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Bluebook 20th ed. Cori H. Loomis, Emerging Health Care Litigation Issues: The Times They Are a-Changin,85 Okla. B.J. 2037 (2014).

ALWD 6th ed. Cori H. Loomis, Emerging Health Care Litigation Issues: The Times They Are a-Changin,85 Okla. B.J. 2037 (2014).

APA 6th ed. Loomis, C. H. (2014). Emerging health care litigation issues: The times they area-changin. Oklahoma Bar Journal, 85(26), 2037-2042.

Chicago 7th ed. Cori H. Loomis, "Emerging Health Care Litigation Issues: The Times They Area-Changin," Oklahoma Bar Journal 85, no. 26 (October 4, 2014): 2037-2042

McGill Guide 9th ed. Cori H Loomis, "Emerging Health Care Litigation Issues: The Times They Are a-Changin"(2014) 85:26 Oklahoma B J 2037.

MLA 8th ed. Loomis, Cori H. "Emerging Health Care Litigation Issues: The Times They Area-Changin." Oklahoma Bar Journal, vol. 85, no. 26, October 4, 2014, p. 2037-2042.HeinOnline.

OSCOLA 4th ed. Cori H Loomis, 'Emerging Health Care Litigation Issues: The Times They Are a-Changin'(2014) 85 Okla BJ 2037

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Emerging Health Care LitigationIssues: The Times They

Are A-Changin'By Cori H. Loomis

f you are old enough (or cool enough), you will recall a greatBob Dylan song titled "The Times They Are A-Changin'." Thetitle, and even some of the lyrics,1 seem especially appropriate

for this topic. The implementation of the Patient Protection andAffordable Health Care Act (ACA),2 a spike in qui tam litigationand the proliferation of HIPAA3 class actions have all given riseto a host of new potential liability risks or potential claims,depending on your perspective. The purpose of this article is todiscuss these emerging litigation issues.

ACA FALLOUT

We are just now beginning to get a glimpse oflitigation that may arise under the ACA, otherthan the constitutional legal challenges andother challenges regarding its content. In earlyApril, a group of plaintiffs in Nevada filed thefirst class action lawsuit over a state insurancemarketplace.4 The lead plaintiffs assert thatthey purchased plans and paid premiumsthrough the Nevada Health Link Insuranceexchange. They were later informed they hadno insurance coverage after incurring signifi-cant health care expenses, because the exchangefailed to submit their applications and premi-ums to the insurance companies they selected.One plaintiff claims to owe more than $400,000in medical bills. The class consists of all Nevadaresidents who applied for and paid healthinsurance premiums through the exchange butwere denied coverage.

Even though Oklahoma did not implement astate exchange, similar administrative snafus

could result in the federal exchange or otherstates. This lawsuit raises several legal ques-tions about the viability of this type of lawsuit.First is whether and to what extent the state orfederal exchanges may be held liable for dam-ages. The second is whether class actions canbe maintained against the exchanges. Third iswhether tort damages can be established.

Another example of litigation that may arisefrom the ACA is the possibility that employeeswill file lawsuits against their employers fornegative consequences occurring if the employ-er restructures their workforce as a response tothe employer pay or play mandate.5 Accordingto a 2014 employer survey conducted by Tow-ers Watson and the National Business Groupfor Health, 95 percent of respondents continueto view benefits packages that include healthcoverage as something worth retaining. How-ever, 92 percent of the respondents plan tomake changes in the near-term to lessen theircoverage responsibilities.6

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Some employers have considered limitingthe hours worked by certain employees to lessthan 30 to reduce the number of employeeswho are eligible for health plan coverage. Uti-lizing this strategy may raise issues under Sec-tion 510 of the Employee Retirement IncomeSecurity Act of 1974 (ERISA).

Section 510 of ERISA provides that, "It shallbe unlawful for any person to discharge, fine,suspend, expel, discipline or discriminateagainst a participant or beneficiary for exercis-ing any right to which he is entitled under theprovisions of an employee benefit plan or forthe purpose of interfering with the attainment ofany right to which such participant may becomeentitled under the plan."

Employees who may have been eligible forbenefits as a "full-time employee equivalent"may assert any reduction in hours was "inter-fering with the attainment" of health plan cov-erage in violation of ERISA. To counter thisargument, employers will assert that anemployee who does not satisfy the definitionof a full-time employee would not be entitledto health coverage in any circumstance. How-ever, this argument may not succeed against"variable" hour employees who sometimesworked more than 30 hours a week and mayhave been entitled to health coverage pursuantto the formula used to determine full-timeemployee equivalents.

Since the employer mandate has been delayeduntil 2015 (and 2016 for employers with 50-99employees), no claims have been filed on thisissue as of yet, but speculation is that they willonce the mandate goes into effect.

QUI TAM LAWSUITS - THE RISE OFTHE WHISTLEBLOWER

In 2013, the federal government collectedover $345 million from lawsuits filed by qui tamrelators (whistleblowers). Of the 845 new FalseClaims Act (FCA)7 cases filed in 2013, whistle-blowers filed 752 of them - a new record. Aqui tam relator may receive as much as 30 per-cent of an FCA settlement, so the upward trendof filings will likely continue.

Examples of cases resolved in 2013 that illus-trate the financial incentives and consequencesat stake include the following:

1) Johnson & Johnson agreed to pay $2.2 bil-lion to settle criminal and civil allegationsthat it promoted prescription drugs for

off-label uses and paid kickbacks to physi-cians and pharmacies.

2) Tuomey Health care System was hit witha $273 million judgment for violations ofthe Stark Law, which resulted in morethan 20,000 false claims.

3) A Florida dermatologist agreed to a $26million settlement to resolve allegationsthat he accepted kickbacks from a labora-tory and billed federal health care pro-grams for medically unnecessary servic-es. The settlement was one of the largestFCA settlements ever reached with anindividual.

Oklahoma providers also have been the sub-ject of whistleblower lawsuits. In April 2014, itwas announced that The Medical Center ofSoutheastern Oklahoma (MCSO) and its parentcompany, Health Management Association Inc.(HMA), settled a lawsuit initiated by a whistle-blower that they billed Medicaid for proce-dures that were either not medically necessaryor were performed in violation. MCSO andHMA agreed to pay $1,065,000 to the federalgovernment and $435,000 to the OklahomaMedicaid program to resolve the lawsuit.

The specific allegations against MCSO werethat it billed SoonerCare for unnecessary surgi-cal procedures performed by the doctor. Thewhistleblower asserted that the doctor per-formed sinus surgeries that were not medicallynecessary on children who were Medicaidbeneficiaries. Although the case was filed in2012, the claims were for services performedfrom 2005 through 2010.

Because of the financial incentives involved,whistleblower litigation likely will continue toescalate and both the federal and state govern-ments are getting in on the action. This trendwill be facilitated by increased access to data(as discussed in the next section) that maymake it easier to file whistleblower cases.

SUNSHINE MAKES LITIGATION RAIN

The payment and financial information thatmust now be publicly reported pursuant to thePhysician Payments Sunshine Act (SunshineAct) and the Center of Medicare and MedicaidServices' (CMS) new policy of disclosing pay-ments to physicians are expected to drive morequi tam litigation.

The Sunshine Act was passed as part of theACA8 and requires pharmaceutical, medical

Vol. 85 No. 26 10/4/2014The Oklahoma Bar journal

device, biological and medical supply manu-facturers to report to the Department of Healthand Human Services any "payment or othertransfer of value" to physicians and teachinghospitals. Manufacturers were required to sub-mit their first reports to CMS by March 31, 2014,and CMS will release the first publication bySept. 30, 2014. The report must include informa-tion about the amount of the payment, the dateon which the payment was made, the form ofpayment, and the nature of the payment (e.g.,gifts, consulting fees, entertainment).

The policy goal of the Sunshine Act wasarticulated by CMS Deputy Administrator forProgram Integrity Peter Budetti, M.D., as: "Youshould know when your doctorhas a financial relationship withthe companies that manufactureor supply the medicines or medi-cal devices you may need. Disclo-sure of these relationships allows and ipatients to have more informeddiscussions with their doctors." more

On April 9, 2014, CMS released, consefor the first time, informationdetailing approximately $77 bil- violatillion in Medicare payments to is themore than 880,000 health careprofessionals.9 In an April 2, 2014 Of claletter to the American MedicalAssociation (AMA), CMS said resultithat the release is required under breachthe Freedom of Information Act,and that "the data to be released largewould assist the public's under-standing of Medicare fraud, waste of Peand abuse, as well as shed light onpayments to physicians for ser-vices furnished to Medicare bene-ficiaries, which are governed by statutoryrequirements that CMS must follow."

It is anticipated that these new sources ofpayment data will increase whistleblower law-suits. On April 14, 2014, Reuters released anarticle that stated: "Within hours of the U.S.government's unprecedented release last weekof a trove of Medicare billing data, a small fra-ternity of lawyers who specialize in represent-ing whistleblowers in health care fraud casesbegan to mobilize."1

The data released pursuant to the SunshineAct and by CMS may provide facts to supporta plaintiff's whistleblower lawsuit. On the flipside, the FCA "public disclosure bar," which is

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triggered when the fraud allegations were inthe public domain before a qui tam relator filedsuit, may make it more difficult for whistle-blowers to successfully prosecute such claims.

TOO MUCH INFORMATION - PRIVATELAWSUITS AND CLASS ACTIONS

Even though HIPAA does not have a privateright of action, a trend has developed in whicha violation of HIPAA serves as a breach of dutyby the covered entity in negligence cases, fidu-ciary duty cases, and violation of privacy cases.For example, in I.S. v. Washington University,11

the judge recognized that there was no indi-vidual private right of action under HIPAA.However, the judge also concluded that under

Missouri law, HIPAA could beused to establish a standard ofcare, and that HIPAA could

ier new, also be used to establish a legalntially duty of care.

In a more recent West Vir-istating, ginia Supreme Court case,12 thecourt concluded that HIPAAnce for did not preempt common law

of HIPAA tort claims stemming fromallegations of the wrongfulergence disclosure of health informa-actions tion. The plaintiff in the casesued the hospital because sev-

rom data eral hospital employees im-properly accessed his medicalnvolving records in violation of a num-imbers ber of state laws. Allegedly, thehospital employees informede. the man's estranged wife andher divorce attorney of his psy-chiatric hospitalization. Thehospital argued that HIPAApreempted the patient's state

law claims. The court disagreed and concludedthat common law claims based on wrongfuldisclosure of medical or personal informationare not preempted by HIPAA. It is unclear howOklahoma courts will address state law claimsbased on HIPAA, but it is likely they will fol-low the rulings and trends in other states.

Another new, and potentially more devastat-ing, consequence for violations of HIPAA is theemergence of class actions resulting from databreaches involving large numbers of people.Previously, the requirements for standing in afederal class action have precluded most con-sumer litigation alleging data breach. Actual orimminent injury was necessary for standing. 13

Vol. 85 No. 26 10/4/2014 The Oklahoma Bar journal

However, the class action settlement in Curryv. AvMed Inc.,14 approved Feb. 28, 2014, mayindicate that courts are willing to entertain alower threshold for class action status in databreach cases. The facts of AvMed were that lap-tops that contained unencrypted protectedhealth information of over one million healthplan members were lost. Evidence showed thatnumerous plan members sustained financialinjury as the victims of identity theft. Thisallowed an inference that AvMed's failure tosecure the data resulted in identity thefts andthat there was a sufficient nexus between thedata breach and the identity theft.

Several other class action lawsuits have beenfiled based on data breaches. These cases dem-onstrate that covered entities need to reevalu-ate their information technology practices anddetermine whether encryption software is agood investment, as opposed to the high costsof litigation, breach notification protocols,potential penalties and damages paid to plain-tiffs damaged by breaches.

TIMES ARE DEFINITELY CHANGIN'

This article only scratches the surface of thepotential new causes of action that may bearising from the rapidly changing and evolv-ing health care landscape. In-house and out-side counsel, plaintiff and defense attorneyswill all have to monitor developments closelyto best position their clients in this evolvingenvironment.

1. Lyric from The Times They Are A Changin': "Come senators, con-gressmen, please heed the call; Don't stand in the doorway, don't blockthe hall; For he that gets hurt will be he who is stalled; There's a battleoutside, it's raging; It'll soon shake your windows and rattle yourwalls. For the times they are a changin'."

2. Patient Protection and Affordable Health Care Act, Pub.L.111 148, 124 Stat. 119, H.R. 3590, enacted March 23, 2010.

3. The Health Insurance Portability and Accountability Act of 1996(HIPAA; Pub.L. 104-191, 110 Stat. 1936, enacted August 21, 1996) wasenacted by the United States Congress and signed by President BillClinton in 1996. HIPAA was amended by the Health Information Tech-nology for Economic and Clinical Health (HITECH) Act, Title XIII ofDivision A and Title IV of Division B of the American Recovery andReinvestment Act of 2009 (ARRA), Pub. L. No. 111-5, 123 Stat. 226 (Feb.17, 2009), codified at 42 U.S.C. §§300jj et seq.; §§17901 et seq.

4. "First class-action lawsuit filed over Nevada's insurance market-place," Las Vegas Review Journal by Jennifer Robinson (April 1, 2014)www.reviewjournal.com/business /first-class-action-lawsuit-filed-over-nevada-s-insurance-marketplace.

5. The "employer mandate" generally requires employers with 50or more full-time (and full-time equivalents or FTEs) to provide"affordable" health insurance to 95 percent of their full-time employ-ees or face paying a penalty.

6. www.towerswatson.com /en/Insights /IC-Types /Survey-Research-Results/2014/03/towers-watson-nbgh-employer-survey-on-purchasing-value-in-health-care.

7. 31 U.S.C. §3729 et seq.8. Section 6002 of the ACA, 2010.9. See, "Medicare Released Individual Physician Payment Data,"

Medscape Medical News (Mark Crane, April 9, 2014). wwwmedscape.com/viewarticle /823360.

10. "Lawyers start mining the Medicare data for clues to fraud," byTerry Baynes, April 14, 2014. www.reuters.com/article/2014/04/14/us-data-idUSBREA3DO582)140414.

11. I.S. v. Washington University, Dist. Court, ED Missouri 2011,Case Number 4:11CV235SNLJ.

12. R.K. v. St. Mary's Med. Ctr., Inc., No. 11-0924 (W.Va. Nov. 15,2012)/

13. See, Clapper v. Amnesty International USA, 133 S. Ct. 1138 (2013).14. Civil Action No. 10-cv-24513 (Southern District of Florida).

Cori H. Loomis of Crowe &

Dunlevy PC is a director in thebusiness department and a mem-

'R ber of the firm's health care prac-

tice group. Her primary focus ison the representation of healthcare providers with transactional,

compliance, reimbursement, leg-islative and regulatory compliance issues. Ms. Loomisgraduated with special distinction from OU in 1991and with honors from the University of Texas Schoolof Law in 1994.

Vol. 85 No. 26 10/4/2014The Oklahoma Bar journal

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Vol. 85 No. 26 10/4/2014 The Oklahoma Bar journal

The Oklahoma Bar Journal Vol. 85 No. 26 10/4/2014