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" »

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 FHW attorney Michelle D. Bayer

When the Michigan legislature enacted the Michigan Medical Marihuana Act, MCL §333.26421 et seq, effective December 4, 2008, it joined about 12 other states which at that time had legalized the medical use of marihuana. However, recent developments indicate that even individuals who are legally authorized to use medical marihuana may still come under fire for a variety of related offenses.

There has always been a conflict between federal law, which classifies marihuana as a Schedule I controlled substance which is prohibited under the Federal Controlled Substances Act, and these state statutes legalizing medical marihuana use. A 2009 memo from Deputy Attorney General David Ogden directed U.S. Attorneys not to target medical marihuana businesses in areas where they're legal, as long as they're following state law, was seen as a green light for the state legislation.

Despite this pronouncement by the Obama administration and the Deputy Attorney General, medical marihuana statutes across the country and in Michigan have come under attack.

Recently, the Federal DEA has sought to obtain state medical marihuana program members’ information as part of its investigations. In Michigan, legislation has been proposed which would require the Michigan Department of Licensing and Regulatory Affairs, the governmental body which processes medical marihuana program applications, to give the Michigan State Police the names and addresses of registered patients and caregivers. Right now, law enforcement authorities can only check registrations by obtaining a patient or caregiver’s personal identification number.

Significantly, in Michigan, and other states, card carrying program members have been prosecuted for a variety of actions including, driving under the influence, violations of zoning ordinances, probation violations, excessive plant growing, and other technical violations of the state statute, even though they are properly enrolled in the medical marihuana program. The discharge of an employee for off-duty marihuana use, who was in compliance with the state medical marihuana statute, was affirmed.

Continue reading "Has Freedom to Use Medical Marihuana Burned Out? " »

Since the False Claims Act (FCA) is regularly used in cases involving health care fraud, the Health Care Lawyer Blog covers significant FCA activity.

The Supreme Court held this morning that a federal agency’s written response to a request for records under the Freedom of Information Act (FOIA) constitutes a “report” within the meaning of the FCA's public disclosure bar. The 5-3 decision (Kagan, J. recused herself) resolved a longtime split amongst the circuits and will have significant impact on FCA plaintiffs and their counsel going forward.

Background

Generally, the federal FCA prohibits a private plaintiff (often referred to as a relator or whistleblower) from filing an action that is “based upon the public disclosure of allegations or transaction in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit or investigation, or from the news media.” See 31 U.S.C. 3730(e)(4)(A), amended by the 2010 Patient Protection and Affordable Care Act, this amendment will be discussed in detail below. Frequently referred to as the “public disclosure bar”, this provision was included in the legislation to prevent “parasitic” lawsuits and ensure that cases were only filed by insiders with personal knowledge of fraud against the government.

In Schindler Elevator Corp. v. United States ex rel. Kirk, a private plaintiff filed an FCA lawsuit against defendant Schindler Elevator Corp. Kirk alleged that defendant, a contractor with the Department of Defense, failed to comply with certain regulations and thus all claims submitted to the government for payment were fraudulent. In support of his allegations that the defendant falsely complied with the regulations, Kirk relied on information that his wife had obtained from the Department of Labor in response to three FOIA requests.

Schindler moved to dismiss Kirk’s suit, claiming in pertinent part that the information in the FOIA reports constituted a “public disclosure” and Kirk’s suit was thus barred. The District Court granted the motion, and Kirk appealed to the Second Circuit Court of Appeals.

On appeal, the Second Circuit vacated and remanded, holding that an agency’s response to a FOIA request is neigh a report nor an investigation within the meaning of the public disclosure bar. Schindler appealed.

After the jump - analysis of the Court's opinion and what the case means to FCA cases

Continue reading "Supreme Court: FCA Actions Cannot Be Based Upon Information Obtained Via FOIA Requests" »

As repeated pleas for bi-partisan cooperation reverberate in Congress following the Tucson, Arizona shooting earlier this month, Democrats and Republicans continue to battle over the fate of the Patient Protection and Affordable Care Act (PPACA).

This week several Democratic leaders, including Senate Majority Leader Harry Reid and House Democratic Leader Nancy Pelosi, filed an amicus brief in a pending Sixth Circuit Court of Appeals case which questions the constitutionality of PPACA. The case, Thomas More Law Center v. Obama, et al. (Court of Appeals Docket #: 10-2388), is on appeal from the Eastern District of Michigan, where Judge George C. Steeh ruled last October that Congress had the power under the Commerce Clause to implement PPACA’s mandatory coverage provision.

Although dozens of lawsuits have been filed challenging PPACA constitutionality, the More case is the first to reach the appellate court level. So far two other district court judges have upheld the law, and another has declared the individual mandate unconstitutional. Many other cases have been tossed out of court on procedural grounds.

The amicus brief filed by Democratic leaders alleges that PPACA is a valid exercise of Congress’ power to regulate commerce, and that Congress also has power under the Constitution’s “Necessary and Proper Clause” to adopt the individual mandate. Dozens of other amicus briefs have been filed in the case for both pro and anti-PPACA groups; a few participants to date include the American Cancer Society, American Hospital Association, March of Dimes, and countless other professional and medical specialty organizations.

Several Democratic Attorney Generals said last week that they have formed a coalition to defend the constitutionality of the law in the More case, and in other cases. They include Oregon, Iowa, California, New York, Vermont, Connecticut, Hawaii, Maryland, and Delaware. Conversely, twenty-six other states (most represented by the state Attorney General) have filed a separate lawsuit in Florida challenging the health reform law.

While last week the House of Representatives passed H.R. 2, the two-page bill which repeals PPACA, the fate of PPACA is likely to be resolved in the Supreme Court and, depending on how quickly an opinion is rendered, More will likely be the first case to present the issue before the nine justices. It is almost certain that regardless of whether the Sixth Circuit affirms, reverses, or remands the case, any holding will be appealed by either the More Law Center or the federal government to the Supreme Court.

Oral argument has not yet been scheduled in the More case. The Health Care Lawyer Blog will continue to follow More and other cases regarding PPACA.

You know the drill – you call your health care insurer to see if a certain procedure or drug is covered by your plan. After the friendly representative assures you it is, you go ahead and order the drug or procedure. However, a few weeks later you receive a hefty invoice for the allegedly “covered” procedure, leaving you in a nasty game of “He said, she said” and endless calls to your insurance company.

Relief from such scenarios may be on the way. Last week, the Departments of Health and Human Services (HHS), Labor, and the Treasury issued new regulations designed to help consumers appeal coverage decisions made by health plans and insurance companies, and to help boost the availability of resources to do so. The appeals regulations, which were issued pursuant to the Patient Protection and Affordable Care Act (PPACA), includes $30 million in Consumer Assistance Program grant funding to help states establish consumer assistance offices or strengthen existing ones. Consumers who live in the State of Michigan, for example, can appeal denied claims through the Office of Financial and Insurance Regulation.

While many insurance plans already include a mechanism by which consumers can appeal coverage denials, under PPACA such provisions are now mandatory. Additionally, for the first time patients will have the right to appeal coverage decisions to an outside, independent decisions-maker. Specifically, consumers in states who lack such outside determination laws will not have access to a Federal external review program.

For more information on the appeals regulations, check out the HHS Fact Sheet or contact Mercedes Varasteh Dordeski.

The U.S. Senate left for a long weekend Friday without tying up one major loose end – the so called “doc fix” which would prevent a 21 percent cut in Medicare reimbursement to physicians.

House Bill 4213, which would give physicians a 19-month reprieve before the pay cuts went into effect, was passed by the U.S. House of Representatives in May but has not yet been approved by the Senate. The repeatedly delayed cut technically took effect June 1, 2010, but the Centers for Medicaid and Medicaid Services again announced that contractors would not process claims for services delivered on the first 10 business days of the month. However, this “grace period” ends June 15. Therefore, unless the Senate swiftly passes the Bill and President Obama approves, physicians will see a significant reduction in Medicare pay rates.

AMA President J. James Rohack has lambasted the Senate for its failure to act, claiming that seniors are being hurt by the cuts in that physicians are being forced to limit the number of Medicare patients they can treat. According to Rohack, one in five physicians say they are already limiting the number of Medicare patients in their practice due to reduced payment rates, and the resulting impact on seniors' health care will be dramatic.

Expansion of the Recovery Audit Contractor (RAC) program, increased penalties under federal sentencing guidelines and heightened program integrity measures are just a few of the new anti-fraud provisions found in the Patient Protection and Affordable Care Act (PPACA).

This week Lew Morris, counsel for the Department of Health and Human Services-Office of the Inspector General, released a chart outlining the fraud and abuse/program integrity provisions in the PPACA, many of which took effect on the date of enactment (i.e. March 23, 2010) and require prompt compliance attention.

Some of the new provisions merely confirm long standing legal positions - for example, the PPACA amends the federal Anti-Kickback statute (AKS) to define a "false claim" under the federal False Claims Act as any claim that includes items or services resulting from a violation of the AKS. However, federal courts had long adhered to this position when deciding FCA cases.

However, other new changes should be carefully noted by providers - for instance, one of the amendments which may have the greatest impact on the health care industry is the relaxed "specific intent" requirement under the AKS. Importantly, the amendment provides that an AKS violation may be established without showing that an individual kew of the statute's provisions and intended to violate the statute. Previously, conviction for an AKS violation required proof of intent.

As another example, the PPACA requires that Medicare overpayments must be reported and returned within 60 days of identification or the date a corresponding cost report is due, whichever is later. Any overpayment retained after the 60-day deadline is considered an obligation for purposes of the FCA.

Providers are well-advised to carefully review the fraud and abuse summary, and contact an attorney to update compliance plans and manuals.

As part the of nationwide “Communities Putting Prevention to Work” initiative (or as I like to call it, the “Duh” initiative), the Department of Health and Human Services has awarded $119 million in grant monies to states and U.S. territories to support efforts to reduce obesity, increase physical activity, improve nutrition and reduce smoking. The initiative is funded through the American Recovery and Reinvestment Act and is directed at curbing “behavioral” waste, which is often cited as a factor in the rising costs of health care.

The monies will be allocated to all 50 states, the District of Columbia, and U.S. territories to help communities and schools support healthy choices. For example, one projected use of the funds will go towards using the media to support healthy food and beverage choices and increase physical activity, and increasing access to health choices and “safe” places to be active (which is a often-cited as a concern in inner-city areas). Grant monies will also be used to fund “quitting hotlines” for smokers and media campaigns promoting tobacco cessation.

The awards are broken up into three major categories – 1) Statewide policy and environmental change; 2) competitive special policy and environmental change, and 3) Tobacco cessation through quitlines and media. The awards to Michigan are as follows:

Policy and Environmental Change - $1,299,666
Competitive Special Policy and Environmental Change Initiative - $1.5 million to reduce exposure to second-hand smoke, including partnering with Native Americans.
Tobacco cessation through quitlines and media - $1,251,009

The grants to Michigan represent are among the largest in each of the three categories (Michigan received the seventh-highest for Policy and Environmental; seventh in Tobacco cessation, and was included as one of 13 states to receive funding for special policy and environmental changes.) Some examples of other states initiatives under the latter category include a grant of $2.7 million to Texas to promote breastfeeding; $2.3 million to Minnesota to revamp school lunch menus; and $3 million to North Carolina to “conduct a state-level policy analysis and develop a process to promote physical activity through land use and transportation planning.”

After the jump - Michelle Obama's Let's Move! campaign

Continue reading "HHS Awards $119M in Grant Monies to Promote Healthy Lifestyles" »

The personal health information of thousands of Detroit area patients was compromised recently when five computers and a flash drive were stolen from the Herman Kiefer Health Center in downtown Detroit. The stolen devices contained electronic medical records for approximately 10,000 immunization program patients, including names, addresses, social security and Medicare/Medicaid numbers.

Following this electronic medical records security breach, many health care providers may be wondering how they would respond to a similar crisis. In light of the Congressional push to require health care providers to make “meaningful use” of electronic health records by 2011, the prevalence of electronic records is on the rise and will only increase in coming years. Additionally, the proper handling of such breaches has become even more crucial in light of the security breach notification requirements that were added last year to the Health Insurance Portability and Accountability Act (“HIPAA”).

Given that a medical records security breach is enough to send even the most seasoned health care provider into a panic, practitioners should familiarize themselves with the HIPAA breach notification requirements and establish written policies and operating procedures before a breach occurs. Importantly, providers who fail to adhere to the HIPAA breach notification requirements may face penalties of anywhere from $100 to $1.5 million, depending on the nature of the breach and the mental state of the provider.

After the jump - a crucial checklist for providers

Continue reading "Responding to an Electronic Medical Records Security Breach: What Every Health Care Provider Needs to Know" »

Despite the fireworks caused by the night-owl Senate vote for cloture on the “Patient Protection and Affordable Care Act” by a margin of 60-40, the real questions remains – what is health care reform going to mean for America? While the Senate and House versions of health care reform legislation are similar in scope, bills contain significant differences in how the legislation will be paid for.

The hotly-contested Senate bill, which does not contain the “public option” insurance coverage provision in its House counterpart, was heralded by President Obama this morning as “a big victory for the American people.” However, given the call for bi-partisanship that emanated from last year’s presidential election, the vote was not a political victory. The vote was so evenly divided down party lines, with every single Republican Senate member opposing the bill, that Democrats were forced to coax votes from waffling Senators such as Joe Lieberman (I-Conn.) and Ben Nelson (D-Neb.) by slicing provisions from the legislation. Specifically, in order to garner Nelson’s vote, amendments were made to the bill’s abortion provisions and a provision was added requiring the federal government to cover Nebraska’s costs for expanded Medicaid coverage after 2016. (No other state is currently slated to receive this benefit.) Additionally, the public option and Medicare expansion program was jettisoned to appease Lieberman and middle-of-the-road Democrats.

The Senate will hold additional procedural votes on the health care bill this week, and a final vote is scheduled for Christmas Eve. If the bill passes (as expected), the Senate version will then head to a conference committee, where it will be merged with a House health care bill passed last month. Both the House and Senate will then have to approve the final version before it goes to President Obama to be signed into law.

Comparing the House and Senate Versions

Both the House and Senate versions require nearly all individuals to maintain a minimum level of health insurance or pay a penalty, with the House version calling for a penalty of 2.5 percent of adjusted gross income over a certain level ($9,350 for singles and $18,700 for couples). Individuals who cannot afford health insurance will receive subsidies to do so. The House bill provides for the creation of a single-payor, government run insurance plan where individuals can obtain coverage; the Senate bill would instead create new nonprofit private plans overseen by the federal government.

After the jump - comparing the House and Senate bills (continued)

Continue reading "Senate Votes for Cloture on Health Care Reform; Bill Inches Towards Final Vote" »

Non-smokers in Michigan can finally breathe easy – literally.

Effective May 1, 2010, all restaurants and bars in the state will be required to be smoke-free following legislation that was passed by the Michigan House and Senate Thursday. The bill (H.B. 4377) is headed to the desk of Governor Jennifer Granholm, who has stated that she intends to sign it.

Efforts to pass the non-smoking legislation were log-jammed for years by groups who claimed such laws would affect business owners’ autonomy, or have an adverse impact on casino business. The approved bill does not apply to Indian gaming casinos, and allows smoking on the gaming floors of other casinos, but not in casino bars, restaurants or hotels. Also exempt are tobacco specialty shops and existing cigar bars that have humidors and derive at least 10 percent of their revenue from the sale of cigars. The legislation does not permit new cigar bars to open.

Affected establishments are required under the legislation to remove all ashtrays from the business premises by May 1, and post signs that smoking is not allowed. In the event a patron does choose to light up, the penalties will be assessed against the smoker, and not the establishment. Violating the smoking ban counts as a civil infraction, with the first violation resulting in a $100 fine and subsequent violations in a fine of up to $500.

After the jump - author's comments on the legislation.

Continue reading "Michigan Bars, Restaurants to be Smoke-Free By May 2010" »

The U.S. Senate has consolidated two versions of health care reform bills into one piece of legislation, dubbed the “Patient Protection and Affordable Care Act.” Released late Wednesday night, the bill is expected to cost $130 billion over the next decade, according to an analysis of the bill released by the Congressional Budget Office. However, according to the Democrats' Senate website, the legislation will also cut the deficit by $127 billion, extend coverage to more than 94 percent of Americans, and insure 31 million more of the uninsured.

As with the House version, the Bill includes a government-run insurance plan. However, the difference with the Senate Bill is that states can opt-out of the government run plan, which means that by enacting legislation, a state may elect to prohibit the government-run plan from being made available to state residents. Of course, the problem with this is that the Senate bill also includes a provision requiring individuals to purchase some form of health insurance. However, the deadline for doing so would be moved from July 1, 2013 to January 1, 2014. Individuals who fail to purchase insurance would be penalized in an amount of up to $750 per year. Subsidies will be provided to low and moderate-income families to help such families purchase insurance.

This morning Senate Finance Committee Chairman Max Baucus (D-Mont.) released a health care reform proposal, offering a peek at the pending legislation to come. Dubbed "America's Healthy Future Act of 2009", the proposal is published in the form of a "Chairman's Mark." This is intended to provide a more informal overview of the nation's current health care problems and how to fix them, instead of releasing actual legislative text.

Importantly, the "Chairman's Mark" does not provide for a government-run health plan (other than existing plans such as Medicare, Medicaid, etc.). The proposal does require individuals to purchase insurance coverage, establishes state health insurance exchanges, provides for a tax refund to help individuals and families to purchase such coverage, and contains eligibility requirements (in order to prevent illegal immigrants from accessing state exchanges).

Debate on the full committee is expected to start September 22, 2009. The 23-member Senate Finance Committee consists of 13 Democrats and 10 Republicans. The Health Care Lawyer Blog will continue to monitor such debates and provide a more complete overview of the proposal in the near future.

Last week Michigan Speaker of the House Andy Dillon (D-Redford Township) introduced legislation which, if passed, will consolidate the health benefits of all Michigan’s public employees into a single state health insurance plan. HB No. 5345, which was proposed by Dillon back in July of this year faced strong dissent from parties ranging from the Michigan Education Association to Jennifer Granholm, and is expected to be the subject of similar debate as it makes its way through the legislature.

Entitled “The Michigan Health Benefits Program Act”, the legislation creates a 13-member program board to develop a health benefit plan and determine the total premium cost for each plan to be adopted. The plan will cover all employees of “public employers” which is defined to include the state; any city, village, township, county or other political subdivision; any intergovernmental, metropolitan or local department, school district, and certain community colleges and institutions of higher education.

Any health benefits plan approved by the board may include health and wellness incentives (i.e. reward improvements in health outcomes for individuals with chronic diseases, the increased utilization of appropriate preventive health services, or reductions in medical errors), and may also provide financial incentives for the increased use of health information technology.

The full plan is available here. To date, the bill has been introduced in the House and referred to the Committee on Public Employee Health Care Reform. The Health Care Lawyer Blog will continue to monitor developments.

Today the Department of Health and Human Services' interim final regulations governing the new Health Insurance Portability and Accountability Act (HIPAA) security breach notification requirements were published in the Federal Register. These regulations take effect September 23, 2009, and health care providers should take care to familiarize themselves with the requirements by then.

The Health Information Technology for Economic and Clinical Health (HITECH Act), which was part of the 2009 Stimulus Bill, requires HIPAA-covered entities to provide notification to affected individuals and the Secretary of Health and Human Services following the discovery of a breach of unsecured protected health information (PHI). In some cases, the HITECH Act requires covered entities to provide notification to the media of the breaches. In the case of a breach of unsecured PHI by a business associate (such as an accountant or attorney) of a covered entity, the Act requires the business associate to notify the covered entity of the breach. Finally, the Act requires the Secretary of Health and Human services to post a list of covered entities that experience a breach of the PHI of 500 or more individuals on the HHS website.

However, it is important to note that the HITECH Act does not require the reporting of every slip-up and privacy violation by a covered entity or business associate. For example, in order for a breach to occur the PHI must be “unsecured”. This means that the information must not be rendered unuseable, unreadable, or indecipherable to unauthorized individual. For example, if a covered entity accidentally emails notes on a patient file to the wrong address, but the email is encrypted in a certain fashion delineated by the regulations, the notice requirements would not be triggered because the information is not “unsecured”.

After the jump - how to determine if a "breach" has occurred >>

Continue reading "Health Care Providers Should Take Note of Interim Final HIPAA Breach Notification Laws" »

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.

Today the U.S. Marshals responded to a directive from the Food and Drug Administration (FDA) ordering the seizure of drugs from Caraco Pharmaceutical Laboratories, Ltd.'s facilities in Detroit, Farmington Hills and Wixom. Caraco Labs, which apparently manufacturers over 60 varieties of generic pharmaceuticals, is alleged to have failed to comply with the FDA's mandatory current Good Manufacturing Practice (cGMP) regulations, which ensure drug quality. The specific violations named involve manufacturing defects, including oversized tablets and possible formulation error. The U.S. Marshals also seized ingredients held at the same facility.

Caraco Labs previously issued major drug recalls in January 2009 in an attempt to recapture the defective medications. An FDA inspection completed in May of 2009 uncovered continuing cGMP standard violations. The drastic action taken during today's seizure will hopefully lead to major changes at Caraco's facilities.

The FDA's cGMP standards are designed to ensure that drugs are manufactured, handled, and repackaged correctly, and include strict requirements to ensure that unsafe pharmaceuticals are not introduced into commerce. The standards require drugmakers to obtain and use raw materials of appropriate quality, maintain reliable testing labs, eliminate cross-contamination with beta-lactam drugs, etc.

The United States House of Representatives is contemplating legislation which would tax drugmakers to the tune of nearly $37 billion in order to help pay for the nation's health care overhaul. Currently, drugmakers are permitted to deduct their direct-to-consumer advertising costs for prescription drugs. The proposal is only one of many revenue-raising measures that are being discussed as a way to fund a plan being drafted by House Democrats which would include $600 billion in tax increases and $400 billion in cuts to Medicare and Medicaid.

Drugmaker advertising has come under fire in recent months, and House Ways and Means Committee Chairman Charles Rangel has stated that it's improper for taxpayers to subsidize pharmacuetical ads because such ads actually encourage consumers to request drugs that they might not actually need. However, the proposed change has sparked outrage from drugmakers and ad groups, who claim that such measures violate First Amendment freedom of speech and unfairly target one industry.

While tax increases are seldom (if ever) met with universal approval, the fact remains that cuts and revenue-raising will have to take place at some level given the current budget deficit. Furthermore, taxpayers may be more amenable to plans that would tax drugmakers as opposed to taxing employer-provided health insurance, another idea which has been tossed around in Congress recently.

A bill which would ban smoking in almost all Michigan workplaces was recently approved by the House of Representatives and will now move to the Senate for consideration. House Bill 4733, which would prohibit smoking in all public establishments with the exception of cigar bars and the gaming floors of casinos (including Native American casinos), is similar to the smoke-free workplace laws already passed in 37 states and the District of Columbia. A previous bill introduced last year, HB 4163, was approved by the House and Senate but failed to receive enough votes to be passed to Michigan Governor Jennifer Granholm for signing.

Supporters of the Bill, such as the Michigan Campaign for Smokefree Air, urge that such anti-smoking restrictions are necessary to protect the health of Michigan workers and consumers. However, HB 4733 has been met with opposition from restaurant and bar owners who claim such a bill would strip them of their autonomy as business owners. (Perhaps due to these sentiments, the current Bill includes an anti-provision which prohibits business owners from taking adverse action against employees who exercise their rights under the Bill.)

While restaurant and bar owners may claims that their "business autonomy" is restricted by bills such as HB 4733, it is important to note that such business have never been granted free reign over their operations. For example, there are restrictions imposed on restaurants/bars with respect to whom alcohol can be served and when. Such businesses must pay their employees at least minimum wage (with some exceptions, such as waitstaff) and obey health and sanitation regulations with respect to how food is stored and prepared. Few would argue that such laws and regulations are necessary to protect the safety and well-being of employees and consumers.

Continue reading "Michigan "Smoke-Free Workplace" Bill Passes House, Moves to Senate" »

I am back from a pleasant hiatus. My children, both living out of town, blessed us with two new grandchildren this summer--a grand-daughter and a grandson--and the last few months have been occupied with enjoyable travel.

The U. S. District Court for the Middle District of Georgia was more active than I was, however, when it recently held that a physician who unsuccessfully sued the hospital where he worked, and some other physicians on staff, must pay the defendants' attorneys fees and costs because he had signed an "Applicant's Consent and Release" when he was applying for medical staff privileges at the defendant hospital. The amount to be paid is yet to be determined but could be substantial because there were 3 defendants seeking fees, including two physicians and their group professional corporation.

In the case of Adeduntan v. Hospital Auth. of Clark City, No.3:04-CV-065 (CDL)(M.D. Ga. July 31, 2008), arising out of the medical peer review of plaintiff's performance during an emergency abdominal aortic aneuryism procedure, the Court found that "...[Dr. Adeduntan] was required to execute the form in order to apply for mediacal staff appointment and privileges at Athens Regional and that [his] signature appears on multiple copies."

The language of the document provided:

"If...I [Dr. Azeez Adeduntan] institute legal action against the Hospital [Athens Regional] and/or its Medical Staff members and do not prevail, I agree to reimburse the Hospital and any Medical Staff members named in the action for any and all costs incurred in defending the legal action, including reasonable attorneys fees."

Recognizing that credentialing litigation is on the rise because of numerous decisions allowing such disputes to move into the courts, and most American courts cannot impose attorney fee obligations on losing litigants, in the absence of a contractual requirement, I would expect that most staff privilege applications would be promptly amended to include such language.

Depending on the applicant's specialty, and state law, the language may or may not be negotiable. A good healthcare attorney, however, is essential to review the application, research the issue and attempt to obtain any modifications. As always, even the most innocuously appearing document--a simple "application" may contain time-bombs that lay dormant for many years.

As I reported earlier, the Michigan Medicaid False Claims Act was amended effective January 1, 2006 through the efforts of Attorney General Mike Cox and Representative David Law (R., Commerce). I worked actively for passage of the amendment and testified before the Michigan House of Representative Judiciary committee, then chaired by Rep. Law..

The State of Michigan can recoup extra funds from combined state/federal recoveries because of the provisions of the federal Deficit Reduction Act of 2005 ('DRA"). To explain, shortly after the the Michigan Medicaid False Claims Act amendment passed the Michigan Legislature and Governor Granholm signed the Act, the U.S. Congress passed the DRA providing for a 10% incentive to States which enacted a "compliant" Qui Tam statute addressing Medicaid fraud. Specifically, the Medicaid program is a joint federal/state program. Thus, in Michigan, the federal government pays about 56% and the state 44% of the costs of the Medicaid program and fraud recoveries are divided on the same percentage.

If the state has a "compliant" Qui Tam statute, the state receives an extra 10% of the recovery--that is, 54% in Michigan--of the recovery--instead of 44%--a significant amount of money since most recoveries are in the tens of millions of dollars or more!!

However, on December 21, 2006, the U.S, Department of Health and Human Services/Office of Inspector General ("HHS/OIG") advised the state, by letter, that its Medicaid False Claims Act was NOT "DRA compliant" (that is, a mirror image of the federal False Claims Act).

In order to comply, all that was needed was a simple bill adding civil monetary penalties of at least $5000 for each violation and making one other technical amendment. Since the revisions would not have had any negative fiscal impact on the state and would have had a potentially tremendous positive impact in the event of any recovery, one would have expected Representative Law to quickly introduce a clarification/modification bill and obtain quick passage--after all, the State would most certainly not turn down the opportunity to reverse the flow of funds from Michigan to Washington??

Unfortunately, in 2006 and 2007, petty partisan bickering was rampant in the Michigan Legislature--we were paralyzed by the absurd budget fight and leadership was non-existent.

Rep. Law, finally, on September 17, 2007, introduced a one-page bill. The date of introduction is significant. In addition to being a Saturday, the day of the Notre Dame-UM football game (a game, I suspect, Rep. Law, a Notre Dame grad, was attending), it was three days before Ray Sayeh, then a WXYZ-TV investigative reporter, had scheduled (at my request) an interview with the representative to discuss the failure to take action on the revisions.

Unfortunately, again because of partisanship and Democratic control of the House of Representatives, the bill went nowhere while the Attorney General continued to obtain recoveries from fraud-feasors and the unclaimed 10% incentive was lost to Washington.

Finally, on February 19, 2008, Representative Marc Courveau (D., Northville) introduced HB 5757. The amended FCA, as presented in HB 5757, would allow the Michigan FCA to become DRA compliant. Once again, the small changes made by HB 5757, as required by the federal HHS/OIG., would cost the state nothing in administrative or other costs and would bring millions of dollars in the future back from Washington.

HB 5757 quickly passed the House with NO opposition and was sent to the Senate.

Tragically, because of continued political maneuvering, the Bill sits in the Judiciary Committee.

It seems that Rep. Courveau was elected at the expense of a Republican and the leadership of the Judiciary Committee and Senate Majority Leader, Mike Bishop will not allow this largely unopposed, fiscally responsible bill, to be brought up at the committee or floor level because it would give "points" to Rep. Courveau!!!!

The State of Michigan is in a deep recession/depression, unemployment sits at 8.5%, the highest in the nation, GM is in deep trouble, the City of Detroit is selling assets and landmarks--such at the Detroit-Windsor tunnel--and the Legislature cannot pass a one-page bill that will bring money to the state and its Medicaid recipients.

This Bill is under the radar, unfortunately--Ray (now Rez) Sayeh has joined CNN International and is posted in Pakistan, columnists such as Brian Dickerson and others have been unresponsive despite my entreaties, my solicitations to the Legislature and the use of my contacts have been unavailing.

I am frustrated. Medicaid fraud is rampant, the Attorney General is acting diligently in pursuing the cheaters, and we have been filing qui tam cases under the new Act, but even if all of these activities are successful--and they will be--the State will not receive the full benefit of its recoveries!!!

I will not stop my efforts, but it will take action by my readers to move this along. Sen. Mike Bishop may be contacted by email and his office phone number is (517) 373-2417.

The other Senators on the Judiciary Committee may be emailed at:

senwkuipers@senate.michigan.gov Sen. Kuipers - Chair

senacropsey@senate.michigan.gov Sen. Cropsey

senasanborn@senate.michigan.gov Sen. Sanborn

senbpatterson@senate.michigan.gov Sen. Patterson

sengwhitmer@senate.michigan.gov Sen. Whitmer - minority vice-chair

senhclarke@senate.michigan.gov Sen. Clarke

senmprusi@senate.michigan.gov Sen. Prusi

The House and Senate this week voted by substantial margins to override President Bush’s veto of a Medicare package (H.R. 6331) that blocks the over 10% reimbursement cut to physicians that went into effect July 1 (See original Alert below.)

The U.S. Senate, this afternoon, passed the Medicare Improvements for Patients and Providers Act of 2008 (H.R. 6331) upon voting to end the Republican filibuster with 69 affirmative votes for cloture. The Senators had agreed that the bill would be considered passed if cloture was invoked. The Bill, among other things, eliminates the proposed 10.6% physician pay cut, instead instituting a 1.1% increase effective January 1, 2009.

Senator Ted Kennedy made his first appearance on the Senate Floor since his brain tumor was discovered.

Monica Navarro pointed out to me that WPS Medicare Part B e-News today reported that independent laboratories may no longer (for dates of service on or after July 1, 2008) bill Medicare for the technical component (TC) of physician pathology services furnished to patients of a covered hospital, regardless of the beneficiary's hospitalization status (inpatient or outpatient) on the date that the service was performed.

WPS indicated that this ruling has its genesis In the final physician fee schedule regulation published in the Federal Register on November 2, 1999, where the Centers for Medicare & Medicaid Services (CMS) stated that it would implement a policy to pay only the hospital for the TC of physician pathology services furnished to hospital patients. Prior to this proposal, any independent laboratory could bill the carrier under the physician fee schedule for the TC of physician pathology services for hospital patients. At the request of the industry, to allow independent laboratories and hospitals sufficient time to negotiate arrangements the implementation of this rule was administratively delayed. Subsequent legislation formalized a moratorium on the implementation of the rule. As such, during this time, the carriers and, more recently, Medicare Administrative Contractors (MAC), have continued to pay for the TC of physician pathology services when an independent laboratory furnishes this service to an inpatient or outpatient of a covered hospital.

The most recent extension of the moratorium was established by the Medicare, Medicaid, and SCHIP Extension Act (MMSEA). Section 104 of the MMSEA expired on June 30, 2008, thus ending the moratorium.

Our firm published a series of articles in the Summer, 2008 edition of Michigan Medical Law Report.

Michigan Medical Law Report is published by Dolan Media Company. Frank, Haron, Weiner & Navarro was asked to contribute to this prestigious magazine sent to 20,000 practitioners.

Michelle Bayer's article on Internet pharmacies is entitled "They're efficient, but mail-order Internet pharmacies have intricate legal requirements."

Mercedes Varasteh's article entitled "Joint Commission standard fosters collaboration between medical staffs, hospitals" covered the application of MS 120.

Louis Szura wrote on revisions to Section 179 of the Internal Revenue Code in an article, "Economic Stimulus Act offers big tax breaks for health care providers."

David Haron instructed providers on the federal False Claims Act in "Exposing fraud and abuse--what a private citizen may do."

Finally, Melinda Balian and Ross Hammersley gave excellent employment related information in "Employees--your biggest risk and your biggest ally."

Fortune Magazine recently included comments from Jeff Kindler, CEO of Pfizer, the major pharmaceutical company, that approximately half of written prescriptions go unfilled. Other reports have indicated that the reason is inability to pay by seniors, difficulty finding or travelling to pharmacies (and the cost of gas doesn't help), forgetfulness and problems at the pharmacy, including language difficulties.

Such problems cause significant difficulties for patients. The obvious problem is the loss of the curative properties of prescribed drugs. Less apparent is the effect these unfilled prescriptions have on the efficacy of drugs--that is, when the patients return to their physician for follow-up care--and the previously diagnosed condition has not been alleviated or affected, embarrassed patients often do not advise the physician that the original prescription was not filled. This leads to inaccurate future diagnoses or, worse, prescriptions for more potent dosages--strength that might not have been needed had the original prescription been filled and used. Increased use of some drugs can also lead to immunities and weakening of the efficacy of these drugs.

Why is this happening in America? Why are the drug companies encouraging physicians to write more and more prescriptions--often at higher and higher dosages?

What can be done to encourage and assist patients to fill their prescriptions and to force physicians to follow-up with the patients? One solution is better follow-up calls by physician office staff. Another interesting possibility is office drug drug dispensing using a service/product such as Dispensing Solutions which is legal in all states (with some restrictions in 5 states) and approved by the FDA. More information is available at the Dispensing Solution web-site.

In May, I commented upon the oral arguments presented to the Michigan Supreme Court in the appeal from the Michigan Court of Appeals decision in the case of Miller v Allstate.

This case raised the issue of whether a physical therapy clinic, incorporated under the Michigan Business Corporation Act, was lawfully rendering services entitling it to reimbursement from its auto-accident injured patient's No-fault insurance carrier.

Allstate Insurance Company argued that a physical therapy clinic-a medical service provider-needed to incorporate under Michigan's Professional Service Corporation Act in order to lawfully render services under Michigan's No-Fault auto-insurance act, even though the physical therapist actually performing the services was a lawfully licensed physical therapist.

The lower courts permitted the claim and the Supreme Court issued its opinion affirming those decisions on July 2, 2008, although not for the same reason the lower courts did.

Essentially, the Supreme Court held that once a corporation, of any sort, files its Articles of Incorporation with the State, it is conclusively determined that the incorporation is lawful--unless the state Attorney General successfully challenges that incorporation in a court proceeding. this conclusion was based on statutory language and the Supreme Court's interpretation of long-standing Michigan law.

I believe the result in this case is correct (although one of the two concurring Justices, Elizabeth Weaver, believes that the Court's tortured logic in reaching the decision was incorrect because of a long-standing battle she has on the Court's Standing decisional process (a topic for some law professor's blog some day))because, as the Court stated, allowing challenges to every corporation in every suit brought by a corporation would affect the very stability of the economy. Every patient would have to verify compliance by every provider with every corporate statute before accepting treatment and whether payment would be made would depend on the creativity of every insurance lawyer in every case when payment decisions were made.

For once, the Supreme Court majority seems to have gotten it right.

Let's see if the Michigan Legislature and the Department of Labor and Economic Growth follow suit and picks up on this decision and clarifies the incorporation requirements as Michael Hamblin of our firm has described on his blog, Michigan Business Lawyer, for peripheral medical and other licensed providers.

Until they do, however, every licensed practitioner and other individuals in Michigan must immediately consult competent health care business lawyers such as my firm, to review their corporate status and to consider re-incorporation as Professional Corporations if permitted and advisable.

HAVE A HAPPY AND SAFE 4TH OF JULY HOLIDAY---AND GOD BLESS AND KEEP OUR TROOPS AND THEIR FAMILIES. LET'S BRING THEM HOME SOON!!!

The Detroit Free Press reported last night that a petition drive to give voters a chance to vote on "Universal Health Care" has fallen about 260,000 signatures short of the 390,000 needed to qualify for a ballot position. However, petition drive chairman John Freeman, recognizing that the ballot effort was abandoned because of lack of financial resources and competition from other ballot initiative drives, is reported to have shifted his focus to lobbying attempts.

The petitioners, in my opinion, are well-meaning, but a mandate to the Michigan legislature is doomed to failure. This body is too split by partisan bickering, carried on by inexperienced, term-limited synchophants, to reach a meaningful compromise on such a volatile subject as universal health care. Further, even if they could, the economy in Michigan would never be able to fund such efforts.

Ironically, placement of the petition on the ballot, I believe, would have led to passage where there are some 1.2 million--or more--uninsured Michiganders--and countless other under-insureds. Significantly, the health industry -- the growth engine of Michigan where 1 in 10 Michiganders work (more than twice those directly employed in the auto industry) according to Crain's Detroit Business-- should support a lobbying effort--if it realizes that such a program would mean a million or more new paying customers. Unfortunately, none of the plans on the table in conventional debates will solve the problems with present health insurance by improving health delivery structural deficiencies, the burden on employers and still provide choice to patients and discretion to physicians. I have highlighted a plan which meets all of these objectives in an earlier entry on this Blog--but I doubt it will be debated--it is too logical and efficient.

Nevertheless, the petition effort did keep the dialogue going. Let's hope someone is listening.

Louis Szura, an Associate Attorney at Frank, Haron, Weiner & Navarro, has been admitted, through waiver, to the State Bar of Michigan. Louis, a University of Michigan and Cornell Law School graduate and an attorney licensed, and who has practiced, in Ohio and Illinois, was approved by the Character and Fitness Committee and sworn in before the Honorable Shalina Kumar, Judge of the 6th Circuit in Michigan in Oakland County.

Louis will continue his practice in all aspects of litigation, including health care and complex business matters.

The House voted today to postpone a planned cut in payments to physicians who treat Medicare patients. The bill passed by 355 to 59. There was a fear that the cut--some 10.6%--would affect physician's desire to treat medicare patients. Instead, the bill will increase Medicare payments to doctors by 1.1% in January instead of another 10% cut.

The elimination of the cut will be paid for by reducing payments to private Medicare Advantage programs.

Action in the Senate involves drafting a compromise measure that may avoid a White House veto. Senate Finance Committee Chairman Max Baucus (D-Mont.) and ranking Republican Charles E. Grassley (Iowa) may have reached a deal on the compromise.

This entry has nothing to do with health care--except my own--but one of the funniest, most controversial and wonderful comedians--George Carlin--died Sunday. He was an American institution and many comedians, including Bill Maher, Roseanne Barr, Lewis Black and Jerry Seinfeld reflected on his significance to comedy--and to the country--on Larry King Live. Jerry Seinfeld said: "It's been a bad day--nobody dies at 71 anymore--it is so old fashioned.".

We will miss him......Maybe this is about health care--every time a comedian dies--we all should feel less happy.

The Michigan Medicaid False Claims Act was amended effective January 1, 2006 through the efforts of Attorney General Mike Cox and Representative David Law (R., Commerce). I worked actively for passage of the amendment and testified before the Michigan House of Representative Judiciary committee, then chaired by Rep. Law.

The Amendment brought Michigan into line with 22 other progressive states by adding a Qui Tam provision to the existing Medicaid False Claims Act. According to Wallace Hart, an Assistant Attorney General, actively involved in fraud control, the amendments--giving private citizens the right to bring Qui Tam suits to recover fraudulent monies stolen from the taxpayers by providers treating the Medicaid program as their own private ATM machine--the amendment helped him reduce his in-box.

The Michigan Medicaid False Claims Act prohibits the presentment of any false or fraudulent claim for payment under the Social Welfare Act – namely, for Medicaid benefits. The law currently provides for the State to recover the full amount received by a Medicaid provider due to fraudulent conduct, plus triple the amount of damages suffered by the State as a result of the conduct.

HB 5757, a bill pending before the Michigan Senate after having passed the House in near unanimous fashion, would allow the State of Michigan to recoup extra funds from combined state/federal recoveries because of the provisions of the federal Deficit Reduction Act of 2005 ('DRA"). To explain, shortly after the the Michigan Medicaid False Claims Act amendment passed the Michigan Legislature and Governor Granholm signed the Act, the U.S. Congress passed the DRA providing for a 10% incentive to States which enacted a "compliant" Qui Tam statute addressing Medicaid fraud. Specifically, the Medicaid program is a joint federal/state program. Thus, in Michigan, the federal government pays about 56% and the state 44% of the costs of the Medicaid program and fraud recoveries are divided on the same percentage.

If the state has a "compliant" Qui Tam statute, the state receives an extra 10% of the recovery--that is, 54% in Michigan--of the recovery.

Continue reading "David Haron Testifies on Michigan Medicaid False Claims Act Revisions" »

My partner, Monica Navarro, and I recently returned from Chicago where we attended the American Bar Association Conference on "Physician-Legal Issues--Physicians Under Siege--What is their Future."

Although it was a long day for us--storms between Chicago and Detroit kept us on our Northwest Airlines plane for two hours before takeoff (fortunately in Business Class because of frequent-flyer updates, with free snacks and foot room)--we learned a lot and were able to interact with many health lawyers from around the country.

The Conference covered Fraud and Abuse Issues Impacting Physicians, CMS pressure on Medicare expenditures, Physician Joint Ventures and other Alternative Practice Strategies, such as, physician owned hospitals, ASCs, under arrangements, diagnostic and other ancillary enterprises, concierge medicine, insurance opt-out, managed care models and sales of health care products. Other topics included responses to marketplace demands that impact physician practice models, relationships with hospitals, employment models, etc.

Finally, a panel discussed the future FOR Physicians in the face of pressure on costs of and access to health care, demands by both Democrats and Republicans for "universal" health care, hospital mergers, productivity demands, hospital governance changes, increased regulatory demands and other negative influences on the profession--pointing out--as all physicians know--that the majority of physicians are unhappy, angry, resigned, scaling back expenditures and expectations and deeply concerned about the future.

The conference presentations were at a very high level and highlighted the need for physicians and other health care entities to be proactive and to consider their legal and professional relationships before they experience a crisis. While specialists and others in unique and specific practice niches may not have experienced significant reductions in income, most internists, family practice and pediatricians, among others, have and all are certainly aware of the pressures that have been building in the industry. Comfort today can turn into difficulty tomorrow in the face of hospital mergers and acquisitions, exclusive arrangements forcing out smaller practices and entities, "sham privileging" schemes, increasing employment of Hospitalists, and unfair payer practices.

Consultation with legal and professional experts prior to eruption of credentialing confrontations and issues, unfair competition or payer practices and regulatory activities and suspensions can--and will--reduce future costs, aggravation--or worse.

The tone of the sessions--and especially the luncheon address by Catherine I. Hanson, Vice-President and director of the AMA's Private Sector Advocacy and the Advocacy Resource Center on unfair payer practices and the AMA' s 1% Campaign to reduce payer's improper rejections to 1% of billings--presented a somewhat dismal picture of practice and a real need for increased physician organization and participation in the debate.

Nevertheless, Monica and I returned with a renewed interest in assisting our health care clients and in working with them to develop workable practice models in line with the most cutting-edge--and compliant--practice models in operation and contemplated across the country and globe.

The Presidential candidates, Barack Obama and John McCain, have both proposed forms of "Universal Health Care." However, both plans, and those of the previous candidates, appear to address coverage for the 43,000,000 uninsured Americans--mostly children. little is discussed about the under-insured or those who become uninsured when they lose their jobs. Nor is anything mentioned about eliminating the "600 pound gorilla" in the room with every American employer who is seeing health care benefit payments rising at far more than the cost of inflation.

However, there may be an easy solution--if we had the political will to solve the issue.

We could get the government essentially out of the medical insurance business that Medicare, Medicaid and Tri-Care represent. We could provide every American the same type of coverage that the members of Congress, and their families enjoy. We could relieve every employer in the country of the burden of health care costs.

And we could do this without a painful tax increase or loss of income for the medical providers.

So what's the catch?

There is none, say Ezekiel Emanuel, M.D., PhD., an oncologist, author of No Margin, No Mission, and president of the Posterity Project and Victor R. Fuchs, the Henry J. Kaiser Jr professor emeritus at Stanford University, in their 2005 White Paper, Solved! It covers everyone. It cuts costs. It can get through Congress. Why Universal Health Care Vouchers is the next big idea..

Ezekiel and Fuchs plan envisions a mandatory voucher system providing every American access to the "Rolls Royce" health care protection every member of Congress enjoys, administered by private insurance companies and allowing free choice of providers. Government's only role will be to set up the system, oversee its operation with an independent board, modeled on the Federal Reserve Board, collect the money to pay for the program, through a value-added tax and mailing out the vouchers once a year--like Income Tax refunds.

The details of the system, and the ease of implementation and execution are set forth in their White Paper, but it is clear, as they point out, that the proposal deserves respect and consideration because it meets the obvious goals of any proposal for "health care reform:".

1. Every American is covered,
2. The program is largely paid for by cutting fraud, waste and abuse in the present system--something that has been calculated to be as high as 20% of the present $2 Trillion expense.
3. It reduces the rate of cost increases in the future..
4. The plan will provide more rather than less choice.
5. We will become more productive because of it.
6. Government bureaucracy will be decreased .
7. It will offer much to many interest groups.

Read the plan and let me know how you feel about it---and why you haven't heard of it?

Recently I acted as moderator and presenter for an ABA Business Law Section Teleconference discussing “Qui Tam: What Business Lawyers Need to Know.”

Federal and state False Claims Acts allow a private person to file a qui tam suit to recover monies wrongfully paid to providers by federal or state governments as a result of false claims the defendant made to the government. For example, if a physician practice group is overcharging Medicare, a person can file a sealed qui tam lawsuit that will trigger an investigation, allow the government to recover up to triple damages, as well as fines and penalties, and potentially, receive a substantial reward.

The teleconference I participated in covered:

Bringing a Qui Tam suit.
Avoiding a suit through the use of compliance mechanisms.
Reacting to internal complaints made by whistleblowers.
The employment status of whistleblowers.
Internal investigations, releases, confidentiality and severance agreements.
Do your knees knock when the FBI comes calling.

We are one of the leading Qui Tam firms in the nation, but through the knowledge gained in such representation, we counsel employers and providers in compliance matters and in the implementation of procedures and policies designed to avoid such actions.

My partner, Monica Navarro, and I taught Health law at Cooley Law School last semester. The 14 week class covered all aspects of health law--from the definition of disease, through credentialing, practice formation and operation, antitrust and fraud and abuse.

The class was so well received and we enjoyed teaching it to such a degree, that we decided to institute an in-house continuing education class in Frank, Haron, Weiner & Navarro designed to bring the latest knowledge, cases and news to our attorneys and strengthen their health law skills. the attorneys are all experienced in all aspects of health law and regularly serve our growing base of clients in credentialing, regulatory, transactional and litigation matters; however, our recent experiences will permit us to keep them sharp in cutting-edge practice methods and issues.

I just returned from my Sunday morning Weight Watcher's weigh-in. I reached my "10% Goal" and have lost 10% of the weight I was at when I began the program--this time--in October, 2007. I am looking at another 5% loss within a few months to reach my goal and begin a program of lifetime maintenance. In addition, I am starting an extensive exercise program with a "platoon" type trainer as soon as I pass a stress test ordered by my cardiologist (I had a "minor" heart-attack two years ago so the trainer wants to make certain I am good to go (I know I am, but why take any chances)).

Since I became a weight watcher, I have lost about 6 inches on my waist and many of the clothes I had relegated to the spare closet fit and look terrific. I am finally ready to start shopping again. I also feel much more energetic.

When I started my new program, I issued a challenge to our staff. most are pretty fit and pay attention to what they eat and how they live. We also offered a monetary incentive. We do not have a lot of food and snacks floating around (I used to peek in drawers every afternoon looking for them) but some were unhappy with their appearance. Since my challenge more than one has lost significant weight and we all feel pretty good.

There has been a global movement to '"Wellness Programs" in the workplace (Weight Watchers International and local chapters are available to help organize such endeavors.)

According to the Society for Human Resource Management, wellness programs are a tool to reduce health care costs and disability- and illness-related absences, or and a tactic to attract talent.

Wellness programs are most prevalent in the United States where they’re seen (as our firm has found) as a way to reduce health care costs by making workers more aware of healthy behaviors and encouraging them and their families to adopt healthier lifestyles..

Whether you institute a formal program through an organization such as Weight Watchers or some other professional program, encourage your staff to try something like Weight Loss Wars , create a self-designed pool or contest, or just bring in a healthy lunch now and then, you will see increased productivity, less absenteeism and happier employees.

We are pleased to announce that Frank, Haron, Weiner & Navarro recently joined forces with several professional service firms to launch a new business advisory group, The Alliance. The Alliance was formed to answer the need for expert business analysis and guidance that can be critical to a company’s success in identifying and meeting both short and long term business goals. The Alliance offers a team of established experts that provide clients a single source for addressing their specific business challenges.

The Alliance team includes:
• Frank, Haron, Weiner & Navarro
• Colburn Group
• BBK
• Huffmaster
• StaffPro America, Inc.
• CERB Associates

Clients of The Alliance will benefit from a holistic approach of considering all areas of a business that are integral to its success. Instead of hiring internal experts or researching, interviewing, and contracting several individual consultants, clients can now have an integrated team with best-in-class expertise in a range of fields:
• Law
• Property and Casualty Insurance
• Employee Benefits
• Financial Systems & Operational Performance Efficiencies
• SecurPlace™ (risk and legal management, security and operations) for real estate
• Recruitment Management
• Communications, Marketing, Advertising
• Human Resource Solutions
• Wealth Management

The group is very excited to launch The Alliance, as it is a natural evolution of what each Alliance member has experienced in its collective 150+ year history of providing custom solutions to clients. In today’s world, clients need business guidance in many different areas and, with the launch of The Alliance, we are able to offer one source to whom they can go to solve their business challenges and achieve their goals.

Utilizing a proprietary assessment process, The Alliance provides free initial services customized for each client. Based on the client’s individual needs, a unique Alliance team is created to analyze the business and develop strategies to impact the business’ short-term profitability and long-term viability. The key focus is to offer not only an integrated strategy, but also to provide ongoing support by helping implement and measure the strategies developed.

We look forward to discussing the opportunities The Alliance offers.

The Michigan Supreme Court recently heard oral arguments in an important case involving the proper incorporation of health care corporations that provide licensed services to the public. The case is Miller v. Allstate. The major issue Miller is whether those providing a service requiring a license must incorporate under the Michigan Professional Services Corporation Act (PSCA) instead of under the Michigan Business Corporation Act (BCA). The Michigan Supreme Court is reviewing the decision of the Michigan Court of Appeals ruled, which ruled that under the language of the PSCA, any licensed professional (including a health care professional) who incorporates must do so under the PSCA and not the BCA.

The Miller decision by the Michigan Court of Appeals has caused quite a stir in the Michigan legal and business communities. It has caught everyone off guard, including the State of Michigan. The State of Michigan has taken the formal position that the Miller decision goes contrary to the plain language and purposes of the business incorporation acts in Michigan, as well as the accepted interpretation of those acts by everyone, including the Michigan Attorney General and the State agency that administers corporate filings.

To understand why the Miller decision has caused such an uproar, it is necessary to understand the history of incorporating professional service corporations in Michigan. Traditionally, only members of the “learned professions” such as doctors and lawyers have been required to incorporate under the PSCA. In the past, any other kind of business that provided professional or personal services had the choice of incorporating under the PSCA or the BCA. This was true even if a license was required to provide the services in question. The Miller decision has changed all of this.

The Miller case concerns a patient who was referred to a physical therapy clinic for treatments. Licensed physical therapists administered the treatments pursuant to medical prescriptions that the patient’s doctor’s properly issued. The physical therapy company was incorporated under the BCA. When Allstate was billed for the patient’s treatments, it refused to pay, because the physical therapy company was supposedly improperly incorporated under the BCA instead of the PSCA.

Allstate claimed that the physical therapy company should have incorporated under the PSCA since its business involves providing professional services that require a license. Allstate took the position that that the physical therapy company’s incorporation was defective because it was incorporated under the BCA instead of the PSCA. Allstate claimed that this alleged technical deficiency gave it the legal right to refuse the charges from the physical Therapy company.

There are a number of interesting and important legal issues involved in the Miller case. But, the issue of which statute professionals should incorporate their businesses under has received the most press. This issue also probably has the most potential to disrupt the businesses that have been incorporated under the BCA and not the PSCA. It appears that a ruling by the Michigan Supreme Court in favor of Allstate point could cause Michigan businesses that incorporated under the BCA and provide licensed services significant difficulties. Some of these difficulties might include difficulty collecting receivables and possible personal shareholder liability for company obligations.

Qui Tam health care settlements occur regularly resulting in substantial recoveries for the governments of the United States and the various individual states from providers of false and fraudulent claims to the Medicare, Medicaid and other government programs.

On May 2, 2008, McKesson Corporation, a national distributor of branded and generic prescription medications, agreed to settle allegations that it violated federal reporting provisions relating to the sale of certain prescription medications regulated by the Drug Enforcement Administration announced United States Attorney Rod J. Rosenstein. Under the agreement between the company and six United States Attorney’s Offices, including the District of Maryland, McKesson has agreed to pay $13,250,000 in civil penalties, $2 million of which relates to conduct allegedly occurring at McKesson’s Landover, Maryland facility. In addition, McKesson has entered an administrative agreement with DEA in which it agrees to implement new policies and procedures to detect and prevent drug diversion beyond those currently required by federal regulation.

A recent pattern of expert witness intimidation has emerged across the country. Some physicians encouraged by ambitious (to say the least) attorneys, and some professional organizations, are apparently concerned that expert testimony for plaintiffs in medical malpractice cases poses a "threat" to the administration of justice.

John Vail of the American Association of Justice's Center for Constitutional Justice believes that the fury of malpractice defendant physicians, funneled towards colleagues who testify that malpractice did indeed occur, and catalyzed by insurance company pressure to curtail malpractice litigation, has produced new weapons in the war against malpractice plaintiffs: peer review of medical expert testimony and scrutiny of that testimony by licensure boards.

Some states have defined such testimony as the "practice of medicine" and have permitted licensure boards to oversee and consider the testimony in licensing actions. These actions threaten the free flow of information to the courts and chill speech protected by the First Amendment. Wisely, according to Mr. Vail, courts are acting to dampen the threat.

However, credentialing committees and aggressive peer review may still be expected to consider such testimony as long as the AMA and other professional organizations and societies continue to campaign for medical liability "reform" and rail against "trial lawyers."

I am firmly against frivolous lawsuits. When I was chair person of the State Bar of Michigan Standing Committee on Professionalism, our committee addressed this issue, improper advertising by lawyers and lawyer competency, but believed, correctly, that our present Michigan Rules of Professional Conduct, various statutes-, the State Bar of Michigan-and an active Court System--adequately deals with these concerns.

However, the existing court system and vigilant defense lawyers (who also provide services in "trials" and are properly referred to as "trial lawyers" too) have many tools at their disposal to deal with such actions. On the other hand, I believe that physicians and other medical professionals should be able, without fear of retaliation, to support activity designed to compensate victims of malpractice and incompetence and to improve the quality of health care in this country (where the Institute of Medicine has reported that over 98,000 persons die annually from medical errors).

The vast majority of physicians diligently observe the Hippocratic Oath every day in their practices and, of course, care about the quality of services they provide to their patients. Those who don't should be dealt with firmly.

Any physician threatened with adverse or retaliatory consequences for testifying truthfully and in good-faith in a malpractice action should seek the representation of a competent health care lawyer immediately.

I would like to introduce myself and my new HEALTH CARE LAWYER BLOG. I have been practicing business and health related transactional, regulatory and litigation law since 1969 when I graduated from the University of Michigan Law School and joined a firm in Detroit (after a stint as law clerk to the Chief Judge of the Michigan Court of Appeals). Presently, I am a Principal Member of Frank, Haron, Weiner and Navarro, P.L.C., a boutique law firm in Troy, Michigan, a northern suburb of Detroit. I have been named a Super Lawyer for 2007 by Law & Politics Magazine and am active in the community and the Bar Association.

Health Care is the number one industry in the United States and certainly in Michigan where most other industries are in the doldrums. There is more construction in Michigan in the health care field than any other (except, perhaps, casinos!) and the issues -- regulatory and transactional-are immense. Recently, my partner, Monica Navarro, and I taught a Health Care Law Class at Cooley Law School in Auburn Hills, Michigan. The subject, taught from a 1400 page text book covered everything from the definition of disease to the drug industry to antitrust considerations to death and dying. The students were fascinated by the breadth and scope of the subject--as were we when we looked at the text book. Given the attention the "health care crisis" is receiving in the current political campaign and the rising cost of health care in America and throughout the world, the subject--and this Blog--will have a long life.

Plese return often for insight into the area, information on subjects new to you and for detailed information in areas that will be of assistance to medical practitioners, attorneys and the general public.