Behavioral Health Law Registry | June 2022


Welcome to the big book

Welcome to the fourth issue of Greenberg Traurig’s Quarterly Behavioral Health Ledger, which keeps behavioral health and integrated health providers abreast of legal and regulatory developments in behavioral health. Each quarter, we highlight recent legal developments, including but not limited to audit risks, significant litigation, enforcement actions, and changes in laws or regulations related to behavioral health such as health privacy, privacy and/or security issues, consent issues, data-sharing allowances, and other cutting-edge arrangements and issues faced by behavioral and integrated healthcare providers.

Lawmakers urge move to OTC status for naloxone text

In an effort to increase access to naloxone and potentially save lives, a bipartisan group of 30 lawmakers wrote to seven major naloxone manufacturers in April 2022, urging them to seek over-the-counter (OTC) status for the naloxone, a drug that quickly reverses an opioid overdose. See a copy of the letter.

The United States has seen a dramatic increase in opioid-related overdose deaths since the start of the COVID-19 pandemic. Over 107,000 deaths were reported in the United States between December 2020 and December 2021. Some industry stakeholders raised questions to consider alongside the OTC discussion, namely, how to address the cost of naloxone over-the-counter to make it widely available when, as an over-the-counter drug, it would no longer be covered by insurance.

Lawmakers noted that the FDA strongly supports changing the status of naloxone and has taken steps to facilitate the transition to OTC status, including creating a model drug information label that could be used for over-the-counter naloxone. This was the first time the FDA had developed a model drug information label for an over-the-counter change. Lawmakers pointed out that the responsibility now rests with manufacturers to submit the necessary documents to make the change. Letters from lawmakers have been sent to CEOs of a number of pharmaceutical companies. The American Medical Association, American Society for Addiction Medicine and Remedy Alliance support the letters.

Colorado Passes Bill to Address Conflicts of Interest in Regional Organizations Owned by Behavioral Health Care Providers

Colorado passed a bill on May 23, 2022, that will require certain regional organizations owned by behavioral health service providers who provide behavioral health services to the public (i.e. through the Medicaid program) to comply with specified conflict of interest policies to promote greater transparency and accountability. Affected organizations must comply with the new law by January 1, 2023.

Conflict of Interest in Public Behavioral Health, Colorado Senate Bill 22-106, Requires Managed Care Entities (MCEs), Administrative Service Organizations (ASOs), and Managed Service Organizations (MSOs) owned 25% or more by behavioral health service providers comply with the following conflict of interest policies:

(a) Owners and Board Members Should Not Control Provider Network Decisions: Suppliers who are owners or members of the board of directors of an MCE, ASO or MSO must not have control, influence or decision-making power in the establishment of supplier networks . For ASOs and MSOs, providers with an ownership interest or board membership should also not have control, influence, or decision-making authority over how funding is distributed to a vendor.

(b) Required Reports and Reviews of Funding Fairness, Network Denials and Rate Comparisons: Each MCE must report on a quarterly basis the number of suppliers who have requested to join the network and have been refused and provide a comparison of the price ranges for suppliers who are owners or members of the board of directors compared to suppliers who do not. are not owners or board members of MCE. For ASOs and MSOs, the Office of Behavioral Health (OBH) must review funding allocations from an ASO or MSO on a quarterly basis to ensure that all providers are equally considered for the financing and compliance with applicable state and federal rules and regulations to ensure that no inappropriate preference is given to vendors owned by ASO or MSO or members of the Board of Directors.

(c) No Joint Employment of a Supplier under Contract with an MCE, MSO, or ASO Without State Approval: An employee of a contracted provider of an MCE shall not be an employee of MCE unless the employee is the Chief Clinical Director or Director of Utilization Management of the MCE. The same restriction applies to ASOs and MSOs, unless the employee is the Medical Director of the ASO or MSO. If the dual-employee is also an employee of a provider that is a board member or owner of the MCE, the MCE must develop policies, approved by certain regulatory bodies or government officials depending on the type of organization regional, to mitigate any conflict of interest the employee may have.

(d) Limits on Provider Board Membership: An MCE, ASO and/or MSO board of directors must not have more than 50% of contracted suppliers as members of the board of directors, and the MCE, ASO or MSO is encouraged to have one member of the community on the board of directors of MCE, ASO, MSO.

Colorado MCEs, ASOs, and MSOs owned by behavioral health service providers may wish to review their conflict of interest policies, provider networks, and board composition, as well as their incorporation documents, and prepare to comply with these new requirements.


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