetts and New Jersey have smaller programs and will spend substantially less.

DSRIP funding is part of the broader Section 1115 waiver programs that require budget neutrality for federal spending, meaning the federal government cannot spend more under the waiver than estimates show it would spend without the waiver. The budget neutrality requirement generally generates a lot of negotiation between states and the federal government.

In concept, states will undertake initiatives expected to save Medicaid funds and then use the savings for new investments in delivery system reform. States also have used DSRIP waivers as a means to continue receiving Medicaid funds for supplemental payments to hospitals as they expand their use of managed care.

The Role of DSRIP Waivers Is Evolving

The role of DSRIP waivers in delivery system reform is evolving. Recent DSRIP waivers highlight the evolution, which includes increasing accountability and a growing set of providers. For example, the New York DSRIP waiver—the most recent one approved—includes funding for a broad group of providers, a more specific set of metrics and projects, and new requirements for the state to meet statewide goals as a condition of continuing to receive DSRIP funding.


Looking ahead, it will be important to evaluate the longer-term outcomes of DSRIP initiatives and the extent to which they are driving changes in care delivery, clinical outcomes and population health. CMS has not released specific guidance for states about requirements for DSRIP programs. Watching how states structure their programs in terms of eligible providers, projects and metrics—as well as how they finance their initiatives and account for budget neutrality—will provide important guideposts for states considering DSRIP programs.

There are continuing questions around whether states will be able to renew DSRIP waivers and how DSRIP programs might differ across states that are implementing Medicaid expansion and states that are not. Ultimately, it will be important to monitor DSRIP initiatives to measure success in meeting delivery reform goals, as well as in achieving clinical and population health improvements. If DSRIP programs are successful, policymakers may want to see how they can be scaled and replicated across a larger number of states.

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Confidentiality of Health Information in PHRs and Mobile Apps: California Law Could Have Important Implications

Authors: Deven McGraw, Partner, Manatt, Phelps & Phillips, LLP | Susan Ingargiola, Director, Manatt Health Solutions

Editor’s Note: Consumers are increasingly using personal health records (PHRs) and mobile health applications to track and store their health information. Federal privacy and security protections for health information stored in certain PHRs and most mobile apps, however, remain spotty. Recognizing this, California enacted legislation (AB 658) to protect the confidentiality of health information maintained in these increasingly popular tools. In a recent article for iHealthBeat, summarized below, Manatt Health examines the law’s implications for consumers, as well as developers of consumer-facing health tools. In addition, we explore the privacy and security protections afforded to health information stored in some PHRs and mobile health apps.


The Health Information Technology for Economic and Clinical Health (HITECH) Act defines PHRs as electronic records of “identifiable health information on an individual that can be drawn from multiple sources and that is managed, shared and controlled by or primarily for the individual.” Consumers can receive PHRs and mobile health apps as a service from their providers or through commercial vendors, who often charge a fee.

Federal Privacy and Security Framework

Health information in PHRs and mobile health apps is not comprehensively regulated under HIPAA. HIPAA only covers PHRs that are offered by HIPAA-covered entities (such as providers or payers) or their business associates (contractors acting on their behalf, such as software or technology companies). HIPAA does not apply to freestanding PHRs (e.g., HealthVault) that are not offered by HIPAA-covered entities.

Another federal statute applicable to PHRs and mobile apps offered by for-profit organizations is the Federal Trade Commission (FTC) Act. This law gives the FTC the authority to crack down on “unfair” and “deceptive” trade practices. An example of a “deceptive” trade practice is failure by a PHR or mobile app vendor to protect data to the extent stated in their policies or advertising. The FTC also has held companies accountable for failing to adopt reasonable security precautions. However, because the FTC does not set detailed requirements for either data privacy or security, protections for patient-generated health information not protected by HIPAA are much more dependent on the discretion of the technology vendor and the current priorities and resources of the FTC.

Further, under the HITECH Act, vendors of PHRs (and apps offered through PHRs) not covered by HIPAA must notify individuals in the event of a breach of patient health information. The FTC enforces this requirement, which provides some protection but only after a breach has already occurred.

California Privacy and Security Framework

The principal California state law addressing the privacy and security of health information is the Confidentiality of Medical Information Act (CMIA), which lists permitted uses and disclosures of “medical information” for entities covered by the law, similar to HIPAA. Entities covered by CMIA have historically included healthcare providers, health services plans, and individuals and businesses that contract with these entities for work that involves access to medical information. A few years ago, California enacted legislation to extend CMIA to cover “[a]ny business organized for the primary purpose of maintaining medical information in order to make the information available to an individual or to a provider of healthcare.”

Prior to California’s enactment of AB 658, it was unclear whether non-healthcare-related vendors of PHRs and mobile health apps met the requirement of being “organized for the primary purpose” described above, casting doubt on whether they were subject to CMIA’s requirements.

The Scope of AB 658

AB 658, which went into effect in January 2014, addressed this issue, providing that any business that offers a PHR or other digital tool designed to maintain “medical information” for a broad array of purposes is subject to CMIA. As amended by AB 658, CMIA applies to “[a]ny business that offers software or hardware to consumers, including a mobile application or other related device that is designed to maintain medical information . . . in order to make the information available to an individual or a provider of healthcare at the request of the individual or a provider of healthcare, for purposes of allowing the individual to manage his or her information, or for the diagnosis, treatment, or management of a medical condition of the individual.”

The law applies to software or hardware that maintains “medical information,” which is limited to individually identifiable information regarding a patient’s medical history, mental or physical condition, or treatment that is either in the possession of or is derived from a healthcare provider, health plan, pharmaceutical company, or contractor thereof. This means that CMIA may not reach all PHRs and mobile health apps.

For example, if a PHR or mobile health app pulls information directly from a healthcare provider’s electronic health record (EHR), it is now covered under CMIA (and this probably applies even if the PHR or mobile app also includes information that an individual self-enters). However, if a PHR or mobile app only contains information an individual enters directly or that comes directly from an individual’s device (e.g., fitness apps that keep track of individuals’ weight or exercise regimens), it is not covered under CMIA. Whether PHRs and other apps to which individuals upload copies of their physicians’ treatment notes, which would appear to meet the requirement of being “derived from” a healthcare provider, are covered under CMIA is less clear.

The Effect of AB 658

The CMIA expressly permits entities to use and disclose medical information for a host of purposes without individual authorization. As under HIPAA, these include disclosures for treatment, payment, and various healthcare operations (which include certain administrative, financial, legal, and quality improvement activities of an entity that are necessary to run its business and to support the core functions of treatment and payment). These disclosures are common business activities for healthcare entities but are an odd fit for the business model of most PHRs and mobile apps.

Businesses newly subject to CMIA also must now comply with a host of restrictions on what they can do with the medical information they store. For example, except for the permitted uses described above or where required by law, they may not disclose information regarding an individual without first obtaining the individual’s authorization, which must be written and satisfy precise requirements (e.g., it must list the specific uses and limitations on the types of medical information to be disclosed).

Given that most mobile apps obtain user consent through general assent to terms and conditions, the impact of extending CMIA’s authorization requirements to mobile app developers could be significant. This specific authorization requirement also extends to marketing and other commercial uses of medical information. Newly covered businesses with business models that include the sales or marketing use of certain customer information that meets the definition of medical information will have to change their business models or obtain their customers’ specific authorization. Failure to comply with the law could result in penalties of nominal damages of $1,000 and the amount of actual damages, if any, sustained by the patient, as well as administrative fines and possible civil and criminal penalties.

Looking Forward

Federal privacy protections under HIPAA are limited to traditional healthcare entities (such as providers and insurers) and their contractors. California’s new law is broader, holding many different types of organizations—such as software vendors—to confidentiality standards and medical disclosure rules that traditionally have been reserved for healthcare entities.

It is uncertain whether the new law will suffice to provide comprehensive protections for individuals. It also remains to be seen whether it will result in unintended consequences for PHR and mobile app developers. What is clear is that PHR and mobile app developers should be vigilant in determining whether they are subject to CMIA and, if so, what changes they may have to make to meet their legal requirements.

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Pharmacy Compounding Update: Regulators Search for the Right Formula

Author: Michelle McGovern, Associate, Healthcare Industry, Manatt, Phelps & Phillips, LLP

Editor’s Note: Last November, the Compounding Quality Act (the Act) became law after a yearlong national debate on whether—and how—to regulate compounding pharmacies. In the months since the Act’s passage, the Food and Drug Administration (FDA) has issued guidance on the law, ranging from proposed good manufacturing practices to requests for nominations of substances that may be used at drug compounding facilities. In a new article for Bloomberg BNA’s Health Care Policy Report, summarized below, Manatt Health reviews the history of compounding leading up to the Act’s passage, recaps key provisions of the Act and discusses the steps taken to date to interpret the new law. Click here to download the full article.


History of Compounding

Under the traditional definition of compounding, compounders prepare customized drugs for patients who are unable to take a product in its commercially available, FDA-approved form. These prescriptions are prepared on a patient-specific basis and are commonly used for elderly or infant patients or patients who may be allergic to an inactive ingredient.1

Because each preparation is patient-specific, compounders have generally been exempt from federal regulation. It would be nearly impossible to require a new drug application (NDA) for each drug prepared for a specific patient. Therefore, until the passage of the Act, compounding pharmacies—traditionally regulated at the state level—generally avoided regulation by the FDA.

In 1997, the FDA Modernization Act (FDAMA), which modified certain provisions of the Federal Food, Drug and Cosmetic Act (FDCA), became law. The FDAMA added Section 503A of the FDCA, which excepted compounded drugs from various “new drug” requirements, as long as they complied with certain restrictions. Among other things, the FDAMA prohibited compounders from behaving as manufacturers and making copies of FDA-approved products.2

The law was challenged in court for restricting free speech, as one provision prohibited compounders from soliciting prescriptions and advertising compounded products. The case was eventually sent to the Supreme Court, which in 2002 held that the speech-related restrictions were unconstitutional.3

The Supreme Court did not decide on whether the non-speech-related provisions of Section 503A could stand, however. Therefore, the underlying case, which struck down the remaining regulations on compounding, became the national standard.

In 2008, the Fifth Circuit came to a different conclusion, and held that the remaining provisions of the law were enforceable.4 The decision, however, applied only to the states in the Fifth Circuit—Texas, Louisiana, and Mississippi. In the rest of the country, the FDA’s authority to regulate compounders came from a compliance guide the agency issued after the 2002 Supreme Court decision. Since the guide did not carry the force of law, it provided the FDA with uncertain authority over compounders and created an environment in which some compounders functioned as unregulated manufacturers.

In some cases, these “bad actors” copied FDA-approved drugs in large quantities and sold them for far less than their FDA-approved counterparts. Without going through the NDA process, compounders were able to produce drugs far more cheaply than manufacturers. Further, because the FDA had no enforcement jurisdiction over compounders, it was unable to ensure they were adhering to appropriate quality and safety measures.

In the fall of 2012, a tainted injectable prepared by the New England Compounding Center sickened 751 individuals and killed 64. This incident set off a year of national debate around regulating compounding pharmacies.

Compounding Quality Act

On November 27, 2013, the Act was signed into law and gave the FDA clear enforcement jurisdiction over registered compounding pharmacies.5 The Act represents a compromise among legislators, regulators and industry stakeholders, many of whom disagreed on what, if any, role the FDA should play in regulating compounding facilities.

Among other things, the Act requires all compounders to adhere to quality and sterility standards. In addition, it creates a mechanism for the voluntary registration of “outsourcing facilities,” which are subject to specific quality and sterility standards, FDA inspection, and enforcement action.

Compounders who choose to register as outsourcing facilities are subject to, among other things, restrictions relating to quality. They also face restrictions on behaviors traditionally associated with manufacturers, such as copying FDA-approved products, acting as wholesalers of compounded products or compounding certain drugs, such as those withdrawn from the market. Outsourcing facilities also have to comply with heightened reporting requirements (e.g., adverse event reporting).

In addition, registered facilities will be required to pay an annual fee that will start at $15,000 in fiscal year 2015, adjusted for inflation. Facilities that require reinspection by the FDA in any fiscal year will have to pay a reinspection fee of $15,000 in that fiscal year. These inspection and reinspection fees will help fund enforcement actions.

To help prevent health crises like the spinal meningitis outbreak in 2012, the Act also provides for the FDA to receive submissions from states with concerns about compounding pharmacies that may be violating the requirements set forth in Section 503A of the FDCA, and descriptions of actions taken against compounding pharmacies. The Act leaves regulation of traditional compounders who prepare products based on patient-specific prescriptions to the states.

FDA Guidance on Pharmacy Compounding

To date, the FDA has released a number of guidance documents in light of the Act’s passage. Key guidance documents are discussed in detail below.

1. Guidance on Compounding Products Under Section 503A

Section 503A provides that for compounders not registered as outsourcing facilities to be exempt from certain regulations that apply to drug manufacturers, their compounded products must:

  • Be prepared for individual patients based on the receipt of a valid prescription.
  • Be prepared by a licensed pharmacist either upon receipt of an individual prescription or in limited advance quantities based on the pharmacist’s history and under orders generated by a physician with whom the pharmacist has an established relationship.
  • Be compounded in compliance with United States Pharmacopeia (USP) standards on pharmacy compounding using bulk drug substances.
  • Be prepared using bulk substances manufactured by establishments registered under the FDCA.
  • Be prepared using bulk substances accompanied by valid certificates of analysis for each product.
  • Be prepared using ingredients other than bulk substances that comply with USP or National Formulary (NF) standards, if one exists, as well as with the USP chapters on pharmacy compounding.
  • Not be prepared with products that appear on the list of drug products withdrawn or removed from the market for being unsafe or ineffective.
  • Not be prepared by a licensed pharmacist or physician who compounds regularly in inordinate amounts drug products that are essentially copies of commercially available drug products.
  • Not be a product the FDA has by regulation identified as a product that presents demonstrable difficulties for compounding and that reasonably demonstrates an adverse effect on the safety or effectiveness of the product.
  • Be prepared in a state that has entered into a Memorandum of Understanding (MOU) with the FDA addressing the distribution of inordinate amounts of compounded products interstate and providing for appropriate investigations by a state agency of complaints relating to compounded drug products distributed outside such state. In states that have not entered into such an MOU with the FDA, the compounder cannot distribute out of the state in which they were prepared more than 5% of the total prescription orders dispensed or distributed by the compounder.6  

In addition, the FDA stated that it:

  • Intends to update periodically the list of drugs that cannot be compounded because they have been withdrawn or removed from the market for being unsafe or ineffective.
  • Is in the process of publishing a list of bulk substances that are safe for compounding, even if the substances do not have an applicable USP or NF monograph or if they are not components of FDA-approved drugs. (Until this list is finalized, human drug products should be compounded only using bulk substances that are components of drugs approved under the FDCA, or if they are the subject of USP or NF monographs.)7  
  • Has requested information about compounded drug products that present demonstrable difficulties in compounding.
  • Will be developing an MOU for use between states and the FDA to address the distribution of compounded products interstate.8

The draft guidance also:

  • Describes sterility and quality requirements for drug products compounded under Section 503A.
  • Notes that the product labeling, advertising and promotion must not be false or misleading.9
  • Includes enforcement actions for compounders whose products do not meet the conditions of Section 503A.10
  • Discusses the FDA’s enforcement approach with respect to compounded products, indicating that the highest enforcement priority is around regulations posing the greatest public health risks.

It’s important to remember that the FDA’s compliance guidance simply indicates the organization’s thinking with respect to enforcement. The requirements set forth in the guidance do not, at this time, carry the force of law.

2. Current Good Manufacturing Practices (CGMP) for Outsourcing Facilities

The Act requires registered outsourcing facilities to conform their operations to CGMP found in federal regulations. Those regulations, however, are not necessarily applicable to compounding facilities, which have different considerations and procedures than manufacturers.

As the FDA is working to develop specific CGMP regulations for outsourcing facilities, interim guidance was released to describe the FDA’s current thinking on best practices for outsourcing facilities. In the guidance document, the FDA acknowledges that there are differences between outsourcing facilities and conventional drug manufacturers, and that CGMP requirements must be tailored to compounding businesses.10

3. List of Registered Compounders

As of September 5, 2014, 55 compounders have elected to register as outsourcing facilities with the FDA, triggering an FDA inspection of each facility (16 facilities have yet to be inspected, however). As of that date, 12 of the 55 registered facilities had been issued an FDA warning letter as a result of an inspection, and one facility received a recall letter.

It’s critical to keep in mind that passing an FDA inspection captures only a “snapshot in time.” Providers who purchase compounded products from registered outsourcing facilities, however, have—at least in part—the comfort that the registered facility is held to FDA-mandated standards of quality and sterility.

4. Guidance on Bulk Substances to be Used in Compounded Products

The FDA has requested input from industry stakeholders on the types of bulk substances that can—and cannot—be used safely in compounds prepared by both registered outsourcing facilities and compounders subject to Section 503A of the FDCA. In general, these requests replaced outdated proposed rules on similar topics.

The FDA is also requesting nominations for drug products that present demonstrable difficulties for compounding under Sections 503A and 503B of the FDCA, and for additions and modifications to the list of drug products that have been removed from the market for safety or effectiveness reasons. The stakeholder nominations and subsequent FDA rulemaking will help ensure the quality and safety of products prepared by compounders nationwide.

What’s Next

While the FDA has released draft guidance on the new regulatory regime for compounding pharmacies, the true test of industry change is yet to come. As draft and final regulations are released, compounders and outsourcing facilities alike will begin to understand the technical requirements with which they must comply to avoid enforcement action. To that end, the FDA also will need to ensure that it has the resources to enforce the regulations. Until then, stakeholders of all types await further—and final—guidance on how to prepare compounded products in the wake of the Act.


1 See Thompson v. Western States Medical Center et al., 535 U.S. 357, 360-61 (2002).
2 See 21 U.S.C. § 353a
3 Western States Medical Center, 535 U.S. at 357.
4 Medical Center Pharmacy, et al., v. Mukasey, 536 F.3d 383 (2008).

5 Pub. L. No. 113-54; 127 Stat. 587 (11 PLIR 1438, 12/6/13). The Compounding Quality Act is part of the new Drug Quality and Security Act, which also includes supply chain provisions that are not discussed in this article.
6 See
7 Id.
8 Id.
9 Id.
10 Id.
11 See
12 See 

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You’re Invited to “Reinventing Long-Term and Post-Acute Care: Integrating Into a New Healthcare System”

According to the Congressional Budget Office, by 2050, 20% of the U.S. population will be 65 or older, compared to just 12% in 2000 and 8% in 1950. The number of people 85 or older will grow the fastest, constituting 4% of the population by 2050—10 times the share in 1950. One study estimates that more than two-thirds of 65-year-olds will need assistance to deal with impaired functioning at some point during their remaining years, sharply increasing the need for long-term care assistance. Adding to the soaring demand for long-term care is the growth in younger patients with chronic and disabling conditions.

Couple the exploding growth in older and disabled Americans with the seismic shift in healthcare driven by delivery system and payment reforms, and it’s clear that long-term and post-acute care (LTC and PAC) providers need to reshape their strategies to thrive in a radically different world. What are the transformational trends that will have the greatest impact on LTC and PAC providers, as well as their acute care partners? How should you respond to ensure success in a changing healthcare landscape? Learn the answers at a new, free webinar from Manatt Health, “Reinventing Long-Term and Post-Acute Care.” During the session, you will:

  • Discover how LTC and PAC providers are redefining themselves to adapt to emerging reforms, evolving Integrated Delivery Systems (IDS) and the sea change in the healthcare system.
  • Identify the demographic, structural, regulatory, political and technological trends that will be the strongest change drivers for LTC and PAC—from their current status to their projected effects.
  • Understand how powerful trends are redesigning LTC and PAC providers’ relationships with consumers, as well as their business models with health plan and Accountable Care Organization (ACO) partners.
  • Explore how both states and health systems are responding to meet the “challenge of the vulnerable,” as the population ages and the need for caregiving skyrockets.
  • Examine the decisions and actions LTC and PAC providers must take to navigate the new market.

With cost pressures rising, health systems consolidating, demographics shifting and states gaining power, trends are converging to redraw the healthcare map. In this new environment, LTC and PAC will play a central role in meeting the needs of an aging population with increased care needs—and on cutting hospital costs by reducing preventable readmissions. The webinar will ensure that LTC and PAC providers can anticipate and prepare for the changes critical to their future—and build sustainable success for their organizations.

Even if you can’t make the original airing on October 28 from 1:00 to 2:00 p.m. ET, register now and we’ll send you a link to view the program on demand.


Stephanie Anthony, Director, Manatt Health Solutions

Carol Raphael, Senior Advisor, Manatt Health Solutions

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You’re Invited to a New Manatt Webinar, “The ACA One Year In: Current Progress and Coming Game Changers.”

Having survived political wars, Supreme Court appeals and even a government shutdown, the Affordable Care Act (ACA) has made it through its first year of implementation. The public Marketplaces that are central to the ACA launched on October 1, 2013—and a year later, we are facing our second open enrollment period. In spite of the bumpy beginning of and the raging debates around health reform, Obamacare is here to stay.

What’s the real status of the ACA today? What’s the outlook for both public Marketplaces and private Exchanges? Which trends and developments are proving to be the true market disruptors? And what can you expect next? Manatt Health helps you navigate the rhetoric of both the ACA’s critics and champions to give you an accurate view of Obamacare’s status, impact and future in a new webinar, “The ACA One Year In: Current Progress and Coming Game Changers.”

Manatt Health Solutions Managing Director Joel Ario—who led the development of the regulatory framework for Exchanges as Director of the Office of Health Insurance Exchanges at the U.S. Department of Health and Human Services—will give you an in-depth update on health reform. During the program, you will have the chance to:

  • Compare the performance, plans and projections for state-based and federally facilitated Marketplaces.
  • Examine three developments that could reshape the public Exchange landscape prior to 2016.
  • Explore the range of models making state-based Marketplaces “laboratories of democracy.”
  • Look ahead to how a new president could shape a new equilibrium after 2016.
  • Understand how 1332 innovation waivers can be used to achieve ACA coverage goals in new and innovative ways.
  • Identify and analyze key market disruptors, including narrow networks, cost sharing, consumer empowerment and federal expansion.
  • Learn the latest on the employer mandate and its anticipated effects.
  • Discover how private Exchanges may change the game.

Don’t miss this opportunity to see exactly where the ACA stands as it passes its first birthday—and what lies ahead for U.S. health reform. Even if you can’t make the original airing on November 19, register free now, and we’ll send you a link to view the session on demand.


Joel Ario, Managing Director, Manatt Health Solutions

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