Healthcare Regulation in the United States

The healthcare industry is highly regulated and is subject to changing political, legislative, regulatory and other influences.

Business Liabilities

Existing and new laws and regulations affecting the healthcare industry could create unexpected liabilities for companies, could cause us to incur additional costs and could restrict our operations. Many healthcare laws are complex, and their application to specific products, services, and business arrangements may not be clear. In particular, many existing healthcare laws and regulations, when enacted, did not anticipate the healthcare information services that some companies provide. However, these laws and regulations may nonetheless be applied to their products, services, and business arrangements. Their failure to accurately anticipate the application of these laws and regulations, or other failure to comply, could create liability for them, result in adverse publicity and negatively affect our business. Even in areas where some companies are not subject to healthcare regulation directly, these companies may become involved in U.S. governmental actions or investigations through their relationships with customers that are regulated, and participation in such actions or investigations, even if the companies are not a party and not the subject of an investigation, may cause these companies to incur significant expenses. (1)

Business Risks

Some of the risks some companies face from healthcare regulation are as follows:

Regulation of Drug and Medical Advertising and Promotion

Some companies provide services involving advertising and promotion of prescription and over-the-counter drugs and medical devices and claims of nutritional supplements. If the FDA or the Federal Trade Commission
(FTC) finds that any of these companies products and services or any information on their brochures or webpages violates applicable regulations and guidance documents, they may take regulatory or judicial action against these companies and/or the advertiser or sponsor of that information.

State attorneys general may take similar action based on their state’s consumer protection statutes. Any increase or change in regulation of drug or medical advertising and promotion could make it more difficult for companies to contract for sponsorships and advertising.

In January 2014, the FDA issued a draft guidance clarifying the application of the FDA’s promotional regulations to certain content on social media Websites. It is difficult to predict how customers or others in the industry might implement the FDA’s guidance in the future or how its implementation might affect some business. Recent private industry initiatives have resulted in voluntary restrictions, which advertisers and sponsors have agreed to follow.

Advertising restrictions apply not only to the companies´ business in the United States, but also to operations in Europe. European Websites belonging to American companies must comply with the national laws of the respective countries whose physicians they address. Under these European laws, there are several restrictions regarding advertising of drugs or medical issues. There are, in particular, broad prohibitions on the advertising of prescription or reimbursed drugs to the general public, the use of indirect or disguised marketing, and the offering and providing of gifts or benefits with promotional purpose which are not only of minor value. If the relevant European national competent authorities find that any product or service, or any information on Websites or in mobile applications, violated applicable regulations, they may take regulatory or judicial action against the companies offering them and/or the advertisers or sponsors of that information.

Moreover, competitors, or even competitors of advertisers and sponsors, may take actions against some companiess and/or advertisers or sponsors of the information. (2)

Anti-Kickback Laws

There are federal and state laws that govern patient referrals, physician financial relationships and inducements to healthcare providers and patients. The federal healthcare program anti-kickback law prohibits any person or entity from offering, paying, soliciting or receiving anything of value, directly or indirectly, for the referral of patients covered by Medicare, Medicaid and other federal healthcare programs or the leasing, purchasing, ordering or arranging for or recommending the lease, purchase or order of any item, good, facility or service covered by these programs. Many states and European countries also have similar anti-kickback laws that are not necessarily limited to items or services for which payment is made by a government healthcare program. These laws are applicable to manufacturers and distributors and, therefore, may restrict how we and some of our customers market products to healthcare providers, including e-details. Any determination by a state, federal, or foreign regulatory agency that any of companies practices violate any of these laws could subject them to civil or criminal penalties and require these companies to change or terminate some portions of their business and could have an adverse effect on their business. Even an unsuccessful challenge by regulatory authorities to their practices could result in adverse publicity and be costly for them to respond to. (3)

False Claims Laws

See the Federal False Claims Act.

Medical Professional Regulation

The practice of most healthcare professions requires licensing under applicable state law, as well as under applicable national law of most of the European countries. In addition, the laws in some states and European countries prohibit business entities from practicing medicine. If a state or other enforcement authority determines that some portion of a company business violates these laws, they may seek to have this company discontinue those portions or subject it to penalties or licensure requirements. Any determination that this business are a healthcare provider and have acted improperly as a healthcare provider may result in liability to it. (4)

Genetic Information Nondiscrimination

See the Genetic Information Nondiscrimination Act (GINA).

Main Topics of Healthcare

This entry in the American Encyclopedia has been organized to address the following topics, among others:

Healthcare : Doctor-Patient Confidentiality
Healthcare : Informed Consent
Healthcare : Insurance
Healthcare : Managed Care/HMOs
Healthcare : Medicaid
Healthcare : Medical Malpractice
Healthcare : Medical Records
Healthcare : Organ Donation
Healthcare : Patient’s Rights
Healthcare : Treatment of Minors
Healthcare : Treatment Without Insurance

Notes

WebMD 2014 Annual Report, SEC Filings
Id.
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Healthcare Regulation