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July 2018

 

NOTES:

Summer has arrived and in less than three weeks, the Federation’s Summer Meeting will be held at the wonderful Wailea Beach Resort & Spa on Maui, Hawaii from July 29, 2018 until August 4, 2018.  It is not too late to register!

The Healthcare Practice Section and Professional Liability Sections have joined up to co-present at the Summer Meeting.  The topic is "The Economics of Reasonable Value and the Valuation of Medical Losses Opioid Crisis and the Blame Game" presented by our very own Caroline Berdzik and Michael Drahos with Goldberg, Segalla, LLP, Princeton, NJ and Miami, Florida and Jessica Davis with Brennan, Manna and Diamond, Columbus, OH.  The break out session is scheduled for Wednesday, August 1st from 7:00 a.m. to 8:00 a.m. It should be a fantastic presentation and we hope you will attend.

NEWS:

Bill Capping Punitive Damages Against Long-Term Care Facilities Fails in Pennsylvania

By:Caroline J. Berdzik, Esquire and Whitney L. Allen, Esquire, Goldberg Segalla LLP


The Pennsylvania House of Representatives, in a 103-91 decision, recently defeated a bill to cap punitive damages in lawsuits involving assisted-living communities, personal care homes, and nursing homes. The House Bill called for limiting punitive damages against facilities and agents of the facility to 250 percent of compensatory damages awarded. This legislation would have amended the Medical Care Availability and Reduction of Error (MCARE) Act, which imposes limits on punitive damages in lawsuits against physicians.
 
The Pennsylvania Health Care Association (PHCA), a state affiliate of the American Health Care Association, was one of the industry organizations that supported the legislation. PHCA President and CEO W. Russell McDaid stated that long-term care facilities are looking for similar protection to physicians, who have a cap on damages in lawsuits filed against them to 200 percent of the amount of compensatory damages. McDaid additionally noted that out-of-state law firms advertise in newspapers across the state and then file frivolous lawsuits against these facilities, asking for punitive damages — and that this encourages defendants to settle lawsuits for fear of punitive damages being awarded.
 
Although the bill failed, there are still actions long-term care providers can take to limit potential exposure to punitive damages in these cases. Facilities and their counsel should remain proactive and look for opportunities to try and have punitive damages dismissed on preliminary objections, when appropriate, and also at the summary judgment phase.

ANNOUNCEMENTS:

Registration remains open for the DRI Nursing Home/ALF Litigation Seminar being held in New Orleans, Louisiana September 13-14, 2018.  A Women in the Law Luncheon will be held on September 14, 2018. This is a must attend for defense counsel, in-house attorneys and insurance professionals practicing in the aging services field.  Caroline J. Berdzik is vice chair of the conference.

 


 

May 2018

 

NOTES:

 

I hope everyone is having a pleasant spring.  Here in Birmingham, Alabama it has already been in the 90s consistently.  This is a reminder that the Summer Meeting is rapidly approaching.  The meeting will be held at Wailea Beach Resort & Spa on Maui, Hawaii from July 29, 2018 until August 4, 2018.  This is a wonderful destination, very relaxing and a great opportunity for some fellowship!

 

Once again the Healthcare Practice Section and Professional Liability Sections have joined up to co-present.  The topic is "The Economics of Reasonable Value and the Valuation of Medical Losses Opioid Crisis and the Blame Game" presented by our very own Caroline Berdzik, and Michael Drahos with Goldberg, Segalla, LLP, Princeton, NJ and Jessica Davis with Rooetzel & Andress, LPA, Columbus, OH.  The break out session is scheduled for Wednesday, August 1st from 7:00 a.m. to 8:00 a.m.  It should be a fantastic presentation. 

 

NEWS:

 

There are some new healthcare fraud and abuse investigations emerging.   The investigations involve arrangements with cardiology physicians that entered into an arrangement with a certain laboratory to perform pharmacogenetic testing of its cardiac patients and entry of patient information into a “registry.”  This is a type of genetic testing used to predict whether a given medication would be an effective treatment for the patient and whether it could result in potentially serious side effects.  As part of the agreement, the doctors swabbed patients to order the testing and entered their demographic information into an electronic database or “registry.”  The lab paid the doctors a fee for every patient referred for testing to compensate the doctors and staff for the time and effort associated with obtaining the swab specimen, entering patient data into the registry, interpreting the complex test results, and explaining the results to the patients.  USDOJ has been issuing subpoenas for records to physicians and taking their statements as part of the investigation.  The investigation follows up on a June 2014 HHS-OIG issued special fraud alert regarding registry arrangements.  See “Special Fraud Alert: Laboratory Payments to Referring Physicians” at 5-7 (June 25, 2014). 

 

·                 Office of Inspector General (“OIG”) issues new Advisory Opinion on May 7, 2018

 

The OIG approved a proposed arrangement involving medical devices/supplies.  OIG Advisory Opinion No. 18-02 concerns an arrangement where a company that manufactures, distributes, and sells medical device and pharmaceutical products provides a limited number of free sample ostomy products to patients and contracts with a third party to conduct follow-up customer satisfaction surveys.  The OIG conclude that the Proposed Arrangement presents a low risk of fraud and abuse under the anti-kickback statute, and it would not impose administrative sanctions on Requestor under the anti-kickback statute. 

 

The Advisory Opinion is located at the following link:

https://oig.hhs.gov/fraud/docs/advisoryopinions/2018/AdvOpn18-02.pdf

 

·                 OIG Report indicates CMS paid practitioners for telehealth services that did not meet Medicare requirements

 

The Office of Audit Service conducted an audit of CMS claims for telehealth services.  Its objective was to determine whether the CMS paid practitioners for telehealth services that met Medicare requirements.  The Office of Audit Services analyzed 2014 and 2015 (the audit period) telehealth claims and found that more than half of the professional telehealth claims paid by Medicare did not have matching originating-site facility fee claims.  It   estimates that Medicare could have saved approximately $3.7 million during the audit period if practitioners had provided telehealth services in accordance with Medicare requirements.

 

The report is located at the following link https://oig.hhs.gov/oas/reports/region5/51600058.asp

 

ANNOUNCEMENTS

 

Registration is open for the DRI Nursing Home/ALF Litigation Seminar being held in New Orleans, Louisiana September 13-14, 2018.  This is a must attend for defense counsel, in house attorneys and insurance professionals practicing in the aging services field.  Caroline Berdzik is vice chair of the conference.

 


 

April 2018

Submitted by: James A. Hoover and Adam Overstreet

 

Healthcare Practice Section

News, Notes and Articles for April 2018

ARTICLES:

Once again, Adam Overstreet with Burr & Forman and a former United States Assistant Attorney General for the Southern District of Alabama has graciously agreed to contribute his four part series on examination of pill mill cases.  If you have any questions about the articles or would like to talk to Adam feel free to email him at aoverstreet@burr.com.   

Below is the final installment of the series on the government's prosecution of pill mill practices.  In the last installment of this series, Adam explains the red flags government investigators look for and suggest practices that pain management professionals can implement in order to avoid government scrutiny. 

 

I.          RED FLAGS

 

The government has several investigative tools at its disposal in "pill mill" cases.  Investigators use these tools to identify what they claim are "red flags" suggesting that the targeted medical practice is functioning as an illegal "pill mil."  It is important for medical professionals to know what those red flags are.  Several of the red flags the government most often relies upon in these cases are as follows:

 

  • The doctor prescribes a large volume of opioids, as reflected in data maintained by state's prescription drug monitoring program ("PDMP").

 

  • The doctor has an extremely high patient volume, which regularly results in long lines of patients waiting outside the practice to see the doctor.

 

  • The doctor either fails to conduct patient medical examinations or conducts only cursory ones during initial and follow-up visits. 

 

  • Patient visits with the doctor are brief, typically lasting five minutes or less; or patients do not see the doctor at all, and receive prescriptions that non-medical staff members write. 

 

  • Patients are not required to provide medical histories or treatment records (including diagnostics records) at any time during their treatment. 

 

  • Most of the doctor's patients are prescribed controlled drugs, and the doctor never suggests alternate treatment methods such as non-narcotics drugs, physical therapy, or surgery. 

 

  • Patients travel from long distances -- sometimes in groups -- to see the doctor, bypassing other pain management practices on the way. 

 

  • The pain management practice owns an "in-house" pharmacy or rents space to a nearby pharmacy, resulting in this pharmacy filling the majority of the prescriptions the practice issues.

 

  • Prescriptions are unsupported by patient records (or are supported by falsified records) and objective diagnostic testing confirming the patient's complaints of pain, including MRI's, x-rays, or CT scans. 

 

  • The doctor does not monitor patients for "drug diversion" by checking PDMP data or ordering urine drug screens, or ignores signs of diversion (such as drug screens returning negative for the presence of an opioid in the patient's system, patient's routinely "losing" prescriptions, or patients requesting refills before the prescription runs out).

 

  • The doctor ignores clear signs of drug-seeking and addiction, and fails to refer patients to specialists for drug rehabilitation or psychiatric evaluation. 

 

  • The practice is a "cash-only" business that does not accept medical insurance. 

 

  • The doctor engages in suspect prescribing practices, such as: giving a patient a month-long prescription every two weeks; prescribing different opioids for the same patient during the same visit (e.g., prescribing a patient a 30-day supply of both Oxycodone and Hydrocodone); prescribing certain combinations of drugs, such as the "Holy Trinity" (the combination of an opioid, muscle relaxer, and anti-anxiety drug); prescribing controlled drugs that are not appropriate to treat the patient's complaints; and continually increasing a patient's dosage or prescribing or more powerful opioid without medical justification. 

 

II.        SUGGESTED PRACTICES     

           

As these red flags indicate, to avoid government scrutiny and potential prosecution under the Controlled Substances Act, doctors should, in general, prescribe reasonably and carefully in the context of each patient's presentation and carefully document their treatment.  To that end, the following are suggested practices pain management doctors should implement, among others:

 

  • The practice should maintain a thorough intake procedure which requires the patient to give a detailed medical history.  Along those lines, the patient should be required to provide customary intake documents, such as a medical history questionnaire and a medical records release form.  The practice should make efforts to obtain all pertinent records reflecting the patient's treatment and prescription history, and the patient should be required to bring any previous diagnostic studies to the initial visit.  If applicable, the patient should sign an "opioid treatment agreement," which sets out the side effects and risks of such treatment and requires the patient to abide by certain opioid use guidelines (which should be renewed at least once a year).

 

  • Before prescribing opioids, doctors should perform a thorough physical examination during the patient's initial visit, not just an examination focused on the patient's primary complaint.  Doctors should, at certain points in the patient's treatment, repeat these physical examinations during follow-up visits. Doctors should thoroughly describe the examinations in the patient's records. 

 

  • Before prescribing opioids, doctors should consider alternative treatment options, such as non-narcotic drugs, physical therapy, and surgery.  If it is determined that these alternative treatment methods would be ineffective, this decision should be clearly documented in the patient's records.  Also, doctors should order, where warranted, appropriate diagnostic testing to confirm the patient's complaints of pain. 

 

  • Doctors should prescribe the lowest dosage and quantity of opioids possible to treat a patient's complaints.  For example, doctors should consider limiting a patient's prescription interval to a 30-day supply.  As another example, doctors should avoid, when medically appropriate, providing a 30-day supply during the patient's initial visit if the doctor does not have the patient's previous medical records and diagnostic tests.  In that scenario, doctors should consider issuing a 14-day supply until the records are in hand.

 

  • Doctors must monitor for signs of diversion and addiction.  To accomplish that, doctors must regularly review the patient's PDMP data and order drug screens.  All results should be documented in the patient's file.  Doctors should have a frank conversation with the patient about suspected diversion, and, once again, document that conversation in the patient's records.  If necessary, doctors should be prepared to terminate the patient's treatment due to continued diversion.  Similarly, patients demonstrating signs of addiction should be referred to an appropriate specialist. 

 

  • Doctors should consider having regular independent audits (preferably once a year) done to ensure compliance with all applicable regulations and laws. 

 


 

March 2018

Submitted by: James A. Hoover and Adam Overstreet

 

(Click here to download a .pdf of this section update)


THANK YOU:

Thank you to everyone who attended the Winter Meeting and the Healthcare Practice Section and Professional Liability Sections joint presentation.  The venue was great and the weather was even better.  Quite a few people had questions and complimented our speakers, John Schneider and Cara Scheibling with Avalon Health Economics located in Morristown, New Jersey.  Their topic was “The Economics of Reasonable Value and the Valuation of Medical Losses.”  If you would like to speak with John or Cara there contact information is john.schneider@avalonecon.com, (w) (862) 260-9193 or cara.scheibling@avalonecon.com, (w) 862.260.9192. 

ARTICLES:

Once again, Adam Overstreet with Burr & Forman and a former United States Assistant Attorney General for the Southern District of Alabama has graciously agreed to contribute his four part series on examination of pill mill cases.  If you have any questions about the articles or would like to talk to Adam feel free to email him at aoverstreet@burr.com.   

 

Below is the third part in the series on the government's prosecution of pill mill practices.  In part three of this series, Adam gives a detailed explanation of how the Department of Justice investigates “pill mill” cases. 

 

I. DATA ANALYSIS

“Pill mill” investigations often start when the investigative agency receives a tip that a doctor is overprescribing drugs or drugs are being “diverted” from the practice.  Just as many investigations arise from data mining by investigators to uncover allegedly inappropriate prescribing patterns or doctors who are “statistical outliers” in terms of the type and amount of drugs they prescribe.

·PDMP Data

Almost every state has a prescription drug monitoring program (“PDMP”), an electronic database that tracks all controlled substance prescriptions statewide, based on information submitted by the dispensing pharmacy or doctor to a central clearinghouse.  The PDMP data generally reflects the drug prescribed (type, strength, and quantity), the prescribing doctor, the patient, and the pharmacy at which the prescription was filled.  Doctors can access this database for various purposes, such as pulling a patient’s history of filling controlled drug prescriptions to determine if the patient is “doctor shopping” – that is, getting multiple opioid prescriptions from multiple doctors at the same time.  But the data is also accessible to investigators who use it, for example, to identify doctors who are writing high numbers of prescriptions for high doses of opioids or to determine whether doctors are prescribing repeated patterns of the same drugs.

·ARCOS Data

ARCOS (the Automation of Reports and Consolidated Orders System) is an automated, comprehensive drug reporting system the DEA maintains which monitors the flow of controlled substances – from their point of manufacture through commercial distribution channels to point of sale or distribution at the dispensing / retail level.  ARCOS accumulates these transactions, which are then summarized into reports.  Investigators use these reports, for example, to identify pharmacies that are receiving unusually high volumes of controlled drugs. 

·Insurance Claims Data

Investigators also regularly obtain claims data from Medicare, Medicaid, and private insurance companies such as Blue Cross Blue Shield to show that there are “statistical outlier” doctors who are billing these insurance companies for large amounts of opioids.  In that vein, CMS (the Centers for Medicare & Medicaid Services) contracts with outside “program integrity” companies who monitor and analyze claims / billing data to uncover suspected Medicare and Medicaid “fraud, waste, and abuse.”  The results of these audits are often shared with investigators. 

II. RECORD SEARCHES

Investigators typically obtain the financial records of the pain management practice and its doctors in an effort to uncover evidence that the practice is a “cash only” business or the doctors are allegedly involved in illegal kickback and money laundering schemes.  In addition, the government will use this financial data in an effort to locate, seize, and forfeit money and assets the doctors derived from the operation of their alleged “pill mill.”  Investigators will also search disciplinary records to determine if the target doctor has a history of administrative discipline by the state medical board for allegedly inappropriate prescribing practices. 

III. SURVEILLANCE

Investigators commonly utilize surveillance tactics as part of these investigations.  Investigators will personally surveil the practice or install “pole cameras” – video cameras installed on nearby utility poles – to record activities at the practice around the clock.  Investigators look for what they claim are sure signs of a “pill mill” operation, such as long lines of people standing outside the practice and leaving after only a short visit, or unusual hours of operation to allegedly cater to drug-seeking patients.  Through surveillance, investigators also attempt to identify patients who may be willing to testify or provide evidence against the practice or participate in an undercover operation.

IV. UNDERCOVER OPERATIONS

A common investigative tactic in “pill mill” investigations is the use of undercover agents who pose as patients and schedule multiple appointments with the targeted “pill mill” doctor to obtain opioids.  These meetings are secretly audio / video recorded.  The investigators analyze the recordings to determine if, for example, the doctor: met with the “patient” for a very short time period; failed to conduct a thorough physical exam and obtain a full medical history; failed to encourage alternatives to opioid treatment such as physical therapy; ignored signs of addiction; suggested symptoms the “patient” should claim to feel; or instructed the patient to use a particular pharmacy. 

V. ADMINISTRATIVE INSPECTIONS

The DEA has a large cadre of “diversion investigators” (“DI’s”) who have the authority to conduct administrative inspections of premises registered or regulated by the agency after giving proper notice to the registrant.  DI’s can use their authority to obtain an administrative inspection warrant (“AIW”) any time a registrant refuses to consent to an inspection or the DI believes that a civil or administrative sanctions are likely to result from the inspection.  DI’s can, and often do, provide their findings to law enforcement investigators. 

VI. SEARCH WARRANTS

After the “covert” portion of an investigation is complete, investigators will “raid” the pain management practice and execute a search warrant, during which they will seize paper documents and “mirror image” the hard drives of the practice’s computers.  Among other things, the investigators will target medical files and charts, financial records (such as payment records and ledgers), communications (including e-mails) by and between the targeted doctors and their employees, and employee personnel files.  During the search warrant execution, the investigators will attempt to interview office personnel and even the targeted doctors.  

VII. EXPERT WITNESSES

Investigators will provide the patient files and other pertinent records obtained during the search to an expert witnesses, typically doctors who are pain management specialists.  These doctors will inevitably testify at trial that, based on their records review, the target doctor was illegally prescribing drugs for illegitimate purposes.  Thus, it is imperative that anyone defending these charges retain experts who can review the same records and opine that the doctor was engaged in the legitimate practice of medicine, not a criminal enterprise.  

 


 

 

February 2018

Submitted by: James A. Hoover and Adam Overstreet

 

Healthcare Practice Section

News, Notes and Articles for February 2018

 

(click here to download a .pdf of this section update)

 

 

REMINDER:

This is a reminder that the Winter Meeting is rapidly approaching.  The meeting will be held at Amelia Island from Sunday, February 25, 2018 until Wednesday, February 28, 2018.  If you have never visited Amelia Island you should seriously consider attending. It is a wonderful destination and very relaxing!

 

The Healthcare Practice Section and Professional Liability Sections have joined up to co-present.  The topic is "The Economics of Reasonable Value and the Valuation of Medical Losses" presented by John E. Schneider, PhD and Cara M. Scheibling.  They are with Avalon Health Economics LLC, 26 Washington St., 3rd Floor, Morristown, NJ  07960.  The break out session is scheduled for Tuesday, February 27th from 7:45 a.m. to 8:45 a.m.  It should be a fantastic presentation. 

 

 

ARTICLES:

 

As a reminder, Adam Overstreet is Counsel with Burr & Forman and a former United States Assistant Attorney General for the Southern District of Alabama.  He has graciously agreed to contribute the articles.  If you have any questions about the articles or would like to talk to Adam feel free to email him at aoverstreet@burr.com

 

Below is the second part of a multiple part series on the government's prosecution of pill mill practices.  In part one of this series, Adam detailed how the U.S. Department of Justice has focused its attention on the aggressive investigation and prosecution of “pill mill” cases. In this installment, Adam discusses the varied consequences doctors and other medical professionals potentially face as a result of a “pill mill” investigation.

 

I.          CRIMINAL PROSECUTION

 

A litany of criminal charges can be heaped on medical professionals at the conclusion of a “pill mill” investigation.  Exactly what charges the government pursues will obviously depend on the facts and circumstances of each particular case.  One charge that will inevitably be included in every “pill mill” indictment is an alleged violation of the Controlled Substances Act (“CSA”).  The CSA governs the distribution and dispensing of various listed drugs, including narcotics, that are prescribed by doctors and other licensed medical providers.  To issue a controlled substance, a doctor must be licensed to practice by a state authority and must have a DEA registration number. 

Under the CSA, controlled substances are placed into one of five “schedules” based on whether they have a currently accepted medical use in the United States, their relative abuse potential, and their likelihood of causing dependence when abused.  The schedules are summarized as follows:

 

•Schedule I – these drugs have no acceptable medical use and a high potential for abuse.  Examples include heroin and LSD, among others.

 

•Schedule II – these drugs have acceptable medical uses and a high potential for abuse.  Most opioids are Schedule II drugs.  Examples include oxycodone (e.g., OxyContin®) and hydrocodone (e.g., Lortab®). 

 

•Schedule III – these drugs have acceptable medical uses and a potential for abuse that is less than schedule I and II drugs.  One example is buprenorphine (e.g., Suboxone®).

 

•Schedule IV – these drugs have acceptable medical uses and a low potential for abuse relative to Schedule III drugs.  Examples include alprazolam (e.g., Xanax®) and diazepam (e.g., Valium®). 

 

•Schedule V – these drugs have acceptable medical uses and a low potential for abuse relative to Schedule IV drugs.  Examples include cough preparations containing codeine.

 

To be convicted under the CSA, the government must prove that (1) the defendant doctor knowingly and intentionally distributed or dispensed a controlled substance, and (2) did so “for no legitimate medical purpose and outside the usual course of professional practice.”  Determining whether a doctor has illegally prescribed drugs under this standard is never simple and will necessarily involve a “battle of the experts.” 

 

A criminal conviction for violating the CSA may result in a vast array of prison sentences under the federal Sentencing Guidelines, a set of advisory sentencing rules that establish a uniform policy for individuals convicted of felony crimes in federal court.  The exact range may vary significantly from case-to-case, depending primarily on the type and quantity of controlled substances involved.  And these ranges can be staggeringly severe.  In a large “pill mill” case I helped prosecute, the doctors each faced a guidelines range of imprisonment of 30 to 240 years, although the court sentenced them well below that range (20 and 21 years, respectively) – as it had the discretion to do.  In addition to applicable guidelines ranges in each case, the CSA provides for statutorily “enhanced” sentences in certain circumstances.  For instance, if the government proves that a patient’s death resulted from the distribution of a Schedule II controlled substance, the convicted doctor will face a sentence of no less than 20 years and up to life in prison. 

 

II.        SEIZURE AND FORFEITURE

 

In almost every “pill mill” case, the government will attempt to seize (take possession of) and forfeit (take ownership of) bank accounts, business assets, and personal assets of the targeted medical professional based on a theory that they are “proceeds” of the alleged “pill mill” operation or somehow “facilitated” the purported criminal enterprise.  For example, following the doctors’ convictions in the case I prosecuted, the government forfeited their bank accounts, investment and retirement accounts, college fund accounts, houses, beach-fount condominiums, and 20-plus luxury automobiles.

 

III.       CIVIL LIABILITY

 

On top of criminal prosecution, a “pill mill” investigation could result in a civil lawsuit by the government against the targeted doctor or medical professional, to the extent they have billed a federal health care program.  For instance, the government might bring a direct suit under the False Claims Act (“FCA”), alleging that the doctor made false diagnoses, prescribed drugs for non-covered indications, or prescribed excessive or “medically unnecessary” drugs for Medicare or Medicaid patients.  Likewise, the government may join in a “qui tam” suit which is initiated by a “whistleblower” – such as a current or former employee of the practice – claiming that the targeted doctor or practice has violated the FCA and other laws. 

 

IV.       ADMINISTRATIVE PROCEEDINGS

 

In addition to facing criminal prosecution, the loss of asserts, and civil liability, doctors investigated or charged in a “pill mill” case can be subject to a number of administrative sanctions.  The DEA, in particular, has a range of administrative actions it can take, such as: issuing a letter of admonition to the registrant providing notice of a violation of the applicable law / regulations; requiring the registrant to enter into a memorandum of understanding agreeing to take certain corrective steps to stave off revocation of the registration; or, for the most serious alleged violations, pursuing a show cause order to appear before an administrative law judge, during which the DEA will advocate for revocation of the registration. 

 

Like the DEA, state professional boards (such as medical and pharmacy boards) have disciplinary authority and can sanction practitioners for professional violations, such prohibiting a doctor from prescribing specific schedules of drugs, suspending a doctor’s medical and/or dispensing license, or revoking the license. 

 

Further, the Centers for Medicare & Medicaid Services (“CMS”) may limit, suspend, or revoke a provider’s Medicare billing privileges for, among other things, noncompliance with Medicare enrollment requirements, a felony conviction related to controlled substances, or a pattern of improper prescribing practices.  Likewise, state Medicaid agencies can impose various administrative sanctions against providers, including outright exclusion from the program.  

 

 


 


January 2018

Submitted by: James A. Hoover and Adam Overstreet

News, Notes and Articles for January 2018

Notes:

I hope everyone had a wonderful holiday season and had time to spend with your family.  This is a reminder that the Winter Meeting is rapidly approaching.  The meeting will be held at Amelia Island from Sunday, February 25, 2018 until Wednesday, February 28, 2018.  If you have never visited Amelia Island you should seriously consider attending. It is a wonderful destination and very relaxing!


The Healthcare Practice Section and Professional Liability Sections have joined up to co-present.  The topic is "The Economics of Reasonable Value and the Valuation of Medical Losses" presented by John E. Schneider, PhD and Cara M. Scheibling.  They are with Avalon Health Economics LLC, 26 Washington St., 3rd Floor, Morristown, NJ  07960.  The break out session is scheduled for Tuesday, February 27th from 7:45 a.m. to 8:45 a.m.  It should be a fantastic presentation.

Articles:

The amount of healthcare false claims/qui tam cases continues to rise for what seems the previous five years.  General healthcare litigation has also picked up, at least in my part of the country.


One of the big topics toward the end of 2017 that will pick up steam greatly in 2018 is all types of litigation surrounding opioids.  These cases range from DEA/state regulators cracking down on perceived "pill mills," false claims/qui tam lawsuits against toxicology labs related to billing for the confirmation and/or screening tests for opioid use or diversion and more recent theories of liability against wholesale drug distributors for not reporting suspicious drug orders and pharmaceutical manufacturers for failure to warn or other tort types of claims.


The Healthcare Practice Section newsletter will run a multiple part series on the government's prosecution of pill mill practices as this area should see continued activity.  A colleague of mine, Adam Overstreet, a former United States Assistant Attorney General for the Southern District of Alabama has graciously agreed to contribute the articles.


If you have any questions about the articles or would like to talk to Adam feel free to email him at aoverstreet@burr.com.


The New Department of Justice Initiative:
Aggressively Investigating and Prosecuting Opioid-Related Cases


Before joining the Burr & Forman, LLP law firm, I was a federal prosecutor for a little over a decade specializing in health care fraud and general white collar matters.  In that role, I was the member of a prosecution team that secured guilty verdicts earlier this year against two pain management doctors in Mobile, Alabama following a protracted jury trial.  The doctors were convicted of a litany of federal crimes arising from their operation of a pain management clinic, including, among others, violations of the Controlled Substances Act and the Anti-Kickback Statute.  The doctors received substantial prison sentences of 20 and 21 years, respectively, and forfeited virtually all of their assets (including bank accounts, houses, and cars) to the government. 


The doctors in this case were convicted of running what the government calls a "pill mill," a pain management clinic that allegedly prescribes narcotics for illegitimate purposes.  Pain management professionals should be aware that this is just one example of what will likely be an onslaught of "pill mill" and other opioid-related prosecutions by the Department of Justice (DOJ) during the current administration.  In fact, just a few months after the convictions in the Mobile case, Attorney General Jeff Sessions announced a nationwide takedown of 120 doctors, pharmacists, and nurses -- dubbed "Operation Pilluted" -- who were charged with various federal crimes related to their alleged "unlawful distribution of opioids and other prescription narcotics."  In announcing the takedown, Sessions noted that the DOJ would continue to "aggressively pursue corrupt medical professionals," and that "the Department's work is not finished.  In fact, it is just beginning."


On the heels of that announcement, in August of this year, Sessions heralded a new DOJ pilot program called the "Opioid Fraud and Abuse Detection Unit."  According to Sessions, the unit "will focus specifically on opioid-related health care fraud using data to identify and prosecute individuals that are contributing to the opioid epidemic."  Sessions warned, "If you are a doctor illegally prescribing opioids or a pharmacist letting these pills walk out the door and onto our streets based on prescriptions you know were obtained under false pretenses, we are coming after you."  Sessions explained that the DOJ would be appointing a special federal prosecutor in twelve select districts across the country whose sole purpose will be to prosecute "pill mill" and other opioid-related cases.


One of the districts which has received one of the special "pill mill" prosecutors is the Northern District of Alabama, in Birmingham.  The U.S. Attorney for that district, Jay Town, separately confirmed that the new prosecutor will spend "one hundred percent of their time working these types of cases. . . .  What we're going after are the medical providers who are operating outside the boundaries of the law and the medical practice."  Echoing the Attorney General's statements, Town vowed, "We're going to rid the Northern District of these pill mills."


Note that "pill mills" are not the only opioid-related cases on the DOJ's radar.  In fact, it is also concentrating on the "diversion" of opioids in hospital settings.  Such "diversion" schemes include, for instance, the theft of opioids from a hospital "Pxyis" machine (a device hospitals utilize to regulate the dispensing of controlled substances) by nurses, or the forgery or fraudulent creation of opioid prescriptions by hospital personnel. 


In sum, the DOJ has fired a warning shot that physicians, pharmacists, and other medical professionals involved in the treatment of paint patients will be under intense scrutiny for the foreseeable future.   This is especially true for physicians who operate pain management clinics.  These doctors should, in general, prescribe opioids reasonably and carefully in the context of each patient's presentation and thoroughly document their treatment. 


To that end, doctors should, among other things: maintain a thorough intake procedure which requires the patient to give a detailed medical history and provide previous diagnostic studies; have the patient sign, if applicable, an "opioid treatment agreement" requiring the patient to abide by certain opioid use guidelines; perform exhaustive physical examinations during the initial visit and at regular intervals during the patient's treatment (which should be carefully documented); consider alternatives to opioid treatment, such as non-narcotics drugs, physical therapy, and surgery (and, where applicable, carefully document why alternative treatments would be ineffective); prescribe the lowest dosage and quantity of opioids possible to treat the patient's condition; closely  monitor for signs of diversion and addiction by regularly ordering urine drug screens and reviewing the patient's prescription drug monitoring data; and have regular independent audits conducted by a billing consultant or another pain management specialist to ensure compliance with all regulations and laws.  Implementing these practices should help doctors avoid government scrutiny as part of the DOJ's new initiate to crackdown on alleged "pill mill" operations.  


 



December 2017

Submitted by: James A. Hoover

 

News, Notes and Articles for December 2017

NOTES:

 

Membership Drive - Just because Thanksgiving is over doesn't mean the membership drive is over.  We are always looking to recruit qualified candidates for membership for the coming year.  If you know of someone who would enjoy becoming a member of the FDCC simply submit the name of the candidate to Jim Hoover, Chair of the Healthcare Practice Section.  Ideally, some of the candidates will be industry folks or corporate counsel. 

 

NEWS:

 

OCR RELEASES GUIDANCE ON PERMITTED DISCLOSURE OF PHI RELATED TO OPIOID ADDICTION

 

 In light of the nation-wide opioid crisis, and perhaps prompted by President Trump's recent declaration of a state of emergency in regard to the same, the Office of Civil Rights ("OCR") of the federal Department of Health and Human Services ("HHS") has released new guidance regarding the release of protected health information ("PHI") governed by HIPAA in cases involving opioid users in crisis situations.

Current regulations allow sharing information with a patient's loved ones in emergency or dangerous situations. The new guidance document clarifies that such sharing of PHI without the patient's consent is lawful in situations including, but not necessarily limited to:

  • Situations where the patient is incapacitated or unconscious and the information is shared by the provider with a family member who is directly involved in the patient's plan of care or payment of care. The information disclosed must be limited to information that is directly related to the patient's immediate health care condition.
  • Situations where the patient has overdosed on opioids and the physician determines, based on all the facts and circumstances, that the patient poses a serious and imminent threat to his or her health through continued opioid abuse upon discharge.

The new guidelines also include certain limitations necessary to respect patients' autonomy in decision-making. The full text of the new guidelines can be found on the website located at https://www.hhs.gov/hipaa

 


TASK FORCE RELEASES REPORT ON HEALTH CARE CYBERSECURITY

 

A Task Force established by the Department of Health and Human Services pursuant to the Cybersecurity Information Sharing Act of 2015 ("CISA") has issued a 96 page report concerning the increasing threat to cybersecurity in the health care industry, including recommendations to combat that threat. The Task Force is composed of representatives from a broad range of leaders from the health care industry and public health sectors.

The Report recognizes the unique culture and infrastructure of the health care industry, and generally calls for greater education and awareness, increased and improved information sharing among both public and private health care institutions, and vastly increased resources to combat cybersecurity threats.

In the area of information sharing, the Report encourages amendments to the Stark Law and Anti-Kickback Statute to remove potential barriers to health systems assisting physicians in the acquisition of cybersecurity software and other technology. CISA itself preempts certain provisions in the HIPAA and HITECH laws that are seen as barriers to effective information sharing.

 

 

CMS ANNOUNCES APPEAL SETTLEMENT INITIATIVES

 

In light of the large backlog of pending Medicare appeals CMS has announced two new settlement initiatives for appeals pending before the Office of Medicare Hearings and Appeals ("OMHA") and the Medicare Appeals Council ("the Council") of the Departmental Appeals Board.

The Low Volume Appeals Settlement option ("LVA") will result in qualifying appeals being settled for at least 62% of the net allowed amount. To qualify for the LVA option, claims must meet the following, in addition to certain other conditions:

  • The appellant must have fewer than 500 Part A or Part B appeals pending at the OMHA and/or the Council, combined, as of 11/3/17; and
  • Each pending appeal must have a total amount billed in controversy of $9,000 or less.

In addition, CMS announced OMHA will be expanding the Settlement Conference Facilitation ("SCF") process for certain appellants who are not eligible for the LVA option. According to the CMS website, details about an expansion of the SCF process will be made available in the "coming weeks."

ARTICLES:

 

A colleague of Caroline J. Berdzik with Goldberg Segalla, Susan Smith, wrote an excellent article on how regulators and public health officials are sharpening their focus on waterborne pathogens in nursing homes that appeared on McKnight's Senior Living. Click here to read the article.

 

 


 

November 2017

Submitted by: James A. Hoover

 

 

NOTES:

 

Membership Drive - This is a reminder that the FDCC is looking to recruit four qualified candidates for membership for the coming year.  If you know of someone who would enjoy becoming a member of the FDCC simply submit the name of the candidate to Jim Hoover, Chair of the Healthcare Practice Section.  Ideally, some of the candidates will be industry folks or corporate counsel.

 

NEWS:

The Opioid Epidemic: Are We Headed Toward a Tipping Point?

This nation’s opioid problem has been labeled by many as an epidemic. The opioid problem is consistent on the local, state, and national levels. President Trump has, like others, labeled the problem a “national emergency.” His Administration has not escaped its touch: the President’s pick for “drug czar” withdrew from consideration on October 17th after allegations that he sought to shield big drug distributors—in particular, distributors of opioids—from some of the Drug Enforcement Administration’s powers.

The impact of the opioid epidemic is undeniable. Opioids are often the default treatment for pain in America, but they do not come without risks. Prescribing physicians may find themselves in the trenches in the battle to help prevent opioid abuse, and arming themselves with information on the problem and possible solutions can help them help their patients. The Centers for Disease Control and Prevention (CDC) reports that the number of overdose deaths involving prescription opioids such as oxycodone, hydrocodone, and methadone have more than quadrupled since 1999. The CDC also noted that 91 Americans die each day from opioid overdose. In my home state of Alabama, the Alabama Department of Public Health’s Center for Health Statistics reports a 13% increase in opioid deaths since 2011. In fact, more pain pills are prescribed per person in Alabama than in any other state.

The epidemic appears to be gaining ground, but its damage has not gone unnoticed or unopposed. The responses to the crisis have been varied, ranging from policy approaches to education and from legislation to litigation. For example, Attorneys General of approximately 40 states have recently come together in order to address the opioid crisis. In particular, the bipartisan group of State AGs will investigate whether drug manufacturers and distributers are violating any laws as they market and distribute opioids. The group has issued subpoenas and demanded information from several manufacturers and distributors—including the three distributors which are the focus of the City of Birmingham’s lawsuit discussed below.

Even commercial insurers have taken initiatives to address the opioid crisis. Some of the Blue Cross Blue Shield plans are partnering with local and state agencies to increase public awareness of opioid risk; supporting proper prescribing of opioids by educating primary care physicians; offering medication-assisted treatment for members; and supporting public outreach efforts to prevent opioid use and abuse.

Additionally, several lawsuits have been filed across the county, one recently in the Northern District of Alabama against three major national drug distributors, alleging that the distributors sent millions of dollars’ worth of opioids into Birmingham while failing in their obligation to report suspicious drug shipments. The City of Birmingham’s lawsuit is not alone. Counties and cities across the country have been filing suits against drug companies involved in the opioid supply chain, and this trend shows no sign of ceasing. One law firm recently moved to transfer 66 lawsuits, filed in various federal courts around the nation, leading to expectations that consolidation into multi-district litigation (MDL) may be around the corner. As many of the suits involve the same defendants and the same allegations (generally, that the drug companies have understated the addictive nature of the drugs for the sake of profit, and/or that they have failed in reporting obligations), consolidation of at least some of the suits may make sense. Regardless, staying abreast of the proliferation of such cases on the national scene is valuable, as the resolution of these cases may shift the opioid-prescription landscape.

OCR RELEASES GUIDANCE ON PERMITTED

DISCLOSURE OF PHI RELATED TO OPIOID ADDICTION

In light of the nation-wide opioid crisis, and perhaps prompted by President Trump's recent declaration of a state of emergency in regard to the same, the Office of Civil Rights ("OCR") of the federal Department of Health and Human Services ("HHS") has released new guidance regarding the release of protected health information ("PHI") governed by HIPAA in cases involving opioid users in crisis situations.

Current regulations allow sharing information with a patient's loved ones in emergency or dangerous situations. The new guidance document clarifies that such sharing of PHI without the patient's consent is lawful in situations including, but not necessarily limited to:

·      Situations where the patient is incapacitated or unconscious and the information is shared by the provider with a family member who is directly involved in the patient's plan of care or payment of care.  The information disclosed must be limited to information that is directly related to the patient's immediate health care condition.

·      Situations where the patient has overdosed on opioids and the physician determines, based on all the facts and circumstances, that the patient poses a serious and imminent threat to his or her health through continued opioid abuse upon discharge. 

The new guidelines also include certain limitations necessary to respect patients' autonomy in decision-making.  The full text of the new guidelines can be found at:  https://www.hhs.gov/sites/default/files/hipaa-opioid-crisis.pdf.

 

 


 

October 2017

 

NOTES:

 

Membership Drive - The FDCC is looking for a few good members.  The Healthcare Practice Section is looking to recruit four qualified candidates for membership for the coming year.  If someone has a suggestion of an individual who would enjoy becoming a member of the FDCC simply submit the name of candidate to Jim Hoover, Chair of the Healthcare Practice Section.  Ideally, some of the candidates will be industry folks or corporate counsel. 

 

Speaking Engagements - Our very own Caroline Berdzik is speaking at two upcoming seminars.  If you attend either of the seminars please consider attending her sessions.  They are:

  1. The ACI Nursing Home Litigation Seminar in Miami in January.  You can register at https://www.americanconference.com/long-term-care-litigation-risk-management-strategies-2
  2. PLUS International in Atlanta November 1-3 at a Spark Session on Workplace Violence in Healthcare Settings

If anyone has an upcoming speaking engagement or other announcement please let the Chair or any of the Vice Chairs know and we will gladly add it to our monthly newsletter. 

 

NEWS:

Pennsylvania Courts Continue to Extend Theories

of Liability in Nursing Home Malpractice Cases

A recently published opinion from the Superior Court of Pennsylvania provides guidance on when nursing home management companies may be found liable to their residents in nursing malpractice actions.

In Scampone v. Grane Healthcare Company et al., the plaintiff sued the nursing home  where his mother had been a resident (Highland Park) as well as the management company  that oversaw the nursing home (Grane Healthcare), contending that both were liable for a urinary tract infection and a subsequent fatal heart attack that his mother sustained in 2004. After the trial court dismissed Grane at the close of the plaintiff’s evidence, a jury found Highland liable, awarding damages in the amount of $193,500.

 

On appeal, the Superior Court reversed, finding that Grane was subject to vicarious liability while the nursing home was subject to direct corporate liability. On remand, the Superior Court directed the trial court to ascertain whether Grane owed any duties to the plaintiff. The trial court dismissed Grane a second time, finding that Grane did not owe any duties to the plaintiff.

 

In a lengthy opinion, the Superior Court once again reversed, finding that the plaintiff presented sufficient evidence at trial to preclude the dismissal of Grane at the close of the plaintiff’s evidence. In reaching this opinion, the court provided useful guidance on when a court will find that a management company owes a duty to a nursing home resident and when this duty has been breached. 

 

Critical to the court’s decision in determining that the plaintiff had presented sufficient evidence on Grane’s duty to the plaintiff were several facts that established that Grane “contractually undertook to render services to residents of [Highland]” that “Grane should have recognized … were necessary for the protection of those elderly and infirm residents.”  These facts included the following:

  1. The management agreement between Highland and Grane “required Grane to manage all aspects of the operation of Highland, establish and administer a quality assurance program, and ensure that [Highland] provided quality nursing services to its residents.”
  2. Grane “hired and trained all of the RNs” at Highland, and “a Grane nurse consultant visited Highland weekly and directly oversaw patient care delivered at the facility.”
  3. Grane “created and disseminated the policies and procedures” at Highland.
  4. The administrator of Highland was “subject to the supervision of a Grane employee.”

Instrumental to the court’s determination in finding that the plaintiff had presented sufficient evidence that Grane had breached its duty to the plaintiff were facts that, according to the court, established that Grane was aware that Highland was understaffed. The court stated, “A jury could find that lack of sufficient staff was a contributing factor in the pervasive improper care and [plaintiff decedent’s] death.”

 

The court ultimately granted a new trial as to the plaintiff’s compensatory damages against Grane, noting that the plaintiff was entitled to recover from Grane in light of the jury’s verdict against Highland.

 

In light of this opinion, management companies of nursing homes in Pennsylvania should closely review their relationship with any facilities to which they are providing management services and scrutinize any documentation of that relationship to ensure that it does not misrepresent the actual relationship between the parties. Pennsylvania courts have increasingly extended potential liability theories against nursing homes, and providers in the Commonwealth would be well-advised to take into account this shifting litigation landscape to assess when they may be subject to liability in a nursing malpractice action.

 

For more information, please contact: Caroline J. Berdzik (609-986-1314; cberdzik@goldbergsegalla.com).



 

SEPTEMBER 2017

 

A Major Win For The Medical Negligence Defense Bar In Washington
Submitted by: Ed Bruya

 

On July 6, 2017, the Washington Supreme Court unanimously affirmed the trial court dismissal of Washington State medical negligence claims against Idaho family physician Dr. Timothy Burns related to treatment of his Idaho patient in Donald R. Swank v. Valley Christian School, et al, No. 93282-4.  Bennett Bigelow & Leedom, P.S. trial attorneys Edward J. Bruya and Eric R. Byrd obtained the trial court dismissal for Dr. Burns, and were joined on appeal by Gregory M. Miller of Carney Badley Spellman, P.S. 

 

The claims against Dr. Burns were brought by the parents of his long-time Idaho patient Andrew Swank, who tragically died following head injuries in a high school football game played in Washington State in September, 2009.  The suit was filed in Washington and named the private high school, its coach, and Dr. Burns.  The suit asked the Washington courts to assert jurisdiction over Dr. Burns for medical care he rendered entirely in Idaho to his long-time Idaho patient who sought him out for the care.  It alleged all defendants failed to comply with a newly-passed Washington statute, the Lystedt Law, which was designed to address and help prevent concussion injuries in youth athletes.  The law restricted the youth athlete’s return to play until an evaluation and written clearance are obtained from a licensed health care provider.  

 

In its July 6 decision, the Supreme Court unanimously held the Lystedt statute does contain an implied cause of action against those who fail to comply with it, that coaches and sports programs have a continuing duty to monitor their athletes for concussions, and that a health care provider’s written clearance does not excuse the coach or program from monitoring the returned athlete and taking immediate steps based on their observations.

 

The unanimous decision affirmed dismissal of Dr. Burns because Washington law does not allow the assertion of state jurisdiction over out of state health care providers for care rendered in their home state and not in Washington.  The Court denied the Swanks’ efforts to apply Washington’s long arm statute to Dr. Burns, affirming its decision in Lewis v. Bours, 119 Wn. 2d 667, 835 P.2d 221 (1992).  It reiterated its holding in Lewis that “claims for medical malpractice originating from care provided in another state but the injury manifests itself in Washington do not constitute a tortious act giving rise to the exercise of personal jurisdiction in Washington.”  Lewis, 119 Wn. 2d at 669. The Court held in Swank that, because Dr. Burns provided medical care only in Idaho, the tort occurred in Idaho, not Washington, and therefore Washington courts lacked personal jurisdiction over Dr. Burns. The Court also reiterated the general rule in Washington, and throughout the country, that the provision of medical care, as a personal service, is strongly tied to the location where those services are performed.  Because the decision did not discuss application of the concussion statute to Dr. Burns,  It implicitly rejected the plaintiffs’ arguments that the new law contained a new, separate basis for a malpractice claim against him as a health care provider.  

 

In sum, the Swank decision is a major win for the medical negligence defense bar, Dr. Burns, and physicians’ practices, and patients.  Allowing such a claim for medical care rendered in a neighboring state would have been a major change in law and the plaintiffs worked very hard to get that change, primarily under the authority of the new concussion statute.  By refusing to extend Washington’s personal jurisdiction beyond the Idaho boundaries where Dr. Burns practices, the Washington Supreme Court strengthened the limitations concerning on extending liability of physicians into jurisdictions where their patients’ injuries may manifest. This is an important win for the Defense bar, which frequently faces attempts by plaintiffs to venue shop to expand the liability of a physician to a state with a longer statute of limitations. It further strengthens the protections provided by Lewis v. Bours, and preserves longstanding limitations on potential exposure for physicians who treat patients who reside or participate in athletic events in states where the physician does not practice.  It will likewise encourage the treatment of Washington residents or athletes who seek medical care outside the state, as those non-Washington practitioners need not fear they may be subject to some unknown Washington statute for work they are licensed to do in their home state.

 

If you have questions about this client alert or related topics, please feel free to contact either of the Bennett Bigelow & Leedom, P.S. attorneys: Edward Bruya (ebruya@bbllaw.com), Eric Byrd (ebyrd@bbllaw.com).

 


 

AUGUST 2017


On Monday, August 7, 2017, the United States Court of Appeals for the Eleventh Circuit affirmed the dismissal of a proposed class action lawsuit pending in the United States District Court for the Northern District of Georgia.  Two individuals that underwent heart surgery discovered small metallic particles in their brains after the surgery.  They brought suit on behalf of themselves and a putative class, alleging that the particles were metal shavings that had been shed during surgery by instruments manufactured and sold by Intuitive Surgical, Inc. and Intuitive Surgical Operations, Inc. 

 

The plaintiffs asserted several theories of negligence under Georgia law.  The district court granted the defendant’s 12(b)(6) motion to dismiss, ruling the amended complaint’s allegations did not state a claim for negligence under Georgia law.  The district court concluded that the plaintiffs had failed to sufficiently plead that they had suffered an injury due to the defendants’ alleged negligence.  The plaintiff’s contended that the district court’s conclusion was erroneous because the presence of metal shavings in the plaintiffs’ brains is a legally recognized injury in and of itself. 

 

A unanimous panel of the 11th Circuit Court of Appeals agreed with the district judge in their August 7, 2017 ruling.  The 11th Circuit Court stated the plaintiff’s factual allegations must be enough to raise a right to relief above the speculative level based upon the assumption that all of the allegations in the complaint are true.  The 11th Circuit Court said that, under Georgia law, the presence of metal shavings in the brain did not by itself constitute a legally recognized injury.  The judges also said plaintiffs' allegations that they "suffered and will continue to suffer physical, neurological and mental effects" was too vague and did not describe any particular symptoms.  The court also struck down plaintiffs' claims of financial harm, allegedly due to future medical costs and future wage loss because the plaintiffs failed to make clear what symptoms will interfere with their ability to work and cause a loss of wages.

 

The case is Nassar Cure et al v. Intuitive Surgical Inc et al, No. 17-10978 (11th Cir. 2017).

 


 

JULY 2017

OIG Issues Favorable Advisory Opinion Relating to Waivers of Copayments

On July 7, 2017, the U.S. Department of Health and Human Services, Office of Inspector General (OIG) issued Advisory Opinion 17-02.  The Advisory Opinion relates to a request by a hospital outpatient facility and a biomedical company that proposed to reduce or waive the cost-sharing amounts owed by Medicare beneficiaries for items and services furnished in connection with a clinical research study.

Brief Summary of Fact
The hospital is a non-profit, full-service, 171-bed regional medical center that provides inpatient and outpatient services and operates an outpatient facility (“Center”). The Center furnishes comprehensive wound care services, primarily to patients with chronic, non-healing wounds.

The biomedical company manufactures biodynamic therapies for wound care, including a product cleared by the U.S. Food & Drug Administration, which is indicated for the management of ulcers and exuding wounds (“Wound Care System”).

Under the proposed arrangement, the Center would reduce or waive applicable cost sharing amounts owed by financially needy beneficiaries for all study-related items and services.  The biomedical company certified that it would not compensate or reimburse the Center or the hospital in any manner for reduced or waived cost-sharing amounts owed by Medicare beneficiaries.

Under the Proposed Arrangement, the Center would determine a beneficiaries’ financial need in accordance with the hospital’s financial need policy. According to the financial need policy, to qualify for financial assistance, individuals must complete an application and provide documentation such as payroll check stubs, unemployment records, documentation of government benefits, and any other financial documentation requested by the hospital.  In addition, the hospital’s financial need policy requires patients to certify that all information provided on the financial need application is true.  Additionally, the waivers or reductions would not be on a non-routine basis and would not be advertised.

Brief Legal Summary
The anti-kickback statute makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program. For purposes of the anti-kickback statute, “remuneration” includes the transfer of anything of value, directly or indirectly, overtly or covertly, in cash or in kind.  Where remuneration is paid purposefully to induce or reward referrals of items or services payable by a Federal health care program, the anti-kickback statute is violated. By its terms, the statute ascribes criminal liability to parties on both sides of an impermissible “kickback” transaction.

The Beneficiary Inducement Civil Monetary Penalty rule provides for the imposition of civil monetary penalties against any person who offers or transfers remuneration to a Medicare or Medicaid beneficiary that the offeror knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of any item or service for which payment may be made, in whole or in part, by Medicare or Medicaid. The OIG may also exclude a party from Medicare for violations of the Beneficiary Inducement CMP rule.

Conclusion
The OIG concluded that the Proposed Arrangement would not constitute grounds for the imposition of civil monetary penalties and although the Proposed Arrangement could potentially generate prohibited remuneration under the anti-kickback statute, the OIG would not impose administrative sanctions.  The OIG relied on several factors including: (1) there was no advertising of the offer to reduce or waive the cost-sharing or waiver, (2) the study participants would not be told of the offer unless the study participant expressed an inability to pay the cost sharing portion, (3) the reduction or waiver of cost sharing amounts was not routine, and (4) the waiver would be based on objective evidence of financial need.

To view the advisory opinion you may click on the following link: https://oig.hhs.gov/fraud/docs/advisoryopinions/2017/AdvOpn17-02.pdf


 

JUNE 2017

 

CMS Lifts Prohibition on Nursing Home Arbitration Agreements After SCOTUS Decision

On Monday, June 6, 2017, the Centers for Medicare and Medicaid Services (CMS) proposed a rule rescinding a previous regulation that prohibited nursing homes and long-term care facilities from offering pre-suit arbitration agreements to incoming residents and their families as a condition of admittance.

The proposed revision represents a major change in course for CMS. In October of 2016, the regulation published by CMS prohibited nursing homes and long-term care facilities that participate in Medicare or Medicaid from requiring prospective residents to enter arbitration agreements. Soon after the regulation took effect, the American Health Care Association (AHCA) and several nursing homes in Mississippi brought suit in Federal Court, challenging the regulation and seeking a preliminary injunction to enjoin CMS from its enforcement. (See American Health Care Association vs. Burwell, District Court for the Northern District of Mississippi, Civil Action No. 3:16-Cv-00233). The suit alleged the regulation violated the Federal Arbitration Act and that CMS had exceeded its authority under the Medicare and Medicaid Acts, among other things. The District Court agreed, and issued a preliminary injunction enjoining CMS from enforcing the ban on arbitration. Thereafter, CMS appealed the ruling to the United States Circuit Court of Appeals for the Fifth Circuit. However, rather than submit their appellate brief in the case, CMS voluntarily withdrew its appeal and has now issued the proposed revision eliminating the prohibition on arbitration agreements.

The new proposed rule and CMS’s withdrawal of its appeal comes less than a month after the Supreme Court of the United States (SCOTUS) issued its decision in Kindred Nursing Centers LP vs. Clark. In Kindred, SCOTUS struck down a decision by the Kentucky Supreme Court which held arbitration agreements executed pursuant to a power of attorney were unenforceable unless they contained specific provisions giving the signor authority to waive a resident’s right to a trial by jury.  Accordingly, assuming the proposed revision is implemented, nursing homes and long-term care facilities will be able to offer pre-suit binding arbitration agreements to residents prior to admittance without any legal impediments. The deadline for public comment on the proposed revision is August 7, 2017.

 


 

MAY 2017


No Business Associate Agreement Leads to a $31,000 Penalty

Jim Hoover

Suite 3400 • 420 North 20th Street • Birmingham, Alabama 35203

jhoover@burr.com   www.burr.com

 

On, April 20, 2017, the Center for Children’s Digestive Health (CCDH) paid the U.S. Department of Health and Human Services (HHS) $31,000 to settle potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule and agreed to implement a corrective action plan. CCDH is a small, for-profit health care provider with a pediatric subspecialty practice that operates its practice in seven clinic locations in Illinois. 

 

In August 2015, the HHS Office for Civil Rights (OCR) initiated a compliance review of the Center for Children’s Digestive Health (CCDH) following an initiation of an investigation of a business associate, FileFax, Inc., which stored records containing protected health information (PHI) for CCDH. While CCDH began disclosing PHI to Filefax in 2003, neither party could produce a signed Business Associate Agreement (BAA) prior to Oct. 12, 2015. Additionally, neither party could produce a signed BAA prior to Oct. 2015.

 

The OCR has penalized more and more cases with covered entities and business associates for not having a business associate agreement.  It is important for you to remember that if your law firm represents a healthcare client and has access to patient health information as a result of that representation your firm is likely a business associate of the healthcare client.  As a result, the law firm and healthcare client must enter into a HIPAA compliant business associate agreement.  Otherwise, both the healthcare client and the law firm are subject to penalties. 

 

 


 

 

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