Health Care Lawyer Blog

Health care providers who currently use or are planning to use electronic health records should take note of a pending change to the accounting rules under the Health Insurance Portability and Accountability Act (“HIPAA”).

Under current HIPAA regulations, if a patient requests an “accounting” of how their protected health information (PHI) has been used, covered entities are required provide patients with the details of each disclosure over the past six years. Each accounting must include:
1) The date of the disclosure
2) The name of address of the entity/person who received the PHI;
3) Brief description of the information disclosed;
4) Brief statement of the purpose of the disclosure (or a copy of the written request for the disclosure).

The current privacy rule exempts disclosures to carry out treatment, payment, and health care operations from these accounting requirements. However, as a result of the HITECH provisions contained in last year’s Stimulus Bill, these exemptions no longer apply to disclosures through an “electronic health record.”

Starting January 1, 2011, any covered entity that uses electronic health records must comply with the new requirements, and provide an accounting of such disclosures made during three years prior to the request. For example, if a patient requests an accounting under the new statute, the covered entity must account for every transmission of the patient’s information; whether it is for billing purposes, sending lab results to another covered entity for analysis, etc. Obviously, the number of transactions to be accounted for will significantly increase.

The Department of Health and Human Services (HHS) recently issued a Request for Information (RFI) to providers seeking information on the interest of individuals with respect to learning of such disclosures, and the administrative burdens on accounting for the same. The specific information sought from providers includes answers to such questions as “Are individuals aware of their current right to receive an accounting of disclosures? On what do you base this assessment?” and “What are the benefits to the individual of an accounting of disclosures?”

The full Request for Information is available here.

When a federal False Claims Act/qui tam case is successful, the media coverage naturally focuses on the amount returned to the government – and, much of the time, the relator’s share or “bounty payment” received by the whistleblowers. For example, last year’s Pfizer relators made headlines when it was announced that the group of six relators would share in a $106 million reward as their part of the federal recovery.

However, not all such qui tam cases result in the proverbial happy ending – and, even if they do, the cases often take a significant toll on the relators who choose to come forward. A recent article in the New England Journal of Medicine (NEJM) discusses in detail the challenges faced by whistleblowers, which include being blacklisted in their industry, personal and/or financial difficulties, and health problems caused by the strain of litigation.

The article, entitled “Whistleblowers’ Experiences in Fraud Litigation Against Pharmaceutical Companies,” summarized the NEJM’s findings after interviews with 26 whistleblowers involved in 17 federal qui tam cases against pharmaceutical manufacturers settled between January 2001 and March 2009. Although all the relators interviewed ended up filing qui tam suits, only six specifically intended to do so. The others “fell into” filing qui tams after seeking out attorneys for other reasons, such as unfair employment practices or harassment, or after being encouraged to file suit by family or friends.

The federal False Claims Act dates back to the Civil War, when President Abraham Lincoln enacted the law to deter individuals from supplying rotten food or sawdust-filled gunpowder to the Union Army. Since resources were strained by the war and the government could not police fraud itself, it relied on private individuals to bring fraud to its attention. However, realizing that private individuals would need some incentive to do so, a relator’s share provision was incorporated into the statute.

After the jump -- Why Blowing the Whistle is No Easy Task

Continue reading " Health Care Whistleblowers Report Retaliation, Divorce and Financial Strain, According to NEJM " »

Editor's Note: Today's post was authored by FHWN attorney Sue Nolan.

The details on a new federal income tax credit for certain employers who make nonelective contributions towards employee health insurance premiums will be published next month in the Internal Revenue Service Bulletin.

Specifically, the new credit is designed to help small employers who have relatively low-wage employees. Businesses with 10 or fewer full-time equivalent employees earning less than $25,000 a year on average will be eligible in 2010 for a tax credit of 35% of health insurance costs. Companies with between 11 and 25 workers and an average wage of up to $50,000 are eligible for partial credits. On a state-by-state basis, this credit will change when the states set up Small Business Health Options Programs called "SHOP Exchanges" where small businesses can pool together to buy insurance. The SHOP Exchanges are required to be set up by 2014.

After the SHOP Exchanges are created, the tax credit will remain in place, increasing to 50% of health insurance costs for the first two years a company buys insurance through its state exchange.

Background

The Patient Protection and Affordable Care Act (PPACA) amends the Internal Revenue Code (by adding Section 45R) to provide a credit to small businesses for health insurance costs. The credit applies to any tax year beginning after December 31, 2009. There is a phase-out provision to limit the amount of the credit for small business employers who have more than 10 employees and/or whose average wage is higher than $25,000. Currently, there is a "transition" rule in place that applies until the sooner of 2014 or the time that the employer's state sets up a Small Business Health Options Program called "SHOP Exchange" where small businesses can pool together to buy insurance.

Current Provisions

Credit. The amount of the credit with respect to any eligible small business employer is equal to 35 percent (25 percent for a tax-exempt eligible small employer) of the lesser of (1) the eligible small employer's nonelective contributions for premiums paid for health insurance coverage for an employee or (2) an amount the Secretary of HHS determines is the average premium for the small group market in the State in which the employer is offering health insurance coverage or such area within the State as specified by the Secretary.

Phase-Out. The amount of the credit shall be reduced by the sum of the following:

(1) the amount of the credit multiplied by a fraction whose numerator is the total number of full-time equivalent employees of the employer in excess of 10 and the denominator of which is 15.

(2) the amount of the credit multiplied by a fraction the numerator of which is the average annual wages of the employer in excess of the dollar amount in effect under subsection (d)(3)(B) and the denominator of which is such dollar amount.

The dollar amount specified in (d)(3)(B) is currently $25,000.00. The amount of any credit taken reduces the employer's deduction for health care expenses.

After the jump - definitions

Continue reading " New Tax Credit Gives Break to Small Employers Contributing to Employee Health Plans " »

A frequent topic on the Health Care Lawyer Blog has been combating fraud and waste in the health care industry – both waste due to negligence, and “behavioral waste,” which is the term used to describe monies spent on treating preventable illnesses, such as those associated with obesity, smoking and non-adherence to medical regiments.

Therefore, I was pleased to learn that the new PPACA legislation seeks to combat behavioral waste by allowing employers to give further reductions in health insurance premiums to employees who practice healthy behavior. Prior to PPACA, employers were allowed to give a discount of up to 20 percent of the costs of premiums for employees who reached certain health goals – for example, maintaining a healthy weight, quitting smoking, and keeping blood pressure, blood sugar and/or cholesterol within a healthy range. Under PPACA, that cap is now lifted. Starting in 2014, employers can allow discounts of 30 percent and up to 50 percent in the cost of individual or family health care premiums.

Starting in 2011, small businesses (defined as companies that have 100 or fewer employees working 25 or more hours per week) will be eligible to receive grant funding to help implement such wellness programs. There will also be technical assistance and other resources available to help employers evaluate and launch such wellness programs.

PPACA will also expand wellness discounts in the individual (i.e., non-employer sponsored) market – an initial demonstration project involving 10 to-be-determined states is to be launched in July 2014. Employers who want to learn more about seeing up a wellness incentive program should contact Mercedes Varasteh Dordeski.

(For more additional information about PPACA's wellness and prevention provisions, feel free to check out my article in this month's ABA Health eSource.)