Health Law Update

Health Law Update

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.


Practice Fusion Settles With FTC for Deceptive Practices in Posting Consumer-Generated PHI

I would like to make an appointment for my back pain and possible shingles. Can you please call me @ [phone number]. Thank you! [patient name]” – Patient Review, December 31, 2012

The Federal Trade Commission (FTC) and cloud-based electronic health record company Practice Fusion, Inc. (Practice Fusion), recently agreed to a proposed settlement to resolve allegations that the company engaged in deceptive practices in soliciting and handling consumer-generated health information over a 12-month period. According to the FTC complaint, Practice Fusion operated a service for healthcare providers that allowed patients to make and track appointments, access their electronic health records, and directly communicate with providers via a secure web portal. As part of a plan to offer a public directory of physicians, accompanied by patient reviews, Practice Fusion e-mailed patients post-visit satisfaction surveys that appeared to have come directly from the provider. Believing that the surveys were a private communication with the provider, patients submitted hundreds of responses with their names, phone numbers and personal health information. Continue Reading

OCR Clarifies “Reasonable, Cost-Based” Fee Calculations for Access to Medical Records

The HHS Office for Civil Rights (OCR) recently issued guidance that clarifies open questions for covered entities on how to charge for copies of personal health information requested by patients and members, regardless of state laws.