Supreme Court Decision Adds More Confusion to False Claims Act0

This article, Supreme Court Decision Adds More Confusion to False Claims Act, was first published July 12, 2016 at California Healthcare News.

Wooden puppet with a headache

“The darkest places in hell are reserved for those who maintain their neutrality in times of moral crisis.” — Dante Alighieri

As modern medicine continues its attempts to bridge the gap between body and mind to provide more comprehensive care for patients, so too must the Federal Government address this gray area while endeavoring to regulate care for those less tangible medical issues of the mind.  The already elaborate labyrinth known as the Medicare Act has recently grown even more chaotic under the recent Supreme Court decision Universal Health Services, Inc. v. United States (ex rel. Escobar), which further blurs the line between false and fraudulent claims.

Teenage Medicaid beneficiary Yarushka Rivera sought guidance at Arbour Counseling Services in Lawrence, Massachusetts. The facility diagnosed Rivera as bipolar, although the Arbour “Ph.D.” rendering this opinion failed to disclose that her degree was from an unaccredited Internet-based college, or that Massachusetts had rejected her application for licensure as a psychologist. Twenty-three other Arbour “clinicians” also lacked the purported mental health professional licensures Arbour professed to represent. Not surprisingly, the service’s “prescribing psychiatrist” was in fact a registered nurse who lacked the credentials to do so. Arbour also misrepresented various payment codes, such as “family” or “individual” therapy, and it was discovered to have lied in its attempt to garner National Provider Identification (NPI) numbers for its non-practitioners. Needless to say, Rivera’s mother Carmen Correa and stepfather Julio Escobar were not pleased upon learning of the facility’s transgressions from an Arbour counselor five years into Rivera’s treatment.Read more →

Health Care’s Adventures in Wonderland0

This article by Craig B. Garner[1] and Jessica Weizenbluth[2], Health Care’s Adventures in Wonderland: Provider Agreements for Electronic Records, was first published in February 2016 in California Health Law News.

iStock_000068974059_Large“Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”[3]

I.  INTRODUCTION

Y93.J1: Activity, piano playing[4]

Today’s health care provides its own spin on the word “complex,”[5] while at the same time forging possible paths to what may be “unwinnable” scenarios.[6] For the modern physician[7], the universe within which he or she exists requires updated definitions for words such as “complex” and “challenging,” especially as that “perfect storm”[8] also known as health care reform continues to age. Somewhere in between the 2015 Physician Quality Reporting System (“PQRS”)[9], the Physician Value Based Payment Modifying Policies (“VBP”)[10] and tenth revision of the International Statistical Classification of Diseases and Related Health Problems (also known as ICD-10),[11] physicians find themselves still struggling to adopt electronic health records (“EHR”) in practice.[12]

As technology continues to evolve, there remains a general landscape with which those in the health care field must familiarize themselves. Even from this challenging vantage point, providers still have opportunities to bolster their position and practice their craft as they continue down the digital path and adopt an EHR system for which the Federal Government established incentive payments.[13]Read more →

The Decay in Regulating California’s Corporate Practice of Medicine0

This article, The Decay in Regulating California’s Corporate Practice of Medicine, first appeared in the Business Law News (Issue 2, 2015) of the State Bar of California on June 24, 2015.

ToothThere is nothing worse than a sharp image of a fuzzy concept.”[1]

         In the 1990s, dentists in North Carolina[2] began to whiten teeth.[3] A decade later, nondentists across the state began to provide the same services, but at a lower price.[4] In 2006, the North Carolina State Board of Dental Examiners (the “N.C. Dental Board”) responded by issuing more than 47 cease-and-desist letters to parties whitening teeth without degrees in dentistry, and in 2007 the N.C. Dental Board enlisted the aid of the North Carolina Board of Cosmetic Art Examiners to issue similar warnings, specifically to cosmetologists[5] Their combined efforts were successful, and North Carolina nondentists soon stopped offering teeth whitening services.[6]

         The United States Federal Trade Commission (the “FTC”) took exception to the actions by the N.C. Dental Board, and in 2010 the FTC filed an administrative complaint, alleging the N.C. Dental Board acted deliberately for the benefit of North Carolina dentists and to the detriment of North Carolina nondentists.[7] According to the FTC, these anticompetitive and unfair tactics violated the Federal Trade Commission Act, and in particular Section 5.[8]

         After multiple hearings before an administrative law judge, followed by the FTC’s internal oversight and a review by the Court of Appeals for the Fourth Circuit[9] in February 2015, the United States Supreme Court[10] agreed with the FTC’s 2010 allegations, namely that the anticompetitive conduct of the N.C. Dental Board violated antitrust law, and in particular the Sherman Act.[11] The Supreme Court also held that sovereign immunity did not protect the actions of the N.C. Dental Board.[12]

         In its 6-3 decision referring to the roles of dentists and nondentists in North Carolina, the Supreme Court reached a far greater audience than those concerned with tooth color in the Tar Heel state.[13] In point of fact, the Court’s ruling did much to undermine most if not all authority held by professional organizations in California, including in particular the Medical Board of California (“MBC”).[14] This article explores how and why such change came about. … Read more →

Cadillac Tax Coming Soon0

This E-Bulletin was first published by the Business Law Section of the California State Bar on March 2, 2015.

iStock_000004290636LargeAdded to the Internal Revenue Code (“IRC”) by the Affordable Care Act (“ACA”), Section 4980I begins after December 17, 2017, and the new regulation imposes a 40 percent excise tax (the “Cadillac Tax”) on employer-sponsored coverage that has an aggregate cost in excess of a statutory dollar limit (revised annually). The excise tax applies to “the excess, if any, of the aggregate cost of the applicable coverage of the employee for the month over the applicable dollars limit for the employee for the month.” Under Section 4980I(d)(3), the term “employee” includes “a former employee, surviving spouse, or other primary insured individual.” The 2018-baseline dollar limit per-employee in 2018 for self-only coverage is $10,200 and for other-than-self-only coverage is $27,500. [§ 4980I(b)(3)(C)]

Other adjustments to increase the applicable dollar limits include a “health cost adjustment percentage,” such as cost-of-living adjustment, agent and gender adjustments, if applicable, an adjustment for a “qualified retiree” or for someone “who participates in a plan sponsored by an employer the majority of whose employees covered by the plan are engaged in a high-risk profession or employed to repair or install electrical or telecommunication lines.” The entity obligated to pay the excise tax includes (1) the “health insurance issuer” under an insured plan, (2) “the employer” if the applicable coverage “consists of coverage under which the employer makes contributions to” an HAS or Archer MSA, and (3) “the person that administers the plan” in the case of any other applicable coverage. In each instance, the employer must prepare the calculations for the excise tax and notify the responsible entity.

Pursuant to Section 4980I(f)(10), the excise tax is not deductible for federal tax purposes. Certain types of coverage excluded from applicable coverage include accident or disability income insurance, liability insurance (such as automobile liability insurance), worker’ compensation insurance, dental and vision insurance (if provided under a separate policy) and credit-only insurance, among others.

The IRS has invited comments on the issues no later than May 15, 2015. Additional information can be found here.

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 →

HIPAA Privacy in Emergency Situations0

iStock_000019241379SmallThis State Bar of California Health Law E-Bulletin was published on November 19, 2014.

In response to concerns about the spread of Ebola Hemorrhagic Fever, the United States Department of Health and Human Services (“HHS”), Office of Civil Rights (“OCR”) issued a bulletin clarifying the ways in which the HIPAA Privacy Rule applies in emergency situations. Designed to protect the privacy rights of patients’ protected health information (“PHI”), OCR is mindful that in certain events health care providers must balance privacy rights with the need to protect the nation’s public health. The Privacy Rule provides for certain exceptions on a daily basis:

*  The Privacy Rule permits covered entities to share patient information without authorization when it is necessary to treat the patient (or to treat different patients).

*  Public health authorities and other parties responsible for ensuring public health and safety have access to PHI. This includes possible disclosure to a public health authority, at the direction of a public health authority, or to individuals at risk of contracting or spreading a disease or condition.

Read more →

The Light at the End of the Tunnel . . . or Cliff0

 This article was published on June 5, 2014, in Corporate Compliance Insights.

iStock_000000261863Small“Truth emerges more readily from error than from confusion.”  — Francis Bacon

With each passing day health care reform in America gains momentum, even as the chasm between successful and unsuccessful providers continues to expand. Earlier this month, the Federal Government tested the fortitude of the system when it released thousands of regulatory pages explaining the many ways in which Medicare providers will get paid and penalized over the next few years.  Eagerly awaited by those in the field, the 2015 Hospital Inpatient Prospective Payment System regulations for acute care hospitals lives up to all expectations as it journeys through the labyrinth created by such diffuse entities as the Hospital Value-Based Purchasing Program, the Hospital Readmissions Reduction Program, and the Hospital-Acquired Conditions Reduction Program.  Not to disappoint its devoted readers, the Powers That Be issued regulations the same week for skilled nursing facilities, inpatient psychiatric facilities, inpatient rehabilitation facilities, hospices, and federally qualified health centers. … Read more →

Lessons Learned from Dial-Up0

This article was first published in the Daily Journal on May 15, 2014.

iStock_000013044243MediumIn the largest cities across the U.S., locating an Internet connection has become as easy as finding a cup of coffee. In modern times, however, the ability to effectively communicate in business is inextricably connected to the rate by which one is able to transfer data. Like a bad cup of coffee, we may tolerate a slow connection when options are limited, but no one really enjoys it. Lessons from both support the notion that we not only prefer quality speed, but it also improves our performance at work.

If bit rates are the standard measurement for telecommunications, hospital beds present the equivalent in health care. … Read more →

Regulatory Compliance Has No Speed Traps0

This article was first published on Corporate Compliance Insights on February 26, 2014.

iStock_000000906033Medium“A truth that’s told with bad intent / Beats all the lies you can invent.”  — William Blake

Formed through legislation signed by President Gerald Ford in 1976, the Office of the Inspector General (“OIG”) is one federal agency that should never be underestimated by those in the health care industry. In its pursuit to protect the integrity of health care programs and the welfare of their beneficiaries, the OIG boasts the power to determine the fate of most health care providers through standards both objective (42 U.S.C. § 1320a-7(a) – Mandatory Exclusions) and subjective (42 U.S.C. § 1320a-7(b) – Permissive Exclusions). While those unfortunate enough to find themselves on the List of Excluded Individuals and Entities (LEIE) may at times disagree, the pellucidity with which the OIG enforces its statutory directive is in perfect alignment with the transparency through which the agency insists providers conduct their business. … Read more →