January, 2005
Volume 1, Issue 1

Welcome To Health Law News

BDB is pleased to send you this first issue of Health Law News. We have created this newsletter to keep our clients and friends informed about legal issues in the health care field as they arise. The newsletter will come out four times a year, with our next issue scheduled for April.

This issue of Health Law News includes articles of interest to physicians and physician practices as well as to nursing home providers. Rich Milligan, a shareholder in our Canton office, explains why tort reform enacted in 2003 has not yet had an effect on malpractice liability costs. Rich also offers advice for physicians on keeping negative comments out of patient charts. On the topic of communicating with families, Joe Feltes, another shareholder located in Canton, advises physicians that saying "I’m sorry" does not open them to a malpractice suit and may even avert litigation or at least lead to a lower settlement. Tom Hess, a shareholder in our Columbus office, provides a summary of some of the areas that the Office of Inspector General at the Department of Health and Human Services will be focusing on in the upcoming year. Finally, Don Antrim, another Columbus shareholder, discusses the various regulations physician practices must comply with and provides the steps a physician practice should follow in order to create an effective compliance plan.

Health Law News will continue to feature helpful and interesting articles to keep you informed of all the latest developments in health care law. We hope that you enjoy our new publication!

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Priya Bathija is an Associate attorney and member of the Health & Medicine Practice Group. She can be contacted at pbathija@bdblaw.com or 614.227.4282.

OIG Releases Work Plan Detailing Priorities for Fiscal Year 2005

By Thomas Hess

Each year, the Department of Health and Human Services (DHHS) Office of Inspector General (OIG) publishes a work plan announcing where it will focus its resources. Among OIG’s agenda items for 2005 are plans to:

Medicare Hospitals

· Determine the appropriateness of payments for nursing and allied health (NAH) education programs;

· Study the appropriateness of alternate payment methodologies for graduate medical education involving the costs of training residents in nonhospital settings;

· Assess the ability of Medicare contractors to limit payments to acute care hospitals for patients who are discharged from a prospective-payment-system inpatient hospital and admitted to one of the several postacute-care settings;

· Examine diagnosis-related groups that have a history of aberrant coding to determine whether some acute care hospitals exhibit aberrant coding patterns;

· Continue to determine whether claims for inpatient outlier payments were submitted in accordance with Medicare laws and regulations; and

· Determine whether Medicare beneficiaries in long-term care hospitals are receiving acute-level services or could be cared for in skilled nursing facilities.

Medicare Home Health

· Assess the effect of the prospective-payment system on access to home health services by Medicare beneficiaries who have been discharged from the hospital; and

· Assess the quality of home health care since the implementation of the home health prospective-payment system.

Medicare Nursing Homes

· Determine whether the prospective-payment system for skilled nursing facilities has adversely affected Medicare beneficiaries’ access to care;

· Examine the nature and extent of survey and certification deficiencies in nursing homes and identify patterns of repeated noncompliance with Federal quality standards;

· Examine nursing home compliance with reporting requirements related to the Minimum Data Set;

· Examine the type, frequency and severity of deficiencies related to assessment and care planning for nursing home residents; and

· Determine whether skilled nursing facility care provided to Medicare beneficiaries with consecutive inpatient stays was medically reasonable and necessary.

Medicare Physicians and Other Health Professionals

· Identify and review the relationships among billing companies and the physicians and other Medicare providers who use their services;

· Examine Medicare Part A and Part B claims with overlapping services for skilled nursing facility patients and determine whether duplicate payments were made to either the physicians or the nursing homes for the same patient services;

· Review Medicare claims for therapy services provided by physical and occupational therapists to determine whether the services were reasonable and medically necessary, adequately documented, and certified by physician certification statements; and

· Determine whether claims for wound-care services were medically necessary and billed in accordance with Medicare requirements.

Medicare Medical Equipment Supplies

· Determine the appropriateness of Medicare payments for certain items of durable medical equipment, such as power wheelchairs and therapeutic footwear; and

· Compare Medicare payment rates for certain medical equipment and supplies with the rates of other Federal and State health programs, as well as with wholesale and retail prices (items covered will include wheelchairs, enteral nutrition, and oxygen equipment and supplies).

Medicaid Mental Health Services

· Assess the Preadmission Screening and Resident Review (PASRR) program for Medicaid nursing facility residents aged 22 to 64 with a serious mental illness or mental retardation.

Medicaid Drug Reimbursement

· Analyze Medicaid paid claims data to identify beneficiaries who have received significant amounts of OxyContin and the prescribing physicians as well as evaluate the appropriateness of the prescriptions.

This list is just a sampling of the areas the OIG will focus on in the upcoming year. All of the areas the OIG intends to focus on in 2005 are listed in the OIG’s “Work Plan Fiscal Year 2005,” which is available at: www.healthlawyers.org/docs/ask2004/OIG_2005_workplan.pdf.

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Tom Hess is a Shareholder and Co-Leader of the Health & Medicine Practice Group. He can be contacted at thess@bdblaw.com or 614.227.4260.

The Medical Malpractice Crisis: The laws have been passed and the judges elected - what next?

By: Richard Milligan

So now that the laws have been passed and the judges elected, is the battle won? Not yet.

Spurred on by the medical malpractice liability crisis, physicians and health care providers have become engaged in the political process like never before in Ohio history.

Legislators have been lobbied. Legislation has been passed. Supreme Court judges have been supported and elected.

What more is to be done?

The driving force behind the political activism of the medical community has been the burdensome cost of medical liability insurance coverage. Nearly all the enacted reforms are intended to reduce malpractice liability costs for physicians and other health care providers. With reduced costs, stabilized or lower medical malpractice insurance premiums should result.

There is understandable frustration that the efforts to date have not substantially altered the cost of liability insurance.

The reality is that the impact of the legislation adopted in 2003 has yet to be felt “on the ground.” By its terms, the 2003 law (HB 281) does not apply to any injury or claim that occurred before April 11, 2003. Since medical malpractice claims must generally be filed within a year and a half, we are just now seeing lawsuits to which the new law applies.

The last time “tort reform” was enacted in Ohio, the Ohio Supreme Court struck it down. There will no doubt be challenges to the new law. This writer is unaware of a medical malpractice case that has been tried to verdict under the 2003 law and its damages cap. As this is written in December of 2004, not a single court has yet been asked to determine the constitutionality of the act.

Lawyers for physicians and other medical providers will be doing battle over the medical malpractice reform bill for many years. A challenge to the act will likely reach the Ohio Supreme Court sometime in late 2005 or early 2006. In part through your good work, the case will be heard by at least four of the justices who have a record of giving due deference to the law as written by the elected representatives in the Ohio House and Senate.

Hopefully the Ohio Supreme Court will do what the Utah Supreme Court recently did; find the caps on non-economic damages constitutional. See, Judd v. Drezga, 2004 UT 94.

In the meantime, the election of three Supreme Court judges supported by the medical community is a positive sign that the broader community is becoming aware of the costs imposed by unmeritorious claims and over-the-top jury verdicts. Ultimately, it is restraint exercised by jurors and the courts that will restrain the costs of medical liability. A sign of this is the concern expressed by jurors following a recent trial. They were all concerned that the physician involved not leave the community as others have because of liability costs.

Finally, one practice reminder. Avoid publicly blaming other health care providers for bad outcomes in shared patients. However tempting, pointing a finger at another is not a foolproof way to avoid liability.

Patients and families see lawyers when negative comments are made to them. Documenting criticisms is a red flag to plaintiff lawyers that the case is worth investigating. Don’t put anything in the record that is not necessary to document the medical care received by the patient. Save any criticisms for the quality or peer review committee where they can be analyzed and addressed in a confidential, privileged setting.

When you criticize another's care you are not helping yourself. What you are doing is advertising to every plaintiff's lawyer who looks at the chart that there might be a problem. A chart is the place to document the care, not assign blame.

Hopefully, the coming years will see a decline in medical liability costs and a corresponding decline in liability insurance premiums.

This article was previously published in M.D. News.

Rich Milligan is a Shareholder in the Health and Medicine Practice Group. He may be reached at rmilligan@bdblaw.com or 330.491.5280.

“I’m Sorry”—A Prescription for Preventing Malpractice Suits

By: Joseph J. Feltes

Not long ago, the Stark County Common Pleas Court Judges addressed a group of physicians, who attended a program to learn more about today’s gripping malpractice crisis from the judicial perspective. Judge V. Lee Sinclair told the story of a discussion he had in chambers with an embittered plaintiff, the wife of a deceased patient, who sued her husband’s physician for medical malpractice. The Judge wanted to speak with this woman, who adamantly rebuffed all reasonable monetary attempts to settle the case.

The plaintiff admitted to the Judge that her bitterness—stemming from the physician’s not communicating with the family—rather than money, motivated her to file the lawsuit and reject settlement efforts. “My husband had been his patient for 20 years, and he (the doctor) never even said ‘I’m sorry’ that my husband died. He didn’t even bother to talk with us. He didn’t seem to care.”

Judge Sinclair confirmed what many physicians have known or intuited—breakdowns in communications with patients and their family members can lead to hard feelings and lawsuits. He admonished physicians to make the time to talk with patients or their families when mistakes are made or when any unanticipated clinical outcome occurs, even in the absence of mistakes.

Up to this point, that good piece of advice has been difficult for physicians to put into practice, particularly after having been reminded repeatedly by counsel of their “Miranda” rights: “Anything that you say can and will be used against you in a court of law.” Ironically, this “defend and deny” approach may actually have led to lawsuits that might have been adverted if patients (or family members) had not perceived the doctor as being insensitive, uncaring, or as trying to hide something.

Physicians heretofore have found themselves between a rock and a hard place. Sub. H.B. 215, recently passed by the Ohio general Assembly, may help to alleviate that dilemma. The Act prohibits the use of a physician’s apology or expression of sympathy as evidence of liability in a medical malpractice action.

Simply put: A physician, who talks with the patient or family following an unanticipated clinical outcome from medical care, should no longer need to worry about having his words come back to haunt him during cross examination by the plaintiff’s attorney at trial.

The statue declares “all statements, affirmations, gestures, or conduct expressing apology, sympathy, commiseration, condolence, compassion, or a general sense of benevolence” to be inadmissible, i.e. such discussions are off limits at trial in a malpractice case.

Beyond creating a layer of evidentiary protection for physicians to speak candidly with patients or their families, the statute—which is patterned after Colorado’s “I’m Sorry” law—may have the additional prophylactic benefit of deterring the filing of some potential malpractice claims in the first place. One medical professional, quoted in a recent Wall Street Journal article, opined that “nothing is more effective in reducing liability than an authentically offered apology.”

Even if suit were brought, a physician’s apology or sincere expression of condolence may facilitate lower settlements. According to one Ohio legislator, State Sen. Jay Hottinger, who supported H.B. 215, “A growing number of hospitals, doctors and insurers believe that apologies could end up quelling victim anger and perhaps reducing some of the huge sums paid out to settle disputes over medical care. By protecting such statements from being used as evidence of an admission of liability in subsequent litigation, the bill we passed better safeguards physicians when they apologize.”

Prominent hospitals throughout the country, such as Johns Hopkins and Dana-Farber Cancer Institute, have adopted policies that encourage physicians to talk to patients, admit their mistakes when they occur, and apologize. Additionally, insurers like COPIC now are conducting programs that focus on teaching physicians how to discuss medical errors with families, as a matter of risk management.

Translating what appears in Ohio’s Sub. H.B. 215 into practical application, may largely be a matter of applying common sense. It is helpful to keep these guidelines in mind:

· Physicians should take the initiative in contacting the patient or family, sooner rather than later. The longer a physician waits, the more uncaring and evasive he or she may be perceived as being. Time allows feelings to fester and anger to mount and harden.

· Physicians need to calm their emotions, have a good understanding of what happened, and not speculate or jump to conclusions before meeting with the patient or family.

· Physicians should be factual, candid, sincere and forthcoming in explaining what happened and answering questions.

· It is not necessary for physicians to “fall on their sword” by accepting responsibility or blame when they did not make a mistake.

· Apologizing or expressing condolences should not turn into “finger pointing” at others.

· Sometimes the only thing necessary and appropriate to say is something like: “I’m sorry about your loss. Your husband was a good man.” Expressions of sympathy do not equate to admissions of wrong-doing.

· If you have any questions, doubts or concerns about meeting with a patient/family, or what you should or should not say, first contact your legal counsel or insurance carrier for guidance.

Saying “I’m sorry” or expressing condolences is not a panacea. Nor is it the miracle drug that will cure the malpractice epidemic. But, hopefully it will prove to be an effective prescription for physicians to control damage and avoid potential claims.

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This article was previously published in M.D. News.

Joe Feltes is a Shareholder in the Health & Medicine Group. He can be reached at jfeltes@bdblaw.com or 330.491.5225.

Healthcare Corporate Compliance: The BIG Picture from the Physician Practice Perspective

By: Donald A. Antrim

The health care industry often overlooks the breadth of the corporate compliance scheme envisioned by the Office of the Inspector General of the Department of Health and Human Services (“OIG”). Beginning with the corporate compliance program for clinical laboratories released in March 1997, the OIG has published a series of compliance programs for various sectors of the health care industry.[1] The OIG compliance programs are in the form of compliance guidance because the releases are not model plans, but rather discuss what a model plan should contain. The program for individual and small-group physician practices was published in the Federal Register on October 5, 2000 (65 FR 59434). This compliance program is directly applicable to physicians and physician practices.

The publication of a compliance program, however, leads to the question, “compliance with what and for what purpose?” “Compliance with what” means compliance with the significant array of statutes and rules affecting the Medicare and Medicaid programs, all other governmental payors and, in some instances, private health care programs. The “for what purpose” question is answered by the desire to avoid an enforcement action or a prolonged investigation, or to survive a billing audit.

The OIG maintains that the benefit of developing a corporate compliance program is the creation of effective internal controls which lead to efficiencies in billing practices and procedures. The adoption of a compliance plan also assures adherence to applicable federal and state law and the satisfaction of program requirements for federal, state and private health plans, not to mention the prevention of fraud and abuse. Additionally, the penalties under these statutes, both civil and criminal, can be enormous. The existence of an effective compliance program can significantly reduce fines and penalties.

The names of the federal laws for which the OIG compliance programs were established give a fair sense of their import:

Medicare/Medicaid Conditions of Participation (42 C.F.R. 482)
Anti-kickback Law (42 U.S.C. §1320a-7b(b))
False Claims Act (31 U.S.C. §3729-3733)
Physician Anti-Self Referral Law (Stark II) (42 U.S.C. §1395nn)
Civil Monetary Penalties Law (42 U.S.C. §1320a-7a)
Medicare/Medicaid Exclusion (42 U.S.C. §1320a-7)

The following strictly criminal statutes have an impact on the health care industry and should be covered by any compliance plan as well:

Health Care Fraud (18 U.S.C. §1347)
Theft or Embezzlement Affecting Health Care Plans (18 U.S.C. §669)
False Statements (18 U.S.C. §1035)
Obstruction of Criminal Investigation of Health Care Offenses (18 U.S.C. §1518)

The primary goal for the adoption of a corporate compliance program is to create an internal program which assures compliance with these statutes and the health care programs which they impact.

The compliance programs proposed by the OIG are fairly uniform. They all have seven basic components or steps, which have their origin in the Federal Criminal Sentencing Guidelines. If this fact isn’t enough to advise the industry that compliance is serious business, the fines, penalties and potential term of imprisonment under the various federal laws should be enough to suggest that every physician should pay close attention to the creation of a compliance program.

All compliance programs should start from the same base—an assessment of the operations of your practice. Thereafter, the OIG recommends the creation of a Compliance Plan which progresses through the following seven steps:

Step 1: Audit and Monitor: Under this step the practice should establish standards and procedures to review the claims submission process and gather an understanding of what is billed and on what basis. There should be periodic auditing of the billing process to assure compliance with Medicare and Medicaid guidelines on coding and billing procedures.

Step 2: Establish Practice Standards and Procedures: A compliance plan should be a written document and it should identify specific risk areas. The Plan should contain a clear statement of purpose indicating that the goal of the practice is to be in compliance with the various federal programs and that no deviations from full compliance will be tolerated.

Step 3: Designate a Compliance Officer: A Compliance Officer should be identified for the purposes of assuring implementation of the compliance plan as embodied in a policy and procedures manual. The Compliance Officer should have responsibility for overseeing the auditing and monitoring function, as well as all other components of the Plan.

Step 4: Training and Education: This step involves identification of the individuals within the practice who need to be trained and the types of training that would be most effective. The OIG recommends specific training on at least an annual basis.

Step 5: Detection of Offenses and Development of Corrective Action Initiatives: The plan should create protocols for reviewing the claims submission process. There should be a clearly identified investigatory process, which can be modeled after the self-reporting protocols published by the OIG. The Plan should also indicate that there may be circumstances which call for consultation with outside counsel, and consideration should be given to self-reporting.

Step 6: Develop Open Lines of Communication: The Plan, in addition to designating a Compliance Officer, should establish an open-door policy with respect to the Compliance Officer and the practice leaders. There should be a bulletin board and an anonymous drop box established for the purposes of encouraging reporting, and there should be a published no-retaliation policy.

Step 7: Enforcement of Disciplinary Standards: What constitutes a violation of the Compliance Plan should be clearly specified. Appropriate disciplinary action may range from written reprimands to temporary suspension all the way to termination.

The above seven components provide an outline for the creation of a Compliance Plan. Compliance Plans do not fit into the category of “one size fits all” and there is no benefit in preparing a Plan that only sits on the shelf and collects dust. Compliance Plans do not need to be overly elaborate or call for the creation of unreasonable documentation or reporting. The recommended course of action is to assess your practice in light of the governmental payor services that your practice performs, examine your business relationships, and consider your resources from a financial and personnel standpoint. Then the practice administrator or leader should work with a professional experienced in health care corporate compliance to prepare a Plan that fits your practice’s particular needs.

Compliance programs do not need to be overly costly nor complex, but they should reflect the practice’s commitment to corporate compliance. It is also essential to establish individual responsibilities to assure that the Compliance Plan remains a viable component of the practice’s operation.

[1] There are presently 11 compliance programs, for the following health care industry segments: hospitals; clinical laboratories; home health agencies; durable medical equipment; suppliers, third party medical billing companies; hospices; Medicare +Choice organizations offering coordinated care plans and nursing facilities; individual and small group physician practices; ambulance suppliers; and pharmaceutical manufacturers.

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Don Antrim is a Shareholder in the Health & Medicine Group. He can be reached at dantrim@bdblaw.com or 614.227.4292.

PRACTICE GROUP PROFILE FEATURING G. BRENDA COEY

Buckingham Canton^SM

330.491.5255

bcoey@bdblaw.com

Brenda Coey joined Buckingham, Doolittle & Burroughs in 2003 as an Associate, bringing to the firm her background in health care both as an attorney and as an administrator with over 15 years of experience in nursing home management. She is a member of the firm’s Health & Medicine practice group and is based in Canton.

“I focus my practice on health law, particularly as it pertains to long-term care entities, and on medical malpractice defense,” Brenda explains. Her clients include nursing homes, adult day care centers, assisted living centers and independent living facilities as well as continuing care retirement communities. She also works with home health service providers and hospices.

Brenda provides counsel in matters of administrative and regulatory compliance and administrative hearings. She helps health care organizations construct policies and procedures, drawing on her experience in health care administration as well as her knowledge of the law. “What I find fascinating is how different organizations and administrators develop creative approaches to resolving similar problems. Using problem-solving skills, they develop policies and procedures unique to the organization. I enjoy helping them work through the process and reach a workable solution,“ she says.

In the course of her work, Brenda frequently visits her clients’ facilities and provides advice on minimizing risk. As a member of the firm’s medical malpractice defense team, she is also active in investigations following an incident where there is potential liability. “We can help our clients get a handle on what really happened,” she says. “And we help them work through the business and insurance issues that arise from the litigation process. Naturally, when a lawsuit is filed, we are there to aggressively defend the facility’s interests.”

Brenda earned her J.D. at the University of Akron School of Law. She also has a B.S. in Health Planning and Administration from the Pennsylvania State University. She is a member of the American, Ohio State and Stark County bar associations and maintains her Nursing Home Administrator’s License.

Newly Issued CMS Survey and Certification Letters for Nursing Home Providers

By: Priya Bathija

The Centers for Medicare and Medicaid Services (CMS) issued new survey and certification letters to state survey agency directors in December 2004. Those of particular interest to nursing home providers are as follows:

· Federal Requirements for the Information Dispute Resolution (IDR) Process for Nursing Homes (S&C 05-10);

· Improving Enforcement via the Special Focus Facility Program for Nursing Homes (S&C 05-13); and

· Clarification of Nursing Home Reporting Requirements for Alleged Violations of Mistreatment, Neglect, Abuse, Including Injuries of Unknown Source, and Misappropriation of Resident Property (S&C 05-09).

The last letter (S&C 05-09) is especially important because it clarifies the definition of “injuries of an unknown source.” The letter states that an injury will be classified as an “injury of unknown source” when both of the following conditions are met: (1) The source of the injury was not observed by any person or the source of the injury could not be explained by the resident; and, (2) The injury is suspicious because of the extent of the injury or the location of the injury (e.g., the injury is located in an area not generally vulnerable to trauma) or the number of injuries observed at one particular point in time or the incidence of injuries over time.

Complete copies of these letters are available at http://www.cms.hhs.gov/medicaid/survey-cert/letters.asp.

Priya Bathija is an Associate attorney and member of the Health & Medicine Practice Group. She can be contacted at pbathija@bdblaw.com or 614.227.4282.

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HIPAA’S SECURITY RULE

By: Shila Nalawadi

HIPAA’s Security Rule involves the national implementation of standards designed to safeguard the electronic creation, use, storage, maintenance, and transmission of an individual’s health information. Compared to HIPAA’s Privacy Rule, which broadly mandates covered entities to safeguard protected health information (PHI) in both electronic and non-electronic media; the Security Rule applies only to an individual’s health information as created, transmitted, or maintained in electronic form or “electronic protected health information” (EPHI).

The Security Rule directs covered entities to use certain administrative, physical, and technical safeguards to protect the confidentiality, integrity, and availability of EPHI. Like HIPAA’s Privacy Rule, the Security Rule allows a covered entity to take into account its size, complexity, and capabilities to reasonably and appropriately implement the Rule’s standards. Covered entities—health care providers, health plans, and health care clearinghouses—must comply with the Security Rule by April 20, 2005 (small health plans have an additional year to comply).

Shila Nalawadi is an Associate attorney and member of the Health & Medicine Practice Group. She can be contacted at snalawadi@bdblaw.com or 330.491.5238.

In December 2004, Christopher Parker was one of three speakers for a Continuing Legal Education seminar titled "Advanced Deposition Tactics for Expert Testimony."

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In November 2004, the Health & Medicine Group and the Litigation Group held their annual seminar titled, "Litigating a Healthcare Negligence, Fraud and Abuse, and Medical Malpractice Claim." The seminar designed to instruct administrators on legally and ethically operating a facility while minimizing the risk of fraud and abuse issues.

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If you are interested in obtaining information on upcoming seminars or would be interested in having speakers from BDB make a presentation to your organization, please contact: Lorna J. Henderson, Client Relations Administrator, at 800.686.2825 ext. 473 or lhenderson@bdblaw.com.

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