No SGR Action by Senate

March 27, 2015 – Special Alert


Senate leaves for recess with no action on SGR repeal 
Despite a successful vote in the House yesterday, the Senate failed to bring to a vote legislation to repeal the flawed Medicare Sustainable Growth Rate (SGR) formula before leaving for April recess early this morning. MGMA is extremely disappointed that the Senate failed to enact permanent SGR repeal legislation before the March 31 deadline and will allow a 21% physician payment cut to take effect April 1. It is imperative that the Senate return from recess ready to pass this legislation. Tune into Wednesday’s Washington Connection for more information on what happens next.


MGMA president and chief executive officer Halee Fischer-Wright, MD, MMM, FAAP, released the following statement:

MGMA: Specter of a 21% decrease in reimbursement is looming over nation’s caregivers

“MGMA is extremely disappointed the Senate failed to act on permanent SGR repeal and will allow a 21% physician payment cut to take effect on April 1. We urge the Senate to vote to repeal the SGR immediately upon return from the April recess and remove its dark cloud over physician group practices.”


MGMA has repeatedly urged Congress to put an end to temporary short-term patches and pass a permanent solution to the SGR. Join the effort! Contact your Senators and urge them to repeal SGR once and for all.

News from MGMA re SGR Repeal

Historic SGR repeal passes in House 
Today, the House of Representatives passed the Medicare Access and CHIP Reauthorization Act, H.R. 2, by a vote of 392–37. This legislation permanently repeals the SGR and returns stability to physicians and Medicare patients.


MGMA President and CEO Halee Fischer-Wright released the following statement:

“The House of Representatives has voted to remove the dark cloud of financial uncertainty over physician group practices. Medicare innovation has been hampered far too long by the SGR. The Senate is one vote away from returning stability to patients and physicians in Medicare. MGMA urges the Senate to immediately vote to repeal the SGR.”


MGMA has worked tirelessly over the years urging Congress to permanently repeal the SGR and put an end to temporary short-term patches. MGMA members have lent their own critical support to the effort, engaging in years of influential grassroots campaigns.


Attention now turns to the Senate, which must also pass the legislation before the current patch expires on March 31 to avoid an automatic 21% cut to physician payments. Make your voice heard! Urge your Senators to repeal the SGR now.

Concierge Practice Network Subject to Malpractice Liability

In Beber v. Metzger and MDVIP, along with other physician defendants, a Florida jury awarded $8.5 million in a malpractice claim, and found MDVIP, a national concierge physician network with over 800 physicians, partially liable for the award.

Without the benefit of a judicial opinion, we can only speculate as to why a jury believed that MDVIP was partially responsible for the negligence of a member physician, however the theories of negligence in contractual ventures are not that different from those applicable employed physicians and integrated delivery systems.

The argument at trial was that MDVIP was presenting its member physicians to potential patients and making representations with respect to quality of care.  Obviously, the jury believed that, if MDVIP or any other concierge network is making quality representations, then those entities run the risk of being held responsible for the failure to meet those “promises”.

Furthermore, there are additional theories of liability which might be explored.  Entities that have contracts with other physicians and other healthcare providers have potential liability based upon theories of agency and vicarious liability, in the same way that a practice is responsible for the actions of its employed physicians.

Another potential theory of liability is negligent credentialing.  Will concierge physician networks be held responsible for allowing physicians, with suspect qualifications or issues that might have been discovered had the credentialing process been more diligent, to participate in their network, particularly if the network is concurrently making the type of quality representations that were apparently significant issues in the Beber case.

Ohio Proposes New Telehealth Prescribing Regulations

The Ohio State Medical Board has proposed new telehealth prescribing regulations, which are predicated upon whether the drug is a controlled or not a controlled substance.

Non-Controlled Substances

For non-controlled substances, physicians may prescribe or dispense medication to a person on whom the physician has never previously conducted a medical evaluation only if the physician completes and document a medical evaluation and collects a relevant clinical history that “conforms to minimal standards of care consistent with an evaluation that was completed in a face-to-face interaction” using real time telehealth technology.

Controlled Substances

For controlled substances, physicians may dispense or prescribe only in the following situations:

  1. On-call or cross coverage arrangements with another physician.
  2. Consulting with another physician or healthcare provider.
  3. As a medical director or hospice physician to a patient enrolled in hospice program.
  4. Persons for in-patients or residents of institutional facilities.

Pennsylvania Nursing Home That Failed To Sign Arbitration Agreement Cannot Seek to Enforce the Agreement

Danielle Dietrich, an attorney in Tucker Arensberg’s Pittsburgh office, recently prepared the below:

On January 15, 2015, the Pennsylvania Superior Court in Bair v. Manor Care of Elizabethtown, PA, LLC 2015 Pa. Super. 9 (2015) ruled that a nursing home arbitration agreement was not enforceable when the facility did not sign the agreement.

M. Sylvia Bair commenced this action for wrongful death and survival in the Court of Common Pleas of Lancaster County as Executrix of the Estate of Martha A. Edwards against Manor Care, alleging that neglect and abuse of Ms. Edwards by Manor Care lead to her death.

Manor Care filed preliminary objections seeking to have the case referred to arbitration pursuant to an arbitration agreement executed by Ms. Bair on behalf of Ms. Edwards upon her admission to Manor Care. However, no Manor Care representative completed or signed the arbitration agreement on behalf of the entity. The trial court overruled Manor Care’s preliminary objections, permitting the litigation to move forward in the state court. Manor Care appealed to the Pennsylvania Superior Court.

The “Voluntary Arbitration Agreement” at issue contained blanks on the first page for the insertion of the names of the contracting parties and the date. Those blanks were not completed. The agreement also failed to attach a brochure to which it referred and incorporated into the agreement. There were also signature lines for the Patient, the Patient’s legal representative and for the Center Representative. The Center Representative did not sign the agreement.

Manor Care argued that the mere presentation of the form constituted an offer to arbitrate. By signing the agreement, they argued, Ms. Bair accepted the offer.

Ms. Bair argued that the form does not indicate who the parties are and that the form was “facially devoid of essential terms” and was therefore unenforceable.

The Superior Court found that by failing to affix its signature, Manor Care did not consent to arbitrate, as there was no mutual assent. It found that the nursing home could not enforce the arbitration agreement.

New York Passes Telehealth Bill

New York Governor Andrew Cuomo signed a Bill late last week, which will take effect as of January 1, expanding telehealth coverage in New York. This law does three things which are on the leading edge of telehealth coverage:

  1. First, it requires commercial insurance and medical assistance to provide telehealth coverage, which provision is often referred to as “parity legislation” by telehealth providers.
  2. Second, in defining the originating site for telehealth coverage, it does not exclude a patient’s home. Rather, the new law defines the originating site as “a site at which a patient is located at the time healthcare services are provided to him or her by means of telemedicine or telehealth”. There is no exclusion for a patient’s home.
  3. Third, it defines telehealth technology as “information and communications technologies consisting of telephones, remote patient monitoring devices or other electronic means which facilitate this assessment, diagnosis, consultation, treatment, education, care management and self management” without specifying that the technology must be either synchronous or asynchronous, thereby allowing the providers and insurers to choose any technology which they believe permits appropriate delivery of care.

Important Ruling on Required FMLA Notices

Scott Leah, an attorney in Tucker Arensberg’s Pittsburgh office, recently circulated the below client alert:

Employers with more than 50 employees need to be aware of a recent ruling on FMLA notices, which employers are required to give to employees.

In Lupyan v. Corinthian Colleges, Inc., 761 F.3d 314 (3d. Cir. 2014), the employer mailed an FMLA notice to the employee, and later fired the employee for not returning to work after the expiration of her 12 weeks of FMLA leave. The employee claimed to have not been aware that her leave was being considered to be FMLA leave and the date that she was required to return to work.

The employee denied receiving the notice, and the employer could not prove that the employee received it. The Court ruled for the employee, noting that the employer could have sent the notice in a manner that would prove delivery (such as certified mail or FedEx), for little cost. The Court therefore ruled for the employee on her claim of interference with her FMLA rights.

While is it best to give FMLA notices personally to an employee, if they must be mailed, the wise course of action would be to do so by certified mail or FedEx.