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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.

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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. 

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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. 

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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.  

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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. 

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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. 

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