Pennsylvania’s Patient Test Result Information Act, which is set to take effect December 23, 2018, requires diagnostic imaging services providers that identify a “significant abnormality” in their test results to directly notify the patient or his/her designee within 20 days of the completed test, its review and its delivery to the ordering health care practitioner.  The new law defines the circumstances under which a patient notice is mandatory, as well as required information and language that must be included in any applicable notice.

For more information regarding the specific requirements of the Act and its applicability to health care providers, you can visit our Fox Rothschild Health Law Alert.  The full text of the Act can be accessed at this link.

USA Today, New York Times, BNA, and several other news outlets have been reporting over the last few weeks about non-competition agreements and non-compete laws especially related to low-wage workers.  There have been interesting changes and proposed changes to state laws that may affect several industries including healthcare.

In a recent article on Law360, titled “Noncompete Agreements Under Siege At The State Level,” the authors highlighted some developments in non-compete law.  They posit that many areas of employment and labor law have seen changes, but the law of noncompetition agreements has been relatively static.  Until recently, most changes came from case law in this area of law; however, more recently we are seeing that many state legislatures are taking up the issue.

Some states like Massachusetts, Oregon and Missouri are offering laws which include broad prohibitions on the enforcement of noncompetition agreements.  However these proposals have not made much legislative progress according to the authors.

Other states have offered legislation that has health care industry-specific prohibitions.  For example, the authors note that last year Rhode Island enacted legislation that effectively renders physician noncompetition agreements void and unenforceable, while Connecticut imposed new limits as to when noncompetition agreements can be enforced.

According to the authors, in 2017 the trend is continuing.  West Virginia enacted a statute regarding physician noncompetition agreements, which limits the ability to enforce such provisions.  The authors state:

Measures have also been introduced recently in Pennsylvania, Minnesota, Oregon (home care workers), New Mexico (certified nurse practitioners and midwives), and Connecticut (homemakers, companions and home health aides) that target noncompete enforcement against physicians and others in the health and medical profession. (emphasis added)

Low-wage employee non-compete clauses have also come under scrutiny.  The authors note that this year several states have or are currently considering income-based restrictions, including Massachusetts, Maine, Maryland (did not pass), and Washington.

With the landscape of this very important issue changing, individual healthcare providers, their employers, and anyone else who uses, or is subject to, non-compete provisions will need to keep on top of developments to their state’s specific laws.  As the laws change, it will be more important than ever to have non-compete provisions and agreements reviewed or re-reviewed to ensure you understand the effect of such changes.

The Medicare incentive programs with which you and your medical practice are familiar will soon be no more.  As of January 1, 2017, these programs (including the Electronic Health Records (EHR) Meaningful Use Incentive Program, the Physician Quality Reporting System (PQRS), and the Physician Value-Based Modifier Program) will morph into the new Medicare Quality Payment Program (QPP).   The QPP will also include a fourth category of incentives entitled “Clinical Practice Improvement Activities”, which we discuss in more detail below.

The purpose of the QPP is to create one central program that will govern Medicare Part B payments to physicians, while incentivizing physicians to increase quality of care and decrease inefficiencies in the cost of care for Medicare patients.  Participation in the QPP will be mandatory beginning January 1, 2017.  The QPP will either reward or penalize physicians and their practices by adjusting their reimbursement rates under the Medicare Physician Fee Schedule two (2) years after the reporting year.  Therefore, physicians/practices will have their reimbursement rates adjusted in 2019 based on their reporting data for the year 2017.

As we noted in our first blog post in the Series, accessible here, physicians will have the option to choose between two payment tracks under the QPP:  (1) the Merit-Based Incentive Payment System (MIPS); and (2) an Advanced Alternative Payment Model (Advanced APM).  This blog post will discuss the basics of the MIPS and how to qualify for the MIPS in 2017, while our next post will touch on the basics of participation in Advanced APMs.

Basics of the MIPS

Each physician or group practice (you may report individually or as a group) participating in the MIPS in 2017 will earn a “composite performance score” based on the physician/group’s scores within the following four (4) categories:

  1. Quality of Care – 60%
    • Explanation: Scored based on the reporting of “quality measures”, which will be published annually by CMS.  Physicians will be able to choose which quality measures they will report each year.
    • Replaces: PQRS and quality component of the Value-Based Modifier.
  2. Advancing Care Information – 25%
    • Explanation: Scored based on the reporting of EHR use-related measures with which you are familiar from the current EHR Meaningful Use Incentive Program.  However, unlike the existing program, the QPP measures will not have “all-or-nothing” targets.
    • Replaces: EHR Meaningful Use Program.
  3. Clinical Practice Improvement Activities – 15%
    • Explanation: Scored based on attestation by the physician/group that the physician/group has performed certain care coordination, beneficiary engagement, population management and patient safety activities.
    • Replaces:   New Program.
  4. Resource Use – 0%
    • Explanation: Scored based on per capita patient costs and episode-based measures.  CMS collects and analyzes the data from your claims submissions.  No additional reporting will be required.
    • Replaces: Cost component of the Value-Based Modifier.

How to Qualify for 2017

CMS has eased the reporting requirements for the first year of the QPP.  No physician/group will be required to begin collecting data in accordance with the QPP’s requirements on January 1, 2017 (but may elect to do so).  To receive a neutral or positive payment adjustment, physicians/groups will need to report data for only a 90-day performance period during the year.  There are also minimum threshold reporting requirements to avoid a negative payment adjustment and full participation requirements which are more likely to result in a guaranteed positive adjustment.  The table below organizes the requirements in an easy-to-read format:

MIPS Measures Chart

Final Thoughts on Qualifying for the MIPS in 2017

  • Get involved sooner rather than later. CMS has kept reporting requirements minimal in 2017 in order to encourage clinicians to participate in the QPP.  Take advantage of that opportunity to ensure your practice has the right software to report the quality and EHR use-related measures.  Since adjustments will be made based on threshold scores, it may be easier in 2017 to earn a positive adjustment, and even an exceptional bonus, than in later years.
  • Ensure that your current EHR technology meets the requirements for the QPP in 2017, including reporting capabilities for quality measures and EHR use-related measures. The easiest way to do this is to contact your EHR vendor.
  • CMS has given providers plenty of time to report 2017 data. The deadline for reporting 2017 data is March 31, 2018.

As always, if you have questions specific to your practice, please contact a knowledgeable and experienced attorney.

The U.S. Department of Health and Human Services (“HHS”) Office for Civil Rights (“OCR”) issued an alert on November 28, 2016, regarding an email purporting to be from OCR.  This phishing email can look like an official government email which may use fake HHS letterhead and may even appear to be signed by OCR’s Director, Jocelyn Samuels.

OCR says:

The email prompts recipients to click a link regarding possible inclusion in the HIPAA Privacy, Security, and Breach Rules Audit Program.  The link directs individuals to a non-governmental website marketing a firm’s cybersecurity services. In no way is this firm associated with the U.S. Department of Health and Human Services or the Office for Civil Rights.”

If you or your organization has a question about whether you received an official communication, OCR suggests that you contact them via email at OSOCRAudit@hhs.gov.

The alert can be found at the following link: OCR Alert.

The Office of Inspector General (“OIG”) of the Department of Health and Human Services, generally, would have concerns about a potential or existing referral source receiving free goods or services, since these free goods and services could be used to provide unlawful payments for the referral of Federal health care program business.  However, under Advisory Opinion 16-09, the OIG decided not to pursue sanctions against a company that provides computerized point-of-care storage and dispensing systems for vaccines (the “Dispensing System”) to physicians free of charge due to the specific circumstances in this arrangement.

The Arrangement:  A manufacturer of a refrigerated vaccine storage and dispensing system (the “Dispensing System”) would retain title to their Dispensing System and the internal data, but would provide the system free of charge to certain physicians.  The manufacturer would enter into two types of agreements:

1)  Sole-Source Vaccine Agreement – The Dispensing System manufacturer would enter into an agreement with manufacturers who are the sole suppliers of a vaccine (“Sole-Source Vaccine”).  The Sole-Source Vaccine manufacturer would pay the Dispensing System manufacturer a fee for each unit of vaccine that a participating physician dispenses out of the Dispensing System (the “Dispense Fee”).

2) Physician Agreement – Dispensing System manufacturer would enter into agreements with only those Physicians who had not previously stocked adult vaccines previously, or only stocked vaccines sporadically or in low volumes.  The Dispensing System would be free of charge to physicians, provided the physician agrees to stock at least one Sole-Source Vaccine that has an Agreement with the Sole-Source Vaccine manufacturer.  The physician would be responsible for the internet connectivity and utilities for the system.  The physician could use the Dispensing System to store other vaccines.  However, the physician may only store Sole-Source Vaccines if the vaccine manufacturer has an agreement with the Dispensing System manufacturer.

OIG’s Analysis: Due to the following “unique factors” the OIG concluded that the following arrangement would be permissible.

  • No Dispense Fee is shared with the physicians.
  • The Dispense Fee is paid directly to the Dispensing System manufacturer, who does not generate Federal healthcare program business.
  • The risk of unfair competition is reduced because (1) only Sole-Source Vaccine manufacturers can enter into an agreement with the Dispensing System manufacturer; (2) More than one Sole-Source Vaccine manufacturer can have their vaccines in any machine and each would be paying the Dispense Fee; and (4) Since a physician needs the Sole-Source Vaccine for patient, the physician has inherently chosen the manufacturer, since they cannot get the vaccine from anywhere else.
  • Physicians may store any non-sole-source vaccines in the Dispensing System that they wish.
  • The manufacturer will not advertise, market or promote any specific vaccine.
  • Adult vaccines are administered in limited manner and serve to prevent diseases, which if not prevented could lead to costlier services to federal payors.
  • The Arrangement helps achieve the CDC’s goal to improve adult vaccination rates which is a benefit from a public policy perspective.
  • The Dispensing System helps mitigate one of the key challenges – proper vaccine storage and management

While it appears the opinion is likely limited to the discrete issue of vaccine storage, it does demonstate that the OIG may be willing to entertain proposals that align with public health concerns or other government agency goals, even in situations where there could be a risk of fraud or abuse to federal payor programs.

If your practice is interested in guidance regarding free vaccine dispensing systems or similar arrangements, be sure to consult experienced counsel.

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.

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.

As of December 1, 2015, the PA Medical Society has retracted its opinion that physicians, health care practitioners and practice staff must obtain child abuse clearances under the PA Child Protective Services Law.  The PA Department of Human Services has also informally agreed that such practitioners and staff are not required to obtain clearances.  Please see our updated post on this issue at: PA Child Abuse Clearances Update

In addition, as always, be sure to consult your legal counsel for legal advice.

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.

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.

Over the last several years, hospitals have been acquiring specialty physician practices in response to a number of market forces.  However, these types of acquisitions are not new to the American health care system and those who have been around long enough know that these arrangements can and badly.  In my experience, one of the primary reasons that these combinations fail is that traditional hospital/physician practice acquisition/employment transactions tend to focus on short-term concerns and protections and as a result fail to build a strong foundation for a long-term successful relationship.  Under a typical acquisition/employment model, the physician is engaged for the sole purpose of providing clinical services and is insulated from input into the management and operations of the post-acquisition practice.  This has the effect of removing the physician from one of the key areas where they can provide significant value:  participation in operational cost savings.   

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