COURT TAKES EXPANSIVE VIEW OF DUTY TO REPORT CHILD ABUSE
November 20, 2012
Posted by Frank Ciesla
Last week the New Jersey Appellate Division issued an opinion in the case of L.A., as Parent and Legal Guardian of S.A., a minor, and L.A., individually, v. New Jersey Division of Youth and Family Services, et al. In that case, L.A., as guardian of S.A., sued an emergency room physician for malpractice, based on an allegation that the physician should have filed a report of child abuse with the Division of Youth and Family Services (DYFS, now known as the Division of Child Protection and Permanency), and failed to do so. The case involved a child who was taken to the emergency room after ingesting cologne. The motion judge in the Law Division granted summary judgment in favor of the physician, finding that no reasonable jury could conclude that there was “reasonable cause to believe that child abuse had been committed” against the child.
The Appellate Division overruled the motion judge, and held that the medical condition of the child required the physician to report the case to DYFS as potential child abuse. The statute at issue requires any person having “reasonable cause” to believe that a child has been subjected to child abuse, to immediately report the situation to DYFS. The Appellate Division held that injury arising from reckless or grossly or wantonly negligent conduct is sufficient to constitute child abuse and must be reported to DYFS. The court then concluded that a reasonable jury could conclude that a two year old child’s ingestion of cologne was the result of reckless or grossly or wantonly negligent conduct, and therefore summary judgment should not have been granted in favor of the physician.
It is clear that in the circumstances of this case, the court has imposed an obligation on providers to report an expansive view of potential child abuse cases based upon the presentation of a child to a provider. While this involved presentation in an ER, there is no reason to believe that this kind of expansive view of a medical condition requiring reporting to DYFS does not also apply to a presentation of a minor in any other health care setting such as a private physician’s office.
One can conclude from reading this case that any child presented for care, who has swallowed any inappropriate liquid, would trigger a requirement of reporting to DYFS. This holding obviously expands the exposure of providers to both the civil and criminal aspects of the reporting requirements to DYFS.
Post-Election Update Regarding the Affordable Care Act
November 9, 2012
Posted by Frank Ciesla
With the election behind us, it is clear that the implementation of the Affordable Care Act (ACA) will move forward. It is also clear that the country is faced with a significant fiscal deficit and that steps, whether it is a grand compromise or characterized in any other way, will have to be taken to respond to that deficit. The ACA was structured in such a way that a significant number of regulations and implementing provisions of the ACA were to occur in 2013. As these regulations are published, providers must review them for the impact upon their ability to deliver services to their patients both from a fiscal point of view and from an operational point of view.
In addition, the Sustainable Growth Rate is currently scheduled to be implemented on January 1, 2013, which will result in approximately a 30% cut in physician reimbursements under Medicare. As in every other year before this one, it is likely that this will be postponed at least for another year. The Congressional Budget Office projects that the cost of postponing the cut for 2013 will be about $40 billion and the cost for postponing the cut in 2014 will be $61 billion. The current projected deficit assumes the implementation of the Sustainable Growth Rate, and therefore postponing the Sustainable Growth Rate for 2013 will add $40 billion to the proposed deficit and postponing it again through 2014 will add another $61 billion to the deficit. At this point, it is not clear as to the reaction of both the Congress and the President in handling the Sustainable Growth Rate for 2013.
In addition, it appears from a number of statements that have been made over last year, that reductions in Medicare will be part of the grand bargain. It is also clear from the ACA that the philosophy of the ACA is not to reduce services to Medicare beneficiaries. That leaves few options–either raise premiums for Medicare to the beneficiaries or reduce the payments to the providers. At this point, it is too early and leaves only speculation as to the both. However, providers should be careful in implementing programs in which they are committing funds, with respect to the uncertainty as to whether or not they will receive adequate reimbursement to recover those investments.
As regulations are implemented and their impact upon providers becomes clearer, we will continue to provide our analyses through this blog.
Emergency Department Staffing Company Liable for Acts of “Independent Contractor” Physician
October 19, 2012
Posted by Beth Christian
Last week, the Appellate Division issued its decision in Monk v. Emergency Physician Associates. The decision could have significant ramifications for emergency department, “Nighthawk” Radiology, and other staffing companies that contract with physicians to provide services at hospitals and other licensed health care facilities.
The Monk case involved a suit for damages arising from the death of a physician who presented at the emergency department of Virtua Hospital in Voorhees complaining of pain from kidney stones. The physician was allegedly administered an overdose of Dilaudid by an emergency department physician and died while he was in the emergency department. Emergency Physician Associates (“EPA”) provided physician staffing for the hospital’s emergency department. Under the physician staffing arrangement, EPA entered into contracts with independent contractor physicians who were retained to staff specific shifts in the emergency department pursuant to EPA’s staffing contract with the hospital.
The estate of the physician sued Virtua, the treating emergency department physician, two nurses, and EPA. The lower court granted EPA’s motion for summary judgment, concluding that the EPA physician who treated the patient was an independent contractor, and was not EPA’s employee. As a result, the lower court found that EPA was not vicariously liable for the physician’s actions.
The Appellate Division reversed the decision of the lower court and found that EPA could be held liable for the acts of its independent contractor physician. The court found that under the contract with the emergency department physician, EPA retained broad authority over the physician’s actions, but for the ability to dictate the physician’s exercise of his professional judgment in particular cases. The court also found that since EPA provided physician division directors for the emergency department, EPA physician managers affected the manner in which the emergency department physician performed his tasks. The Appellate Division also found the following factors to be dispositive of its determination that the emergency department physician was, in actuality, functioning as an employee of EPA: (1) the fact that the emergency department physician was compensated by EPA, by payment of a fixed hourly compensation, plus bonus; (2) EPA assumed responsibility for providing educational resources to emergency department physicians; (3) EPA retained the right to terminate the emergency department physician for cause, or upon 30 days’ notice without cause; (4) EPA indirectly exercised control over the emergency department physician by supervising and assessing his work, and retaining the power to intervene with training, if appropriate, or termination; (5) EPA assumed responsibility for billing for services rendered to the emergency department physician’s patients; (6) EPA’s contract with the physician prohibited the physician from contracting separately with Virtua, or Virtua’s patients; (7) EPA retained the remaining balance of the patient’s or insurer’s payments after paying the emergency department physician his fixed hourly salary plus bonus; and (8) EPA retained a continuing interest that its physicians perform their services competently and capably, in order to preserve EPA’s relationship with Virtua.
It is common for entities providing physician staffing to hospitals to enter into independent contractor agreements with physicians who provide services under the staffing arrangement. While the specific facts of this case centered around the staffing of an emergency department, the decision could have broader implications for companies providing staffing of other healthcare services, including, but not limited to, Nighthawk radiology services and telepsychiatry. To the extent that the decision is upheld by the New Jersey Supreme Court, or is not the subject of a further appeal, it will significantly expand the liability exposure of staffing companies who have independent contractor relationships with physicians who provide services under a separate agreement between the staffing company and a health care facility.
Possible Reorganization of New Jersey’s Emergency Medical Services System Ahead
October 4, 2012
Posted by Beth Christian
Earlier this week, legislation that would overhaul the current emergency medical services system in New Jersey was approved by the Senate Budget and Appropriation Committee. The bill, S-1650, will now move to the full Senate for consideration. It would require EMTs, paramedics and emergency responders to be licensed by the Department of Health and to undergo a criminal history record background check as part of the licensure process. The Department of Health would be required to maintain a list of licensed paramedics and EMTs on its website. The bill would require that the Office of Emergency Medical Services serve as the lead state agency for oversight of emergency medical service delivery in New Jersey. If enacted into law, S-1650 is likely to increase costs for individuals serving as emergency responders due to the cost of proposed licensure and background check requirements which will be passed on to these individuals. It may also accelerate the pace of consolidation of volunteer ambulance squads that we have already been experiencing in New Jersey.
OIG Issues Memo Regarding Excluded Individuals
October 3, 2012
Posted by Sharlene Hunt
Last week, the HHS Office of the Inspector General (OIG) issued a memorandum to the Centers for Medicare and Medicaid Services regarding the employment of excluded individuals by service providers participating in Medicaid managed care entities. The OIG reviewed a sample of 500 providers and identified 16 individuals who were employed by the providers who were excluded from the Medicare and Medicaid programs.
If an individual employed by a provider is excluded under a federal program, including Medicare and Medicaid, the federal government will not pay the employer for services provided by the excluded individual. The federal government has previously indicated that this applies not only to individuals who provide clinical services, but also to individuals who provide administrative services, such as billing and claims processing. Thus, a provider who employs an excluded individual is not entitled to reimbursement for services provided by the excluded individual, including claims for clinical services provided by the individual, but also claims on which the individual only provided billing services. In addition, a provider who employs an excluded individual may face civil monetary penalties.
In its report, the OIG limited its review to hospitals, nursing facilities, home health agencies and pharmacies. Of the 16 excluded individuals employed by these facilities, 7 were employed in nursing facilities, 5 were employed in hospitals, and 4 were employed by home health agencies. Of the 16 individuals, 7 were excluded because their licenses had been revoked, 5 were excluded because of program related convictions (such as Medicare fraud), 3 were excluded because of convictions for patient abuse or neglect, and 1 was excluded because of a felony conviction of health care fraud involving privately funded health insurance.
In examining the reasons behind the failure of these providers to identify excluded individuals, the most common reason was that the individuals gave names on their employment applications that differed from the names listed on the OIG’s List of Excluded Individuals and Entities (LEIE). The OIG posts tips on its website on how to improve accuracy and increase name verification. Other problems arose for providers who relied on contracted companies to check the exclusion of contracted employees or to perform background checks on behalf of the provider.
Of all of the providers reviewed, 78% used the LEIE to check the exclusion status of their employees. Seventy-eight percent (78%) of providers checked the exclusion status at the time of hire, and also conducted periodic checks (i.e., monthly, quarterly or annually). Forty-two percent (42%) of providers required prospective employees to sign an affidavit or attestation regarding their exclusion status. Only 4% had a policy requiring contracted companies to check the exclusion status of their employees. Fifty-five percent (55%) of providers said costs and resource burdens are challenges to compliance. Only 7% of the providers reviewed did not check the exclusion status of their employees, primarily due to lack of knowledge regarding the requirement to do so.
The report serves as an important reminder to all providers who participate in Medicare and Medicaid or other federal programs to check their employees and contractors against the LEIE database and to have in place other safeguards against hiring individuals excluded from federal programs. The OIG tips provide some useful advice for improving provider practices in this area.
THE HEALTHCARE COST CONTAINMENT DIALOGUE CONTINUES
September 14, 2012
Posted by Frank Ciesla
Continuing our coverage of the cost containment and the potential reconfiguration of healthcare going forward, this blog contains links to three articles discussing cost containment issues. One is a recent article from the Washington Times which describes the potential of an Executive Order requiring physicians to take care of all patients covered under the Affordable Care Act irrespective of the financial consequences to the practice. The second is a September 22, 2012 article in the Atlantic as to the reorganization of the healthcare industry. The article outlines not only a change of attitude, but the commitment of time needed to care for patients. As pointed out in the article “from a strictly economic point of view, it might be possible to reduce the average length of doctor-physician interactions from twenty (20) minutes to fifteen (15) minutes, and from fifteen (15) minutes to twelve (12) minutes. This would enable each doctor to see five (5) patients per hour instead of three (3). But doing so may require doctors to stop listening to and caring for their patients. It might make good economic sense, but it does not make good medical sense. An efficient “doctor is not always a good doctor.” If we combine a requirement for additional services from the healthcare provider with a reduction in compensation to the healthcare provider, then the financial squeeze on the healthcare provider may adversely affect the ability of the healthcare provider to provide the resources necessary to deliver healthcare. The third article is from the Bloomberg website by Peter Orszag, former Director of the Federal Office of Management and Budget under President Obama. The article discusses the “re-engineering” of the health care delivery system which will reduce health care expenditures by reducing payments to providers.
OIG ISSUES ADVISORY OPINION RE: WAIVER OF CO-PAYMENTS BY AMBULANCE SUPPLIERS
September 13, 2012
Posted by Beth Christian
On September 11, 2012, the HHS Office of Inspector General (“OIG”) published Advisory Opinion No. 12-11. The Advisory Opinion imposes significant restrictions on the ability of a private ambulance supplier to waive the collection of co-payments and other cost-sharing amounts for services rendered to residents of a municipality. In addition, the Advisory Opinion significantly narrows the OIG’s earlier findings in OIG Advisory Opinion No. 99-1, which also dealt with co-payment collection obligations under an arrangement between a municipality and a private ambulance supplier providing services to the municipality’s residents.
Under the facts reviewed in Advisory Opinion No. 12-11, the private ambulance supplier provided Basic Life Support (“BLS”) ambulance services in a particular state. In the state where the private BLS ambulance supplier is located, volunteer first aid squads do not typically charge residents for cost sharing amounts (such as co-payments) associated with emergency BLS ambulance transports.
Under the proposed arrangement discussed in the Advisory Opinion, the private BLS ambulance supplier would enter into agreements with various municipalities to provide part-time emergency ambulance services. Under the agreements, the private BLS ambulance supplier would provide BLS ambulance services to residents of a municipality during certain specified blocks of time (e.g., 9:00 a.m. to 5:00 p.m. on a weekday) when a volunteer ambulance squad was unable to provide coverage for that block of time. The private BLS ambulance supplier would bill Medicare and other third party insurers for these transports, but would waive all cost-sharing amounts, a practice known as “insurance-only” billing. The private BLS ambulance supplier certified that municipalities with which it would contract to provide part-time emergency ambulance services were requiring the private BLS ambulance supplier to waive all cost-sharing amounts owed by the municipality’s residents as a condition of the municipality awarding the private BLS ambulance supplier the contract to provide the part-time emergency ambulance services. In addition, the municipalities would not pay the private BLS ambulance supplier the waived cost-sharing amounts on their residents’ behalf.
The OIG found that the proposed arrangement potentially violated the anti-kickback statute. The OIG made the following findings with regard to the proposed arrangement:
Under the Proposed Arrangement, the municipalities would effectuate the routine waiver of cost-sharing amounts by: (1) requiring BLS Supplier to bill residents ‘insurance only,’ and (2) not paying owed cost-sharing amounts on their residents’ behalf. In short, if the municipalities wish to assume cost-sharing obligations owed to an independent ambulance supplier, such as BLS Supplier, for ambulance services provided to their residents on a part-time basis, they must pay the owed amounts. Failure on the part of the municipalities to make the payments—or to permit BLS Supplier to bill residents for them—implicates the anti-kickback statute.
[footnote omitted]
The OIG distinguished the circumstances analyzed in Advisory Opinion No. 99-1, which also involved the waiver of co-payments and other cost-sharing amounts by a private BLS ambulance supplier providing back-up emergency ambulance services in situations where no volunteer first aid squad was immediately available to respond. In the circumstances discussed in that Advisory Opinion, the volunteer first aid squad was at all times the primary supplier of BLS ambulance services, and back-up services were provided by the private BLS ambulance supplier only in isolated and unanticipated circumstances where the volunteer first aid squad was unavailable (e.g., where the volunteer first aid squad was already preoccupied responding to existing calls in its service area). In contrast, the OIG found that the private BLS ambulance supplier discussed under the facts of Advisory Opinion No. 12-11 would itself be the primary supplier of BLS ambulance services during designated time slots, rather than the volunteer ambulance squad. The OIG concluded that the proposed agreement to provide BLS emergency services on a scheduled basis as the primary supplier of emergency ambulance services, even if part-time, distinguished the facts of the proposed arrangements from those discussed in OIG Advisory Opinion No. 99-1.
Private BLS ambulance providers and municipalities would be well advised to review their current arrangements (or proposed arrangements that are being negotiated) to ensure that the private BLS ambulance supplier is not providing scheduled BLS ambulance services under circumstances in which the private BLS ambulance supplier is required to waive (or offers to waive) collection of co-payments and deductibles. While the Advisory Opinion is technically only applicable to the requester, private BLS ambulance suppliers that ignore the analysis contained in the Advisory Opinion place themselves at risk of being found in violation of the anti-kickback statute, having fines and penalties imposed and exposure to the possibility of whistleblower lawsuits and actions by potential qui tam relators.
Massachusetts Health Care Plan Update
September 7, 2012
Posted by Frank Ciesla
As pointed out in our previous blogs { http://www.njhealthcareblog.com/2012/08/massachusetts-health-care-plan/; http://www.njhealthcareblog.com/2012/07/massachusetts-provider-payment-controls-a-harbinger-for-the-future/; http://www.njhealthcareblog.com/2012/05/new-efforts-unveiled-to-control-payments-to-massachusetts-health-care-providers/; http://www.njhealthcareblog.com/2012/03/%e2%80%9cromneycare%e2%80%9d-a-precursor-of-%e2%80%9cobamacare%e2%80%9d/; http://www.njhealthcareblog.com/2011/10/government-coercion-as-a-vehicle-to-alter-healthcare/}, the State of Massachusetts, which enacted legislation that was the precursor to PPACA, has now passed legislation attempting to contain the cost of healthcare. The primary cost containment vehicle is an attempt to contain payments to providers. In light of PPACA, it is essential to develop an awareness concerning proposals that deal with cost control. There is no dispute that for PPACA to succeed, it will be essential to control the costs of healthcare. The New York Times had two articles, regarding this issue this week. One article was on proposed budgeting, which is a methodology used throughout Europe and Canada for National health care. Another recent New York Times article discussed bundling of payments. This is the beginning of a series of legislative proposals, which will be introduced in the next Congressional session to attempt to control health care costs.
What is clear from the events in Massachusetts, as well as the two recent articles, is that the attempt to control health care costs will reduce the reimbursement and payment to health care providers. It is essential that healthcare providers review the proposals as they are made and as they move towards adoption, so that they can adjust to keep their delivery system economically viable.
Frank Ciesla Quoted In Article, “Credit Downgrades: How Could They Impact a Hospital’s Capital Structure?”
September 5, 2012
Posted by ewoo
Through the first six months of 2012, non-profit hospital credit downgrades have outnumbered upgrades 23 to 20, and there were 12 downgrades alone in the second quarter…READ MORE
COURT ADDRESSES CONFIDENTIALITY UNDER THE PATIENT SAFETY ACT
August 14, 2012
Posted by Sharlene Hunt
Last week, the Appellate Division issued its decision in a case involving the scope of the confidentiality provisions of the New Jersey Patient Safety Act. The Patient Safety Act, or PSA, requires licensed health care facilities to develop patient safety plans to improve the health and safety of patients within their facilities. The patient safety plan must meet several requirements, including a requirement that there be a process to analyze events occurring within the facility that result in unintended injury or illness, which may or may not have been preventable, or which are “near-misses” of such events. The PSA also provides that materials and information developed as part of this process are not subject to discovery or admissible in evidence in any civil, criminal or administrative matter.
The case before the Appellate Division, C.A. v. Bentolila, involved the issue of whether certain documentation developed by the hospital defendant was discoverable under either the PSA or under the so-called common-law privilege of self-critical analysis. The self-critical analysis privilege applies to traditional peer review and quality improvement activities in hospitals, and applies a balancing approach, balancing one party’s need to know the information against the other party’s need to maintain the confidentiality of the information.
The case decided last week provides an analysis of the interplay between the confidentiality provisions under the PSA and the privilege of self-critical analysis. Despite this analysis, because of the similarity of the activities required under the PSA and the activities required for peer review and quality improvement, and due to the highly factual analysis undertaken by the Court, there will remain many unanswered questions about the PSA privilege into the future.
In essence, the court upheld the absolute privilege to be applied to information developed under the PSA. However, in doing so, Court issued several caveats to this holding, which will limit the application of the privilege, and will require the courts going forward to examine the factual scenario and the process followed in each case, to determine whether the privilege should apply. Unfortunately, the end result will be that hospitals and other health care facilities will continue to face uncertainty as to whether actions they take under the PSA will be covered by the privilege.
In issuing its holding, the Court limited the application of the absolute privilege only to situations in which the information is developed exclusively under the PSA. This issue of exclusivity is not as clear cut as it may seem, and will depend on the facts involved in any given scenario. For example, in the case before the Court, the Director of Patient Safety was also involved in conducting investigations under the hospital’s quality improvement process, and could not, under cross-examination, explain how he distinguished investigations under the two programs. The Court found that this blurring of functions and responsibilities weakened the hospital’s claim that the information in question was protected by the PSA privilege.
The Court also stressed that in order to retain the PSA privilege, a health care facility must adhere strictly to the requirements of the PSA and related regulations. Whether a facility has complied with the PSA can also be driven by the facts. For example, the Appellate Division found that the hospital had departed from the statutory requirements because no physicians were involved in reviewing the incident in question. The event under review raised issues of whether there had been physician error. The PSA requires review by teams comprised of various disciplines with “appropriate competencies.” Since physician error was a potential issue, the Court found that the “appropriate competencies” included physicians in this particular case.
Of special note is a comment in a footnote, in which the Court stated that if information is developed through the PSA process but then “voluntarily disseminated within the hospital thereafter for a non-PSA use (such as a quality assurance program or for peer review), then the item is subject to potential disclosure” under laws applicable to non-PSA materials. This footnote seems to require health care facilities to conduct parallel investigations if an event requires a PSA review and review under the facility’s quality assurance or peer review processes, which creates the potential for conflict between the PSA process and other processes designed to promote patient health and safety.
Due to the importance of strict compliance with the statutory and regulatory requirements, legal counsel should be consulted in creating and implementing PSA processes within a health care facility. However, even with legal involvement, due to the highly fact specific analysis undertaken by the Court in this case and apparently to be applied by the courts considering the application of this privilege, uncertainty will remain as to the ultimate outcome in any given scenario.
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