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On the Digital Health Frontier: Developments Driving Industry Change in 2018

As digital health innovation continues to move at light speed, both new and incumbent stakeholders find themselves on a new frontier—one that challenges traditional health care delivery and payment frameworks, in addition to changing the landscape for product research, development and commercialization. Modernization of the existing legal framework has not kept pace with the rate of digital health innovation, leaving no shortage of obstacles, misalignment and ambiguity for those in the wake.

What did we learn in 2017 and what’s to come on the digital health frontier in the year ahead? From advances and investments in artificial intelligence (AI) and machine learning (ML) to the increasingly complex conversion of health care innovation and policy, McDermott’s Digital Health Year in Review details the key developments that shaped digital health in 2017, along with planning considerations and predictions for the health care and life science industries in 2018. 

Report highlights include

  • Privacy and Cybersecurity: Cybersecurity continues to plague the digital health ecosystem and will only continue to escalate as the demand for and proliferation of digital health mobile wellness and disease management apps increases. Management of this risk demands relentless diligence of tracking applicable federal and state laws and establishing, maintaining, assessing, and improving privacy and cybersecurity compliance and risk management programs that include, among other things, a thorough and well-tested cybersecurity breach or cyberattack preparedness response plan.

  • Provisions to the 21st Century Cures Act: In 2018, the US Department of Health and Human Services (HHS) is expected to implement several provisions of the 21st Century Cures Act (Cures Act) relating to health information technology to encourage the consistent implementation and use of common standards, and to take steps toward achieving national interoperability. Additionally, HHS’s Office of the National Coordinator for Health Information Technology (ONC) and Office of Inspector General (OIG) are expected to release a proposed rule in early 2018 relating to information blocking. OIG is also pushing the Centers for Medicare and Medicaid Services (CMS) to increase its efforts to detect improper payments made to health care providers participating in the Meaningful Use Programs.

  • Telehealth: State regulation of telehealth reached an all-time high in 2017, with 34 states and the District of Columbia passing a total of 62 legislative bills, representing a 22 percent increase from 2016. The focus of state legislation in 2017 continued to move away from regulating the delivery of care (e.g., practice standards for securing informed consent and remote prescribing) and toward regulating the coverage and payment of telehealth services by private payors. Other developments impacting telehealth are detailed in the full report, including the expansion of coverage and payment policies of commercial and government payors for telehealth services.

  • US Food and Drug Administration (FDA) Updates: In July 2017, FDA published its Digital Health Innovation Action Plan, in which the agency acknowledged that the traditional regulatory approach toward moderate and higher risk medical devices is not well suited for the fast-paced, iterative design, development and type of validation used for digital health software products today. FDA also issued a number of guidance documents—some of which were promised in the Digital Health Innovation Action Plan—that affect digital health product development and compliance activities, analyses regarding the regulatory status of products in the United States and the overall regulatory strategy for those products. Taken together, the Digital Health Innovation Action Plan and various FDA guidance statements continue to clarify how developers should approach certain development, classification and post-market product decisions and surveillance for digital health products in 2018. However, many important questions remain unanswered.

  • Modernization of Federal Human Subject Protection Regulations: HHS issued a long-awaited final rule amending the Common Rule (Common Rule Final Rule) in an effort to bring the human subject protection regulations into the modern, digital era. The regulation includes several changes designed to ease regulatory burdens on institutions that conduct human subjects research, particularly research involving secondary use of data and biospecimens.

  • Artificial Intelligence & Machine Learning: Advances in AI and ML applications in 2017 were coupled with continued compliance uncertainty across a variety of industry settings, including which legal and regulatory frameworks should apply to current and future iterations of the technology. Despite these problems, 2017 saw no significant legal or regulatory changes focused on AI and ML outside of FDA, as well as the FUTURE of AI Act. Introduced in both the House and the Senate, the FUTURE of AI Act would establish a committee to advise the Secretary of Commerce on AI in the context of a variety of issues, including work force, education, legal and regulatory regimes, and international competitiveness.

Technology’s disruption of traditional health care will only continue, and organizations must be aware of and prepared for the implications of digital health innovation—mitigating risk to ensure compliance and a strong foundation for growth. Read the full Digital Health Year in Review Report for a detailed breakdown of each of the key development areas, corresponding legislative updates and considerations for planning in 2018 and beyond.

© 2020 McDermott Will & Emery


About this Author

Jiayan Chen, McDermott Will Emery Law Firm, Health Care attorney

    Jiayan Chen is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Washington, D.C., office.  She focuses her practice on counseling clients on a range of regulatory issues, including compliance and strategic considerations for data sharing and research initiatives, as well as on transactions relating to pharmaceutical and medical device companies.

    Jiayan’s regulatory practice includes advising clients on research compliance and data privacy and security laws, including the Common Rule, FDA good clinical practices, HIPAA, the Privacy Act...

    Lisa Schmitz Mazur, Health Law Attorney, McDermott Will Law Firm

    Lisa Schmitz Mazur is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.  Lisa maintains a general health industry practice, focusing on the representation of hospitals and health systems and other health industry providers.

    Lisa’s representation of hospitals and health systems includes providing guidance on not-for-profit corporate governance matters, tax-exemption issues, conflict of interest compliance and overall corporate compliance effectiveness.  In addition, Lisa regularly assists hospital and health system clients to develop and negotiate physician compensation programs, and prepare agreements with physicians and helps to guide governing boards and committees in the review and approval of such arrangements. 

    Digital Health

    Lisa advises a variety of healthcare providers and technology companies involved in “digital health” – the intersection of health software applications, analytical tools, medical technology and electronic data assets enabled by the Internet and mobile devices – on the applicable legal and regulatory infrastructure, with a particular focus on telehealth, telemedicine, mobile health and consumer wellness programs. For example, Lisa has assisted numerous clients in developing and implementing telemedicine programs by advising on issues related to professional licensure, scope of practice, informed consent, prescribing and reimbursement. Lisa assists her clients to identify and understand the relevant legal issues and develop and implement practical, forward-thinking solutions and strategies that meet the complex and still-evolving digital health regulatory landscape.

    In addition to writing extensively on matters related to her digital health practice, Lisa has spoken at numerous conferences on a variety of digital health topics. She is the co-editor of McDermott’s Of Digital Interest  blog, co-chairs the Interstate Collaboration in Healthcare Stakeholder Group and chairs the Illinois Telehealth Law Forum Program Planning Committee

    Lisa also co-leads the Firm’s Digital Health affinity group, which brings together McDermott lawyers from within and outside the Health Industry Advisory Practice Group to develop thought leadership, share information and collaborate on best practices.