Attached is a PDF issued by CMS regarding blanket waivers of the Stark Law in order to allow physicians and hospitals to adjust 18 different potential financial relationships in order to deal with the COVID-19 emergency. The waivers were issued on March 30, 2020, with a retroactive effective date of March 1, 2020. They will terminate in accordance with conditions established in Section 1135(e) of the Social Security Act, which essentially provides they will be tied to the duration of the national emergency. Please contact us if you have further questions regarding these issues.
OCR Relaxes HIPAA Rules for COVID-19 Disclosures
Although many believe the HIPAA rules already allow for disclosure of COVID-19 cases on the basis of a public emergency, OCR just issued Guidance, attached in the link below, confirming disclosure is permitted when needed to provide treatment, with the notification is required by law and in order to prevent or control the spread of a disease or prevent or lessen and imminent threat to public safety.
COVID-19 and Physician WRVU Productivity
A vast majority of current physician employment contracts, both with larger systems and in individual practice, have some sort of productivity component for compensation, dependent upon the production of:
- WRVUs (Work Relative Value Unit)
- Collections
- Net Profits
Even if there are no negotiated “resource” provisions, most contracts also have what was always thought to be just generic obligations of the employer to provide appropriate resources–which they are not necessarily doing if the “offices are closed”, or there are some other restrictions.
I would suggest it is not good planning to wait until you see what happens. Perhaps you, or a group of you, can initiate the discussion, request postponement of the productivity requirements, etc.
Contact Mike Cassidy if you would like to discuss.
Centers for Medicare and Medicaid Services Issue a Telemedicine Tool Kit
The Centers for Medicare and Medicaid Services (CMS.gov) issued a Telemedicine Tool Kit. Use this link to access the Tool Kit.
COVID-19 Physician Private Practice Guidance
I. Introduction.
The COVID-19 pandemic presents all physicians, but especially private practice physicians, with numerous clinical, liability and business challenges. We have chosen the following categories to organize and present recommended guidance and linked resources for your information:
1. Clinical Guidance
2. Malpractice Liability
3. Reimbursement
4. Employer/Workers Compensation
5. Telehealth
II. Clinical Guidance.
Many authoritative sources are providing clinical recommendations, so we thought it would be more useful to curate some of the leading sources rather than attempt to summarize or paraphrase those recommendations:
1. PA Med: https://www.pamedsoc.org/education-cme/public-health/coronavirus
2. AMA: https://www.ama-assn.org/delivering-care/public-health/covid-19-2019- novel-coronavirus-resource-center-physicians
3. CMS: https://www.medicare.gov/medicare-coronavirus#500
4. CDC: https://www.cdc.gov/coronavirus/2019-ncov/index.html
5. WHO: https://www.who.int/health-topics/coronavirus
III. Medical Malpractice.
The medical malpractice category can be separated into two categories, i.e. following Clinical Practice Protocols and Malpractice Prevention.
1. Clinical Practice Protocols.
We reviewed many clinical practice protocols and decided the best combination of practical advice and risk management would be to publish the guidance Norcal, since it is one of the leading malpractice insurer.
The guidance is found at https://www.norcal-group.com/covid-19. It not only emphasizes patient communications, it also collects similar information from many other sources, i.e. CDC, WHO and NIH.
As with any other patient communication or informed consent process, it is critical to document that the patient has been made aware of or informed that the risk of COVID19 infection cannot be totally eliminated, that there is no way of assuring via testing that none of your employees have not been exposed, that you have very little control, if any, regarding the health status of any patients (other than those obviously manifesting symptoms) of the patient’s exposure from other sources, and that complete social distancing and quarantine are the only reliable protections. By coming to your office, patients are assuming the same risks as the general population in other crowded environments or situations.
2. Insurance Coverage.
In its most basic sense, medical malpractice occurs when a physician or other healthcare professional commits medical negligence. A doctor or healthcare professional commits medical negligence when they breach what is referred to as the “standard of care.” The “standard of care,” in turn, is the generally accepted medical practice used by medical professional in the same geographic area for patients suffering from a particular illness or condition. In addition to proving that a healthcare professional committed medical negligence by breaching the standard of care, a claimant must also prove that the alleged medical negligence of the professional directly resulted in (i.e., caused) the claimant’s injuries.
Given the novelty and unprecedented nature of the COVID-19 virus, healthcare professional, aided by guidance from organizations such as WHO, CDC, and NIH, are still in the process of establishing the standard of care for the screening and treatment of the virus. At this time, the best way to limit the risk of liability exposure that may arise from a patient contracting COVID-19 while visiting a doctor’s office or other healthcare facility is to implement the risk management procedures referenced above. Employing these risk management procedures and remaining vigilant of warning signs that patients or employees may be carriers of the virus, and taking appropriate actions to separate those individuals from others upon such recognition, is in keeping with the proper standard of care as it presently exists. Absent the knowing or grossly negligent exposure of a patient to the virus, healthcare professionals should not be held liable for situations where a patient contracts the virus while present in their office of facility.
As noted above, by coming to your office, patients are assuming the same risks as the general population in other crowded environments or situations. To make these risks clear to patients, and to further protect against potential claims of liability, healthcare professionals should post flyers or similar notices advising of the potential risks of exposure to COVID-19 in prominent locations both outside and within their offices. These flyers should state in clear language that in spite of the implementation of risk management procedures and other controls, there is no way to ensure that a patient will not be exposed to the virus by virtue of their presence in the office. In addition, these flyers should explain the risks associated with the contraction of the virus, including hospitalization and death. By making patients aware of these possibilities, they can make an informed choice and will be deemed to have assumed the risk of exposure in the unfortunate event such exposure occurs.
As healthcare professionals scramble to formulate policies in response to the COVID-19 outbreak, so too do medical professional liability insurers. Whether an insurer will defend against claims involving a patient contracting the virus while in the doctor’s office will be determined on a case-by-case basis depending on the particular facts and coverage involved. Practitioners who are concerned by this issue should contact their insurers directly to obtain information regarding their coverag
III. Reimbursement
COVID-19 patient visits will presumably be treated as “E&M office visits,” of some degree of complexity (excluding Telehealth), which we will address below. Reimbursement levels, pre-authorization requirements, etc. will be dictated by the terms of the third party payer/insurance plan. Attached is guidance from:
1. Medicare: https://www.cms.gov/newsroom/fact-sheets/medicare-telemedicinehealth-care-provider-fact-sheet
2. Highmark: https://hbcbs.highmarkprc.com/Newsletters-Notices/COVID-19- CORONAVIRUS-INFORMATION-FOR-PROVIDERS
3. UPMC Health Plan: https://www.upmchealthplan.com/pdf/ReleasePdf/2020_03_13-telehealth-visits.html
4. Pennsylvania Medicaid: https://www.medicaid.gov/state-resourcecenter/disaster-response-toolkit/covid19/index.html
IV. Employment/Workers Compensation
1. COVID-19 Legal Update. President Trump signed the Families First Coronavirus Response Act (“FFCRA”) into law on Wednesday, March 18, 2020. It will take effect within 15 days
The FFCRA requires employers with fewer than 500 employees1 to provide two different kinds of paid leave for certain Coronavirus/COVID-19-related reasons, as follows:
1. Paid sick time. Employees shall receive paid sick leave if they are unable to work (or telework) due to a need for leave because: a. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19. b. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; c. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis; d. The employee is caring for an individual who is subject to an order as described in a., above, or has been advised as described in b., above; e. The employee is caring for a son or daughter whose school or place of care has been closed, or whose child care provider is unavailable, due to COVID-19 precautions; f. the employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury. 1 An employer may exclude employees who are health care providers or emergency responders from coverage under this law. Additionally, the Secretary of Labor has the authority to issue regulations to grant exemptions to businesses with fewer than 50 employees upon a showing that compliance would “jeopardize the viability of a business as a going concern.”
Leave time taken for reasons 1a.-c. is to be paid at the employee’s regular rate of pay, subject to daily and aggregate limits of $511 and $5,110, respectively. Leave time taken for reasons 1d.-f. is to be paid at 2/3 of the employee’s regular rate of pay, subject to daily and aggregate limits of $200 and $2,000, respectively.
The duration of the paid sick leave is: 80 hours for full-time employees; or, for part-time employees, the number of hours each works on average over a two-week period. Expanded FMLA leave. Employees who have been employed for at least 30 days are entitled to up to 12 weeks of job-protected paid leave if they are unable to work (or telework) due to a need to care for the son or daughter under 18 years of age if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a COVID-19-related public health emergency.
It is very important to note that not all Coronavirus/COVID-9-related reasons trigger the right to these leaves. For example, the FFCRA does NOT require employers to provide paid leave under broader circumstances, e.g., an employer’s decision to cease operations, reduce headcount or hours, etc. It is up to employers to decide whether to expand their current paid time off plans/policies to cover these other situations.
Some other key attributes of the FFCRA:
• This paid sick time is to be made available to employees in addition to existing paid leaves and, accordingly, an employer may not require an employee to use other paid leave before the employee uses this paid sick time;An employer may not require, as a condition of providing this paid sick time, that employees search for or find a replacement to cover the hours they are off;
• This paid sick time shall be available for immediate use by employees regardless of how long any employee has been employed;
• The government will provide new tax credits to offset/cover the costs of the new leaves;
• The requirement to provide both leaves sunsets on December 31, 2020.
So… what should an employer do now?
(i) It should definitely determine whether it has fewer than 500 employees. (ii) If it has fewer than 50 employees, determine whether it will seek a waiver;
(iii) If it is covered by this law, it should make sure that its FMLA administrator/HR staff fully understands what circumstances are and are not covered by these two leaves so that it is ready to properly determine individual employees’ eligibility.
Employers with fewer than 25 employees are exempt from the requirement to restore an employee to his/her prior position (or an equivalent) upon the expiration of the need for leave, if the employee’s position no longer exists following leave due to operational changes occasioned by a public health emergency (e.g., a dramatic downturn in business caused by the COVID-19 pandemic), subject to certain conditions. During the first two weeks of this expanded FMLA leave, an employee can opt (but not be required by the employer) to receive accrued vacation, personal, or sick leave. The remaining period is to be paid at 2/3 of the employee’s regular rate, subject to daily and aggregate limits of $200 and $10,000, respectively and otherwise administer these leaves.
Since there are many situations under which employees may miss work that are outside of the FFCRA’s scope, it should decide how to handle the most foreseeable ones. (What if the employer sends most/employees’ home? What if wants some to work at home but others are unable to work offsite? What if an employee is asked to continue to report for work but objects for general reasons (not because he or she has been individually diagnosed, told to quarantine, etc.)?).
2. Covid-19 Workers’ Compensation, etc. The PA Workers’ Compensation Act recognizes “occupational disease” as a compensable work injury; employers (through WC insurance carriers) can be required to pay wage loss and medical benefits for time loss and medical care associated with COVID-19 as an occupational disease, or as an “injury” based on the onset of the infection. For employees who may be exposed to COVID-19 in the workplace, contract the virus, and miss work and require medical care as a result – the state Bureau of Workers’ Compensation will recognize (and likely accept) the claim as compensable – forcing the employer/carrier to pay Workers’ Comp benefits to the employee.
In fact, the PA Department of Labor & Industry website already lists “filing options” for employees who contract the disease, as follows:
• Option 1: An employee can file a typical “disease-as-injury” Worker’s Compensation claim, which would require the employee to provide medical evidence that they were exposed to COVID-19 in the workplace. Employees must provide this type of evidence for all injury-related claims.
• Option 2: An employee could file an “occupational disease” Workers’ Compensation claim, which would require showing that COVID-19 is occurring more in the employee’s industry or occupation than in the general population, such as the healthcare industry.
In extreme circumstances, resulting in the death of an employee as a result of contracting COVID-19, the employee’s spouse and/or surviving children would have a viable claim for survivor benefits as against the employer (WC carrier). Conversely, in the much more common/likely scenario, where the virus “runs its course” – and the employee makes a full recovery in less than ten days – Workers’ Compensation wage loss benefits would be limited to the period of required time off for recovery and/or quarantine. It is important to note that an employees’ legal right of recovery as against an employer, for any sort of work injury, is limited to recovery of wage loss and medical benefits.
In any/all scenarios where an employee is affected, and a Workers’ Compensation claim is reported, the best strategy, from a Workers’ Compensation liability exposure perspective, is to defer to the WC carrier to process payments for wage loss and medical care…while taking the necessary steps to prevent future COVID-19 exposure in the workplace.
V. Telehealth.
The telehealth issue is essentially whether the patient may be diagnosed and treated remotely.
1. Medicare already authorizes certain treatments, albeit with originating/treating site requirements, wherein would ordinarily preclude most such visits. However, recent Federal emergency relief action has warned those site restrictions effective March 6, 2020. Medicare also already allows virtual check-ins.
• https://www.cms.gov/newsroom/press-releases/president-trump-expands-telehealthbenefits-medicare-beneficiaries-during-covid-19-outbreak
• https://www.cms.gov/newsroom/fact-sheets/medicare-telemedicine-health-care-providerfact-sheet
2. UPMC Health Plan: https://www.upmchealthplan.com/pdf/ReleasePdf/2020_03_13-telehealth-visits.html
3. Highmark: https://hbcbs.highmarkprc.com/Newsletters-Notices/COVID-19- CORONAVIRUS-INFORMATION-FOR-PROVIDERS
4 Medicaid: https://www.medicaid.gov/state-resource-center/disaster-responsetoolkit/covid19/index.html
We would expect all third party payers to be relaxing telehealth restrictions in order to facilitate emergent and timely COVID-19 medical services, and to be pushing that information out through news releases and websites. We will curate and post it as it becomes available.
For additional information contact:
Mike Cassidy
Albert Lee
Ken Scholtz
Weston Pesillo
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Workers’ Compensation Claims for Healthcare Professionals Exposed to COVID-19 in PA – Updated March 17, 2020
Just a few short weeks ago, the Center for Disease Control’s Director of the National Center for Immunization and Respiratory Diseases warned that the spread of coronavirus in the U.S. was “not a question of if, but when.” As of this updated posting, the entire country is locked in an unprecedented grip of uncertainty and concern regarding what comes next.
Looking into the not-so-distant future, employers – particularly those in the healthcare industry – should be prepared for liability claims associated with the disease, namely Workers’ Compensation claims…it’s “not a question of if, but when.”
Right now, the Governor’s shutdown of non-essential state government offices does NOT include the Bureau of Workers’ Compensation. That means, an employee with a medically-documented, extended leave of absence, related to the coronavirus can file a claim (online) and seek to recover wage loss benefits, and reimbursement for medical care, including out-of-pocket expenditures. This is not a “rubber-stamp” process – the filing of a claim merely starts the process of litigation, that could (for reasons explained below) result in liability for the employer (via its Workers’ Compensation carrier). The extent of liability for such a claim would be for wage loss and medical benefits associated with the disease…and does extend to the extreme circumstance of a death/survivor benefit.
The remainder of this post explains the basis upon which a worker can submit a claim and recover wage loss and medical benefits through the Workers’ Compensation system.
Focusing on employer liability, specifically PA Workers’ Compensation claims for those in the healthcare industry, there is a basic framework for determining whether COVID-19 cases would fall within the category of recoverable “occupational disease” claims in PA.
By way of basic background – the PA Workers’ Compensation Act recognizes certain occupational disease claims as compensable. There are four specifically recognized and compensable “occupational disease” related Workers’ Compensation claims in PA. These are:
- Heart and lung disease for fireman who have four or more years of service;
- Pneumoconiosis and silicosis for any occupation that involves direct contact with or exposure to coal dust;
- Specific types of chemical poisoning (i.e. lead, arsenic, mercury) for occupations that involve direct contact or exposure, or to the preparation of compounds; and
- Tuberculosis and hepatitis for health care workers, blood processors, lab techs and related professionals who are exposed to these diseases.
www.dli.gov/businesses Focusing on healthcare professionals, claims involving tuberculosis and hepatitis require proof of causal connection, via expert medical report/testimony. This expert medical evidence is often coupled with additional evidence to support the connection or establish the basic premise that the disease was present in some form (patient, blood/tissue sample, equipment/surface, or visitor) in the workplace.
COVID-19 is not a listed/recognized disease according to the PA Department of Labor & Industry, as it was a virtually unknown threat until late 2019. It is however interesting to note that the Bureau of Workers’ Compensation website already has a page devoted to COVID-19 claims – and a basic blueprint for claims associated with the disease. See link
For reasons explained below, it is likely that PA Courts will award benefits for COVID-19, as a compensable Workers’ Compensation claim, if/when a causal connection can be established between the onset of the disease and some exposure in the workplace, particularly for healthcare professionals. In this context, causal connection evidence in the form of expert medical testimony would be required to establish the link between the disease and the workplace. For healthcare workers, it appears the burden of proof will be lowered if it turns out that the spread of the disease “is substantially greater in that industry or occupation than it is in the general population.” (Id.).
Given the early spread of the disease in the U.S., at a nursing home near Seattle, and the heightened risks of exposure to healthcare industry workers nationwide, it becomes clearer that a future PA Workers’ Compensation claim – for a healthcare worker whose exposure occurred in the workplace – would likely be awarded in favor of the worker and/or surviving family members (in the event the worker dies from the disease). The Court’s basis/justification for such an award would likely be based on this premise that the spread of the disease is “substantially greater in that industry or occupation than it is in the general population.” Now, an employer could likely “rebut the presumption” of a compensable claim by offering proof that the disease has not spread through the workplace in any form, or by offering evidence to create another causal connection link (evidence that the employee traveled to places where the disease has spread, or the employee was exposed to the disease at home or elsewhere in the community).
Looking at a basic “incident” analysis, and a claimant’s burden of proving contact and exposure, there is some precedent in PA for an award of Workers’ Compensation benefits to a worker who contracted a rare disease as a result of exposure via workplace contact. 30 years ago, the PA Commonwealth Court awarded benefits to the family of a City of New Castle Public Works Department employee who died from exposure to meningococcal septecemia that was determined to have been contracted an office party. In City of New Castle v. W.C.A.B. (Sallie), 546 A.2d 132 (Pa. Commw. Ct. 1988), the Commonwealth Court upheld a determination that a fatal Workers’ Compensation claim was compensable where a causal link between onset of the disease, and exposure at work, was established.
In Sallie, the Court relied on the medical expert testimony from two infectious disease specialist physicians who provided emergency medical care to the Claimant/decedent during the short period between onset of symptoms and death. In reviewing the expert medical testimony, the Commonwealth Court utilized the PA standard that, “in Workers’ Compensation cases in which there is no obvious causal connection between a claimant’s condition and a work injury, unequivocal medical testimony must be produced to establish that connection; the testimony of the expert must be considered as a whole, and complete medical certainty is not required.” (Id. at 135). In Sallie, the testimony of the medical experts, combined with eyewitness testimony regarding the Claimant/decedent’s exposure, was sufficient to affirm the award of survivor death benefits to Mr. Sallie’s family. It is worth noting that the eyewitness testimony, from co-workers, was determined to prove that Mr. Sallie contracted the disease from giving a co-worker a farewell kiss on the cheek at a maternity leave office party. The medical expert testimony established the connection between that kiss, and the onset of the disease that ultimately killed Mr. Sallie.
The Sallie case illustrates the point that COVID-19 Workers’ Compensation claims, based on workplace exposure, will only require evidence of causal connection. Combining the Court’s analysis in Sallie, with the basic framework of occupational disease claims in PA, there is a high likelihood that PA Courts would award Workers’ Compensation benefits to individuals who contract COVID-19 from workplace exposure, regardless of whether the worker is a healthcare professional.
For additional information contact Ken Scholtz.
Workers’ Compensation Claims for Healthcare Professionals Exposed to COVID-19 in Pennsylvania
Just a few short weeks ago, during a press briefing by the Center for Disease Control’s Director of the National Center for Immunization and Respiratory Diseases, the director warned that the spread of coronavirus in the U.S. was “not a question of if, but when.” As of the date of this posting, there are now confirmed cases of COVID-19 in more than half the states in the U.S. Looking into the not-so-distant future, predicting the likelihood of whether litigation will follow the spread of coronavirus in the U.S., one could also say, that it’s “not a question of if, but when.” Focusing on employer liability, specifically PA Workers’ Compensation claims for those in the healthcare industry, there is a basic framework for determining whether COVID-19 cases would fall within the category of recoverable “occupational disease” claims in PA.
The PA Workers’ Compensation Act recognizes certain occupational disease claims as compensable. There are four specifically recognized and compensable “occupational disease” related Workers’ Compensation claims in PA. These are:
- Heart and lung disease for fireman who have four or more years of service;
- Pneumoconiosis and silicosis for any occupation that involves direct contact with or exposure to coal dust;
- Specific types of chemical poisoning (i.e. lead, arsenic, mercury) for occupations that involve direct contact or exposure, or to the preparation of compounds; and
- Tuberculosis and hepatitis for health care workers, blood processors, lab techs and related professionals who are exposed to these diseases.
www.dli.gov/businesses Focusing on healthcare professionals, claims involving tuberculosis and hepatitis require proof of causal connection, via expert medical report/testimony. This expert medical evidence is often coupled with additional evidence to support the connection or establish the basic premise that the disease was present in some form (patient, blood/tissue sample, equipment/surface, or visitor) in the workplace.
COVID-19 is not a listed/recognized disease according to the PA Department of Labor & Industry, as it was a virtually unknown threat until late 2019. However, for reasons explained below, it is likely that PA Courts will award benefits for COVID-19, as a compensable Workers’ Compensation claim, if/when a causal connection can be established between the onset of the disease and some exposure in the workplace, particularly for healthcare professionals. In this context, causal connection evidence in the form of expert medical testimony would be required to establish the link between the disease and the workplace. For healthcare workers, it appears the burden of proof will be lowered if it turns out that the spread of the disease “is substantially greater in that industry or occupation than it is in the general population.” (Id.).
Given the early spread of the disease in the U.S., at a nursing home near Seattle, and the heightened risks of exposure to healthcare industry workers nationwide, it becomes clearer that a future PA Workers’ Compensation claim – for a healthcare worker whose exposure occurred in the workplace – would likely be awarded in favor of the worker and/or surviving family members (in the event the worker dies from the disease). The Court’s basis/justification for such an award would likely be based on this premise that the spread of the disease is “substantially greater in that industry or occupation than it is in the general population.” Now, an employer could likely “rebut the presumption” of a compensable claim by offering proof that the disease has not spread through the workplace in any form, or by offering evidence to create another causal connection link (evidence that the employee traveled to places where the disease has spread, or the employee was exposed to the disease at home or elsewhere in the community).
Going beyond the healthcare industry, there is some precedent in PA for an award of Workers’ Compensation benefits to a worker who contracted a rare disease as a result of exposure via workplace contact. 30 years ago, the PA Commonwealth Court awarded benefits to the family of a City of New Castle Public Works Department employee who died from exposure to meningococcal septecemia that was determined to have been contracted an office party. In City of New Castle v. W.C.A.B. (Sallie), 546 A.2d 132 (Pa. Commw. Ct. 1988), the Commonwealth Court upheld a determination that a fatal Workers’ Compensation claim was compensable where a causal link between onset of the disease, and exposure at work, was established.
In Sallie, the Court relied on the medical expert testimony from two infectious disease specialist physicians who provided emergency medical care to the Claimant/decedent during the short period between onset of symptoms and death. In reviewing the expert medical testimony, the Commonwealth Court utilized the PA standard that, “in Workers’ Compensation cases in which there is no obvious causal connection between a claimant’s condition and a work injury, unequivocal medical testimony must be produced to establish that connection; the testimony of the expert must be considered as a whole, and complete medical certainty is not required.” (Id. at 135). In Sallie, the testimony of the medical experts, combined with eyewitness testimony regarding the Claimant/decedent’s exposure, was sufficient to affirm the award of survivor death benefits to Mr. Sallie’s family. It is worth noting that the eyewitness testimony, from co-workers, was determined to prove that Mr. Sallie contracted the disease from giving a co-worker a farewell kiss on the cheek at a maternity leave office party. The medical expert testimony established the connection between that kiss, and the onset of the disease that ultimately killed Mr. Sallie.
The Sallie case illustrates the point that COVID-19 Workers’ Compensation claims, based on workplace exposure, will only require evidence of causal connection. Combining the Court’s analysis in Sallie, with the basic framework of occupational disease claims in PA, there is a high likelihood that PA Courts would award Workers’ Compensation benefits to individuals who contract COVID-19 from workplace exposure, regardless of whether the worker is a healthcare professional.
For additional information contact Ken Scholtz.
It Is Not Illegal to Pay Physicians More Than They Generate
While we are waiting for final disposition of the AKS Safe Harbors and Stark Exceptions proposed in October of 2019, since the comment period expired December 31, 2019 and final rules have not been issued, I thought we should reflect on the comments made and proposed regulations regarding physician compensation.
Physicians have become accustomed to hospitals trying to hold down compensation with arguments that it’s illegal to pay physicians more than the revenue they generate, or we can’t exceed the 75th percentile or the 90th percentile of MGMA or other standards. The latter portion of that comment is obviously untrue; somebody is in the top quartile and decile and they are not in jail. It is important to recognize that, although it is prohibited to pay physicians based entirely upon the revenue they generate, except for certain productivity exceptions for bonafide compensation, that does not mean the reverse is true. Physicians may be paid based upon fair market value even if their compensation would otherwise exceed the revenue generated by their services.
I have attached a PDF of comments from CMS/ OIG, i.e. pp. 55790-55791 regarding “Commercially Reasonable” and pp. 55796-55799 regarding “Fair Market Value”, wherein they recognize that commercially reasonable/fair market value can encompass situations in which the compensation exceeds the potential revenue or national standards. Click the links to read the comments: pp. 55790-55791 and pp. 55796-55799.
CMS acknowledged compelling concerns of commenters when they explain that, even knowing when the compensation arrangement may result in losses, it may not only be reasonable but necessary in situations governed by community need, timely access, fulfillment of license or obligations, and talent, improvement of quality health outcomes. I am sure there are many circumstances when specialists and even primary care physicians are serving hospitals in areas with insufficient volume to pay what would otherwise be the average going rate, but that physician is absolutely necessary in that community. Nobody questions that.
On page 134, CMS acknowledges that it could be possible to pay an orthopedic surgeon more than the going rate because of his or her national stature and expertise.
Obviously none of this justifies routinely disregarding the national fair market value data or the revenue sources, but it does indicate that those arrangements are not per se illegal, just subject to the rule of reason.
Telemedicine Comes of Age: OIG is Prosecuting Telehealth Fraud
You can now tell that telemedicine is a mature industry, because it has achieved enough critical mass that the fraud has started and the OIG is beginning to prosecute. There is a lag time between when the cash flow and profit achieves sufficient critical mass to attract the criminals, the OIG identifies the problems, and the prosecution actually begins.
I am attaching a link to an OIG news release dated February 5, 2020 indicating the OIG is now prosecuting owners of a telemedicine company allegedly involved in arranging kickbacks for referrals.
Concurrently, the Office of the National Coordinator for Health Information Technology (ONC), which is a department of HHS, has proposed a rule to implement certain provisions of the 21st century Cures Act (Cures Act) designed to advance interoperability, support the access, exchange, and use of electronic health information, and make patients electronic health information (EHI) more electronically accessible through the adoption of standards and certifications for mobile digital applications (apps) on March 4, 2019, which proposed regulations are being studied by the White House. The major app makers, i.e. Google, Apple, Microsoft, etc., the very industry giants seeking the access deals mentioned herein, believe interoperable health information apps should be as easily loaded as any other mobile app, but many regulators are concerned about the privacy and security of this data. Attached is a link to the proposed rules.
One of the critical issues is interoperability, and whether one app developer can program restrictions into that app that would prohibit the sharing of that information through other systems. The restriction is fairly common with other commercial apps which do not contain PHI and do not interfere with a patient’s management of their own healthcare, or the management by or sharing with other systems. However, that commercial application is viewed as incompatible with the idea of improving health care delivery through the use of mobile apps.
Ambulance Company Pays $65,000 Settlement
On December 30, 2019, the U.S. Department of Health and Human Services, Office for Civil Rights (“HHS”) announced a $65,000 settlement with West Georgia Ambulance, Inc. for violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Security and Breach Notification Rules.
According to HHS, in 2013 the ambulance company reported a breach where an unencrypted laptop fell off the back bumper of an ambulance. The company did not recover the laptop and reported that 500 individuals were affected by the breach.
An investigation showed that the company did not conduct an accurate and thorough risk analysis, did not have a HIPAA security training program, did not provide security training to its employees and failed to implement Security Rule policies or procedures.
In additional to the monetary settlement, the ambulance company agreed to enter into a Corrective Action Plan requiring a very detailed and thorough review and analysis of all of the security risks and vulnerabilities in the company, submit detailed reports, provide training and routine retraining, adopt and implement appropriate written policies and procedures and other corrective actions.
You can read the HHS Press Release and Resolution Agreement here: https://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/agreements/westgeorgia/index.html
If you would like guidance on how it can prevent HIPAA violations from occurring, or how to handle a HIPAA violation, please contact our firm.
Danielle Dietrich is a healthcare and litigation attorney in Tucker Arensberg’s Long Term Care Practice Group. She is licensed to practice law in Pennsylvania, Ohio and West Virginia. Danielle can be reached via email: ddietrich@tuckerlaw.com, telephone: 412-594-5605 or on Twitter at @DLDietrich.
