Health Care Lawyer Blog

Court Holds Physician's Rights Violated in Suspension Proceedings

Tue, 01 May 2012 14:07:24 -0500

A recent federal court case serves as an important reminder for every physician facing or undergoing a suspension that hospitals are required to take certain steps under the law in connection with suspensions, and physicians should remain vigilant to ensure that these steps are followed.

In the case, a federal court in New Mexico held that a hospital that suspended a physician’s privileges without making a reasonable effort to obtain the facts of the cases underlying the suspension was not immune from the physician's claim for damages and injunctive relief.

In Osuagwu v. Gila Regional Medical Center, plaintiff Chinonyerem Osuagwu was an OBGYN on the medical staff at Defendant Gila Regional hospital. Following two laparoscopic procedures performed by plaintiff where the patients suffered complications, the hospital’s Medical Executive Committee (“MEC”) held a special meeting – unbeknownst to plaintiff – and summarily suspended plaintiff’s privileges for 14 days. Importantly, the notice of suspension did not specify exactly which procedures were in question, nor did the MEC ever interview Plaintiff regarding the charges against him or the cases it was considering.

Following the summary suspension, the MEC asked the hospital's internal Peer Review Committee (PRC) to review the two cases and provide recommendations. None of the physicians on the PRC were gynecologists. In addition to looking at the two cases, the PRC randomly pulled 34 of plaintiff’s charts and divided them up amongst several “unidentified physicians” for review. Plaintiff was never interviewed in connection with the review or asked to provide evidence or an explanation during the process. Following the review, in which the physicians held that plaintiff’s performance “fell below the standard of care”, the MEC held an emergency meeting and voted to suspend plaintiff’s privileges indefinitely.

Law Amends Background Check Requirements for Nursing Facilities

Tue, 03 Apr 2012 14:24:48 -0500

Two recent Public Acts have revised the Michigan law that requires a criminal background check of applicants for a license to operate a home for the aged or an adult foster care center.

Under the law prior to March 13, an applicant would have to submit to a criminal background check, but only by the Michigan State Police. Additional individuals that needed to submit for this background check included authorized representatives of a home for the aged; license designees of an adult foster care facility; owner, operator, or member of the governing body who has direct access to residents or on-site operational responsibilities in a home for the aged; and an owner, partner, or director who has direct access to residents or on-site operational responsibilities in an adult foster care facility.

Now, at the time of application for a license to operate one of these two facilities, each applicant has to give written consent for a criminal background check to both the Michigan State Police and the FBI.

Supreme Court Oral Arguments Continue Today in PPACA Challenge

Tue, 27 Mar 2012 09:41:11 -0500

While the hearings which will ultimately decide the fate of the Patient Protection and Affordable Care Act began yesterday and will continue through tomorrow, today marks the most eagerly-anticipated oral argument of the year - whether or not PPACA's individual mandate is constitutional.

Yesterday's argument focused on whether the Court could even rule on the constitutionality of the individual mandate in light of the Anti-Injuction Act (AIA). In a nutshell, the AIA essentially provides that a challenge cannot be made to a "tax" unless the tax actually has been assessed. PPACA provides for a penalty - starting in 2014 - if individuals do not obtain health insurance coverage, which, as the argument goes, is a "tax" for purposes of the AIA. However, all parties to the case agreed that the AIA does not bar the Court from adjudicating the other challeges raised to PPACA (ostensibly because everyone wants a decision on PPACA sooner rather than later). Therefore, the Court appointed Robert Long to act as amicus curiae and argue that the AIA applies.

The transcript of yesterday's oral argument is available here.

State AG Files Enforcement Action Against Business Associate for HIPAA Breach

Mon, 19 Mar 2012 11:07:49 -0500

Today's post was authored by FHW member Suzanne D. Nolan

Enforcement of the Health Information Portability and Accountability Act (“HIPAA”) against business associates by government regulatory agencies has begun. It is not the federal government which filed this enforcement action. Rather, it is the Attorney General of the State of Minnesota who filed what may be the first enforcement action against a business associate for a HIPAA data breach. The suit was filed against Accretive Health Inc. (“Accretive”) which allegedly lost patient data when a laptop containing the data of 17,000 to 23,000 patients was allegedly stolen from an Accretive employee’s car.

The filing of this suit sends a strong signal to business associates that they can no longer rely on lax enforcement of HIPAA by the federal government, and should pay close attention to implementing security measures that will effectively protect electronically stored protected health information (“ePHI”) to avoid actions from a state attorney general.

State attorneys general were given the right to sue to enforce the privacy and security rights of their respective state’s citizens by the Health Information Technology for Economic and Clinical Health Act (“HITECH”) which amended HIPAA and required business associates to directly comply with HIPAA’s privacy and security rules. Prior to HITECH, only HHS’s Office of Civil Rights was permitted to enforce HIPAA. Pursuant to HITECH, business associate compliance with HIPAA began on February 18, 2010. However, the U.S. Department of Health and Human Services (“HHS”) policy is to not take enforcement actions against business associates until HHS issues final regulations under HITECH after the compliance date specified in those final regulations.

Health Insurer Pays $1.5M to Resolve HIPAA Breaches

Fri, 16 Mar 2012 11:50:46 -0500

Blue Cross Blue Shield of Tennessee has agreed to pay the federal government $1.5M to resolve potential vioalations of the Health Information Portability and Accountability Act (HIPAA), in what is the first settlement resulting from a breach notification report.

Under the 2009 Health Information for Economic and Clinical Health (HITECH) Act, health care providers are required to notify the U.S. Department of Health and Human Services and certain other parties when patient health information is improperly disclosed. The settlement followed a notice submitted by BCBS Tennessee that 57 unencrypted computer hard drives were stolen from a leased facility in Tennessee. The hard drives contained information for over 1 million patients, including names, social security numbers, birth dates, diagnosis codes, and other sensitive information.

The results of the government’s investigation indicated that BCBS Tennessee had failed to take adequate precautions to protect the information from being improperly accessed, including implementing appropriate physical safeguards (which are required by the HIPAA Security Rules).

In addition to paying $1.5M, the settlement requires BCBS Tennessee to review, revise and maintain proper security policies and procedures; to make sure employees are properly trained; and to perform reviews to make sure BCBS Tennessee complies with the corrective action plan.

It is important to note that even though BCBS Tennessee complied with the breach notification requirements, the federal government still initiated an investigation and the insurer was still required to make a substantial settlement payment. This demonstrates the importance of having a robust compliance plan in place to prevent any breaches to begin with. In other words, saying “mea culpa” will not absolve covered entities of the initial sin.

Stage 2 Meaningful Use of Electronic Health Records: Here We Go Again

Wed, 07 Mar 2012 11:10:56 -0500

By now, health care practitioners should be familiar with the “carrot and stick” approach to the Meaningful Use guidelines – i.e., practitioners must make “meaningful use” of electronic health records (EHR) in order to receive bonus payments from Medicare and Medicaid (the carrot), and practitioners who fail to make “meaningful use” of EHRs will be penalized with reduced Medicare payments (the stick).

What is probably less familiar to some practitioners is what exactly “meaningful use” means and when it must be achieved, especially in light of the government’s flip-flopping implementation approach. The chronology of the federal government’s issuance of meaningful use guidelines has gone something like this:

- The 2009 American Recovery and Investment Act (aka the “Stimulus Bill”) requires providers to make meaningful use of EHRs.
- The Center for Medicare and Medicaid Services (CMS) published draft regulations on meaningful use, set to be implemented in phases.
- CMS receives thousands of comments from concerned providers and their attorneys that the bar for achieving meaningful use was set too high and providers would never be able to comply with such guidelines.
- CMS releases kinder, gentler guidelines.
- CMS delays the deadlines for meaningful use of electronic health records.

Last month, CMS published draft regulations detailing what Phase 2 of achieving meaningful use may look like. The draft regulations (“Proposed Rule”) also modifies some earlier Phase 1 objectives to make them more user-friendly.

CMS Releases Proposed Rule on 60 Day Medicare Repayment Provision

Wed, 15 Feb 2012 11:15:25 -0500

The Centers for Medicare and Medicaid Services (CMS) has released a draft of the Proposed Rule on reporting Medicare overpayments. The Proposed Rule is expected to be published in the Federal Register on February 16, 2012.

The reporting provision, which was included as part of the 2010 Patient Protection and Affordable Care Act, requires health care providers to report and return Medicare overpayments within 60 days after the overpayment is identified, or the date any corresponding cost report is due. Significantly, providers who fail to do so are subject to liability under the Federal False Claims Act.

The reporting provision caused significant concern in the health care industry, as providers and their counsel scrambled to decipher when exactly the provision might apply. What constitutes an “overpayment”? When is an overpayment “identified”? What if a provider thinks he/she may have identified an overpayment, but needs more than 60 days to figure it out?

Appeals Court Holds Wa. Hospital Not Entitled to HCQIA Immunity in Physician Suspension Suit

Mon, 06 Feb 2012 10:37:14 -0500

A Washington state appellate court recently held that a hospital that failed to make a reasonable effort to obtain the facts underlying a physician’s suspension or give reasonable notice of the same lost its statutory immunity under the Health Care Quality Improvement Act (HCQIA). The decision is notable because even though the plaintiff physician’s suspension lasted for a very short time, the court still held that the hospital’s hasty actions were enough to deprive it of protection from the physician’s lawsuit.

In Smigaj v. Yakima Valley Memorial Hospital Association, Dr. Diana Smigaj was an obstetrician/gynecologist (obgyn) who was on the medical staff of Yakima Valley Memorial Hospital (the “Hospital”). After concerns arose regarding the quality of care provided by Smigaj, a peer review committee at the Hospital recommended the suspension of her medical staff privileges. The medical chief of staff agreed and notified Dr. Smigaj of the suspension; however, the Hospital’s Medical Executive Committee (“MEC”) reinstated her privileges 11 days later. The reinstatement was not retroactive.

Accordingly, Smigaj sued the Hospital and several physicians/administrators, claiming that the suspension was arbitrary and capricious, motivated by gender discrimination and anticompetitive bias, a breach of the hospital’s bylaws, and a breach of contract and fiduciary duty.

The trial court granted the Hospital’s motion to dismiss, finding that it was entitled to immunity under HCQIA. However, the appellate court reversed.

HCQIA generally affords hospitals immunity for “professional review actions” so long as the following conditions are met:
1) The professional review action was taken in the reasonable belief that it was in furtherance of quality healthcare;
2) The professional review decision was made after a reasonable effort to obtain the facts;
3) The physician received adequate notice and procedures that are fair under the circumstances;
4) The action was taken in the reasonable belief that, under the facts known, a suspension was warranted.

After the jump - why HCQIA did not apply

Drug Companies Must Report Payments to Docs Under "Sunshine" Provisions to PPACA

Sun, 15 Jan 2012 16:26:09 -0500

Under a new federal reporting requirement, drug companies must now disclose all payments made to physicians – or else risk getting hit with hefty penalties.

The new “sunshine” provisions were included as part of the 2010 Patient Protection and Affordable Care Act, but proposed guidelines for reporting were not released until recently. The public will have until February 17 to comment on the proposals, after which time Medicare officials will issue final rules.

Under the guidelines, drugmakers and manufacturers of medical devices will have to report any payments made to physicians to develop, assess or promote new products. Royalty payments to doctors for inventions or discoveries, and payments to teaching hospitals for research or other activities will also have to be reported. (Payments to physicians who are employees of the device/drug manufacturer will not have to be reported.)

All payment data will be posted on a website where it will be available to the public. Companies who fail to properly report such payments face fines – the government will impose a penalty of $10,000 for each payment the company fails to report. A company that knowingly fails to report payments will be subject to a penalty up to $100,000 for each violation, up to a total of $1 million per year.

The “sunshine” reporting requirements were enacted out of concern that payments to physicians were skewing health care providers’ professional judgment and detracting from the patients’ best interests.

HHS Rejects Michigan's Request for Medical Loss Ratio Exemption

Wed, 04 Jan 2012 11:01:30 -0500

The U.S. Department of Health and Human Services (HHS) has rejected Michigan’s request to be exempted from a provision of the health reform law that would require insurers to spend a certain percentage of each dollar collected on premiums for quality improvement activities.

This August, two Michigan lawmakers issued a letter to HHS asking to be waived from the percentage requirement, which is commonly known as the “medical loss ratio.” This requires insurance companies selling policies in the individual market and small group market (up to 100 employees) to spend at least 80 percent of premium dollars collected on medical care and health improvement activities. Insurance companies selling policies in the large group market (over 100 employees) must spend at least 85 percent on such activities.

In the letter, Reps. Dave Camp (R-MI) and Fred Upton (R-MI) claimed that based on 2010 data, only two of Michigan’s seven health plans would be able to meet the 80 percent threshold, and the seven plans combined would suffer a net estimated loss of $30.9 million if forced to comply. While the law provides for exceptions for states if “there is a reasonable likelihood that market destabilization, and thus harm to consumers, will occur” HHS rejected the lawmakers’ claims.

The Michigan Office of Financial and Insurance Regulation said yesterday that the office won’t appeal HHS’ Dec. 19 ruling. Michigan is the sixth state to have its waiver request denied.

GE Healthcare to Pay $30M to Resolve Fraud Allegations on Myoview Dilution

Wed, 28 Dec 2011 14:27:53 -0500

GE Healthcare, a global provider of medical technologies and pharmaceuticals, has agreed to pay $30M to resolve allegations that it knowingly provided false or misleading information to the federal Medicare program in connection with the distribution of Myoview.

For the full press release, click here.

Court Holds Florida Statute Preempted by HIPAA

Mon, 19 Dec 2011 11:09:22 -0500

A federal court in Florida recently held that a state statute requiring nursing homes to furnish patient information to an individual’s “representative” was overly broad and pre-empted by the federal Health Insurance Portability and Accountability Act (“HIPAA”). The case is notable because it demonstrates the importance of strict compliance with HIPAA wherever patient information is concerned – even if a state law provides otherwise.

In Opis Management Resources, LLC, et al. v. Dudek, Plaintiff operated several nursing home facilities. Under Florida state statute, nursing homes are required to “furnish to the spouse, guardian, surrogate, proxy, or attorney in fact… for a former resident… a copy of that resident’s records which are in possession of the facility.” Fla. Stat. §400.145. After Plaintiff refused to provide healthcare records of deceased residents, the Florida Agency for Health Care Administration cited Plaintiff for violation of the statute. In response, Plaintiff claimed that the statute was preempted by HIPAA and therefore they could not comply without violating the federal law, and sought declaratory judgment with the U.S. District Court for the Northern District of Florida.

On review, the Court noted that HIPAA provides that a “covered entity” (such as the nursing home in this case) may not disclose patient information except to the patient, or to the patient’s “personal representative.” Pursuant to HIPAA, a “personal representative” includes an executor, administrator, or other person who has authority under state law to act on behalf of a deceased individual or of the individual’s estate.

After a detailed analysis of the variations between “personal representative” as defined in the HIPAA statute and Florida state law, the Court concluded that the Florida state statute requiring the nursing home to turn over records was overly broad and therefore preempted by HIPAA. Cases like Opis Management highlight the need for health care providers to be well-acquainted with HIPAA and be able to recognize when a seemingly innocuous state or municipal law may run afoul of the federal Act. Providers with questions about HIPAA should contact Mercedes Varasteh Dordeski at (248) 952-0400.

The case is Opis Management Resources, LLC v. Dudek, Case No. 4:11-cv-00400 (N.D. Fla. December 2, 2011).

Deadline for Meaningful Use of Electronic Health Records Delayed

Fri, 09 Dec 2011 11:44:23 -0500

Today's post is authored by FHW member Suzanne D. Nolan

The Department of Health and Human Services (HHS) is taking two steps to make it easier for eligible professionals, such as physicians, dentists, oral surgeons, optometrists, podiatrists and chiropractors, to meet the requirements for Meaningful Use of Electronic Health Records (EHRs) and thus qualify for Medicare EHR incentive payments.

First, HHS is delaying the start of Stage 2 Meaningful Use of EHRs from 2013 to 2014 for eligible professionals who attest to meeting the Stage 1 Meaningful Use requirements for calendar year 2011. Many eligible professionals were waiting until 2012 to attest to Stage 1 Meaningful Use out of concern they would not be able to meet the Stage 2 Meaningful Use requirements in 2013 which would reduce the incentive payments for which they could qualify. With the extension, eligible professionals who attest to Stage 1 Meaningful Use for 2011 by the February 29, 2012 deadline can qualify for incentive payments for 2011 as well as payments for 2012 and have until 2014 to qualify for Stage 2.

Second, as another inducement to adopt EHRs, HHS also announced that it is providing education and training to eligible professionals who have registered in the Medicare EHR Incentive Program but have not yet met Meaningful Use requirements.

There is also a Medicaid EHR Incentive Program in which eligible professionals who furnish at least thirty percent of their services to Medicaid patients can participate, if they are not participating in the Medicare EHR Incentive Program. By taking appropriate steps prior to the end of the year, eligible professionals who wish to participate in the Medicaid EHR Incentive Program may be able to qualify for a Medicaid incentive payment. The Medicaid EHR Incentive Program does not require eligible professionals to meet meaningful use requirements in their first year of participation and thus it may be easier for professionals to qualify for incentive payments under this program.

Providers with questions about implementing EHR systems should contact Sue Nolan at (248) 952-0400.

U.S. Supreme Court Will Hear Arguments on PPACA in March

Mon, 14 Nov 2011 12:48:22 -0500

Today the Supreme Court of the United States agreed to hear arguments on whether or not the provisions of the Patient Protection and Affordable Care Act (PPACA), which require all individuals to obtain health insurance coverage by 2014, are constitutional.

The Supreme Court granted certiorari in three separate federal cases, each challenging the law's constitutionality. The Court will hold two hours of oral argument on the "individual mandate," which requires the purchase of health insurance by 2014; 90 minutes on whether the "individual mandate" requirement can be severed from the rest of the Act; one hour on whether the Anti-Injunction Act applies (the Anti-Injunction Act generally provides that an individual cannot challenge a tax until they have to pay it); and one hour on the constitutionality of expanding the Medicaid program. It is not clear if all of the cases will be heard on a single day.

Government Restores Public Access to National Practitioner Data Bank

Thu, 10 Nov 2011 13:45:27 -0500

An agency from the Department of Health and Human Services has restored the public use database to the National Practitioners Data Bank, two months after removing the data amid concerns of inappropriate usage.

However, individuals who use the public access database must now agree that they will not link the information in the database with public information, such as court records, in order to identify the doctors.

The National Practitioner Data Bank (NPDB) is a nationwide repository where hospitals and other entities are required to report malpractice payments and other adverse actions taken against physicians, such as denial of clinical privileges or restrictions. While access to the database is generally restricted, there is a public use file that contains redacted information. Access to the database was shut down in September after certain individuals matched court records in malpractice cases to information in the database, thus publicly identifying the doctors.

In a statement released yesterday, the administrator of the Health Resources and Services Administration (the agency within HHS that manages the NPDB) said that the new restrictions are needed to avoid violating legal requirements on confidentiality. Pursuant to federal statute, information in the NPDB may only be disclosed to certain delineated individuals and organizations, and cannot be obtained via subpoena.