February 2, 2015

Idaho’s Medical Lien Statute

by Kim C. Stanger, Holland & Hart LLP

Idaho law allows hospitals and other healthcare providers to file a lien to help secure payment of treatment to persons who have been involved in an accident or who might otherwise be entitled to recovery from a third party for injuries the patient suffers. The lien statute is, however, limited in scope and must be strictly followed to enforce the lien.

Medical Liens. Idaho’s medical lien statutes allow hospitals,¹ nursing care providers,² and other entities licensed to practice medicine³ to file a lien “for the reasonable charges for … care, treatment and maintenance of an injured person, … or to the legal representative of such person, on account of injuries” caused by another person.⁴ Significantly, the lien statutes do not apply charges for care rendered to all patients; instead, they only apply to charges for care rendered to patients who were injured by the actions of another person (e.g., auto accidents, personal injury cases, assault and battery, etc.). Also, the lien statutes do not enable the healthcare provider to file or enforce a lien against the patient’s own property; instead, the lien gives the healthcare provider a right to recover against the person or entity causing the patient’s injuries (the “tortfeasor”). The net effect is that the tortfeasor (or their insurer) will want to ensure that the provider is paid as part of any personal injury settlement, or the tortfeasor may remain directly liable to the provider for the cost of the provider’s care. The lien does not apply to accidents or injuries that are covered by workers compensation.⁵

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December 15, 2014

Referral Reward Programs

by Kim C. Stanger, Holland & Hart LLP

I often see programs in which health care providers offer rewards to persons who refer new business to the practice. Such programs are risky.

Anti-Kickback Statute. The federal Anti-Kickback Statute prohibits offering or paying any remuneration to induce referrals for items or services payable by federal healthcare programs, including Medicare or Medicaid. (42 USC 1320a-7b(b)). Violation of the Anti-Kickback Statute is a felony. It is also an automatic violation of the federal False Claims Act. Accordingly, providers should never reward referrals for Medicare or Medicaid business. In addition, the OIG has suggested that carving out federal program business from reward programs may not insulate the provider from Anti-Kickback Statute liability because a person who receives rewards for referring non-federal program business is likely to refer federal program business as well. (OIG Advisory Opinion No. 12-06).

State Laws. Referral reward programs might also violate state laws. For example, the Idaho Medical Practices Act prohibits “[d]ivision of fees or gifts or agreement to split or divide fees or gifts received for professional services with any person, institution or corporation in exchange for referral.” (Idaho Code 54-1814(8)). Idaho’s insurance code also prohibits rewarding referrals that result in “treatment of physical or mental illness or injury arising in whole or substantial part from trauma.” (Idaho Code 41-348). I am not aware of any cases in which these statutes have been applied to referral reward programs, but there is a risk. Continue reading →

December 11, 2014

Stark Requirements for Physician Contracts

by Kim C. Stanger, Holland & Hart LLP

Entities that employ or contract with physicians must ensure their agreements are structured to comply with the federal Ethics in Patient Referrals Act (“Stark”)¹ if they intend to bill Medicare for services rendered or referred by the physicians. Under Stark, if a physician (or a member of the physician’s family) has a financial relationship with an entity, the physician may not refer patients to the entity for certain designated health services (“DHS”)² payable by Medicare unless the financial relationship is structured to fit within a regulatory safe harbor.³ Entities may not bill Medicare for services improperly referred and, if they have done so, the entity must repay amounts improperly received. Failure to report and repay within 60 days may result in additional civil penalties of $15,000 per claim as well as False Claims Act liability.⁴ Repayments can easily run into the hundreds of thousands if not millions of dollars. Given the potential liability, it is critical that physician arrangements be structured to fit within the regulatory safe harbors.
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December 3, 2014

Physicians Should Beware Illegal Conspiracies when Dealing with Hospitals

by Melissa Starry, Holland & Hart LLP

Physicians and other providers must beware illegal conspiracies when taking coordinated action to obtain payment from hospitals. On December 1, 2014, the State of Idaho Office of the Attorney General reached settlements with four physicians who were investigated for their actions during on-call pay negotiations with Madison Memorial Hospital in Rexburg, Idaho.

According to the Attorney General’s press release, the hospital’s on-call policy required physicians to provide unpaid on-call coverage for the emergency department as a condition of receiving privileges. Several doctors jointly sought to negotiate changes to the policy and notified hospital administrators that they would no longer provide on-call coverage until the hospital agreed to pay them. The Attorney General asserted that the physicians’ coordinated response violated the Idaho Competition Act.

Both federal and state laws prohibit agreements between competitors that restrain trade. At issue in Rexburg was the Idaho Competition Act which prohibits conspiracies “between two or more persons in unreasonable restraint of Idaho commerce.” See Idaho Code § 48-104. Examples of unreasonable restraint include price fixing, allocating or dividing markets, and boycotting or refusing to deal. Attorney General Lawrence Wasden said, “[a]t issue for my office in this investigation is using anticompetitive tactics to bring about change in the marketplace.” The investigation did not consider the merits of paying physicians for on-call services. According to the Attorney General’s press release, the investigation into the matter is ongoing. Continue reading →

November 25, 2014

Valid HIPAA Authorizations: A Checklist

by Kim C. Stanger, Holland & Hart LLP

The HIPAA privacy rules generally prohibit healthcare providers and their business associates from using or disclosing protected health information (“PHI”) unless (1) they have a valid written HIPAA authorization signed by the patient or the patient’s personal representative, or (2) a specific regulatory exception applies.¹ Many if not most authorizations received by providers are invalid. To be valid, a HIPAA authorization must satisfy the following²: Continue reading →

November 19, 2014

Colorado DME

by Chris Esseltine, Holland & Hart LLP

Colorado recently enacted a bill that will significantly affect Durable Medical Equipment (DME) suppliers in the state. The bill requires a DME supplier that currently bills or plans to bill the Medicare program for services or products to have a license with the Secretary of State. The licensee must be physically located within the state or within 50 miles of the state, have sufficient inventory and staff to do business, and be accredited by an organization recognized and accepted by the centers for Medicare and Medicaid services.

According to a representative at the Secretary of State’s office, the law will go into effect January 1, 2015. However the office is still working out details about how to procure the license, enforcement and penalties for non-compliance, and a possible grace period past the January 1 deadline.

For more information on this or any other legal issues relating to DME, please contact Chris Esseltine at Holland & Hart.

This publication is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal or financial advice nor do they necessarily reflect the views of Holland & Hart LLP or any of its attorneys other than the author. This publication is not intended to create an attorney-client relationship between you and Holland & Hart LLP. Substantive changes in the law subsequent to the date of this publication might affect the analysis or commentary. Similarly, the analysis may differ depending on the jurisdiction or circumstances. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

September 3, 2014

HIPAA Business Associate Agreements: Deadline Approaching

by Kim C. Stanger, Holland & Hart LLP

If they have not already done so, the deadline for covered entities and business associates to update their HIPAA business associate agreements to comply with Omnibus Rule requirements is September 22, 2014.

BAA Requirements. HIPAA requires that covered entities and business associates execute contracts (called “business associate agreements” or “BAAs”) which require that business associates comply with certain portions of the HIPAA Privacy, Security and Breach Notification Rules. (45 CFR 164.314(a)), 164.502(e), and 164.504(e)). The HIPAA Omnibus Rule changed BAA requirements. Under the Omnibus Rule, covered entities and business associates must modify their BAAs to require business associates to:

comply with the HIPAA Security Rule;
execute BAAs with any of their subcontractors that create, receive, maintain, or transmit protected health information on behalf of the business associate;
report security incidents, including breaches of unsecured health information; and
comply with the Privacy Rule requirements applicable to covered entities if and to the extent the business associate is to carry out a covered entity’s obligations under the Privacy Rule.

(45 CFR 164.314(a) and 164.502(e)). For a checklist of all required BAA terms, click here. The Office for Civil Rights (“OCR”) has also published sample BAA provisions, although the OCR sample may not include additional terms that covered entities or business associates may want to include in their BAAs. Continue reading →

August 6, 2014

May our medical group offer free screenings?

As with other free or discounted items or services, offering free screenings can violate (1) the federal Anti-Kickback Statute (“AKS”) if one purpose of the free screening is induce referrals for items or services payable by federal healthcare programs (42 USC § 1320a-7b), and/or (2) the federal Civil Monetary Penalties Law (“CMP”) if the physician knows or should know that the free screening is likely to induce a federal program beneficiary to purchase items or services covered by federal healthcare programs (42 USC § 1320a-7a). There are several potentially relevant CMP exceptions, most of which focus on whether the screening is tied to the provision of other services payable by federal healthcare programs. In Advisory Opinion 09-11, the OIG approved a hospital’s free blood pressure screening program where (1) the free screening was not conditioned on the use of any other goods or services from the hospital; (2) the patient receiving the screening was not directed to any particular provider; (3) the hospital did not offer the patient any special discounts on follow-up services; and (4) if the screening was abnormal, the patient as advised to see their own health care professional. Under these circumstances, the OIG concluded that the test was not improperly tied to the provision of other services by the hospital.

For more information, see the OIG’s Special Advisory Bulletin: Offering Gifts and Other Inducements to Beneficiaries (August 2002), available at https://oig.hhs.gov/fraud/docs/alertsandbulletins/SABGiftsandInducements.pdf.

Kim Stanger is the Chairman of Holland & Hart LLP’s Health Law Group. He can be reached at kcstanger@hollandhart.com or (208) 383-3913. To subscribe to Holland & Hart’s free e-newsletter or blog concerning health law issues, please e-mail Mr. Stanger.

July 30, 2014

Beware Excluded Individuals and Entities

by Kim C. Stanger, Holland & Hart LLP

Federal laws generally prohibit providers from billing for services ordered by, or contracting with, persons or entities that have been excluded from participating in Medicare, Medicaid, or other federal health care programs. Violations may result in significant penalties, including repayment of amounts improperly received. To avoid penalties, providers should check the OIG’s List of Excluded Individuals and Entities (“LEIE”) before hiring, contracting with, or granting privileges to employees, contractors, or practitioners, and should periodically re-check the LEIE thereafter.

Effect on Excluded Entities. Federal statutes such as the Civil Monetary Penalties (“CMP”) law allows HHS to exclude individuals and entities from participating in federal health care programs if they have been convicted of fraud or abuse or engaged in certain other misconduct. (See, e.g., 42 USC §§ 1320a-7 and 1320c-5). States are required to exclude from Medicaid any person or entity that has been excluded by HHS. (Id.). An excluded individual or entity generally may not do the following: Continue reading →

June 25, 2014

Waiving Copays and Deductibles

by Kim C. Stanger, Holland & Hart LLP

Providers sometimes waive patients’ cost-sharing amounts (e.g., copays or deductibles) as an accommodation to the patient, professional courtesy, employee benefit, and/or a marketing ploy; however, doing so may violate fraud and abuse laws and/or payor contracts. From a payor’s perspective, waiving cost-sharing amounts creates two problems. First, payors often contract with providers to pay based in part on the provider’s usual charges. The Office of Inspector General (“OIG”) has argued that a provider who routinely waives copays is misrepresenting its actual charges. Second, and more importantly, payors require copays to discourage overutilization and reduce costs. Waiving copays and deductibles removes the disincentive for utilization, thereby potentially increasing payor costs. Accordingly, federal and state laws as well as payor contracts generally prohibit waiving cost-sharing absent genuine financial hardship.

Federal Programs. Waiving copays and deductibles for government program beneficiaries implicates at least the following laws:

1. Monetary Penalties Law. The federal Civil Monetary Penalties Law (“CMPL”) prohibits offering or transferring remuneration to federal program beneficiaries if the provider knows or should know that the remuneration is likely to influence the beneficiary to order or receive items or services payable by federal or state healthcare programs (e.g., Medicare) from a particular provider. (42 USC 1320a-7a(a)(5)). Violations may result in penalties of $10,000 per item or service provided, treble damages, repayment of amounts paid, and exclusion from federal programs. (Id.; 42 CFR 1003.102). The CMPL specifically defines “remuneration” to include waivers of copays and deductibles. (42 USC 1320a-7a(i)).

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