Updates for Individuals and Families from the IRS0

Updates for Individuals and Families from the Internal Revenue Service

This e-Bulletin from the Health Law Committee of the Business Law Section for the California State Bar regarding updates for individuals and families from the IRS was published on January 27, 2015.

The Affordable Care Act’s impact on tax provisions in 2014 was significant, especially relating to individuals and families. IRS Publication 5187 provides an overview, explaining how taxpayers satisfy the individual shared responsibility provision by enrolling in minimum essential coverage, qualifying for an exemption, making a shared responsibility payment, and the new premium tax credit. The IRS also has a useful chart showing the ways in which health insurance qualifies as minimum essential coverage.

The IRS also published new forms for 2014, including Health Coverage Exemptions (Form 8965), Premium Tax Credit (Form 8962), and Health Insurance Marketplace Statement (Form 1095-A).

The IRS also issued Revenue Procedure 2015-15 which provides the 2015 monthly national average premium for qualified health plans that have a bronze level of coverage for taxpayers to use in determining their maximum individual shared responsibility payment under Section 5000A(c)(1)(B) of the Internal Revenue Code. Effective January 1, 2015, the maximum monthly national average premium for qualified health plans that have a bronze level of coverage and are offered through the Health Insurance Exchanges is $1,035 for a shared responsibility family with five or more members.

Finally, true to the Affordable Care Act’s commitment to transparency as it relates to health insurance benefits and coverage, on December 30, 2014, the Departments of the Treasury, Labor and Health and Human Services released the Summary of Benefits and Coverage and Uniform Glossary (79 Federal Register 78578).

Jan 28th, 2015 Administrative, Clinical, E-Bulletins, Health Care Law, Historical, Uncategorized

For Foreign Law Firms in Australia1

The gamble of doing business in Australia came into sharp relief this past week when one U.S. law firm parted ways with Australia while another global firm took its relationship with the country to a whole new level.

New York law firm Fried, Frank, Harris, Shriver & Jacobson LLP announced that it’s shutting down its offices in Shanghai and Hong Kong in coming months. Meanwhile, global law firm Dentons unveiled plans to merge with mainland Australia’s largest law firm.

… Read more →

Jan 26th, 2015 Law Firms, Real Estate

Foreign, Law

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

This 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 →

Dec 17th, 2014 Administrative, Community, E-Bulletins, Health Care Law, Health Care Reform, Hospitals, News, Regulatory

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

This 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:

A complete recalibration of Medicare disproportionate share payments (“DSH”) to hospitals[9];
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
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 →

Dec 16th, 2014 Administrative, Clinical, Community, Health Care Law, Health Care Reform, Historical, Hospitals, Miscellaneous, News

The Nexus Between Compliance and Reputation0

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

“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 →

Dec 11th, 2014 Administrative, Clinical, Health Care Law, Health Care Reform, Historical, Miscellaneous, News, Regulatory

HIPAA Privacy in Emergency Situations0

This 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.

Medicare’s Hospital Readmissions Reduction Program0

This November 10, 2014, e-Bulletin is from the Health Law Committee of the Business Law Section of the California State Bar.

In its third year, Medicare’s Hospital Readmissions Reduction Program (“RRP”) penalized hospitals for certain excess readmissions, including those relating to acute myocardial infarction (AMI), heart failure (HF), pneumonia (PN), total hip arthroplasty (THA) and total knee arthroplasty (TKA). On October 1, 2014 (the beginning of the new fiscal year for the federal government), the total amount for which a hospital may be penalized increased to 3 percent (up from 2 percent in fiscal year 2014 and 1 percent in fiscal year 2013). In addition to the increased penalty, this year Medicare also introduced four new measures for inclusion in the Hospital RRP: (1) coronary artery bypass grafts (CABG) surgery; (2) chronic obstructive pulmonary disease (COPD); (3) percutaneous coronary intervention (PCI); and (4) other vascular conditions.

For 2015, the formula employed by CMS to calculate the readmissions penalty is:

Aggregate payments for excess readmissions =

[(sum of base operating DRG payments for AMI) x (Excess Readmission Ratio for AMI-1)] + [(sum of base operating DRG payments for HF) x (Excess Readmission Ratio for HF-1)] + [sum of base operating DRG payments for PN x (Excess Readmission Ratio for PN-1)] + [(sum of base operating DRG payments for COPD) x (Excess Readmissions Ratio for COPD-1)] + [(sum of base operating DRG payments for THA/TKA) x (Excess readmissions Ratio for THA/TKA-1)].

Aggregate payments for all discharges = sum of base operating DRG payments for all discharges. Ratio = 1 – (Aggregate payments for excess readmissions/Aggregate payments for all discharges.) Readmission Adjustment Factor for 2015 is the higher of the ratio or 0.9700, all of which is based on claims data from July 1, 2010 to June 30, 2013.

In California, 223 hospitals (64 percent) were penalized, with the average penalty being 0.41 percent. By comparison, 307 hospitals nationwide lost the maximum amount (1 percent) of their patient reimbursements in fiscal year 2013, and only 18 hospitals lost the maximum amount (2 percent) in fiscal year 2014. This year, 39 hospitals will receive the largest penalty (3 percent). A complete listing of hospital results for fiscal year 2014–2015 is available at this link (courtesy of Kaiser Health News).

Nov 10th, 2014 Administrative, Clinical, E-Bulletins, Health Care Law, Health Care Reform, Hospitals, News, Regulatory

California’s Annual Data Breach Report0

This November 7, 2014, e-Bulletin is from the Health Law Committee of the Business Law Section of the California State Bar.

In the October 2014 California Data Breach Report, Attorney General Kamala D. Harris offers a number of recommendations to protect the 38 million consumers in California, the same state where 17 percent of 2012 data breaches in the United States occurred and with a 28 percent increase in 2013. Some key findings from the AG’s report include:

In 2013 the AG’s Office received 167 data breach reports.

The retail industry reported the most breaches in 2013 (26 percent). Health care made up for 15 percent of statewide breaches in 2013.

More than half of the 2013 breaches (53 percent) were caused by computer intrusions (malware and hacking). The remaining breaches resulted from physical loss or theft of laptops or other devices containing unencrypted personal information (26 percent), unintentional errors (18 percent) and intentional misuse by insiders (4 percent).

Between 2012 and 2013, lost or stolen hardware or portable media containing unencrypted data made up the majority of breaches in the health care sector (70 percent).

The Problem With Value-Based Purchasing0

This article first appeared in AHLA Weekly on October 31, 2014.

From its inception on October 1, 2012,[1] the Hospital Value-Based Purchasing (VBP) Program shifted Medicare’s paradigm to emphasize performance over costs in determining hospital reimbursement.[2] Reducing the overall Medicare reimbursement to hospitals by an estimated $1.4 billion for Fiscal Year (FY) 2015,[3] the VBP Program was quick to secure the attention of the nation’s health care providers. Technically “budget neutral,”[4] the VBP Program will return this same $1.4 billion to hospitals the following year in the form of performance incentives.[5] According to the federal government: The program’s “benefits will be seen in improved patient outcomes, safety, and in the patient’s experience of care. However, [the federal government] cannot estimate these benefits in actual dollar and patient terms.”[6]

As the federal government waits to assess the accuracy of its prediction, the FY 2015 reduction of 1.50% will finally level off at two percent (2%) in 2017.[7] An additional two years, however, are unnecessary to evaluate the VBP Program under fundamental accounting principles when using a general overview into the ways in which successful and profitable companies operate. Viewed from this perspective, the VBP Program is fundamentally flawed, and data from 2015, 2016, or 2017 will not present opportunities for correction. This article suggests that while smaller hospitals may bear the greatest collateral damage from the VBP Program, larger systems may suffer as well. The number of hospitals forced into financial distress or insolvency by the Hospital VBP Program remains to be seen, although consideration should be given to the number of hospitals lost to their communities it would take to undermine the projected benefits relating to outcomes, safety, and the overall patient experience. … Read more →

Oct 31st, 2014 Administrative, Clinical, Health Care Law, Health Care Reform, Historical, Hospitals, News, Regulatory

Just As Fragile As A Patient0

This article was first published on October 30, 2014 in the Los Angeles Daily Journal.

“Where there is a why, there is a how.” — Friedrich Nietzsche

The American hospital has evolved greatly over the past 100 years, from the almshouse once visited mainly by the desolate and poor as a last resort to that enigmatic, cutting edge institution which today forms the foundation of modern American health care. Advances in technology and medical science have transformed what were once terminal illnesses into minor health inconveniences, with the real battles against serious health threats typically occurring inside the four walls of a patient’s local hospital. The modern hospital has become such a beacon of hope that in 1986 Congress passed laws granting nearly everyone an unrestricted entitlement to emergency medical treatment at most acute care facilities.

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