Little Health Law Blog

STARK Whistleblowing Case Leads To Record $85 Million False Claims Act Settlement Between Florida Hospital System And The Government

April 22, 2014 | Little Health Law

Halifax Hospital Medical Center and Halifax Staffing, Inc. (Halifax), on the day of jury selection, agreed to pay $85 million and made other concessions as part of a settlement with the federal government to resolve allegations that Halifax violated STARK prohibitions and the False Claims Act (FCA). The settlement amount is the largest STARK sanction to date against a hospital system for STARK law violations.

The case is styled United States ex rel v. Halifax Hospital Medical Center, et al., No. 09-cv-1002 (M.D. Fla). The government’s allegations stemmed from Halifax’s financial relationships with a group of oncologists. The case was initiated by a compliance officer of the hospital, and the Justice Department agreed to take the case pursuant to the FCA.
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March 19, 2014. Our firm’s article Financial Ramifications for Physician Practices of ACA Deductibles: Getting Paid for “Affordable Care,” Published by The Ambulatory M&A Advisor

March 19, 2014 | Little Health Law

Our firm’s article Financial Ramifications for Physician Practices of ACA Deductibles: Getting Paid for “Affordable Care,” Published by The Ambulatory M&A Advisor

Possible Delay of the Affordable Care Act’s Individual Mandate

March 12, 2014 | Little Health Law

House Republicans gained the support of 27 Democrats and passed The Suspending the Individual Mandate Penalty Law Equals Simple (SIMPLE) Fairness Act (H.R. 4118), a bill that would delay for one year the Affordable Care Act (ACA) individual mandate penalty tax for those failing to buy health insurance before the deadline this month. As reported recently in the Washington Post, while destined to fail in the Democratic-controlled Senate, this Bill nonetheless underscores mounting pressure upon the Administration and Democrats in an election year, as the troubled healthcare law struggles to get traction in its implementation and with voters. Republicans want mileage in November from increasing public confusion and disenchantment about the ACA. They seize upon much publicized trouble spots of ACA implementation, such as the disastrous rollout of the website, cancelled policies, patients unable to stay with the doctor they prefer, and higher insurance premiums.

Insurers and proponents of the ACA view the individual mandate as critical to the financial mechanics of the health insurance reform intended by the ACA, namely expansion of insurance coverage to most Americans irrespective of health conditions and without lifetime or annual caps on benefits. With the new law’s imposition upon insurers of a requirement that they insure all Americans — even the most high-cost patients — it is important that the young and healthy, whether they need insurance or not, pay insurance premiums to help fund the insurers’ cost of paying for the health care of unhealthy Americans. Hence the law’s controversial individual mandate that everyone obtain coverage and pay insurance premiums or, alternatively, pay a penalty tax based on household income. The penalty is to begin this year, phased in at 1 percent of taxable income, then 2 percent in 2015, and 2.5 percent in 2016.
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Navigating Troubled Waters: Five Tips for Physician Practice Breakups and Departures

February 24, 2014 | Little Health Law

Medical practice breakups and physician departures are inevitable. Some are the result of professional or personal disputes, and others are simply the result of practical or economic realities or life events (disability, death, retirement, etc.). Whatever the circumstances, failing to carefully execute a plan for the breakup can quickly result in financial, legal, and emotional complications. All physicians and physician practices should anticipate the inevitable conclusion of any professional relationship.

1. Have a Good Contract

When a business relationship fails or otherwise ends, not having a properly done contract that fairly, accurately and precisely sets forth the parties’ respective rights and obligations will be a painful mistake, financially and otherwise. At the beginning of the marriage (or at least during the period that it is happy), the parties should carefully and thoughtfully construct a written agreement that states their meeting of the minds. That contract should also specifically set forth in reasonable detail a road map for the parties to separate when it is time for the relationship to conclude.

2. Carefully Document the Termination of the Relationship

Whether or not the practice had proper preparation before a breakup or departure, both parties should carefully document the final resolution in writing. This is especially the case if the resulting departures necessitate any post-employment obligations such as unfinished payments, restrictive covenants, confidentiality agreements, etc. Important practice contracts and documents should be marshalled and carefully reviewed to determine what the parties’ respective rights and obligations will be in concluding the relationship, including:
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February 20, 2014. Kevin Little speaks to physicians. Financial Ramifications for Physician Practices of ACA Deductibles. In Health Consulting & Educational Services National Tele-Class Series.

February 20, 2014 | Little Health Law

Kevin Little speaks to physicians. Financial Ramifications for Physician Practices of ACA Deductibles. In Health Consulting & Educational Services National Tele-Class Series.

Medical Practice Compliance 101

February 18, 2014 | Little Health Law

Patients tend to see physicians only as providers of care — meeting their medical needs. The reality is that a physician’s efforts to stay compliant with regulations and laws may consume as much or more time than actually rendering care. With consequences for regulatory violations ranging from financial to criminal, compliance is a subject of the utmost importance for any physician practice.

The best way to avoid penalties is to have a serious compliance program in place to prevent, detect, and respond to any possible violation. With regulations always changing on both a federal and state level, especially now with the implementation of the Affordable Care Act (ACA), having a compliance program in place is critical. The benefits of creating an effective compliance program range from better sleep, higher ethical standards, satisfying government auditors and regulators’ requirements, and ensuring that business operations align with proper legal protocol. Given all the possible problems that may derive from doing otherwise, the absence of a strong compliance program invites problems.

To create an effective compliance program, physicians must first understand that there is no one-size-fits-all model. Compliance programs must be adaptable to each practice’s unique structure, services, and personnel. An experienced consultant and/or healthcare attorney should be considered to help set up or review the program and minimize particular risks applicable to your specific type of practice. You must also keep in mind that an effective compliance program will require time and resources to set it up properly and to modify it as needed to adapt to changes in our regulatory environment.
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An Ounce of Prevention: Identify and Mitigate HIPAA Compliance Issues to Avoid Costly HIPAA Penalties

December 31, 2013 | Little Health Law

An unencrypted thumb drive cost a dermatology practice $150,000. On December 26, 2013, the U.S. Department of Health & Human Services (HHS) announced a settlement with Adult & Pediatric Dermatology, P.C. of Concord, Massachusetts (APD) of alleged violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). APD, a “covered entity” for HIPAA purposes, has offices in Concord, Westford, Marlborough, and Ayer, Massachusetts, and Wolfeboro, New Hampshire.

The thumb drive contained unsecured electronic protected health information (ePHI) relating to the performance of Mohs surgery for about 2,200 patients. The thumb drive was stolen from the vehicle of one of APD’s employees. APD informed its patients of the theft of the thumb drive and provided a media notice.

HHS investigated and determined that APD did not timely conduct an accurate and thorough analysis of the risks associated with potential exposure of the ePHI. HHS also determined that APD did not fully comply with the administrative requirements of HIPAA’s breach notification requirements to have written policies and procedures and train employees regarding breach notification requirements. HHS also determined that APD disclosed ePHI in violation of HIPAA by the access gained to it when APD did not reasonable safeguard an unencrypted thumb drive.

HHS fined APD $150,000 and required APD’s execution of a Corrective Action Plan. The Corrective Action Plan requires APD to develop a comprehensive risk analysis and risk management plan to ensure future compliance with HIPAA and to periodically report to HHS the status of APD’s implementation of the plan. HHS released its right to take further action against APD, conditioned upon full compliance by APD with the Corrective Action Plan. See HHS Resolution Agreement.
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The Affordable Care Act Will Enhance Direct Practice Medicine Opportunities

December 28, 2013 | Little Health Law

The Affordable Care Act (ACA), widely known as “Obamacare,” will create new opportunities for primary care doctors (and some specialists) who weigh starting or converting to a direct primary care model. At first blush direct care medicine practices, also known as “concierge,” “boutique” and “retainer-based” practices, which charge patients a monthly or annual membership fee and tend to exclude (or limit) third party payer involvement (one of the strong points for pursuing the model), would seem limited as an opportunity by the ACA’s objective of getting everyone “insured.” But the opposite may prove to be the case. Actually, the ACA may drive a strong need for new concierge medicine doctors.

A New Era of High Deductibles

While a stated goal of the ACA is to decrease the number of uninsured Americans, a consequence of the ACA will likely be that many newly insured patients under plans obtained via the new insurance exchanges will soon realize that due to very high deductibles, much or all of the costs of treatment (i.e., all non-preventive care) incurred over the course of a year must be paid out of pocket by the insured. For a typical household in Richmond County, Georgia, for example, as of this writing there are 18 plans available via the exchanges: 7 “Bronze Plans,” 6 “Silver Plans,” 4 “Gold Plans,” and 1 “Platinum Plan.” For the Bronze Plans, the annual deductibles range from $4,000 to $6,300. It is widely expected that most people will seek to minimize their premiums and opt for one of the Bronze Plans, only two of which have annual deductibles of less than $5,000.

What will that mean? That will mean most doctor visits (excluding preventive care) will be paid out of pocket by the “insured” patients who presently may not realize what is in store for them by way of doctor bills. As the public becomes aware of how the ACA will actually work for them (i.e., even though they are “insured” they are writing checks for doctor bills), the appeal to consumers of concierge options will increase. As recently reported in the Wall Street Journal, “People with deductibles of $5,000 or more should think about how many times a year they typically see the doctor and for what, keeping in mind that annual checkups are free under the ACA. If doctor visits typically cost $150 and the patient has six appointments a year, a concierge practice offering the same services for $40 or $50 a month might be cheaper.” Pros and Cons of Concierge Medicine (November 1, 2013).
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Don’t Work for Free: Obtaining Timely Physician Reimbursement

November 28, 2013 | Little Health Law

Nobody likes to work for free. Physicians and other healthcare providers are frequently at risk of non-payment for valuable services to patients due to third-party payer mistakes and/or attempts to arbitrarily delay, reduce or avoid reimbursement. A common practice of payers is, for example, to deny reimbursement based on an allegation that the provider did not submit correct paperwork or alleged improper coding. Another tactic of third third-party payers is to simply adjust a payment downward because the payer concludes the physician is entitled to less reimbursement based on what was paid on a prior, “similar” claim. Reimbursement issues have led 49 states to enact laws to address such problems. Unfortunately, State laws only mildly abate the problem for healthcare providers.

Action that a healthcare provider can take to address payer abuse often depends largely on the State in which the provider is located. Some states allow physicians to take direct court action against a third-party payer with regard to reimbursement issues. Other States require providers to appeal to their insurance regulatory agencies to take action against a payer for any prompt pay issues, or similar exhaustion of administrative remedies. A regulatory agency may investigate and take action against a third-party payer. Provider options may also be affected by whether a State’s prompt pay laws are preempted by the Employee Retirement Income Security Act (ERISA), which provides its own remedies in some circumstances.

Steps physicians can take to protect reimbursement revenue and reduce the chance of disputes with payers include:

Read every word in your payer-physician contract: Pay close attention to the language used in the contract and the terms and conditions. Are the policies and procedures affecting payment clearly laid out? Does the language include a requirement for the payer to submit advance notice of any modifications to payment? Does the contract clearly define what is considered a “clean claim”?

Don’t procrastinate: In submitting claims, believe Murphy. Allow your practice more than enough time to submit a claim to a payer. You never know what delays, issues, or human errors could give a payer the opportunity to contend your claim was late or submitted incorrectly.

Breaking Up is Hard to Do: Dividing Medical Practice Assets

November 28, 2013 | Little Health Law

Ending a professional relationship is not easy for anyone. But the demise of a healthcare business relationship among doctors often involves more risks, greater headaches, and more issues to tackle than non-healthcare businesses. Dividing up medical business assets is, for example, much more complex and involved than simply drawing a line down the middle of the office. Federal laws and regulations affecting healthcare providers pose significant business risks and adverse legal ramifications where the division of assets is not done properly. If you and other physician owners are leaving a practice, it is critical to ensure any division of big ticket items — e.g., medical equipment leases, practice branding, and electronic health records – is done in a legally compliant manner.

Most often, medical equipment in physician practices is leased. The leased status creates potential complications if multiple owners want a particular item or if, on the other hand, no one wants the accompanying financial obligations. Whichever side of the coin your practice breakup falls on, medical practice owners should take into account the depreciating value of the equipment when determining the division of assets. Sometimes, outstanding liabilities or personal guarantees that equipment may be subject to are mistakenly overlooked in the process of dividing assets. The division process should begin with an experienced consultant who can aid in the necessary number crunch and ensure fair and balanced allocation of value and financial responsibilities that attend leased equipment assets.

While a practice’s name and brand may not be easy to value with precision, the inherent value should be weighed and factored into the division of assets. As with any business, the reputation of a brand or identity is a key to success. A medical practice’s good reputation carries critical patient confidence, which is a valuable asset for any practitioner. When physicians choose to work in the same field and geographic area, the division of such an asset is problematic and may raise difficult business and legal issues.
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