Colorado Approves Direct Medicare Payment to CRNA’s

Medicare Regulations allows CRNA’s to administer anesthesia without physician supervision if the state governor opts out of the regular physician supervision requirement.

Governor Ritter of Colorado opted out in 2010, and his action was challenged by the Colorado Medical Society and the Colorado Society of Anesthesiologists.  That challenge was dismissed by Colorado trial courts, which decision was just affirmed on appeal by the Colorado Supreme Court.

The Colorado Medical Society continues to assert that Colorado law requires physician supervision of CRNA’s, and that the decision affects only Medicare reimbursement.  That issue was raised but not addressed in the proceedings.

While expecting continued litigation on the issue, the Colorado Association of Nurse Anesthetists (COANA) praised the decision as a victory for CRNA’s.

TelaDoc Wins Injunction Against Texas Medical Board re: Telehealth Restrictions

The Federal District Court of the Western District of Texas has ruled against the Texas Medical Board and granted TelaDoc’s Motion for a Preliminary Injunction prohibiting the Texas Medical Board from enforcing new rules requiring either a face-to-face or an existing physician patient relationship in order to prescribe medication.

The Court rejected the Texas Medical Board argument based on the standard of care.  The Texas Medical Board argued the standard of care would be jeopardized by allowing unrestricted telehealth encounters, but the court ruled that the standard of care for physicians remained in tact, assuming that physicians providing telehealth services would be held to the same standard of care as a physician engaged in a face-to-face encounter.  Presumably, this leaves the issue of whether the standard of care was observed in any particular encounter to the rules of professional licensing and malpractice.

The Court accepted the TelaDoc argument that the rules would likely violate the Federal Anti-Trust Laws and that it would substantially harm TelaDoc’s business model.

The ruling is certain to be appealed.

OIG Issues Fraud Alert to Warn Hospitals and Physicians

On June 9, 2015, the OIG issued a Fraud Alert entitled “Fraud Alert: Physician Compensation Arrangements May Result in Significant Liability”.  This is just a one page letter warning hospitals and physicians by stating the OIG recently reached settlements with 12 individual physicians who entered into questionable medical directorship and office staff arrangements; the settlements presumably included the entities paying those compensation arrangements as well.

The Fraud Alert covered no new ground.  It states the arrangements were questionable for a number of reasons, including:

  • Taking into account the value or volume of referrals
  • Not reflecting fair market value
  • Failing to actually provide services required by the agreement
  • Arrangements that covered other physician financial responsibilities such as reimbursement for office staff salaries.

The alert also provides website addresses for guidance provided previously by the OIG, including “Compliance Program Guidance for Individual and Small Group Physician Practices” and the OIG “Road Map for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse”.

Physician Estopped From Alleging FCA Violations in Contract He Previously Approved

Cooper v. Pottstown Hospital is another case where a dissatisfied party is attempting to use the federal Anti-Kickback Statute or the Stark Law in litigation arising out of the contracts to which they were willing parties at one time.  Usually, breaching parties have used this argument as a defense, claiming that the contracts were illegal, to justify or defend refusal to perform.

However, Dr. Cooper is using a different tactic.  In Cooper, the relater, A.C. Cooper, M.D., was both an employee of a hospital and a party to a call coverage contract.  Both the employment contract and the call coverage contact contained restrictive covenants.  Dr. Cooper’s employment contract was terminated by the hospital because he had acquired a financial interest in a competing surgical hospital.  Following the termination, Dr. Cooper then became employed by another competing hospital, which allegedly violated the restrictive covenant in the call coverage contract.  Dr. Cooper’s call coverage contract was subsequently terminated.

Cooper then filed a False Claims Act complaint alleging that the termination was evidence that his original contracts were intended to induce referrals and thus violated the False Claims Act.  The government has apparently has declined to intervene.

The District Court granted the hospital’s motion to dismiss for failure to state a claim of action for the following two reasons:

  1. First, Dr. Cooper did not plead facts establishing either a Stark or an Anti-Kickback violation, i.e.,
    • The hospital had no legitimate business need for call coverage, or
    • The compensation was in excess of fair market value
  2. Second, Dr. Cooper had represented while executing the contract that the compensation was fair market value and it was not intended to induce referrals.  Thereby, Dr. Cooper’s prior warranties and representations contradicted his claim.

Furthermore, the court concluded the hospital’s actions in terminating the contracts were legitimate actions based upon the contracts.

Pennsylvania Introduces Telehealth Bill

House Bill 706 has been introduced in the Pennsylvania House.  This is a “parity” bill which does the following:

It defines telehealth in such as way as to neither mandate nor prohibit asynchronous or synchronous telehealth technology.  It simply defines telehealth as the remote interaction of the healthcare provider with a patient through the use of any of the following:

  1. A video camera transmission,
  2. A computer video transmission,
  3. An electronic health monitoring device, or
  4. Another telecommunications device that delivers health information concerning the patient to a healthcare professional.

This is a parity law because it requires insurers that provide health insurance policies in the commonwealth to “provide coverage for telehealth under the following conditions”:

  1. The use of telehealth is appropriate for the patient;
  2. The healthcare professional is able to maintain proper direct examination of the patient or direct examination of the patient is not necessary;
  3. The use of telehealth is expected to result in lower healthcare cost than if it were not used.

That last condition is a little unusual.  On one hand, one would expect the telehealth coverage would expand utilization, because access will be easier.  On the other hand, one of the presumed benefits of expanded access is early detection and prevention.  I wonder what machinations a carrier might consider to avoid providing telehealth coverage on the basis that it is not expected to result in lower healthcare costs?

TELADOC Sues Texas Over Telehealth Restraint

The Texas Medical Board recently adopted a new rule requiring face to face encounters by physicians with patients before prescribing medication.  Teladoc has sued the Texas Medical Board in Federal Court alleging restraint of trade, stating that the new Texas rule “would raise prices and reduce access” to telehealth services.  The Complaint alleges the same wrongful conduct as the recent case against the North Carolina State Board of Dental Examiners which attempted to restrain non-dentists from providing teeth whitening services.  United States Supreme Court just held on February 25, 2015 that the State Board of Dental Examiners was immune from Sherman Act Regulation under the Doctrine of State – Action Antitrust Immunity.  Some commentators expect the same issues to arise in the Texas Teladoc case.

Allegheny County Court Rules UPMC/Highmark Agreements Trump Consent Decrees

The ruling by Judge Ward of the Allegheny County Court of Common Pleas highlights another facet of the ongoing dispute between UPMC and Highmark.

On February 18, 2015, Judge Ward of the Allegheny County Court of Common Pleas ruled that the arbitration agreements contained in the various agreements between Highmark and UPMC hospitals, most of which have separate participation agreements with Highmark and which each contain substantially identical arbitration provisions, apply to the disputes between the parties and are not preempted by the Consent Decrees that each of those parties have entered into with the Commonwealth of Pennsylvania.

One of the key points is that each of the parties have entered into separate Consent Decrees with the Commonwealth.  As you may recall, it was reported that separate Consent Decrees were created because the parties would not negotiate together.

Now the Allegheny County Court of Common Pleas is ruling that the Consent Decrees are not agreements between the two parties; instead they are agreements between the separate parties and the Commonwealth.  On the other hand, the various hospital participation agreements are agreements between the parties and in those agreements the parties have agreed to certain arbitration provisions.  The Court stated as follows:

UPMC appears to contend that the Consent Decree operates as an amendment to the agreements between Highmark and UPMC.  UPMC further argues that the Consent Decrees, in addition to amending the parties written agreements, also divest this court of jurisdiction to interpret the agreements.  The Consent Decrees, however, do not purport to amend the parties’ agreements, nor could they.  The Consent Decrees are agreements between UPMC and the Commonwealth of Pennsylvania and Highmark and the Commonwealth of Pennsylvania, respectively.  Accordingly, they do not deprive this Court of jurisdiction.

Peer Review Privilege: Facts vs. Conclusions

All states have some degree of confidentiality protection for peer review activities and the information generated by those activities, and there is additional federal protection for information gathered and created by Patient Safety Organizations (PSOs), established pursuant to the Patient Safety and Quality Improvement Act (PSQIA) of 2005.

However, physicians, hospitals, and medical staffs should not cavalierly rely upon assumed confidentiality for the protection of the information generated and collected by various peer review organizations or bodies.  In a number of pervious Med Law Blog posts, I have noted that incident reports, information collected for risk management purposes, and other types of non-peer review activity does not qualify for peer review confidentiality unless the information is generated by the peer review activity for a legitimate peer review purpose.

In Krusac v. Covenant Medical Center, Inc., (2015 Michigan Lexis 923), the Michigan Supreme Court held that, “objective facts gathered contemporaneously with an event” are not entitled to privilege under Michigan’s peer review privilege statutes.

The lesson is that one should not assume that all information that might be used for peer review activities is automatically protected by the peer review confidentiality statutes of the various states.

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