overview of health care legal issues bruce d. armon, esq., partner business department saul ewing...
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![Page 1: Overview of Health Care Legal Issues Bruce D. Armon, Esq., Partner Business Department Saul Ewing LLP Telephone: 215-972-7985 1-800-355-7777, ext. 7985](https://reader036.vdocuments.us/reader036/viewer/2022062421/56649e315503460f94b22939/html5/thumbnails/1.jpg)
Overview of Health CareLegal Issues
Bruce D. Armon, Esq., PartnerBusiness Department
Saul Ewing LLPTelephone: 215-972-79851-800-355-7777, ext. 7985Email: [email protected]
March 18, 2008
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Bruce D. Armon, Esq.
HEALTH LAW SUBJECTS
Regulation of health care providers Credentialing of health care providers Reimbursement issues Fraud and abuse Antitrust Tort law
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Bruce D. Armon, Esq.
FRAUD AND ABUSE
The Government's war
Anti-Kickback statute
Stark statute
Criminal prosecutions and civil investigations
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Bruce D. Armon, Esq.
ANTI-KICKBACK STATUTE
Basic prohibition – knowing and willful solicitation or receipt of any remuneration in return for referring persons or arranging for acquisition of goods or services
Penalties: Criminal and Civil
Safe Harbors
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Bruce D. Armon, Esq.
ESSENCE OF MEDICARE/MEDICAID ANTI-FRAUD AND ABUSE STATUTE
Prohibits remuneration to induce referrals
“Remuneration” is broadly defined – e.g., opportunity to make money, kickback, bribe, rebate, anything of value
Statutory Exceptions
Judicial Interpretations
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Bruce D. Armon, Esq.
SAFE HARBORS
Common Theme -- FMV; 1+ year contracts; full disclosure
Intended to protect non-abusive business arrangements
If it does not fit, it is not necessarily illegal
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Bruce D. Armon, Esq.
SAFE HARBORS Investment interests Space rental Equipment rental Personal services and
management contracts Sale of Practice Referral Services Warranties Discounts Employees Group purchasing organizations Waiver of beneficiary
coinsurance and deductible amounts
Increased coverage, reduced cost-sharing amounts, or reduced premium amounts offered by health plans
Price reductions offered to health plans
Practitioner recruitment Obstetrical malpractice
insurance subsidies Investment in group practices Cooperative hospital service
organizations Ambulatory surgical centers Referral agreements for
specialty services Price reductions offered to
eligible managed care organizations
Price reductions offered by contractors with substantial financial risk to managed care organizations.
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Bruce D. Armon, Esq.
OTHER INTERPRETATIVE RESOURCES
OIG Fraud Alerts Advisory Opinions
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Bruce D. Armon, Esq.
STARK STATUTE If a physician (or family member) has a financial
relationship with an entity:
(1) physician may not "make a referral to the entity for the furnishing of designated health services" for which payment may be made under Medicare or Medicaid; and
(2) the entity may not bill for designated health services furnished pursuant to such referral
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Bruce D. Armon, Esq.
WHAT IS A FINANCIAL RELATIONSHIP?
An ownership or investment interest in the entity Such interest “may be through equity,
debt, or other means” An indirect ownership interest is still
an ownership interest A compensation arrangement, with
certain exceptions
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Bruce D. Armon, Esq.
WHAT ARE THE DESIGNATED HEALTH
SERVICES?
Durable medical equipment and supplies
Parenteral and enteral nutrients, equipment and supplies
Prosthetics, orthotics, and prosthetic devices
Home health services and supplies
Outpatient prescription drugs
Inpatient and outpatient hospital services
Clinical laboratory services
Physical therapy services
Occupational therapy services
Radiology, including MRI, CT scans, and ultrasound services
Radiation therapy services and supplies
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Bruce D. Armon, Esq.
ARE THERE EXCEPTIONS TO STARK?
These are the most important part of the analysis to a health care lawyer, and for our physician-clients.
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Bruce D. Armon, Esq.
CATEGORY OF EXCEPTIONS
Ownership only Ownership and compensation Compensation only
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Bruce D. Armon, Esq.
EXAMPLES OF STARK EXCEPTIONS
Physician group practices
Personal service arrangements
Remuneration not related to the provision of designated health services
Physician recruitment
Rental of office space Equipment leases Bona fide employment
relationships Isolated financial
transactions Certain group practice
arrangements with a hospital
Payments by a physician for items and services
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Bruce D. Armon, Esq.
STARK PENALTIES
Denial of payment by Medicare Required refunds of payments
made by individuals Civil money penalties and possible
exclusion from Medicare and Medicaid
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Bruce D. Armon, Esq.
STARK VS. ANTI-KICKBACK
No proof of intent Applies to physicians Improper unless
exception
Unlawful intent Any person or
entity Technicalities
may not be penalized
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Bruce D. Armon, Esq.
HIPAAWhat Is This About?
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Bruce D. Armon, Esq.
HIPAA Overview
The Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) (HIPAA) became law on August 21, 1996. At the time it was commonly referred to as “Kennedy-Kassebaum” (after Senators Ted Kennedy (D-MA) and Nancy Kassebaum (R-KS) who were instrumental in its passage.)
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Bruce D. Armon, Esq.
HIPAA Key Provisions Insurance reform - improve portability and continuity
of health insurance for groups and individuals. Extend fraud and abuse prevention measures to all
types of insurers (not just Medicare/Medicaid), and dedicate additional resources to fraud and abuse enforcement.
Administrative simplification - create a framework for the standardization of electronic data interchange (EDI) in health care, including protections for the privacy and security of individually identifiable health information.
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Administrative Simplification
Electronic Transactions and Code Sets Standards Privacy Standards Security Standards Electronic Signature Standards Identifier Standards
Employer Identifier StandardProvider Identifier StandardHealth Plan Identifier StandardIndividual Identifier Standard
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Final Rule published December 28, 2000 (65 FR 82462 et seq.)
Effective Date - April 14, 2003
Final Rule, Version II, published August 14, 2002 (67 FR 53182 et seq.)
Privacy Standards
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Privacy Standards
Is created or received by a health care provider, health plan, public health authority, employer, life insurer, school or university, or health care clearinghouse; and
Relates to the past, present, or future physical or mental health or condition of an individual, the provision of health care to an individual, or the past, present, or future payment for the provision of health care to an individual.
“Health information” is any information, whether oral or recorded in any form or medium, that:
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Bruce D. Armon, Esq.
Individually Identifiable Health Information
Individually Identifiable Health Information (IIHI) is health information that identifies an individual or there is a reasonable basis to believe could be used to identify an individual.
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Bruce D. Armon, Esq.
Protected Health Information
The focus of the Privacy Rule is Protected Health Information (PHI). PHI is IIHI that is transmitted or maintained in electronic or any other form or medium.
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Applicability
Health Plans Health Care Clearinghouses Health Care Providers
Privacy Rule applies to covered entities:
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Bruce D. Armon, Esq.
Health Care Providers
Health care providers include any individual or entity that is covered as a provider under Medicare or any other person or organization that provides medical or other services or who furnishes, bills or is paid for health services or supplies in the normal course of business.
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Uses and Disclosures of PHI
When PHI is to be disclosed for purposes of
Treatment Payment Health Care Operations
an individual’s consent is not required pursuant to the Final Rule, Version II
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Administrative Requirements
Privacy official Contact person for complaints Training Safeguards Complaints Sanctions Mitigation
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Administrative Requirements (cont’d)
Intimidating or retaliatory acts Waiver of Rights Policies and procedures Documentation
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Business AssociateBusiness Associate means with respect to a Covered Entity (other than as a member of the workforce) an entity that performs or assists
In the performance of a function or activity involving the use or disclosure of individually identifiable health information, including claims processing or administration, data analysis, process or administration, utilization review, quality assurance, billing, benefit management, practice management and repricing, or any other function covered by these regulations.
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Preemption of State Law
General preemption rule. A requirement or other provision of the HHS Privacy Rule that is contrary to a provision of state law preempts the state law provision unless an exception applies.
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DECIDING WHERE TO PRACTICE
Institutional
Private practice
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EVALUATING A PRACTICE OPPORTUNITY
Developing your checklist
Identify priorities
Determine deal-breakers
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THE FIRST INTERVIEW
Establishing a rapport
Identifying the “nuts” and “bolts” of the practice
Asking the right questions
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THE MAJOR ISSUES Compensation --
not just salary!
Term and termination
Be aware of the Agreement’s details
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COMPENSATION
Possible salary formulas Base salary Base salary PLUS
production or collections
Production less overhead
Income Guarantee
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NON-SALARY BENEFITS Salary is only part
of the equation
Ascertain employer’s potential flexibility
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TERM AND TERMINATION
Term
How long is the initial term?
Automatic renewals and notice provisions
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TERM AND TERMINATION
Termination
For cause Without cause Timelines for termination Effects on benefits
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MOVING ON
Non-competition provisions
Access to patient records and confidentiality
Settling disputes -- arbitration or litigation?
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SYNOPSIS FOR NEGOTIATING EMPLOYMENT AGREEMENTS
Don’t rely on a handshake
The devil is in the details Don’t be afraid to ask for
changes Enjoy your first
professional practice opportunity (even though it might seem far away)!