Health Care Lawyer Blog

The State of Michigan has intervened in a state false claims act suit filed against clinical laboratory company Quest Diagnostics, Inc., alleging that the company defrauded the state Medicaid program by overcharging for lab tests.

The suit was originally filed in 2008 under the Michigan Medicaid False Claims Act by relators Chris Riedel and Hunter Laboratories, LLC, who alleged that Quest submitted false claims by billing the Michigan Medicaid program a higher cost for lab tests than it charged to private payors. The Michigan Medicaid guidelines forbid providers from charging Medicaid higher rates than those billed to others for the same or similar services.

According to the original complaint, Quest charged private payors lower prices to ensure a continued stream of business, and then “subsidized” their losses by charging the Michigan Medicaid program higher prices in violation of the Medicaid guidelines. In some cases, the complaint alleged that Quest charged the Medicaid program triple or even quadruple the cost charged to private payers.

After the jump - more allegations against Quest

Continue reading "State of Michigan Intervenes in Fraud Lawsuit Against Quest Diagnostics" »

Under a new federal reporting requirement, drug companies must now disclose all payments made to physicians – or else risk getting hit with hefty penalties.

The new “sunshine” provisions were included as part of the 2010 Patient Protection and Affordable Care Act, but proposed guidelines for reporting were not released until recently. The public will have until February 17 to comment on the proposals, after which time Medicare officials will issue final rules.

Under the guidelines, drugmakers and manufacturers of medical devices will have to report any payments made to physicians to develop, assess or promote new products. Royalty payments to doctors for inventions or discoveries, and payments to teaching hospitals for research or other activities will also have to be reported. (Payments to physicians who are employees of the device/drug manufacturer will not have to be reported.)

All payment data will be posted on a website where it will be available to the public. Companies who fail to properly report such payments face fines – the government will impose a penalty of $10,000 for each payment the company fails to report. A company that knowingly fails to report payments will be subject to a penalty up to $100,000 for each violation, up to a total of $1 million per year.

The “sunshine” reporting requirements were enacted out of concern that payments to physicians were skewing health care providers’ professional judgment and detracting from the patients’ best interests.

The U.S. Department of Health and Human Services (HHS) has rejected Michigan’s request to be exempted from a provision of the health reform law that would require insurers to spend a certain percentage of each dollar collected on premiums for quality improvement activities.

This August, two Michigan lawmakers issued a letter to HHS asking to be waived from the percentage requirement, which is commonly known as the “medical loss ratio.” This requires insurance companies selling policies in the individual market and small group market (up to 100 employees) to spend at least 80 percent of premium dollars collected on medical care and health improvement activities. Insurance companies selling policies in the large group market (over 100 employees) must spend at least 85 percent on such activities.

In the letter, Reps. Dave Camp (R-MI) and Fred Upton (R-MI) claimed that based on 2010 data, only two of Michigan’s seven health plans would be able to meet the 80 percent threshold, and the seven plans combined would suffer a net estimated loss of $30.9 million if forced to comply. While the law provides for exceptions for states if “there is a reasonable likelihood that market destabilization, and thus harm to consumers, will occur” HHS rejected the lawmakers’ claims.

The Michigan Office of Financial and Insurance Regulation said yesterday that the office won’t appeal HHS’ Dec. 19 ruling. Michigan is the sixth state to have its waiver request denied.

GE Healthcare, a global provider of medical technologies and pharmaceuticals, has agreed to pay $30M to resolve allegations that it knowingly provided false or misleading information to the federal Medicare program in connection with the distribution of Myoview.

For the full press release, click here.

A federal court in Florida recently held that a state statute requiring nursing homes to furnish patient information to an individual’s “representative” was overly broad and pre-empted by the federal Health Insurance Portability and Accountability Act (“HIPAA”). The case is notable because it demonstrates the importance of strict compliance with HIPAA wherever patient information is concerned – even if a state law provides otherwise.

In Opis Management Resources, LLC, et al. v. Dudek, Plaintiff operated several nursing home facilities. Under Florida state statute, nursing homes are required to “furnish to the spouse, guardian, surrogate, proxy, or attorney in fact… for a former resident… a copy of that resident’s records which are in possession of the facility.” Fla. Stat. §400.145. After Plaintiff refused to provide healthcare records of deceased residents, the Florida Agency for Health Care Administration cited Plaintiff for violation of the statute. In response, Plaintiff claimed that the statute was preempted by HIPAA and therefore they could not comply without violating the federal law, and sought declaratory judgment with the U.S. District Court for the Northern District of Florida.

On review, the Court noted that HIPAA provides that a “covered entity” (such as the nursing home in this case) may not disclose patient information except to the patient, or to the patient’s “personal representative.” Pursuant to HIPAA, a “personal representative” includes an executor, administrator, or other person who has authority under state law to act on behalf of a deceased individual or of the individual’s estate.

After a detailed analysis of the variations between “personal representative” as defined in the HIPAA statute and Florida state law, the Court concluded that the Florida state statute requiring the nursing home to turn over records was overly broad and therefore preempted by HIPAA. Cases like Opis Management highlight the need for health care providers to be well-acquainted with HIPAA and be able to recognize when a seemingly innocuous state or municipal law may run afoul of the federal Act. Providers with questions about HIPAA should contact Mercedes Varasteh Dordeski at (248) 952-0400.

The case is Opis Management Resources, LLC v. Dudek, Case No. 4:11-cv-00400 (N.D. Fla. December 2, 2011).

Today's post is authored by FHW member Suzanne D. Nolan

The Department of Health and Human Services (HHS) is taking two steps to make it easier for eligible professionals, such as physicians, dentists, oral surgeons, optometrists, podiatrists and chiropractors, to meet the requirements for Meaningful Use of Electronic Health Records (EHRs) and thus qualify for Medicare EHR incentive payments.

First, HHS is delaying the start of Stage 2 Meaningful Use of EHRs from 2013 to 2014 for eligible professionals who attest to meeting the Stage 1 Meaningful Use requirements for calendar year 2011. Many eligible professionals were waiting until 2012 to attest to Stage 1 Meaningful Use out of concern they would not be able to meet the Stage 2 Meaningful Use requirements in 2013 which would reduce the incentive payments for which they could qualify. With the extension, eligible professionals who attest to Stage 1 Meaningful Use for 2011 by the February 29, 2012 deadline can qualify for incentive payments for 2011 as well as payments for 2012 and have until 2014 to qualify for Stage 2.

Second, as another inducement to adopt EHRs, HHS also announced that it is providing education and training to eligible professionals who have registered in the Medicare EHR Incentive Program but have not yet met Meaningful Use requirements.

There is also a Medicaid EHR Incentive Program in which eligible professionals who furnish at least thirty percent of their services to Medicaid patients can participate, if they are not participating in the Medicare EHR Incentive Program. By taking appropriate steps prior to the end of the year, eligible professionals who wish to participate in the Medicaid EHR Incentive Program may be able to qualify for a Medicaid incentive payment. The Medicaid EHR Incentive Program does not require eligible professionals to meet meaningful use requirements in their first year of participation and thus it may be easier for professionals to qualify for incentive payments under this program.

Providers with questions about implementing EHR systems should contact Sue Nolan at (248) 952-0400.

Today the Supreme Court of the United States agreed to hear arguments on whether or not the provisions of the Patient Protection and Affordable Care Act (PPACA), which require all individuals to obtain health insurance coverage by 2014, are constitutional.

The Supreme Court granted certiorari in three separate federal cases, each challenging the law's constitutionality. The Court will hold two hours of oral argument on the "individual mandate," which requires the purchase of health insurance by 2014; 90 minutes on whether the "individual mandate" requirement can be severed from the rest of the Act; one hour on whether the Anti-Injunction Act applies (the Anti-Injunction Act generally provides that an individual cannot challenge a tax until they have to pay it); and one hour on the constitutionality of expanding the Medicaid program. It is not clear if all of the cases will be heard on a single day.

An agency from the Department of Health and Human Services has restored the public use database to the National Practitioners Data Bank, two months after removing the data amid concerns of inappropriate usage.

However, individuals who use the public access database must now agree that they will not link the information in the database with public information, such as court records, in order to identify the doctors.

The National Practitioner Data Bank (NPDB) is a nationwide repository where hospitals and other entities are required to report malpractice payments and other adverse actions taken against physicians, such as denial of clinical privileges or restrictions. While access to the database is generally restricted, there is a public use file that contains redacted information. Access to the database was shut down in September after certain individuals matched court records in malpractice cases to information in the database, thus publicly identifying the doctors.

In a statement released yesterday, the administrator of the Health Resources and Services Administration (the agency within HHS that manages the NPDB) said that the new restrictions are needed to avoid violating legal requirements on confidentiality. Pursuant to federal statute, information in the NPDB may only be disclosed to certain delineated individuals and organizations, and cannot be obtained via subpoena.

This morning’s announcement from retail giant Wal-Mart provided an interesting glimpse of what the future of primary care may look like.

Specifically, according to a press release, Wal-Mart plans to begin offering a range of primary health care services such as prevention, diagnostic tests, and even management of chronic conditions such as diabetes and heart disease.

Wal-Mart has issued a 14-page Request for Information (RFI) to health care providers or “vendors” to propose business models whereby Wal-Mart would team up with the vendors to build a “nationally integrated healthcare platform aimed at delivering the lowest cost primary healthcare services.” The RFI seeks vendors to provide services in the following areas:
- Chronic Care (management/monitoring of diabetes, asthma, high blood pressure, obesity, etc.)
- Diagnostic Services (Allergy testing, blood tests, etc.)
- Preventative Services (Vaccines, physical exams, stress management, etc.)
- Health and Wellness (smoking cessation, pregnancy evaluations, etc.)
- Acute Care (Digestive and Urinary exams, skin/hair/nail exams, etc.)

While the provision of basic medical services has slowly moved away from primary care physicians' offices in recent years to places like Rite-Aid or CVS clinics, Wal-Mart’s plan raises some concerns. It is one thing for a patient to receive something like a flu shot or poison ivy cream at a walk-in clinic, but encouraging patients to use store clinics like Wal-Mart may lead to fragmented medical care and weaken the doctor/patient relationship. Additionally, while the clinics are intended to provide primary care services, patients may mistakenly believe that the clinics are a substitute for all health care providers and stop seeing needed specialists such as cardiologists, etc.

In any event, it will be interesting to see how Wal-Mart’s plan involves and if it comes to fruition.

Today's post was authored by FWH attorney Sue Nolan

The final rule implementing provisions of the Medicare Shared Savings Program for Accountable Care Organizations (“Final Rule”) was released by the Centers for Medicare and Medicaid Services ("CMS") on October 20, 2011. The Final Rule will be published in the Federal Register on November 2, 2011, and sets forth requirements for Accountable Care Organizations ("ACOs") under the Medicare Shared Savings Program. These requirements pertain to how ACOs are formed, the governance of an ACO, the entry into an ACO agreement with CMS, who may form an ACO, who may join an ACO, beneficiary assignment, quality reporting, calculation of and sharing of savings and losses and termination of an ACO.

The Final Rule contains several changes that addressed comments made by the various stakeholders on a proposed rule published by CMS on March 31, 2011 (“Proposed Rule”).

Listed below are some of the most important changes made in the Final Rule. On the whole, the changes are expected to make formation of and participation in an ACO more appealing to providers and health systems, in part because the financial incentives are stronger and the compliance burdens are somewhat less. (Note: A separate Health Care Lawyer Blog post will follow addressing the interim final rule issued by the OIG setting forth certain waivers of Stark, the Federal Anti-Kickback Statue, and certain civil monetary penalties law provisions that apply to specified arrangements involving ACOs.

Background on ACOs. The goals of the Medicare Shared Savings Program are to provide better care to Medicare beneficiaries, promote better health for the Medicare population, and reduce the growth in Medicare expenditures. In short, an ACO is expected to increase the quality of care while at the same time reducing the cost of care. An ACO is a legal entity recognized and authorized under applicable state, federal or tribal law, is identified by a taxpayer identification number, formed by one or more ACO eligible participants, and may include other participants. The ACO provides the structure for coordinating care, controlling the quality of care given to Medicare beneficiaries, distributing shared savings payments or paying for losses.

After the jump - Important highlights from the Final Rule

Continue reading "Final Rule on Medicare Shared Savings Programs for ACOs Released" »

Michigan physicians may not refuse to enter into a doctor-patient relationship with individuals based on discriminatory reasons, according to a recent opinion by the Michigan Court of Appeals. Importantly, the opinion overrules long-standing Michigan common law, which generally held that a doctor-patient relationship is consensual and a physician cannot be required to render services to anyone.

In Moon v. Michigan Reproductive & IVF Center, et al., (Case No. 299623), plaintiff Allison Moon contacted the defendants, two southwest Michigan fertility centers, and specifically asked if the clinics would provide in vitro fertilization (IVF) services to a single woman. Both clinics responded that they would not. Moon filed suit against both, alleging discrimination based on marital status under Michigan’s Elliott-Larsen Civil Rights Act.

The Elliott-Larsen Act provides generally that: “The opportunity to obtain employment, housing and other real estate, and the full and equal utilization of public accommodations, public service, and educational facilities without discrimination because of religion, race, color, national origin, age, sex, height, weight, familial status, or marital status as prohibited by this act, is recognized and declared to be a civil right.” MCL 37.2102(1)(emphasis added).

The circuit court granted defendants’ motion for summary disposition, reasoning that under Michigan common law: "a physician-patient relationship is voluntary and consensual, and a physician may refuse to enter into such a relationship for any reason or no reason at all. This Court does not believe the ELCRA was intended to function so as to force professionals to enter into relationships with clients. That is likely one reason why MCL 37.2302 begins with the phrase “[e]xcept where permitted by law.”

After the jump - what this case means to medical professionals

Continue reading "MI Court Holds that Medical Professionals May Not Deny Services For Discriminatory Reasons" »

A recent New York Times article spotlighted the use of telepsychiatry, or the use of web-based video conferencing technology such as Skype or iChat, to connect patients with psychiatrists. The article described a patient receiving an appointment “reminder” on her iPhone, then fixing herself a mojito and lounging poolside while her therapist counseled her via webcam.

The use of such technologies to provide health care remotely (commonly referred to as telemedicine) may sound idyllic, but can also raise numerous compliance issues for health care providers. For example, is the use of such technologies within the scope of practice? Do state laws place a restriction on the use of telemedicine? Is the standard of care for services provided via telemedicine the same as services provided in real life?

The following are a few issues that providers should consider before using telemedicine as a means to treat patients.

What do state statutes or licensing boards say about the use of telemedicine? First and foremost, a provider should check with his/her state licensing board or consult applicable state statutes to determine if telemedicine is contemplated within the scope of practice. For example, in Michigan the statute defining practice of medicine does not include telemedicine, as some other states such as Indiana. In addition to statutory guidance, state licensing boards may have issued informal or formal guidance to providers regarding the use of telemedicine. If the state licensing board is silent on the issue, a provider should consult with any professional societies he/she may belong to (American Medical Association, American Psychological Association, etc.) for information.

After the jump - additional considerations for providers.

Continue reading "Telemedicine: A Checklist for Health Care Providers" »