The California Consumer Privacy Act (CCPA) is a major new state law poised to affect the privacy landscape not just in California, but in the U.S. as a whole. It was signed into law by California Governor Jerry Brown on June 28, 2018, after being hastily introduced in the California Legislature just a few days prior.

z The Act gives “consumers” (defined as natural persons who are California residents) four basic rights in relation to their personal information:

1) The right to know, through a general privacy policy and with more specifics available upon request, what personal information a business has collected about them, where it was sourced from, what it is being used for, whether it is being disclosed or sold, and to whom it is being disclosed or sold;
2) The right to “opt out” of allowing a business to sell their personal information to third parties (or, for consumers who are under 16 years old, the right not to have their personal information sold absent their, or their parent’s, opt-in);
3) The right to have a business delete their personal information, with some exceptions; and
4) The right to receive equal service and pricing from a business, even if they exercise their privacy rights under the Act.

The Act will apply to for-profit businesses that collect and control California residents’ personal information, do business in the State of California, and: (a) have annual gross revenues in excess of $25 million; or (b) receive or disclose the personal information of 50,000 or more California residents, households or devices on an annual basis; or (c) derive 50 percent or more of their annual revenues from selling California residents’ personal information.

The law does not apply to information already regulated under the Health Insurance Portability and Accountability Act, the Graham-Leach Bliley Act, the Fair Credit Reporting Act, or the Drivers’ Privacy Protection Act; it still applies to entities covered by these laws to the extent they collect and process other personal information about California consumers.

Matthew Smith, director of Government Affairs and general counsel for the Coalition Against Insurance Fraud.commented on new laws governing cyber, data privacy in an article that appeared in the Claims Journal. Two of the most significant laws, he said, came out of South Carolina and California.

“The California Privacy Law applies to insurers and all other businesses in the state and has very severe restrictions on the use of private data,” Smith explained.

“We’re looking at it from the standpoint of what impact it might or might not have on an insurer’s ability to even report fraud. We think we’re all right there, but we’re partnering with others to look to make certain that it does not infringe on the ability to report insurance fraud under the Privacy Act.”

Businesses will incur significant compliance costs in order to update procedures, policies and Web sites in accordance with the new law. Additionally, the Act’s grant of a private right of action means that companies will have to anticipate a possible flood of consumer-driven litigation.

It is expected that the state legislature will continue to refine and amend the Act’s privacy-related requirements before the final version of the law goes into effect on January 1, 2020.

Legal experts in the field of data privacy claim in an article published in a legal newsletter that “data privacy remains one of the most significant concerns facing the insurance industry. A flurry of new and evolving data security and privacy laws and regulations are re-shaping the regulatory landscape, making it more difficult for companies to avoid exposing themselves to regulatory and other legal risk:.

Companies should start formulating compliance strategies well before the law goes into effect January 1, 2020.

Just weeks after Novartis floated the idea that $4-5 million was fair value for its new gene therapy against a deadly neuromuscular disease, a major benefits manager is pushing back. The Swiss drugmaker’s assessment of AVXS-101’s value for treating spinal muscular atrophy (SMA) has put the company front-and-center in the debate over what “super drugs”, for rare diseases afflicting relatively few patients, are really worth.

Among the first to react was pharmacy benefits manager Express Scripts, which helps U.S. employers manage workers’ prescription costs.

Its chief medical officer, Steve Miller, told Reuters he “loves the science” behind Novartis’s therapy, a potential cure for newborns who are diagnosed early.

But $4 million or more per patient?  “You just can’t keep pushing these price points up,” Miller said. “I just don’t think we can allow it. It is not sustainable over time.”

Novartis, which bought U.S.-based AveXis for $8.7 billion in April to add the SMA therapy to its portfolio, is still mulling its asking price as it awaits U.S. Food and Drug Administration approval, likely in early 2019.

But the company has begun its campaign to convince insurance groups and governments to cover AVXS-101, contending the one-and-done infusion will save society money over the long haul, even with a cost near the highest ever for a one-time therapy.

There’s now only one approved drug for SMA, Biogen’s two-year-old Spinraza, and it is listed at $750,000 for the first year and $350,000 thereafter. Spinraza is not a cure and must be taken indefinitely.

“When we look at 10-year costs, you see somewhere between $2.5 million to $5 million being spent by societies to care for these types of patients,” Dave Lennon, AveXis’s president, said.  “Four million dollars is a significant amount of money, but we believe this is a cost-effective point.”

A diagnosis of SMA, which affects one in 10,000 live births, is devastating. Forty percent of victims have the severest form and historically die within months. Children with less severe SMA can live to adulthood, although with profound physical disabilities. Though cognitively normal, many cannot feed themselves and require 24-hour care, wheelchairs and machines to help them breathe and cough.

As Novartis prepares to launch AVXS-101, it also hopes for tacit endorsement of its pricing strategy from the non-profit Institute for Clinical and Economic Review (ICER), which is currently reviewing the cost-effectiveness of SMA therapies.

The Boston-based non-profit, established in 2006, carries out cost-benefit analyses on drugs that it calls independent of “Big Pharma”, insurers and government.

Unlike European price regulators, ICER cannot dictate costs. But it has steadily gained influence in the U.S. pricing debate, as companies like Express Scripts and CVS Caremark and governments rely on its analyses.

ICER has conducted 11 assessments in 2018, some covering multiple drugs. In seven of the reviews, it concluded drugs’ prices aligned with their benefits, like when it said Roche’s $482,000 hemophilia medicine Hemlibra could save the U.S. system up to $1.9 million for the hardest-to-treat patients.

Four times, however, ICER concluded drugmakers were asking too much, giving payers ammunition to bargain them down. For instance, the New York Department of Health told Reuters that ICER’s finding that a $270,000-per-year cystic fibrosis drug from Vertex Pharmaceuticals represented “low long-term value” helped underpin the state’s demand for a steep discount.

Novartis and Biogen, as well as Switzerland’s Roche, which also has an SMA drug in development, are all lobbying ICER to broaden what it considers a meaningful benefit, potentially helping their therapies fare well in the group’s review.

Treatments for rare diseases like SMA are increasingly popular among drugmakers, because they command high prices while insurers are hard pressed to reject claims, especially for sick children. Sales of rare disease therapies will rise 11 percent annually, nearly twice the overall market rate, through 2024, when they’ll hit $262 billion, consultancy Evaluate Pharma has forecast.

Novartis Chief Executive Vas Narasimhan, with ambitions of treating hundreds of SMA patients annually, highlights 90 kids in AVXS-101 trials over four years, including some who would otherwise have been incapacitated and fed through tubes.

Failed back surgery (continued low back and leg pain after surgery) is relatively common. With each reoperation, success, as defined by pain reduction, becomes less likely and most patients do not improve.

However, preliminary studies using a simple procedure to remove scar tissue or adhesions suggests a new treatment could help those with post-surgical, chronic low back pain.

The study was approved by the Boston University Medical Center Institutional Review Board. This was a retrospective cohort, in which all patients had decompressive spine surgery that involved L4-5 or L5-S1 more than six months earlier. Current continuous symptoms included severe intractable radicular low back pain that failed conservative management including medications, physical therapy, and conventional epidural steroid procedures.

The Simplified Epiduralysis After Laminectomy/fusion (or SEAL) was performed on 30 patients who continued to experience low back and leg pain after back surgery.

Short-to moderate-term pain relief was reported in 74 percent of these patients. Nearly 40 percent reported greater than 50 percent pain relief. After three years of follow-up, only one patient went on to repeat lumbar spine surgery.

The SEAL procedure uses a low-cost standard obstetric epidural kit to place the epidural (via catheter) near the post-surgical site. The goal is to break up scar tissue or adhesions that are pushing up against the nerves.

There are more complex procedures and implantable devices that help failed back surgery, but SEAL is less invasive and done in one outpatient visit.

“SEAL could be an efficacious intervention for failed back surgery with a simplified procedure, lower costs, shorter procedure times and minimal adverse events,” explained author Michael Perloff, MD, assistant professor of neurology at Boston University School of Medicine.

One of the study authors cautions that these findings could have bias yet given their promising results a clinical trial is planned for next year.

Details of the study, The Simplified Epiduralysis After Laminectomy/Fusion (SEAL) Procedure for Postsurgical Radicular Low Back Pain can be found in the journal Pain Medicine, 2018; DOI: 10.1093

The SMART Act was passed into law by President Obama on January 10, 2013, as a mechanism to modify and improve upon Medicare’s Secondary Payer requirements. Those provisions of the Social Security Act were enacted in 1980 to establish Medicare as a secondary payer to certain primary plans if payment has not been made or cannot reasonably be expected to be made to the beneficiary by a primary plan.

In those cases, Medicare may make a “conditional payment” with the expectation it will be repaid when the beneficiary receives a settlement, judgment, award or other payment. Conditional payments are for items or services that are later determined to be the financial responsibility of a health plan.

Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) added mandatory reporting requirements with respect to Medicare beneficiaries who who receive settlements, judgments, awards or other payment from workers’ compensation

As required by section 202 of The SMART Act, CMS is required to annually review its costs relating to recovering conditional payments as compared to recovery amounts.

For the last two years 2017-2018, CMS has maintained the threshold of $750 across all non-group health plan (NGHP) lines of business- workers’ compensation, liability, and no-fault insurance.

The threshold means that if the Total Payment Obligation to the Claimant (TPOC) amount is $750 or less, the claim does not need to be reported to Medicare and parties do not need to be concerned with reimbursement of conditional payments.

CMS has announced that the threshold for 2019 will remain at $750, therefore, no changes to reporting/conditional payment practices are necessary at this time.

CMS has additionally posted an Alert regarding an upcoming MSPRP webinar: November 19, 2018 – Webinar for Upcoming Enhancements to the Medicare Secondary Payment Recovery Portal (MSPRP):

Effective January 7, 2019, new functionality will be added to the MSPRP that will allow authorized users to self-report, Non-Group Health Plan (NGHP) Medicare Secondary Payer (MSP) leads.

CMS will host a webinar on December 18, 2018 to provide additional information on this enhancement.

Salvatore Carbone, 58, pleaded no contest to insurance fraud and will serve 40 days in Monterey County Jail.

Carbone, a Sand City resident, has owned and operated Sal’s Alley Side Cafe and Carbone’s Bar in Monterey since 2007.

The Workers’ Compensation Fraud Unit at the Monterey County District Attorney’s Office received a tip in June 2017 that Carbone had presented to his workers’ compensation carrier – State Compensation Insurance Fund – that he had no employees for the insurance policy period of August 2014 through August 2015.

Investigators with the District Attorney’s Office obtained business and payroll records and interviewed Carbone, his employees and his accountant.

The District Attorney’s Office concluded the evidence showed Carbone intentionally misrepresented his payroll in order to obtain a lower insurance premium from the State Compensation Insurance Fund.

Carbone pleaded no contest to a misdemeanor Wednesday and Judge Stephen Sillman sentenced him to 40 days in county jail, three years probation and suspended a $10,000 statutory penalty, which will remain suspended if he complies with the conditions of his probation.

The District Attorney’s Office said that business owners and the public need to be aware that California law requires all employers to secure workers’ compensation insurance for their employees so there is adequate medical coverage and benefits for employees for any work-related injuries that may occur.

Making a material misrepresentation to obtain a lower workers’ compensation insurance premium has a maximum penalty of five years and a fine of up to double the amount of the fraud.