Amanda Johnston presented on Compliance Considerations in High-Tech Healthcare at a recent CLE program that Gardner Law and Fieldfisher hosted in Huntington Beach, California. If you don't have time to watch the session recording, please see the summary of key topics below.

Cutting-edge technology is desirable to consumers for its ability to deliver innovative solutions, improved efficiency, enhanced user experiences, and the promise of staying ahead in an ever-evolving digital landscape. The growing consumer demand for technology extends into the medical device and healthcare sector. However, the qualities that make the technology appealing can also give rise to potential compliance risks. With technological advances outpacing laws and regulations, it is imperative for companies to carefully structure their commercial arrangements to prevent unintentionally triggering healthcare fraud and abuse laws.

Tech Advances + Consumer Demand = Rapid Growth

As consumer tech evolves, the demand for non-invasive, home-use healthcare options is also rising. According to market.us, the global wearable device market is expected to reach $156 billion by 2032, with North America leading at 38% market share as of 2022.

Compliance Considerations for High-Tech Healthcare

Payment and Reimbursement

• Developing, manufacturing, and maintaining high-tech healthcare can be expensive. The first challenge is determining how the company will be paid.
• New, novel technology often encounters reimbursement challenges. Explore Medicare programs that could be leveraged, including New Technology Add-On Payments (NTAP), Transitional Pass-Through Payments (TPT), and Transitional Payments for New and Innovative Equipment and Supplies (TPNIES). Keep track of the progress of the proposed Transitional Coverage of Emerging Technologies (TCET) rule.

Provision of Products and Services

• High-tech healthcare is attractive due to its potential value. When considering it, evaluate the remunerative streams for healthcare professionals and institutions, as well as the risks of patient inducement.
• When using artificial intelligence (AI) or machine learning (ML) to assist healthcare professionals in clinical or treatment decisions, it is important to consider the Corporate Practice of Medicine Doctrine. This doctrine prohibits corporations from practicing medicine. Some AI/ML technologies can provide diagnostic information or treatment decisions that may border on practicing medicine. It is important to evaluate if the product goes beyond the boundaries of AI/ML and actually practices medicine.

Durable Medical Equipment (DME)

• Technological advancements are changing the DME landscape, which may lead to challenges in billing compliance.
• Clear roles and requirements prevent confusion and compliance risks for medical device manufacturers who are also DME suppliers.

Cybersecurity

• Understand the implications of the DOJ's Civil Cyber-Fraud Initiative, which uses the False Claims Act to hold entities and individuals accountable for “deficient cybersecurity products or services, knowingly misrepresenting their cybersecurity practices or protocols, or knowingly violating obligations to monitor and report cybersecurity incidents and breaches.”

Telemedicine

Clinical Laboratory Testing

• Acknowledge the DOJ's focus on clinical laboratory testing, likely driven by its non-invasive nature, low time commitment for the patient and healthcare professional, rapid technology advances, and unique billing structures.
• Common fraud prosecutions in this area include unnecessary testing, unauthorized testing, unbundling tests, kickbacks and bribes, unlicensed testing, and tests by unqualified persons.