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Physician Law

Current news, updates, & useful tips relating to legal issues affecting physicians & non-institutional providers in their personal & professional lives

Pennsylvania Department of Health Clarifies Clinical Laboratory Law

Posted in Ancillary Services, Pennsylvania Legislation

On December 18, 2013, Pennsylvania Act 122 amended the Pennsylvania Clinical Laboratory Act to, among other things, impose licensure requirements on out of state clinical laboratories and to place certain prohibitions on physician financial arrangements with labs.  Among other things, Act 122 prohibits the payment or receipt of commissions, bonuses, kickbacks or fee-splitting arrangements and prohibits laboratories from leasing office space, shelves or equipment within a physician’s office.  The Department of Health has now issued two rounds of “Frequently Asked Questions” regarding clinical laboratories and Act 122.  These FAQs can be found on the Department’s website here.  Physicians in Pennsylvania who have financial/contractual arrangements with clinical laboratories, whether those labs are located in Pennsylvania or in another state, should carefully review Act 122 and the FAQs to ensure that their arrangements are in compliance with these new requirements.

Medicare Rolls Out 5-Star Rating System for Providers/Physicians

Posted in Medicare

Are you and your practice ready to be rated by Medicare?  If not, you should probably get ready.

According to a CMS blog post by Dr. Patrick Conway, CMS Deputy Administrator for Innovation and Quality and Chief Medical Officer, the Medicare program is getting ready to role out a five-star rating system for three provider-types including hospitals, dialysis facilities and home health providers.  These will be in addition to the five-star rating systems already being implemented for nursing homes and, to a limited extent, for physician practices.

According to Dr. Conway, the ratings will be based on “established scientific standards of rigor and accuracy” and are designed to help patients make informed decisions based on quality.  These rating systems are (or will) be available on the Medicare.gov “compare” websites at the follwoing links: Hospital Compare, Dialysis Facility Compare, Home Health Compare, Nursing Home Compare, and Physician Compare.

According to the Physician Compare website, at the present time, the site can only be used to compare physician group practices but patients will be able to compare individual physicians in the future.  The site also encourages physicians to keep their data up to date to be sure that patients are using current data when making comparisons.  If you are not yet familiar with the Medicare Compare websites, it’s a good idea to review them, get an understanding of the rating data and see how you and your practice measure up.

Considering Telemedicine? Pay Attention to Legal Requirements

Posted in Practice Management

The topic of telemedicine is becoming increasingly more common in the medical community.  For certain, telemedicine can be a cost effective way of communicating with and monitoring patients, but it is not without its risks.  For one thing, physicians need to be mindful of the potential for increased malpractice exposure which could come from not seeing a patient in person.  For example, a telephone or video visit may fail to disclose tell-tale signs of a medical problem that would otherwise be evident from an in-person visit.  For this reason, physicians intending to engage in telemedicine are well advised to consult with their malpractice carrier to be sure they have adequate coverage. Care should also be take to ensure that the technology used is effective and reliable.   Finally, before engaging in telemedicine, physicians should carefully research applicable federal and state laws on the subject.  State telemedicine laws can vary significantly from state to state.  Some states require telemedicine technology to meet specific requirements and many states require physicians to be licensed in the state where the patient lives.  In addition, the American Medical Association recently published recommendations regarding telemedicine, including that physicians be licensed in the state where the patient resides (See AMA: Doctors must be licensed in patient’s state to practice telemedicine on Washingtonpost.com).

DOJ Joins Whistleblower Case On 60-day Overpayment Refund Requirement

Posted in Fraud and Abuse

One of the often overlooked requirements in the federal Affordable Care Act  is that healthcare providers now have an obligation to refund overpayments to the Medicare within 60 days of discovery.  Failing to do so may expose a provider to liability under the federal False Claims Act and possible exclusion from the Medicare program.  Late last week, the Department of Justice elected to join a whistleblower lawsuit based on this very provision.  According to an article on  law360.com, this suit, which alleges that Mount Sinai Health System in New York failed to return Medicaid overpayments within 60 days of identifying them, is one of the first to apply this new provision.  Stay tuned for more on this important case.

Healthcare Companies Score Low in Cybersecurity Study

Posted in Health Reform, Practice Management

An article on Businessweek.com today suggests that healthcare companies rank worse than financial institutions, utility companies and even retailers when it comes to cybersecurity.  This is particularly frightening news given the intense focus on healthcare data security under HIPAA for a number of years now.  By now, healthcare companies and providers should be well aware of the requirements of HIPAA and should have appropriate safeguards in place that meet or exceed the HIPAA requirements.  At its core, HIPAA requires that health information be protected with reasonable administrative, technical, and physical safeguards to ensure its confidentiality, integrity, and availability and to prevent unauthorized or inappropriate use or disclosure.   What safeguards are reasonable will depend on the facts and circumstances.  If you’re still not sure what you are supposed to be doing to protect your patients’ health care data, it’s probably a good time to conduct an audit of your policies, procedures and systems to be sure they are compliant.


OIG Proposed Rule on New Civil Money Penalty Authorities

Posted in Fraud and Abuse, Medicare

The Office of Inspector General (OIG) today issued a proposed rule which would amend the federal civil monetary penalty (CMP) regulations addressing new CMP authorities created under the Affordable Care Act.  The revised regulations would allow for civil penalties, assessments, and exclusion from Medicare for and of the following:

  • Failure to grant OIG timely access to records;
  • ordering or prescribing while excluded;
  • making false statements, omissions, or misrepresentations in an enrollment application;
  • failure to report and return an overpayment; and
  • making or using a false record or statement that is material to a false or fraudulent claim.

Comments on the proposed regualtions can be submitted up until July 11, 2014.  The proposed rule and instructions for submitting comments can be viewed here:  http://oig.hhs.gov/authorities/docs/2014/fr-79-91.pdf

Prepare Your Practice for the Future – Whatever It May Be

Posted in Practice Management

None of us knows what the future holds for physicians and the practice of medicine.  Of course, many physicians are, by entering into various contractual arrangements with hospitals, ACOs and other networks, placing their bets on the practice model they think is most likely to prevail under the Affordable Care Act.  I caution my physician clients to take a different approach, however.  Rather than scrambling to sell to the local hospital or link up with the first network to come knocking, I continue to suggest that practices focus on developing into real, sophisticated, business entities so that they will be prepared to adapt to whatever model or models emerge.

How does a practice prepare for the future when no one knows what that future will look like?  My suggestion is to identify possible scenarios and be prepared for all of them.  And what would the successful medical practices of the future look like?  I expect that they would have some or all of the following characteristics:

-Greater business sophistication and management expertise;

-Sophisticated information management systems that they know how to use;

-Staffing and systems to manage and ensure regulatory compliance;

-The ability to do real strategic planning and implement those plans;

-Economic depth; and

-Increased efficiency.

I also think that that larger medical practices will have the greatest chance of developing the above qualities and systems.  As the delivery of healthcare becomes increasingly complex and expensive, we can reasonably expect that small practices will continue to struggle to keep pace with the larger, better-funded, players in the marketplace.

While we don’t know what the future holds, few would argue that those medical practices that can evolve from mom-and-pop shops into sophisticated provider entities will stand the best chance of not only surviving, but thriving in the new healthcare environment.

Does Your Group Practice Income Division Formula Comply with Stark

Posted in Ancillary Services, Fraud and Abuse

Many physicians I speak with are still surprised to learn that the federal Stark statute imposes restrictions on income division within group practices.  These restrictions only apply to profits generated from any of the Stark “designated health services” and only those that are covered by Medicare and Medicaid (including managed care), but if your group provides any of these designated services, the Stark income division rules apply to you and  penalties for failing to comply are steep.  )  Penalties for violating this statute include a $15,000 civil money penalty for each tainted referral and for each claim submitted pursuant to a tainted referral, as well as potential false claims liability.

Here are some of the basics (but realize that Stark is a complex and technical law so if you think this is an issue for your group, you should consult with a knoweldgeable health care attorney).  Stark designated health services include the following:

–clinical laboratory services;
–physical therapy services;
–occupational therapy services;
–radiology, including MRIs, CAT scans and ultrasound services;
–radiation therapy services and supplies;
–durable medical equipment and supplies;
–parenteral and enteral nutrients, equipment and supplies;
–prosthetics, orthotics, and prosthetic devices;
–home health services and supplies;
–outpatient prescription drugs; and
–inpatient and outpatient hospital services

Most physician group practices rely upon what is known as the Stark ”in-office ancillary services exception” to legally permit them to refer to and bill for Stark designated health services within their practices.  One of the conditions of this exception is that the practice must meet Stark’s definition of a “group practice”.  And, group practices may only divide Stark profits in a limited number of ways.

Under Stark, physicians in a group practice may receive a share of the practice’s overall profits derived from the DHS of the group provided the share is not determined in any manner which is directly related to the volume or value of referrals by such physician.  The regulations define “a share of the overall profits” to mean a share in either all of the profits derived from the Stark services of the entire group or of any component of the group that consists of at least five (5) physicians.  This means that Stark DHS profits may be allocated among all physicians in the group or among subgroupings of no fewer than five (5) physicians – bu even then, the profits may not be allocated to individual physicians in a manner that reflects their referrals to the stark services.

The Stark regulators have provided the following examples of permissible income division formulas:

–per capita division of the overall profits (i.e., equally among all physicians in the group);
–based on the distribution of the group practice’s revenues attributable to services that are not Stark services payable by federal or private payors;
–Any distribution of Stark revenues if the group practice’s Stark revenues are less than 5% of the group’s total revenues, and no physician’s allocated portion is more than 5% of that physician’s total compensation from the group.

Physicians may also be paid productivity bonuses for personally-performed services (or incident to personally perfomed services) as long as the bonus is not directly related to the volume or value of referrals for Stark services by the physician.

Stark is a strict liability statute, so penalties will attach to a violative arrangement whether the violation was intentional or inadvertant.  Therefore, if you have not reviewed your income division formula for Stark compliance, you should do so without delay.



Changes to New Jersey’s Mental Health Privilege

Posted in Uncategorized

By Michael Coco

The New Jersey Supreme Court, through the Committee on the Rules of Evidence (the “Committee”) is proposing changes to the rules on admitting evidence and allowing testimony from health care professionals involved in the counseling and treatment of mental health patients. As it currently stands, New Jersey has a patchwork statutes, evidentiary rules, and agency regulations (“Current Rules”) that address privilege in the mental health setting. The Committee is looking to replace the Current Rules with one unified evidentiary rule (“Draft Rule”) that covers all mental health related communications, including the specific practitioners who are granted this privilege and when the privilege applies.

The Draft Rule confers privilege on the following professionals: psychologists; physicians (including psychiatrists); marriage counselors; family therapists; victim counselors; social workers; nurses; professional counselors; and psychoanalysts. These professionals would be able to claim privilege under most circumstances if asked to testify to any conversation with the mental health patient. In fact, the Draft Rule states that such professionals “shall claim the privilege unless otherwise instructed by the patient.” In other words, these professionals must maintain patient confidentiality unless they receive specific consent from the patient, or if an exception applies. Exceptions in the Draft Rule are similar to current privilege exceptions, and include allowing the professional to disclose information if the patient is a danger to himself or others. Patients, guardians, family members and representatives of a deceased patient may claim the privilege, but the mental health professional may not claim the privilege if the patient waives the privilege.[1]

Although the list of professionals in the Draft Rule is thorough, the Committee should consider including emergency responders, i.e. first responders, emergency medical technicians, and paramedics. These emergency responders often record vital information on a patient’s condition and use that information to determine transport options, and they relay the information to medical facilities or other emergency personnel. Patients should feel comfortable telling these responders – in confidence – about their current mental health crisis. Allowing the patient to confide in first responders will also increase the likelihood of the patient disclosing steps he may have taken to harm himself, such as ingesting a poison. Allowing a mental health patient to confide in first responders will also alert the responders to any danger the patient may pose to the first responders or to the public at large.

The Committee has not yet finalized the Draft Rule and is soliciting comments and opinions from the public. If you have thoughts on the mental health privilege, please share them with the Committee. The deadline for comments for the Draft Rule is June 2, 2014. More information on the Committee and submitting comments can be found here:  http://www.judiciary.state.nj.us/notices/2014/n140402a.pdf

For more information, please contact Michael Coco

[1] In certain privileged conversations, such as the priest-penitent privilege, both parties hold the privilege. In that case, for example, a priest will not be forced to testify to a privileged conversation even if the penitent waives his or her own privilege.

New Tool For HIPAA Security Assessment

Posted in Health Reform, Medicare, Practice Management

This past Friday, the Office of the National Coordinator for Health Information Technology, in collaboration with the HHS Office for Civil Rights and HHS Office of the General Counsel, developed a HIPAA “Security Risk Assessment Tool.”  The Security Risk Assessment Tool is a downloadable program that was developed to assist providers in performing HIPAA security risk assessments and determining HIPAA vulnerabilities.  The program offers an easy tool for providers to (1) determine what types of safeguards are needed for their practice, (2) document whether or not they meet each standard, and (3) document why any of the safeguards are not applicable to their practice.  The program is available for download on the HealthIT website at the following address:  http://www.healthit.gov/providers-professionals/security-risk-assessment.  There is also a helpful video on how to use the program available here:  http://www.healthit.gov/providers-professionals/security-risk-assessment-videos (3rd video on the web page).

For more information on this new tool or HIPAA security, contact Matthew Redding