Healthcare Law Blog
This blog is devoted to current legal and regulatory issues affecting health care providers in New York, New Jersey and nationally. We regularly publish on topics of interest to doctors, pharmacists, hospital administrators, and everyone who is interested in the current developments in the legal landscape affecting the healthcare industry.
Some of the partnership considerations a healthcare attorney must analyze include:
1. Underlying economics of the practice, its assets, liabilities, risks and prospects.
2. Financial structure of the practice, ownership rights, and governance documents, as well as, all documents, agreements, and contracts relating to the practice, including payor agreements, hospital agreements, property leases and subleases, equipment leases, management, employment, and other service agreements.
3. The representations and warranties contained in the Purchase & Sale and/or Buy-Out Agreement and their implications.
4. Compensation, buy-ins, buy-outs, restrictive covenants, and exit strategies including agreements regarding compensation upon dissolution of the partnership and/or death of a partner. Note that if the practice compensates owners based on their respective production, a healthcare attorney must review the initial structuring and ongoing execution of the arrangement to ensure it complies with the Stark Law, the Anti-Kickback Statute, applicable state laws, Medicare reimbursement regulations, and the Internal Revenue Service’s (IRS) unreasonable compensation regulations.
Before committing to becoming an owner of a practice, prospective partners should have their healthcare attorney extensively review the agreements and issues involved in joining a practice to ensure a financially successful and generally rewarding partnership
If you have any questions or would like a consultation regarding this or any other healthcare legal issues please do not hesitate to call one of our experienced healthcare attorneys at 212.668.0200 or email us at [email protected] Our healthcare partners have years of experience representing physicians in numerous transactions including practice buy-ins and buy-outs, partnership formations and dissolutions, practice mergers and acquisitions as well various types of contracting among healthcare providers. The attorneys at MDRXLAW are here to provide guidance and counsel on any of your healthcare legal matters.
Providers who receive unfavorable overpayment determinations have up to five levels of appeal available to them. First, the provider may request a redetermination from the CMS claims processing contractor. Second, the provider may appeal to a CMS Qualified Independent Contractor (QIC). Third, the provider may appeal to a CMS Administrative Law Judge (ALJ). Fourth, the provider may appeal to the Medicare Appeals Counsel (MAC). Finally, the provider can request a judicial review in a federal district court.
For each level of appeal, Medicare is required to give the provider a specific rationale for denying its claims or determining that an overpayment was made. An adequate, specific and detailed explanation for denial of a claim or a finding of an overpayment is an essential procedural component of the appellate process. It provides the information to effectively dispute the determination and serves as evidence that a contractor properly conducted the review. If CMS did not require its contractors to provide an explanation for denying a claim, then it would be able to circumvent the appellate process by systematically denying claims and then changing its rationale for denial upon hearing the provider’s defense. If a determination decision does not include specific reasoning for denial of a claim, the appeals process fails to function properly and denies the healthcare provider a full and fair appeal.
This same logic applies to overpayment calculations performed through extrapolation from a statistical sample. Often, CMS or one of its contractors will audit a sample of patient medical records and extrapolate its findings to all claims submitted during the look-back period. To adequately defend against such an extrapolation, a provider needs to be fully informed of the extrapolation methodology, particularly the sample used. In The Case of Global Home Care Inc., the MAC declined to review the ALJ’s decision to not use the extrapolation conducted by CMS’s contractor. The ALJ found that because the contractor failed to produce its sampling documentation to the provider, the provider was unable to recreate the “statistically valid random sample,” thereby denying him a full and fair appeal. Thus, providers are entitled to see the Medicare contractor’s extrapolation methodology documentation.
If you have been audited or an overpayment determination has been made against you do not hesitate to call our firm and speak with one of our experienced healthcare attorneys. We will ensure that your rights are effectively protected!
What is key for all physicians to realize is that PQRS is not simply a system of incentives, failure to comply with the new mandates will cause penalties in form of reimbursement adjustments on future claims. These penalties can and should be avoided simply by implementing a proper quality measures reporting system.
- Patient Safety,
- Person and Caregiver-Centered Experience and Outcomes
- Communication and Care Coordination,
- Effective Clinical Care,
- Community/Population Health, and
- Efficiency and Cost Reduction
Physicians take note! The PQRS will serve as the input source for CMS’s Value-Based Payment Modifier (“VBPM”) program. The VBPM program will apply a value modifier to physicians’ claims under the Medicare Physician Fee Schedule (“MPFS”) based upon the quality of care furnished in relation to total costs. Accordingly, what a physician reports under the PQRS this year, if anything, will determine how much money he gets two years from now. Moreover, under the VBPM, physicians who don’t participate in the 2014 PQRS will be subject to an additional -2.0% payment adjustment on all of their MPFS claims. Thus, physicians who fail to properly implement the PQRS this year will be subject to a 4% penalty plus a value based adjustment depending on the quality and efficiency of their care.
With this recent legislative developments , healthcare practitioners need to be extra vigilant in their HIPAA compliance policies and data protection. To avoid exposure, every practice is strongly encouraged to implement a comprehensive compliance program in line with the applicable state and federal regulations.
Please contact our experienced healthcare attorneys with any questions pertaining to implementation of a comprehensive compliance plan, for general regulatory and compliance guidance and, immediately, in the event of an audit or an investigation by any state or federal agency.
Implement Written Policies, Procedures, and Standards of Conduct: Practices must maintain documentation that clearly and specifically outlines the policies and procedures for ensuring such compliance. This often includes a comprehensive “Compliance Plan” and separate written policies and procedures. The Compliance Plan should describe compliance expectations as embodied in a code of conduct or code of ethics, implement the operation of the compliance program, provide guidance to employees and others on dealing with potential compliance issues, and identify how to communicate compliance issues to appropriate compliance personnel. A basic outline of an effective compliance program will consist of:
- Compliance Officer/Committee Designation and High Level Oversight
- Effective Training and Education
- Effective Lines of Communication & Whistleblower Protections
- Effective System for Monitoring, Auditing and Identification of Compliance Risks
- Procedures and System for Prompt Response to Compliance Issues
- Well-Publicized Disciplinary Standards
For example, a physician who unknowingly violates the PPACA, such as the recent Stark Law amendment requiring physicians to inform patients in writing that they have ownership or compensation relationships with providers of in-office ancillary services, could be subject to penalties of up to $15,000 for each service in violation of the Stark Law. Moreover, violations of the Anti-Kickback Statute now implicate the False Claims Act. Thus a simple gift from a physician to a referrer can subject the physician to monetary penalties of up to $25,000 and/or imprisonment of up to 5 years, as well as a penalty of $11,000 per false claim submitted, plus three times the amount of damages sustained by the federal government.Physicians and medical practices are strongly urged to obtain proper legal guidance in this time of high regulatory turbulence in the healthcare arena and ever-increasing complexity of the administrative aspects of the practice of medicine. For answers to all of your compliance related questions, as well as with audit resolution assistance, regulatory counsel, liability avoidance guidance or when in need of an expert professional licensure defense attorney please feel free to contact the healthcare group of our firm at [email protected] or by phone at 212.634.6350 or 718.787.9500. For more information on our practice areas and the backgrounds of our experienced attorneys please visit our website www.mdrxlaw.com, a place where healthcare practitioners find answers to their legal questions.
One of the worst accusations a physician or any healthcare professional can face is a sexual misconduct complaint. If a physician is contacted by the Office of Professional Medical Conduct (“OPMC”) they should immediately seek legal counsel and avoid engaging in any communications with the investigators prior to securing legal representation. OPMC takes sexual misconduct complaints very seriously and thoroughly investigates even unsupported and plainly baseless accusations. If you or a physician you know is faced with allegations of sexual misconduct or a complaint has been filed by a patient alleging an incident involving inappropriate sexual conduct our team of experienced health care attorneys are here to answer all your questions and defend you in the event that proceedings are in fact initiated by the Office of Professional Medical Conduct....
It is very often the case that a young physician presented with an employment agreement from a hospital feels that there is absolutely no room for negotiation. The key, as with any instance of leverage balance between contracting parties, is the initial impression and assessment of the benefit to each respective party. And while it is true that certain industry-wide accepted provisions may be standard, many important terms of a hospital employment agreement can and should be negotiated. And notwithstanding acceptance of any changes to the proposed terms of the agreement by the hospital-employer, what is most important for a physician is to fully understand the terms of the contract, which is a legally binding document. Entering into an employment agreement without guidance of competent legal counsel specializing in healthcare law is a mistake that can impact the physician both financially and professionally. Therefore, a physician reviewing a proposed employment agreement should carefully analyze the terms and conditions of the contract and make sure that it reflects his or her understanding of the position offered. If a physician discussed and agreed upon the particulars of the position with the employer, such as compensation, amount of call, vacation time, CME reimbursements, malpractice coverage and the like during an interview, all of these details must be accurately reflected in the written agreement....
Enforcement of a non-compete provision in an arbitration proceeding rather than through courts has become more efficient through new rules allowing for urgent injunctive relief, which is so often so necessary. Effective October 1, 2013, the American Arbitration Association (“AAA”) has delineated new rules within the Commercial Arbitration and Mediation Procedures of the AAA (“CAMP”) that allow parties to seek injunctive relief directly from an arbitrator prior to the commencement of the arbitration itself. Thus, when an employer seeks to enforce a restrictive covenant, it can now obtain both monetary and injunctive relief from the arbitrator.
A restrictive covenant is a provision in an employment contract, whereby an employer can restrict an employee’s ability to work in the same occupation or profession upon termination of employment. Restrictive covenants are enforceable in New York, however, courts strictly construe the provision, ensuring that its limitations are reasonable in time, scope, and geographic area. A restraint is considered reasonable if it satisfies the following three-prong test: 1) it is reasonably limited in time and scope and is no greater than is required for the protection of the legitimate interest of the employer and to protect the former employer from unfair competition; 2) it does not impose undue hardship on or dully burdensome to the employee; and 3) it is not harmful to the public. BDO Seidman v. Hirschberg, 93 N.Y.2.d. 382, 289-90, 690 N.Y.S.2d 854 (1999). For instance, a restriction on a former employee’s ability to work for a competitor is invalid unless the employee’s services are “unique or extraordinary” or if the job is considered a “learned profession”, Id.; OTG Mgmt v. Konstantinidis, 40 Misc. 3d 617, 620, 967 N.Y.S.2d 823,825 (Sup. Ct. N.Y. Co. 2013).
When an employer finds it necessary to enforce a restrictive covenant against a former employee, to the extent the employment contract provides for arbitration, the employer would arbitrate seeking money damages and a permanent injunction against the former employee. However, if the employer wanted the employee to stop working immediately (prior to any arbitration or trial), he would seek preliminary injunctive relief from the courts. Thus, when seeking a preliminaryinjunction, parties would often have to take a two-track process, in which a request for injunctive relief would be sought in the courts while the underlying dispute would be handled through arbitration. This two-track process was cumbersome and inefficient since parties would have to litigate in two separate forums, thereby increasing their costs. In an effort to resolve this inefficiency, the AAA has provided a new roadmap for the process, which now allows for an “emergency arbitrator” to directly decide whether a preliminary injunction should be granted. CAMP Rule R-38 (entitled “Emergency Measures of Protection”) describes the new procedure, which includes expedited deadlines for notice, service, and hearings.
Arbitral rules that expressly provide parties the ability to obtain all of their desired relief from one forum should result in quicker resolutions and lower costs for the parties. Moreover, it will reduce the overall burden on the court system to handle such disputes and the errors that occur from the former disjointed two-track process.
Should you be seeking to enforce a non-compete or struggling to defend a lawsuit or arbitration proceeding to enforce a restrictive covenant do not hesitate to call our firm and speak with one of our experience healthcare attorneys.
Study conducted in Oregon and published in the journal Science finds that after getting health insurance under Medicaid, people went to the emergency room more often than their uninsured counterparts; findings cast doubt on the hope that expanded insurance coverage for the poor will help rein in emergency room costs just as more than two million people are gaining coverage under the Affordable Care Act. See More Source: New York Times.
All healthcare providers are advised that pursuant to Section 6503 of the Federal Patient Protection Affordability Care Act (“PPACA”), all providers using third party billing companies or agencies to submit claims to Medicaid on their behalf are responsible for ensuring that those companies are properly registered and compliant with the NYS Medicaid Program as per the regulations promulgated by the Office of Medicaid Inspector General ("OMIG"). Since February 2011, OMIG has made a list of the currently enrolled billing service agencies available for general public on its website....
Healthcare practitioners need to be aware of revised, heightened patient privacy requirements. On January 17, 2013, the U.S. Department of Health and Human Services ("HHS") released new rules expanding protections afforded by the Health Insurance Portability and Accountability Act (“HIPAA”). The rules are expected to place greater burdens on healthcare practices and affiliated entities than ever before.
The new rule’s focus is two-fold: more individual protections for patients, and higher privacy protection obligations on practices and affiliated entities, with tougher penalties resulting from privacy breaches.