Archives: physician

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.

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.

According to various news outlets, physicians at the University of California student health centers (as many as 150 physicians in all) went on strike this week in protest of what they believe are unfair labor practices by the University.  These physicians are members of the Union of American Physicians and Dentists.  The protest stems from contract negotiations between the Union and the University which have been ongoing for many months.  While this is only the first time in more than 25 years that physicians in the United States have gone on strike, with more and more physicians becoming employees of large health systems and insurance companies, this strike could be a sign of things to come in the not too distant future.

Last week, the Centers for Medicare and Medicaid Services (CMS) issued the final Physician Fee Schedule for Fiscal Year 2015.   The annual Physician Fee Schedule includes various policy and payment changes to be implemented in the coming year.  This year’s Fee Schedule includes details regarding Medicare’s payment for services outside of a face-to-face visit for managing the care for Medicare patients with two or more chronic conditions beginning in 2015. as well as a new, more transparent process for setting physician payment rates which is designed to allow for public input into the process.  Other changes announced include changes to the quality reporting initiatives: Physician Quality Reporting System (PQRS), Medicare Shared Savings Program, and Medicare Electronic Health Record (EHR) Incentive Program, and further implementation of the physician value-based payment modifier.  A summary of the FY2015 policy and payment changes can be viewed on CMS’ website Here.

Physicians in Pennsylvania who have been dispensing and billing for prescription drugs under the Pennsylvania Workers’ Compensation program will be disappointed to learn that House Bill 1846 (which already passed the House) was approved by the Pennsylvania Senate yesterday, essentially clearing the way for the bill to be signed into law.  HB 1846, among other things, limits the amount a physician may charge for drugs under the Workers’ Compensation program to 110% of the Average Wholesale Price of the drugs.  The Bill also limits the amount of drugs a physician can dispense to a Workers’ Compensation patient to a 7-day supply for Schedule II and III drugs and to an initial 30-day supply for any other drug.  The final bill can be viewed here:  Pennsylvania House Bill 1846

According to a final rule published by the Centers for Medicare and Medicaid Services on August 4, 2014, providers will be required to use  the International Classification of Diseases, 10th Revision for diagnosis coding starting on October 1, 2015.  Until then providers are to continue using the 9th Revision (ICD-9).

Given the winding path that ICD-10 has taken thus far, whether this new compliance date will stick remains to be seen.   The Department of Health and Human Services (HHS) announced in 2009 that ICD-10 would be the standard code set (required by HIPAA) to replace ICD-9.  The original implementation date was to be October 1, 2013.  However, citing a lack of resources and readiness to implement ICD-10, in 2012, HHS extended the complianc deadline to October 1, 2014.  But, the Protecting Access to Medicare Act of 2014 (PAMA), which was adopted on April 1, 2014, prohibited HHS from implementing ICD-10 before October 1, 2015 — hence the new “official” compliance date.

Physician ancillary service joint ventures continue to proliferate and not surprisingly, federal and state regulators are on the lookout for arrangements which may violate fraud and abuse laws .  In its recent “Special Fraud Alert: Laboratory Payments to Referring Physicians”, the Office of Inspector General (OIG) has (once again) expressed concern over financial arrangement between physicians and clinical laboratories to which they may refer.  In the alert, the OIG focus on two types of financial arrangements which they believe raise substantial risk under the anti-kickback statute:

1.            Payments by clinical laboratories to physicians to collect, process, and package patients’ specimens; and

2.            Payments by clinical laboratories to physicians to report patient data to “registries” established by the clinical laboratories.

With regard to specimen collection arrangements, the OIG cites the following characteristics as potentially problematic:

  • Payments that exceed fair market value for services actually rendered by the physician;
  • Payment for services for which payment is also made by a third party, such as Medicare;
  • Payments made directly to the ordering physician rather than to the ordering physician’s group practice, which may bear the cost of collecting and processing the specimen;
  • Payments made on a per-specimen basis for more than one specimen collected during a single patient encounter or on a per-test, per-patient, or other basis that takes into account the volume or value of referrals;
  • Payments offered on the condition that the physician order either a specified volume or type of tests or test panel, especially if the panel includes duplicative tests;
  • Payments made to the physician or the physician’s group practice, despite the fact that the specimen processing is actually being performed by a phlebotomist placed in the physician’s office by the laboratory or a third party.

With regard to registry arrangements, the OIG cites, among other things, the following characteristics of concern:

  • The laboratory requires, encourages, or recommends that physicians who enter into Registry Arrangements perform the tests with a stated frequency (e.g., four times per year) to be eligible to receive, or to not receive a reduction in, compensation;
  • The laboratory collects comparative data for the Registry from, and bills for, multiple tests that may be duplicative or that otherwise are not reasonable and necessary;
  • Compensation paid to physicians on a per-patient or other basis that takes into account the value or volume of referrals;
  • Compensation paid to physicians which is not fair market value for the physicians’ efforts in collecting and reporting patient data; and
  • Compensation paid to physicians that is not supported by timely documentation memorializing the physicians’ efforts.

Physicians considering entering in to financial arrangements with clinical labs should review their arrangements carefully for compliance with not only the federal anti-kickback statute but other federal and state fraud and abuse laws.

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).

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.

 

 

Hospital-physician acquisition of medical practices continues at a furious pace.  Unfortunately, no one knows for certain whether physician employment by hospitals is the key to better or more cost-effective care.  Moreover, the hospital or the physician in such a transaction may for any number of reasons decide later on that the relationship is less than desirable.  Because no one can predict the future, it is generally advisable to include an unwind provision in the original practice purchase and employment agreement to allow the parties to unwind the transaction.  Sometimes the unwind may be triggered or exercised upon failure to meet certain agreed-upon milestones (e.g., failure to hire another physician in the same specialty with a defined period of time), during a limited period (e.g., only during the third year of employment) or at any time during the term.  The unwind clause should spell out the triggers as well as how it can be exercised and the details of how it will work to ensure a smooth transition back to private practice.  Where the physician’s employment by the hospital was precipitated by the purchase of the physician’s practice assets, an unwind will usually involve the repurchase of those assets by the physician from the hospital.  In this is the case, the unwind provision should address the valuation methodology to be used and the timeline for the repurchase.  Finally, if the employment agreement includes a restrictive covenant, it will need to include a carve-out for the unwind.  With even the best intentions on both sides of a transaction, there will be no guarantees of success.  A well-thought-out unwind clause can be an important safety valve for both parties if the arrangement does not turn out as planned.