HIPAA: Society’s Modern Day Prohibition0

This article, HIPAA: Society’s Modern Day Prohibition, was first published in California Healthcare News on May 4, 2015.

HIPAA: Society’s Modern Day Prohibition
HIPAA: Society’s Modern Day Prohibition

Secrets, silent, stony sit in the dark palaces of both our hearts: secrets weary of their tyranny: tyrants willing to be dethroned.” – James Joyce, Ulysses

Codified in American Law through Article Three of the United States Constitution and evolving through changing times by way of the Sixth and Fourteenth Amendments, the right to trial by jury remains a sacrosanct keystone of our nation’s legal system. Even so, there exists a degree of delicacy with which the judicial system evaluates the facts of any given case, and all involved must remain mindful that at times pertinent information may not be available for consideration. Significant violations of judicial filtering may result in the end of deliberations, known more abrasively as a “mistrial.”

The judicial system understands all too well that information cannot be honestly disregarded or ignored once heard, and does its best to account for the imperfections of the human mind. To enforce the Constitutional tenets of trust and truth upon which the faith of a jury must rest, today’s health care providers find themselves held to a unique standard of scrutiny when dealing with issues of privacy.Read more →

2016 Hospital IPPS For Acute Care Hospitals0

2016 Hospital IPPS For Acute Care Hospitals

iStock_000023989921LargeThis e-bulletin from the Health Law Committee of the Business Law Section for the State Bar of California, published on April 20, 2015, summarizes recent proposed regulations by the Centers for Medicare & Medicaid Services (“CMS”) for the Fiscal Year (“FY”) 2016 Hospital Inpatient Prospective Payment Systems (“IPPS”) for Acute Care Hospitals.

Every spring CMS issues its proposed regulations to modify the inpatient prospective payment systems for acute care hospitals, as well as other facilities. Sometime in August CMS issues its final regulations in anticipation of the new fiscal year starting October 1. This year like all others, the 1,526 pages of regulatory guidance (reduced to approximately 800 triple-columned-pages in the Federal Register on April 30, 2015) provide hospitals with the most important revenue information for the year, especially as these institutions try to navigate through the current climate of health care reform.

The proposed regulations cover the gamut of Medicare reimbursement concerns, including the types of hospitals that must adhere to the 2016 changes as well as what’s new with the already established Hospital Value-Based Purchasing (“VBP”) Program, the Hospital-Acquired Condition (“HAC”) Program, the Hospital Readmissions Reduction Program (“HRRP”) and disproportionate share hospital payments. One new additions to CMS’ annual encyclopedia of regulatory modifications includes a recoupment adjustment to account for changes in Medicare-severity diagnosis-related group (“MS-DRG”) documentation and coding that do not reflect real changes in case-mixing, totaling $11 billion over the next four years.

As the Medicare program continues to swell in ranks and hospitals become more dependent on revenue therefrom, just about any of the 382,000 words in the proposed regulations may hold the key to unlocking the mystery behind Medicare in 2016. For more information, the proposed regulation can be found here.

Physician-Owned Hospital Self-Disclosures0

The following Health Law E-Bulletin was published by the Business Law Section of the California State Bar on March 27, 2015.

The following summarizes recent instructions from the Centers for Medicare & Medicaid Services (“CMS”) for disclosures of noncompliance arising solely from a violation of 42 C.F.R. § 411.362(b)(3)(ii)(C) (physician-owned hospitals: website and advertising disclosures).

As part of the Affordable Care Act, Section 6001, physician-owned hospitals and rural providers must disclose on any public website for the hospital, and in any public advertising, that the hospital is owned or has physician investors. See 42 C.F.R. § 362(b)(3)(ii)(C). CMS has determined that for providers to comply with the requirements in section IV.B of the CMS Voluntary Self-Referral Disclosure Protocol (OMB Control No.: 0938-1106), physician-owned hospitals disclosing non-compliance with this very specific part of the regulation need only provide the following information:

  • Name and address of hospital
  • Hospital’s CMS Certification Number(s) (CCN), national provider identification number(s) (NPI), and tax identification number(s) (TIN)
  • Hospital’s contact person/representative for the disclosure
  • Names and NPI numbers of all physicians who were owners/investors during the period(s) of noncompliance identified below.
  • Period(s) of noncompliance: For the period beginning on September 23, 2011, identify the months during which the hospital had at least one noncompliance. The hospital can provide a date range to satisfy this requirement.
  • Provide the requested certifications

The complete instructions appear online here. Other disclosures, including those that include website and advertising concerns, must follow the Voluntary Self-Referral Disclosure Protocol.

OIG Report on Medicare and CAHs0

The following E-Bulletin discussing a recent OIG Report on Medicare and CAHs was published on March 18, 2015, by the State Bar of California, Business Law Section’s Health Law Committee.

iStock_000009499779SmallThe following summarizes a recent report by the Office of Inspector General (OIG) that found Medicare could have saved billions over a 6-year period at Critical Access Hospitals if swing-bed services were reimbursed using the skilled nursing facility prospective payment system rate.

To ensure that beneficiaries in rural areas have access to a range of hospital services, Congress established the Rural Flexibility Program, which created Critical Access Hospitals (CAHs). CAHs have broad latitude in the types of inpatient and outpatient services they provide, including “swing-bed” services, which are the equivalent of services performed at a skilled nursing facility (SNF). Medicare reimburses CAHs at 101 percent of their reasonable costs for providing services to beneficiaries rather than at rates set by Medicare’s prospective payment system (PPS) or Medicare’s fee schedules.

For a hospital to be designated as a CAH, it must meet certain Conditions of Participation (CoPs). Some of these CoP requirements include: (1) being located in a rural area; (2) either being at a certain distance from other hospitals or being grandfathered as a State-designated necessary provider; (3) having 25 or fewer beds used for inpatient care or swing-bed services; and (4) having an annual average length of stay for a patient that does not exceed 96 hours.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.

Advancing Health Care The Old-Fashioned Way0

This article, Advancing Health Care the Old-Fashioned Way, was first published by Healthcare Innovation News on February 8, 2015.


Stethoscope and hourglass with book.“Nothing recedes like progress.”
— Edward Estlin (e.e.) Cummings

Though cutting-edge technology serves as the foundation for modern American healthcare, an accurate measure of progress must consider the occasional conflict between society and science. Even as yesterday’s medical miracles give way to what are now considered “state of the art” practices, it is the duty of health care providers to remain mindful of both sides of the equation, balancing the capabilities of today’s technologies with the needs of today’s patient. If society and science are not in sync, patient care will suffer, and sometimes we can only advance healthcare through old-fashioned methods. For example, radiology information systems (RIS) and picture archiving and communication systems (PACS) collaborate to deliver dynamic and brilliant medical images to any healthcare provider around the globe with access to a desktop computer or mobile device. And yet, if these technologically advanced tools of the trade fail to employ the appropriate methods of encryption as they transmit digital health information to a doctor’s iPad as he or she vacations on the island of Tristan da Cunha, or worse, send this sensitive information to the hard drive of any one of the island’s 297 permanent residents living in the recesses of the Atlantic Ocean, a data breach occurs. This is no small matter for the hospital of today, and could easily result in a series of fines that could force the shutting of its doors for a single infraction.

Read more →

A Brave New Medicare0

This article, A Brave New Medicare, was first published in California Healthcare News on February 4, 2015. 

Caduceus background“Consistency is contrary to nature, contrary to life. The only completely consistent people are dead.” —Aldous Huxley

Next month the Affordable Care Act turns five, and by all accounts the influence of this historic legislation will forever change the landscape of health care in the United States, regardless of its ultimate fate. As each passing year introduces thousands of new regulatory pages to an already expansive body of federal and state law, praise for what has come to be known as health care reform is only rivaled by the relentless partisan calls for its repeal.

Recognition of the Affordable Care Act’s more laudable accomplishments should not be overlooked, especially the elimination of preexisting conditions, an overall reduction in the number of uninsured, and, according to some experts, findings that point to an actual slowing in health care spending at a national level. On the other hand, we as a nation must also be mindful of any collateral damage caused by reform, especially when considering that the immediate statistical data used to document the success of reform tends to present itself easily, while the longer-term, potentially less favorable information upon which the Affordable Care Act can also be judged may take decades to unfold.Read more →

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 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.

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