The major development since our last Health Law Alert is the effective date of the Medicare Part D drug program. This program holds great promise for millions of Americans. At the same time, it presents significant challenges for various components of the health care delivery system, as well as for Medicare beneficiaries themselves. Substantial confusion existed prior to January 1st and continues to exist to date, relating to the decisions which must be made by each Medicare beneficiary. Although dual-eligible beneficiaries in long term care facilities have been assigned to PDPs, the decision making process for others has been difficult. In fact, I personally struggled in determining which PDP was most appropriate for my father and my mother-in-law. Each has different health care needs and each lives in a different state. The process has been completed, although it was not pleasant and it was not easy.

Even more significant issues exist for health care providers and for the PDPs. Of particular concern is the situation in long term care facilities which historically have chosen one institutional pharmacy to serve all of their residents, particularly their Medicaid residents. To the extent that residents of a single nursing facility choose multiple PDPs, which may contract with multiple institutional pharmacies, it is not clear how the pharmacies and nursing homes will manage to ensure a continued supply of appropriate drugs and services to the nursing home residents. Further, significant payment denials have resulted from confusion regarding enrollment and participant status. In any case, it is hoped that these issues will be addressed in the short term and that the promise held out to Medicare beneficiaries of adequate drug coverage will be realized.

Other issues were also addressed in the last couple of months, not the least of which related to the struggle of health care providers in areas devastated by Hurricanes Katrina and Rita. Of particular note, the Secretary of the Department of Health and Human Services issued a waiver of various Medicare and Medicaid requirements, including those relating to the Stark self-referral statute. This action made it possible for many health care providers to continue to serve the communities in which they are located despite unimaginable hurdles and difficulties. The waivers have expired, although the need in those areas continues. We stand amazed at the dedication and commitment of those who continue to serve in the face of substantial personal and family challenges.

As detailed in this issue of the Health Law Alert, developments regarding the application of the federal False Claims Act have continued unabated. Despite significant attention paid to the federal anti-kickback statute and the Stark self-referral law, the "action" continues to center on the federal False Claims Act and particularly on cases filed by qui tam relators. The promise of substantial financial returns has continued the trend in which federal and state health care enforcement priorities seem to be set by private individuals.

During the last couple of months, this firm assisted a client in the resolution of a voluntary disclosure filed with the OIG relating to financial relationships potentially violative of the anti-kickback statute and the Stark law. The resolution of that filing demonstrates the value, in specific situations, of the voluntary disclosure program. That experience convinces us that the program may, indeed, be a valuable tool for a provider which discovers potential violations of the law, addresses and resolves the issues, and establishes policies and procedures to avoid future concerns.

Numerous attorneys continue to discuss the "monster in the closet" relating to the identification of Stark violations, even where those violations are both technical and inadvertent. The penalties imposed by the Stark law, including nonpayment, are certainly out of proportion to the nature of the Stark noncompliance. At the same time, however, the failure to return money to which a provider is not entitled may present significant concerns. It is not anticipated that a definitive answer to this issue will be arrived at in the near future. However, continued dialogue with the federal authorities on the question is certainly appropriate and necessary.

In this issue of the Health Law Alert, we welcome patent lawyer Royal W. Craig, who joins our firm as a principal. During his career, Roy has secured more than 400 patents for his clients mainly in the areas of technology and health care services, including medical device and pharmaceuticals companies. Roy joins our Intellectual Property practice and will greatly enhance Ober|Kaler's ability to service clients.

I would also like to welcome two new additions to the Ober|Kaler Health Law Group. Specifically, congratulations to Bill and Lisa Mathias on the birth of Brayden Andrew on December 19th, and to Julie and Howard Kass on the birth of Marleigh Dana on February 9th. We can only hope that Brayden and Marleigh will continue the tradition of serving our health care clients.

Finally, I again want to remind friends and clients of the establishment of the Leonard C. Homer Ober, Kaler, Grimes & Shriver Law and Health Care Fund at the University of Maryland School of Law. This fund was established in honor of Len and his significant contributions to the development of health law over the last 30 years. Anyone wishing to make a tax deductible contribution to that foundation in honor of Leonard should contact me directly.

Sandy Teplitzky, Department Chair