Health Law and Regulations Essay

Custom Student Mr. Teacher ENG 1001-04 1 December 2016

Health Law and Regulations

In understanding regulatory agencies the differences between regulation and legislation needs defining. Legislation is the law that has been passed by a voting process and regulation is the responsibility of the regulatory board appointed to enforce laws once the law is passed; it sets forth rules on how the laws are to be implemented and to what degree. In health care the Department of Health and Human Services (HHS) has the predominant responsibility to enforce legislation that impacts the health and well-being of Americans. Under the umbrella of HHS there are 13 regulatory agencies tasked with setting rules on the enforcement of the legislation passed by lawmakers.

Regulatory Agencies

Two of the most influential regulatory agencies within HHS are the United States Food and Drug Administration (FDA) and the Center for Medicare and Medicaid Services (CMS), these two agencies have substantial influence on every aspect of health care delivery. The FDA is responsible for protecting and promoting public health through the regulation and supervision of food safety, medical devices, drugs, vaccines, blood products and biologics. In addition, they monitor medical errors and adverse reactions and reporting such to providers, (U.S. Department of Health and Human Services, 2011). CMS controls the Medicare program and works in collaboration with state governments to oversee Medicaid, and the State Children’s Health Insurance Program (SCHIP).

In addition to these responsibilities, CMS dispenses criteria from the Health Insurance Portability and Accountability Act of 1996 (HIPAA), surveys and certifies quality standards in long-term care facilities, and clinical laboratories, (Centers for Medicare and Medicaid Services). The proportion of national health spending sponsored by both federal, state, and local governments was 45% in 2010, a significant source of revenue depended on by providers of health care, (Centers for Medicare and Medicaid Services, 2011).

Current FDA Regulations

The Patient Protection and Affordable Care Act (PPAC Act), amended the Public Health Service Act (PHS Act) to create a shortened authorization route for medications found to be “highly similar” or “interchangeable” with an FDA-approved medication, (U.S. Department of Health and Human Services, 2011). The goal is similar to the Drug Price Competition and Patent Term Restoration Act of 1984 (“Hatch-Waxman Act”), which produced condensed methods for the approval of drug products under Federal Food, Drug, and Cosmetic Act (FFD&C Act). The outcome is aimed at the FDA’s instituted policy of allowing confidence on what is already known about a drug, thus protecting time and resources, (U.S. Department of Health and Human Services, 2011).

To help increase access to affordable prescription medications, the FDA implemented measures to expedite the development and approval of generic drugs. Generic drugs cost 50 to 70% less than their brand-name counterparts equating to a savings of eight to ten billion dollars a year at retail pharmacies, (Crawford, June). These savings do not include the use of generic drugs in an institutional setting. PPAC expands on the practice of generic drugs and incorporates using medications that have the same efficacy as another more expensive medication leading to more options in the prescribing of medications. The practice of using generic drugs is not without concern. As evidenced by the case Pliva v. Mensing where the question was; the safety standards for brand-name drug labeling also apply to generic-drug manufacturers.

The patients in the case took the generic drug metoclopramide and developed tardive dyskinesia, which was listed on the label. The patients argued the warning was not adequate and the manufacturer argued the “changes being effected” process was not available to generic-drug manufacturers because the FDA requires labels for generic versions of drugs to be identical to those of the brand-name drugs, (Glantz & Annas, 2011). The FDA upheld the manufacturer’s claim although the FDA added the manufacturer had a responsibility to request a label change if the manufacturer knew a stronger warning was needed to market the drug safely.

The court found in favor of the manufacturer stating “federal law still preempted injured patients from bringing lawsuits in state courts, because the state laws in question require a safer label, not communicating with the FDA about the possibility of creating a safer label,” (Glantz & Annas, 2011, p. 682). Despite this regulatory standing, a controversial issue may entail for the FDA in the allowance of medications to be “interchanged” to promote an additional avenue for savings in prescription medications. Much foresight needs to be included to protect the safety and well-being of patients.

Current CMS Regulations

The Health Information Technology for Economic and Clinical Health (HITECH) Act, part of the American Recovery and Reinvestment Act of 2009 (ARRA), is legislation aimed at the adoption and “meaningful use” of health information technology. CMS was authorized to establish incentive programs for eligible Medicare and Medicaid providers who adopt, implement, upgrade, or “meaningfully use” certified electronic health records (EHR). The term “meaningful use” is an acknowledgement that improved health care is not the product of technology but a method to exchange and use health information to support clinical decisions at the point of care. To qualify for CMS’ incentive program the provider must obtain certified electronic health record technology. An incentive of $44 thousand can be achieved by an eligible professional who shows “meaningful use” over a five year period. Hospitals implementing a certified EHR system can qualify for a two million dollar base payment.

In 2015 Medicare will implement a reduction in payment to those not displaying “meaningful use”. The decrease in payment begins at one percent and rises each year that hospitals and providers receiving Medicare payments do not make evident “meaningful use,” to a maximum reduction of five percent, (Centers for Medicare and Medicaid Services, 2011). The use of EHRs is encouraged by touting improved efficiency, cost-effectiveness, quality, and safety of health care delivery. A study on the use of EHR in 2952 hospitals in the United States revealed 12% of hospitals had instituted electronic physicians’ notes across all clinical units and 17% had instituted computerized provider-order entry for medications in all clinical units, (Jha, et al., 2009). The cited barriers to implementation of EHR were inadequate capital (74%), maintenance costs (44%), resistance of physicians (36%), unclear return on investment (32%), and lack of available staff with expertise in information technology (30%), (Jha, et al., 2009).

Ironically, the hospitals who had implemented the use of EHRs cited financial reasons such as additional compensation for electronic health record use (82%) and financial enticements for implementation (75%), (Jha, et al., 2009). The estimated cost of purchasing, installing, and implementing an EHR system in a provider’s office is approximately $40,000 and this figure does not reflect the cost of maintenance, (Blumentha, 2009). A survey by the American Hospital Association revealed “the median annual capital investment on information technology was over $700,000 and represented 15% of all capital expenses. Operating expenses were much higher at $1.7 million, or 2 percent of all operating expenses,” (National Institutes of Health, 2006, p. 18).

Although there are indisputable reasons for implementing an EHR system, CMS’ incentive program is merely a pittance compared to the ongoing costs of operational expenses. The concept of all health care providers possessing an EHR system is ideal. As with any form of electronic technology comes the prospect of personal information being violated. The Health Insurance Portability and Accountability Act (HIPAA) does provide for penalties from $100 to $1.5 million, depending on the violation and whether it was done unknowingly or willfully and can include imprisonment up to 10 years. HIPAA protects the health information of individuals; “it does not create a private cause of action for those aggrieved,” (The General Counsel Department of Health and Human Services, 2005).


Federal regulatory agencies are a necessity to interpret and assist in the implementation of legislation. Without federal regulatory agencies the United States would have over 50 different interpretations on one piece of legislation. The FDA and CMS play a significant role in the ever changing health care arena. The FDA is based on scientific integrity evidenced by the recent publication of defined key principles of scientific integrity. Through this commitment to scientific integrity and quality the FDA provides medical safety to the American people. Through research and establishing guidelines the FDA has been instrumental in making generic drugs available to the public, saving them more than eight billion dollars annually.

The PPAC tasked the FDA has been tasked with expanding on the generic drug practice by discovering medications that have the same efficacy as another medications leading to more cost saving options in the prescribing of medications. CMS has been tasked with implementing HITECH that has the promise of decreasing costs and errors in health care delivery. This is a lofty goal with over 80 percent of the United States hospitals without any type of electronic health record in place.

The financial incentive provided by the federal government through CMS does not seem to be enough of a motivator to encourage the financial commitment of an EHR. Although, after 2015 when hospitals and providers have not demonstrated “meaningful use” these providers of Medicare services may be more inclined when losing one percent of their Medicare payments. These regulatory agencies and the legislation cited in this paper are a minute representation of the responsibility and obligation the federal agencies have to protect the well-being of the American people. The cited legislation delegated to these regulatory agencies is not only focused on health but financial constraint and safety of the American people.

Blumentha, D. (2009, April 9). Stimulating the Adoption of Health Information Technology. Retrieved from The New England Journal of Medicine: Centers for Medicare and Medicaid Services. (2011, October 17). Medicare and Medicaid EHR Incentive Program Basics. Retrieved from Centers for Medicare and Medicaid Services. (2011, September). National Health Expenditures 2010: Sponsor Highlights. Retrieved from Centers for Medicare and Medicaid Services. (n.d.). About us. Retrieved from Crawford, L. (June, 23 2004). The Law of Biologic Medicine. Retrieved from FDA: Glantz, L., & Annas, G. (2011, August 25). Impossible? Outlawing State Safety Laws for Generic Drugs. Retrieved from The New England Journal of Medicine: Jha, A., DesRoches, C., Campbell, E. G., Donelan, K., Rao, S., Ferris, T., . . . Blumenthal, D. (2009, April 16). Use of Electronic Health Records in U.S. Hospitals. Retrieved from The New England Journal of Medicine: National Institutes of Health. (2006, April). Electronic Health Records Overview. Retrieved from National Institutes of Health: The General Counsel Departmentof Health and Human Services. (2005, June 1). SCOPE OF CRIMINAL
ENFORCEMENT UNDER 42 U.S.C. § 1320d-6. Retrieved from The United States Department of Justice: U.S. Department of Health and Human Services. (2011, November 16). FDA Fundamentals. Retrieved from About FDA: U.S. Department of Health and Human Services. (2011, March 10). Implementation of the Biologics Price Competition and Innovation Act of 2009. Retrieved from U.S. Food and Drug Administration:

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