OIG Rejects Block Leasing Joint Venture
Check David Harlow's HealthBlawg ( http://healthblawg.typepad.com/) for a discussion of OIG Advisory Opinion 08-10, finding that a block leasing aggreement would be a prohibited joint venture.
HIPPA Administrative Simplification Proposed Rule
On August 22, 2008 the Department of Health and Human Services published a Proposed Rule that would modify two of the medical data code set standards adopted in the Transactions and Code Sets final rule. The Proposed Rule would modify the standard code sets for coding diagnoses and inpatient hospital procedures by concurrently adopting the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD -10-CM) for diagnosis coding, and the International Classification of Diseases, Tenth Revision, Procedure Coding System (ICD-10-PCS) for inpatient hospital procedure coding. These new codes would replace the ICD-9-CM Volumes 1 and 2 and the International Classification of Diseases, Ninth Revision, Clinical Modification ("CM") Volume 3 for a diagnosis in procedure codes, respectively. Comments on the proposed rule are being accepted until 5:00 p.m. on October 21, 2008.
Paul Welk
412-594-5536
pwelk@tuckerlaw.com
Physicians Must Reimburse Hospitals and Medical Staff Officers for Successful Defense of Peer Review Claims
Physicians initiating peer review litigation should be careful of two issues involving attorney's fees. First, Section 42 USC 11113 of the Health Care Quality Improvement Act provides that hospitals may recover attorney's fees from physicians who file frivolous or bad faith claims.
Second, sometimes the application for medical staff privileges contains clauses providing the immunity to the peer review participants and/or providing that the physician applicant will reimburse attorneys fees in the event of an unsuccessful credentialing dispute. In Adeduntan vs. Hospital Authority of Clark County the United States District Court for the Middle of District of Georgia found that a physician who was unsuccessful in prosecuting a peer review action against the Hospital Authority, Athens Regional Medical Center, and several physicians involved in the peer review process was required to reimburse the hospital and those physicians for their attorneys fees.
This presents a dilemma for medical staff members. The application should be a four man process approved by the medical staff as part of the medical staff by-laws that will require individual medical staff members to reimburse the hospital for the attorney's fees in the event of a dispute? Should there be some condition so that only frivolous lawsuits would generate reimbursement obligations? If the medical staff by-laws require individual physicians to reimburse attorneys fees when they lose a credentialing, should they be able to recover attorney's fees when they win a credentialing case? The opinion in the Adeduntan case is attached in the link below.
Key Points of Medicare Improvement for Patients and Providers Act of 2008 (MIPPA)
1. Medicare Physician Fee Schedule. The sustainable growth rate (SGR) automatic physician compensation reduction of -10.6% was retroactively replaced with a .5% increase, essentially maintaining the .5% conversion factor increase implemented for January-June 2008.
2. Incentive Payments. Extends through 2010 incentive payments for implementation of electronic prescription systems (EPS).
3. Medicare Advantage Plan.
· Essentially eliminates funding for 2014
· Begins phase out of IME costs in 2010
· Requires private fee for service contractors to negotiate specific contracts, rather than merely "match" Medicare
4. DMEPOS Bidding.
· Invalidates the Round 1 competitive bidding on contracts and requires rebidding
· Delays bidding of Round 2 until 2011
5. Accreditation. Authorizes the Secretary to recognize hospital accreditation by bodies other than the Joint Commission.
6. Miscellaneous
· Extends the 60-day locum coverage period if the covered doctor is in the active military
· Doctors adopting EPS will be eligible for a 2% bonus
· The 5% physician scarcity bonus will be eliminated while the 10% HPSA bonus remains
CMS PROVIDES EVALUATION AND MANAGEMENT SERVICES GUIDE
The CMS Medical Learning Network ("MLN") has posted an Evaluation and Management Services Guide for billing and coding. The Guide is a useful explanation of this complicated area and provides links to the 1995 and 1997 Documentation Guidelines for Evaluation and Management Services, as well as the Medicare Claims Processing Manual and the Current Procedure Terminology book.
http://www.cms.hhs.gov/MLNProducts/downloads/eval_mgmt_serv_guide.pdf
Peer Review Update: Adverse Peer Review Actions Require Independent Investigation
A California court has held that one hospital cannot take adverse peer review actions against a physician based solely on adverse peer review actions at another hospital; there must be an independent investigation of the medical issues.
In Smith vs. Selma Community Hospital, a copy of the opinion is attached below, the California appellate court affirmed a California trial court decision reinstating Dr. Smith's political privileges. Selma Community Hospital had terminated Dr. Smith's clinical privileges based upon adverse peer review actions at two other related hospitals, identified as the Hanford Hospitals. Interestingly, the Hanford Hospitals' peer review actions appear to be part of a long history of litigation between Dr. Smith and the Hanford Hospitals involving both an attempt to acquire Dr. Smith's practice and the peer review issues.
The medical staff proceedings at Selma Community Hospital had proceeded as follows:
1. The Medical Executive Committee had recommended termination of Dr. Smith's clinical privileges;
2. Dr. Smith requested a medical staff hearing, which essentially found that the Hospital had not demonstrated via preponderance of the evidence that termination was reasonable and warranted based on the facts, as required by the Medical Staff Bylaws;
3. The Hospital appealed the Medical Staff Hearing Panel decision and the Governing Board reversed that decision;
4. Dr. Smith filed an action for mandamus with the California trial court, which reversed the Board's decision; and
5. The Hospital appealed the trial court decision to the California superior court, which affirmed the trial court's decision.
You should note in this lengthy opinion that the peer review issues are decided under California law, which was enacted in January 1990, and California is one of the few states to opt-out of the protections of the Heath Care Quality Immunity Act provisions by establishing its own basic procedural requirements. The California courts essentially decided that the Selma Community Hospital Board decision was incorrect because it treated the Hanford Hospitals' decisions as binding administrative decisions, which it was bound to follow pursuant to the Doctrine of Collateral Estoppel and that the Medical Staff Hearing Panel had not made separate findings of fact. The California appellate court rejected both of those arguments, declaring that the Hanford Hospital decisions were not binding under the Rules of Collateral Estoppel and that Selma Hospital Medical Staff Hearing Panel had specifically found that Selma Community Hospital had not made an independent investigation in separate findings of fact.
The Importance of Medical Non-Compete Agreements
An Appellate Court in Tennessee recently held that a medical practice can enforce a medical noncompete agreement with a certified orthotist who took a job with a competitor due to the protectable interest that the practice had in the training that they provided to the employee who then acquired a specialized skill. The Court also found that the practice had an interest in protecting the relationships it had with its patients and preventing the orthotist from taking them with him to the new practice.
This opinion shows the value of having a well written physician noncompete agreement, that specifically sets forth what the practice's protectable interest is and has both sides agree that the practice has an interest in protecting the same.
Scott Leah
412-594-5551
sleah@tuckerlaw.com
Medlaw Blog Establishes New Record
I would like to thank all of the subscribers and users of the Medlaw Blog. July 2008 was a record setting month for the Medlaw Blog. We had more than 5,300 visits. We appreciate the support and welcome any suggestions you might have for content that you would like to see on Medlaw Blog.
