Health Care Law – Flashcards

● Gov't is largest insurer in the country (ex. of publicly-funded healthcare: SChip, Medicare, Medicaid, Veterans Health Association) ● 42 million are uninsured in U.S. Of this number, 1/3 belong in households that make $50,000 or more annually, and some around age 30 opt not to purchase health insurance ● Going through our healthcare system - how it works: 1. Person who is sick or injured 2. Primary care physician 3. Specialty physician 4. Hospital or Testing Facility (Diagnostic Imaging Centers - conduct MRIs, mammograms, etc.) 5. Pharmacy 6. Hopefully sick person gets well (if not, you loop back into the process)

1. Consumers ● Quality, cost, accessibility, ability to pay matter most to consumers ● Most likely everyone at some point (kids, sick, healthy, elderly) ● Issues that are important - quality, affordable, efficient, access/convenience of care

● Types of Healthcare Providers ○ Hospitals (acute treatment hospital, long-term hospitals, pediatric, cardiac, etc.) ○ ASC's (Ambulatory Surgical Center - surgery center patient walks in and out, don't stay overnight; 2 types: multi-specialty and single specialty) ○ Public Health Clinics (publicly funded health centers) ○ Mental Health Centers ○ Physicians ○ Diagnostic Imaging Providers (radiologists practice here - 2 types: diagnostic [diagnose patients] & interventional [interact w/patients via use of scopes, etc. - these may refer patients sometimes]) ○ ESRD (End stage Renal Disease - ex: dialysis) Facilities ○ Nursing Homes Physicians<primary care or specialists. Primary care: family practice physicians, pediatricians, OBGYN's, mid-level provides. Specialists<referring or non-referring. Referring: neurosurgeons, cardiologists, orthopedists, oncologists, dermatologists. Non-referring: radiologists, anesthesiologists, pathologists. ● What is a referral? When one doctor sends you to another health care provider ○ See Power Point charts on diff. types of primary care and specialty doctors ○ All primary care physicians refer their patients (whether it's to a hospital, testing center, or to specialty doctors) ○ Some specialty physicians refer; others don't

● U.S. Government (Medicare, Medicaid, etc.) ○ How does gov't get most for its money? ■ Gov't doesn't bargain; they say this is what we'll pay, period. In some states there are so many Medicaid patients, doctors/hospitals virtually have to take these patients (ex: MS - lots and lots of patients on Medicaid) ● State Gov't (participate in Medicaid) ● Workers Compensation Programs [Employers (if self-insured)] ● Lawsuits (Damages) ● Charity Care (no payment) ● Insurance Companies ○ How does an insurance company get the most from its providers? ■ Insurance companies contract w/physicians & hospitals and say we will direct them to you, but in order to contract w/us and have access to these patients, you have to charge us less than your usual charge (so, basically, they bargain w/the health care providers b/c the providers want access to these patients) ● Consumers/Patients ● Most important issues to the people who are paying? ○ Costs and effectiveness (want to get results from what they are paying for)

● lots of regulators both federal and state. Biggest enforcer is Centers for Medicare and Medicaid Services (CMS) - they are huge, scary enforcer - send doctors to jail ● What issues are important here? Over-charging patients, unnecessary treatments, unnecessary or improper referrals, etc. - Gov't has to put restrictions on these things, so doctors and hospitals don't take advantage of the system ● Major Regulatory Schemes ○ CON laws, EMTALA, HIPAA , ERISA, UHCDA (Uniform Healthcare Decisions Act - deals w/informed consent & who can consent for minors and incapacitated persons), STARK (anti-self-referral law), ANTIKICKBACK STATUTE (AKS) (prohibits doctors from getting paid for making referrals), FCA

1. Physician/Hospital Relationship ● What is the relationship b/t physicians and hospitals? ○ Employment or Not? Generally, doctors are not employed by the hospital; rather, they are independent contractors. Some radiologists, etc. are employed. ○ Medical Staff membership ■ Documents ● Bylaws (hospitals have bylaws that tell doctors how they have to behave) ● Fair Hearing Plan (medical staff's bylaws ; medical staff reviews doctors after they have unanticipated bad outcomes from treatments or surgeries, and Fair Hearing Plan outlines how to do this) ■ Credentialing Process (how hospital reviews doctor's credentials before allowing them on medical staff—they look at physician's educational background, work history, if any complaints have been filed and upheld against the physician) ■ Peer Review ● How do hospitals/doctors get patients? ● Doctors on medical staff send them there, or they come in through emergency room. ● How do hospitals/doctors get paid? ● Hospital<Board, Medical Staff. Board: Community leaders, Chairman of Medical Staff. Medical Staff: Medical Executive Committee.

2. Provider/Regulator Relationship ● What is the relationship b/t providers and regulators? ○ Analogy? Good drivers and law enforcement - still get nervous when you pass them even if not doing anything wrong - this is how healthcare providers feel around regulators - like they're on edge ○ Governing documents ■ Conditions of Participation (Medicare) ■ Medicare Auditors (MACs, QICs) ■ Statutes ● STARK ● ANTI-KICKBACK LAW ● False Claims act

● 1974 - National Health Planning and Resource Development Act ○ Intent to have major healthcare services/equipment pre-approved ○ All states were required to have CON laws by 1980 ● Legislative intent: ○ CON laws were originally enacted to insure quality health care by limiting supply ○ Insure access to indigent population ○ Control costs (one of primary motivating factors - state hoped to prevent expenditure of large amounts of money on health care services in areas where they weren't really needed) ○ Prevent unnecessary duplication of resources ● In 1982, after CON programs were in place, statistics showed there had been increases in health care costs per capita by 14% ● In 1987, there was a gov't repeal of the federal act ● Followed end of cost-plus reimbursement ● 15 states dropped CON programs ● 35 (including MS) still have them [in the last 5 years, each year there has been a proposal in the MS State Legislature to do away with CON laws, and each year the proposals have failed] ● Who likes these CON laws? Hospitals and health service providers already in existence b/c it keeps out competition ● There has been only 1 hospital approved in MS since 1974 b/c of CON laws!!! (Gilchrist said that 2 have been built) ● Who benefits most from CON laws? Health lawyers b/c there is a lot of fighting over CON laws ● Proponents of CON laws say that CON laws ○ promote "appropriate competition" (however they define this?); ○ maintain higher quality care as a result of the state's monitoring; & ○ insure availability of services to geographic areas who would otherwise not have those health services

● Economic factors ○ MS ranks 50th in median household and family income ○ 16% of MS families live below the poverty level ○ 22% of Mississippians have no health insurance ○ 22 counties w/double-unemployment rates in 2004 ● Health Factors ○ Highest percentage of births to "at risk" mothers ○ Highest rate of adult overweight and obesity ○ Exceed the national new case rate of TB each year ○ 3rd highest prevalence for diabetes (37% higher) ○ 1 of 11 states in "stroke belt"

● Mississippi State Department of Health ○ State Health Plan ● Issued each year, effective July 1 ● Currently under 2012 plan (supposedly effective through June 30, 2012) ● Each CON application is reviewed under State Health Plan in effect on the date Application was filed ○ Certificate of Need Manual ○ Case Law ● So, when you file a CON app., you have to satisfy 3 different tests (SHP, CON manual, case law)

● CON granted only if Department determines: ○ Need exists (most of them are volume based - based off numbers); ○ Other specific/general criteria are satisfied (in CON manual) economically viable, need (not specific numbers) you have to show you give quality care; ○ You have to show you will provide a reasonable amount of Indigent care; and ○ Access to indigent patients. ○ Most specific things are in the state plan, but if something isn't specified in the state plan, use the Con Manuel. ● "Reasonable amount of indigent care" is defined by MDOH as: ○ an amount comparable to the amount of such care offered by other providers of the same service in the same geographic area

1. Any expenditure that exceeds the "capital expenditure threshold," as defined by MDOH. ● $1,500,000 for major medical equipment ● $2,000,000 for clinical health services ● $5,000,000 for other (construction, repairs, renovations) 2. Construction, development, establishment of a new health care facility. ● Health care facility includes: ■ Hospitals/ skilled nursing facilities ■ Comprehensive medical rehab facilities ■ ASC's ■ Home health agencies ● Does not include: ■ Doctors' offices/dentists' office ■ Diagnostic testing facilities 3. Relocation of a health care facility or portion thereof, or major medical equipment ● Unless within a mile; AND ● Costs less than capital expenditure threshold ● Applies to a wing, a service, unit, or beds ● Getting additional beds should be number 4!!!! 4. The following always require CON (unless already provided in last 12 months): ● Open heart surgery ● Cardiac catheterization ● Skilled nursing beds ● Home health services ● Comp. inpatient Rehab services ● Radiation therapy ● MRI/PET ● Ambulatory Surgery Center (ASC) ● LTAC (Long term acute care) Services ● Invasive Diagnostics ● Swing beds ● Licensed psychiatric/chemical dependency services 5. Relocation of one or more health services (unless within mile, under cap. Exp.) 6. Acquisition or control of "major medical equipment" a. Mme - any equipment that costs more than a 1.5 million (capital expenditure) 7. Change in ownership ● If piece of equipment or facility changes ownership by 50%, you must get approval by the Dept. beforehand 8. Change in ownership of skilled nursing facility, intermediate care facility or intermediate care facility for mentally retarded 9. Any activity described in 1-9 above, if that same activity would require CON approval if undertaken by a health care facility 10. Any capital expenditure by or on behalf of a health care facility not covered in 1-10 above. ● Med. Office Bldg. (MOB) constructed on land adjacent to health care facility ● Land leased from health care facility for construction of MOB ● Health care facility has option to purchase MOB or other structure ● Health care facility maintains authority to approve tenants of MOB or other structure

○ Satisfy the 4 general goals of the SHP ○ Satisfy any applicable "specific standards and criteria" ○ Substantially comply with General Review Criteria (set forth in CON Review Manual)

1. To prevent the unnecessary duplication of health resources 2. To provide cost containment 3. To improve the health of MS residents 4. To increase the acceptability, accessibility, continuity and quality of health services

● Section B - Criteria and standards applicable to various health facilities and services ● Every CON application for any of the specified facilities or services must be found to be in substantial compliance w/these standards and criteria before a CON will be issued ● Examples of Specific Standards and criteria ○ Open heart surgery - must show: top two the most important ● Minimum population base of 100,000 within the service area ● 150 surgeries per year by end of year 3 ● Other providers in area doing 150 surgeries per year for 2 yrs. ● Staffing levels (personnel and proper location) ● Data maintenance requirement ○ MRI Services/equipment top two the most important ● 2,700 procedures per year by end of year 2 ● Existing units must be performing at least 1700 procs per year ● Full range of diagnostic imaging modalities available ● Staffing levels (personnel, location) ● Data maintenance ○ Acute Care Beds (aka as hospital beds) ● Bed Need Formula: ○ Counties w/no hospital - state average occupancy of beds per 1,000 ○ Counties w/hospital : ADC (average daily census)+ K (confidence number given by state)(squre root of ADC) - avg. daily census = ADC - K - confidence factor ○ New: underdeveloped counties w/rapidly growing populations [only county under formula here that qualifies for a hospital is DeSoto county] ○ Occupancy > 70% for last 2 years ○ Virtually impossible to build a hospital under this formula (b/c you can't build a hospital w/less than 100 beds and under formula it's nearly impossible to show that there is a need for 100 beds) ○ ASC's ● 1,000 surgeries per room per year ● Population base of 60,000 w/in 30 min. ● Existing facilities in ASPA have done 800 surgeries per room per year in most recent year ● Economically viable in 2 years ● Physician support w/in 25 miles ● Other services available

○ "The MSDH may use a variety of statistical methodologies including, but not limited to, market share analysis or patient origin data to determine substantial compliance with projected need and with applicable criteria and standards in this Plan." (Source: SHP at 1-3) ○ Some sets of standards prescribe formulas for projecting need ● Use prescribed formula ● Use another methodology [Recent MRI cases - no published decision] ○ Where there is no prescribed formula, a variety of methodologies have been approved by the Department and on appeal: ● Population calculations based on patient origin data ● Sworn affidavits by supporting physicians ● Reference to historical utilization and documented growth of practices ○ See these cases from slide: Mississippi State Department of Health v. Natchez Community Hospital, 743 So. 2d 943(Miss. 1999) ● No "unsupported statements" by physicians Biloxi HMA, Inc. v. Singing River Hospital, 743 So. 2d 979 (Miss. 1999) ● ASC rule - AVERAGE number of surgeries, not actual. Delta Regional Medical Center v. Mississippi State Dept. of Health, 759 So. 2d 1174 (Miss.1999) ● Population calculations - in variety of ways.

○ 16 General Review Criteria apply to every project - those with specific criteria and those without 1. Economic viability (show it will be economically viable by end of year 2 of operation) 2. Need, generally, for project 3. No significant adverse impact to existing service providers 4. Quality of care (existing providers) *1st 2 of these are argued about the most

Step 1: Notice of Intent to Apply for CON (30 days before filing Application) ○ Step 2: File CON application with MDOH ● CON application considered on schedule of "review cycles" ● Filing dates December 1, March 1, June 1, September 1 ● Filing fee: ○ .5% of proposed capital expenditure, Not less than $1000 or more than $25,000 ○ additional fee: .25% of poroposed capital expendiure ○ not less than $1250 or more than $75,000 ○ Step 3: Application must be "deemed complete" by Department's Division of Health Planning and Resources ● 30 days from filing ● Opportunity to submit additional information ○ Step 4: Comment Period ● 30 days - Letters accepted from Affected Parties ○ Step 5: Department issues its "Staff Analysis" ● First indication of whether application will be approved or disapproved ● Made on the face of the application (they don't look into the validity of the affadavits or numbers) ○ Step 6: "Affected Parties" (anyone in the service area) may request a hearing on the application ● Called a Hearing During the Course of Review ● Must be requested within 20 days after issuance of the Staff Analysis ● The Applicant may request a Hearing IF the Application is recommended for disapproval ○ Step 7: Hearing w/in 60 days of Hearing Request ● Presided over by Hearing Officer (employee of AG office) ● Parties submit Proposed Findings w/30 days of transcript ○ Step 8: Hearing Officer's Findings/Conclusions ○ Step 9: State Health Officer (Dr. Ed Thompson) announces the Department's decision at the next monthly CON announcement meeting

○ First Appeal: Chancery Court (Currently eliminated - could be brought back) ● Appeal w/in 20 days of MDOH Final Order ● Applicant may appeal to Hinds Co. or home county ● Opponent may appeal only to Hinds Co. ● Chancellor must rule within 120 days from Final Order of MDOH, or MDOH deemed affirmed ○ Second Appeal: MS Supreme Court ● Appeal w/in 30 days from chancery decision ● Oral argument granted if requested ● Standard of Review ■ Same at Chancery and Supreme Court levels ● Presumption that Hearing Officer and State Health Officer are correct in their decisions ● MCA § 41-7-201(2)(f) provides: "[t]he order shall not be vacated or set aside, either in whole or in part, except for errors of law, unless the court finds that the order ... is not supported by substantial evidence, is contrary to the manifest weight of the evidence, is in excess of the statutory authority or jurisdiction of the [Department], or violates any vested constitutional rights of any party involved in the appeal ...." ● Likely Timeline (with hearing) ○ Day 0 - Notice of Intent ○ Day 30 - Con Application filed ○ Day 60 - Application Deemed Complete ○ Day 90 - Comment Period Ends ○ Day 105 - Staff Analysis Issued ○ Day 125 - Hearing Requests Deadline ○ Day 180 - Hearing Starts (??) ○ Day 243 - Parties' Proposed Findings Due ○ Day 273 - Final Decision from MDOH ● Likely Timeline ... (w/appeal) ○ Day 293 - Appeal to Chancery Court ○ Day 393 - Chancery Court decision ○ Day 423 - Appeal to Supreme Court

○ Pros ● Prevents unnecessary duplication ● Curtails free market/competition ● Increases efficiency ● Decreases costs ● Maintains quality [biggest pro - jobs for lawyers!!!] ○ Cons ● Promotes monopolistic activity ● Curtails free market/competition ● Reduces efficiency ● Raises costs ● Reduces quality

● Who receives Program Benefits? ● What Benefits Are Provided? ● How should Benefits be provided? ● What are the proper administrative roles?

● 1798 - first federal gov't medical program ● Mid 1800's - state hospitals for mentally ill ● 2004 - $548.5 billion (45.3%) of total GNP spent on healthcare ● Federal gov't provides: ● Veterans care (150 facilities) ● Military and dependent care (115 facilities and CHAMPUS) ● Native Americans (1.5 million in 200 facilities) ● Disabled coal miners (Black Lung program) ● Others through grants to states, counties, local governments ● 2006 ● Medicare - $401 billion (19% of GNP) ● Medicaid - $309 billion (15% of GNP ● 2007 ● Medicare - $426 billion ● Currently, Medicare and Medicaid are 21% of our total budget. 2010 outlays=$3.5 trillion ● Ongoing Debate: Future of Programs ● Cost - continues to grow ● Growth in M'care program threatens to overwhelm its support sources ● No clear answer to question of how to reform ● Widespread impact of reform ○ Quarter of population (very politically active segment) ○ Healthcare facilities (large contributors politically)

● Growing concern about Medicare is that it will be depleted in the near future due to all of the baby boomers approaching the Medicare age ● Today there are 4 workers for every 1 person on Medicare - shows us that money we put it now probably won't be there by time we are Medicare age; by 2020 there will be 2.9 workers per beneficiary, and 2.4 workers by 2030 ● "The Health Insurance for the Aged and Disabled Act" - Title XVII of the SSA

● Covers: ● Most Americans 65 or older. ● Under 65 and ○ Disabled ○ ESRD (kidney failure) (1972) ○ Lou Gherig's disease ● 43 million people covered ○ 35.5 million > 65; ○ 6.3 million < 65 with disabilities

1. Part A - Hospital Insurance (HI) ● Hospitalization and related care ○ Inpatient hospital benefits (up to 150 days) ○ Post-hospital extended care (up to 100 days) - SNF's - Home Health Agency (in-home) ● Blood Clotting factors (hemophilia pts) ● Hospice ○ Provides short-term inpatient care ○ Must be entitled to Part A and be terminally ill (terminally ill = 6 months or less) ● Eligibility: ○ Day before 65th birthday ○ Must enroll w/in 6 months of 65 [if don't enroll in time, there's a penalty fee - must pay higher premium] ○ If you have worked and paid into system for 10 years, you don't have to pay a premium. If haven't worked 10 years, then you have to pay copayment, coinsurance for expenses ○ Continues until death ○ Based on own earnings or those of spouse, parent, child ● Must have worked for 10 yrs. (40 quarters - not necessarily successive) in order to get Medicare w/o paying a premium (must still pay a deductible - standard today is $1,000) ○ If in hospital - must pay coninsurance after 60 days (rate tiers up to 90 and 150 days) - after 150 days, you pay everything. ○ Different eligibility period for kidney patients - you apply when you are diagnosed (if on dialysis, there's a 3 month waiting period before it kicks in; if getting transplant, it kicks in immediately) ○ Changes due to PPACA ● See slides ○ Unearned income = cpaitla gains, etc. - anything you sell and make money from it. 2. Part B - Supplemental Medical Insurance (SMI) ● Requires deductible and participating provider ● Supplements Hospital Insurance: ○ Home health visits not available under HI ○ Physicians' services ○ Services/supplies incident to Dr.'s services ○ Hospital services incident to Dr.'s services ○ Diagnostic services ○ Home dialysis supplies/equipment ○ Outpatient PT, OT, speech therapy services ○ Various screening tests ○ Qualified psychologist services ○ Some ambulance services ○ Some prosthetic devices ○ Vaccines ● In 2009, Part B deductable was $135.

● Part B Eligibility (separate enrollment from Part A) ○ Must enroll during an enrollment period ■ If entitled to HI or are 65 or over ■ Citizen or resident alien who meets residency requirements ○ Must pay required premiums ■ Beginning Jan. 1, 2007, premium based on income ■ Standard premium is $96.40/month (2009) ■ If you make more than $85,000/year, monthly premiums go up (remember most people will be in standard premium range b/c they aren't working and won't be drawing more than $85,000 from SS) ● Gaps in Coverage ○ Limited long term care ○ No eyeglasses, dental care, hearing aids ○ High cost sharing for services ○ MediGap policies - standardized policies that pay for some of these gaps in services (there are 12 standardized categories of MediGap policies - policies A-L; all A policies have to provide same benefits, all B policies have to provide same benefits, etc. but prices may vary). Must enroll in all Medicare Parts ○ Gov't says you can go bridge the gap on your own for these types of services (out of 10 beneficiaries have these policies, sold by private insurance cos., that cover the above listen things (12 different types of policies [MediGap A-L]) ○ Cannot get MediGap unless you pay for Part A & B - must also pay additional premium

3. Part C - Medicare Advantage plans (aka Medicare + Choice) ● More choices among health plans and additional benefits, but higher cost ● Provides Part A, B and D benefits ● Anyone with Parts A and B is eligible, except: ○ ESRD patients w/out Medicare + Choice plan at onset of disease ● 5.6 million enrollees ● Once you have Medicare Advantage plan, your MediGap policies don't work anymore

Prescription Drug Coverage ● Available to everyone on Medicare ● Effective 1/1/06 (before this Medicare beneficiaries had to pay all costs for this prescriptions unless they already had another insurance plan like BlueCross & BlueShield) ● No single plan provided ○ Must enroll in one of approved plans ○ Plans vary based on drugs offered and premium required ■ Premiums for $0 to $265 in 2007 ■ Average premium in 2009 was $28/month (down from 2006) ■ Copays and coinsurances also apply ○ Substantial discounts (almost 100% if you are on limited income) ● Problem: "Doughnut hole" ● Once total expense gets up to $2,250, Part D stops...once you get up to $5,000, part de kicks back in and apys 97%...until calendar year ends; then it starts back over. ● Big Changes in 2009 ● 74% did not reach coverage gap in 2007. Total Part D plans=26.7 million. Total numbder of Medicare beneficiaries=45.2 million.

● Participating providers (hospitals, SNF's, HHA's, hospices...) must comply w/Title VII of Civil Rights Act ● NO distinction based on race, color, national origin

● Originally: Cost/Charge Based Reimbursement ● Was highly inflationary ○ 1967-83 hospital expenditures increased from $3billion to $33 billion ● Abandoned as to hospitals in early 1980s ● Abandoned as to physicians in early 1990s ● 1982 Congress Mandated Prospective Payment System (PPS) ● 2008 Transition to Severity Based DRG system ○ DRG system groups patients by principal diagnoses ■ 23 systems or Major Diagnostic Categories (MDC's) ■ 746 separate DRG's ■ DRG weights are recalibrated annually ○ Examples ■ DRG 75 (surgery, major chest): weighted at 3.1331 ■ DRG 59 (tonsillectomy): weighted at .6943 ○ Based Rate is used in calculation ■ Considered geography, labor force... ● Impact of PPS ○ Shift of services from in patient to outpatient ■ Surgeries now performed in outpatient settings ■ Diagnostics now performed in outpatient settings ■ More outpatient surgery centers - who owns these? ■ Hospital stays eliminated ○ Enormous financial impact to hospitals

● Two Tests: ● Income and Assets test (indigent part of test - "deserving poor"; rules vary from state to state; doesn't provide healthcare to all poor). Exception: if you have excessive medical expenses, you may not have to satisfy this test ● Categorical Test - who qualifies (pre-PPACA) ○ Children ○ Adults ■ Parents of dependent children ■ Pregnant women ○ Aged ○ Disabled **Must satisfy both tests to be eligible for Medicaid ● Medicaid is a State administered program ● You must apply - ○ Coverage starts retroactive to 3 months preceding application ○ Coverage ends at end of month in which a person's circumstances change ● State must have a State Medicaid Plan to get federal assistance ● Eligible Groups: ● Pregnant women ○ Married or single ○ If on Medicaid when child born, child is too ● Children/Teenagers ○ 18 or younger AND ■ Limited income in family OR ■ Child is sick enough to need nursing home care but could stay home with care there ● Parent or child living alone may apply **Medicaid does NOT cover nondisabled childless couples or childless single people, no matter how poor they are ● Mandatory Eligibility ● States MUST provide Medicaid coverage for the following: ○ Limited income families who meet requirement of AFDC ○ Supplemental Security Income recipients ○ Infants born to Medicaid-eligible women ○ Children under 6 and pregnant women whose family income is <133% of Federal poverty level (if work a min. wage job, you are probably above poverty level, so wouldn't qualify for Medicaid but don't make enough $ to pay for healthcare - this where argument comes in that there may be an incentive not to go get a job) ● Optional Eligibility ● Infants up to 1 year old and pregnant women w/family income < 185% of federal poverty level (state can set %) ● Certain blind, aged, disabled w/incomes below poverty level ● Institutionalized individuals w/limited income and resources ● Optional targeted low-income children

● Benefits Provided ● Mandatory Benefits (states have to provide) ● Inpatient hospital services ● Outpatient hospital services ● Physician services ● Medical and surgical dental services ● Nursing facility services for > 21 ● Optional Benefits (states may provide) ● Clinic services ● Nursing facility services for < 21 ● Intermediate care/mentally retarded services ● Optometrist services/eyeglasses ● Prescription drugs

● Expenditures by Type ● Nursing services - 20% ● Health insurance payments - 19% ● Hospital services - 19% ● Home health - 11% ● Prescription drugs - 11% ● Overall spending expected to increase by 132% by 2016 ● Mississippi - 32.5% of total budget, FY 2005 ● In Miss., we have a lot of Medicaid eligible children who have not been enrolled - so cost would be even higher if they were

○ False Claims act, Stark law, AKS, Overpayment Audits (RACS, MAC's, ZPIC's)

● Payment for Services ● Fee-for-Service ● Medicaid patients guaranteed choice of physicians ● Physicians have freedom of choice whether to participate in program ● Medicaid Fee schedules: ○ 1993 - paid 75% of Medicare rates ○ 2000 - paid 64% of Medicare rates

● Federal Medical Assistance Percentage (FMAP) ● Determined annually for each state ● Formula based on comparison of state's per capita income and national average ● FMAP is at least 50%, but not greater than 83%

● Population 2.8 million ● Medicaid population - 731,000 (25%) ● Population under 100% of FPL - 25% ● Additional population under 200% of FPL - 22% ● Medicaid births (2002) - 55.8% of all births ● Median household income (03-05) - $34,508

GET INFO FROM SLIDE!!!!!

● (a) Liability for certain acts: Any person who ... ● (1) knowingly presents to US gov't a false or fraudulent claim for payment ● (2) knowingly makes or uses a false record or statement to get a false or fraudulent claim paid by the gov't ● (3) conspires to defraud the gov't by getting a false or fraudulent claim paid

● Means that a person: ○ has actual knowledge of the information ○ acts in deliberate ignorance of the truth or falsity of the information; or ○ acts in reckless disregard of the truth or falsity of the information, and ○ no proof of specific intent to defraud is required (31 USC 3729(b)) **if health care provider participates in Medicare/Medicaid system, gov't presumes knowledge (it is presumed health care provider knows all these rules, etc.)

● "Claim" ● Includes any request or demand for money or property: ○ if the government provides any part of the money or property requested OR ○ if the government will reimburse any portion of the money or property requested.

● Types of Causes of Actions ● Billing for services not performed ● Billing for services performed by someone else ● Billing for services performed by unlicensed or unapproved personnel ● Billing for unreasonable costs ● Billing for unnecessary or excessive care ● Billing for services not in compliance with Medicare or Medicaid requirements ● "Upcoding"

● Actual Damages to Government ● Treble Damages (3x actual damages gets added on) ● Civil Penalties per claim ○ $5,500 to $11,000 per claim

A. Introduction ● Title 31 Section 3729, United States Code ● History ● 1863 - Also known as Lincoln Law ● Since 1986, over $12 billion in FCA settlements and judgments. ● Fraud and abuse adds 10% to total health care spending (1994) ● 1999 - Medicare paid $13.5 billion in improper payments ● FCA was designed to protect the gov't from paying for goods or services

● 31 USC 3729 a. Liability for certain acts: Any person who ... (1) Knowingly presents to US government a false or fraudulent claim for payment (2) Knowingly makes or uses a false record or statement to get a false or fraudulent claim paid by the government (3) Conspires to defraud the government by getting a false or fraudulent claim paid

● Knowing, knowingly ... Means that a person ● Has actual knowledge of the information ● Acts in deliberate ignorance of the truth or falsity of the information; or ● Acts in reckless disregard of the truth or falsity of the information, and ● No proof of specific intent to defraud is required (31 USC 3729(b))

Claim" ● Includes any request or demand for money or property if the gov't provides any part of the money or property requested if the gov't will reimburse any portion of the money or property that is requested

● Types of causes of action: ● Billing for services not performed. ● Billing for services performed by someone other than provider/person's name on the bill. ■ Doctors/providers must only bill under their provider number; if put it under a diff. number, it is a false claim (unless some special rule providing otherwise) ● Billing for services performed by unlicensed or unapproved personnel. ● Billing for unreasonable costs. ■ Everything physician does must be "medically necessary"

● Reverse False Claims ● Anyone who knowingly makes, uses or causes to be made or used, a false record or statement to conceal, avoid or decrease an obligation to pay or transmit money or property to the gov't

● Qui Tam Actions ● Qui tam is Latin for "He who brings an action for the king" ● Civil actions for false claims (brought by others, not gov't) ● Brought by Whistleblowers or "Relators" ■ More than 80% of false claims act actions are started by Whistleblowers, not by gov't ● One or more relators may bring suit ● Government has the right to ■ Intervene and join the action ○ Where gov't intervened in case, median length of action was 38 mos. ■ Decline to intervene ○ If gov't does not intervene and relator goes on w/action and loses, relator is stuck w/attorney fees ■ Settle case before intervening ● Types of Fraud Alleged in Qui Tam Cases b/t 1987 and 2005 ● Health care 1,145 ● Procurement 818 ● Grant Program 109 ● Housing 40 ● Student Loan 23 ● Veterans Benefits 4 ● Overseas bribery 1 * see chart for types of fraud where DOJ intervened, settled, declined, pursued ● Deadline for Qui Tam action ● Statute of limitations under FCA ■ 6 years from violation ■ 3 years from when Gov't knew or should have known of violation (at least one circuit says that it starts when the whistleblower reports) ■ Never more than 10 years after violation **If another relator files first, you lose your right to bring action - person who files first is THE whistleblower ● How is a Qui Tam Filed? ● File in Federal Court ● Complaint and disclosure statement of all evidence in relator's possession must be served on Attorney General and US Attorney for district where brought. ● Everything stays under seal and completely confidential for 60 days ■ Violation of seal order (including if whistleblower violates) may result in dismissal of action ■ Seal period may be extended. Can last up to a year. ( whistleblower is one who would want seal period extended b/c usually whistleblower is employee of place getting turned in) ● After seal period, complaint is served on D and case proceeds normally (whistleblower is revealed, can't discriminate or retaliate against whistleblower) *see approximate timeline for a Qui Tam Case ○ Whistleblowers-disgruntled employees or former employees, low level employees, auditors

● Damages Available ● Actual Damages to Government (total amount paid by government times 3 plus civil penalties) ● (Treble Damages) ● Civil Penalties per claim ● Whistleblowers/Relators receive money only if gov't recovers money from defendant ■ Set of factors to determine relators part of recovery - whether relator was involved in false claim, degree participated in action, etc.] ■ Can receive b/t 15 to 30% of the total recovery from the defendant ● If whistleblower pursues it w/out gov't intervening, may recover 25-30% ● Still get 10% if other people have to be involved

● 2 things to have your clients prepared for: 1) if gov't to show up by a) preventative steps - have a compliance plan: ■ Compliance plan = rule book for your health care provider that tells them how to comply w/Stark, Aks, FCA, proper documentation for Medicaid, etc. so everyone knows their role for being compliant with rules ■ Compliance plan should always (1) designate a compliance officer [person to monitor employees], (2) state that compliance training will be provided for employees, (3)require provider to perform regular internal audits [go through periodically and pull random sample of patients' charts to look at coding, billing, documentation to make sure it's ok] * also should have a provision that an internal investigation will be conducted if needed; internal investigation is needed if compliance officer/employee (1) suspects a problem, (2) someone else reports a problem, (3) or actual errors are discovered b) if find a problem in internal audit, immediately pay any overpayments discovered - find way to resolve problems found 2) responding to the gov't appropriately ■ If gov't shows up, it's usually a complete surprise & they come w/subpoenas and search warrant. They will usually try to do sweeping interview w/employees ■ 10 things client should know about how to respond to gov't ○ Call their lawyer ○ Ask for identification and bus. Cards of all gov't investigators to confirm they are who they say they are ○ Get a copy of subpoenas, search warrant & verify that they are directed at them. ○ Give gov't access to everything SW provides access to BUT nothing else - hold them to what documents allow them to do ○ Follow gov't people around and listen to them - write down everything they say to each other and to you or your employees ○ Compile an inventory of documents they have taken, so client knows what they took ○ Ask gov't if they may back up their computers before they take their computers so they may continue to do business ○ Send all nonessential personnel home as soon as gov't arrives, and anyone not there should be called and told not to come in ○ Instruct all employees that they are free to talk to gov't but are not required to talk to them, and as part of this, you will provide them w/your legal counsel ○ Do NOT give gov't a conference room to conduct interviews - if employee wants to talk to them that's fine but they can go outside and talk ○ Do NOT destroy any gov'ts or otherwise impede the gov't's investigation (means don't shred, don't delete emails, even routine destruction of stuff should stop when they show up) ○ Any employee interviewed by gov't should be debriefed by compliance officer to find out everything that was said in interview - this is only way to get a hint of what's going on if action is brought against you

● Aka Anti-Self-referral Law ● Makes it unlawful for a physician to refer a patient for designated health services if the physician has a financial relationship with the entity ● Penalties ● $15,000 - per occurrence ○ Plus 2 x the reimbursement claimed ● $100,000 for knowing violations or schemes ● Exclusion from Medicare Program ● Strict Liability Law (if you violate it, nothing else matters - no factors, no weighing factors) ● Qui Tam Actions

● Physician- ○ Includes immediate family members ○ Does not include mid-level providers ■ Nurse practitioners, physicians assistants, CRNAs, RPAs ● Referral - ○ A request by a physician for an item or service for which payment may be made under Medicare Part B - not personally performed services ● Patients - ○ Include only federally funded patients ○ Other patient referrals are not actionable ● Designated health services - ○ Clinical laboratory services ○ Physical therapy ○ Occupational therapy ○ Diagnostic radiology ○ Radiation therapy services and supplies ● Financial Relationship - (with doctor or immediate family member) ○ Compensation relationships ○ Ownership/investment interest ● Entity - ○ Clinic ○ Hospital / Nursing Home ○ DME provider/Lab/Pharmacy ○ Nonprofit foundation/HMO ○ The referring physician is not an entity

● More than 30 exceptions exist currently - STRICT COMPLIANCE REQUIRED ● 3 major categories: ○ Ownership/Investment - 42 CFR 411.356 ○ Compensation - 42 CFR 411.357 ○ Combination Ownership/Investment and Compensation - 42 CFR 411.355 ● Exceptions - Examples ○ Physician Recruitment: ■ Payment is meant to recruit a physician to the hospital's service area ■ Written agreement, signed by the Parties ■ Not conditioned on the referral of patients to hospital ■ Physician can join other hospital medical staffs ■ Hospital can join with Clinic, but only pay incremental expenses ○ Non-monetary Compensation/Incidental Benefits: ■ Non-cash items and services, up to $300, may be provided by DHS entity ● Can't be solicited by Physician ● Can't be based on volume/value of referrals ■ Incidental benefits ● Up to $25/day ● While Physician is on campus providing patient care or other hospital related services ○ Equipment/Office Rentals: ■ In Writing ■ Signed by the Parties ■ Sets forth the specific equipment/space to be leased ■ Does not exceed that which is r'bly necessary for legitimate business purpose ■ Term of at least 1 year ■ Charges over the term of the lease are consistent with fair market value, and are not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties.

● STARK makes it unlawful for: ■ A physician ■ To refer ■ Federally funded patients ■ For designated health services ■ If the physician has a financial relationship with the entity. ● STARK Law - Background ■ Enacted in 1989 ■ Implementing Regulations proposed in 1992 ■ Final regulations 1995 - Stark I ○ prohibitions limited to clinical lab services ■ Stark II - expansion to include ten additional categories of service ■ Stark III - effective Dec. 4, 2008 ● STARK II ■ Penalties ○ $15,000 - per occurrence (plus two times the reimbursement claimed) ○ $100,000 for knowing violations or schemes ○ Exclusion from Medicare Program ■ Strict Liability Law ■ Qui Tam Actions (???) ■ False Claims Act

● 5 steps to determining if STARK has been violated: a. Is he/she a doctor? b. Was there referring? c. Of federally funded patients? d. For designated health services? e. With an entity that physician has a financial relationship with? * if yes to all 5 of these, must change deal to fit or find an exception that fits OR can't do the deal

● Major Definitions ■ Physician: ○ Includes immediate family members ○ Does not include mid-level providers (nurse practitioners, physicians' assistants, CRNAs, RPAs) ■ Refer - referral: A request by a physician for an item or service for which payment may be made under Medicare Part B ○ Does NOT include personally performed services (ex: Dr. says come back on Tues. and let me do this follow-up procedure - this is ok) ■ Patients: ○ Include federally funded patients ○ Non-federally funded patient referrals are not actionable under STARK ■ Designated Health Services: ○ Clinical laboratory services ○ Physical therapy ○ Occupational Therapy ○ Diagnostic Radiology ○ Radiation Therapy Services and Supplies ○ DME and supplies ○ Parental and Enternal Nutrients, equipment and supplies ○ Prosthetics, orthotics and prosthetic devices ○ Home health services and ○ Inpatient and outpatient hospital services ■ Financial Relationships (3 types) ○ Compensation relationships (doctor getting paid to do something; if dr. is leasing machine from hospital or renting property from it = financial relationship w/that hospital) ○ Ownership interest ○ Investment Interest ■ Entity ○ Clinic ○ Hospital/nursing home ○ DME provider/Lab/Pharmacy ○ Nonprofit foundation / HMO ○ The referring physician is NOT an entity

● Scenario #1 ■ You represent John Jones, M.D. Jones is a plastic surgeon in McComb, MS. ■ Jones calls you and says he and some of his doctor friends (a neurologist, a cardiologist and 4 orthopedic surgeons) want to open their own diagnostic imaging center. It will be located down the road from Jones's clinic. The center will take patients of all types (insured, self-pay, Medicaid, Medicare), and will provide all different imaging modalities. ■ PROBLEM?

● Scenario #2 ■ You represent Our Lady of the Lake Hospital in Biloxi, MS. CEO calls you up and tells you he wants to help a local neurosurgery group (and a big referral source for Our Lady) recruit a new doctor from Hattiesburg who has an enormous patient base on the coast. CEO wants to provide this Dr. an income guarantee of $250,000 for 3 years, pay his moving expenses, and help the group by paying half of its lease expense for its office space. ■ Concerns about this proposal? 1. Got the Hattiesburg dr. and dr. group 2. Hattiesburg dr. will be referring to hospital, and dr. group refers too 3. There are federally funded patients 4. There are designated health services 5. There is a financial relationship (compensatory type - annual salary, hospital is paying his moving expenses) b/t Hattiesburg dr. and hospital, and there is a financial relationship b/c hospital is helping dr. group by paying half of its lease for office space it owns What do we do? Find an exception(s) OR don't do it!

● Scenario #3 ■ You represent Leake County Memorial Hospital. By email one day, you receive draft space leases between Leak Mem'l and several physicians for space in Leake Mem'l's medical office building. The leases state that Leake Mem'l will provide 1500 sq. feet per doctor at a rate of $10 per sq. foot per year. ■ What are the first questions you will ask the CEO when you call him? ■ What concerns might these leases raise? 1. Several physicians (need to ask CEO of hospital what type of doctors) 2. Assume they are referring doctors 3. There are federally-funded patients (ask CEO though) 4. There are DHS 5. Financial relationship if they do this deal? Physicians will be paying rent to hospital for office space, so there is a financial relationship b/t them *may have a problem here - need to find out more about what type of doctors and if they will be referring patients ***ANYTIME Dr. comes to you w/Lease or contract b/t doctor and hospital, Must consider STARK law

● Scenario #4 ■ You represent Dr. Ken Mansfield, your town's most active cardiovascular surgeon. It has long been suspected that Dr. Mansfield single-handedly keeps the local hospital (St. Lucien's) afloat with his enormous number of patients and complicated surgeries. In the last 16 months, a new hospital has been constructed just 15 miles down the road. It will have a state of the art heart program. Dr. Mansfield calls you to let you know that St. Lucien's has offered him a position as its Medical Director of Cardiology Services. St. Lucien's is offering annual compensation of $190,000 for Dr. Mansfield's services. ■ Dr. Mansfield badly wants to accept this offer and wants to know from you whether he should have any concerns? 1. We have a doctor - Dr. Mansfield 2. Dr. Mansfield does heart surgeries at St. Lucien's - so those patients are referrals (whenever physician admits patient to hospital he has referred that patient to that hospital) 3. There are fed. funded patients 4. There are DHS 5. There is a financial relationship w/hospital - they're going to pay him $190,000 for Dr. Mansfield's services as its Medical Director *We have a problem - either need an exception or don't do it.

Rental of Office Space (or equipment), Bona Fide Employment (you have to have this to have healthcare), Personal Service Arrangements (ex. medical directorship), Recruitment: Recruitment of Doctor to Hospital, Recruitment: Hospital assisting group practice, Non-Monetary Compensation, in office ancillary services, group practices, rural area providers

■ In writing, signed, specify premises ■ At least 1 year ■ Space rented is only what is needed ■ Charge set in advance, not based on volume or value of referrals, Fair market value ■ Commercially reasonable ■ Holdover ok - up to 6 months

■ Identifiable services ■ Remuneration is FMV, not determined based on volume or value of referrals ■ Commercially reasonable ■ CAN have productivity bonuses based on personally performed services ■ No term requirement (usually can't do part time employment and meet this exception)

■ With Dr., family member, group practice (not exactly sure about family member part, she is supposed to address this later, if not, ask) ■ Must have an agreement in writing, signed, specific about all services he/she is going to provide ■ Covers ALL svcs provided to entity ■ Services provided must be the least amt. necessary (can't make up things) ■ Must be for at least a term of 1 year ■ Compensation must be set in advance at FMV, and not tied to referrals

■ Must be intended to induce Dr. to relocate medical practice into the geographic service area, in order to become a member of hospital's medical staff - does NOT work if Dr. is already on hospital's medical staff OR in service area already ■ Must be in writing, signed ■ Not conditioned on referrals by Dr. to hospital ■ Remuneration not tied to referrals ■ No restriction on staff privileges elsewhere ■ Geographic area = lowest number of contiguous counties where 75% of inpatients come from ■ Relocated means EITHER: ○ Moved medical practice from outside service area to inside service area and at least 25 miles; OR ○ Moved practice from outside service area to inside service area but less than 25 miles, but at least 75% of doctor's revenues will come from new patients ■ Relocation requirement does NOT apply if ○ Recruit has practiced for one year or less or is a resident; OR ○ Recruit has been employed for 2 years immediately prior, with DOD, VA (veteran's ass.), Prison Bureau, or Indian Health Service Note: THERE WILL BE A HYPO ON PHYSICIAN RECRUITMENT ON EXAM!!!!

■ Agreement must be signed by party to whom payments are directly made ■ Hospital may pay: ○ Actual cost incurred by Group in recruiting ○ Money paid directly to recruited physician (must pass through) ○ Costs allocated to Group cannot exceed actual additional incremental costs actually attributable to recruited physician - means hospital can only reimburse Group for things actually attributable to recruitment of physician (if hospital participates in recruitment of physician to Group, Group can't put non-compete provision in K; if Group recruiting alone, it can put non-compete provision in) **Example - If group has to enlarge its facility or sign a new lease directly b/c of this new physician - hospital could pay ■ Keep records for 5 years ■ Remuneration from hospital is not tied to referrals ■ Group cannot restrict physician from practicing in hospital's geographic area

■ Up to $359 in 2011 per doctor ■ Cannot be solicited by doctor ■ Not tied to referrals ■ Cannot violate the AKS (anti kickback statute) ■ Inadvertent overpayment (if overpay doctor more than $300/year): ○ Cannot exceed 50% of allowed ○ Must be repaid w/in 180 days, or in same calendar year ○ Can only be used once every 3 years as to same doctor (can't routinely overpay physicians than just pay it back) *also an incidental expenses exception that involves paying for lunches, for doctor's pagers, etc. Medical Staff Incidental Benefits. Items or services used on hospital's campus, at times when docs are making rounds or otherwise benefitting hospital, provided to ALL members of Medical Staff in same specialty, without regard to volume or value of referrals, low value (<$25) per benefit, no violation of AKS.

■ Primary exception relied on by physicians to protect referrals for DHS w/in their practices. ■ 3 part test to satisfy STARK: 1. Performance Test ○ DHS must be performed by: ● The referring physician' ● Another member of the same "group practice"; ● An individual supervised by the referring physician (or member of same Group) ○ If satisfied, go to Billing Test 2. Billing Test ○ DHS services must be billed by: ● The performing or supervising physician ● The group practice (under group's number) ● 3rd party billing company under Group's billing number 3. Site of Service Test (must satisfy 1 of these 3) a. Group Centric test ● Same building where physician or group practice has office open 35 hours/wk; and ● Referring physician/group practice regularly practices at least 30 hours/wk b. Patient Centric Test ● Patient receiving DHS generally comes to that building for services from referring physician or group; ● Referring physician or group owns or rents office normally open at least 8 hours/wk; and ● Referring physician/group members practice there at least 6 hours/wk c. Specialist Centric Test ● DHS is provided when referring physician is present and is in connection w/a patient visit; ● Referring physician or group owns or rents office normally open at least 8 hours/wk; and ● Referring physician/group members practice there at least 6 hours/wk

■ 2 or more physicians legally organized ■ Each member provides substantially the full range of services of his practice to the group (75%) ■ Substantially all of the services rendered are billed by the group ■ Income and expenses distributed in a predetermined manner ■ No physician receives compensation directly or indirectly based on referrals of DHS ■ Critical issues relate to compensation - ○ Compensation must be set in advance, but you can't pay based on volume or value of referrals of DHS ○ You can pay profits and bonuses on other non-DHS factors though: ■ RVUs, Patient encounters, number of non-DHS services, any combination

■ Everywhere in Miss. except for Jackson and Coast is considered rural ■ Ownership or investment interest in the following entities, for purposes of the services specified: ○ A rural provider, in the case of DHS furnished in a rural area. ■ A "rural provider" is an entity that furnishes substantially all (not less than 75%) of the DHS that it furnishes to residents of a rural area. ○ A hospital that is located in Puerto Rico, in the case of DHS furnished by such a hospital ○ A hospital that is located outside of Puerto Rico, in the case of DHS furnished by such hospital, if - ■ (i) the referring physician is authorized to perform services at the hospital; ■ (ii) effective for the 18-month period beginning on Dec. 8, 2003 (or such other period as Congress may specify), the hospital is not a specialty hospital; and ■ (iii) the ownership or investment interest is in the entire hospital and not merely in a distinct part or department of the hospital

● AntiKickback Law (can't pay someone for referrals to you) ● Anti-Kickback Law violation (elements): ● Whenever any individual or entity ● knowingly or willfully ● solicits, receives, offers, or pays ● any remuneration (remuneration is "the transfer of anything of value, directly or indirectly, overtly or covertly, in cash or in kind") ● to induce or reward referrals of items or services ● payable by a federal healthcare program *applies to any transaction where ONE PURPOSE is to induce or reward referrals

● Penalties ● Criminal liability to both sides upon violation ● Violation is a felony ○ Maximum fine of $25,000 ○ Up to 5 years in prison ○ Both fine and imprisonment ○ Automatic exclusion from federal healthcare programs

● Safe Harbors ● The safe harbors approved by the government are set forth at 42 U.S.C. § 1001.952, et seq. ● They set forth specific conditions which, if met, assure involved entities of not being prosecuted or sanctioned. ● Arrangements that do not fit squarely w/in a safe harbor will be evaluated on a case-by-case basis. ● Physician Recruitment ● "Remuneration" does not include monies paid to induce a doctor who has been practicing for less than a year to locate, or to induce any other practitioner to relocate into a HPSA for his or her specialty area as long as 9 standards are met ● Not a strict liability law ● Space and Equipment Rental/Personal Services and Management Contracts Safe Harbor ● Must be written agreement ● Must be for term of at least a year ● Must specify payment amount, and/or premises or equipment covered ● If not full-time, must specify time periods and exact compensation to be paid ● Rental must be set in advance and FMV - not based on volume or value of federally funded patients ● Fair Market Value ○ Space Leases: value of rental property for general commercial purposes. ○ Equipment: value of equipment when obtained from a manufacturer or professional distributor. ○ FMV assessment may not include additional value for location or convenience to sources of Medicare or state healthcare program patients.

● Overview ● AKS is violated: ■ whenever any individual or entity ■ knowingly or willfully ● if no safe harbor, you can do things to make clear that there was no intent to induce/reward referrals & say it was for other purposes ■ solicits, receives, offers, or pays ■ any remuneration ■ to induce or reward referrals of items or services ■ payable by a federal healthcare program (in part or in whole) (referral of ff) ● Unlike Stark that is a strict liability law, AKS law requires intent ● Stark is a civil law; AKS is a criminal law (can go to jail!) ● Unlike Stark, AKS is not limited to only designated health services ● Unlike Stark, no financial relationship necessary for AKS- only the offer to pay ● Unlike Stark, physician is not necessary for AKS to apply ● Take each of the 6 things and ask whether each is present in an AKS problem like we did with Stark ● Unlike Stark, things don't have to fit squarely within the safe harbors - ASK ABOUT THIS!!!! ● Unlike stark, there are no issues with family members (hypo 8) ● Definitions: ■ Remuneration: "the transfer of anything of value, directly or indirectly, overtly or covertly, in cash or in kind." ○ Applies to any transaction where ONE purpose is to induce or reward referrals ● United States v. Gerber, 760 F.2d 68 (3d Cir. 1985). ● Some circuits have been more lenient, holding that there is a violation only where the PRIMARY PURPOSE of the transaction is to induce or reward referrals ● Penalties: ■ Criminal liability ○ Violation is a felony ● Maximum fine of $25,000 ● Up to 5 years in prison ● Or BOTH ○ Mandatory exclusion from federal healthcare programs if convicted ■ Civil Monetary Penalties

● Hypotheticals: (same scenarios as above in STARK hypos section) ● Scenario #1 ■ Not an AKS scenario, they just want to refer to themselves ● Scenario #2 ■ Any concerns about this proposal? ○ Hattiesburg guy - we have hospital offering to pay his moving expenses plus yearly salary to a doctor who is going to refer patients to their hospital - so we're assuming that they are paying him for his referrals must look and see if you can find a Safe Harbour (look to see if you can satisfy Stark first, then AKS) ○ Dr. group - not sure if hospital is paying group $ for referrals but could argue that, so should look for a safe harbor ● Scenario #3 ■ AKS problem here? ○ May be problem here if hospital is giving Drs. rent rate for space that is below market value ● Scenario #4 ■ AKS problem? ○ Have all AKS elements here, big problem - it definitely looks like hospital is paying dr. unreasonable amount of $ for referrals

● AKS SAFE HARBORS (see handout!) ● Rental of Space ● Equipment Rental ● Personal services and Management Contracts ● Employees (see statute) ● Practitioner Recruitment: o Investment Interests

● Practitioner Recruitment: ■ Remuneration does not include amounts paid: ○ To induce a practitioner ○ Who has been practicing in his specialty for less than 1 year OR ○ any other physician to relocate His primary place of practice into a Health Professional Shortage Area (HPSA) for his specialty (must be sure dr. is being recruited into HPSA) (Miss. is a HPSA for almost everything!) ■ SO LONG AS ALL 9 OF THE FOLLOWING STANDARDS ARE MET: ○ Set out in writing, signed, & specifies benefits provided, terms, and obligations of all parties ○ For Drs. leaving established practices, at least 75% of revenues at new location come from new patients ○ Benefits provided only up to 3 years, and are not renegotiated during that time (if HPSA ceases, can continue full term of 3 years with no renegotiation) ○ No requirement for referrals (CAN require staff membership) ○ No restriction on establishing staff privileges elsewhere ○ Amount of benefits cannot vary w/value or volume of referrals ○ Recruit agrees to treat in nondiscriminatory manner ○ At least 75% of revenues must come from patients in HPSA, MUA, or MUP ○ Payment or exchange of anything of value must not benefit anyone in a position to make or influence referrals, other than recruited doctor

● Investment Interests ■ Large investment interests ( > $50,000,000 in assets) ■ Small entity providers - investment ok IF: ○ No more than 40% of value of investment interest is held by referral or potential referral sources, OR providers of items or services ○ No more than 40% of the entity's gross revenue comes from business generated by investors ○ No requirement that passive investors refer ○ No marketing (or furnishing services) to passive investors differently than to non-investors ○ No loans to investors who can refer to assist with investment in entity. ○ Terms of investment to passive investor who can refer are same as to other passive investors ○ Terms of investment not tied to volume or value of referrals expected ○ Amt. of return must be directly proportional to investment ■ Rural/Underserved Area Entities Investment ok IF: ○ no more than 50% of investment interest held by referral or potential referral sources ○ at least 75% of dollar volume of business must come from persons residing in MUA or members of MUP ○ no requirement that passive investors refer ○ no marketing (or furnishing services) to passive investors differently than to non-investors ○ no loans to investors who can refer to assist w/investment in entity ○ terms of investment to passive investor who can refer are same as to other passive investors ○ terms of investment not tied to volume or value of referrals expected ○ amt. of return must be directly proportional to investment ***If Area ceases to be underserved - investment ok for lesser of: ● current term of investment ● 3 years from date of change in status

● January 2008 OMB Report - M'care ■ $10.8 billion in improper payments (07) ■ 3rd highest of fed programs (Medicaid was 1st)

● What is RECOUPMENT? ■ Seeking out and collecting improper payments by any method they can come up with ■ Term "recoupment" strikes fear in medical providers b/c it can possibly put them out of business ■ CMS (Center for Medicaid and Medicare Services) has a reputation ■ 2003 Comprehensive Error Rate Testing Program (put in effect by CMS) ○ Error rate reduction since - from 9.8% to 3.9% (so arguably program has worked)

● Medicare Contracting Reform ■ Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA) ○ Intent - to improve M'care's administrative services to beneficiaries and providers ■ MACs ■ RACs (Recover Audit Contractors - look for improper payments to anybody from Medicare and start process of trying to collect those) ○ 3 year test phase (2005) - did testing in New York, California, Florida, and expanded in 2007 to Arizona, South Carolina, Massachusetts. In 2 years in 3 states and 3 years in 6 states, they identified $ billion in overpayments (some due to coding errors but almost half b/c RACs discovered that whatever treatment/service was not medically necessary - you would expect a doctor to decide this but none were involved) ○ NY State test phase - concerns raised/addressed: ● Contingent fee (how RACs would be paid - original proposal said RACs got a percentage of ALL identified overpayments; in pilot program, RACs got their percentage regardless of whether overpayments made it thru appeal process and got paid [this later corrected]) ● Unqualified personnel performing audits (during pilot program, no medical people were involved; this problem was addressed, so that now all RACs must have a medical doctor on staff) ● No "Statute of Limitations" on Audits (RACs could look at ANY year; after pilot, they said cannot look back before Oct. 1, 2007 or look back before 3 years) ● No Limit on Records Reviewed by RACs (after pilot, gov't put in place limits: ● For hospitals, RACs may request 10% of hospital's avg. monthly claims up to a max. of 200 every 45 days ● For a solo doctor, RACs may only request 10 claims every 45 days per provider number ● 2-5 doctors, 20 records for 45 days per provider number ● 6-15 doctors, 30 records for 45 days per provider number ● 16+ doctors, 50 records every 45 days per provider number ● Other concerns: identification of excessive overpayments ● Based on pilot program results, it was concluded that approx. 40—45% of all claims ever submitted are improper

● Post Trial Phase: ● Four RACs (country is divided into 4 pieces - see ppt. slide "RAC Expansion Schedule") ● Automatic and complex reviews ● Issues being reviewed routinely by any RAC will be posted to RAC website ● Process ■ RAC requests documents from provider ■ RAC reviews documents ■ RAC notifies provider and FI/Carrier/MAC [Medicare Administrative Contractor]of overpayments ■ 5 level appeals process

● Common Errors found by RACs ● Wrong code ● Not medically necessary (now determined by medical doctor) ● Records problems, services not written down - if Medicare gets billed for services and it's not written down, then in view of gov't IT DIDN'T HAPPEN and they won't pay for it ● Services not properly provided (services rendered by unqualified person, etc.)

● Process (See letters on Twen for examples) ● So you represent Dr. Gibbs ... ○ After documents are requested and he has sent them to RACs, he will get a LETTER OF NOTICE stating how much he has received in overpayment but that it is not a demand letter (ha, right) ○ DEMAND LETTER - tells him how much he owes when to pay, etc.; also tells him that he has to figure out how much of these patients' copayments that he needs to pay back to them and then pay that too ○ Opportunity to meet and discuss the overpayment with the RAC (will have opportunity to work out a payment plan w/interest)

● APPEALS PROCESS (See chart on twen) 1. Redetermination ○ 120 days from receipt of initial demand ■ BUT - only 30 days to recoupment ■ If no appeal by day 30 - recoupment day 41 ○ Review by FI, Carrier or MAC ■ Same entity/different personnel (problem??) ○ If file by day 30, interest begins to accrue ○ No minimum amount in controversy (at this point you need to put together a package for your client of ALL relevant documents, at second level you put things into record and at subsequent levels nothing can be added to the record) Generally get answer in 60 days 2. RECONSIDERATION ○ Conducted by QIC ○ "On the record" review (no in person hearing) ○ You have 180 days from receipt of Redetermination to file a notice of reconsideration, you have 60 days from receipt of redetermination if you want to keep recoupment from happening at this level ○ All documentation MUST be submitted (42 CF 405.966 (absent good cause...)) ○ No minimum amount in controversy requirement 3. 3rd Level of Appeal - ALJ ○ 60 days from receipt of Reconsideration ○ Can no longer stop recoupment, so recoupment is happening at this level - it starts 15 or 20 days after reconsideration and interest has been running ○ In person hearing OR telephonic hearing ■ Witnesses called ■ Experts ■ exhibits ○ Must look at each of your arguments and each of the claims at issue (AL J has to look at each claim b/c any claims that are wrong make the overall number of overpayment decrease, which matters a lot) ○ This 3rd level of appeal is your BEST shot at reversal! ○ ALJ is supposed to provide a decision w/in 90 days 4. 4th Level of Appeal - Medicare Appeals Council (MAC) ○ If ALJ fails to provide decision w/in 90 days, it automatically goes up to MAC ○ Normally, must file appeals 60 days from receipt of ALJ decision (probably will file it faster than this since recoupment is still happening) ○ Must identity all parts of ALJ decision appealed ○ No hearing; de novo review ○ Appeal limited to issues raised in written request for review 5. 5th level of appeal - ○ 60 days from receipt of MAC decision ○ Findings of MAC deemed conclusive if supported by substantial evidence

● CAN YOUR CLIENTS AVOID RAC AUDITS? ● Probably not ● Limit exposure? Yes ○ By using Solid Compliance Measures: ■ Identify and monitor areas subject to review ■ Develop and implement effective processes for responding to requests for records ■ Develop and implement effective processes for appeals

● PRIMARY DEFENSES FOR PROVIDERS ● Treating Physician rule ○ basically, I'm the doctor and I know best and procedure was medically necessary; law says treating physician's opinion has to be given extra weight ○ treating physician knows patient better than gov't does, so treatment given should be presumed to be legitimate ○ always make this argument like if RACs claim something wasn't medically necessary, etc. ● Provider without fault ○ means that if a doctor is going to be deemed w/out fault for the overpayment (provider did not know or should not have known that there was a mistake in the claim) ● Reopening Regulations (reliance on National coverage decisions and local coverage decisions) ● Challenges to statistics of extrapolation (can't challenge extrapolation but can challenge the manner of extrapolation)

A. The Basics ● EMTALA was the result of a gov't effort to prevent "patient dumping" and provider refusal to treat patients who they think can't pay ● Patient dumping - refers to private hospitals transferring uninsured patients to charity or public hospitals ● Before EMTALA, there was no mandate for physicians to take care of patients with emergency conditions ● EMTALA was passed as part of COBRA ● EMTALA applies to hospitals who take Medicare AND have a dedicated emergency department (DED) ● Hospitals and doctors who violate the act can be liable under EMTALA, although there is no private right of action against individual physicians under EMTALA ● If the hospital takes Medicare, EMTALA applies to all patients that meet EMTALA requirements, not just Medicare patients

B. 2 General requirements of EMTALA ● SCREEN ● STABILIZE ● Or, under certain conditions, TRANSFER ● Requirements for Transfers Out ● Requirements for Transfers In

● Medical Screening requirement: In the case of a hospital that has an emergency department, if an individual comes to the emergency department, the hospital must provide an appropriate medical screening examination, including ancillary services routinely available to the emergency department, to determine whether an emergency medical condition exists. ● "emergency department" = a Dedicated Emergency Department ○ Any department or facility of the Hospital that is: ■ Licensed by the State as an emergency department; OR ■ Held out to public as providing emergency treatment; OR ■ Actually provided emergency treatment on 1/3 of the visits to that department in the preceding calendar year ● CMS says ... "comes to the emergency department" means: ○ At the hospital's dedicated emergency department requesting treatment ○ On hospital property other than DED with what may be an emergency medical condition ■ hospital property would include ER parking lots, which means hospitals should be surveilling them ■ also includes sidewalks, lobbies, waiting rooms, etc. ○ In a hospital-owned ambulance (anywhere) ■ if an ER is "on diversion," it means that the ER is too busy and hospital tells them to take person to another hospital's ER - if ambulance brings them to ER on diversion anyway, then that hospital's ER is responsible for them even though it told ambulance not to bring them there ○ In a non-hospital-owned ambulance on hospital property ○ What about helipads? Helipads are an exception to the rule (ambulance rule doesn't apply). If helicopter lands at hospital's helipad but is going to another hospital (hospital where patient is supposed to be going is responsible) - patient is deemed a continual transfer. Exception is if NEW emergency condition arises on the helipad, then the hospital owning the helipad is responsible for the patient ○ A little more about ambulances... ● Hospital owned vs. Non ● Trauma System Issues - organization of hospitals in the state, pay or play, each hospitals have levels...trauma regulations decide where you will be taken. ● Hospitals on diversion ● "appropriate medical screening examination" (MSE) ○ Conducted by qualified medical personnel ● Must be set out in regulations of some sort (I'm not sure which ones) ○ Purpose - to determine whether an emergency medical condition exists ○ Must be provided regardless of diagnosis, financial status, race, color, national origin and/or disability ○ May be requested by a minor child (usually a minor may not request medical treatment but they may request a MSE) ○ Needs to be the same screening process each time. They should have a set out plan. ● CMS says ... "emergency medical condition" means: ○ A medical condition manifesting itself by acute symptoms of sufficient severity such that the absence of immediate medical attention could reasonably be expected to result in - ■ Placing the health of the individual (or, with respect to a pregnant woman, the health of the woman or her unborn child) in serious jeopardy; ■ Serious impairment to bodily functions; or ■ Serious dysfunction of any bodily organ or part. ○ Baby K case - a mother wants the baby to be put on a ventilator. Baby has no chance of survival. Hospital says it is unethical to be giving the baby treatment. Father agrees with the hospital. Is this an emergency medical situation? Court says it is and that they have to treat that child. Ruling the other way may lead to a slippery slope. 1) No exceptions to EMTALA - if there is an emergency medical condition you have to do a MSE and stabilize regardless of anything including if a physician thinks tending to the emergency condition is medically or ethically inappropriate 2) Must screen and stabilize ALL patients w/emergency medical condition (not just those being transferred to another hospital - Harry case held to the contrary). Note: once patient is admitted to a hospital, obligations under EMTALA end.

● EMTALA says ... Stabilization Requirement ○ If any individual comes to the hospital and has an emergency medical condition, the hospital must either: ■ Stabilize the medical condition with the staff and facilities available at the hospital, or ■ Arrange for an appropriate transfer of the individual to another medical facility ○ "stabilized" means: ■ no material deterioration of the condition is likely, within reasonable medical probability, to result from or occur during the transfer, or ■ with respect to a woman in labor, the child and placenta have been delivered ○ "appropriate transfer" means ■ Transferring hospital provides medical treatment within its capacity to minimize risks to the individual's health and, in the case of a woman in labor, the health of the unborn child ■ Receiving hospital ● has available space and qualified medical personnel for treatment of the individual; and ● has agreed to accept transfer of the individual and to provide appropriate medical treatment ○ may only transfer an individual with emergency condition who has not been stabilized IF: ■ the individual requests transfer to another facility in writing, OR ■ a physician has signed a certification that the medial benefits expected from the provision of medical treatment at another facility outweigh the increased risks to the individual and in the case of labor, to the unborn child ○ A hospital that has specialized capabilities or facilities (not defined) shall not refuse to accept an appropriate transfer of an individual who requires such specialized capabilities or facilities if the hospital has the capacity to treat the individual ○ Advise clients to take patients if they can take them....even if this is undefined. ○ If person leaves against medical advice (AMA) then you are off the hook.

● On-Call Physicians ○ Each hospital must maintain an on-call list of physicians on its medical staff (Hospital must have on-call doctor for every area of the hospital) (Must be specific, names and dates) ■ HOSPITAL has ultimate responsibility for ensuring adequate on-call coverage ■ List to be maintained in manner that will best meet the needs of patients, in view of hospital's resources. *If on-call doctor doesn't come then he will be liable under EMTALA as well. ■ Physician group names are not sufficient. Must have individual names. *EMTALA has created a weird balancing in hospital-doctor relationship - often doctors don't want to be paid for being on-call but hospital argues if you won't be on on-call list, then you won't get staff privileges here, etc. ■ in determining EMTALA compliance, CMS will consider "all relevant factors" ○ A physician who does not come to the hospital when called, but repeatedly or typically directs the patient to be transferred to another hospital where he can treat the patient, may have violated EMTALA ■ Surveyors will assess facts prior to making recommendation whether physician violated EMTALA ■ Surveyors will consider individual needs and physician circumstances ○ A physician may be on call simultaneously for more than one hospital ○ Physicians may perform elective surgery while on call ● All of these provisions have to be included in the hospital's documents. ○ Liability for selective response to call by physician ■ Physician may be liable ■ Hospital may be liable for permitting ○ Response time of on-call physicians ■ The expected response time should be stated in minutes in the hospital policies ○ Have to have exact minutes ■ Terms such as "reasonable" or "prompt" are not enforceable by the hospital and therefore inappropriate in defining physician's response time ■ Always want your personnel to note the time of notification and the response (or transfer) time ■ **You want all of this stuff written down

● Physician Liability ○ If after initial examination the ER Dr. determines that ■ the patient requires the services of an on-call physician; ■ the on-call physician fails to respond, and ■ ER doc orders transfer because benefits outweigh risks absent specialist services. Liability: ■ Transferring (ER) Dr.? No (has to report that physician that did not show up) ■ On call Dr.? yes, he's in big trouble ■ Hospital? Maybe, depends whether the hospital has a back up plan, it is supposed to have a backup plan ■ Doctor can be penalized under EMTALA but not sued personally.

● Duty to Report ○ Transferring physician obligated to identify non-responding on-call physician in transfer records ○ Receiving hospital obligated to notify CMS of transferring hospital and on-call physician - have to do report w/in 72 hours and if they don't report, then they are in violation of EMTALA ● Assumption of guilt when not reporting

● Sanctions for on-call dr.'s failure to respond: ○ $50,000 civil fine per occurrence (goes to gov't) ○ Not covered by malpractice insurance (patient may sue Dr. for damage from his failure to show up) ○ Exclusion from Medicare participation ○ Potential civil liability

● DUTY UNDER EMTALA ENDS: ○ Upon determination that no emergency medical condition exists ○ Upon determination that emergency medical condition exists and individual is appropriately transferred ○ Upon determination that emergency medical condition exists and individual is admitted to the hospital (does not apply to in-patients)

Acceptable Responses to a Call to Come Treat an ER Patient ○ "I have an office full of patients. I will be there in 4 hours." Not a valid excuse. ○ "I am doing elective surgery. Call someone else or transfer the patient to another hospital." Depends. Yes, if the surgery has started... ○ "I'd rather admit that patient at another hospital. Send the patient there and I'll take care of him over there." Not okay. ○ "I'm on call at another hospital and treating emergencies over here. Send the patient here and I'll take care of him." Still a transfer. Not in trouble for this though. ○ "Sounds like that patient should be seen by another specialist. Call him." Not okay. ○ "I traded call with Dr. Jones while I'm at the ball game. Call him." Not okay. List must reflect change. ○ "My practice is full - I'm not taking new patients." Not okay ○ "I don't accept Medicaid." Not okay ○ "I don't accept illegal aliens." Not okay

The Uniform Health Care Decisions Act (UHCDA) ● Hypothetical ... ● Paul Patient is admitted to your facility with two executed advanced directives and Powers of Attorney for health care decisions. ● The first was executed in Miss. in 1995 and states that Paul wants no artificial feeding or life sustaining mechanisms and designates his sister, Mary, as Agent for health care decisions. ● The second document was executed in Texas in 2000 and states that Paul wants all available means used to keep him alive and designates his pastor, Rev. James Peters, as his agent for health care decisions. ● Which document do you go by in a situation like that? According to UHCDA? Most recent if valid

● Historical Note: Informed consent resulted from Nuremberg code (at Nuremberg, terrible medical experiments were conducted on people); as a result of these atrocities, doctrine of informed consent resulted so that no person should ever have procedures done on his person w/out his consent ● Informed Consent: (1) Must warn patient or representative (2) of known risk of a proposed surgery or treatment (3) so that the patient is able to make an intelligent (informed) decision about whether to undergo the surgery or treatment **if any part of this is absent and consent is obtained, it is invalid! (doctor can't proceed with the treatment or if he does, liable to battery) ● Informed consent protects both doctors (from lawsuits and liability) and patient (if doctor does something w/out obtaining consent, it is battery) ● UHCDA - tells us who stands in patient's shoes to consent when patient can't

● Exceptions to Consent Requirement: ● Emergencies ○ Emergency = where physician determines using competent medical judgment that the proposed treatment is necessary and delay to get consent would jeopardize life, health, or limb of the patient or cause disfigurement or failure of faculties. ● Testing for Infectious Disease ○ For this exception to apply, doctor has to determine the test is necessary to either provide appropriate care to patient OR to protect the safety and health of other patients and health providers

● Governing Law ● Miss. Code Ann. Section 41-41-3, et. seq. (governs unemancipated minors) ● Modified by UHCDA ○ July 1, 1998 ○ Governs Adults/emancipated minors ○ Replaced "living wills" (except for those predating effective date of the act) ○ Allows "individual instructions" (another way to say "the patient gets to say" as long as patient has capacity and doctor Must listen) ○ Allows Powers of Attorney for Healthcare decisions (patient may designate another adult person to make his healthcare decisions in event of patient's incapacity; Power of Attorney stops if patient regains capability to make own healthcare decisions) ○ Allows advanced healthcare directives ■ Advanced healthcare directive - patient makes healthcare decisions in event of incapacity by putting them in writing ■ May have a combination of powers of attorney and advanced healthcare directive (if they conflict, must go by adv. healthcare directive b/c that's what patient said) ■ In advanced healthcare directives, patient can indicate treatments, physicians, facilities, etc. that he wants in the event he is incapacitated ○ Healthcare providers MAY decline to comply w/an individual instruction or health-care decision for reasons of conscience or if it is contrary to a policy of the institution ○ The UHCDA provides immunity for health-care providers or institutions acting in good faith and in accordance with generally accepted health-care standards

● Unemancipated Minors (under age 18 and have not gone thru legal proceedings to get emancipated) ○ Unemancipated minors may not consent for themselves ○ Who can consent for a Minor (where consent is required)? NOTE: must follow this order - it's in statute, only go down if one above isn't available ■ The minor's guardian or custodian ■ The minor's parent ■ An adult brother or sister of the minor ■ The minor's grandparent ■ If none of these are available, any adult that has exhibited special care and concern may consent for the minor ○ Exceptions to Requirement of Consent: ■ Alcohol and drug treatment (if at least 15 - can go to physician or psychologist) NO obligation of doctor to tell the parents. Parents are not obligated to pay the doctor's bill if they didn't know or consent to it in advance. ■ Venereal disease, testing, or treatment ■ Giving blood (if at least 17) ○ Any female regardless of age has authority to consent to treatment regarding pregnancy and birth of a child ○ Unemancipated Minors and Abortion ■ Abortion for minor under 18 - written consent of both parents OR legal guardian REQUIRED (other rules for divorced/separate parents and incest situations) ○ If divorced, one with primary legal guardianship, but if can't be reached, the other one is good. ○ Incest - cannot give the consent if the parent is also the father of the unborn child. ■ Minor may petition court for abortion w/out consent of parents - may be allowed to have an abortion where court finds that minor is mature and well-informed and where abortion is in best interest of child (only 2 cases in Miss. on this and petition for abortion was denied in both cases)

● Adults or Emancipated Minors with capacity ○ emancipated minors = those who have been emancipated either specifically for healthcare decisions OR for all decisions (OR if minor is or has been married under age 18 legally, minor is emancipated for all purposes) ○ Capacity = ability to understand risks, benefits, alternatives of a proposed treatment and to make a decision and communicate to a healthcare provider ○ Adults are presumed to have capacity and ■ may consent to their own treatment ■ have the right to refuse treatment ■ may execute documents recognized by UHCDA ■ if found to be incapable of making health care decisions, treatment decisions will be governed by the UHCDA ○ Determinations of Capacity ■ The primary physician must make the determination that an individual lacks or has regained capacity ■ Record that determination in patient's record ■ Communicate the determination to the patient, if possible, and to any other person then authorized to make health care decisions for the patient ■ Definitions: ● "Primary physician" - a physician designated by an individual or the individual's representative to have primary responsibility for the individual's health care ● "Health Care Decision" ● Selection of healthcare providers and institution ● Approval of tests, procedures, programs of medication, orders not to resuscitate ● Directions to provide, withhold, or withdraw artificial nutrition and hydration and all other forms of health care. ● Does NOT include decisions made pursuant to the Anatomical Gift Law ● Does NOT include consent to such things as arbitration provisions

● Adults or Emancipated Minors who are incapacitated ○ Who may consent for an adult/emancipated minor? 1. The individual patient ■ Individual instruction ● Requires capacity ● May be oral or written ● May be limited to take effect only on specific conditions ■ Advanced healthcare directive ● May consent or refuse any treatment ● Designate healthcare providers ● Approve or disapprove of tests of life-sustaining mechanisms ● Artificial nutrition and hydration issues ● Advanced directive Must be signed, dated, and witnessed to be valid 2. Designated agent for healthcare decisions ■ Power of Attorney ● Appoints agent to make decisions ● Must satisfy requirements of validity: must be signed by two witnesses or notarized by notary republic ● CANNOT be witnessed by a health care provider, an employee of a health care provider or facility; OR the designated agent ● One witness must be someone other than family member OR person entitled to any part of the principal's estate upon principal's death ● Agents' powers are limited in time and scope ● Only takes effect once there is a lack of capacity and ceases when patient regains capacity (this is why it's important for physician to document these things) **Revocation: ● Agent designation - signed writing or personal communication to healthcare provider required for revocation. Except for divorce, annulment, legal separation which automatically revokes prior designation of spouse as agent ● Any other part of Advanced directive: any clearly manifested manner of revocation is sufficient ● Multiple Healthcare Directives - most recent prevails to the extent of any conflict 3. Court appointed guardian (guardianships) ● Guardian: judicially appointed guardian or conservator ● Guardian is below agent in authority ● Must follow individual instructions/advanced directives of ward ● Decisions require no judicial approval 4. Surrogate decision-maker ● Surrogate: individual, other than a patient's agent or guardian, authorized under the Act to make a health care decision for the patient. ● Descending order of priority: a. The spouse, unless legally separated; b. An adult child (if more than one and they disagree, you go with the majority of adult children's decision); c. A parent; or d. An adult brother or sister 5. Court through judicial decree (if none of the above people are available) ● May be obtained: ● Where no agent, no surrogate, or surrogate has refused to act ● There is written request from physician ● Proper documents are presented to the Court. ● Expense to be borne by patient's estate or by his or her caretaker

● Implementation of Health Care Decisions ● Duties of Health Care Providers and Institutions: ○ Communication ○ Documentation ○ Comply with patient's wishes ○ May decline, under certain circumstances, to comply with an individual instruction or health care decision ○ May NOT require advanced directive as condition for treatment ● Liability of Health Care Providers: ○ A health care provider or institution is not subject to civil or criminal liability or to discipline for: ■ Complying with a health care decision of a person w/apparent authority (person claiming to be a husband who brings in a wife/same last name); ■ Declining to comply with a health care decision of a person apparently without authority; or ■ Complying with an advance health care directive and assuming that the directive was valid when made and has not been revoked or terminated.

● Psychotropic Medication ● Same consent rules apply: ○ Patient can consent ○ If patient is determined to lack capacity - agent, guardian or surrogate may decide ○ Admission to mental treatment facility does not equate to finding of incapacity

a. Background i. Enacted in 1996 ii. HITECH Act-February, 2009. American Recovery and Reinvestment Act. Security and privacy. Technology...Breach notification rules (you have to report it to that person that is violated), business associate compliance, mandatory enforcement actions, increased penalties for breach, damages to individuals, required HITECH audits, & Attorney General suits. Penalties for misuse of PHI by covered entity: tiered penalty system under HITECH, top end penalty under HITECH - $ 1.5 million. Willful neglect: substantial fines, jail time. iii. 42 USC 1320d-6: A person who knowingly and in violation of this part- (1) uses or causes to be used a unique health identifier; (2) obtains individually identifiable health information relating to an individual; or (3) discloses individual identifiable health information to another person, shall be punished as provided in subsection (b) of this section. A person described in subsection (a) of this section shall- (1) be fined not more than $50,000, imprisoned not more than 1 year, or both; and (2) if the offense is committed under false pretenses, be fined not more than $100,000, imprisoned not more than 5 years, or both; and (3) if the offense is committed with intent to sell, transfer, or use individually identifiable health information for commercial advantage, personal gain, or malicious harm, be fined not more than $250,000, imprisoned not more than 10 years, or both. iv. HIPAA is: Intended to Protect Privacy and Security

b. Basic Rule: You may not do ANYTHING with someone else's protected health information-unless: HIPAA permits it; OR you have a valid authorization from that person.

● HIPAA's Overall Goals ● Provide continuity and portability of health insurance benefits to people in b/n jobs ● Ensure security and privacy of individual health information (important one for this class) ● Reduce administrative expenses in the health care system ● Provide uniform standards for electronic health information transactions ● Provide measures to combat fraud and abuse in health insurance and health care delivery ○ Privacy Issues: ■ FLA: Woman brings teenage daughter to work at hospital. Leaves her unattended at computer. Girl logs in, looks up patient phone numbers and calls people to tell them they've tested HIV positive. One patient attempted suicide. ■ SD: Med student took home psychiatric records to work on research project. Disposed of them in fast food restaurant dumpster. They were found and given to newspaper reporter. ■ MN: University health facility sent emails to transplant recipients, revealing names of hundreds of donors to whom confidentiality had been promised. ● What you need to know ○ Who is covered ○ What is protected and when ○ Basic duties

● The Privacy Rule: The Basics: ● Acceptable disclosures of PHI (protected health information) ● Patient's rights ● Covered entities' duties ● Disclosure of PHI for selected other purposes ● How to Protect PHI

● Who is Covered by HIPPA? ● Covered Entities - does it furnish health care or bill or receive payment for health care in its normal daily business? Yes - Then does the business conduct cover transactions (the exchange of any electronic form)? ● Business Associates (not exactly sure what this is - ask gilchrist)- billing company, law firm ● Health Plans ● Health Care Clearinghouses ● Health Care Providers who transmit Any Health Information in Electronic Form ● Examples of Covered Entities: ○ Hospitals and clinics ○ Diagnostic imaging centers ○ Nursing homes ○ Home health agencies ○ Ambulance services ○ Physicians, pharmacists and dentists ○ Counselors ○ Social services (public and private) ○ Laboratories ○ Employee welfare and benefit plans

● What is Protected? ● Individually identifiable health information, IIHI, or as we generally know it: Protected Health Information or PHI - realtest to physical/ental health, individual identifiable, create d or received by CE. information about someone's health or condition that is identifiable. A PHI can be deidentified and it would be no longer covered by HIPPA. ● Which is used or disclosed by a covered entity in any form, whether ○ Electronically, ○ on paper, or ○ orally ● PHI is information that: ○ Relates to past, present or future physical or mental health or condition, payments and provisions about healthcare ○ Identifies the individual in a personal way ○ Is created or received by the covered entity

● Examples of PHI: Types of PHI Where it Might Be Found Who Might Have Access Medical records forms Providers Billing info. Spoken words Billing Personnel Insurance Forms E-mails Clergy Prescriptions Voce Mail Food Services Patient Charts Faxes Researchers Patient Registry White Boards Security ID bracelets InformationTech

● Permitted Disclosures ○ Treatment (T) ○ Payment (P) ○ Healthcare Operations (O) =TPO ○ When required by law ○ To the patient (or his legal representative) ○ With valid authorization ■ If you aren't sure if it is ok... ■ Minimum Necessary Standard ● With every disclosure except: ● Treatment (MRI - need to know if the person has a pacemaker) ● Law Enforcement Needs (some) ● Authorization - If state specific laws conflict with Hippa, go with the more strict one. ○ Authorizations: ■ The Covered Entity is required to obtain HIPAA complaint authorizations for uses and disclosures of PHI not otherwise permitted ■ HIPPA requires that certain info. and statements be contained in the authorization -What can be disclosed, who can disclose, provide for an expiration date on the authorization, must be place on form notifying patient of his/her right to revoke the authorization

● Under HIPAA individuals have the right to: ○ Receive a written notice of privacy practices, which means in practice: upon request, any provider with an individual's PHI must provide a copy of the procedures for protecting it. ○ Inspect, view, and make copies of PHI. Which means in practice: individuals may ask to see their PHI and make copies of it. ○ Request amendment to their PHI, which means in practice: if amendments are made, it must be communicated to all who have PHI make changes, not change history. ○ Request that they may be contacted in a more confidential manner, which means in practice: i.e., phone, e-mail or at a different address ○ Request a restriction for the use and disclosure of their PHI, which means in practice: patient can now dictate who can and cannot receive their PHI (exceptions) ○ Receive an accounting of disclosures of PHI (in last 6 years), which means in practice: file a complaint with the Covered Entity or federal government. Physician has to keep up (a log) of the information.

● Written Notice of Privacy Practices: ○ FORM (privacy notice) - clear and in writing ○ Must explain how the Covered Entity may use and disclose patient's health information ○ Covered entities with a direct treatment relationship with patients must make a good faith effort to obtain patient's written acknowledgment of receipt of the notice ■ Your clients should provide and obtain signature on Privacy Notice from all patients upon arrival, before testing performed

● Right to Inspect and Copy: ○ Must allow individual to inspect his/her PHI ○ Does not require a covered entity to release all of an individual's PHI to the individual ■ Chance of harm ■ Legal proceedings ■ Psychotherapy notes ■ Inmates ○ STIMULUS BILL - if covered entity uses EHR's, patient has right to get it in electronic format. Fee that can be charged is limited to actual cost of labor (hospitals/clinics don't like this b/c don't make as much $ off it as if they made hard copies)

● Right to Amend: ○ Amendment is ok. Rewriting history is not. ■ The file can be supplemented with additional information ○ Under certain conditions, requests to amend may be denied if the entity determines that the information or record: ■ Was not created by the covered entity ■ Is not part of the designated record set available to the individual ■ Would not be available for inspection; or ■ Is inaccurate or incomplete

● Use and Disclosure of PHI (important!!!) ○ No non-health related use of PHI unless specifically permitted under HIPAA or authorized by the individual ○ General Rules: ■ Signed HIPAA-compliant authorization is NOT needed for the release of PHI for the purpose of treatment, payment or healthcare operations (still must be limited to min. amt. necessary) ■ Disclosures of PHI should be limited to the minimum amount necessary EXCEPT: ● Treatment purposes, ● Where authorization is obtained, and ● Certain law enforcement need ■ In all other situations, if you are unsure whether to release the PHI, do not disclose the information unless you have an authorization ○ Authorizations: ■ The Covered Entity is required to obtain HIPAA complaint authorizations for uses and disclosures of PHI not otherwise permitted ■ HIPPA requires that certain info. and statements be contained in the authorization -What can be disclosed, who can disclose, provide for an expiration date on the authorization, must be place on form notifying patient of his/her right to revoke the authorization

● Business Associates ● A Business Associate is a person or an entity (not in covered entity's work force) that helps the Covered Entity in a function or activity involving the use or disclosure of PHI including (put simply, business associate is a non-employee that does business w/covered entity) ● Every business associate must execute a business associate's agreement: ○ Provides basically that business associate will abide by HIPAA as to the PHI it comes in contact with ○ STIMULUS BILL - ■ Failure of business associate to comply with HIPAA will subject it to same penalties as the covered entity (including civil and criminal penalties) [this is a big change - basically turns business associate into a covered entity] ■ Business associate violates HIPAA if it knows of violation by covered entity - before, the covered entity had to police the BA's conduct, but now goes both ways ■ Business associate must report violations (wrongful disclosures of PHI) to covered entity

● Enforcement ● HIPAA is enforced by the U.S. Department of Health and Human Services (money goes to gov't not violated patient - hitech made it possible for individual to receive money but the state AG has to bring the suit on their behalf, has happened 2-3 times since 2009). ● Complaint-driven process ■ covered entities required to tell patients of unauthorized disclosure of PHI patient makes complaint ■ in past, gov't did not audit; in last 2 years, gov't has done some audits of HIPPA compliance - audits are still unlikely for the most part though ● Covered Entities must have a process to receive and investigate complaints ● See HIPPA slides for Charts and Graphs

● Penalties (make sure up to date) ● Covered Entities that misuse PHI are subject to Civil Penalties: ■ $100 per violation ■ Up to $25,000 per person, per year for each requirement or prohibition violated ● Also provides for criminal penalties for knowingly violating patient privacy: ■ Substantial fines ■ Jail time

● PREEMPTION ● What is Preemption? ■ Preempts state law to extent they are in conflict (state law can be more stringent than HIPPA but not less) ● Disclosing PHI to parents or guardians ● Disclosing pursuant to a court or administrative subpoena ● Psychotherapy notes - a special authorization is required

o Grandfather plan - if you like your plan, you can keep it. Any plan that existed on the date of passage could stay in effect. (excempt from some parts, not everything). However, the grandfather plans could be forfeited. If a grandfathered plan got rid of a coverage, or increased co-insurance amounts or decrease annual limits, etc. you lose your grandfather status. Limited because no economically possible to not increase costs, so most will lose GF status. o Preexisting conditions - any condition that was present before coverage whether or not any diagnosis or treatment was received. o Lifetime maximums - no lifetime maximums on essential health benefits (criteria hasn't been released). o Annual maximums are being phased out. Completely gone by 2014. o Dependents - all children (adopted and everything) age 26. Cannot increase the premium for an adult child, but can increase for an increase in the amount of people on the policy. o Not talk about Nondiscrimination rules. o Rescission- can't do it anymore except for fraud or intentional misrepresentation of material facts. Can still do it prospect fully. Can still cancel for nonpaid premiums. o Not worried about preventive services.

o FSA contribution limits - not worried o Mandate - all u.s. citizens must purchase minimum coverage. • Exempt - American Indians, incarcerated, religious objection, Those with financial hardships (below the tax filing threshold - in 2009, the people who make below 18,700 as a couple) • Penalty • In 2014, the penalty is 95 a person or 1 percent of taxable income o In 2015 jumps, 325 or 2 percent o 2016 - 695, 2.5 percent. o After, will also increase by cost of living

o Health exchanges • Each state is required to create one (similar to Travelocity or orbitz) • You go to the cite, enter your information • Basically a marketplace to buy insurance • Navigators will be paid by the state and help operate the site. • Some states already have them (utah and mass.) • Offer 4 levels of plans • Precious metals o Each level is associated with a different amount paid by the insurance company (spanning from 60 to 90 percent) • Required to cover essential benefits. • Available to individual sand small groups (up to 100 employees) • Includes a lot regulations.

o Expansion of Medicaid • Will now cover all non-medicare people under the age of 65, who have below 33 percent of the federal poverty level. • Projected to add 14 million new beneficiaries. • Fed gov is expecting to take all of the bill for the new beneficiaries. • Will eventually ratchet back to 90 percent of the costs and stay there. • All new benef. Will be guaranteed a health package equivalent to ones in the exchange.

- Tax/fee related o Changes to medicare • Payroll taxes - few have ever worked. Has always been 1. 45 percent will now be 2.3 percent out of your paycheck if you earn more than 200,000 a year. • Unearned income over 200k, 250k for a couple - you have a new 3.8 percent tax. o Industry speciric revenue raising provisions • Insurance companies - 8 billion fee due to the govt from insurance companies (parceled out over the companies. based on there companies percentage of market share - 2018, 14.3 billion dollars. • Pharmaceutical - 2.8 billion in 2012. 2018 - 4.1 billion, then drops back in 2019 and stays there (2.8 billion) • Medical device - exise tax on all sales 2.3 percent. o Impact to employers • All you need to know • Small employers will have access to credits if they offer ins. To employees • Medium - choice • Large will get penalties if they aren't good enough or too expensive. (criteria - do you have any employees that go to the exchange and get a tax credit? Credit is the key, they have to qualify for it. Then we will penalize you) o Cost • By 2019, pretty much everything with the law is running.