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New Players in the Chronic Care Management Market and the Potential for Abuse

The introduction of reimbursement for Chronic Care Management (CCM) services by the Centers for Medicare and Medicaid Services presents an opportunity to better care for patients with chronic illnesses and to receive payment for the time spent caring for these patients. It also presents an opportunity for companies to assist physician practices in performing CCM services. You may have read recent articles about such a company, a publicly traded pharmaceutical wholesaler, joining the CCM space. In order to provide CCM services, the wholesaler contracted with a practice management firm, which manages a multi-specialty, independent physician network comprised of over two hundred doctors.

We note this development in the CCM space due to the potential dangers and risk for abuse that this new role for wholesalers poses from an industry perspective. Pharmaceutical wholesalers already have direct relationships with hundreds of thousands of physicians. They can easily use these relationships to market the CCM services they provide, and convince physicians of the need for them to participate in CCM. Because wholesalers frequently sell so many healthcare supplies and healthcare technology products, they can easily use the depth of sales to exert influence by bundling products and services, providing discounts in violation of federal law such as the Anti-Kickback Statute or the Stark Law, when physicians purchase higher quantities of products or services from them. At present, there is very little “hands-on” policing of the relationships between providers and entities offering CCM services that would monitor whether the CCM services are provided at fair market value and without any inappropriate referrals. Such lack of review allows for potential abuse.

We want you to know about this for two reasons: one, for those of you in the CCM space or considering entering the CCM space, this news impacts your business. Second, we believe that if pharmaceutical wholesalers begin to play a larger and larger role in various aspects of healthcare, this development has the potential to significantly alter the healthcare market, similar to the ways in which pharmacy benefit managers have changed the way pharmacies operate. Frier Levitt understands the CCM market and the regulatory and statutory compliance requirements that CCM businesses must meet. If you are considering entering the CCM market, contact Frier Levitt today.