Health Law Blog - Healthcare Legal Issues

We Received a PPP Loan – Now What?

May 5th, 2020

We Received a PPP Loan—Now What?

I wanted to direct everyone over to my law firm’s main website for excellent COVID-19 legal development coverage. Ruder Ware COVID-19 Coverage.

With a second round of Paycheck Protection Program (“PPP”) funding coming available last week, a large percentage of small businesses either have already received (or will soon receive) the proceeds of a PPP loan. At only one percent interest over two years, PPP loans present a great opportunity, but, obviously, businesses are most interested in the forgiveness component. Maximizing loan forgiveness is key.

Three of my law partners, Mary Ellen Schill, Amy E. Ebeling and Associate Benjamin E. Streckert have published a great article on what to do one you receive your Paycheck Protection Program check. Check out this article and our other great coverage of COVID-19 legal issues – Ruder Ware COVID-19 Coverage

CMS State Goals in the COVID-19 Pandemic

April 30th, 2020

CMS has identified its general goals during the COVID-19 pandemic on a few occasions. The most recent was in the April 30, 2020 press release in which CMS introduces new regulatory waivers to assist providers as they emerge from the pandemic. CMS’ identified goals have included:

  1. To ensure that local hospitals and health systems have the capacity to handle COVID-19 patients through temporary expansion sites (also known as the CMS Hospital Without Walls initiative);
  2. To expand at-home and community-based testing to minimize transmission of COVID-19;
  3. To expand the healthcare workforce by removing barriers for physicians, nurses, and other clinicians to be readily hired from the local community or other states;
  4. To increase access to telehealth for Medicare patients so they can get care from their physicians and other clinicians while staying safely at home; and
  5. put patients over paperwork by giving providers, healthcare facilities, Medicare Advantage and Part D plans, and states temporary relief from many reporting and audit requirements so they can focus on patient care.

The Joint Commission COVID-19 Information Page for Health Care Providers

April 23rd, 2020

The Joint Commission has issued a Coronavirus (COVID-19) guidance page for hospitals and other organizations who are accredited through that organization. The page contains a letter and a video from the CEO of the Joint Commission, Mark R. Chassin, MD, FACP, MPP, MPH.

the joint commission covid-19 guidance

The Joint Commission Offers Useful Resources on the COVID-19 Pandemic.

The page also contains a variety of statements from the Joint Commission, Frequently Asked Questions about the Joint Commission’s statement on use of face masks brought from home, a statement on universal masking, a public statement on the shortage of critical equipment.

The page contains an interesting section highlighting stories from health care workers who are working on the front lines of the battle against the virus.

The Joint Commission page contains topical coverage of a variety of COVID-19 issues that are being faced by health care providers. The Joint Commission offers some really good content. There are informative articles, videos, training material and a wide variety of resources related to the COVID-19 virus, organized by category.

Some of the information on the Joint Commission site includes:

Visit the Joint Commission COVID-19 Resource Page, but plan to spend a while over there. There is a lots of really nice content.

For continual coverage of COVID-19 Legal Issues, Visit our Coronavirus Resources and Blog

When is a Referral Mandate for Employed Physicians Permitted under the Stark Law?

April 22nd, 2020

When Employed Physicians be Required to Make Referrals for Designated Health Services

Referral Requirements Employed PhysiciansThe Stark Law Regulations include a provision that dictates the conditions under which an employer of a physician may mandate referrals for designated health services.  Certain specific conditions must be met if an employer wishes to require its employed physicians to make referrals to the employer’s designated health services.  Many institutions assume that an employer may always require an employed physician to make referrals to its ancillary services.  That assumption is not correct.

The Stark regulations provides that a physician’s compensation from a bona fide employer or under a managed care contract or other contract for personal services may be conditioned on the physician’s referrals to a particular provider, practitioner, or supplier.    There are a number of specific requirements that must be present to permit referral requirements including:

  1.  The required referrals can only relate to the physician’s services covered by the scope of the employment or the contract.
  2. The referral requirement must be reasonably necessary to effectuate the legitimate business purposes of the compensation arrangement.
  3. The physician’s compensation must be set in advance for the term of the agreement requiring referrals.
  4.  The physician’s compensation must be consistent with fair market value for services performed (that is, the payment may not take into account the volume or value of anticipated or required referrals).
  5. The arrangement must otherwise comply with an applicable exception under Sec. 411.355 or Sec. 411.357.
  6.  The requirement to make referrals to a particular provider, practitioner, or supplier is set forth in a written agreement signed by the parties.
  7. The requirement to make referrals to a particular provider, practitioner, or supplier may not apply if the patient expresses a preference for a different provider.
  8. The referral requirement may not apply to cases where the patient’s insurer determines the provider, practitioner, or supplier;.
  9. The referral requirement may not apply where the referral is not in the patient’s best medical interests in the judgment of the referring physician.
  10. There can be no requirement that an employed physician make referrals that relate to services that are not provided by the physician under the scope of his or her employment or contract.

This scenario most commonly applies in cases where a hospital or health system employs a physician and requires direction of referrals to the system’s designated health services.  It is not uncommon to see a health system contractually require employed doctors to refer to the hospital or ancillary services of the hospital.  The Stark Law permits the employing hospital to require referrals subject to these conditions.  It is also common to see referral requirements without including in the contract the various conditions that must be present to permit the direction of referrals.  The Stark Law would cast a shadow over a compensation arrangement with an employed physician that requires referrals without subjecting the referrals to the conditions set forth in the Stark regulations.  Failing to subject the required referrals to the Stark Law conditions would seem to make the compensation arrangement illegal.  Any referral made to the hospital’s designated health services may be tainted and reimbursement arising from the illegally required referrals would be prohibited.

Stark Law Provisions Relating to Referral Requirements of Employed Physicians

The following is the exact wording of the portion of the Stark Law that established the various conditions that must be met in order to permit the provider of designated health services to require employed physician’s to refer to its DHS.

42 C.F.R. § 411.354(d)(4)

(4) A physician’s compensation from a bona fide employer or under a managed care contract or other contract for personal services may be conditioned on the physician’s referrals to a particular provider, practitioner, or supplier, provided that the compensation arrangement meets all of the following conditions. The compensation arrangement:
(i) Is set in advance for the term of the agreement.
(ii) Is consistent with fair market value for services performed (that is, the payment does not take into account the volume or value of anticipated or required referrals).(iii) Otherwise complies with an applicable exception under §411.355 or §411.357.(iv) Complies with both of the following conditions:

(A) The requirement to make referrals to a particular provider, practitioner, or supplier is set forth in a
written agreement signed by the parties.

(B) The requirement to make referrals to a particular provider, practitioner, or supplier does not apply if the patient expresses a preference for a different provider, practitioner, or supplier; the patient’s insurer determines the provider, practitioner, or supplier; or the referral is not in the patient’s
best medical interests in the physician’s judgment.

(v) The required referrals relate solely to the physician’s services covered by the scope of the employment or the contract, and the referral requirement is reasonably necessary to effectuate
the legitimate business purposes of the compensation arrangement. In no event may the physician be required to make referrals that relate to services that are not provided by the physician under the scope of his or her employment
or contract.

Complying with HIPAA and Beyond during COVID-19

April 22nd, 2020

Safeguarding Patient Health Information in an Emergency Situation

Even in an emergency situation such as that presented by the COVID-19 pandemic, covered entities must continue to meet their obligations under federal and state laws protecting confidentiality of patient health care information, to implement reasonable safeguards to protect patient information against intentional or unintentional impermissible uses and disclosures. They must continue to comply with the administrative, physical, and technical safeguards of the security rule and privacy rule of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Covered Entities must continue to comply with HIPAA and other confidentiality laws during the COVID-19 pandemic. Certain emergency provisions may apply in applicable state and federal regulations.

The obligation to conduct periodic HIPAA security assessments continues, even during the existence of an emergency or natural disaster. The obligation to meet the requirements of state laws protecting special status health information such as mental health records and drug and alcohol rehabilitation records, also continues through a pandemic.

Each of the bodies of regulations that apply to patient health information contain certain specific provisions that can apply during a pandemic. For example, HIPAA permits disclosures to public health authorities and others where it is necessary for purposes of controlling the spread of the virus or to otherwise protect the public from harm. These exceptions permit disclosures that may be in the public good for purposes of addressing the emergency situation. The emergency exceptions do not provide blanket exemption from assuring compliance with applicable regulations.


HIPAA Applies Only to Covered Entities and Business Associates, But Other Laws May Apply More Broadly

The HIPAA Privacy Rule applies to disclosures made by employees, volunteers, and other members of a covered entity’s or business associate’s workforce. HIPAA does not apply to others, such as some emergency workers, law enforcement, fire responders, and other first responders who may be involved in the course of a patient’s health care episode. But you should be aware that other laws, such as laws protecting confidentiality of mental health treatment information and substance/alcohol rehabilitation records, may be applicable and will normally be more protective of patient confidentiality than HIPAA. Covered entities include health plans, health care clearinghouses, and most health care providers. Business associates generally are persons or entities that are not inside the organization and who perform functions or activities on behalf of, or provide certain services to, a covered entity that involve creating, receiving, maintaining, or transmitting protected health information.


Business associates also include subcontractors of other business associates that create, receive, maintain, or transmit protected health information. The HIPAA privacy rules do not apply to disclosures made by entities or other persons who are not covered entities or business associates. (although such persons or entities are free to follow the standards on a voluntary basis if desired). There may be other state or federal rules that apply.
A business associate of a covered entity may make disclosures permitted by the HIPAA rules, including those that are available in the case of an emergency.


Although HIPAA may not apply to law enforcement and others who may come into possession of information concerning the health care of an individual, other federal and state laws apply more broadly and extend beyond covered entities and business associates. For example, the regulations applicable to substance and alcohol abuse records are subject to laws prohibiting any party who receives the protected information from the provider to comply with a prohibition against redisclosure. Even though law enforcement and other first responders may not be covered entities or business associates as defined in HIPAA, the provisions of 42 CFR Part 2, the federal regulations providing confidentiality protection for substance and alcohol abuse treatment records, and possibly state laws protecting mental health records, may impose an obligation on law enforcement and other non-covered entities, to maintain the confidentiality of the information that they receive.


We previously released a blog article describing some of the Emergency Provisions available under HIPAA.

Coronavirus Checklist for Nursing Homes and Hospitals

April 16th, 2020


Follow the links below to download from the CDC.

A coronavirus preparedness checklist for hospitals, including long-term acute care hospitals are available from the CDC.

Interim Infection Prevention and Control Recommendations for Patients with Confirmed Coronavirus Disease 2019 (COVID-19) or Persons Under Investigation for COVID-19 in Healthcare Settings:

Strategies to Prevent the Spread of COVID-19 in Long-Term Care Facilities (LTCF):

Telemedicine IT Donations and the Anti-kickback Statute – OIG Opinion 18-03

October 29th, 2018

IT Donation to Facilitate Telemedicine Consultations – Low Risk of Fraud says OIG

telemedicine donation it The Office of Inspector General (“OIG”) of the U.S. Department of Health and Human Services issued Advisory Opinion No. 18-03 in support of an arrangement where a federally qualified health center look-alike (the “Provider”) would donate free information technology-related equipment and services to a county health clinic (the “County Clinic”) to facilitate telemedicine encounters with the County Clinic’s patients (the “Proposed Arrangement”).  The OIG concluded that although the Proposed Arrangement could potentially generate prohibited remuneration under the federal Anti-Kickback Statute (“AKS”) and Civil Monetary Penalties Law (“CMPL”) with the requisite intent to induce or reward referrals of federal health care programs, the OIG would exercise its discretion and not sanction the Provider or the County Clinic (collectively the “Requestors”).

The OIG’s analysis and conclusion of the Proposed Arrangement provides new insight into the government’s position on these type of donations that facilitate telemedicine encounters.  Specifically, how the government views these type of donations with the continued expansion of coverage and reimbursement of telemedicine services under federal health care programs.  The Advisory Opinion indicates support for the development of collaborative telemedicine affiliations and that the potential remuneration from the future referrals can be outweighed by the access to health care services and benefits actually received by rural or remote communities.

The County Clinic is a division of the County Department of Health that furnishes certain confidential sexually transmitted infection testing, treatment and counseling. The Provider has an existing referral relationship with the County Clinic but the facilities are separated by about 80 miles making it difficult for patients to access the Provider.  Under the Proposed Arrangement, the Provider would donate information technology-related equipment and services to the County Clinic to facilitate telemedicine encounters between the Provider and the County Clinic’s patients for certain HIV prevention and treatment services.  The Provider would cover the costs of the equipment, its set up, and maintenance through grant-funding from the State Department of Health.  The Provider would bill the Medicare program for the professional services delivered in the telemedicine encounters.  The County Clinic would house the equipment and bill the state Medicaid program an originating site fee related to the telemedicine encounters. The originating site is not required to provide any personnel or equipment in order to bill for the facility fee (Q3014) (which is only a coverage requirement to provide the telehealth consult).

 

OIG Analysis

Under the Proposed Arrangement, the County Clinic would receive remuneration of the free equipment and services and the Provider would have the opportunity to bill for the telehealth consultation referred by the County Clinic.  As such, the OIG acknowledged that the Proposed Arrangement could potentially generate prohibited remuneration under the federal AKS with the requisite intent to induce or reward referrals of services payable by a federal health care program.  However, the OIG identified the following factors as minimizing the potential risk of fraud and abuse:

  • There are safeguards in place to prevent patient steering to the Provider for treatment; namely use of technology with any other provider is not restricted and patients are given the option to have either a virtual or in-person consultation
  • Not likely to result in patient steering for prescriptions to any pharmacy operated by the Provider or County Clinic
  • There would be no increased cost to any federal health care program
  • Patients would benefit by having increased access to treatment; making it more likely that patients will seek out and receive such services

It is important to keep in mind that under the Proposed Arrangement the County Clinic would not obtain ownership of the equipment, as the Provider would use grant funds awarded by the State Department of Health to cover the costs of the equipment and services and the state agency would retain title and have the authority to recover the equipment at any time.  This could prove to be an important distinction concerning whether and how donating providers can provide information technology-related equipment and services to referring facilities in the other arrangements.

In prior Advisory Opinions (99-14, 04-07 and 11-12) concerning donations of information technology-related equipment and supplies, the OIG similarly concluded that it would not pursue sanctions; however, those proposed arrangements would not have directly resulted in a service payable by a federal health care program, but rather would only potentially result in other items or services to the patient by the donating provider. Under the Proposed Arrangement, both the County Clinic and the Provider would be in a position to submit claims to a federal health care program as a result of the telemedicine encounter and follow-up services.  Nevertheless, the OIG concluded that there would be no increased cost to any federal health care program because the County Clinic would have performed the preliminary tests and referred clinically appropriate patients for in-person consultations and, potentially, follow-up items and services regardless of the Proposed Arrangement.

While the analysis acknowledges the additional reimbursement the County Clinic would receive for serving as the originating site (i.e., the location of the Medicaid beneficiary when the service furnished via a telecommunications system occurs), there is no actual analysis of this facility fee and why it is not considered an increased cost.  To be clear, the County Clinic does not provide the HIV preventative services to be delivered by the Provider via the telemedicine consultation, and therefore, would not have previously received any payments if and when the patient was referred to the Provider for an in-person consultation.

Again, it appears that the OIG is willing to prioritize the health benefits to patients over any secondary or tertiary benefits to the referring provider; especially when such subsequent benefits are unlikely to result in over-utilization and have the potential to decrease costs to federal health care programs.

Ruder Ware Health Care and Compliance Attorney Receives Top Award

August 28th, 2018

Ruder Ware health care and compliance attorney John Fisher has received top recognition from JDSupra, a leading national legal blogging platform and resource site.  Mr. Fisher received the 2018 Reader’s Choice Award from JDSupra in two separate categories, Health Care and Compliance.  Mr. Fisher joins some of the top legal authors in the country receiving this award.

Mr. Fisher ranked #5 in Health Care and #7 in Compliance.

You can view the JDSupra 2018 Reader’s Choice recipient pages at the following links: Health Care Compliance

Mr. Fisher blogs on the Ruder Ware Blue Ink Blog, the Health Law Blog,  Wisconsin Health Lawyer in addition to other various blog sites and is syndicated through JDSupra.

May 25th, 2018

Complying with Michigan’s New Controlled Substance Laws – The Bona-Fide Prescriber-Patient Relationship Requirement

The state of Michigan has enacted a number of separate pieces of legislation to address the opioid epidemic.  Most of these laws are directed at controlling the prescribing relationship between a physician and a patient.

Generally, Michigan requires a controlled substance license to prescribe controlled substances in the state. A holder of a controlled substance license may administer or dispense a schedule 2 to 5 controlled substance without a separate controlled substance license covering those substances. Additional requirements will attach to the prescribing relationship commencing at various intervals.

This article covers the new requirement regarding the establishment of a bona-fide prescriber-patient relationship.  Starting on the sooner of March 31, 2019 or the date that regulations are issued, a licensed prescriber will be required to have a “bona-fide prescriber-patient relationship” in order to prescribe a schedule 2 to 5 controlled substance.  In order to be considered a “bona-fide prescriber” the prescriber must review relevant medical/clinical records, complete a full assessment of medical history and current medical condition, conduct a relevant medical evaluation either in person or through telehealth, and maintain records of the patient’s condition to medically accepted standards.

All of these factors should be supported by the patient’s medical record.  There are a lot of lose ends on the definitions applicable to each of these requirements.  It is possible that additional details will be forthcoming when regulations are finalized.  Because these requirements a condition precedent to being able to prescribe schedule 2 to 5 controlled substance, it is critical that physicians and other prescribers review their documentation standards to be certain that these requirements are reflected in the patient’s chart in each instance.  Provider entities will need to consider adopting policies and procedures setting the standards for documentation and integrating the other requirements of Michigan’s new laws.  Appropriate training should also be conducted to assure that prescribers and their support staff are aware of the detailed documentation requirements.  Additionally, appropriate monitoring and auditing should be conducted to assure that prescribers are meeting the requirements.

Treatment Center Plead Guilty to Anti-kickback Statute Violations Involving Alcohol and Drug Addiction Treatment Centers

May 22nd, 2018

Substance Abuse Treatment Center Fraud Scheme Results in Guilty Plea

Treatment Center Fraud PleaThe Department of Justice recently announced the guilty plea of two individual alcohol and substance abuse treatment center owners for their participation in what DOJ labeled a “multi-million dollar health care fraud and money laundering scheme.”  The two individuals owned a licensed substance abuse service provider (or treatment center) offering clinical treatment services for persons suffering from alcohol and drug addiction. The treatment center also offered medication-based treatment for opioid addiction.

The government had accused the two owners of paying illegal kickbacks/bribes to “sober homes” in exchange for the referral of the sober homes’ insured residents to treatment program. The sober homes provided safe and drug-free residences for individuals suffering from drug and alcohol addiction. This made them a prime source of potential referrals to the treatment program.

The accusations against these defendants read like a laundry list of thinly veiled kickback schemes.  Some of the specific accusations included:

  1. Providing funds used to purchase or rent several sober home properties under purchase agreements or leases that were in the names of other parties so as to disguise the source of funds.
  2. Paying remuneration for referrals in the form of free or reduced rent, insurance premium payments, and other benefits to individuals with insurance who agreed to reside at the sober homes and attend drug treatment.
  3. Using a separate entity to pay insurance premiums for treatment patients so that the treatment program could continue to bill the patients’ insurance companies for treatment expenses.
  4. Hiring a doctor to serve as the medical director who frequently pre-signed prescriptions that were used to dispense controlled substances.
  5. Continuing to employ the medical director after the doctor’s license was suspended.
  6. Failing to inform the Florida Department of Children and Families that it could not continue to operate when the treatment center lost the medical director.
  7. Submitting insurance claims that falsely stated that testing and treatment was medically necessary.

If the allegations made by the government are to be believed, the treatment center is an illustration of exactly what intentional fraud looks like.  This was not a mistake.  Rather, it appears that the defendants deliberately set up a system intended to generate referrals and providing financial benefits to individuals in a position to make or influence those referrals.  In short, this is what health care fraud looks like.

Providers that we deal with go to great lengths just to make certain that they proactively look for potential risk areas and take affirmative and proactive actions to be certain that they are not making mistakes that could inadvertently result in an overpayment or imputed knowledge.  A great deal of expense goes into assuring that these providers are in complete compliance.   By contrast, cases like the one involving these treatment programs illustrate the very reason why well providers with the best of intentions find it necessary to look over their shoulders.

John H. Fisher

Health Care Counsel
Ruder Ware, L.L.S.C.
500 First Street, Suite 8000
P.O. Box 8050
Wausau, WI 54402-8050

Tel 715.845.4336
Fax 715.845.2718

Ruder Ware is a member of Meritas Law Firms Worldwide

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