Warning: If You Handle Protected Health Information (PHI) or Personally Identifiable Information (PII), Buy Data Breach and Security Incident Insurance!

We live in the data age where every day a new technology is announced in business- and consumer-oriented ecommerce and mobile health (mhealth).  In response, in recent years, federal and state legislators have enacted strict data privacy and security laws, such as HIPAA, COPPA, and Gramm-Leach-Bliley, to protect data whether in electronic (IT) or physical form.  This data is known as protected health information under HIPAA and personally identifiable information (PII) under other statutes.  New federal and state laws also mandate comprehensive data breach responses, including notifications to individuals whose PHI or PII was breached and some agencies and state attorneys general.  The shared premise behind these laws is that the public expects the highest standard of data protection from businesses and government.  (Whether or not this is true – after all we regularly give our credit card numbers to anonymous persons over the phone – is a subject for another day…)  [Read More]

HHS Releases Final Rule and Interim Final Rules on Affordable Care Act's State Health Insurance Exchanges

On March 12, 2012, the U.S. Department of Health and Human Services (HHS) released the long-anticipated Final Rule and Interim Final Rules (the "Rules") on the Patient Protection and Affordable Care Act's (ACA) state health insurance exchanges ("Exchange(s)"), a key element of President Obama's healthcare reform plan. Set to go into effect on January 1, 2014, the goals of the Exchanges are to enhance competition, improve availability of affordable health insurance options and allow small businesses the same purchasing power that large businesses currently enjoy. As described in the Rules, the Exchanges will operate as competitive marketplaces, allowing individual consumers and small businesses to directly compare pricing and quality of health insurance options, among other factors.

The Final Rule incorporates two proposed rules originally published in mid-2011 that together implement what HHS refers to as the Exchange establishment and eligibility rules that address the eligibility, enrollment and plan function of the Exchanges. Affording substantial discretion to states in the design and operation of the Exchanges, the Final Rule details minimum federal standards for the establishment and operation of the Exchanges, minimum standards that health insurers must meet in order to participate in the Exchange and offer a qualified health plan, and standards of participation for the Small Business Health Options Program.

Read the full text of the Duane Morris Alert.


Physician Payments Sunshine Act

Last December, we blogged about a proposed rule published by the Center for Medicare and Medicaid Services (“CMS”), concerning the Physician Payments Sunshine Act (the “Act”) that is part of the healthcare reform legislation, and the impact of the Act upon physicians.  Essentially, the Act requires drug and medical device manufacturers (“Manufacturers”) to collect information concerning payments, gifts or transfers of value they make to physicians that are worth more than $10, and to report such information to CMS on an annual basis.  In short, any drug company or medical device company that gives money or something else of value to a doctor shall have to report it to the federal government, including direct compensation and costs of Manufacturer-supported, physician-related research, consulting, and continuing medical education [Read More]

Aetna Sues Surgery Centers Over Billing Practices

In a bold and seemingly unprecedented move, Aetna recently sued several California surgery centers for an alleged “fraudulent billing scheme”.  The lawsuit alleges that the surgery centers induced physicians to refer patients to the surgery centers with promises that the patients would not have any financial responsibility for their coinsurance and deductibles.  Aetna claims that the surgery centers then turned around and submitted charges for reimbursement that were artificially inflated driving up the cost of health insurance coverage.

Aetna’s lawsuit alleges that providers are liable for engaging in a fraudulent and illegal kickback scheme when they waive a patient’s coinsurance and deductible amounts, even if the provider bills the patient but ultimately does not collect from the patient.  Aetna is asking the court to require the surgery centers to pay damages, to disgorge their profits, and pay Aetna’s attorney fees.  Aetna is also asking the court to issue an injunction preventing such “fee-forgiving” practices, in the future.

Aetna’s theories of liability are somewhat novel and it remains to be determined if they will be successful.  Providers should be aware that insurers are increasingly using aggressive litigation tactics to challenge unauthorized discount arrangements between providers and patients.  As a result of increased scrutiny by third party payors with respect to charges and waivers of co-pays and deductibles, providers should review their billing and collection practices to ensure contractual, legal and regulatory compliance.


Duane Morris Health Law

Reporting legal developments in the healthcare industry and the latest on the implementation of
the Healthcare Reform Act impacting providers, employers and physicians.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.