Revisions to Certain Patient’s Rights, Conditions of Participation and Conditions of Coverage0

iStock_000017988429SmallThis State Bar of California Health Law E-Bulletin was published on December 16, 2014.

Medicare and Medicaid Program; Revisions to Certain Patient’s Rights Conditions of Participation and Conditions of Coverage

Last year the U.S. Supreme Court held that Section 3 of the Defense of Marriage Act (DOMA) was unconstitutional because it violated the Fifth Amendment. United States v. Windsor, 133 S. Ct. 2675, 2695 (2013).  Section 3 defined the word “marriage” to mean only a legal union between one man and one woman, and so “spouse” could only refer to a person of the opposite sex who was a husband or wife.  1 U.S.C.  § 7.  The Supreme Court argued that the federal prohibition of same-sex marriages that states had lawfully recognized “undermined both the public and private significance of state sanctioned same-sex marriages,” and that Section 3’s ‘‘purpose and effect [was] to disparage and to injure those whom the State, by its marriage laws, sought to protect’’ 133 S. Ct. at 2694-95. … Read more →

The Poor Get Poorer: the Fate of California’s Hospitals Under the Affordable Care Act0

iStock_000013550840SmallThis article appeared in California Health Law News, Volume XXXII, Issue 3, Fall 2014/Winter 2015

[1] By Samuel R. Maizel[2] and Craig B. Garner[3]

Introduction

Distressed hospitals in California operate on small or non-existent profit margins.[4] For many of these hospitals, Medicare and Medicaid (Medi-Cal in California) are the largest payors.[5] The Patient Protection and Affordable Care Act of 2010 (the “Affordable Care Act”)[6] was designed in part to increase the number of insured nation-wide,[7] the result of which logically should have been positive for California hospitals. Any cause for celebration, however, must first prevail over the cost containment provisions firmly entrenched in the Affordable Care Act, as these regulations created new concerns for California’s financially distressed hospitals.[8] Included among the multitude of threatening provisions in the Affordable Care Act are:

  1. A complete recalibration of Medicare disproportionate share payments (“DSH”) to hospitals[9];
  2. A reduction in Medicare revenue up to 1.5% during Fiscal Year 2015 (and 2.0% by Fiscal Year 2017) for hospitals which perform poorly under the Hospital Value Based Purchasing (“VBP”) Program[10]; and
  3. A penalty of as much as 3.0% for the hospitals which fail to meet the standards set forth in the Hospital Readmission Reduction Program (“RRP”).[11]

In addition to a penalty up to 2% for lapses in inpatient quality reporting and similar penalty relating to outpatient quality reporting, [12] a 2% cut in Medicare due to sequestration[13] as well as a penalty for those hospitals which fail to attest for “Meaningful Use”,[14] collectively the potential for any hospital to lose more than 10% of its Medicare revenue creates daunting challenges, especially with those institutions in California already struggling financially not to mention lacking the resources to establish the necessary infrastructure to compete in this era of change.[15]Read more →

The Nexus Between Compliance and Reputation0

This article first appeared in Corporate Compliance Insights on December 11, 2014.

reputation conceptual meter“It is easier to cope with a bad conscience than with a bad reputation.” — Friedrich Nietzsche

The past few years have been fraught with litigation for the health care industry, with major companies feeling the sting of compliance in both their reputations and their pocketbooks. In early November, Stryker settled hip implant litigation for more than $1 billion. In 2012, GlaxoSmithKline paid $3 billion to settle claims of overcharging, kickbacks and other health care transgressions, while, Abbott Laboratories paid $1.5 billion and Johnson & Johnson $1.2 billion, both for alleged violations of law. Even so, during the first week of November 2014, Stryker traded at its 52-week high, as Abbott and Johnson & Johnson traded near their 52-week high, though GlaxoSmithKline dipped near its 52-week low. GlaxoSmithKline’s downward trend began before a court in Changsha, China fined the company $500 million after a bribery conviction, coupled with the company’s pending bribery charges in the United Arab Emirates, Syria, Jordan, Iraq and Poland. Sadly, bribery charges are not uncommon in today’s health care market, as can be seen by the events of 2013, when prosecutors in Poland investigated Stryker, and those in 2014, when Abbott settled claims in India. China also fined Johnson & Johnson in 2014 for bribery charges, with a penalty of just over $3 million.Read more →