Real Estate Financing in the Healthcare Space: Keep Your Eye on the Ball

Merle M. DeLancey Jr. and Ryan C. Craig*

Over the past couple of months, there have been two important developments that could affect a lender’s decision whether to finance real estate transactions involving entities and individuals in the healthcare field.

Advisory Opinion No. 19-05 (Purchasing Real Estate from an Excluded Party)

In September 2019, the Department of Health and Human Services Office of Inspector General (“HHS OIG” or “OIG”) issued an advisory opinion regarding the proposed purchase of real estate from a company owned and managed, in part, by an excluded individual. The Proposed Arrangement involved a community health center that receives Federal grant funding and owns and operates community health centers enrolled in the Medicare program (“Health Center”). The Health Center sought to purchase the real estate on which one of its community health centers is located. The Company from which the Health Center sought to purchase the property is owned and managed, in part, by an individual who was excluded from participation in all Federal healthcare programs by HHS OIG (“Excluded Person”). Continue reading “Real Estate Financing in the Healthcare Space: Keep Your Eye on the Ball”

Defense Health Agency and Defense Logistics Agency Memorandum of Agreement: A Good First Step, but What about Coordination with the Department of Veterans Affairs?

Merle M. DeLancey Jr.

On August 15, 2019, the Defense Health Agency (“DHA”) and Defense Logistics Agency (“DLA”) agreed upon a joint approach to healthcare logistics. Under the Memorandum of Agreement (“MOA”), DLA will be responsible for materiel acquisitions, while DHA will take the lead on medical services acquisitions. The MOA clarifies the agencies’ complementary roles and responsibilities and avoids duplication of effort. The MOA covers all aspects of medical logistics support provided by DLA to DHA, and DHA’s consideration for that support in performance areas including pharmaceuticals, medical-surgical supplies, healthcare technology equipment, cataloging, and Class VIII surge and sustainment materiel required by the services to meet the demands of the national military support strategy.

The uninformed might question the need for DHA and DLA to formally enter into a MOA. After all, DHA and DLA are both under the Department of Defense (‘DoD”) umbrella. Why is an agreement required to coordinate the two agencies’ efforts? Why wasn’t such coordination and avoidance of duplication of effort simply ordered by DoD senior command? Good questions perhaps, but the MOA was necessary to ensure the agencies stay in their respective lanes. Continue reading “Defense Health Agency and Defense Logistics Agency Memorandum of Agreement: A Good First Step, but What about Coordination with the Department of Veterans Affairs?”

Will HHS’s Safe Importation Action Plan Affect How the Federal Government Purchases Drugs?

Merle M. DeLancey Jr.

On July 31, the Department of Health and Human Services (“HHS”) and the Food and Drug Administration (“FDA”) announced their latest plan to reduce the prices Americans pay for prescription drugs. The Safe Importation Action Plan identifies two pathways for the importation of drugs.

Pathway 1 allows states, wholesalers, and pharmacists to submit plans to HHS for demonstration projects, which test and measure the effect of potential program changes, that allow for the importation of certain drugs from Canada. Importing drugs from Canada is not a new concept. In 2003, Congress gave the Secretary of HHS the authority to permit drug importation from Canada. To implement a drug importation plan, however, the Secretary was required to certify to Congress that the importation program poses “no additional risk to public health and safety” and the program will result in a “significant” reduction in costs of products to American consumers. No HHS Secretary has ever made such a certification to Congress. Implementation of importation plans under Pathway 1 will most likely take considerable time. HHS intends to implement Pathway 1 through a formal Rulemaking process with Notice and Comment. Then, importation plans will need HHS approval before going “live.” Continue reading “Will HHS’s Safe Importation Action Plan Affect How the Federal Government Purchases Drugs?”

Agency Protests: An Emerging Tool and Potential Threat for Contractors

Merle M. DeLancey Jr. and Michael Joseph Montalbano

In May 2018, the Government Accountability Office (“GAO”) implemented a $350 filing fee for bid protests. There are differences of opinion regarding why GAO implemented the fee. GAO publicly states that the fee was implemented to cover the costs of its new Electronic Protest Docket System (“EPDS”). Many, however, believe the fee was implemented to deter the filing of frivolous protests. Regardless, there “may” be an unintended consequence of the protest filing fee—an increase in agency-level protests. Recently, several agency contracting officers have stated that they are handling more agency protests, and, in their opinion, it is a direct result of GAO’s protest filing fee. As a result, contractors should understand and be prepared to mitigate the risk of agency protests to protect their contracts and position themselves for new ones.

Pros and Cons of Agency Protests Continue reading “Agency Protests: An Emerging Tool and Potential Threat for Contractors”

Spring Cleaning for Government Contractors? Think Compliance.

Merle M. DeLancey Jr.

If you’re like me, it’s the time of year when you clean out your garage and closets and do all those outside projects you delayed until the weather warmed up. If you are a government contractor, you should consider this to be the season to do some spring cleaning in terms of your government contract compliance programs and procedures. Not to be an alarmist, but there are numerous areas you can review now and, if you should find some compliance deficiencies, you still have ample time to get your house in order before an agency audit or the deadline for submission of certain government reports.

Set forth below is a list of areas you may want to clean up: Continue reading “Spring Cleaning for Government Contractors? Think Compliance.”

OFCCP Releases FY 2019 CSAL

Merle M. DeLancey Jr.

On March 25, 2019, the Office of Federal Contract Compliance Programs (“OFCCP”) issued a Corporate Scheduling Announcement List (“CSAL”) for FY 2019. As it announced in February, OFCCP changed how it notifies government prime contractors and subcontractors that they may be subject to a compliance review. Rather than sending the traditional advanced notification letters, OFCCP posted the FY 2019 CSAL on its website. In addition to the CSAL, OFCCP also posted its Scheduling Methodology, CSAL Frequently Asked Questions (“FAQs”), Corporate Management Compliance Evaluation (“CMCE”) FAQs, and a link to its Section 503 Focused Review page.

OFCCP significantly increased the number of contractors potentially subject to review to more than 3,500. OFCCP’s CSALs for FY 2018 and 2017 identified 1,003 and 802 contractors, respectively. Continue reading “OFCCP Releases FY 2019 CSAL”

States Pass Fewer Drug Manufacturer Pricing Disclosure Laws in 2018

Merle M. DeLancey Jr.

While the introduction of state legislation that would require drug manufacturers to disclose pricing and other information did not slow down in 2018, the number of bills that were made law did slow down. During 2018, 22 state legislatures considered bills seeking to require drug manufacturers to disclose pricing information; however, most of the legislation failed.

Two New State Laws

Since my Drug Manufacturer Pricing Disclosures: Mid-Year 2018 Update, two states—Vermont and New Hampshire—passed laws that arguably touch on requiring pharmaceutical manufacturers to report drug prices.[1] Continue reading “States Pass Fewer Drug Manufacturer Pricing Disclosure Laws in 2018”