Category: Health Law

The Pennsylvania Supreme Court recently ruled that a state law, establishing confidentiality for medical provider peer review proceedings, did not apply to a contractor staffing a hospital’s emergency department.   The hospital, the contractor and the physician face a lawsuit from the patient and her husband, alleging that the physician failed to diagnose an emergent, underlying heart problem during an emergency room visit and that the patient suffered a heart attack just days after she was discharged without treatment. In the course of litigation discovery the patient was seeking the physician’s performance review, which the contractor and the hospital argued was protected from discovery under the Pennsylvania Peer Review Protection Act (the “Act”). In a 4-3 decision, the Supreme Court affirmed a finding by the state’s Superior Court that the Act did not shield the hospital or the contractor staffing the hospital’s emergency department from discovery of the physician’s performance reviews.

The Supreme Court confirmed the Superior Court’s conclusion that the document was not entitled to protection under the Act because the performance review had been drafted by the physician’s supervisor, and not by an employee of the hospital itself. The Court also found that a business entity, like the contractor emergency medicine group, was not contemplated under the peer review protection statutes and therefore could not claim the privilege itself.

In another recent case eroding peer review privilege, an Illinois hospital claimed that certain of its documents were confidential and that the court should not have ordered the hospital to produce the records during discovery in a civil case. The hospital argued that the Illinois Medical Studies Act protects those documents from disclosure. Specifically, the hospital contended that its peer-review policy provides that, if certain indicators are met (such as the death of a patient and a concern raised about that death), then an investigation begins. The hospital insisted that because the peer-review policy authorized the investigation, everything that was discovered through that investigation is privileged under the Medical Studies Act. However, the appellate court agreed with the trial court and said that all of the documents at issue should be produced stating that the Medical Studies Act does not protect against disclosure of information generated before the peer-review process began and that the hospital’s argument was contrary to over 20 years of precedent establishing that the Medical Studies Act cannot be used to conceal relevant evidence that was created before a quality-assurance committee or its designee authorized an investigation into a specific incident.

The takeaway here is that courts are strictly construing peer review protection statutes. Providers cannot be assured that their peer review records are protected unless the peer review records are created in full compliance with legal and regulatory requirements.

According to a Department of Justice press release, the United States has filed a complaint against a compounding pharmacy, alleging that the pharmacy paid illegal kickbacks to induce prescriptions for compounded drugs reimbursed by TRICARE. The government’s  claim also charges two pharmacy executives, and a private equity firm which manages both the pharmacy and the private equity fund that owns the pharmacy, for their involvement in the alleged kickback scheme.

The private equity firm allegedly invested in the pharmacy company in 2012 with the goal of increasing the company’s value and then selling it for a profit in 5 years. The private equity firm allegedly “managed and controlled” the pharmacy company through two of its partners who served as “officers and/or directors” of the company. During its investment, the private equity firm was allegedly actively involved in developing and implementing the company’s business strategy around maximizing reimbursement so as to enhance the value of the company, prior to selling its interest.

The complaint describes statements in e-mails sent by the private equity firm principals, about opportunities to capitalize on ‘the extraordinarily high profitability’ which could result in a ‘quick and dramatic payback’ on its investment.” According to the U.S. Attorney, the private equity firm acknowledged in emails that “‘overcharging the product’ in its ‘pain management business’ risked ‘cross[ing] the line from an ethics standpoint.’”

The take away from this complaint is that private equity investors are not immune from prosecution for health care fraud. Private equity investors need to consider the risks associated with managing and controlling their health care investments.

Telemedicine generally refers to the use of information technologies and electronic communications to provide remote clinical services to patients. Examples of telemedicine are the transmission of medical imaging and video consultations with patients and specialists. Telemedicine is the first generation description of the clinical application of technology to medicine.

As the application of technology to health care has evolved, the term “telehealth” has become the second generation of terminology and describes the evolution of health care technology beyond the delivery of clinical services using remote means. Telehealth encompasses a broader collection of means or methods to enhance care delivery and education. While the terms are often used interchangeably, telemedicine and telehealth are not precisely the same thing.

In 2014, the Department of Health & Human Services Department sought to clarify the two terms in a post on HealthIT.gov:

“Telehealth is different from telemedicine because it refers to a broader scope of remote healthcare services than telemedicine. While telemedicine refers specifically to remote clinical services, telehealth can refer to remote non-clinical services, such as provider training, administrative meetings, and continuing medical education, in addition to clinical services.”

The Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services defines telehealth as the use of electronic information and telecommunications technologies to support and promote long-distance clinical health care, patient and professional health-related education, public health and health administration. Technologies include videoconferencing, the internet, store-and-forward imaging, streaming media, and terrestrial and wireless communications.

According to The Center for Connected Health Policy, “telemedicine” often refers to traditional clinical diagnosis and monitoring that is delivered by technology, while “telehealth” describes the wide range of diagnosis and management, education and other related fields of healthcare.

In 2014, the journal Telemedicine and e-Health published a study that found seven different definitions of telehealth in use in federal agencies alone.

“Although many definitions are similar, there are nuanced differences that reflect each organization’s legislative intent and the population they serve,” the study concluded. “These definitions affect how telemedicine has been or is being applied across the healthcare landscape, reflecting the U.S. government’s widespread and influential role in healthcare access and service delivery. The evidence base suggests that a common nomenclature for defining telemedicine may benefit efforts to advance the use of this technology to address the changing nature of healthcare and new demands for services expected as a result of health reform.”

Telemedicine is a component part of telehealth, but telehealth goes beyond traditional telemedicine. For now, in most cases, the context in which the terms “telehealth” and “telemedicine” are used will be the key to understanding the intent of the word. Usage of the terms will continue to evolve and I predict that the broadest possible term defining the application of technology to health care will survive the test of time.

Physician practices break up in one form or another as often as physician marriages breakup and the breakup of a physician practice can be as costly, tumultuous and painful as the breakup of a marriage. The best advice is to plan ahead and develop a “pre-nuptial” type arrangement or exit plan, when the practice is set up and when new providers are brought into the practice. Unfortunately, many physician practices have no exit plan for practice departures or breakups and suffer unnecessarily as a result.

Even those practices with an exit plan, often encounter rough waters as they work through issues. The biggest disputes seem to be over competition and post termination compensation. The practice may or may not have a non-compete provision in its physician contracts, if there is a contractual non-compete, it may or may not be enforceable. Even with an enforceable non-compete, the departing provider may choose to ignore the non-compete and poach patients and referral sources.

With respect to post-termination compensation, practices may need to hold back some money to account for payer audits,  recoupments, fines,  penalties, practice debt,  contractual obligations, limited liquidity and other miscellaneous costs. It is important to protect the remaining providers and make sure they are not saddled with the departing provider’s expenses and debt.

In addition to the big picture issues, there are a myriad of other issues associated with practice breakups. Patient notification can be a sticky issue. For instance, an academic medical center practice was forced to pay a penalty for violating HIPAA, when the medical center provided protected health information to a departing provider without first obtaining authorization from patients. Conversely, practices have also been penalized for not notifying patients about departing providers.

With respect to practice departures and breakups, the best defense is a good offense. Plan ahead working with experienced health care counsel.

We know that the Americans with Disabilities Act (ADA) restricts the ability to make age-related decisions, unless it can be established that age is a “bona fide occupational qualification”. A bona fide occupational qualification generally means that the individual has a trait that precludes safe and efficient job performance. Under certain circumstances, the courts have allowed some industries to force the retirement of a class of individuals (pilots for example) at a certain age, based on the belief that it is too complicated to deal with such individuals on an individualized bases.

So, is a physician’s age a factor that precludes safe and efficient job performance? To my knowledge, no court has approved a mandatory retirement age for physicians and no credentialing or licensing body has set a firm mandatory retirement date for physicians. However, some credentialing bodies have established age related policies, mandating an evaluation process for physicians of a certain age.

Because physicians’ duties vary widely by practice area, a one size fits all policy doesn’t work. For example, the physical and other skills required to practice orthopaedic surgery are vastly different than the physical and other skills required to practice psychiatry. Even within orthopaedics, the physical and other skills required for joint replacement are vastly different than the skills required for sports medicine. Credentialing and licensing entities need to focus on the individual physician and his or her fitness to safely provide patient care, not age.

Every medical staff should have a medical staff health committee to receive and investigate reports relating to a physician’s fitness for clinical privileges, health, physical and mental disorders, chemical dependency and well-being, etc. Age alone should not be the basis for reviewing and evaluating a physician’s fitness to safely provide patient care. And, it should never be assumed that youth assures that a physician is able to safely provide patient care.

A new policy recently issued by the Justice Department states that the Department will not use its enforcement authority to effectively convert agency guidance documents into binding rules. The new policy has broad ramifications and applies to government enforcement actions as well as civil lawsuits. The policy prohibits Department components from issuing guidance documents that effectively bind the public without undergoing formal rulemaking.

The term “guidance documents” includes any agency statement of general applicability and future effect, such as Medicare billing manuals, special fraud alerts, and frequently asked questions. The Department may continue to use guidance documents to simply explain or paraphrase legal mandates from existing statutes or regulations, but guidance documents cannot create binding requirements that do not already exist by statute or formal regulation.

While the new policy is viewed favorably by most in the health care industry and gives health care providers a new tool to fend off allegations of wrong doing, it may lead to confusion as providers try to interpret complex and confusing statutes and rules.