The Legal Department at UAMS handles a wide array of complex matters. They include research, procurement and revenue contracts; employment and educational questions; all manner of legal issues arising within the hospital setting; bond and banking matters; utility rate matters before the Arkansas Public Service Commission; litigation in state and federal courts, and before the Arkansas Claims Commission; and, medical malpractice and insurance-related issues for licensed, billing providers.
The Department is a part of the University of Arkansas System’s General Counsel’s Office. The General Counsel of the System is David Curran. The Managing Associate General Counsel at UAMS is Mark Hagemeier. Besides Hagemeier, the legal team at UAMS consists of an additional seven attorneys and four paraprofessionals.
Hagemeier also serves as the Vice Chancellor of Institutional Compliance. An additional 28 compliance officers work in the division. The compliance department is divided into four areas: clinical billing compliance, conflicts of interest/international compliance, HIPAA compliance, and research compliance.
Challenges:
As the state’s academic health sciences university and health system, UAMS faces unique legal and compliance challenges. One of the most significant of those stems from changes to the federal government’s 340B program. The 340B program is a federal initiative under a sub-division of the Department of Health and Human Services (DHHS), the Health Resources and Services Administration (HRSA). The 340B program allows certain health care providers, like safety-net hospitals serving low-income patients, to purchase outpatient medications at significantly discounted prices from drug manufacturers, enabling them to stretch limited resources and provide more comprehensive care to their communities without additional cost to taxpayers. It helps these hospitals buy drugs at a lower price to better serve underserved populations.
Currently, there is significant disruption within the 340B space. Some of the key issues include:
- Proposed Rebate Models: Several drug manufacturers introduced changes in their 340B sales model that fundamentally change how 340B covered entities like UAMS purchase 340B medications and realize the corresponding benefit.
- Ongoing Manufacturer Contract Pharmacy Restrictions: Many manufacturers have continued to restrict 340B pricing available for drugs dispensed via contract pharmacy arrangements.
- Proposed Federal Legislation: With HRSA’s authority to enforce its sub-regulatory guidance (such as its contract pharmacy requirements) continuing to erode, it is increasingly likely that new federal legislation will be required to address areas of ongoing 340B program uncertainty.
- State-Level Activity: While efforts to address 340B program issues on the federal level have been slow to develop, state legislatures stepped in with increasing frequency.
- Contract Pharmacy Access Laws: In direct response to ongoing manufacturer-imposed restrictions in the 340B contract pharmacy space, a growing number of states, including Arkansas, have enacted laws to protect contract pharmacy access for 340B-participating covered entities.
- Transparency Initiatives: A handful of states have also enacted laws that introduce covered entity reporting requirements related to 340B savings utilization generated through the 340B program, ostensibly to improve 340B program transparency.
Site Neutral Payments
Another challenge facing UAMS is the possible transition to site neutral payments. Site neutral payments refers to a health care payment policy whereby Medicare would pay the same amount of reimbursement for a medical service regardless of where said service was provided, that is, whether in a hospital outpatient department, ambulatory surgical center, or physician office. Site neutral payments aim to eliminate cost discrepancies based on the care setting while maintaining quality standards; essentially, the payment is “neutral” to the location where the service is delivered.
Opponents of site neutral payments argue that this reform would adversely affect patients’ access to services by reducing hospital revenues, raising particular concerns about access for rural and low-income populations. Opponents also contend that the higher payments for services in hospital outpatient settings are justified by the level of care patients need, the higher costs of providing care in hospitals (e.g., due to regulatory requirements), and the costs of maintaining emergency care and standby capacity.