ONC Contracting Guide Aims to Restore Balanced Bargaining Between Providers and EHR Vendors

Electronic medical record show on tablet.The HHS Office of the National Coordinator for Health Information Technology (ONC) recently published a contracting Guide to assist healthcare providers when entering into electronic health record (EHR) contracts with EHR vendors. Issued in response to provider complaints that EHR contracts often contain hidden fees and restrictions that prevent sharing of patient health records with other providers, the Guide seeks to restore balanced bargaining between providers and their EHR vendors in their contract negotiations.

The 56-page Guide begins by explaining the steps providers should take before selecting an EHR vendor. It highlights the pros and cons of the two principal types of EHR models: the provider-hosted EHR in which EHR software is licensed to a healthcare provider, and the cloud-based EHR. According to ONC, when selecting an EHR vendor, providers should first prepare a list of key issues and technical and operational requirements that will enable them to prioritize and focus on key terms during the due diligence phase and contract negotiations.

ONC strongly encourages that providers consult with both a technical adviser and legal counsel when evaluating an EHR vendor contract to minimize problems during the contract period, anticipate future needs and assess available options. Providers also should conduct parallel negotiations with more than one EHR vendor and consider retaining a different vendor if their preferred vendor refuses to compromise on key issues. The Guide also discusses the importance of selecting ONC-certified EHR technology, a listing of which is available on a searchable website at http://chpl.healthit.gov. Continue Reading

More Than the Leaves Are Changing: Clinical Trial Research Regulations and Policies Get a Fall Makeover

Researcher at workThese changes represent a new season of responsibilities for those who manage and oversee clinical trials.

The Food and Drug Administration (FDA) and National Institutes of Health (NIH) have recently finalized or signaled intent to finalize numerous proposals that promise to change the landscape of clinical trial reporting, clinical researcher responsibility and Institutional Review Board (IRB) oversight. These federal agencies have been busy tidying up existing policies and implementing various requirements to promote better practices in clinical trial research. So what is shaking from the trees? This article provides an overview of the recent proposals and regulations for clinical research.

FDA Draft Guidance for Institutional Review Boards

The Office for Human Research Protections (OHRP) and the FDA have proposed new draft guidance on the written policies and procedures that an IRB should maintain. Although the draft guidance is not binding on IRBs, it provides significant insight into OHRP and FDA expectations for IRB policies and procedures and references specific statutory and regulatory requirements that should be included. The draft guidance is a user-friendly, comprehensive checklist with questions about each policy area, and IRBs are encouraged to take a fresh look at their policies and procedures with this draft guidance in mind. Continue Reading

Come On In and Stay Awhile: IRS Expands Safe Harbors for Bond-Financed Property

IRS Building in WashingtonThe Internal Revenue Service recently issued guidance in Rev. Proc. 2016-44 that meaningfully expands the safe harbors pertaining to management contracts affecting bond-financed property such as professional services agreements (e.g., radiology), medical director agreements, on-call agreements, food service agreements and management services agreements. While the new framework offers clarity and increased flexibility for Section 501(c)(3) organizations in negotiating management contracts, particularly longer-term arrangements with service providers, it also presents new challenges and conditions to meet the safe harbor.

The IRS first provided for the conditions under which a management contract would not result in private business use, or would fall within a safe harbor, in Rev. Proc. 97-13. Those conditions included limits on net profit arrangements, contract term, compensation, and the relationship between the 501(c)(3) organization and its service provider. The IRS then “amplified” the management contract safe harbor with Announcement 2014-67, which added a new and very broad category of permissible five-year arrangements. Continue Reading

Post-Election Webinar by the BakerHostetler Federal Policy Team

Macro Photo of 2016 Campaign Vote ButtonsAs the dust settles after the presidential candidates’ first debate, BakerHostetler’s Federal Policy team continues to analyze the impact of the 2016 election on federal policy issues. After all the votes are counted, please join the team, led by former Congressman Mike Ferguson, for a “morning-after briefing” during which we will analyze the election results and discuss how changes in the White House and on Capitol Hill may impact your company’s or your organization’s bottom line.

This 60-minute webinar takes place on Wednesday, Nov. 9, from 11 a.m. – noon EST. We’ll provide a high-level briefing of key issues, including:

  • How and when might the next administration and the new Congress tackle tax reform, inversions and repatriation?
  • What can we expect regarding possible changes to the Affordable Care Act, Medicaid reform and CHIP?
  • Will Dodd-Frank survive?
  • What is in store for the nation’s energy policy?
  • What is the future of the sequester on defense spending?
  • Will our new president and Congress find common ground in 2017?

For questions, contact Laura Thomas at 202.861.1707.

Register Now >>

Capitol Hill Healthcare Update

Washington DC iStock_000074771283_FullCongress Adjourns, Eyes Election Then Lame Duck

Congress completed work last week on a stopgap budget that keeps the government open until a post-election lame-duck voting session in December, when lawmakers are expected to move on legislation dealing with medical innovation, mental health reform and possibly efforts to stop CMS’s proposed Medicare Part B drug demonstration program.

The November 8 election will be a key inflection point not only for determining who will be president and which party controls Congress, but also for forecasting potential healthcare reforms in December and into 2017.

Lame Duck: 21st Century Cures

Shortly before lawmakers left Washington, bipartisan healthcare leaders pledged to advance the medical innovation legislation called “21st Century Cures” during the lame duck voting session. In fact, Senate Majority Leader Mitch McConnell, (R-KY), told reporters he thought Cures “could end up being the most significant piece of legislation we pass in the whole Congress.” Continue Reading

The Deeper Dive: Section 1557 Attempts to Return the “Care” to “Healthcare”

Definition "discrimination"The U.S. Department of Health and Human Services (HHS) moved to the forefront of anti-discrimination measures when it released a final rule, titled “Nondiscrimination in Health Programs and Activities” (Final Rule), implementing Section 1557 of the Affordable Care Act (ACA), which prohibits discrimination on the grounds of race, color, national origin, sex, age or disability in certain health programs and activities. The Final Rule sets out standards for addressing the prohibition against discrimination on the basis of sex in health programs and the application of Section 1557 to HHS-administered health programs. Hospitals and other healthcare providers are required to be in full compliance with the Final Rule by October 16, 2016, but getting up to speed could take some time. This article outlines some of the many requirements healthcare providers will need to implement to comply with Section 1557.

Scope of the Final Rule

The Final Rule implementing Section 1557 applies to any health program or activity that receives funding from HHS, including but not limited to Medicaid or Medicare Parts A, C and D. The Final Rule applies to, among others, providers such as hospitals that accept Medicare or doctors who receive Medicaid payments, the Health Insurance Marketplaces and issuers that participate in those Marketplaces, and any health program that HHS itself administers. Notably, physicians and suppliers participating in Medicare Part B are not subject to Section 1557; however, they may still be required to comply if they accept Medicaid or meaningful use information technology funding (which ends in 2018). Continue Reading

Dialing for Dollars Yields Conviction for Home Health Telemarketer

Female Customer Services Agent In Call Centre

Sundae Williams, the owner of Serenity Marketing Inc., made unsolicited phone calls to recruit patients, including Medicare beneficiaries, for contracted home health agencies. Williams and Serenity then referred those patients to the home health agencies in exchange for payments on a per-patient basis. Williams was convicted on one count of conspiracy and six counts of soliciting and receiving remuneration in return for the referral of Medicare patients. Williams was the fourth person to be convicted as part of a larger federal investigation into Serenity and the home health agencies. The others have pleaded guilty to a variety of Medicare fraud charges, including billing for unnecessary services, paying kickbacks and falsely certifying patients for nursing services.

The convictions highlight the risks involved with these types of marketing arrangements that are becoming more common, especially if the compensation is not properly structured. In this case, Serenity “employees were trained to cold-call Medicare beneficiaries and convince them to accept home health services.” If a Medicare beneficiary expressed interest, Serenity employees obtained the beneficiary’s personal information, including their Medicare number, and provided it to the home health agencies that had agreed to pay Serenity for the referrals. This is similar to other cases we have seen in which a contractor, in many cases offshore, is engaged to call potential home health and durable medical equipment clients from a boiler-room operation and qualify them for the provider. A second enterprise related to the cold-caller, or in some cases, the provider itself, then calls qualified leads and attempts to sell them on their services.

Summer Fraud and Abuse Roundup

law iStock_000019998471_LargeNow that the kids are back in school and summer vacations are in the rearview mirror, it’s time to catch up on recent fraud and abuse developments. The federal government was busy this summer negotiating a pair of settlements under the Stark Law and anti-kickback statute, drafting changes to the Self-Referral Disclosure Protocol (SRDP), and issuing an interim final rule incorporating statutory increases to civil money penalties.  This article highlights those recent developments.

Summer Fraud and Abuse Settlements

Lexington Medical Center

On July 20, 2016, Lexington Medical Center (LMC) in South Carolina agreed to pay $17 million and enter into a corporate integrity agreement with the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) to settle allegations that its financial relationships with 28 physicians violated the Stark Law and the False Claims Act. LMC is a public hospital district with over 300 employed physicians. The plaintiff, a former LMC neurologist, alleged that LMC acquired physician practices to capture the physicians’ referrals, and in exchange, LMC paid them commercially unreasonable compensation exceeding fair market value. For example, the plaintiff stated his compensation was $250,000 before the acquisition and topped out at $650,000 during his second year of employment by LMC. The plaintiff also reported that LMC held meetings with the employed physicians to discuss declining imaging referrals and terminated him in July 2013 because he refused to send all imaging referrals to LMC. The second amended complaint alleges that LMC’s arrangements with the plaintiff and other physicians violated the Stark Law because the acquisition and employment agreements provided compensation to the physicians in excess of fair market value, took into account the volume or value of referrals, and were not commercially reasonable. Continue Reading

The Proposed Medicaid DSH Rule: Hospitals, States and Associations Declare It Legally Insufficient

Family Medicaid umbrellaThe Centers for Medicare and Medicaid Services (CMS) recently released a proposed rule addressing the treatment of third-party payments when calculating uncompensated care costs for the Medicaid disproportionate share hospital (DSH) formula (Proposed Rule). While CMS maintains the Proposed Rule merely clarifies longstanding policy, industry stakeholders submitting comments prior to the September 14 deadline disagree, saying it would substantively modify the Medicaid DSH formula methodology. The new CMS policy is also the subject of litigation in two federal district courts – New Hampshire and the District of Columbia.

The issue raised by the plaintiffs in both cases involves the 2010 publication of answers to two Frequently Asked Questions (FAQs), #33 and #34. FAQ #33 involves commercial third-party payments. It defines Medicaid-eligible patients with private commercial insurance coverage as “dual eligible,” and requires the inclusion of private third-party payments in the calculation of the hospital-specific limit, when there is no Medicaid claim or payment made on behalf of a Medicaid-eligible patient. FAQ #34 addresses dual-eligible patients and the inclusion of Medicare payments in this same manner. During the DSH audits and the finalization of these audits, CMS has required that any amounts paid during the 2011 cost reporting year be recouped in the 2014 audit. The agency has also threatened to deny federal financial participation to states that fail to enforce the FAQs. Continue Reading

Susan Feigin Harris Named “Lawyer of the Year” in 2017 Best Lawyers in America List

HARRIS_SusanPartner Susan Feigin Harris was named the Health Care Law “Lawyer of the Year” in Houston in the 2017 Best Lawyers in America© list. “Lawyer of the Year” is a designation that reflects the high level of respect a lawyer has earned among other leading lawyers in the same communities and practice areas for his or her abilities, professionalism and integrity. Only a single lawyer in each practice area and designated metropolitan area receives this distinction. Additionally, Harris was recognized in Houston in the “Government Relations Practice” and “Health Care Law” categories of the 2017 Best Lawyers in America list.