Pennsylvania Health Law Lawyer & Attorney : Fox Rothschild LLP : serving Philadelphia, Pittsburgh, Allentown, Erie, Upper Darby Twp

Proving the theory that no good deed goes unpunished, according to a March 17, 2008 Department of Justice press release, Hardeman County Memorial Hospital in Texas agreed to pay the federal government a total of $398,230 to resolve allegations that it violated the federal False Claims Act by submitting improper claims for payment to the Medicare program for healthcare items and services that were provided as a result of improper physician referrals. Interestingly, the case was based on a 2005 self-disclosure by Hardeman to the Office of Inspector General of the Department of Health and Human Services that Hardeman had discovered a physician lease arrangement pursuant to which a referring physician had received free rent from Hardeman. The self-disclosure triggered an investigation which concluded in the settlement and Hardeman's entry into a 3-year Corporate Integrity Agreement.

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Under a recent decision by the U.S. Court of Appeals for the 11th Circuit, a case brought by a group of physicians against a PPO discount card company and a managed care company for appropriation of the doctors’ names and identities in connection with a plan to market and sell medical discount cards will be permitted to proceed in court. Specifically, the plaintiff physicians have alleged that Private Health Care Systems allowed the Capella Group, Inc. to access the PHCS network including the discounts negotiated with the physicians in the network, as well as their names, professional identities and practice information in order to sell Capella’s medical discount cards.

The physicians allege that PHCS gave Capella access to their information without the physicians’ consent. Originally the federal district court dismissed the complaint, holding that the doctors’ sole remedy was on the contract they entered into with PHCS. However, the Court of Appeals found the district court’s decision to be contrary to Georgia law and reversed the decision, clearing the way for the case to proceed to court on its merits.

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As previously reported on this blog, the Centers for Medicare and Medicaid Services (CMS) had announced in 2007 that they intended to send requests for information to all Medicare participating hospitals for details regarding the investment/ownership and compensation arrangements between those hospitals and physicians to determine whether the arrangements were in compliance with the federal Stark statute. However, according to an April 10, 2008 notice published by the Office of Management and Budget, CMS has now withdrawn the Request for Information survey with no indication as to whether a new survey will be issued in the future. Of course, physicians who have financial relationships with hospitals should not assume that this issue is dead and gone but rather should take this opportunity to review their existing hospital relationships to ensure compliance with the Stark statute and regulations.

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According to a recent online Wall Street Journal article, Walgreen Co. is taking definitive steps to expand further into the workplace health center arena. Specifically, Walgreen has announced its plans to acquire two worksite health-center companies in an effort to build its business as a manager of on-site health centers at large companies. The work-site health centers are in addition to Walgreen’s in store clinics.  According to the WSJ article, once the deals are completed, Walgreen will have more than 500 worksite and retail health centers in 40 states. Walgreen’s announcement further confirms the growing trend by big box and national chain stores (e.g., Walmart) to try to reach health care consumers where they work and shop instead of making consumers seek out health care providers.

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According to a recent alert on the Centers for Medicare and Medicaid Services (CMS) website, physicians and other providers are required to begin using a new ABN form when services are expected to not be covered by medicare.  According to the alert, beginning Monday, March 3, 2008, physicians may use the revised ABN for all situations where Medicare payment is expected to be denied. The revised ABN replaces the existing ABN-G (Form CMS-R-131G), ABN-L (Form CMS-R-131L), and NEMB (Form CMS-20007). CMS will allow a 6-month transition period from the date of implementation for use of the revised form and instructions. Accordingly providers and suppliers must begin using the revised ABN no later than September 1, 2008.

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According to an article in the New York Times, Aetna will soon begin offering a new service to help enable patients to research their own specific medical conditions. Specifically, Aetna’s SmartSource Service will allow patients to link online research with their own medical records and claims data.  While a better patient educated patient population holds hope for cutting down on unnecessary medical expenses, there is also the possibility that patients will use this kind of service to exercise self-help rather than seeking professional care. Nevertheless, Aetna’s move is a sign of the times and Aetna is not the only one delving into this arena. According to the Times article, other companies like Google and Microsoft have similar plans. Physicians should begin preparing to deal with patients who are better educated about their own health care conditions than ever before.

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More not-so-good news for Pennsylvania: according to an article in the Times Tribune, Pennsylvania Medical Society officials are predicting a shortage of physicians in Pennsylvania in the foreseeable future.  Citing the Society's recently released demographic report (See The State of Medicine in Pennsylvania), the article suggests that Pennsylvania could be short 10,000 doctors within 10 years.  Pennsylvania's physician population is aging, with a large percentage of physicians approaching retirement age.  According to the article, 50% of Pennsylvania's physicians are over the age of 50.

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Medtronic (and by default, all medical device manufacturers) scored a huge win on Wednesday when the U.S. Supreme Court held that medical device manufacturers cannot he held liable in tort actions for medical devices that have gone through FDA pre-market approval.  The case in question was brought by the estate of a man injured when a balloon catheter manufactured by Medtronic burst.  While the issue of preemption of tort liability under the federal Medical Device Amendments of 1976 have been the subject of debate in the federal courts, the Supreme Court's action will likely end that debate for the time being.

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According to an article in the Los Angeles Times, a dispute is brewing in California over what one insurer is calling an “outreach effort” but others are calling an attempt to pit physicians against their patients. Specifically, Blue Cross of California has sent letters to physicians with a copy of patient insurance coverage applications, asking the physicians to identify patients who had pre-existing conditions at the time insurance coverage was extended to them. Presumably Blue Cross of California would use the information to rescind coverage for patients deemed to have pre-existing conditions. While Blue Cross of California says physician participation in the survey is voluntary, many physicians are concerned that enlisting physicians as moles in the effort could cause patients to withhold critical clinical information from their physicians. While HIPAA would likely permit the disclosure of this information, physicians considering making such disclosures should also check their participation contracts carefully to determine whether they have any duty to provide the data to an insurer.

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