Health Care Lawyer Blog

Back in 2005, the supermarket chain Safeway (along with undoubtedly hundreds of other employers) was brainstorming ways to reduce the company's health care costs. The chain proceeded to implement a unique method for doing so - by providing its employees with financial incentives to practice healthy behavior.

According to a recent Wall Street Journal editorial authored by Safeway CEO Steven A. Burd, the plan has been a success and the supermarket giant has managed to keep its healthcare costs steady (while most American companies' costs have increased 38 percent in the same four years.) Specifically, the Safeway health care model relies on a provision in the 1996 Health Care Portability and Accountability Act (HIPAA) that permits employers to differentiate premiums based on behaviors.

The plan works as follows: Safeway's employees pay a portion of their own health care through premiums, co-pays and deductibles. Employees are tested on four chronic conditions which regularly attribute to increased health care costs - tobacco usage, healthy weight, blood pressure and cholesterol levels. (The testing program is voluntary and data is collected by outside parties, and not shared with company management.) If employees pass all four tests, annual premiums are reduced $780 for individuals and $1,560 for families.

Continue reading " Editorial: Cut Health Care Costs by Encouraging Healthy Behavior " »

Speaker of the House Andy Dillion (D-Redford Township) recently issued a proposal that suggests consolidating the health care plans of all Michigan's public workers - state, local, and public school employees - into a single state health insurance plan. Dillion claims that plan will save up to $900 million a year by efficiently organizing a single insurance “pool.” Other savings would come from careful monitoring of patients to make sure they are diagnosed and treated correctly, in order to prevent wasteful spending.

The proposal will also lump tens of thousands of retired public workers into the plan. It would essentially require unionized public employees across the state to negotiate one extensive health care plan (with various options) to replace the scattered plans that now cover everyone from teachers to police to firefighters; university, and muncipal employees such as courts and police, judges and even the legislature/governor. Under the plan, lower wage employees would pay smaller premiums.

The Michigan Education Association has already voiced objections to the plan, claiming that it is an “assault on collective bargaining.” Michigan Government Jennifer Granholm also critiqued Dillion’s plan, claiming that there are no discernable approaches to save money and that Dillion’s categorization of state employee benefits – i.e. cheaper and better than those of public sector employees – is off-base. In a statement issued Monday, Granholm (perhaps channeling Cuba Gooding Jr.) requested that Dillion "Show me the money" and that she didn't see where the savings would come from.

The firm of Frank, Haron, Weiner and Navarro has collaborated with the United States and Michigan governments to settle a false claims suit against St. John Health System for $822,000.

The lawsuit was filed in 2008 by the law firm under the qui tam provisions of the federal False Claims Act, Title 31, United States Code, Section 3730 (b) –(h) on behalf of Maria Hoepner and Frank Pink, D.D.S.

The Act (and similar state Acts, such as the Michigan Medicaid False Claims Act) provides incentives to private citizens, called Relators, who discover fraud against the federal government and who bring their information to the government and help pursue the defrauding entities. The qui tam provisions allow Relators to represent the interest of the government for damages and civil penalties for a violation of law, and if the action is successful, a portion of the recovery is provided to the Relators.

Ms. Hoepner was formerly the Clinic Coordinator for a dental clinic operated jointly by St. John Health System and the University of Detroit at St. John Detroit Riverview Center. Dr. Pink was a supervising and billing dentist at the clinic. The law suit claimed St. Johns Health System submitted or caused to be submitted claims to the Medicaid program, for dental or oral/maxillofacial care on behalf of three health care professionals at St. John Riverview Center.

Continue reading " Michigan Health Care Fraud Case Settled for $800,000 Against St. John " »

The nation’s hospitals have agreed to contribute $155 billion towards providing insurance coverage for Americans without health care, according to Reuters. The deal, which is expected to be announced by the White House today, was brokered between three hospital groups – the American Hospital Association, the Federation of American Hospitals, and the Catholic Health Association – and the White House, along with the Senate Finance Committee.

Most of the savings – about $100 – would be skimmed by reducing Medicare and Medicaid payments to hospitals. Another $40 billion would be saved by slowly decreasing the amount hospitals receive to care for the uninsured, although the reductions would probably not begin for several years. This “waiting” will test whether a significant number of people will in fact enroll in the new insurance programs.

Hospital officials have been informed that if a new government-sponsored health care program is introduced, it will not pay Medicare or Medicaid reimbursement rates and will most likely be lower. The amount of Medicare/Medicaid payments is hotly contested in the health care industry, where most practitioners feel such payments do not adequately cover the costs of treatment.

The hospital deal was part of a discussion about the “shared responsibility” of the entire health-care system, patients, and the government, and comes only a few days after an announcement from the Obama administration that Medicare plans to cut payments to imaging services and specialists.

As part of the continuing push to reform health care, the Obama administration has announced a proposal to decrease Medicare payments for imaging services and to specialists such as cardiologists and radiologists, and use the savings to increase payments to primary care physicians.

Physicians who pursue careers in primary care may be compared to law school grads that join public interest associations – i.e,. they are foregoing the hefty paychecks of their peers who enter more specialized fields. For example, family medicine doctors earn an average of $185,000 per year, while specialists like radiologists or cardiologists can earn twice that much. However, the waning interest in primary care has led to a decrease in the number of primary care physicians, which is cited as one reason for the nation’s health care crisis. Specifically, patients without a primary care physician typically do not receive the type of preventative care that is essential to good health, such as cholesterol monitoring, smoking cessation guidance, or health management.

Take the following as an example – suppose Joe (let’s call him “Joe the Painter”) develops a nagging cough. He tries to make an appointment to see one of the few primary care physicians in his town who accept his insurance, but cannot get an appointment for several weeks. Joe decides he will just “tough it out” and hopes the cough will go away. Unfortunately, the cough gets worse. When Joe finally does get in to see a primary care doctor, the cough has evolved into severe bronchitis and Joe must be hospitalized. Joe spends several days in the hospital and receives thousands and thousands of dollars of medical treatment. As it turns out, his bronchitis was caused by a minor virus which could have easily been treated with an inexpensive antibiotic that his primary care physician could have prescribed.

Continue reading " Medicare Payments for Imaging, Specialists Slashed Under Proposed MPFS " »

A nursing home’s lawsuit against a long-term care pharmacy provider for failure to provide prescriptions as promised was dismissed by the Michigan Court of Appeals on the grounds that plaintiff’s claims against defendant were grounded in tort law, and not contract law. In Woodward Nursing Home, Inc. v. Medical Arts, Inc., (unpublished opinion issued June 25, 2009), Plaintiff entered into a written contract with Defendant whereby Defendant agreed to provide prescription medications and supplies for Plaintiff’s nursing home residents. Plaintiff alleged that it sent Defendant a prescription order on August 11, 2004, but that Defendant failed to process or deliver the prescription for more than twelve days and then lied about their reasons for nonperformance.

Plaintiff then filed suit in Wayne County Circuit Court, claiming that Defendant’s delay in filling the prescriptions caused it to lose a valuable Medicaid program certification. As a result, Plaintiff was forced to cease operating as a nursing home, was charged with regulatory sanctions, and had its provider agreement with the Michigan Medicaid program terminated.

Plaintiff’s original complaint against Defendant alleged breach of contract, negligence, malpractice and fraud. After Defendant’s Motion for Summary Disposition was denied, Defendants appealed the case to the Michigan Court of Appeals, which held that Plaintiff’s contract claim warranted dismissal because Plaintiff had failed to provide copies of the pertinent contracts pursuant to MCR 2.113(F). The COA further held that Plaintiff should have filed a notice of intent and affidavit of merit with respect to its medical malpractice claims.

Continue reading " Nursing Home's Claim Against Pharmacy for Non-Performance Dismissed; Michigan COA Holds Damages Stemmed From Tort, Not Breach of Contract " »