Disability discrimination lawsuits against hospitals have become relatively common in recent years as former hospital employees allege that their former employers discriminated against them on the basis of various disabilities in violation of the Americans with Disabilities Act of 1990. Other ADA lawsuits have been filed against hospitals and other healthcare providers, claiming that their websites or parking lots do not adequately accommodate those with disabilities. Yet others have been filed accusing hospitals of failing to accommodate deaf patients by not providing a live interpreter. But few, if any, major lawsuits had been brought against hospitals and healthcare providers alleging that the facilities themselves fail to accommodate patients with physical disabilities. That may have changed with a putative class action lawsuit filed in the U.S. District Court for the Western District of Pennsylvania in late July, which may be the first of many cases to come.
On July 23, 2019, the U.S. Senate Finance Committee held a hearing where a representative of the Government Accountability Office testified on elder abuse in nursing homes. At the hearing, reported at GAO-19-671T, the GAO representative discussed the June 2019 GAO report entitled “Improved Oversight Needed to Better Protect Residents from Abuse” (GAO-19-433).
The GAO analysis of CMS data found that, while relatively rare, abuse deficiencies cited in nursing homes more than doubled, increasing from 430 in 2013 to 875 in 2017, with the largest increase in severe cases. In light of the increased number and severity of abuse deficiencies, GAO testified that, while it is imperative that CMS have strong nursing home oversight in place to protect residents from abuse, there are several oversight gaps that may limit the agency’s ability to do so. The gaps include:
- Information on abuse and perpetrator type is not readily available. CMS does not require state survey agencies to record the type of abuse and perpetrator and, when this information is recorded, it cannot be easily analyzed. Without this information, CMS lacks key information and, therefore, cannot take actions—such as tailoring prevention and investigation activities—to address the most prevalent types of abuse or perpetrators.
- Facility-reported incidents lack key information. CMS has not issued guidance on what nursing homes should include when they self-report abuse incidents to state survey agencies. This contributes to delays in state agency investigations and the inability to prioritize investigations for quick response.
- Gaps in CMS processes can result in delayed referrals to law enforcement. CMS requires a state survey agency to make a referral to law enforcement only after abuse is substantiated—a process that can often take weeks or months. As a result, law enforcement investigations can be significantly delayed. GAO reported that delay in receiving referrals limits law enforcement’s ability to collect evidence and prosecute cases—for example, bedding associated with potential sexual abuse may have been washed, and a victim’s wounds may have healed.
The report on which the GAO testimony was based made several recommendations, including that CMS:
- require state survey agencies to submit data on abuse and perpetrator type;
- develop guidance on what abuse information nursing homes should self-report; and
- require state survey agencies to immediately refer to law enforcement any suspicion of a crime.
GAO reported that the Department of Health and Human Services concurred with GAO recommendations.
Some in the health care provider sector have raised concern about confusing definitions of the term “abuse,” pointing out that the CMS definition that applies to various types of providers differs from the definition in the Elder Justice Act of 2010, which requires nursing home reporting of certain types of incidents. As a result, while a nursing home would be obliged to report an incident under the Elder Justice Act, another type of health care provider may not be mandated to do so.
In fall 2019 another GAO report concerning abuse matters is due to be published. It is expected to compare federal abuse reporting requirements for nursing homes and assisted living residences.
Of course, it remains to be seen whether Congress or CMS will act soon to address issues raised by GAO.
On June 17, 2019, the New York Legislative session adjourned without passing a bill that would have legalized adult use cannabis in the state. The sponsor of the leading bill in the assembly and Manhattan Democratic Senator, Liz Krueger, announced that there was not sufficient time to gain the support necessary for passage of a bill. Although there appears to be broad popular support for legalization of marijuana in New York, a number of “safety” issues arose, particularly among suburban constituencies relating to concerns such as operation of motor vehicles under the influence of marijuana. Sentiment in suburban areas caused lawmakers from those districts to withhold the support needed, particularly in the state senate. In addition, many blamed the failure on Governor’s Cuomo’s reluctance to give the measure full support. Although the governor had endorsed adult use legalization earlier in the session, and had attempted to include it within the budget bill passed at the end of March, at the critical time before adjournment he appeared to take a hands‑off approach, becoming oddly passive, a pose this activist governor rarely adopts. Continue reading “Effort to Legalize Adult Use of Marijuana Fails in New York State”
The enforceability of non-competition clauses depends on a number of factors. Non-competition clauses are viewed in the context of anti-trust laws as a restraint of trade and disfavored. Consequently, the entity seeking to enforce a non-compete must be able to prove a legitimate business reason for the non-compete. A number of states flat out prohibit non-competition agreements, while other states enforce non-competition agreements on a case by case basis. In some states where non-compete provisions that restrict the physician’s right to practice medicine are considered void and not enforceable as a matter of law, employers may be able to sue the departing physician for monetary damages suffered because of the competition. Continue reading “Non-Competition Clauses – Make No Assumptions”
On October 24, 2018, President Donald Trump signed the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act), a combination of a number of previously passed House and Senate bills related to addressing the opioid crisis. One of the provisions of this lengthy bipartisan package of bills includes an expansion of the disclosure requirements initially imposed by the Physician Payments Sunshine Act.
Read the full text of this Alert on the Duane Morris LLP website.
Today’s blog addresses compensation and benefits; a complicated subject of upmost interest to our clients. The blog touches on major points to consider regarding compensation and benefits. Physicians and physician groups must consult with compensation experts and legal counsel to insure that they understand the best possible, regulatory compliant compensation model for their needs. There are pros and cons and multiple variations of each model. Continue reading “Physician Compensation”
Indemnity provisions are used to shift risk from one party to another. The intent of an indemnification provision in an agreement is to impose on one party the responsibility to pay the liability, damages, costs, expenses, and attorney fees for the other party to the agreement, under the circumstances set forth in the agreement. An indemnification clause obligates one party to compensate the other party for losses or damages. This compensation is separate and apart from other contractual obligations and damages. Continue reading “Contractual Indemnification – DANGER”
Duane Morris is very pleased to announce the settlement of the Osteopathic Physicians Class Action against the American Osteopathic Association, Talone, et. al v. American Osteopathic Association. The Court has granted preliminary approval of the settlement, and members of the class and sub-classes will be receiving notice of the settlement in the coming weeks.
The settlement is a resolution of the claims the class representatives asserted against the AOA that was negotiated over a period of approximately four months, and that provides a range of benefits to tens of thousands of DOs. Those benefits are estimated in value to be worth significantly more than $35,000,000.
Please see our announcement for more information.
On April 23, 2018, the Administrator of the Centers for Medicare and Medicaid Services (“CMS”) adopted a new ruling conceding the jurisdiction of the Provider Reimbursement Review Board (“PRRB”) in certain circumstances over costs or items “self-disallowed” by the provider. In Ruling No. CMS-1727-R (the “Ruling”), the Administrator announced that the PRRB has jurisdiction over a provider’s appeal regarding Medicare payment for an item that the provider did not include in its cost report when the following circumstances exist:
- The appeal is pending on or after April 23, 2018, or was initiated on or after that date; and
- The cost reporting period under appeal ended on or after December 31, 2008, and began before January 1, 2016; and
- The provider had a good faith belief that the item was not allowable under Medicare regulations or payment policy.
This Ruling represents a retreat from regulations adopted in 2008, which required that in order to appeal an item to the PRRB, a provider must either claim Medicare payment for the item in its cost report or include the item as a protested amount in the cost report. CMS took the position that a provider could not be “dissatisfied” with the Medicare contractor’s determination of Medicare reimbursement, as required by the statute for a PRRB appeal, if the contractor made no determination on the item because it was not included in the cost report, even if reimbursement was prohibited under Medicare policy. The Ruling indicates that CMS is retreating from this position because of the 2016 decision of the U.S. District Court for the District of Columbia in Banner Heart Hospital v. Burwell, which held that the PRRB had jurisdiction over the hospitals’ challenge to Medicare outlier payment regulations despite the hospitals’ failure to claim protested amounts related to their challenge. The district court found that a cost report claim for additional outlier payments would have been futile because the Medicare contractor had no authority or discretion under the outlier payment regulations to make payment as sought by the hospitals. The Ruling states that CMS has decided to apply the holding in Banner Heart in similar administrative appeals.
The Ruling does not entirely do away with the requirement of including an item in the cost report in order to pursue Medicare reimbursement for it in a subsequent appeal. First, the Ruling applies only if the cost reporting period under appeal began before January 1, 2016. This end date is not coincidental—for periods beginning on or after January 1, 2016, CMS has simply shifted the requirement that an item be included in the cost report from being a prerequisite for PRRB jurisdiction to being a so-called “general substantive requirement” for Medicare payment. Second, the Ruling applies only where the provider had a good faith belief that the item was not allowable. The Ruling indicates that “a provider would rarely be able to demonstrate a good faith belief that an item is not allowable when that item is actually allowable under a Medicare payment regulation or other policy.”
Unfortunately, the Ruling may muddy the waters regarding the use of protested amounts in the Medicare cost report. The Ruling acknowledges that providers sometimes claim items through protested amounts “out of concern that a cost report claim for reimbursement of an item deemed non-allowable might raise program integrity questions.” Notwithstanding the Ruling, “a provider still may elect to self-disallow a specific item deemed non-allowable by filing the pertinent parts of its cost report under protest.” But the Ruling then states as follows:
“However, if the PRRB… were to determine that, despite the provider’s self-disallowance of the specific item under appeal, the Medicare contractor actually had the authority or discretion to make payment for the specific item at issue in the manner sought by the provider on appeal and the provider did not demonstrate a good faith belief that such item is not allowable, then the [PRRB] shall apply the Third implementation step for this Ruling.”
Under the third implementation step, the provider’s appeal of the item is to be dismissed for failure to meet the “dissatisfaction” requirement for jurisdiction. One problem with this statement is that providers sometimes claim items as protested amounts where the Medicare contractor has disallowed the item in previous cost report audits for lack of sufficient documentation. The adequacy of documentation to support reimbursement is one area where the Medicare contractor would seem to have discretion to allow payment. Why would CMS want to discourage providers from taking a cautious approach in claiming items in the cost report that have been disallowed in previous audits?
Christopher L. Crosswhite practices in the area of healthcare law, concentrating on Medicare and Medicaid law and regulations, Medicare reimbursement controversies and appeals, and healthcare fraud and abuse provisions.
By Lisa Clark and Samantha Dalmass
On March 27, 2018, the Pennsylvania Supreme Court held in a 4-3 decision that the Pennsylvania Peer Review Protection Act (“PRPA”) would not prevent the disclosure of certain physician performance review files in an ongoing medical malpractice lawsuit despite arguments that the files in question were precisely the kind of peer review documents that the PRPA was intended to protect. This controversial decision limits the protection available to healthcare providers under the narrow PRPA evidentiary privilege and may significantly affect the manner in which Pennsylvania hospitals conduct peer review activities.
The underlying lawsuit was brought in 2012 after plaintiff Eleanor Reginelli suffered a heart attack several days after being treated by Dr. Marcellus Boggs in the emergency room at Monongahela Valley Hospital (“MVH”) for gastric discomfort. The plaintiff alleged that Dr. Boggs failed to diagnose and properly treat an underlying and emergent heart condition before discharging her from MVH. She and her husband filed a four-count complaint in 2012, asserting claims against Dr. Boggs, MVH and UPMC Emergency Medicine, Inc. (“ERMI”), which provides staffing and administrative services for the MVH emergency room.
Dr. Boggs and the other physicians in the MVH emergency department, including Dr. Brenda Walther, were members of the medical staff at MVH and employed by ERMI. Dr. Walther served as the director of the MVH emergency department and supervised the ERMI-employed emergency department physicians working at MVH. When she was deposed during the discovery phase, Dr. Walther revealed that she had prepared and maintained a performance file on Dr. Boggs as part of her regular practice of reviewing randomly selected charts associated with ERMI-employed emergency department physicians. The Reginellis responded by filing discovery requests directed at MVH, seeking production of the complete performance review file for Dr. Boggs.
MVH opposed the motion to compel and argued that the requested items fell squarely under the protection of the PRPA because they had been created and used for the purpose of reviewing the services rendered in the MVH emergency room. This argument was subsequently rejected by the trial court, and the plaintiffs’ motion to compel was granted. At this point, ERMI and Dr. Boggs entered the discovery proceedings and filed a motion for a protective order, asserting entitlement to claim protection under the PRPA for the peer review work performed by an ERMI employee. ERMI argued that the performance file on Dr. Boggs fell outside of the peer review responsibilities that ERMI performed for MVH and that Dr. Walther had created and maintained the file solely on ERMI’s behalf. However, this was not consistent with the motion for reconsideration filed by MVH in which the hospital alleged that Dr. Walther conducted the peer review work on behalf of both ERMI and MVH. Then, before the trial court could rule on the motions filed by MVH and ERMI, both entities appealed the trial court’s decision to compel production to the Superior Court.
The relationship between ERMI and MVH and the inconsistent claims regarding the performance review files were critical on appeal, and the Superior Court upheld the trial court decision that neither ERMI nor MVH were entitled to the evidentiary privilege. The lower court found that ERMI was acting as an independent contractor and, therefore, did not qualify as an entity enumerated in the PRPA as protected by peer review privilege. It also held that MVH could not claim privilege based on the finding that MVH had neither generated nor maintained the performance file for Dr. Boggs.
Both ERMI and MVH appealed the decision, but in the 26-page opinion written by Justice Donahue, the Pennsylvania Supreme Court held that neither entity was in a position to claim the PRPA’s evidentiary privilege.
The Pennsylvania Supreme Court first considered whether ERMI could claim entitlement to protections under the PRPA. The PRPA defines “peer review” as the “procedure for evaluation by professional health care providers of the quality and efficiency of services ordered or performed by other professional health care providers.” The court’s analysis hinged on whether ERMI could hold itself out as a “professional health care provider,” which is defined under the PRPA as “individuals or organizations who are approved, licensed or otherwise regulated to practice or operate in the health care field under the laws of the Commonwealth of Pennsylvania.” There are 12 types of entities enumerated in the statutory definition, including hospitals and physicians. The court said that although it described itself as a “physician organization comprised of hundreds of individual emergency medical physicians… that exists specifically to provide emergency medical services,” ERMI could not claim to be any of the 12 listed entities set forth in the statutory definition. The court said ERMI was not a “professional health care provider” because it was not approved, licensed or otherwise regulated to practice or operate in the healthcare field in Pennsylvania, and it did not become one merely because one of the professional healthcare providers it employed conducted an evaluation of another.
After holding that EMRI could not claim the evidentiary privilege because it did not qualify as a “professional health care provider,” the court addressed whether the PRPA was available to MVH. Although MVH clearly met the statutory definition of “professional health care provider,” the court declined to afford it protection under the PRPA on the grounds that Dr. Walther had not been established as member of the hospital’s peer review committee and the PRPA’s evidentiary privilege is reserved only for the proceedings and documents of a review committee. MVH had previously stated that Dr. Walther acted as a “separate” peer review committee for the ERMI-supplied emergency department physicians, which led the court to conclude that Dr. Walther had conducted peer review activities as an individual. Based on the majority’s interpretation of the PRPA, individuals conducting peer review may qualify as a “review organization” but not as a “review committee” engaging in peer review.
Notably, the court further explained that the PRPA does not extend its grant of the evidentiary privilege to the category of review organization enumerated in the second sentence of the statutory definition of “review organization.” This category includes “any hospital board, committee or individual reviewing the professional qualifications or activities of its medical staff or applicants for admission hereto.” The court expressly identified credentials review as falling outside the scope of peer review privilege under the PRPA.
The court then addressed the argument that the performance files were entitled to peer review protection because the hospital had contracted with ERMI to perform its peer review activities. MVH pointed out that this type of relationship was very common, and hospitals would struggle to survive if they were not able to contract with outside entities like ERMI to fulfill peer review responsibilities. MVH argued that ERMI was contractually bound to perform peer review activities on its behalf. However, the court found this argument lacked merit because it was inconsistent with earlier arguments made by ERMI and unverifiable since neither MVH nor ERMI had thought to include the emergency services contract in the record. Although the Court recognized that no statutory provision exists to preclude a hospital from entering into a contact with a staffing and administrative services entity to conduct peer review services for the hospital’s peer review committee, it refused to consider the issue without conclusive documentary evidence.
In a dissenting opinion, Justice Wecht found the conclusions made by the lower courts and the majority to be at odds with the intent of the legislature in creating the peer review privilege. The dissent found that ERMI did, in fact, qualify as a professional healthcare provider and went on to say that “the majority’s contrary interpretation guts the privilege, given that such contractual staffing and administrative agreements are commonplace.” Justice Wecht also expresses concern about the destabilizing effect of the majority’s reliance on “less than clear” statutory definitions.
This decision has significant implications for healthcare providers in Pennsylvania, especially hospitals and physician groups that contract with outside entities to perform peer review activities. The Supreme Court left the question open as to whether such relationships are permitted and whether the PRPA would apply to peer review documents produced by an outside peer review entity on a provider’s behalf. Therefore, hospitals should carefully evaluate any contracts related to peer review services to make sure that the provisions clearly spell out that such services are performed on the hospital’s behalf. Hospitals may also want to evaluate policies and procedures relating to credentials review as the majority opinion seems to have eliminated the evidentiary privilege for such review activities, finding them to be outside of the scope of peer review protection.
Lisa Clark is a partner in Duane Morris’ Healthcare Law practice with specific focuses in health information technology, regulatory compliance and reimbursement matters for hospitals, physicians and other healthcare providers; software developers and investors in HIT and healthcare products and services; and subcontractors and vendors providing services to the healthcare industry.
Samantha Dalmass is a law clerk at Duane Morris, currently pursuing her J.D. and a Master of Public Health at Drexel University.