In the second installment of their popular annual series, William Horton, Partner, Jones Walker, Daniel Murphy, Partner, Bradley Arant Boult Cummings, and Judith Waltz, Partner, Foley & Lardner, discuss some of the key health law developments in 2021 and what to expect in 2022. They examine the overall state of the health care industry from a regulatory perspective amid the continuing effects of the pandemic and the flurry of activity from CMS and other government agencies. They also discuss the uptick in transactional and M&A activity, the consequences of the price transparency rule, the role of sub regulatory guidance, and more.
Watch the full conversation.
Horton, Murphy, and Waltz are editors of AHLA’s bestselling title, Federal Health Care Laws and Regulations.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
In the second installment of their popular annual series, William Horton, Partner, Jones Walker, Daniel Murphy, Partner, Bradley Arant Boult Cummings, and Judith Waltz, Partner, Foley & Lardner, discuss some of the key health law developments in 2021 and what to expect in 2022. They examine the overall state of the health care industry from a regulatory perspective amid the continuing effects of the pandemic and the flurry of activity from CMS and other government agencies. They also discuss the uptick in transactional and M&A activity, the consequences of the price transparency rule, the role of sub regulatory guidance, and more.
Watch the full conversation.
Horton, Murphy, and Waltz are editors of AHLA’s bestselling title, Federal Health Care Laws and Regulations.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
This episode of HL, a speaking of health law is brought to you by HLA members and donors like you for more information, visit American health law.org.
Speaker 2:Welcome. This is the latest iteration of ALA's, uh, speaking of health law podcasts, and I'm bill Horton. I'm pleased to be able to host this one, uh, along with a great panel of speakers. Uh, we'll look sort of at the, the year end review or parts of it and the regulatory and by environment as we reach, uh, the end of our second year of the public health emergency. Uh, and this is, this is really a carryover from something we did last year, as I hope everyone listening knows HLA publishes and has published for a couple of decades now, uh, HLAs federal healthcare laws and regulations, we, which is a compendium of pretty much all the federal healthcare laws and regulations and an increasingly large number of volumes that comes out every year and is a great resource. And so what we did last year was ask some of our board of editors for the laws and regs book to spend a little time with us to talk about developments in the regulatory field and in the industry in general. And, um, um, just, uh, take a little bit of a look back at what's happened and maybe a little bit of a look forward as to what we can expect in 2022. Uh, so as I said, I'm bill Horton, I'm, uh, head of the healthcare industry team co-head of the healthcare industry team at the Jones Walker law firm, working out of it, Birmingham office. And we have two great panelists with us today on the west coast, we have Judy Walt Judy is well known to most of us as, uh, uh, the co-leader of the healthcare industry team at Foley and Larner. And as, as one of the true national gurus on all manner of regulatory issues, reimbursement enforcement, and all kinds of technical stuff, uh, that makes for a great resource, um, and, and has just finished a term as chair of HLAs, uh, regulation, accreditation, and payment, uh, group, meaning that, uh, for the first time on this podcast, we actually have a rapper. Uh, so we're excited to have that. And then we also, from, from right down the street from me have Dan Murphy, who is a partner in the Birmingham office of Bradley ARA bolt Cummings, uh, and is an outstanding, uh, healthcare transactional lawyer, uh, with also a great focus on regulatory compliance, responding to investigations, all of the things that you have to do, if you're gonna be a transactional lawyer in the healthcare field. Um, these are really two, two stars in our area, and we're just excited to have the chance to chat with him today. And what I guess I would do, uh, to kick us off is really to throw out for the, the two of you, uh, kind of your thoughts on where we are from a big picture regulatory standpoint. We've obviously gone through, uh, last year, a flurry of emergency rules, uh, put in place to deal with the COVID pandemic. Uh, we had right at the end of the year, uh, uh, new stark and any kickback safe Harbor rules, we've had a price transparency rule going to fact, we got the no surprises act, um, all manner of developments, uh, going on under the continuing sort of umbrella of the, the public health emergency and what has become kind of the, the regulatory version of long COVID. Uh, so kind of from a, from big picture perspective, if y'all would share with us, just some thoughts on kind of where we are in the industry and, and what, you know, what trends we're seeing, what fallout we're seeing from the really unprecedented, uh, last year and a half on the, from the regulatory front, Judy, you wanna start us off?
Speaker 3:Yeah, I'll start. So the, the two years since the, um, pandemic was declared, the public health emergency was declared. It had been pretty crazy times, but also pretty fascinating times from my perspective, um, from a regulatory approach, I started my career as an assistant regional council with the department for health and services, and my primary client was CMS. And I'm to see CMS move as quickly as they did. And as expansively as they did has been pretty darn impressive in my view, but it's been hard for the rest of us to keep up a bit and, and anything. I mean, I've sort of felt this since the ACA, but anything I ever knew, I, I wanna double check now because I'm not sure that what I have known or, or what I've known several times is still, um, the same thing. So from a big picture perspective, I think it's required our clients to, um, to pay a lot more attention to what the regulatory rules are. I've also seen some, um, some issues, and I think we're going to see these going forward with, um, uh, um, people assuming they're going to get some breaks because of the pH, if they missed it a little bit, there was just an indictment that I saw that came out with somebody who, who rather broadly interpreted some of the PhD, um, waivers and, and is now in big trouble, whether merit or not. So I think it's been a very fluid time, but also a very exciting time. And it's, I, I think the next step will be first of all, enforcement on some of those, some of the problems that are gonna shake out from those regulatory reforms. Um, but secondly, trying to figure out what will become permanent and what will, um, what will go back to the way it used to be.
Speaker 2:Hey, thanks, Judy, Dan, you wanna add to that?
Speaker 4:Yeah. Yeah. Um, I think, you know, compared to last year, when we all got together for this podcast, maybe there's a little bit less new rule making and regulations that we have to digest. Um, but it was a very busy year for our client. It's trying to, um, operationalize and understand all the stuff that came out last year, combined with the public health emergency. Um, you know, I think we'll talk about it a little bit later, but, um, for our hospital clients in particular imple, figuring out how to implement price transparency, um, right now kind of staring down the deadline for surprise billing rules, um, you know, all, all healthcare providers who are, uh, subject to stark, the stark group practice change, that's coming up, uh, in a couple weeks, um, you know, a lot to digest this. I, I also think that, um, when we got together last year, we were hoping, and maybe expecting that in 2021, we would be unwinding or undoing some of the temporary emergency business arrangements or other arrangements we did, um, under waiver protection, you know, largely, um, you know, unfortunately we're still in this long COVID situation. Um, I, I will say at least from a kind of a practical perspective, we don't have, um, we haven't seen clients really entering into new kind of programs or arrangements relying on those exceptions at this point, um, because nobody really knows when it'll be over. Um, you know, they've enjoyed the protection that's lasted up until now, but I don't, I don't see the flurry that we saw, you know, a year before in putting things together in reliance on those waivers.
Speaker 2:And I think just, just picking up on that thought, one of the things that has been interesting to me is seeing kind of the, uh, to some degree unintended consequences, but really just the uncertainty that has been attendant upon, uh, providers trying to respond to these changes, respond to the emergency rules. I mean, we had a circumstance recently where a client was an ambulatory surgery center that had taken advantage of the, the, uh, temporary opportunity to become a temporary hospital, uh, under the emergency rules that came out last spring. And then they were very surprised to be notified during the summer that they were having their Medicare billing privileges terminated because they hadn't filed a cost report. Well, they had no idea what a cost report was. I mean, they were an ambulatory surgery and, you know, having seized this opportunity to become a hospital temporarily, they didn't really realize that they had to like learn how hospitals worked under Medicare and what they had to do. And though they had to scramble around and, and fix that. And, you know, similarly, I think this is a, as we've talked with some of our physician practice clients about Dan, what you were alluding to the, the group practice changes from last year. I mean, I, what I've seen in more than one case where that smoked out a client that was in fact using a system that may not have been quite precisely what it should have been even before the new rule. Right. Um, so there's been catching up on that and it's really been, uh, um, uh, Judy, I think you said it best there's, there's I think probably never been a time when it's more important to actually, you know, pull the rules, pull the advisory opinion, put the, pull the statute, have them out in front of you because they may not be what you remember.
Speaker 3:Yeah. Yeah. And I would just say I've been doing a ton of, um, lab work during COVID. I did a lot of work with labs beforehand, but the, the astronomical numbers of, of new labs, it's just amazing. I was just looking at the CMS, um, stats this morning. They're now up to over 300,000 labs across the country. And somewhere I had their, the numbers of their enforcement actions too, for entities that they've gone after, during, during the last, uh, while during the PhD, they either didn't know they need a lab certificate or was, um, were doing testing that, uh, was outside the level of certificate that they had. The, there's just an incredible increase in that business. And a lot of least the ones that I've been dealing with, a lot of entities that, um, have no healthcare background ever. Um, and so this is just a, you know, sometimes a rather<laugh> rather shocking awakening to them as to, to all the, all the Nicks and crannies that it that's, that are required to, to be compliant.
Speaker 2:Yeah. The lab business has certainly, I mean, there are a lot of people who've gotten in the lab business in the last 18 months, uh, some with a lot of background and some with no background at all. And I know personally that I found one of the most difficult things to do was figure out sort of who was authorized to administer COVID testing because mm-hmm,<affirmative>, you would think there would be sort of a set of rules there. And in fact, uh, well maybe there was, and I just wasn't smart enough to find it, but I found myself prowling through lots of stuff, trying to have confide and the advice I was giving my client about whether they could do what they wanted to do.
Speaker 3:Well, that would be one suggestion I would have for CMS. And I think I've actually made this to them directly, but if not, they'll, they'll hear it here. Um, if they could include on their website with their clear resources of a list of not just the state contact people, but a list of some of those basic, uh, lab requirements, like if you need an extra state certificate or, or license or who can order what, and, and things of that sort would be very helpful.
Speaker 2:And, and Dan, one of the things, uh, I think we've seen that, that maybe you can talk about a little bit is the impact that all these changes have had on, uh, transactional and M and a activity as, as new business opportunities develop people have gotten into new lines. And then we've also had, you know, providers that were very hard hit by the pandemic, you know, looking to partner, uh, or sell in order to survive. So if you give us a little perspective on what you're seeing as a, as a healthcare deal lawyer, I think that would be very interesting.
Speaker 4:Yeah. It's interesting. I'm interesting. You mentioned, um, the labs, we've seen a lot of laboratory startups, also, anything related to telehealth has been, you know, big in startups. And I think like both of you also said, well, my observation is a lot of those folks are not people experienced with, um, healthcare, uh, operations or regulations, but they are good business people or have, you know, money to invest. And it's, uh, I'll be very interested to see what kind of enforcement problems there are for a lot of these new market entrance coming down the road, because, you know, a lot of them, um, just don't have the background that a lot of, you know, established providers would have when they're setting up these, um, entities. But, um, in terms of the deal activity, I don't, I mean, I think everybody everywhere in the country has experienced more deal activity. Um, I can't, you know, uh, can't ever remember a time as busy as this. Um, and one, one thing that I've I've thought is interesting that I've observed is that at, there seems to be so much deal activity that the, um, the leverage has shifted a lot to sellers and I've seen it, I've seen it affect the diligence process in a way that I haven't seen in, in so far as the sellers are able, I've noticed to, you know, sort of get away with a little bit less, um, intrusive, uh, diligence from their of their business. And a lot of the deal protections that a buyer, at least in my experience could customarily insist on. They've not, they have not been able to get, because, uh, there are so many, um, you know, because it's such a seller's market.
Speaker 2:Yeah. And this is, and, and, and one of the things I think that this has pointed up is you've had a lot of money coming into the industry. You've had a lot of private equity investors and, and you've had a lot of money coming in from sources that, that don't have a background in the industry. And, and do not always recognize the, the interplay between federal and state law and federal and state Reagan and the, you know, the fact that Medicare tells you it will pay, pay for something doesn't mean you can actually do that under state law, or the fact that you can do something under state law doesn't necessarily mean you can get paid for doing it. And, and it's, it's, it is a circumstance where what's possible in one state may be impossible, or at least very difficult you across the border in the next state. And I think a lot of, uh, a lot of investors who perhaps did not have a full appreciation for that, or, uh, you know, getting a quick and sometimes harsh education.
Speaker 4:Yeah. And, and it's, and that's, that's, that's a good point bill. And it's, it's a real challenge, I think for, you know, advising a new, a new startup type client that if they're not used to hearing that, yes, you, so you have good news, you have a green light at the federal level, but there may be 25 red light or yellow lights. Once you try to roll this out across the country. And, you know, that's a challenge if they've never faced that kind of regulatory structure. Um, and especially in this environment where a lot of them are really trying to move fast because they wanna move fast generally, but also because they might be trying to set, set something specific to COVID and there's not time to do, you know, a 50 state survey of every possible issue. So it's, that's also a real challenge.
Speaker 2:Let's talk there a, a couple of, you know, major changes that are really not COVID or pandemic driven, but that, that have potentially profound effects and, and are not all that easy to work with. And think about the, the, the price transparency rule that went into effect, uh, at the beginning of this year. And I think a lot of, a lot of hospitals, uh, particularly, you know, smaller and independent hospitals sort of sat back thinking this really isn't gonna happen. The can's gonna get kicked down the road somewhere, and we're not gonna have to be ready to produce all this information<affirmative> on January 1st. And then they did. And that compliance has been kind of all over the map and, and sort of on a, you know, related topic is the no surprises act. And, uh, to some extent, state law surprise billing rules that really are, uh, potentially really upending a lot of economic arrangements within the industry that, that have been in place for a long time. Um, yeah, maybe if, if you all could share some thoughts on, on those developments and what you're seeing with your clients as the challenges they're facing and how they're coping with them,
Speaker 3:Uh, I'll jump in on that first. So I'm not a big fan of price transparency for hospitals. I mean, I know it doesn't matter. My personal opinion doesn't matter that much, but, uh, it, you know, what hospitals charge<laugh> has very little to do at the end of the day with what they get paid. And, and there's just so manys, so many different complications that go into, you know, it's not, it's not like you say, okay, this is what we charge and, you know, this is whatever, it, it just, it it's too. Um, so anyway, I, I'm not a big fan of that, but we're going forward with it obviously. And, and I know it's a big burden and, and I guess my, my point is, I'm not sure at the end of the day, the doubt is gonna be that helpful to us going forward. What I would know, you know, and not, not to keep focusing on labs, but the lab transparency rights, uh, with pricing for COVID testing are kind of an interesting angle on that. They're in the same part as the same section of transparency rugs, and there, the, you know, a, a lab that offers COVID test has to post online it's usual cost, you know, like hundred, let's say 120 bucks for test. And then with respect to, um, insurers, they either have to negotiate or a with that lab, like they'll pay a hundred bucks 120, or they pay the, the listed price. Um, which many of my clients have, have, um, made quite a profit on, on the Eli, a high price, and then everybody has to pay it unless they enter into. So, so there, it actually has some relationship to, to what's being done. But I, I do think the, a lot of the hospital information, it, it does, it, it will impact not necessarily, or not to a significant extent in my view, the Medicare, um, reimbursements, but will, it will impact potentially the commercial, um, relationships. And I think the same thing on the no surprises, um, act, I mean, I, I see a real need for that. That was, that was a hardship for a lot of people, but at the end of the day, I do think the consequences may, uh, may not be what was intended. And so with that, I'm gonna send, send it over to Dan for, for his comments.
Speaker 4:Yeah. Well, I, I will, first thing I'll pick up on is I agree. I think for both rules, the consequences I would suspect are not gonna be what the lawmakers and intended, um, policy makers intended, uh, ES especially I think on the price transparency. So kind of from a operational perspective, when I've been talking to my clients about this, you know, it's not, it's not just that it's kind of a pain administratively and it is to set up, um, you know, the, the, the tools to disclose pricing in compliance with the rule that that's difficult, especially in the middle of a pandemic. But I think the frustrating thing from our clients is just that, you know, they set this up, but they don't think anybody's gonna use it or not that many to people are gonna use the tool. Certainly not your average customer. Uh, who's gonna go and look at the machine readable file. Um, maybe, maybe the, maybe the, um, you know, the shopable product file, that's a little more user friendly. Some people will look at, but in terms of actually, you know, on a mass scale, if it's going to really change consumer beha patient behavior, you know, it's hard to see that now. And I think that's kind of frustrating when they go to all that effort to, to set up the tools, um, on the surprise billing rules, you know, that's, that's another one where right now that one seems to be from end from kind of the operational perspective, E even more difficult or a lot more difficult for, for a hospital to operationalize. And we're talking to our clients about this right now. Um, and it's not because it's not just that you have to put up a website or post a file. Um, you have to depend on if you're a hospital, say, you've gotta depend on information coming into you that's complete and accurate from other providers, doctors, or from payers. So you have to coordinate a bunch of information. You have to change your work processes and disclosures to patients. Um, you know, I know that, um, I think the AMA and the hospital Associa filed a lawsuit to enjoin part of the surprise billing rules, just the part dealing with the dispute resolution process. Um, but I, you know, I, I, I haven't heard anything about most of the rules being delayed and I just, you know, I kind of, my, my, my suspicion is they may end up just in a spot where they are with transparency, which is okay. We didn't delay it further, but compliance is abysmal. So,
Speaker 2:You know, I, um, I always think one of the great, you know, sort of parables of the healthcare industry is, is something that I saw in 1995. I was at the annual meeting of what was in the national health lawyers association ultimately became HLA. And one of the speakers was somebody who had been a aid to Congressman stark, uh, in when the stark law is being put together. And I swear, this is as close to a direct quote, as I can make it in her presentation. She said, you know, the next time we pass a law like this, we are gonna talk to some people who understand how Medicare reimbursement works before we finalized the bill. And so much of what we're seeing now, I think comes from the fact that we have this really complicated convoluted system. And we have, uh, folks in the administration folks in Congress who know, don't understand how hard it is, who don't understand that as Judy, as you were saying that, you know, a hospital's charge master is not an inherently meaningful document. Uh, you have folks who don't understand that talking about, you know, uh, the, the median price that a payer pays for something, or the, you know, the, the, the typical managed care payment you get for a particular service. Again, that's not, that's not meaningful information because that's not, that's not a single number. That's not something that, that is sort of independently derivable in a me away, but yet we have laws being passed and rules being adopted that we have to try to sort out how to comply with even where the information is not necessarily the right information or the most helpful information. Um, but that seems to be where we're going to live with it. And, and Judy, maybe this is a good, uh, sort of point of Andre into something you were mentioning as we were talking about this, talking about, uh, uh, sort of the potential for rule making reform and, and the role of subregulatory guidance in, uh, regulating the free and advising our, our clients.
Speaker 3:Yeah, thanks bill. To me, this is a real sleeper issue that, that has the potential to dramatically change how things, um, go forward, both in the Medicare, um, reimbursement side and also in the enforcement side. So, um, this started under the Trump administration with a desire to get away from the reliance on subregulatory guidance. So subregulatory guidance is like the CMS man and the, all the millions of things they put out as, as guidance, um, that were then being used for, um, enforcement actions of, of one word and another. So both DOJ and, um, under the Trump administration, HHS indicated that they wanted to back off of, um, reliance that they wouldn't base false claims act cases solely on, on, um, a lack of compliance with subregulatory guidance. And then there, um, there were also some Supreme court decisions, Allina, um, along the same lines that, um, were under scoring the need for rule making process so that people had a chance to weigh in on things, um, um, before they became final. And I'll just give one example of a, a matter that I worked on, um, that involved teaching physicians in their supervision of, of, um, residents and how many concurrent or overlapping, and that that's a big deal in terms of terminology, the difference between concurrent and overlapping, um, how many, um, how many such procedures one teaching physician could, um, could oversee. So the actual prohibition, there is the subregulatory guidance in the manual. There's some, some regulations that, that were used to get to that position, but, um, in a case I handled, we argued to DOJ that that was subregulatory guidance. And we cited all of the, the materials that had come out under the Trump administration saying, you know, that it should drop our case, but we didn't get anywhere with that. Our<laugh>, it was, the answer was kind of like that's our decision to make, not your decision to make. So anyway, um, so much for that. So I don't know how, how much that actually impacted the decisions, but since the Trump administration, um, changed to the Biden administration, the both DOJ and HHS have backed off on that DOJ, um, issued a, a memo in July saying that, that they were abandoning the, the earlier positions. Um, HHS has, um, taken back some of the regulations that were passed by the Trump administration. And some of them have been deferred there's one up now, um, another one that, that was on a different angle, but also had the impact or the potential for impact was that as regulations aged out, if they had not been reviewed within a certain period of time, I think it was 10 years that they'd just die of their own age, which to me was just a very, um, very chaotic approach to, to, um, looking regulations. If you think about conditions of participation that bits and pieces have been added at different, you know, points as people recognized a problem. So, yeah, so, and, and from my perspective, it needed a more holistic approach. So anyway, that is that, um, I'll call it the, get rid of clutter<laugh> proposal on the age one. Um, there is currently, uh, a proposed, um, well, a request for comment on the approach that should be taken there. Um, someone just sent me a 30 page comment that they had submitted on, on all of that nicely footnoted. And, and I admit I haven't read it through. And anyway, the, the idea is that we have so much regulation as it is. We have so much subregulatory guidance and that it's very hard for providers and suppliers to, to comply. And this would the Trump administration approach would've reduced their risk, uh, of non-compliance. Um, but the by administration is getting back to the expectation of, of, you know, pretty substantial compliance.
Speaker 2:I mean, and I think, again, in, in sort of the continuing lesson that, um, nothing is easy in this regard. Uh, I think it is certainly a reasonable position to say that we've got regulations on the books that do not serve any purpose anymore. And, and it is, I think very defensible to say, well, there's conflicting guidance out there, and there is guidance that is inconsistent, um, with other guidance and guidance that's inconsistent with, of the letter of the regulations, but at the same time, the, the, the Trump administration proposal that, that you mentioned that would have essentially created an automatic sunset for rules, uh, just based on how old they were, unless they had been reviewed and sort of, you know, reaffirmed, you could conceive of a situation where the anti kickback statute, because it's a statute would still be on the books, but all of a sudden all of the safe harbors would be gone because they had kind of, you know, reached their maturity, the same thing with the exceptions in the stark regulations, the conditions of just by, as you said, this is, it is very tempting to think there is some sort of a magic wand we can wave and, and make the industry less complicated, uh, for folks to rely on. But we, we have built such a complex and in some respects, irrational structure that you, you kind of just can't go around pulling bricks out of the wall without, uh, you know, running the risk that half house is gonna, um, Dan, you had mentioned before, and we talked briefly about the, uh, the changes in the stark rules on, on the group practice definition and compensation systems, and that, uh, um, you know, was announced this time last year. What are you seeing in terms of how people have been responding, uh, to that?
Speaker 4:Yeah, well, bill, bill, I think you had a good description of, um, the effect of this, this group practice, uh,<affirmative> definition and pro um, special rules on, um, productivity, bonuses, and profit shares, those changes that are coming into effect, um, beginning of 2022, I've also seen an effect, like you said, of smoking out some other issues. So, you know, um, are you the more, more proactive, uh, practices and other, you know, health systems out there who have been looking at this all year long, um, who started early, started digging into their models from what we saw and, um, you know, not only, not only might it be some one, one of the new changes that they have to week to comply with the rules in 20, 22, like not doing split pooling anymore, but, you know, there may have been a model that they put in place a long time ago, and it was great at the time. And as you look at it again, may have drifted outta compliance. Um, so we've seen a lot of that. We're seeing, you know, we're, we're seeing, um, some of, you know, lesser, I guess, less proactive, um, groups just now dawning on them that in two weeks or a couple weeks ago, a month, um, this was gonna have to change, um, which is a scramble. But the, the other thing, the, the other thing that if there is a silver lining to sort of this smoking out of issues that may not have been identified before, um, and a scrambled a change before, 1, 1, 1 of the silver linings has been that when we have dug in and we've been seeing these issues, you know, low and behold, all these changes that CMS has made and clarifications to policies on more of technical issues have been really helpful to kind of remedy or, you know, either remedy or help us conclude. There hasn't been a problem. Whereas if we were going through this exercise a couple years ago, there might have been some more disclosures warranted.
Speaker 2:Yeah. That's uh, uh, and that has been fascinating to watch. And we've seen, I know, uh, I saw a circumstance recently where, um, a hospital had submitted, uh, a stark self-referral self dis closure, um, submission year, literally years ago, um, that CMS has finally kind of hit the top of the stack. And since then, CMS has put out additional guidance and, and the CMS reviewer sort of contacted the hospital or the people who now are in the hospital and said, do you wanna look at this again and see if you want to withdraw any of this disclosure in light of things we have said since then. And, and it was very apparent that they were really trying to avoid, um, you know, unnecessarily, you know, punitive and expensive process for something that, you know, just didn't it wasn't worth fooling with at this stage because of how things had matured. And, and I guess one thing on that point, when we talk about briefly, we're getting close to the end of our time, but, uh, we've seen the, this recent pronouncement on a, a, a liberalization, if you will, of, of the historic policies on colocation, which have, you know, required some really, um, um, one might characterize them as sort of pick Aune arrangements to be put in place to ensure that, that you satisfy the, the very rigid colocation requirements and that you, you know, didn't have, uh, something that looked like it was a hospital within hospital, but, you know, fell out on some technical, uh, frankly immaterial issue. And, and so perhaps this is a little encouraging, uh, that we're seeing, uh, some effort to, to adjust the rules to the way healthcare is being delivered now, and to delivery models that make, you know, more sense from an economic perspective. Any, any thoughts on that?
Speaker 3:Um, I do think that the colocation rules, um, historically had been interpreted. So, um, so strictly, um, although I haven't seen these come up in surveys, but it, I know when people were asking CMS for advise upfront, there were even some restrictions about shared, um, lobby space, you know, entry space and, and just things that, you know, made from my sense, or from my, from my perspective, didn't make any sense in the provision of care. And so basically what the co-location guidance says is you can have two entities sharing space, but if something goes wrong, they're both, um, gonna be<laugh> at risk or whatever it is well wrong, you know, they, aren't gonna be able to say, oh, but that was their corner of the room, or that was their person. Um, and to me, that's an imminently fair. If you're gonna share space, then you share the baggage that comes with it. Um, I'm hoping that they'll extend that also to, um, labs right now, there's a, a survey insert memo out there that says that labs have to, you can have two labs, two clear certificate, it's two labs in the same space, but they have to be, um, least this has been my interpretation. I'm revisiting that. Now they have to be separated either by time or space in terms of their operations. Again, that doesn't, you know, if you draw a line down the floor, it doesn't make a lot of sense if everybody's willing to just take a accountability for what happens in that space. So I do think those are both, um, or, and in particularly the colocation guidance for hospitals is a situation where CMS said, is this really important to us? And then did the right thing and, and backed off from some, some rules that just didn't fit anymore.
Speaker 4:Yeah. And I, one, one other thing, I was glad to see the revised guidance on colocation. Um, and it, it occurred to me, I don't know how much, um, HHS thought about things like colocation or providers where there's a rigid, you know, exclusive use requirement like ASCs, or I DTFs when they were doing all the regulatory sprint stuff, but it, you know, it occurs to me as we've been trying to put together value based enterprises, that one barrier to coordinating care is if you physically can't send another provider into another space that, you know, helps for coordinating a patient's care. And it seems like, you know, especially for hospital colocation, that will make things a little easier to coordinate with other providers.
Speaker 2:Yeah. And that, that is, I mean, I think if you're looking for something encouraging as, as both of you have said, this idea that<affirmative> CMS is really sort of reexamining some long-standing policies to look at, okay, well, does this, does this really make any sense? Is this actually an impediment to the efficient provision of care, um, and, and making changes, or at least talking about making changes where they find that to be the case? I mean, that's, um, that's a refreshing thing. Honestly, it hasn't always been what we've seen and certainly, uh, would love to see more that, uh, as, as one of the things the pandemic has done is really give us an opportunity to, I think, test some ideas about how care could be delivered better, not only by telemedicine, but just in, in other, you know, coordinated arrangements that have been conducted under the various, you know, waivers and emergency rules. And I think it's a great opportunity to use that and hopefully have meaningful regulatory reform that will, uh, enable us to, to, you know, bring care and reimbursement, you know, as a legal matter, more to where we are already capable of doing it as a, you know, as an operational matter. Uh, we are, we are, I think about at the end of our scheduled time, but you can't do a year in review, uh, without at least making a prediction or two. So what's the most important thing. Uh, and we've, and we've really been talking here largely about provider clients. So I guess we'll stick with that, but what's the most important thing that healthcare providers should be looking out for in 2022, aside from the five 80 CAPA variant of, of COVID.
Speaker 3:I, I feel like the last two years have been so unpredictable. I, I am not that COVID is over, but I think the PhD period might be declared over at an earlier point than we expect, um, for one reason and another. And when that happens, I think there's gonna be a mad scramble to figure out what, what was done under the waivers and how to undo them, or if they need to be. So I think that's gonna be out there. And then I do think as well, that we'll start seeing some enforcement, um, for things that are coming out of the pandemic and the additional funding that's gone into, um, PhD efforts, maybe specifically HRSA. Um, so just the things that keep me up at night.
Speaker 4:Yeah. I would, I would say enforcement, um, you know, unless, unless COVID goes on in a terrible pace for the whole next year, it seems like, um, a lot of enforcement activity may be coming specifically related to COVID, but also, um, you know, to the extent that some activities may have been ramped down while providers and others were just struggling to take care of patients for two years.
Speaker 2:Yeah. And that's, um, yeah, I think both of you are right. And a lot of it is gonna be dependent on whether, you know, we succeed in getting to a situation and where COVID is perhaps still around, but no longer an emergency, but it's something that we've kind of built into, you know, our day to day life. I hate to tell, talk about it that way, but, um, obviously we are looking at adjustments that have been made, some of which I think are gonna have to stay in place because that's the world we're living in now. But, um, but I do expect we'll see some stopping and, and taking stock of what's happened, particularly with so many new inference into various parts of the healthcare spectrum. Um, I think, you know, Dan, you talk about enforcement activity. I think we are gonna see that, cuz I think we're gonna see some of these people who, you know, suddenly became laboratory experts and testing experts and, and, um, COVID experts are perhaps gonna be a call to account for some of the things that they did or didn't do in that process, uh, because they really had not prepared to do it. So anyway, I think this has been a great discussion and I think one thing, uh, if we want one conclusion that no one can argue with, uh, that I personally think is a conclusion is that healthcare lawyers are still gonna have a lot of stuff to do in 2022. Um, and some of it will be challenging stuff that we haven't done before, which is always fun. Uh, so we're appreciative of a, a for providing this opportunity for us to talk about some of those ideas and concepts and, uh, and we'll look forward to what happens next. Thank you all for your time.
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