Health Law and Regulations - American College of ...€¦ · Health Law and Regulations Sarah...

American College of Healthcare Executives

Health Law and Regulations

Sarah Freymann Fontenot, BSN, JD

Board of Governor’s Examination Review

Recorded Edition


NOTICE

Sarah Freymann Fontenot, J.D. and ACHE present this seminar with the express

understanding that:

1.no attorney-client relationship exists,

2.neither Ms. Fontenot nor ACHE are engaged in providing legal advice, and

3.that the information is of a general character.

You should not rely on this information when dealing with personal legal matters; rather legal

advice from retained legal counsel should be sought.

American College of Healthcare

Executives


Definition of Knowledge Areas

Laws and Regulations

“This area deals with identifying and interpreting the impact of government regulations and law on the organization; identifying the need for and working with others to develop new regulations and laws;

investigating, monitoring, documenting, and enforcing existing statutes; and maintaining

communication and cooperation with both public and private organizations.”

ACHE Reference Manual



Exam Breakdown

Knowledge Area: Laws and Regulations

Percentage of Questions: 8%

# of Questions: 16

1. Human resources laws and regulations (e.g., labor law,

wage and hour, FMLA, FLSA, EEOC, ERISA, workers

compensation)

2. Confidentiality principles and laws

3. Corporate compliance laws and regulations (e.g.,

physician contracts, billing and coding practices, antitrust,

conflict of interest, EMTALA, Stark, fraud and abuse, anti-

kickback, tax status)


Exam Breakdown

Knowledge Area: Laws and Regulations

[continued]

4. Medicare/Medicaid/Third Party payment regulations

5. Inspection and accrediting standards, regulations and

organizations (e.g., JCAHO/NCQA, OSHA, FDA, NRC,

CDC)

6. Patients’ rights laws and regulations (e.g., organ

donation, HIPAA, medical records, access to care,

advance directives, durable power of attorney, involuntary

commitments)



AGENDA

• Introduction to Health Law

• Confidentiality Principles & Laws

• Corporate Compliance

• Suggestions for Preparation

• Questions, Answers & Discussion


The ONLY Reference I Recommend

American Health

Lawyers Association

♦

ahla.org

♦

Now in it’s SIXTH edition

♦

Current non-member

price is $169.00



Introduction to Health Law

1. Administrative

a. Complying with Laws, Rules, Regulations on a

State & Federal Level

b. Examples: HIPAA, OSHA, Stark

2. Corporate

a. Contracting, Payment Issues

b. Examples: Managed Care Contracting, Employee

Issues, Fraud & Abuse



Introduction to Health Law

3. Quality of Patient Care Issues

a. Legal Issues Involving Patient Care

b. Examples: Allegations of Medical Malpractice,

PSQIA, Patient Safety and the identification of

“Quality”

4. Ethical Issues

a. Individual Rights of Patients & Physicians

b. Examples: Abortion, Physician Assisted Suicide,

Termination of Life Supports, Stem Cell Research,

Human Research & Experimentation



Federal vs. State Control

STATE• You are all subject to your

relevant state laws

• States retain the primary "Police Powers“, which include:

Health

Safety

Welfare

Morals

• Medical Malpractice is [for the most part] a STATE issue

FEDERAL• In the 1960’s, the Federal

Government becomes involved as a major payer of health care

• With Federal MONEY comes Federal Jurisdiction

• Remember: The test has a national scope: do not be confused by STATE law[ex: State HIPAA requirements]


Study Tip: Remember a FEDERAL

Scope

“The Corporate Practice of Medicine”

♦

Physicians are not “employees” of

hospitals

Texas

California

Colorado

Ohio

IowaAnd again, stay tuned…



Civil vs. Criminal Law

Criminal Cases

1. The "State" [i.e. government entity] is always a party

2. The case is brought to punish and to prevent harm to society

3. Any punishment imposed is for conduct declared criminal by the state

4. THIS IS WHERE JAIL COMES FROM!



Civil vs. Criminal Law

Civil Cases

1. Suits brought to enforce, redress or protect private rights

2. May include:

a) Contract cases

b) Torts [i.e. medical malpractice]

c) Also: property, family law, administrative law, corporate law

3. Damages are financial and/or Court Order



AGENDA








Confidentiality Principles & Laws

• HIPAA

• Credentialing

• Intellectual Property

• Peer Review



AGENDA

• Codes of Ethical Behavior

• Patient Rights & Responsibilities

• Ethics Committees

• Cultural & Spiritual Diversity

• Conflicts of Interest

• Concluding Thoughts, Questions, Answers


HIPAA

The Many Waves of

HIPAA: a mini review


Federal Law & Patient Privacy

The Many

Waves of

HIPAA


Executives


A 17 Year Journey

• Health Insurance Portability and Accountability Act of 1996 (HIPAA)

HIPAA Privacy Rule [April 13, 2003]

HIPAA Security Rule [April 20, 2005]

HIPAA Enforcement Rule [March 16, 2006]

• Genetic Information Nondiscrimination Act of 2008 (GINA)

• American Recovery & Reinvestment Act of 2009

HITECH Act February 18, 2010

• HIPAA Omnibus Rule [September 23, 2013]


Executives


A 17 Year Journey


Executives


The Many Waves of HIPAA

“HIPAA’s length compares to that of

a Tolstoy novel.”

Solove, Daniel J. "HIPAA Turns 10: Analyzing the Past, Present and

Future Impact." Journal of AHIMA 84, no.4 (April 2013): 22-28.


Executives


HIPAA Penalties

The HIPAA

Omnibus Rule

♦

January 2013


Omnibus: For the test…

The Omnibus rule largely

restates all that has

come before

♦

For the purposes of test

preparation I would focus

on HIPAA basics


Executives



Executives

Information is Leaving your

Office



A Mini HIPAA Review

• The “HIPAA Preliminaries” must be in place

1. Privacy Officer

2. Policies and Procedures

3. Notice of Privacy Practices POSTED

4. Releasing only what is “Minimally Necessary”

5. Business Associate Agreements if:

a. NOT an employee

b. NOT already covered by HIPAA

c. CAN NOT do their job without access to PHI



A Mini HIPAA Review

• You may release PHI to another provider for

Treatment

Payment or

Operations

• Other disclosures require patient authorization

Special protections for

“Mental Health

Records”

♦

What IS a “Mental

Health Record”?


A Mini HIPAA Review

“Covered entities are free to engage in

communications as required for quick,

effective, and high quality health care.”

[emphasis added]

HHS Guidance on HIPAA

FAQs on Incidental Uses and Disclosures,

Question No. 6


HIPAA is a FLOOR, not a CEILING



A Mini HIPAA Review

When in doubt… “Privacy”

And

“Confidentiality”

Are NEVER

more important than

PATIENT SAFETY!



Sample Question

69. With respect to the processes by which healthcare organizations maintain the confidentiality, security, and integrity of the medical record, all of the following statements are true except:

1. the original medical record of a patient being transferred from one healthcare organization to another may accompany the patient to the new organization.

2. healthcare organizations must have a mechanism to preserve the confidentiality of data/information identified as sensitive.

3. the organization must have a mechanism to safeguard records against loss, destruction, tampering, and unauthorized access or use.

4. written policies must require that medical records may be removed from the organization’s jurisdiction only in accordance with a court order, subpoena, or statute.



Sample Question:

78. A non-legitimate reason to release

information from a patient’s medical record is

when:

1. subpoenaed by a court order.

2. requested by the spouse or next of kin.

3. the patient becomes incompetent.

4. reporting statistics for a research project.


A Mini HIPAA Review

♦

What do you think is

the biggest area of

confusion about

HIPAA?

♦



Original HIPAA Penalties [changed 2/17/10]

• If you make an

HONEST MISTAKE

Ex: Call someone at home despite request you not do so

Ex: Speak to the nosy neighbor pretending to be a treating physician




• CIVIL Penaltiesare:

$100 per incident

Not to exceed $25,000 for identical violations per year

• This is a CIVILviolation




CRIMINAL PENALTIES

1. Up to $50,000 and 1 year in prison for knowingly and improperly obtaining or disclosing PHI

2. Up to $100,000 and 5years if the offence is committed under false pretenses

3. Up to $250,000 and 10years in prison for obtaining or disclosing PHI with the intention to sell it or use it for malicious purposes


ARRA: HIPAA Changes

& the HITECH ActAmerican Recovery and

Reinvestment Act of 2009

Expands protection of

protected health information

(PHI), especially patient

information that is in digital

format and transferred

electronically

changes were effective

Feb. 17, 2010


Penalties under HIPAA Since 2/17/10

“Tiers” of penalties

based on type of

violation:

“Reasonable”

“Knowing”

Constituting “willful

neglect”

Which tier is

enforced is

discretionary based

on the nature and

extent of the

violation and the

extent of any harm

done.


ARRA: HIPAA Changes

$100 per violation not to exceed

25,000 per calendar year♦

$1,000 per violation not to exceed

$100,000 per calendar year

♦



♦


$1,500,000 per calendar yearAmerican College of Healthcare Executives

ARRA & Breach Notification

• IF you have a breach you must notify the

affected patient within 60 days of discovery.

• You must notify the secretary of health and

human services and media outlets if your

breach affects more than 500 patients.

• Vendors also must notify patients.


ARRA & Breach Notification

♦

LARGE

Breaches

=

500

♦


ARRA: Definition of a “Breach”

“In a modern version of the

village stocks, each

covered entity involved in a

breach of 500 or more

individuals resulting in the

acquisition or disclosure of

unsecured PHI will be

publically identified on the

[website] of HHS.”

HITECH Act Resource Guide

AHLA (2009)


HIT Security

♦

Best

IT practices

♦


Executives


The Keys to the Universe

♦

ENCRYPTION!

♦


Executives


Remember This?

$100 per violation not to exceed

25,000 per calendar year♦



♦



♦


$1,500,000 per calendar yearAmerican College of Healthcare Executives

HHS settles case with [Cardiac Surgery

Office] for lack of HIPAA safeguards

An Arizona Cardiac Surgery office “has agreed to

pay (HHS) a $100,000 settlement [after it was

reported] that the physician practice was posting

clinical and surgical appointments for its patients on

an Internet-based calendar that was publicly

accessible. ’This case is significant because it

highlights a multi-year, continuing failure on the part

of this provider to comply with [HIPAA]’”

April 17, 2012 HHS.gov

http://www.hhs.gov/news/press/2012pres/04/20120417a.html


HHS settles case with [Cardiac Surgery

Office] for lack of HIPAA safeguards

On investigation it was also found the office had:

1. failed to implement adequate P & P

2. failed to document that it trained any employees;

3. failed to identify a security official;

4. failed to conduct a risk analysis;

5. failed to obtain business associate agreements

with Internet-based email and calendar services

where the provision of the service included

storage of and access to its ePHI.


HIPAA Review: Want to

Check Me?

General Information and

resources for HIPAAhttp://www.hhs.gov/ocr/privacy/index.html

HIPAA Frequently Asked

Questionshttp://www.hhs.gov/ocr/privacy/hipaa/faq/ind

ex.html


Executives




• HIPAA

• Credentialing


• Peer Review



Sample Question

84. Which of the following is the clear trend regarding a

hospital’s liability for the actions of members of its

medical staff?

1. The hospital may be held liable for a physician’s negligence

even though the physician is an “independent contractor.”

2. Hospitals are not liable for such actions because they are

simply physical sites where patients receive treatment from

privately retained physicians.

3. Courts are becoming more reluctant to impose liability on

hospitals for the negligence of physicians who use their

facilities.

4. The hospital is liable only if the physician is an employee.



Sample Question

84. Which of the following is the clear trend regarding a hospital’s liability for the actions of members of its medical staff?

1. The hospital may be held liable for a physician’s negligence even though the physician is an “independent contractor.”

2. Hospitals are not liable for such actions because they are simply physical sites where patients receive treatment from privately retained physicians.

3. Courts are becoming more reluctant to impose liability on hospitals for the negligence of physicians who use their facilities.

4. The hospital is liable only if the physician is an employee.



The Role of Credentialing

If hospitals are going to be

held liable for the quality of

their hospital staff, there must

be a screening process that

will protect their patients and

reduce exposure

Darling v. Charleston Community

Memorial Hospital 211 N.E.2d 253,

(1965)

cert. denied 383 U.S. 946 (1966)

At the same time,

credentialing is required by:

the Joint

Commission for

hospital accreditation

Medicare conditions

for participation

State Laws



Credentialing: Do it Right!

• Credentialing includes HIGHLY confidential information:

Health Information

Criminal Background Checks

National Practitioner Data Bank

• Re-credentialing

issues could be even

more confidential

Clinical performance

Judgment and skills

Health status

Issues involving

Substance Abuse



Credentialing: Do it Right!

• References

Both oral & written

Get a waiver

Check Them!

• If you are going to check references, you will need an appropriate releasefrom the applicant

• The release can assist you as you obtain reference checks, and as you are asked to give them

Kadlec Medical Center

v.

Lakeview Anesthesia Associates

[2006]



Kadlec: A Cautionary Tale

• 2000 audit revealed discrepancies in Dr. Berry’s narcotics records

• Found asleep [sedated] after failing to respond to pages while on call [March/2001]

• Dr. Berry was allowed to voluntarily resign from Lakeview Anesthesia Associates

• Privileges at Lakeview Regional Medical Center expired thereafter

• Dr. Berry seeks employment through Staff Care, Inc., for which two physicians at Lakeview Anesthesia Associates wrote Letters of Recommendation [an “excellent” physician]

• Through Staff Care, Inc.. Dr. Berry found employment months later at Kadlec Medical Center in Washington State



Kadlec: A Cautionary Tale

• When Kadlec called for a credentialing reference, response was that he had served on the hospital during stated dates [had actually expired 6 months prior to those dates]

• Due to the large volume of inquires the hospital received about its former physicians, no further action would be provided

• In 2002 a 31 year old mother of 3 having a tubal ligation was left in a permanent vegetative state

• Kadlec & Dr. Berry settled for $7.5 million; Kadlec then pursued a claim against Lakeview Medical Center, the two anesthesiologists, and Lakeview Anesthesia Associates

• May 26, 2006: Louisiana District Court awards judgment of $8.2 million


On Appeal…

“the US District Court of Appeals for the Fifth Circuit [5/8/08] held …

that under Louisiana law a peer review body has no affirmative

duty to disclose negative information about a physician to inquiring

hospitals. When, however, a peer review body does choose to

provide some information in response to a credentialing inquiry, it

must ensure that the information is factually accurate” …The Court

“distinguished between two sets of responses to an inquiring

hospital regarding a physician with a substance abuse problem.

The response by Lakeview Medical Center (“Lakeview”) did not

include intentional or negligent misrepresentations. Lakeview

thus had no affirmative duty to disclose its concerns about the

physician to Kadlec Medical Center (“Kadlec”), the Court of Appeals

held, overturning the lower court’s ruling…


On Appeal…

… In contrast, Lakeview Anesthesia Associates (“Anesthesia

Associates”) did provide misleading information to Kadlec. The

Court of Appeal sustained the lower court’s holding [against

them]… At the very least, the Court’s reasoning and holdings

provide some reassurance to hospitals and medical staffs… [but]

peer reviewers should not allow the Kadlec decision to lull them

into a false sense of complacency; for example, remaining

silent when a physician’s behavior is truly egregious may

persuade a court to find liability for the failure to disclose.

Perhaps the most important message in the case is that if a Medical

Staff decides to give information reflecting on the practitioner’s

qualifications misrepresentations may be actionable.”

Kadlec: Federal Appeals Court Clarifies Hospital Duties in Disclosing Peer Review

Information [Arent Fox [5/14/08] www.arentfox.com


And Still…

We could fix a lot if we all

just get a waiver…


Fazaldin: Another Cautionary Tale

• Patient dies after a radical hysterectomy

• Estate sues hospital where the surgeon had previously practiced

• The Plaintiffs claimed the former hospital failed to provide accurate information about the physician's resignation of clinical privileges;

• The hospital also failed to report to State DHS & Federal date banks

• Due to those omissions, the surgeon was granted privileges at the hospital where the surgery took place.

• Court found the defendant hospital had a legal duty to report its termination of the physician's employment

Estate of Fazaldin v. Englewood Hospital & Medical Center B

New Jersey, Appellate Division, 2007


Need Another?

• Defendant hospital appealing a jury award of $7,775,668.02 in damages after her foot was amputated from injuries sustained during foot surgery

• The jury verdict resulted from a negligent credentialing count

• Citing Darling, Appellate Court affirms

Frigio vs. Silver Cross Hospital & Medical Center 9/20/07

WAIVER

♦

REFERENCES

♦

FULL DISCLOSURE

♦

CONFIDENTIALITY



Sample Question

80. In general, courts exhibit what attitude regarding

controversies over medical staff privileges?

1. Human lives are at stake and the courts must intervene to

protect physicians’ rights to save those lives.

2. If the decision were supported by reasonable evidence,

courts will not substitute their judgment for that of the

hospital board.

3. Hospitals must not be permitted to interfere with the doctor-

patient relationship.

4. Courts may not entertain suits regarding medical staff

privileges.


Sample Question

67. The establishment of an appropriate

credentialing procedure for members of the

medical/professional staff should ultimately

be a decision of the:

1. Entire medical/professional staff

2. Credentials committee

3. Governing authority

4. Medical/professional executive committee




• HIPAA

• Credentialing


• Peer Review



Intellectual Property

• “Intellectual property” is a general term for various

forms of property rights attached to inventions,

media, published works, etc.

• Includes patents, trademarks, copyrights

• “Disagreements over medical and software patents

and the severity of copyright enforcement have so

far prevented consensus on a cohesive

international system.” [Wikipedia]

• Human experimentation and research, human

tissues, genetic materials, cell lines



Intellectual Property

• Highly specialized area of

law

• Large Federal Component

United States Patent &

Trademark Office

www.uspto.gov

• Possible State Law

involvement as well [ex:

California Case Law

involving human cell lines]

In general, intellectual

property issues that arise

in the context of health

care [research, writings,

inventions, etc.] are [or at

least should] be clarified

through a Contract




• HIPAA

• Credentialing


• Peer Review



Confidentiality & Peer Review

ANTITRUST

[stay tuned]

• Peer Review is a HIGHLY

confidential process

• Strict adherence to HCQIA

is the only way to prevent

allegations of antitrust [to

follow]

• Outside use of any

information obtained

through the peer review

process may [and likely

will] subject you to state &

federal penalties


A Peer Review Cautionary Tale

“Charleston Area Medical Center … agreed to pay [a

surgeon] $11.5 million to put an end to a contentious 4-

year dispute”… based on a claim that the hospital “had

smeared [the surgeon’s] reputation when they abruptly

revoked his privileges to operate on patients” … and

administrators had taken part in “fraudulent,

malicious, oppressive, and reckless conduct … The

Board of Trustees voted unanimously on the settlement

… after a 30-minute executive session behind closed

doors.”

Health and Life Sciences Daily [8/28/08]



AGENDA








Corporate Compliance

• Corporate Compliance Plan

• Billing Practices

• Kickback Concerns

• Stark Regulations

• Antitrust

• EMTALA




“A well-established corporate compliance

program can protect a healthcare company in the

midst of a legal crisis by shielding the company

from suffering harsher penalties or stricter

sentences. Equally as important, a corporate-

compliance program can reduce the likelihood

of potential violations by clarifying to employees

what behavior is acceptable and what is

intolerable.”Fundamentals of Health Law, 4th ed.



A Corporate Compliance Plan

• Reduces the likelihood of violations

Policies & Procedures consistent with Corporate Compliance Plan

Staff Orientation to Policies & Procedures

On-Going staff education

Proper staff surveillance & discipline

• Reduces Penalties

Under Federal Sentencing Guidelines [1991]

If the violation occurred “despite an effective program to prevent & detect” offenses

7 minimum objectives are used to determine if a corporate compliance program is “effective”



“7 Minimum Objectives”

1. Established standards & procedures

2. High-level personnel have overall responsibility

3. Diligence in not involving people/organizations “with a propensity to engage in illegal activities”

4. Effectively communicate standards

5. Reasonable steps to achieve compliance[monitoring, auditing, reporting system without fear of retribution]

6. Consistent enforcement

7. Respond appropriately to events/prevent others








• Antitrust

• EMTALA



What is Fraud & Abuse?

Fraud:

“The intentional deception or

misrepresentation that an individual knows to

be false or does not believe to be true...

knowing that the deception could result in [an]

unauthorized benefit.”

[i.e. requires intent]


HOT SPOTS

“DOJ/HHS-led Medicare Fraud Strike Force operations have expanded … into nine

healthcare fraud hot spots including Houston; Detroit; Brooklyn; Baton Rouge, Tampa,

Chicago and Dallas. Since their inception in 2007, Strike Force operations have charged more

than 1,000 defendants for Medicare fraud involving more than $2.3 billion in claims,

DOJ/HHS said.”Medicare Fraud Settlements Up 56% in FY 2010

HealthLeaders Media [3/16/11]


FRAUD- an example

Texas Doctor Charged

With Record Level Of

Medicare Fraud.

♦

The federal indictment

referred to the operation

as "staggering in its

breadth and scope."


Texas Doctor Charged With

Record Level Of Medicare Fraud.

“The arrest of a [Desoto] Texas doctor for an unprecedented degree of healthcare fraud is being covered by nearly all major [media outlets] …federal authorities are accusing a single doctor and six other people of stealing $375 million from Medicaid and

Medicare [in 5.5 years]. Prosecutors accuse Jacques Roy and the others of submitting claims for 11,000

patients… the scheme was "brazen" in that it involved registering homeless people for home health care

services they never received… If convicted, Roy faces up to 100 years in prison and forfeiture of $18.5

million.”

Life and Sciences Health Law Daily [2/29/12]



What is Fraud & Abuse?

Abuse:

“Incidents or practices of providers [that] are inconsistent with accepted sound medical practices, directly or indirectly resulting in unnecessary costs [to the

government].”

[i.e. can be an honest mistake]


Getting “Caught”

“Are they really

going after honest

people like

me?”




• “Statistical Outliers” are computer generated

• Geographic location irrelevant

• All payers, public & private

• Physician Profiling

High number of claims for one procedure

Consistent billing at same level or code

An unusually large volume of claims

Routine procedures outside of specialty

Questionable referral patterns [kickbacks]



Remember:

All payers, public and

private, must conduct

random audits




• Qui Tam Plaintiffs Federal Civil False Claims

Act 25 - 30% with Feds, 15 to

25% without

• 1/1/07: all medical providers must

inform their employees about the law [if they receive more than $5 million a year in federal funds]

• Fun Fact: $2 billion of $2.4 billion recovered FY 2009 from qui tam cases




• Incentive Reward Program (HIPAA)

Monetary rewards for information that leads to a minimum recovery of $100.00 of Medicare funds

Rewards can be 10% of recovery up to $1,000.00



Has it Worked?

• 1996 OIG Audit of Medicare 23.2 Billion dollars spent inappropriately

14% of Medicare expenditures

5 Billion attributed to physician services

• 1998 OIG Audit of Medicare 20.1 Billion dollars spent inappropriately

11% of Medicare expenditures


Fraud and Abuse

Fines & Penalties

Criminal

♦

Civil

♦

Exclusion



Criminal Fines & Penalties

•Intent is required

•You are not insured for

this


Fraud and Abuse

Fines & Penalties

Criminal

♦

Civil

♦

Exclusion



CIVIL Fines & Penalties

•$11,000 For each

inappropriate claim

submitted

•Up to three times

amount of false claim


Fraud and Abuse

Fines & Penalties

Criminal

♦

Civil

♦

Exclusion



Exclusion

How long can you

survive without:

Medicare

Medicaid

[S]Chip

Tricare

Any government

program?


Exclusion

Revocation of Provider Agreement

♦

“Medicare Death Penalty



Exclusion

• MANDATORY Conviction of fraud

Minimum mandatory exclusion is for 5 years

Also for convictions related to the abuse or neglect of a patient

• Permanent Exclusions At least 10 years for

providers convicted on one previous occasion for an offense where mandatory exclusion could be imposed

Permanently excludes providers convicted on two or more previous occasions

• PERMISSIVE

Financial crimes short of felony status

Obstruction of an Investigation

Examples: perjury, witness tampering, Obstruction of Justice



Permissive Exclusion

The OIG may also exclude any individual or

entity that fails to grant immediate access

upon reasonable request by an authorized

agency for the purpose of reviewing

documents related to their practice.

18 U.S.C. Section 1128(b)(12)



Balanced Budget Act [1997]

Penalty for

Participating with an

Excluded Provider:

$10,000

• How do you know?

Debarment, exclusion and

suspension lists updated

daily

DHHS Database of

Sanctioned Providers

[www.hhs.gov]



Compliance in Action

• Properly Fill Out Billing Forms

• Return Any And All Inappropriate Payments

• Document & Document Legibly

• Monitor Employees

• Appropriately Comply with any Investigation

• Ongoing Staff Education

• “Zero Tolerance” For Unethical Behavior

• Have a Corporate Compliance Plan: And Follow It!








• Antitrust

• EMTALA



Kickback: Definition

• Any inducement, payment, solicitation, receipt, offer or payment of any kind

• In return for referrals or for recommending, ordering, leasing or purchasing a service or item

• That may be at least partially paid for through a Federal program

Sarah’s Definition



High Risk Activities

• Hospital to physician referrals

• Physician to hospital referrals

• Joint ventures

• Inappropriate incentives from pharmaceutical companies

• Inappropriate incentives from DME companies

• Physician Recruitment & Retention



Safe Harbors Advisory Opinions

• Part of HIPAA [1996]

• Detailed information about a current [or pending!] arrangement submitted to the OIG

• For a [relatively] nominal fee and within a set time frame [60 days after request is complete] an answer will be provided on the legalities of the arrangement



Kickback Concerns

“FAIR

MARKET

VALUE”

DO NOTventure into this area without

a

“net”

[i.e. appropriate legal

consultation]



What is the Risk?

• Not more than 5years in prison and/or

• $25,000 fine

• Exclusion

• Civil Monetary Penalties up to $50,000

Accepting

or Offering

a Kickback

is a

Felony



What is a Felony?

“Any offense

punishable by

death or

imprisonment ...

for more than a

year”

INTENT

[psssst, times they are a’changing…]



Sample Question:

85. A joint venture laboratory owned by a hospital and physicians on its medical staff would probably be in violation of fraud and abuse laws if it were to:

1. market its services to both investors and non-investors.

2. offer ownership shares at the same price to referrers and non-referrers.

3. require investors to refer business to it.

4. base its profit distributions on the amount of capital contributed, not on referrals.


Best Resource!

for STUDY

for LIFE

♦

A Roadmap for New Physicians

Avoiding Medicare and Medicaid

Fraud and Abuse

♦Office of Inspector General [OIG]

U.S. Department of Health and Human

Services

♦

http://oig.hhs.gov/compliance/physician

-education/index.asp








• Antitrust

• EMTALA


Stark: WHY?

“In the Phase I Stark II Final Regulations, CMS

attempted to focus on the main abuse for which the

Stark Law was aimed to deter: physician financial

relationships that result in overutilization of

services.”

Legal Issues in Healthcare Fraud and Abuse: Navigating the

Uncertainties [3rd ed., 2006] page 116


The Scope of “Stark”

Physicians are prohibited from making a

referral for a Designated Health

Service to entities with which the physician [or an immediate family

member] has a financial relationship, unless an

exception applies.


“physician”

Doctor of Medicine

Doctor of Osteopathy

Doctor of Dental Surgery

Doctor of Dental Medicine

Doctor of Podiatric Medicine

Doctor of Optometry

Chiropractor


“designated health service”

1. Clinical laboratory services

2. Physical therapy services

3. Occupational therapy services [speech language pathology]

4. Radiology/Imaging Services

5. Radiation therapy services and supplies

6. DME and supplies

7. Parental and enteral nutrients, equipment and supplies

8. Prosthetics, orthotics and prosthetic devices

9. Home Health services and supplies

10. Outpatient prescription drugs

11. Inpatient hospital services

12. Outpatient hospital services

13. [and stay tuned…]


“family member”

1) Husband or Wife;

2) Birth or adoptive parent, child or sibling;

3) Step-parent, step-child, step-sibling;

4) In-laws – all kinds;

5) Grandparents or Grandchildren;

6) Spouse of grandparent or grandchild.

Yes-

your

Mother-in-law


Financial Relationship

1] “Ownership or

Investment Interests”

♦

2] “Compensation

Arrangements”

♦

3] “Fair Market Value”

• Debt, equity or other

means

• MAY not include

Retirement plans

Stock options

Convertible securities

Unsecured loans

subordinated to a credit

facility


“exception”

Stark

is a law of

Exception


Exceptions Under Stark

ONE exception is all you

need [as long as all the

other conditions apply]

AND you are not creating

an otherwise prohibited

activity, such as a

kickback



Stark v. Kickback

Stark

• Civil

• No Intent Needed

• Is limited to physician

behavior

[but not really]

Kickback

• Criminal

• Requires Intent

• Applies to any Health

Care Provider


Stark Penalties

Why “not Really”?

Stark prohibits the

designated health

service entity from

submitting claims to

Medicare for those

services resulting from a

prohibited referral


Stark Penalties

• Denial of Payment

• False Claims Act

liability

• Civil Money Penalties

for knowing penalties Potential $15,000

CMP/service

3x the amount claimed

• Exclusion

• Overpayment/ Refund

obligation

How

About

JAIL?


By the Way

even if a dealing does not violate STARK

that does not mean the arrangement does

not constitute a

KICKBACK








• Antitrust

• EMTALA



Antitrust in Healthcare

ANTITRUST Credentialing

♦

Peer Review

♦

Managed Care

Contracting


Sample Question

34.* The thrust of antitrust legislation as

applied to the healthcare field is to:

1. Contain costs.

2. Contain rising costs of independent single unit

hospital.

3. Monitor the scope of health services provided in a

given area.

4. Protect the public’s economic interest.

* from “Additional Questions”


Sample Question

34. The thrust of antitrust legislation as

applied to the healthcare field is to:

1. Contain costs.

2. Contain rising costs of independent single unit

hospital.

3. Monitor the scope of health services provided in a

given area.

4. Protect the public’s economic interest.



Antitrust & Managed Care

Can providers obtain an exemption to

the Antitrust laws so they will be able to

collectively negotiate financial issues

when dealing with managed care?

♦

Do you know the “other side” has one?



McCarran-Ferguson Act [1945]** started getting interesting in 2010….

• Specifically exempts "the Business of Insurance" from the antitrust laws to the extent it is regulated by state laws

• Exemption should be applied to:

Agreements between the insurers and the policy holder and

Aspects of the business involving underwriting and spreading of risks

• Exemption should not apply to

Agreements between insurance industry and providers

Still would not permit "acts of boycott, coercion, or intimidation"- is meant to exempt "the business of insurance" not "the business of insurers"



But Until Then: “The Messenger Model”



Antitrust & Managed Care

“Collective Bargaining by Physicians –

Labor Law, Antitrust Law, and Organized

Medicine”Suit Choudhry, LL.B., LL.M.

Troyen A. Brennan, M.D., J.D., M.P.H.

New England Journal of Medicine

Vol. 345, no. 15 pp. 1141 – 1144

October 11, 2001



Antitrust & Credentialing

The Health Care Quality

Improvement Act of

1986

“HCQIA”

42 U.S.C.§§11101 – 11152

How can you screen out

“bad apples” through

credentialing without

being “anticompetitive”?



Antitrust & Credentialing Risks

• Antitrust Actions are expensive and are therefore

more likely to settle

• Treble Damages for Private Actions

• Will go to Federal Court [possible state

involvement]

• State Peer Review Protections May Not Apply

[ex: disclosure of peer review documents]

• May Precipitate Government Activity



HCQIA

• Following procedural rules may protect a hospital from monetary liability in privateantitrust suits brought by affected physicians Does not offer

protection from Civil Rights suits or suits seeking injunctions

Will not prevent government action for anticompetitive activity

Compliance is

critical

and

“Due Process”

is the key!



“Due Process”: What Is It?

1. Reasonable written Notice reason, time & place, enough information to prepare

2. Physical presence of the subject physician is permitted at the hearing

3. There is an Appropriately Conducted Hearing

4. Opportunity for legal counsel

5. Appropriate composition of the hearing body

• What is a Properly composed “Hearing Body”?

Should not include original complainants or economic competitors

Anyone with a known bias should be excluded

Should an outside source be utilized?



“Due Process”: What Is It?

6. Discovery is appropriate Follow hospital bylaws on

access to & identification of sources

7. Opportunity to present information [HCQIA requires the opportunity to present witnesses]

8. Opportunity to cross-examine witnesses who testify

9. A record is created Will help prove fairness of

the proceedings if they are challenged

10.A report is provided a substantive report that

includes the written recommendation of the body

The Basis for the recommendation must be stated

11.There is an internal review process available

12.The final institutional decision must come from the Board Board is not required to

follow the recommendation of the hearing body



An Example: Poliner v. Presbyterian

Hospital of Dallas [2004]

After 2 years practicing at the hospital as an invasive cardiologist, 3 complaints filed

Director of the cardiac cath lab expressed concerns about an angioplasty

Defendant physicians ask Dr. Poliner “to accept abeyance of all procedures in the cath lab” until an ad hoccommittee could review his cases

According to Dr. Poliner, he received the abeyance letter at 2:00p.m. and was told to return the signed abeyance letter by 5:00 p.m. or else his privileges would be summarily suspended.

He was told he could not consult an attorney before signing the letter [!]



Poliner v. Presbyterian Hospital of

Dallas [2004]

Did the patient care in question pose “a present danger”? [3 of the 4 cases under review were cases from months before]

Dr. Poliner was not provided with the opportunity to offer any explanation of the emergency angioplasty case

He was not told which other cases were under review

RESULT?

$366 million

Award

Reduced to $22.5million on appeal



Phew!

“Huge jury award thrown out in peer-review case”

“The 5th U.S. Circuit Court of Appeals in New Orleans has reversed a massive jury award to a Dallas doctor who argued he was defamed by a hospital’s peer-review process, rejecting

a decision that had stunned providers because federal law protects them from liability in such cases… The legal

community viewed the case as an aberration, but the result “sent a shockwave through healthcare organizations” … “It intimidated people, and it emboldened physicians who were

subject to peer review to make all kinds of threats.” Modern Healthcare, July 24, 2008



Sample Question

94. Two independent healthcare organizations

interested in discussing a joint venture to

initiate a cancer treatment program would be

wise to initially consult with their legal

counsel to determine if their:

1. liability is equal even though disproportionately

owned.

2. financial gains or losses can be shared unequally.

3. discussions might violate antitrust statutes.

4. current facilities can accommodate the program.








• Antitrust

• EMTALA



EMTALA: What Is It?

Emergency

Medical

Treatment and

Active

Labor

Act

“In the case of a hospital that has an emergency department, if any individual

(whether or not eligible for Medicare benefits and regardless of ability to pay) comes by him or herself or with another person to the emergency department

and a request is made on the individual's behalf for examination or treatment of a medical condition by

qualified medical personnel (as determined by the hospital in its rules

and regulations), the hospital must provide for an appropriate medical screening examination within the

capability of the hospital's emergency department, including ancillary services

routinely available to the emergency department, to determine whether or not an emergency medical condition

exists.”EMTALA Regulations, §489.24



EMTALA: In a Nutshell

Provide Mandated Medical Screening

Examination

FOR ALL PERSONS

PRESENTING FOR A NON-SCHEDULED

VISIT

• Provide Stabilizing

Care

• Do not transfer

unstable patients

• Maintain on call

system

• Provide medically

appropriate transfers

• Accept transfers



Medical Screening Examination

• Perform all necessary testing/on-call

services

• Rule out emergency medical conditions

• Complaint based exams not sufficient

Ex: just looking at the arm when the patient

says: “My arm hurts”

• No calls for pre-authorization until Exam

[MSE] is completed



EMTALA: Definitions

PHYSICIAN

• Non-Physician Practitioner

is allowed in limited

situations but requires:

Board Approval

Detailed Description

Written detailing authority to

order tests and procedures,

ability to interpret results

Parameters when MD/DO to

be contacted and when

MD/DO must come

Emergency Condition

(i) A medical condition

manifesting itself by acute

symptoms of sufficient

severity (including severe

pain, psychiatric disturbances

and/or symptoms of

substance abuse) such that

the absence of immediate

medical attention could

reasonably be expected to

result in—



“Emergency Condition” [con’t]

“… reasonably be expected

to result in:”

(A) Placing the health of the

individual (or, with respect to

a pregnant woman, the

health of the woman or her

unborn child) in serious

jeopardy;

(B) Serious impairment to

bodily functions; or

(C) Serious dysfunction of any

bodily organ or part; or

(ii) With respect to a

pregnant woman who is

having contractions—

(A) That there is inadequate

time to effect a safe transfer

to another hospital before

delivery; or

(B) That transfer may pose a

threat to the health or safety

of the woman or the unborn

child.



EMTALA: Which Patients?

Your ED

• A patient arriving at “a dedicated [ED]”

• Requests examination or treatment [or someone requests for them]

• If they don’t request, EMTALA applies if a “prudent layperson” would believe that the person needed evaluation and/or treatment

“On-Campus”• A patient seeking emergency

care [within a 250-yard test]

Also L & D and Psychiatric Units

• Also “any area of the hospital that offers such medical services to treat individuals in labor ... even if the hospital’s practice is to admit such individuals as inpatients rather than listing them on an outpatient basis, would be considered a dedicated emergency department” [CMS]

• Your psychiatric unit may qualify too



EMTALA: Final Rule Improvements

• EMTALA obligations are terminated once an individual is admitted for inpatient care

• “a person who is has been admitted to a hospital for bed occupancy for purposes of receiving inpatient hospital services.” [Medicare Hospital Manual]

• Obviously still subject to the standards and protections of the conditions of hospital participation.

That does NOT

mean you can

admit them and

then let them go to

avoid EMTALA!


EMTALA in FIVE words

♦

Treat all people

the same

♦



EMTALA: Penalties

• HOSPITAL

Civil money penalty (i.e., a fine, but without criminal implications) of up to $50,000 per violation.

If the hospital has fewer than 100 beds, the maximum penalty is $25,000 per violation

Revocation of provider agreement

• PHYSICIAN:

Civil money penalty if transferred a patient inappropriately and/or misrepresented a patient's condition

Civil Monetary Penalty if on call and refuses to appear after being called by [the “eyes-on] physician

A physician’s actions may result in a penalty to the hospital



Sample Question

81. Under federal law, whenever a patient comes to a

hospital emergency department with an emergency

condition:

1. with few exceptions, the patient’s ability to pay may be

considered in determining whether to provide treatment.

2. with few exceptions, the patient’s condition must be

stabilized before he/she is transferred or discharged.

3. a police officer may be asked to authorize treatment.

4. the hospital has no duty to treat the person if he/she is not a

patient or a member of the medical staff.



May I Suggest

The “Top 20 Pitfalls” in EMTALA compliance

have been addressed and posted by

Stephen A. Frew, JD

♦

an acknowledged leader in the country on EMTALA

as well as other medical legal issues.

Attorney Frew posted these top 20 EMTALA pitfalls

on his website on May 19, 2006.

[www.medlaw.com]



AGENDA








ACHE Reference Manual

Laws and Regulations

“Questions in the area of government regulations and law

relate to the many ways healthcare organizations and

professionals are affected by legal principles and government

policies. The questions test one’s knowledge of the effects of

government policy on healthcare operations; the opportunities

for and restrictions on lobbying activities and other contact

with government officials; implementation of laws pertaining to

healthcare; the legal responsibilities and liabilities of

organizations and professionals; identification of restraint-of-

trade situations; and identification of healthcare-related fraud

and abuse.”


Suggestions for Preparation

• Do not forget laws

pertaining to Labor,

Human Resources and

Employee Rights:

Fair Labor Standards Act

[FLSA]

Family and Medical Leave

Act [FMLA]

ERISA

Worker’s Compensation

EEOC & Regulation of

Employment Practices



Also Mentioned:

• Contracts

• Corporation Law

• Criminal Law

• Negligence

• Business dealings [mergers, consolidations,

acquisitions, reduction of services, joint ventures]

• Tax Status

• Patient Rights [Consent, right to refuse care, etc.]



Suggestions for Preparation

• Focus on Forest, Not

Trees

• Focus on Federal

issues

• Utilize Recommended

References

• Trust your Personal

Professional

Experiences

Take a

“Reasonable”

approach to legal

issues

&

Always put Patient

Safety First



AGENDA







The ONLY Reference I Recommend

American Health

Lawyers Association

♦

ahla.org

♦

Now in it’s SIXTH edition

♦

Current non-member

price is $169.00



Last, But Not Least

Thank you for your

Attention

♦

Thank You ACHE

♦

Best of luck on your

Exam

-Sarah

Sarah Freymann Fontenot,

BSN, JD

www.sarahfontenot.com


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