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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

Centers for Medicare and Medicaid Services Published New FAQs on EHR Incentive Programs and Final Rule on Stage 3 Participation

Posted in Health Reform, Medicare

This past month, CMS published several new Frequently Asked Questions  (FAQs) on its website addressing questions about the EHR incentive programs, and in particular how to attest to certain measures for health information exchange, patient electronic access, and other objectives that require patient action.  Those FAQs can be found here on the CMS website.

CMS also published the final regulations with a comment period for participation in Stage 3 of the EHR incentive program.  The public may submit comments on the regulations until December 15, 2015.  The regulations can be viewed here in the Federal Register.

New Study Suggests Defensive Medicine May Be Effective in Reducing Malpractice Liability

Posted in Billing & Reimbursement, Health Reform, Malpractice Insurance, Practice Management, Reimbursement

A new study in the BMJ suggests that the more services a physician provides to his or her patients, the less likely the physician is to be sued for malpractice.  The study examined the use of resources by attending physicians in several Florida acute care hospitals during a ten-year period from 2000-2009, in relation to the number of malpractice claims brought against the physicians in the year following care.  Researchers found that physicians who billed higher than average hospital charges were sued less often than lower-billing physicians.

The study builds on evidence that most physicians in the United States report practicing “defensive medicine”, commonly understood to be “medical care provided to patients solely to reduce the threat of malpractice liability rather than to further diagnosis or treatment.”  Prior to this study, no research had been published on whether greater resource use by physicians is associated with reduced claims for malpractice.

The researchers focused on physicians from seven specialties, including obstetrics, which tends to have a higher rate of malpractice claims than other specialties.   The evidence clearly showed that a physician’s risk of being sued for malpractice was reduced among those who performed and billed for more services.  However, the authors noted that the data only show a correlation.  Further research is necessary to understand why higher spending is linked to a lower risk of malpractice claims.

Perhaps the greatest value from this study is that the results corroborate the belief that defensive medicine reduces the likelihood of claims for malpractice.  Interestingly, the authors note that the effectiveness of defensive medicine could be a reason why efforts to reduce physician spending have been difficult.

The full study is available online at:  http://www.bmj.com/content/351/bmj.h5516-0.

Avoiding Insider Trading Liability

Posted in Articles, Fraud and Abuse, Physician Compensation

A new article in the online journal, JAMA Internal Medicine, highlights the importance for physicians of keeping valuable non-public information confidential.  Under insider trading laws, it is illegal for anyone to trade securities based on non-public information and for anyone to supply information to others who trade on such information, if the person sharing the information has an obligation to keep it confidential.  Examples of valuable confidential information to which you might be privy include data and opinions regarding unpublished or ongoing clinical trials or new medical equipment, and information regarding acquisitions involving public health care companies.

Physicians may share their opinions with investors about medical research or other valuable information that is already public knowledge, but the line quickly becomes blurry when it comes to non-public information.  If you are asked to share information with a potential investor that you think may violate insider trading laws, it would be best to consult your legal counsel before disclosing the information.  This includes instances where you are asked to disclose information to, or participate in, “expert consulting networks” and online physician forums.

The line is also blurry for physicians when disclosing non-public information to other physicians and scientists for medical research purposes.  Be careful to disclose such information only  for research purposes.  If you become aware that one of the recipients of the non-public information may be using such information to trade securities, cease disclosing the information immediately and consider seeking legal counsel.

The online JAMA article is accessible in full at this link:  http://archinte.jamanetwork.com/article.aspx?articleid=2457402

The Switch to ICD-10

Posted in Billing & Reimbursement, Health Reform, Medicare, Practice Management, Reimbursement

The long-anticipated implementation of ICD-10 coding finally began this past Thursday, October 1, 2015.  As of that date, government and commercial payors ceased to accept claims under the old coding system (ICD-9).  The transition has been five years in the making due to a government delay in 2012.

The new system has five times the codes of the prior system, including everything from “problems in relationship with in-laws” to “pedestrian injured in collision with roller skater” to “burn due to water-skis on fire”.  The hope is that the breadth and detail of the new codes will provide greater accuracy and increase reimbursement rates.  However, the complexity of ICD-10 could also cause substantial delays in reimbursement from both the provider side and the insurer side.  While CMS and other insurers are committed to ensuring that the implementation of the new system is completed, it is up to each provider to prepare for and manage the transition in their own practice.

Here are a few tips for your practice during the transition:

  • Mitigate the risk of longer-than-expected reimbursement times by setting aside a reserve fund to cover interim operating expenses, such as payroll, in the event of a one to two week delay in reimbursement during the next few months.
  • Whenever your staff has specific claims questions, contact the appropriate payor sooner rather than later.
  • If you haven’t already, consult your practice management and EHR software vendors to find out how they recommend using their technology with the new coding system.
  • In an effort to speed up the learning curve, consider asking your billing and coding staff to dual code a few charts each day.  This will give them additional opportunities to train, while reducing the need for extra training sessions down the line.

Physicians May Be Sued in Pennsylvania for Failing to Report Suspected Child Abuse

Posted in Malpractice Insurance, Pennsylvania Legislation, Practice Management

As a follow up to our most recent post on What You Need to Know About PA’s Child Protective Services Law, you should know that the Pennsylvania Superior Court (PA’s primary appellate court) recently held that a physician may be sued for malpractice for failing to report suspected child abuse, even though there is not an express right to sue a physician for failing to report such abuse under the PA Child Protective Services Law (the “Child Abuse Law”).

You likely know that the Child Abuse Law requires any licensed or certified health care practitioner to immediately report suspected child abuse to the Department of Human Services electronically or by phone when the individual has reasonable cause to suspect that a child is a victim of abuse.  23 Pa. C.S. § 6311(a).  A health care practitioner may have reasonable cause to suspect child abuse from contact with the child in the practitioner’s practice or from a specific disclosure to the health care practitioner by the child or an individual unrelated to the child.  23 Pa. C.S. § 6311(b).  If the health care practitioner willfully fails to report suspected child abuse, the practitioner commits a misdemeanor of the second degree.  If the abuse suffered by the child constitutes a first degree felony or more severe crime, the health care practitioner commits a third degree felony.  23 Pa. C.S. § 6319(a).

In K.H. v. Kumar, the PA Superior Court was presented with the sad case of an infant’s severe brain injury from child abuse that went repeatedly unreported by the infant’s physicians.  The trial court held that the physicians could not be sued for malpractice because the Child Abuse Law, which expressly creates a duty for physicians to report suspected child abuse and establishes criminal penalties for a failure to do so, does not expressly permit non-reporting physicians to be sued in civil court for malpractice.

However, upon review, a unanimous three-judge panel from the PA Superior Court overturned the lower court’s ruling and held that the Child Abuse Law does not prevent physicians from being sued for malpractice for their failure to report suspected child abuse.  The Court noted that the Child Abuse Law does not expressly prohibit suits for malpractice against non-reporting physicians, and emphasized that physicians have a duty of reasonable care to their patients as a result of the physician-patient relationship.  Whether a particular physician fails to meet that duty of care is a question for the jury, not the judge to decide.

Notably, the Court also held that the hospital that employed the physicians could be found negligent for failing to have appropriate policies and procedures in place for the retention and availability of patients’ prior radiological studies.  This is an important warning to medical practices and health care institutions, which should ensure that they have policies and procedures in place to give their physicians ready access to all patient records that could indicate prior physical abuse to a minor patient.

In the conclusion of its opinion, the Court quoted the Hippocratic Oath and its sentiments recognizing that treatment of a patient involves consideration of the patient’s family situation.  The Court emphasized that these sentiments are central to the intent of the sections of the Child Abuse Law requiring health care practitioners to report suspected child abuse.

The full-text of the eloquently written case is accessible at this link:  http://www.pacourts.us/assets/opinions/Superior/out/j-a08018-15o%20-%201023340425279130.pdf#search=%22k.h. kumar%22.

The Takeaway:  Any health care practitioner who has a reasonable suspicion that his or her minor patient has suffered child abuse should not hesitate to report the abuse immediately.  Willfully failing to report the abuse is a crime and can result in civil liability.  Health care institutions should also ensure that policies and procedures are in place to give physicians ready access to patient records that could indicate patterns of child abuse.

To report suspected child abuse in PA, go to www.compass.state.pa.us/cwis or call (800) 932-0313.

What You Need to Know About PA’s Child Protective Services Law

Posted in Employment Law, Pennsylvania Legislation, Practice Management

Pennsylvania’s Child Protective Services Law received a major overhaul after the Penn State child abuse scandal.  On July 1, 2015, Gov. Wolf signed into law the third, and perhaps final, legislation on the matter.  The new legislation broadens the scope of individuals who must obtain and maintain child abuse clearances.

If you’re a physician or an administrator of a health care facility, you’re probably interested in whether your non-professional staff must obtain and maintain clearances.  You may also want to know what the law requires, now that it has been revised.

Here’s a snapshot of the key aspects of the law that are applicable to physician practices and health care facilities:

Who is Required to Obtain and Maintain Clearances?

  • Here is the new, revised definition: Any volunteer or any individual applying for or holding a paid position as an employee who has direct contact with children must obtain and maintain current child abuse clearances.  “Direct contact with children” includes (1) the care, supervision, guidance or control of children, or (2) routine interaction with children, which is defined as “regular or repeated contact that is integral to the individual’s employment or volunteer responsibilities.”
  • “Regular or repeated contact” does not have to be with the same child, so the definition can be seen as encompassing any (1) health care professional who provides patient care, and (2) administrative staff that have direct contact with children (such as front desk staff).
  • The PA Medical Society (although it does not have any legal authority) agrees that administrative staff of a physician practice or health care facility having contact with children as a result of their job responsibilities should obtain and maintain the necessary clearances. [Accessible here: http://www.pamedsoc.org/MainMenuCategories/Laws-Politics/Analysis/Laws-Analysis/Child-abuse/Child-abuse-reporting-2.pdf]  This interpretation of the law is also consistent with recent FAQs issued by the PA Department of Human Services, which provide that child safety should serve as the “paramount consideration” of any employer when determining if an applicant or employee must obtain and maintain clearances.  [Accessible here: http://keepkidssafe.pa.gov/cs/groups/webcontent/documents/document/C_135246.pdf ]

What Must Employers Do?

Regarding applicants, employers must:

  1. Require all applicants covered by the law to produce the required clearances before the applicant accepts or commences employment (whichever is earlier).
  2. Require the employee to provide a written statement that the individual has not been disqualified from employment or convicted of certain felonies (which include child-related felonies and controlled substances-related felonies, among others) (the “Felonies”) since the date of the clearances.
  3. Deny employment to any applicant who has been convicted of one of the Felonies (with certain minor exceptions).

For existing employees who do not have clearances, employers must require such employees to obtain and submit the required clearances to the employer by December 31, 2015.  (The employees also have this obligation.)

For existing employees who have the necessary clearances, employers must require the employees to update their clearances every 60 months.  If the employee’s clearances are currently older than 60 months, then the employer must require the employee to update the clearances by December 31, 2015.  (The employees also have this obligation.)

Other important responsibilities of the employer:

  • Employers must ensure that covered employees maintain the required clearances throughout their employment.
  • The employer must require any covered employees to submit updated clearances to the employer if the employer has been notified or has a reasonable belief that the employee was arrested or convicted of one of the Felonies or was named a perpetrator in a founded or indicated child abuse report.
  • The employer must discipline or terminate an employee who fails to report to the employer within 72 hours after being arrested or convicted of one of the Felonies or for being named as a perpetrator in a founded or indicated child abuse report.
  • The employee is responsible for paying for the clearances; however, an employer may reimburse the employee or set up accounts with the agencies generating the clearances in order to pay for the clearances of all of the employer’s employees.

Note that any obligation of the “employer” discussed above to require an employee to obtain or maintain clearances is also an obligation of the individual responsible for employment decisions for the employer (e.g., the administrator or supervisor).

Penalties for Employers

If the employer (or the person responsible for employment decisions for the employer) “intentionally fails” to require an applicant or an existing employee to submit the required clearances, the employer (and the person responsible for employment decisions) commits a misdemeanor of the third degree, which is punishable by imprisonment for up to one (1) year and a fine of up to $2,500.

What Clearances are Required?

  • State criminal history report from the Pennsylvania State Police
  • Child Abuse History Certification from the PA Department of Human Services (previously the Department of Public Welfare)
  • Fingerprint-based federal criminal history report (which may be obtain through the State Police or FBI)

Final Thoughts

Keep in mind that the Child Protective Services Law does not restrict Pennsylvania agencies, such as the Department of Health, from using part or all of these restrictions (or additional restrictions) for the agency’s own purposes.  For example, the Department of Health may require certain professionals or staff of health care facilities (including independent contractors) to obtain and maintain the necessary clearances in order for the facility to receive DOH licensure.

Note also that this law has similar provisions that apply to volunteers of physician practices or health care facilities having direct contact with children.

We recommend that you consult your legal counsel for legal advice specific to your situation prior to taking any actions under the law.

First Court Decision on the Medicare/Medicaid 60-day Overpayment Rule

Posted in Billing & Reimbursement, Fraud and Abuse, Medicare, Practice Management, Reimbursement

You may have heard some years ago that the Affordable Care Act established a “60-day overpayment rule” that requires a provider to report and return any overpayment from a federal health care program (such as Medicare or Medicaid) within 60 days of “the date on which the overpayment was identified” by the provider (for certain institutional providers, the overpayment must be returned by the later of 60 days or the date on which a corresponding cost report is due to the applicable federal health care program).   Failure to return the overpayment within the required time period (60 days for physician practices) subjects the provider to liability under the False Claims Act and a fine of up to $11,000 per claim plus treble damages.

In an effort to clarify the rule, in 2012, CMS proposed that a provider has “identified” an overpayment when the provider has either “actual knowledge of the existence of the overpayment” or acted in “reckless disregard or deliberate ignorance of the overpayment”.  77 Fed. Reg. 9179, 9182-83.  However, CMS received so much negative feedback regarding its proposed interpretation of the rule that it decided to delay final guidance until 2016.  In the interim, the first court to review the 60-day overpayment rule has had an opportunity to give its opinion.


The Court’s Decision

In U.S. ex rel. Kane v. Continuum Health Partners, Inc., the U.S. Department of Justice, along with an ex-employee whistleblower, brought suit against Continuum Health Partners, Inc. on the grounds that Continuum failed to report and return over 900 Medicaid overpayments within 60 days of identification.   The government argued that Continuum “identified” the overpayments when the ex-employee (who was charged with investigating a software glitch in the billing system) emailed a spreadsheet of over 900 potential Medicaid overpayments to upper management of Continuum.   Continuum argued that it should not have been responsible to report or return the overpayments until it determined the precise amounts of the overpayments.

The Court sided with the federal government, denying Continuum’s motion to dismiss the case.  The Court held that Continuum “identified” the overpayments for purposes of the 60-day overpayment rule when Continuum was put on notice that the overpayments were likely to exist.  The Court explained that the spreadsheet provided by the whistleblower did not need to “conclusively establish each erroneous claim” and it did not need to “provide the specific amount owed” in order to put Continuum on notice of each overpayment, and thereby start the 60-day reporting clock.


What The Case Means for Providers

The Court’s decision in Continuum is not the last word on this issue.  The Court left open what it means to be “put on notice” that an overpayment is likely to exist.  Also, as noted, CMS may issue new guidance on the rule next year.  Nonetheless, the decision can provide useful guidance for providers who have discovered a potential overpayment and want to know how to comply with the rule.

The Court explained that a provider has a duty to investigate and report an overpayment within 60 days after the provider has been put on notice that the overpayment is likely to exist.  The Court also noted that a provider should not be liable under the False Claims Act for failing to return an overpayment within 60 days, if the provider (i) has reported the overpayment, (ii) is diligently investigating it, and (iii) does not intend to withhold repayment once the proper amount has been established.

In sum, the main message of the Court’s opinion is to Take Action and Report the Overpayment.  If you discover a potential overpayment, begin investigation in a reasonable timeframe.  If you are unable to determine whether the claim actually resulted in an overpayment within the 60-day time period, err on the side of caution by reporting and returning the potential overpayment.  If the overpayment(s) are substantial in amount, you may consider withholding repayment; however, be sure to report to CMS (or the applicable federal health program administrator) as much information regarding the claim as possible, including your intention to return each overpayment once the amount to be repaid is established.

Finally, before taking any action, be sure to consult your legal counsel regarding the best options for you and your practice.

Are the Days of Private Medical Practice Over?

Posted in Health Reform

According to a recent study published by Accenture, only 1 in 3 physicians will be in independent private medical practice by 2016.  What’s killing the private medical office?  No surprise there —  according to the study, physicians cite reimbursement pressure and practice overhead as key factors driving them to hospital employment.  Access the Accenture Report here.

Office of Inspector General Advisory Opinion Addresses Hospital Management Services

Posted in Fraud and Abuse

The Office of Inspector General (OIG) of the Department of Health and Human Services posted an Advisory Opinion today addressing a hospital system’s proposal to lease administrative employees and to provide operational and management services to a related psychiatric hospital for an amount equal to the hospital system’s fully loaded costs (i.e., salary plus benefits and overhead expense) plus a two percent administrative fee). Based on the facts presented by the requester of the opinion, the OIG determined that it would not impose sanctions under the federal anti-kickback statute.

In determining that the proposed arrangement closed a low risk of fraud and abuse, the OIG relied on the following three considerations:

1. Because the parties are related organizations, the requestors proposed that the psychiatric hospital would pay the hospital system only its allowable costs under Medicare cost reporting rules.

2. The requestors certified that the proposed arrangement would achieve (i) cost efficiencies between two related entities that are part of an integrated health system and (ii) a reduction in the Center’s labor and operational costs; and

3. Although the parties are related and therefore may have existing incentives to refer to each other, the OIG found no evidence suggesting that the proposed arrangement would increase these incentives, or that any purpose of the arrangement is to induce referrals.

The Advisory Opinion can be found here: OIG Advisory Opinion No. 15-10

Expanded Authority for CMS to Deny Enrollment and Revoke Medicare Billing Privileges

Posted in Articles, Billing & Reimbursement, Medicare, Practice Management, Reimbursement

You may have heard that CMS recently expanded its authority to deny enrollment and revoke the Medicare billing privileges of providers and suppliers.  The new changes could affect any physician, group practice or other Medicare provider or supplier.  As the changes are wide reaching, all Medicare providers and suppliers, and anyone providing support services for such providers or suppliers (such as billing companies or administrative staff), should be knowledgeable about CMS’ expanded authority.

Some important changes include:

  • CMS may deny the enrollment of a new provider or supplier if one of its owners previously owned a Medicare billing entity that (1) has had its billing privileges terminated or revoked, and (2) continues to have overpayments or other Medicare debt.
  • CMS may deny the enrollment, or revoke the billing privileges, of a provider or supplier if the provider/supplier, or an owner or managing employee of the provider or supplier, has been convicted within the last 10 years of any state or federal felony which CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries.
  • CMS may revoke the billing privileges of any provider or supplier which CMS determines has engaged in a “pattern or practice of billing for services that do not meet Medicare requirements”.

I co-authored two articles on the new regulations that provide providers and suppliers (as well as billing companies) with what they need to know about the important changes.  One of the articles was the Cover Article for the May/June 2015 Issue of BC Advantage Magazine (available in print and accessible online for those individuals having a login to the BC Advantage website at: http://www.billing-coding.com/detail_article.cfm?ArticleID=5310).

The other article was published in Physicians News Digest (accessible to the public online at the following link:  http://physiciansnews.com/2015/04/16/physicians-beware-cms-may-deny-or-revoke-medicare-provider-privileges/).

The new regulations took effect on February 3, 2015.