Revised Horizontal Merger Guidelines issued by FTC and DOJ

On August 19, the Federal Trade Commission (”FTC”) and Department of Justice (”DOJ”) issued revised Horizontal Merger Guidelines (”guidelines”).  First adopted in 1968 and revised in 1992, the guidelines are an outline of the primary “analytical techniques, practices and enforcement policies” used to evaluate mergers and acquisitions of actual or potential competitors under federal antitrust laws, including Section 7 of the Clayton Act, 15 U.S.C. § 18, Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, and Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45.

As the first major revision in 18 years, the FTC and DOJ assert that the guidelines are not a change in policy, but a clarification of the merger review process.  In 2006, both agencies issued “Commentary on the Horizontal Merger Guidelines,” the first step towards the refinement of the guidelines.  The agencies jointly announced the project in September 2009.  They posed a number of questions for public comment and conducted a series of workshops this past winter.  As a result, 51 parties provided comments for the revisions.  The agencies further considered 31 written comments to the proposed revisions issued on April 20.

According to the FTC Press Release, the guidelines are primarily aimed to “help the agencies identify and challenge competitively harmful mergers while avoiding unnecessary interference with mergers that are either competitively beneficial or likely will have no competitive impact on the marketplace.” In addition, the guidelines are intended to assist private parties, courts and antitrust practitioners.  Representatives of both agencies had the following to say:

“Because of the hard work of all involved at both agencies, private parties and judges will be better equipped to understand how the agencies evaluate deals. That improvement in clarity and predictability will benefit everyone,” said FTC Chairman Jon Leibowitz…

“The revised guidelines better reflect the agencies’ actual practices,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The guidelines provide more clarity and transparency, and will provide businesses with an even greater understanding of how we review transactions.”

What Has Changed?

According to the FTC Press Release, the guidelines do the following:

• Clarify that merger analysis does not use a single methodology, but is a fact-specific process through which the agencies use a variety of tools to analyze the evidence to determine whether a merger may substantially lessen competition.
• Introduce a new section on “Evidence of Adverse Competitive Effects.” This section discusses several categories and sources of evidence that the agencies, in their experience, have found informative in predicting the likely competitive effects of mergers.
• Explain that market definition is not an end itself or a necessary starting point of merger analysis, and market concentration is a tool that is useful to the extent it illuminates the merger’s likely competitive effects.
• Provide an updated explanation of the hypothetical monopolist test used to define relevant antitrust markets and how the agencies implement that test in practice.
• Update the concentration thresholds that determine whether a transaction warrants further scrutiny by the agencies.
• Provide an expanded discussion of how the agencies evaluate unilateral competitive effects, including effects on innovation.
• Provide an updated section on coordinated effects. The guidelines clarify that coordinated effects, like unilateral effects, include conduct not otherwise condemned by the antitrust laws.
• Provide a simplified discussion of how the agencies evaluate whether entry into the relevant market is so easy that a merger is not likely to enhance market power.
• Add new sections on powerful buyers, mergers between competing buyers, and partial acquisitions.

Analysis by private parties is mixed.  Constantine Cannon LLP writes that the guidelines “reflect a more tolerant approach to mergers, stressing the need to ‘avoid unnecessary interference with . . . competitively beneficial’ mergers.”   In support, Constantine Cannon cites the increased Herfindahl-Hirschman Index (”HHI”) thresholds and statements clarifying that coordination can be legal.

On the other hand, Weil Gotshal writes that the guidelines “appear to provide the agencies with more tools… [and] offer less predictability regarding which analytical methodology will be applied.”  Of primary concern is the decreased emphasis on market definition and increased emphasis on a fact-specific process with a variety of analytical tools.  Revised definitions may create narrower relevant markets which will negate any benefits of higher HHI thresholds.  The newly enumerated categories of evidence may lead to broader document requests and longer investigations.  In providing many alternative techniques and theories, the agency has provided “few true guidelines to assist parties considering a transaction.”

Criticism From Within the Commission

Commissioner J. Thomas Rosch issued a separate concurring statement, in which he “acknowledged” flaws in the guidelines.  According to Commissioner Rosch, the following substantial changes since the 1992 revisions are not reflected in the new guidelines:

First, the Commission is increasingly challenging mergers in preliminary injunction and administrative (Part 3) proceedings…   Second, economic theories embedded in the 1992 Guidelines emphasized price effects almost exclusively. Increasingly, the Agencies and courts have considered nonprice effects, like effects on quality, variety, and innovation, to be no less important. Third, for a variety of reasons, many, if not most, courts have relied on empirical evidence instead of economic evidence, and have considered economic evidence as corroborative of that empirical evidence, if they have considered it at all…  As previously discussed, that in turn has led the staff reviewing mergers ex ante to devote more attention to the empirical evidence that can be presented and defended at trial.

As a result, Commissioner Rosch believes the guidelines do not reflect the way staff at the FTC conduct ex ante merger reviews or the information courts should be told about merger analysis.

According to Commissioner Rosch, the guidelines possess the following additional flaws:

• Stakeholder perspectives were considered unequally. As a result, the guidelines overemphasize “economic formulae and models based on price theory.” Commissioner Rosch credits the large influence of the defense bar, academics, and other kindred souls and at least one private meeting held with the leadership of the ABA Antitrust Section.
• The economic theories of the revised guidelines are improperly based wholly or partially on margins (prices minus incremental costs). Although the draft guidelines acknowledge in two footnotes that “high margins are not in themselves of antitrust concern,” Section 4.1.3 discusses the role of margins in critical loss analysis and as an indication of the sensitivity of demand to price.
• The guidelines say little about non-price competitive effects (ie., how a transaction affects quality, service innovation, and product variety). See page 2 of the guidelines, “[f]or simplicity of exposition, these Guidelines generally discuss the analysis in terms of… price effects.”
• The guidelines fail to offer a clear framework for analyzing non-price considerations. Commissioner Rosch supports this claim with four non-exhaustive illustrations of guideline deficiencies.

Commissioner Rosch’s statement raises many questions about the future of the guidelines.  Are the revised guidelines an accurate statement of current practices?  Will the issuance of the guidelines lead to a greater number of enforcement actions?  How will courts square this administrative document with prior merger and acquisition case law?  Only time will tell.

Fourth Annual Student Health Law Conference To Be Held at Seton Hall Law on October 22nd

The American Society of Law, Medicine & Ethics (ASLME) and Seton Hall University School of Law will co-sponsor the Fourth Annual Student Health Law Conference: Taking the Health Law Career Path on Friday, October 22, 2010, in Newark, New Jersey.

This conference, which is attended by law students from law schools throughout the country, seeks to expose law students to the myriad career paths for attorneys in health and life sciences. The conference provides an introductory session on health law, panels on a variety of employment opportunities in health law, and a networking reception with the conference speakers. Career paths that will be represented include academia, compliance, private firms, government agencies, nonprofit organizations, drug and device companies, health insurers, and hospitals. Speakers for this year’s conference have been chosen for their health law expertise and background.

The format of the conference is a series of panels focused around a particular kind of health law career. Each panel is approximately one hour long and comprised of two to four panelists. Students will have the opportunity to explore nontraditional employment opportunities across the health law spectrum, receive support and guidance from professionals familiar with the experience needed for various careers as well as recruitment and hiring processes, and network with health law attorneys.

Interested in learning more about career paths for attorneys in health and  life sciences?  Click here for information on attending the conference.

Finding an Understanding Between Doctors and Patients

A general perception has been that doctors choose their profession over their patients. The perception takes shape as medical professionals sometimes choose to protect their profession over the chance to improve the quality of medical care– whether doctors refusing to report a colleague’s mistake or perhaps even hindering the efforts of a doctor rating system.

So when medical mistakes occur and possible lawsuits are on the horizon, it’s no shock that medical professionals sometimes fail to own up to their mistakes–implementing instead a code of silence about the case to avoid or limit liability.  In a critical time when patients or family members are looking for answers, doctors can be unavailable to provide it for them. It would also not be a shock if, after any such information could be helpful to the patient, doctors did so under the advice of counsel.

However, a study has been recently reported by the NY Times which suggests that perhaps silence may not be the most prudent approach.  According the NY Times,

Since 2001, the University of Michigan Health System has handled patient injuries by initiating discussions with patients and families, conducting internal investigations and offering apologies with offers of compensation should those investigations reveal medical errors. To examine the repercussions of such an open disclosure with compensation policy, researchers analyzed the number of claims and lawsuits filed against the hospital system between 1995 and 2007, comparing data from before and after the policy took effect.

Contrary to fears that such transparency might worsen litigation, the researchers found that there were actually fewer lawsuits and claims after the hospital began its disclosure with compensation program. Moreover, the hospital system’s liability costs for lawsuits, patient compensation and legal fees dropped, and claims in general were resolved faster than ever before.

While it may seem counter-intuitive to admit fault from a litigation standpoint, these efforts at transparency and an acknowledgment have actually decreased the number of lawsuits.  Richard C. Boothman, who devised and carried out the disclosure program, says, “[w]hen you break that paradigm of litigation and give patients the chance to understand the human element of the other side — of the doctor and what they are struggling with — you find that people are far more forgiving and understanding than has been typically assumed.”

It’s an interesting proposition,  disclosure and accountability as both a means to litigation loss reduction and changing negative perceptions of the profession. In revealing the doctor’s ordeal– in disclosing the fault, one may move forward towards greater understanding between patients and doctors.

It’s also worth noting that additional disclosure methods are being studied.  The Wall Street Journal reports a study about a project, known as OpenNotes, where doctors share their notes with their patients electronically.  While doctors do complain that the OpenNotes may be burdensome, there are those who think it it may be worth the additional burden because it shows– perhaps whether or not the handwriting is decipherable–that doctors are willing to take the extra time to attempt to keep them informed.

But of course, it would better if patients actually understood their doctors. But this would be in stark contrast to a recent study we wrote about here on HRW last week. The study showed a woeful lack of communication (and a wide gap in perception) between hospital staff physicians and “their” patients:

• Only 18% of patients knew their main doctor by name.
• Sixty-seven per cent of doctors believed their patients knew them by name.
• Fifty-seven per cent of patients knew their diagnosis.
• Seventy-seven per cent of doctors believed their patients knew their diagnosis.
• Fifty-eight per cent of patients thought that physicians always explained things in a comprehensible way.
• Twenty-one per cent of doctors stated they always provided explanations of some kind.
• Sixty-six per cent of patients reported receiving a new medication in the hospital, 90% noted never being told of any adverse effects of these medications.
• Ninety-eight per cent of doctors stated that they at least sometimes discussed their patients’ fears and anxieties.
• Fifty-four per cent of patients said their doctors never did this.

Recommended Reading: Recent Legal Scholarship on Issues in Global Public Health

Redressing the Unconscionable Health Gap: A Global Plan for Justice (published in the Harvard Law & Policy Review). In this article Lawrence Gostin brings a big picture issue — the vast global health gap between rich and poor — into perfect focus. Professor Gostin reminds us of an “uncomfortable truth” — “that closing the health gap is well within the means of the international community” — and he proposes a simple (in concept if not execution) plan to do just that.  No international treaty would be required; Professor Gostin’s Global Plan for Justice would take the form of a World Health Assembly resolution.  No new organization or governance structure would be required either; rather, the World Health Organization would “assume its place as the global health leader.”  States would be asked to contribute a small percentage — Professor Gostin suggests 0.25% — of their Gross National Income each year to a Global Health Fund.  The WHO would then allocate the Fund’s resources based on “the health needs of developing countries measured by poverty, morbidity, and premature mortality.”  Professor Gostin suggests that the mission of the Fund be threefold: “(1) ensure the fair allocation of essential vaccines and medicines, with particular attention to low- and middle-income countries in a public health emergency; (2) meet basic survival needs [e.g. food, water, sanitation, and vector controls] and create the conditions in which people can be healthy; and (3) help countries that will suffer most to adapt to the health impacts of climate change.”  Existing efforts, such as the Global Fund to Fight AIDS, Tuberculosis and Malaria, demonstrate the power of voluntary collective action; unlike the proposed Global Health Fund, however, they are too narrowly-targeted and inconsistent to close the global health gap.  Professor Gostin’s article is short (it’s based on the text of a speech), straightforward, and provocative in the best sense of the word.  I highly recommend it.

I also highly recommend Kevin Outterson’s The Legal Ecology of Resistance: The Role of Antibiotic Resistance in Pharmaceutical Innovation (published in the Cardozo Law Review) in which he uses proprietary sales and volume data for the important hospital antibiotic vancomycin to test a number of widely-propounded theories about the interplay between antibiotic resistance and intellectual property law.  The vancomycin case study fails to support the hypothesis that a patent holder is likely to zealously market an antibiotic with an eye to the drug’s dwindling patent term, without regard for the risk that increased uptake could accelerate the evolution of antibiotic-resistant bacteria.  It also fails to support the hypothesis that if patent terms for antibiotics were extended, patent holders would better manage the sales and use of their drugs to forestall the development of resistance.  By contrast, the story of vancomycin is consistent with the hypothesis that antibiotic resistance stimulates innovation — as bacteria evolve that are resistant to an existing antibiotic a market for a new antibiotic arises.  All of this suggests that “tinker[ing] with the patent system” is unnecessary and could even backfire.  Professor Outterson concludes that a more direct and potentially more effective approach to preserving the antibacterial effectiveness of our antibiotics would be to fix our broken health care reimbursement system, under which infection control is an unreimbursed cost and “hospitals and doctors have generally gained revenues from additional infections[.]“

Recommended Reading: Recent Scholarship on Medical Decisionmaking for Children

Alicia Ouellette’s Shaping Parental Authority over Children’s Bodies (published in the Summer 2010 issue of the Indiana Law Journal and available on SSRN) highlights four “shaping cases,” including “a case involving a white father who used surgery to reshape the eyes of his adopted Asian child; another in which parents used human growth hormone to add a few inches onto the adult height of their young son; a third in which a mother consented to liposuction for her twelve-year old daughter; and the case of Ashley X, a young girl with profound disabilities whose parents elected to stunt her growth and remove her breasts and uterus in order to continue caring for her at home.”  Professor Ouellette argues that these cases reveal that the “traditional hierarchical model of the family at play in the health-care setting, which starts from an assumption of parental power” and “take[s] as a given that, absent grievous harm or death, parents have a right to modify a child’s body,” fails to adequately protect or respect children.  She advocates instead the adoption of a “trust-based construct,” under which parents would be conceived of as trustees of their children’s welfare (e.g., their need for food, safety, and nurturing) and developing autonomy rights (e.g., the right to self-determination that will be theirs once they reach adulthood).  Under Professor Ouellette’s trust-based construct, the four shaping cases she identifies would trigger third-party review, because of the potential for conflict between the parents’ trustee-like duties to their children and the parents’ personal interests.  This is not to say that the parents’ decision to “shape” their children would be overruled in all four cases; Professor Ouellette argues that the outcomes of the third-party reviews would likely vary.  Overall, this is a fascinating (and very readable) article in which facts that might seem sensationalistic at first blush are used as a launching pad for a thoughtful theoretical analysis with broad potential applicability.

Rachel Camp’s A Mistreated Epidemic: State and Federal Failure to Adequately Regulate Psychotropic Medications Prescribed to Children in Foster Care (forthcoming in the Temple Law Review and available on SSRN) also takes on the issue of medical decisionmaking for children, focusing on children in foster care for whom psychotropic medication has been recommended.  Professor Camp persuasively argues that parents whose children have been removed and placed in foster care have a right to consent before their children begin taking such medications, because they fall outside the bounds of “ordinary” medical care.  “[W]hen a parent is unwilling or unable to consent,” Professor Camp advocates for “[c]ourt review with an evidentiary burden on the party seeking the medication, not agency acquiescence[.]“  A meaningful and enforced consent requirement would “force[] a check on a system that has become complacent about how psychotropic medications are administered to children in care;” it could also “empower parents to parent — to assess risks, benefits, and make decisions for their children.”  Professor Camp’s article provides an excellent summary of the (startling) facts about the extremely high rates of use of psychotropic medication by children in foster care, a nuanced and thorough accounting of the possible explanations for these high rates, a helpful overview of the applicable law, and concrete recommendations for state-level legal and policy change.

New Rules for Insurance Appeals Under PPACA

On July 22, the Obama Administration released interim final rules that allow patient appeals of health insurance coverage decisions as required under the Patient Protection and Affordable Care Act (”PPACA”) and Health Care and Education Reconciliation Act (”Reconciliation Act”).  Published by the departments of Health and Human Services, Treasury, and Labor, these rules create standards for the internal and external processes by which patients can appeal adverse benefits decisions.

Prior to these rules, coverage appeals were governed by contract and State law.  Forty-four States have created some form of external appeal process for insurance coverage decisions; however, their coverage is limited and the processes vary greatly.  Effective January 1, 2003, changes to the Employee Retirement Income Security Act of 1976 (”ERISA”) regulations provided standards for internal appeals processes.  However, these standards only apply to employer-sponsored group health insurance.

As stated in the Obama Administration fact sheet entitled, “Appealing Health Plan Decisions,”

Today, if your health plan tells you it won’t cover a treatment your doctor recommends, or it refuses to pay the bill for your child’s last trip to the emergency room, you may not know where to turn. Most health plans have a process that lets you appeal the decision within the plan through an “internal appeal” — but depending on your State’s laws and your type of coverage, there’s no guarantee that the process will be swift and objective. Moreover, if you lose your internal appeal, you may not be able to ask for an “external appeal” to an independent reviewer.

Internal Appeals Process

Under the rules, new health plans beginning on or after Sept. 23, 2010, must have an internal appeals process for beneficiaries to challenge “adverse benefits decisions” — a “denial, reduction, or termination of, or a failure to provide or make a payment (in whole or in part) for a benefit.”  Such adverse benefits decisions may be based on individual eligibility, benefit coverage, limitations on otherwise covered benefits (such as preexisting condition exclusions, source-of-injury exclusions, and network exclusions), and a determination that a benefit is experimental or not medically necessary.

In addition, health plans must do the following:

• Notify a claimant of a benefit determination as soon as possible;
• Provide claimants, free of charge, with the evidence relied upon and the rationale for the decision;
• Avoid conflicts of interest by making decisions regarding hiring, compensation, termination, and promotion independent of a claims adjustor or medical experts record of denial of benefits; and
• Meet additional requirements for notice, including information on internal appeals and external review processes.

However, these requirements do not pertain to so-called “grandfathered health plans” — those health plans that were in existence before March 23, 2010 when PPACA was enacted.  In the individual market, health insurance providers must meet the foregoing requirements as well as the following three:

• Applicants for individual insurance must be allowed to appeal initial eligibility determinations;
• Internal review must be limited to a single level, allowing claimants to appeal to external or judicial review immediately; and
• Insurers must maintain all claims and notices for a minimum of six years, which is already required of employer-sponsored health plans under ERISA.

External Appeals Process

If the internal appeal is denied, patients may choose to have the claim reviewed by an independent reviewer.   According to Appealing Health Plan Decisions, States are encouraged to adopt the National Association of Insurance Commissioners (NAIC) standards in “their external appeals laws to adopt these standards before July 1, 2011.”

The NAIC standards call for:

• External review of plan decisions to deny coverage for care based on medical necessity, appropriateness, health care setting, level of care, or effectiveness of a covered benefit.
• Clear information for consumers about their right to both internal and external appeals — both in the standard plan materials, and at the time the company denies a claim.
• Expedited access to external review in some cases — including emergency situations, or cases where their health plan did not follow the rules in the internal appeal.
• Health plans must pay the cost of the external appeal under State law, and States may not require consumers to pay more than a nominal fee.
• Review by an independent body assigned by the State. The State must also ensure that the reviewers meet certain standards, keep written records, and are not affected by conflicts of interest.
• Emergency processes for urgent claims, and a process for experimental or investigational treatment.
• Final decisions must be binding so, if the consumer wins, the health plan is expected to pay for the benefit that was previously denied.

If State laws don’t meet these standards, consumers in those States will be protected by comparable Federal external appeals standards.

As Kaiser Health News reported, “This is a regulation that benefits everyone — consumers get protections, business and providers get more certainty in the rules and the need for litigation to settle these issues should be dramatically minimized,” Phyllis Borzi, assistant secretary of the Department of Labor, said at a briefing for reporters Thursday.

Consumer Assistance Grants

However, procedural rights for consumers are not sufficient to ensure proper appeals.  “Not enough consumers know this is an option that they have,” said Angel Robinson, the consumer advocate in the Iowa Insurance Division, according to Kaiser Health News.

In addition to the new requirements for internal and external appeals processes under the interim final rules, the federal government is offering nearly $30 million in resources to States and Territories to strengthen and establish consumer assistance programs.  Specifically, these programs are charged with:

• Helping consumers enroll in health coverage;
• Helping consumers file complaints and appeals against health plans;
• Educating consumers about their rights and empowering them to take action; and
• Tracking consumer complaints to help identify problems and strengthen enforcement.

Image Credit: Appeal to the Great Spirit, Cyrus Edwin Dallin (1909) Photo by Toni To via Flickr

Health Care Jobs Up– Again

“Health Care Jobs Up,” a tried and true headline that has been capable of use every month in the last decade, and one I’ve used a time or two in one form or another here at HRW. Although the Bureau of Labor Statistics’ latest employment report showed a slowdown in private sector hiring, ambulatory care settings added 8,700 jobs while health care as a whole added 13,100 jobs.

In an article entitled “The Health Care Economy: Where the Jobs Are,” Merril Goozner over at the Fiscal Times writes:

The health care industry is bulletproof when it comes to increasing spending or creating jobs. Growth rates that are often double the rest of the economy have allowed the nation’s hospitals and physician offices to add nearly 1.5 million jobs over the past decade, a period when other private sector employers were shedding 2.8 million jobs, largely the result of the banking and financial crisis. In fact, there hasn’t been a single month in the past decade when health care providers as a group didn’t increase employment opportunities for job-hungry Americans.

The employment gains experienced in the health care sector are prodigious, in January of 2009 The Wall Street Journal reported that in an otherwise bleak economy

“Health care saw a net gain of 419,000 jobs in 2008 and its growth outlook continues to be strong through 2016, according to the Bureau of Labor Statistics.”

And for health law practitioners?  What I wrote back in March of this year seems no less true now:

What might one expect to be the effect of this relatively sanguine state of affairs for Health Care employment on Health Law practitioners?

In the well written and informative words of Professor Jennifer Bard, J.D., M.P.H (I highly recommend the article,  “I’m Interested in Health Law- Now Where Can I Get a Job?” to anyone who may be considering a career in Health Law),

Health care is a trillion-dollar industry[1]that has grown exponentially over the past 10 years with very little sign of slowing. The demand for legal services has tracked the growth of the industry,[2] and, as a result, attorneys calling themselves “health lawyers” have grown from a small core of specialists to a large and diverse group of individuals who are as likely to specialize in bond issuance and tax planning as in torts or food and drug law. Moreover, the increasing regulation of health care has created substantial need for lawyers specializing in compliance with a vast array of federal, state and local regulations. Where 15 years ago most health law was done by small, specialized law firms, today many of the nation’s biggest law firms have thriving health law practices.

Significantly, although officially published in the Winter of 2009 (14 New York State Bar Association Health Law Journal 73 (2009)), Professor Bard first published those words to SSRN in February of 2008-prior to the onset of the Obama Administration and the rising priority of Health Care Reform and regulatory enforcement. Because of these rising priorities, her words are no less true than when they were written, and have arguably gained an even greater currency since.

In an article this month in The American Lawyer, “Drug Supplement.  New federal regs demand more health care lawyers,” Rachel Breitman points out the following:

Ever since President Barack Obama gave health care reform a prime spot on his agenda, hospital, pharmaceutical, medical device, and insurance interest groups have been digging in, with the expectation of a battle to come-the kind that requires lawyers.

Changes have already begun. New federal regulations like a genetic discrimination shield law and new digital privacy security standards have been enacted. The U.S. Department of Justice and Health and Human Services launched a healthcare task force in May. “There’s going to be more oversight about how companies spend government grant funds for research and clinical trials,” says Frederick Robinson, the head of Fullbright & Jaworski’s Washington, D.C., health law practice, which advises clients like Zimmer, Inc., and Walgreen Company. “Also, as health care providers apply for stimulus funds, there will be new compliance challenges to get the money.”

As a result, law firms have a new appetite for health care lawyers.

Seton Hall Law Announces Frank Pasquale as the Schering-Plough Professor in Health Care Regulation and Enforcement

Seton Hall University School of Law has announced the appointment of Frank Pasquale as the Schering-Plough Professor in health care regulation and enforcement. Professor Pasquale has been a member of the Seton Hall Law Faculty since 2004 and is the Associate Director of the Center for Health & Pharmaceutical Law & Policy. He has distinguished himself as an internationally recognized scholar in health, intellectual property, and information law. He has made numerous academic presentations at universities across North America and at the National Academy of Sciences. A prolific writer, Professor Pasquale’s work has been featured in top law reviews, books, peer-reviewed journals, and online blogs, including Health Reform Watch, of which he is Editor-in-Chief. A frequent media presence, he has appeared in the New York Times, San Francisco Chronicle, Los Angeles Times, Boston Globe, Financial Times, and on CNN, WNYC’s Brian Lehrer Show, and National Public Radio’s Talk of the Nation.

Professor Pasquale has testified before Congress and before the New York City Broadband Advisory Commission. He has presented before the Task Force on Competition Policy and Antitrust Laws of the House Committee on the Judiciary, appearing with the General Counsels of Google, Microsoft, and Yahoo.

At Seton Hall Law, Professor Pasquale has taught courses in health care finance and regulation, intellectual property law, and administrative law. He received his J.D. from Yale Law School, his M.Phil. from Oxford University, and his B.A. summa cum laude from Harvard University.

As the Schering-Plough Professor in Health Care Regulation and Enforcement, Professor Pasquale will contribute scholarship which will include public policy analysis of issues related to administrative law, the regulatory and enforcement concerns of providers and patients, FDA law, and drug and device innovation.

This Professorship was made possible by a $2.5 million endowment from the former Schering-Plough Corporation and the Schering-Plough Foundation. The Schering-Plough Foundation supported the advancement of health, education, public policy, and community initiatives.

CMS Regulations: In the Best Interest of Patient Care or the Industry?

By James Hlavenka

Suppose you are an uninsured individual who has been severely injured in a car accident.  After the accident, you are rushed to a hospital with a dedicated emergency room, subject to the requirements of the Emergency Medical Treatment and Active Labor Act of 1986 (”EMTALA”).  Upon being screened, the hospital learns that you need further, immediate treatment to be stabilized.  After admitting you as an inpatient for further stabilization purposes, the hospital discovers that you have severed a critical nerve in your spine.  The hospital is incapable of stabilizing your emergency medical condition and appropriately attempts to transfer you to an available specialty hospital two towns over that specializes in nerve repair.  Under EMTALA and the 2003 Centers for Medicare and Medicaid Services (”CMS”) regulations, there was no direct answer addressing whether the specialty hospital was required to accept your transfer from the original hospital and stabilize your emergency medical condition.

In 2008, CMS proposed rule 73 FR 23669 containing significant policy changes relating to the requirements of EMTALA to address the obligations of specialty hospitals.  Under the proposed 2008 CMS rule, the answer would have been clear: assuming the specialty hospital was subject to EMTALA, it must accept your transfer.  The proposed rule would have clarified the interaction of EMTALA’s transfer provisions with the 2003 CMS regulations that hold EMTALA obligations cease when an individual is admitted into a hospital as an inpatient.  The proposed 2008 CMS rule ensured that EMTALA’s primary purpose of patient stabilization under its transfer provisions would not be contravened by the 2003 CMS regulations.  After solicitation of comments on the proposed 2008 rule, however, CMS ultimately declined to adopt this critical policy clarification in its 2009 Final Rule, CMS-1390-F.

Background

In general, EMTALA imposes specific obligations on certain Medicare-participating hospitals to both screen and stabilize individuals who visit those hospitals’ emergency departments.  For a comprehensive, attorney-prepared EMTALA FAQ page, please click here. After a hospital screens an individual and determines that the individual has an emergency medical condition, it is obligated to provide that individual with necessary stabilizing treatment or provide an appropriate transfer to another medical facility that can achieve stabilization.

EMTALA’s transfer provisions are contained within the “specialized care” requirements of Section 1395dd(g).  Section 1395dd(g) requires a receiving hospital with specialized capabilities to accept a request to transfer an individual with an unstable emergency medical condition as long as the hospital has the capacity to treat that individual and regardless of whether the individual had been an inpatient at the admitting hospital.  These provisions would seem to answer the above hypothetical without the need for any further clarification.  In 2003, however, CMS muddied the answer with a new Final Rule.

In 2003, CMS published Final Rule 68 FR 53263 regarding the applicability of EMTALA requirements to inpatients.  The 2003 CMS rule amended section 489.24(d)(2)(i) of CMS regulations to state that a hospital’s obligations under EMTALA cease when the hospital admits an individual with an unstable emergency condition as an inpatient, so long as the admission is in good faith.  CMS reasserted that EMTALA was not intended to be a federal malpractice statute and that after admission inpatients are protected by State malpractice laws and Medicare Conditions of Participation (”CoPs”).  The 2003 CMS rule was entirely silent, however, as to how EMTALA’s specialized care requirements would continue to apply to inpatients, if EMTALA obligations cease upon admission.

As a result, in 2008, CMS proposed a rule amending Section 489.24(f) of the CMS regulations.  The amendment added a provision requiring a receiving hospital with “specialized capabilities or facilities” to accept an unstabilized inpatient with an emergency medical condition from an admitting hospital, thereby continuing the specialty hospital’s obligation under Section 1395dd(g) of EMTALA.  Thus, when the 2008 proposed CMS rule was analyzed in conjunction with the 2003 Final Rule, EMTALA obligations would not end for all hospitals once an individual is admitted as an inpatient.  Rather, EMTALA obligations would cease only at the hospital where the individual is first admitted as an inpatient.  EMTALA’s transfer provisions would continue to apply, however, to all other participating hospitals with higher levels of care, should an inpatient need to be transferred for stabilization of the original emergency medical condition.

2009 CMS Final Rule 1390-F

Upon review of solicited comments, CMS ultimately decided not to adopt the 2008 proposed rule clarifications in its 2009 Final Rule regarding transfer and inpatient care requirements under EMTALA.  Instead, in the 2009 Final Rule, CMS stated that under EMTALA individuals can only be appropriately transferred to another hospital for specialized stabilizing care where two requirements are met: (1) The individual must have an emergency medical condition that requires specialized stabilizing treatment not available at the hospital where the individual is first screened, and (2) The individual has not already been admitted as an inpatient.

Understandably, commenters disagreed about the possible effects of the proposed 2008 CMS rule.  Both opponents and proponents ultimately offered patient-centered rationales for their  policy perspectives.  When read in conjunction with EMTALA as a whole, however, those in favor of the proposed 2008 rule seem to have stayed most true to EMTALA’s original intent–to provide emergency care to all individuals who are determined to have an emergency medical condition.  The commenters’ statements below can be found within the final rule, here.

Opponents of the proposed 2008 CMS rule

The majority of the concerns raised by the dissenting commenters, which ultimately swayed CMS not to adopt the proposed 2008 rule, can be placed into three categories, each to be discussed in turn:

(1) Patient Dumping

Commenters highlighted the danger of patient dumping at hospitals with specialized facilities.  Of particular concern to one commenter was that a hospital, acting in bad faith, could choose to transfer only “medically complex patients requiring extensive lengths of stay, patients who are uninsured, and patients who have been subject to a medical error” and unresolved medical conditions.  Also of concern was that such transfers would be made as a “convenience measure and not a necessity.”  These particularly strong arguments were not overlooked by CMS when proposing the 2008 rule.  It is true that hospitals can act in bad faith, however such actions would violate both EMTALA and the CMS regulations.  Commenters also emphasized that allowing transfer of inpatients may allow hospitals to transfer unstable individuals before using all available resources in an attempt to stabilize the individual.  Again, while entirely possible, this argument is based in an assumption of bad faith, which in itself is a violation of EMTALA and medical ethics.

(2) Patient Care

Commenters expressed concern about how the proposed rule would affect patient health and safety.  Specifically, commenters were concerned that patients’ physical and psychological health could deteriorate as a result of the potential increase in inappropriate and unnecessary transfers mentioned above.  Commenters noted that referring hospitals may transfer patients who deteriorate following admission, thereby risking the life of the patient.  These arguments must raise concern, as any increase in danger to an individual already suffering an emergency medical condition is unwarranted.  These arguments do not seem overly persuasive, however, when read in conjunction with the safety measures already in place under EMTALA to ensure that transfers only occur when the benefit outweighs the risk to an individual.

(3) Futility

Commenters also asserted that the proposed 2008 rule was largely unnecessary for various reasons.  First, it was stated that it is unlikely that a hospital would knowingly admit an individual with an unstabilized emergency medical condition if the hospital did not have the capability to stabilize the individual.  This argument is not particularly strong.  While it is likely that a hospital would not knowingly do so, in daily practice errors can easily occur.  Therefore, there is no harm to ensuring that if such a mistake does occur, it will not adversely affect the suffering individual.  Along the same lines, a commenter stated that “all hospitals which have emergency departments are capable of evaluating an individual who presents to the emergency department and if the hospital does not have the capability to appropriately care for the individual, the hospital should transfer, rather than admit the individual.”  For the same reasons stated above, while a hospital may have the capability to do so, that does not mean that the hospital will make a correct decision every time.

Proponents of the proposed 2008 CMS rule

Commenters in favor of the proposed 2008 CMS rule focused upon the stabilization and safety of individuals suffering from emergency medical conditions.  Overall, commenters in favor of the proposed 2008 rule stated that the policy clarifications were in the best interests of patient care and should be implemented.  A particularly strong argument by one commenter was that inpatient admission status should be irrelevant in determining whether the individual has an emergency medical condition and whether the admitting hospital has the capability to provide the necessary care. The commenter noted that such requirements are “the only operative criteria to whether the transfer is justified under EMTALA” and as a result, EMTALA and CMS regulations must be read in harmony to achieve such a result.  The commenter stressed that EMTALA was enacted because “Congress recognized that patients needing transfers were being denied access to higher levels of care.”  This argument is very strong.  By failing to adopt the proposed 2008 rule clarifications, the will of Congress was hindered in part.

Of particular concern to other commenters were individuals who suffer emergency medical conditions in rural areas.  Such commenters stated that the proposed rule was “especially important for individuals living in rural areas because those individuals are routinely denied transfer to a regional facility for definitive care based on the conclusion that the individuals are already at a ‘hospital.’”  Given that much of our country is comprised of rural areas, such concerns should not have been minimized.  Last, a proponent addressed the concern of inappropriate transfers by suggesting that the clarified process could be adequately monitored for abuse and bad faith.  This suggestion is sound, as such monitoring is already required under the 2003 Final Rule regarding admission into hospitals to end EMTALA requirements.

Did CMS Get it Right?

CMS should have adopted the proposed 2008 rule.  Although finalizing the proposed 2008 rule may have resulted in an increase in inappropriate transfers to hospitals with specialized capabilities, arguments based on an assumption of bad faith should not outweigh the legitimate concerns voiced by many commenters.  Hypothetical risks of inappropriate transfers are always a possibility.  Regardless of whether an individual is admitted as an inpatient, both the admitting/transferring hospital and receiving hospital must comply with the stringent transfer requirements under EMTALA, namely, the requirements contained within 42 USC § 1395dd(c)(1), (2).  These provisions require a treating physician to certify that the medical benefits of the transfer to another medical facility will outweigh the increased risks to the individual.  Further, the receiving hospital must have both available space and qualified personnel for the treatment of the individual, and must have agreed to accept transfer of the individual and to provide the appropriate medical treatment.

As a result of these safeguards, the argument that individuals could suffer greater physical and psychological harm as a result of inappropriate transfers under the proposed rule equally falls flat.  If both hospitals follow the strict transfer requirements already contained within EMTALA, the risk of patient harm should be no greater or less than already present. Contrary to what CMS and industry commenters have stated, CMS has arguably increased the potential for individual physical and psychological harm by failing to adopt the proposed 2008 rule.

The primary concern of physicians within emergency departments should be focused on patient care, and not whether admitting that patient for crucial stabilizing treatment may extinguish the individual’s right under EMTALA to be transferred to an appropriate hospital.  Surely it is not always possible to give a thorough examination and attempt to stabilize a patient in the emergency room setting and thus, a hospital’s attempt to stabilize a patient through admission (even if ultimately futile because the hospital lacks the ability to do so) should not detrimentally extinguish the ability to appropriately transfer that individual under EMTALA.  As the rule currently stands, once a hospital decides to admit a patient for stabilization purposes, it automatically extinguishes its right to transfer that inpatient.  This right is extinguished even if the hospital later learns it is incapable of stabilizing a potentially life threatening emergency medical condition.

Commenters argue that a hospital should know whether or not it has the capacity to stabilize an individual prior to admission.  Theory, however, does not always equal practice.  In the fast paced, hectic setting of emergency rooms across the country, such accurate assessments may not always be possible for obvious reasons.  CMS was wrong to render this crucial transfer provision of EMTALA inoperable simply because of the technicality of inpatient admission.  Patient care and stabilization must be the focal point of this statute, and not a bright line test of patient admission and hospital liability.  CMS should reconsider harmonizing EMTALA’s original transfer provisions with its 2003 Final Rule regarding EMTALA requirements after inpatient admission.

Recording of Sam Maizel’s Discussion of Distressed Hospitals

A noted expert in the restructuring of health care business debts, both in and out of court, Sam Maizel treated Seton Hall to a one hour crash course on the fiscal crisis encountered by many of America’s hospitals. The significant financial hurdles that the hospital industry is facing has made the bankruptcy process that many hospitals encounter one of the fastest growing fields in health law.

Mr. Maizel has represented the federal government as a trial attorney in the U.S. Department of Justice’s Commercial Litigation Branch. He also served in the JAG Corps in Operation Desert Shield and Desert Storm after serving in the 101^st Airborne Division and the 3^rd US Infantry Regiment. Mr. Maizel now practices in Los Angeles for  Pachulski Stang Ziehl & Jones LLP.

You can download Mr. Maizel’s talk here, or alternatively, you can stream it to your browser by clicking “Play” below:

Mintz Levin: “Health Care Reform Advisory: Assessing the Impact of Federal Health Care Reform on Employers and Employer-Sponsored Group Health Plans”

I’ve written before on this blog about the value of Mintz Levin’s reports, and am about to do so again (you can find their  work, as a permanent link, under “Resources” on this blog). There is, linked below, a very nicely done recap of the health reform law– which gets quickly to the point regarding the implications of a number of provisions within the law for employers and employer-sponsored group health plans. For those of you unfamiliar, Mintz Levin is  a law firm with its primary office in D.C., and a health sciences group with a well deserved reputation for excellence. If you are an employer, or even an employee that has some appropriate notion of “trickle-down,” I highly recommend you take a look.

Written by Alden J. Bianchi and Patricia A. Moran, “Assessing the Impact of Federal Health Care Reform on Employers and Employer-Sponsored Group Health Plans,” may be found here.

Wall Street Journal: Health Jobs Up, Again

There may or may not be health care reform in the offing, but it seems fairly clear that the future still looks rather bright for health care related employment.

Despite a national unemployment rate holding steady for these last two months at 9.7%, in February, according to the Wall St. Journal “the health care sector added 12,000 jobs. That continues the series of monthly job gains that has made health care an economic bright spot since the start of the recession.”

And so it is. That series of monthly Health Care job gains amounts to 658,000 since the start of the recession in December, 2007. To put this in perspective, according to the Bureau of Labor Statistics, the economy has shed 8.4 million jobs during that same time period.

And the impact for Health Law practitioners? I covered this ground last year after the Wall St. Journal had reported that

Health care saw a net gain of 419,000 jobs in 2008 and its growth outlook continues to be strong through 2016, according to the Bureau of Labor Statistics.

But as we’ve exceeded that added job total now by more than 50%, and the bar exam was just again administered, it may be worth reiterating:

What might one expect to be the effect of this relatively sanguine state of affairs for Health Care employment on Health Law practitioners?

In the well written and informative words of Professor Jennifer Bard, J.D., M.P.H (I highly recommend the article,  “I’m Interested in Health Law- Now Where Can I Get a Job?” to anyone who may be considering a career in Health Law),

Health care is a trillion-dollar industry[1]that has grown exponentially over the past 10 years with very little sign of slowing. The demand for legal services has tracked the growth of the industry,[2] and, as a result, attorneys calling themselves “health lawyers” have grown from a small core of specialists to a large and diverse group of individuals who are as likely to specialize in bond issuance and tax planning as in torts or food and drug law. Moreover, the increasing regulation of health care has created substantial need for lawyers specializing in compliance with a vast array of federal, state and local regulations. Where 15 years ago most health law was done by small, specialized law firms, today many of the nation’s biggest law firms have thriving health law practices.

Significantly, although officially published in the Winter of 2009 (14 New York State Bar Association Health Law Journal 73 (2009)), Professor Bard first published those words to SSRN in February of 2008–prior to the onset of the Obama Administration and the rising priority of Health Care Reform and regulatory enforcement. Because of these rising priorities, her words are no less true than when they were written, and have arguably gained an even greater currency since.

In an article this month in The American Lawyer, “Drug Supplement.  New federal regs demand more health care lawyers,” Rachel Breitman points out the following:

Ever since President Barack Obama gave health care reform a prime spot on his agenda, hospital, pharmaceutical, medical device, and insurance interest groups have been digging in, with the expectation of a battle to come-the kind that requires lawyers.

Changes have already begun. New federal regulations like a genetic discrimination shield law and new digital privacy security standards have been enacted. The U.S. Department of Justice and Health and Human Services launched a healthcare task force in May. “There’s going to be more oversight about how companies spend government grant funds for research and clinical trials,” says Frederick Robinson, the head of Fullbright & Jaworski’s Washington, D.C., health law practice, which advises clients like Zimmer, Inc., and Walgreen Company. “Also, as health care providers apply for stimulus funds, there will be new compliance challenges to get the money.”

As a result, law firms have a new appetite for health care lawyers.

Seton Hall Announces Summer Study Abroad International Health Law Program

Seton Hall University School of Law’s Leuven-Geneva Program in Health, Intellectual Property and International Law combines a broad-based introduction to the laws, policies and institutions of the European Union (EU) with a unique, interdisciplinary examination of cutting-edge issues in intellectual property, pharmaceutical development and global public health.

The Program will consist of two courses. European Union Law, a two-credit course, will be taught mainly at the Leuven Institute in  Leuven, Belgium and will include a special trip to Luxembourg to visit the European Court of Justice. Students will also visit some of the main EU institutions in Brussels, such as the European Parliament and Commission.

The goal of this part of the Program is to introduce students to the essential principles and institutions of the EU and to explore firsthand the challenges facing this unique confederation of different languages and cultures. For the Geneva component of the Program, students will study Health and Intellectual Property Law in a Global Environment, a four-credit course, co-taught by one intellectual property law professor and one health law professor.  The course will be conducted in collaboration with Geneva-based international organizations involved in health and intellectual property law issues, including the World Health Organization, UNAIDS, the World Trade Organization and the World Intellectual Property Organization.

Students will work on a series of case studies related to the work of these organizations, both in the classroom and in on-site meetings with organizational representatives. In addition to students from the Seton Hall Program, the Geneva component of the Program will also be open to students from the University of Zurich Ph.D. program in Biomedical Ethics and Law.

More information about the program is available here: http://law.shu.edu/Students/academics/studyabroad/Geneva/index.cfm

Online Graduate Certificate Program in Health & Hospital Law to Launch in April 2010

Seton Hall Law School’s Center for Health & Pharmaceutical Law & Policy is set to launch a new online program in Health & Hospital Law. The new Graduate Certificate in Health & Hospital Law is a non-degree program designed for individuals who seek in-depth knowledge about legal, regulatory, and ethical issues related to health care delivery.  Taught exclusively online, it offers students nationwide a targeted immersion in key substantive issues along with the practical skills necessary to research and communicate effectively about the law.

The intensive program is geared to busy professionals who want to cover a significant amount of material in a relatively short period of time. The program is open to students who have earned a baccalaureate degree from an accredited college or university.  It is specifically designed to meet the needs of mid- to senior-level professionals in the health care industry, but highly motivated students from other backgrounds are also welcome to apply. It is not necessary to have prior academic or work experience in health care in order to do well in the program.

The first class begins April 18, 2010 and applications are being accepted now. Additional information is available at: law.shu.edu/onlinecertificate

Risks to Directors and Trustees of Health Care & Life Sciences Companies: Corporate Compliance in a Distressed Economy

“Risks to Directors and Trustees of Health Care & Life Sciences Companies: Corporate Compliance in a Distressed Economy,” was sponsored by Seton Hall Law’s Center for Health & Pharmaceutical Law & Policy, Epstein Becker & Green P.C., and Navigant Consulting, Inc. The program urged profit and nonprofit health care organizations to prioritize effective corporate compliance programs, particularly in today’s economy.

Moderated by Professor Kathleen Boozang, the program featured keynote speaker Mark Anderson, the New Jersey Medicaid Inspector General, as well as presentations by Lynn Shapiro Snyder and Hervé Gouraige of Epstein Becker & Green P.C. and Sandra Piersol and Geoffrey Kaiser of Navigant Consulting, Inc.

The participants focused on the financial challenges and potential exposure for board members of health care and life sciences entities in maintaining an effective compliance program in order to minimize noncompliant behavior and corporate liability risks.  Current trends in HHS Corporate Integrity Agreements (CIA’s) have shown a movement toward imposing personal liability on boards of directors for failure to ensure that a company has an effective corporate compliance program.

Inspector Anderson first addressed the 2007 statute governing the New Jersey Office of Medicaid Inspector General, focusing in particular on the statute’s broad definitions of “fraud” and “abuse,” which allows his office broad discretion.  Asking the key question, “is your compliance compliant?”, he emphasized that effective compliance programs go beyond simple written policies and procedures, but are specific to the entity’s need to prevent fraud and abuse, and are supported at every level of management — with the tone set “at the top.”  He concentrated on one specific element of compliance programs — self-disclosure of problems within one’s own organization — and stressed that self-disclosure is essential to compliance and is in the company’s best interest, as his office provides incentives to health care entities to self-disclose.  These incentives include forgiveness or reduction of interest payments, waiver of penalties and/or sanctions, timely resolution of overpayment, and a decrease in likelihood of imposition of an OMIG Corporate Integrity Program.

Lynn Shapiro Snyder, Co-Chair of the Health Care Fraud Practice Group at Epstein Becker & Green, spoke about the looming threat of enforcement activities aimed at board members of health care and life sciences entities, and noted that, until recently, the risk has been reputational rather than legal.  She highlighted the blurred line between governance and management obligations, and questioned whether boards need their own consultants to determine whether to sign off on a company’s compliance program.  Later, suggesting a simple, cost-effective way to examine the effectiveness of a compliance program, she recommended that compliance officers file (and follow) a “dummy report” within their own organization, thereby bringing to light gaps and issues in the company’s program.

Sandra Piersol, a Director with the Healthcare Disputes and Investigators practice at Navigant Consulting, addressed how directors and trustees can determine whether they have an effective corporate compliance program.  Discussing the seven elements of an effective compliance program, she emphasized ensuring that the compliance officer has direct access to the board of directors, setting the “tone at the top,” and the need for ongoing training and communication.  She provided a list of structural and operational questions to be considered when examining whether an entity’s corporate compliance program is effective, and concluded with the recommendation that boards should request the performance of an objective and comprehensive review of the program activities performed by persons independent of the compliance program.

Hervé Gouraige, Co-Group Leader of the National Litigation Practice at Epstein Becker & Green, spoke about the risk to board members of personal liability for an ineffective compliance program.  After an overview of the law as it relates to board oversight of compliance, Gouraige discussed the requirement that companies have a process established to address compliance risks within the organization.  Second, he underscored that the process must be executed by the chief compliance officer and monitored by the board.  Finally, he explained that the board must be involved in the selection of a chief compliance officer who is capable of, and willing to, stand up to the board.  He stressed that the chief compliance officer should not also be the general counsel, due to the conflicting duties and obligations of those positions.  He also suggested that there be a separate board committee — which includes the CEO, general counsel, and chief compliance officer — to monitor the compliance program.  Annually, this committee should meet without the CEO and general counsel as well.  Finally, Gouraige suggested that in order to learn about — and address — problems before a prosecutor does, compliance officers periodically spot check internal emails between employees.

Geoffrey Kaiser, Managing Director in the Healthcare Dispute, Compliance and Investigations Practice at Navigant Consulting, focused on the benefits of having an effective compliance program.  He noted that, although it is difficult to quantify the harm avoided by any program, an effective program can reduce or mitigate the risk of violations, particularly through education, which is a cost-effective way to sensitize employees to risk.  Second, having an effective voluntary information and reporting system allows a board of directors to introduce corrective measures proactively.  Third, having an effective corporate compliance program in place can influence prosecutorial discretion.  In addition, having an effective compliance program can reduce the severity of penalties facing an organization at sentencing — not only affecting the amount of the fine, but also the range in which the fine will be imposed.

Overall, each speaker highlighted the cost-effectiveness and benefits of devoting resources to an effective compliance program.  Inspector Anderson, stating that the economic environment cannot dictate compliance policies, emphasized that cutting such programs is short-sighted and a future compliance violation could potentially decimate a company in the long run.  Gouraige explained that it would be a terrible mistake to cut compliance, due to the “wisdom of the long-term investment.”  The speakers, in a question and answer session moderated by Professor Boozang, addressed effective ways to increase board attention to corporate compliance, including focusing on corporate compliance as one of the many legal requirements required by boards and underscoring the investment — rather than the cost — of implementing an effective corporate compliance program.  As attendee Eve Costopoulos of Merck aptly stated, “if you don’t pay today, you’ll pay tomorrow.”

All Photos by Sean Sime

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