Health Law Update

Health Law Update

Assault of Home Health Worker by a Patient’s Father Prompts OSHA Violation

Home Healthcare ProviderA provider of pediatric home health, Epic Health Services, was recently fined $98,000 by the Occupational Safety and Health Administration (OSHA) in connection with the sexual assault of a home health employee by a patient’s father. Allegations include that the father had regularly attempted to grope the employee and made inappropriate comments about her buttocks and breasts. The assaulted employee is suing Epic for negligence and punitive damages as a result of the incident. Allegations include that Epic, which reportedly lacked a system for reporting threats or incidents of violence in the workplace, was aware of two previous assaults on employees by the patient’s father but failed to notify the assaulted employee of the incidents.

As a result of its investigation into the assault, OSHA found that Epic had a history of failing to act on reports by company employees of verbal, physical and sexual assaults in the workplace, including a situation where an employee was forced to work in a home environment with domestic violence. OSHA cited the company for willfully failing to “protect its employees from life-threatening hazards of workplace violence,” failing to “provide an effective workplace violence prevention program” and “failing to record injuries properly on OSHA forms.” OSHA also enumerated a number of abatement techniques that Epic and others can implement to address violence in the workplace, including:

  • A written, comprehensive workplace violence prevention program.
  • Workplace violence hazard assessment and security procedures for each new client.
  • Procedures to control workplace violence such as a worker’s right to refuse to provide services in a clearly hazardous situation without fear of retaliation.
  • A workplace violence training program.
  • Procedures to be taken in the event of a violent incident in the workplace, including incident reports and investigations.
  • A system for employees to report all instances of workplace violence, regardless of severity.

This OSHA action highlights the need for providers to implement processes for addressing violence in the workplace, including responding to employee complaints of violence by patients and family members.

A Tale of Two Escobars: Federal Courts Begin Grappling with Opposing Views of “Materiality”

supreme court iStock_000000865139_LargeOn June 16, 2016, the U.S. Supreme Court issued a highly anticipated opinion in Universal Health Services, Inc. v. U.S. ex rel. Escobar, which for the first time expressly recognized implied certification as a viable theory under the federal False Claims Act (FCA). Implied certification is a theory that has been widely criticized by government contractors because of the broad and open-ended liability it potentially creates. The opinion has been the subject of much discussion because, among other things, it set forth a new “materiality” standard under the FCA. Although the more “demanding” standard was intended to restrict the reach of implied certification by limiting the type of regulatory restrictions that could be actionable, we warned in June that it could ultimately lead to more involved litigation because it relies on a subjective and fact-intensive inquiry.

In the months following Escobar, the anticipated divide between defendants and the government has been coming to fruition in at least one form as parties begin contesting whether the new standard limits claims under the FCA to scenarios where the government would have denied payment had it known of the alleged regulatory violation. The divide largely arises from the opinion’s language stating that “if the government pays a particular claim in full despite its actual knowledge that certain requirements were violated, that is very strong evidence that those requirements are not material.” Continue Reading

The Deeper Dive: Senate Finance Committee Examining Modernization of the Stark Law

The Committee’s interest in the Stark Law and receptiveness to feedback from industry leaders may indicate that significant changes to the law are in the pipeline.

As the healthcare industry moves from a fee-for-service (FFS) reimbursement system for physicians to a value-based payment system, industry insiders are questioning whether the federal physician self-referral law and its implementing regulations (Stark Law) has outlived its usefulness, and their concerns may be picking up steam in the United States Senate. Opposition to the Stark Law is nothing new as stakeholders have argued for many years that the complexities of the law unduly interfere with the practice of medicine. CMS has acknowledged provider struggles with technical violations and revised its regulations in 2015 in an effort to ease this burden. The agency has also acknowledged that innovations in Medicare payment models and private payor arrangements that are designed to integrate physicians and hospitals can be difficult to achieve under the Stark Law. The Senate Finance Committee (Committee) has turned its attention to the Stark Law by engaging stakeholders in a discussion about these issues. The Committee’s recently released white paper describing the concerns of the industry may foreshadow significant changes to the law. Continue Reading

$2.75 Million OCR Settlement Underscores the Importance of Risk Management and Analysis

How the theft of a single password-protected laptop turned into an enterprise-wide review of an organization’s data protection practices.

Following the announcement of a recent settlement between the U.S. Department of Health and Human Services, Office for Civil Rights (OCR) and Catholic Health Care Services, OCR has announced another significant settlement agreement and corrective action plan (CAP), this time with the University of Mississippi Medical Center (UMMC). The agreement imposes a $2,750,000 penalty and three-year CAP on the Jackson-based medical center, one of the few public academic medical centers in the state. Continue Reading

Year of the Bundle: CMS Proposes New Mandatory Cardiac Bundles and Expansion of CCJR

CMS is building momentum with its bundled payment programs and upping the stakes for hospitals.

The Centers for Medicare & Medicaid Services (CMS) recently published a proposed rulethat furthers the U.S. Department of Health and Human Services’ goal to promote cooperative, value-based care and tie at least 50 percent of Medicare payments to quality or value through alternative payment models by the end of 2018. The proposed rule builds on prior experiments with episode-based payment models (EPM) and confirms predictions that bundled payments will become a broader reality and a mandatory reimbursement framework for hospitals – whether they are ready or not. Continue Reading

Coming Soon? Part D Covered Drug Moves to Part B

We may soon see a provision in the 2015 final rule addressing the utilization of end-stage renal disease related drugs and biologics come into action in the next few months. Specifically, the oral-only drug Sensipar may transition to bundled payment and become reclassified as a Medicare Part B covered drug should a non-oral form be approved by the FDA. Prescribers and dispensers should be aware that a transition is possible and will likely impact reimbursement for this product. Continue Reading

Provider-Based Status Post-BBA: CMS Offers Limited Answers, Requests More Feedback

For those in the hospital industry hoping for additional clarity regarding the operation and billing of provider-based departments (PBDs), the CY 2017 Outpatient Prospective Payment System (OPPS) Proposed Rule provides some much-needed insight but raises additional concerns. In the Proposed Rule, the Centers for Medicare & Medicaid Services (CMS) sets forth how the agency intends to implement Section 603 of the Bipartisan Budget Act of 2015 (BBA), which introduced site neutrality for new off-campus hospital outpatient departments. Section 603 requires that certain items and services furnished by certain off-campus PBDs shall not be considered covered outpatient department services for payment purposes beginning January 1, 2017, but instead will be reimbursed “under the applicable payment system.” The Proposed Rule, seeking to operationalize the BBA provision, addresses how renovations or changes in the items or services provided by the PBD may impact its ability to continue to bill hospital outpatient services.

CMS prefaces discussion of the agency’s hard-handed implementation proposal by citing that Section 603 of the BBA is “intended to curb the practice of hospital acquisition of physician practices that then result in receiving additional Medicare payment for similar services. This language and focus is echoed throughout the Proposed Rule.” As discussed below, the Proposed Rule, if adopted, will have a much broader impact on hospital operations than merely reducing acquisitions and will pose significant implementation challenges for hospitals and Regulators alike. Characterizing the Proposed Rule as “short-sighted” and “unreasonable,” the American Hospital Association cautions that the CMS proposals could “freeze the progress of hospital-based health care in its tracks.” Continue Reading

Business Associates in the Crosshairs: Catholic Health Care Services Settles for $650,000 for Failure to Safeguard PHI

Catholic Health Care Services of the Archdiocese of Philadelphia (CHCS) recently agreed to enter into a $650,000 resolution agreement and a two-year corrective action plan (CAP) with the Office for Civil Rights (OCR). CHCS provides management and information technology services as a business associate to six nursing homes. The OCR settlement follows a finding that CHCS violated the HIPAA Security Rule, which requires business associates to conduct enterprise-wide security risk analyses and to prepare corresponding risk management plans.



Nationwide Preliminary Injunction Bars Implementation of Department of Labor’s “Persuader Rule”

On June 27, a federal court in Texas enjoined the United States Department of Labor (“DOL”) from implementing its new interpretation of the “Persuader Rule.” In a sweeping 86-page rebuff to the DOL, the court opined that the DOL’s new interpretation of the “Advice Exemption in Section 203(c) of the Labor-Management Reporting and Disclosure Act” (“New Rule”) is “defective to its core” and thus preliminarily enjoined implementation of the New Rule nationwide. This decision is critically important to employers because it preserves their right to confidential legal representation, without government interference. Prior to this decision, the DOL’s New Rule and its significant reporting obligations were set to take effect on July 1, 2016.