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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

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.

What is Your Strategic Plan?

Posted in Practice Management

This is the second in a series of posts on practical and legal considerations for physicians in deciding whether to sell, merge or stay the same. Before making any major practice decision along those lines, physicians should engage in some careful strategic planning. Simply put, before you can know which or whether one of these transactions will help you to achieve your goals, you must first know what those goals are.

From a practice standpoint, here are some basic “strategic planning” questions you should try to answer:

1. What are the greatest short term and long term challenges faced by your medical practice?

2. What are the greatest opportunities available to your practice?

3. If you were able to overcome your practice challenges and take advantage of your practice opportunities without selling, merging or affiliating with any third party, would your practice be where you want it to be from a financial and lifestyle perspective?

4. What are your options for overcoming your practice challenges and taking advantage of your practice opportunities and could you do that without selling, merging or affiliating with a third-party?

5. If you determine that sale, merger or affiliation is necessary to overcome your practice challenges and take advantage of your practice opportunities, which of these options is readily available and would enable you to achieve your professional, financial and lifestyle goals with the least amount of expense and disruption?

Answering these questions may not be so simple. Effective strategic planning often involves gathering and analysis of data regarding the practice and your specific market. Among other things, you should have a firm grasp on your income and expenses over the last several years to know how they are trending and why they might be trending that way. Similarly, you should understand your practice utilization and referral patterns (including the number of referrals in and out, what those referrals are for, where they come from and where they go). Finally you should have an understanding of what is happening in your market, who your competitors are, what your competitors are doing, who your allies are and how you can improve those relationships.

The above represent only a few of the important considerations for developing a strategic plan for your practice. Even if sale, merger or affiliation is not on your radar screen at present, one way to help ensure that you are prepared for change is to develop a three-year strategic plan and revisit it annually to see whether modifications are necessary and to evaluate whether you are fulfilling that plan.

Practice Planning in Uncertain Times

Posted in Health Reform, Practice Management

These are uncertain times for physicians.  The future of healthcare is uncertain for everyone involved, from payors to providers to consumers.  In fact, there may be only one universal certainty about the future of healthcare: things are changing and are going to continue to change.

The federal Affordable Care Act (ACA) has sent shivers of panic through all levels of the industry.  Payors are scrambling to find ways to control burgeoning premium and provider costs.  Their stated goal is to transition reimbursement from fee-for-service to models based on quality and performance metrics (though no one has really figured out how to accomplish that goal).

Hospitals and other providers are racing to form Accountable Care Organizations (ACOs) and other networks to try to take advantage of these promised “new reimbursement models”.  Unfortunately, developing a network that can effectively control costs and performance across a continuum of care is virtually impossible without knowing what criteria payors will pay for, how those criteria will be measured and how they will be incentivized/rewarded.  As a result, most of the provider networks  I have encountered in the last couple of years are suffering “all hat, no cattle syndrome” — which is to say that they have big plans for managing care but don’t yet have any payor contracts that will pay them for doing so.

For many physicians, particularly those in private practice, the lack of certainty and the resulting panic in the marketplace can be maddening.   Looking for any kind of certainty, many physicians have sold or are considering selling out to a hospital.  Unfortunately, as noted above, hospitals generally have no better idea of what the future of healthcare will look like than anyone else.  Not surprisingly then, most hospital-physician employment agreements have a term of no more than three years, and more and more often, hospitals are building mechanisms into their employment agreements to permit them to reevaluate compensation even before the end of the agreement term.

What will make the most sense for a particular physician or practice will depend on a variety of factors, many of which will be subjective.  While there can likely never be any guaranty that a particular decision in this regard will result in success, the chances of making the right decision will be greatly improved with some careful self-evaluation and planning.

The next several posts on this blog will explore some of the big practice planning decisions physicians are being faced with and the various practical and legal considerations  that physicians should evaluate in making those decisions.  Topics to be covered will include whether to sell, merge or stay the same, identifying the right “partners”, optimizing practice performance to adapt to change and contracting for successful relationships.

Pennsylvania Health Care Name Badge Law

Posted in Pennsylvania Legislation

A new provision in the Pennsylvania Health Care Facilities Act will take effect on June 1, 2015 requiring healthcare facility personnel, physicians in private practice and their employees to wear name badges while treating patients.  Specifically, the rule applies to the following categories of practitioners and personnel:

  • Employees and physicians working at health care facilities licensed by the Department who provide direct care to patients or consumers;
  • Employees and physicians working at the private practice of physicians who provide direct care to patients or consumers; and
  • Employees and physicians working at an employment agency who provide direct care to patients and consumers.

The badges must include:

  • A recent photograph of the employee
  • The employee’s name
  • The employee’s title
  • The name of the employee’s health care facility or employment agency

The title of the employee shall be as large as possible in block type and shall occupy a 1/2-inch tall strip as close as practicable to the bottom edge of the badge.

  • Medical Doctors and Doctors of Osteopathy must use the title ”Physician”.
  • Registered Nurses must use the title ”Registered Nurse” and Licensed Practical Nurses must use ”Licensed Practical Nurse”.

For more information, see the May 16, 2015 Pennsylvania Bulletin.

Fix to the Medicare Physician Fee Schedule Delayed

Posted in Medicare

According to usatoday.com, The U.S. Senate will not act on legislation to fix the 21% pay cut under the Medicare Physician Fee Schedule before it goes into effect on April 1.  Although the House passed legislation earlier this week which would permanently fix the Sustainable Growth Rate formula which causes this pay cut panic every year, Senator Mitch McConnell has indicated that the Senate intends to take the matter up  when it returns from break after April 13, 2015.

CMS Prepares for Physician Fee Schedule Cut

Posted in Medicare, Reimbursement

As of today’s date, Congress has not yet fixed or even patched the expected 21% cut to the Medicare Physician Fee Schedule.  A eNews alert sent out today by the Centers for Medicare and Medicaid Services notifies physicians of the following:

The negative update of 21% under current law for the Medicare Physician Fee Schedule is scheduled to take effect on April 1, 2015. Medicare Physician Fee Schedule claims for services rendered on or before March 31, 2015, are unaffected by the payment cut and will be processed and paid under normal procedures and time frames. The Administration urges Congress to take action to ensure these cuts do not take effect. However, until that happens, CMS must take steps to implement the negative update. Under current law, electronic claims are not paid sooner than 14 calendar days (29 days for paper claims) after the date of receipt. CMS will notify you on or before April 11, 2015, with more information about the status of Congressional action to avert the negative update and next steps.” (CMS Medicare Learning Network)

Physicians should keep a close on how this issue develops as it could impact practice cash flow even it a fix is put in place.