Holland & Hart's Health Law Blog

Who May Consent to Health Care under Idaho Law?

January 15, 2013/in Consent

by Kim Stanger, Holland & Hart LLP

I am frequently asked how an Idaho health care provider may determine whether a person is competent to consent to their own healthcare. Idaho Code § 39-4503 establishes the general standard for medical consents:

Persons who may consent to their own care. Any person who comprehends the need for, the nature of and the significant risks ordinarily inherent in any contemplated hospital, medical, dental, surgical or other health care, treatment or procedure is competent to consent thereto on his or her own behalf. Any health care provider may provide such health care and services in reliance upon such a consent if the consenting person appears to the health care provider securing the consent to possess such requisite comprehension at the time of giving the consent.

(Emphasis added). If the health care provider believes that an adult patient currently lacks the requisite comprehension, the provider should determine whether the patient executed an advance directive or otherwise conveyed his or her wishes while competent. (See I.C. § 39-4509). If there is no such prior direction from the patient or if the patient is an unemancipated minor, the healthcare provider should generally obtain consent from one of the persons identified in Idaho Code § 39-4504(1), i.e., in decreasing order of priority: a court-appointed guardian; person with durable power of attorney for healthcare; spouse; adult child; parent; person identified in delegation of parental authority; other appropriate relative; or other person who is responsible for the patient’s care. With limited statutory exceptions, the general rule is that unemancipated minors probably lack capacity to consent to their own health care. (See I.C. § 39-4504(1)). Idaho Code § 39-4504(3) generally protects providers who, in good faith, obtain consent from a person who appears to have the requisite authority to give consent.

For questions regarding this update, please contact:
Kim C. Stanger
Holland & Hart, 800 W Main Street, Suite 1750, Boise, ID 83702
email: kcstanger@hollandhart.com, phone: 208-383-3913

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.

Hospital Faces Religious Discrimination Claims for Firing Vegan Employee Who Refused a Flu Shot

January 14, 2013/in Nondiscrimination, Interpreters and Translators

by Kim Stanger, Holland & Hart LLP

Cincinnati Children’s Hospital, like many others around the nation, has adopted a policy requiring employees to get a flu shot. A federal court in Ohio just decided that the religious discrimination lawsuit brought by a vegan employee should go forward, at least for now. The ruling allows former employee, Sakile Chenzira, to proceed with her case against the Hospital alleging that the Hospital discriminated against her based on her religious beliefs when it discharged her for refusing a flu vaccination. Chenzira v. Cincinnati Children’s Hosp. Med. Ctr., No. 1:11-CV-00917 (S.D. Ohio Dec. 27, 2012).

Refusing vaccine leads to termination. Chenzira had worked as a customer service representative for the Hospital for more than ten years. As a practicing vegan, Chenzira does not ingest any animal or animal by-products. Chenzira claims that prior to 2010, the Hospital accommodated her request not to receive flu vaccinations because they contained animal by-products. In December of 2010, however, the Hospital terminated Chenzira for refusing the flu vaccine.

Vegan Files Lawsuit Alleging Religious Discrimination and Wrongful Discharge. Chenzira alleges that the Hospital discharged her based on her religious and philosophical convictions as a vegan. She filed a lawsuit in federal court in Ohio asserting three claims, including religious discrimination in violation of Title VII of the Civil Rights Act of 1964.

Hospital Argues Veganism is Not a Protected Religion. The Hospital asked the Court to dismiss Chenzira’s claims in their entirety. As to the religious discrimination claims, the Hospital argued that veganism is not a religion and therefore, cannot be the basis for a discrimination claim. In the Hospital’s view, veganism is a dietary preference or social philosophy. In fact, it found no other cases in which veganism was the basis for a religious discrimination claim. Chenzira, however, argued that her vegan practice constituted a moral and ethical belief that she sincerely held with the strength of traditional religious views. On a motion to dismiss, Chenzira was not required to “prove” her case, but only allege a claim that was plausible on its face. The Court ruled that it was plausible that Chenzira could believe in veganism to the extent necessary to equate to a traditional religious belief. The Court denied the Hospital’s request to throw out the religious discrimination claims.

Defense of Religious Discrimination Claims Will Proceed. The Hospital may have lost the first battle on the religious discrimination claims but it hasn’t lost the war. Chenzira must actually establish that her belief in vegan practices rises to the level of a traditional religious belief. In addition, as the Court pointed out, the Hospital may justify its termination of Chenzira based on patient safety or other overriding reasons. The Court’s ruling, however, keeps Chenzira’s religious discrimination claims based on her veganism alive – at least for now.Hospitals and other health care employers have regularly defeated employee lawsuits challenging mandatory immunization policies, primarily because the employers have carefully crafted those policies to recognize religious and disability-based exceptions. We will continue to watch the Cincinnati Children’s case and let you know if veganism gets a shot in the arm from this federal court.

For questions regarding this update, please contact:
Kim C. Stanger
Holland & Hart, 800 W Main Street, Suite 1750, Boise, ID 83702
email: kcstanger@hollandhart.com, phone: 208-383-3913

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.

Paying for Call Coverage

November 13, 2012/in Contracts & Transactions, Fraud and Abuse

by Kim Stanger, Holland & Hart LLP

Hospitals increasingly pay physicians and other practitioners to participate in call coverage for emergency services. Last week, the Office of Inspector General (“OIG”) issued Advisory Opinion No. 12-15, which reminds providers of fraud and abuse parameters applicable to call coverage agreements.

Permissible Arrangements. Federal law does not require compensation for call coverage, nor does it prohibit paying for call so long as the compensation is not offered to improperly induce referrals for federal healthcare program business. The OIG recognizes that paying for call may be necessary to obtain services that may otherwise be unavailable because of, e.g., the lack of specialty services in an area or local physicians’ reluctance to take call because of practice demands, time commitments, or the probability of rendering uncompensated care. The key is to ensure that any call compensation paid (1) represents fair market value for actual and necessary services, (2) does not take into account the volume or value of referrals or other business generated between the parties, and (3) was not intended to maintain or generate future referrals from the physician for non-emergency patients. Common payment structures include hourly or “per diem” payments to be available for call, payment for time or services actually provided in response to call in exchange for assignment of the physician’s professional fees, etc.

Problematic Arrangements. Call compensation that exceeds fair market value or pays physicians for unnecessary or illusory services may amount to illegal kickbacks and/or Stark law violations. According to the OIG, suspect arrangements include:

“lost opportunity” or similarly designed payments that do not reflect bona fide lost income;
payment structures that compensate physicians even though no identifiable services are provided;
aggregate on-call payments that are disproportionately high compared to the physician’s regular medical practice income;
payment structures that compensate physicians for professional services for which the physician receives separate payments from patients or third party payors, thereby resulting in duplicate payment for the same services; or
payments made in response to threats that the physician will refuse to continue to use the hospital or refer non-emergency patients to the hospital unless call payments are provided.

Regulatory Compliance. Whatever its terms, the arrangement must be structured to satisfy Stark and Anti-Kickback Statute (“AKS”) technical requirements. For example, if the compensation is to be paid to a physician who is not employed by the hospital, the arrangement must satisfy the following:

The agreement must be documented in a written contract fully executed by the parties before any payments are made.
The compensation must represent fair market value for legitimate, needed services actually provided, and not offered to maintain, induce or reward the physician’s referrals to the hospital.
The compensation must not vary with the volume or value of referrals or other business generated by the physician except for services personally performed by the physician.
The compensation formula must be set in advance and be objectively verifiable.
Compensation-related terms may not change during the first year of the arrangement. If the agreement is terminated within a year, the parties may not enter a new agreement with different compensation terms within that year.
To avoid unintentional lapses, it is usually wise to include an auto-renewal or “evergreen” clause so that the agreement automatically renews unless terminated by the parties.

(See 42 C.F.R. §§ 411.357(d) and (l), and 1001.952(d)). Most call coverage arrangements will not satisfy an applicable AKS safe harbor because, e.g., the aggregate compensation is not set in advance. It is important that the parties consider and document the legitimate reasons for the call coverage arrangement, e.g., the hospital’s need for the contracted services, the financial or professional burden on physicians absent call compensation, and the physician’s reluctance to provide needed coverage absent call compensation that reflects fair market value for services actually provided.

For questions regarding this update, please contact:
Kim C. Stanger
Holland & Hart, 800 W Main Street, Suite 1750, Boise, ID 83702
email: kcstanger@hollandhart.com, phone: 208-383-3913

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.

Employee Education Subsidies: Tax Implications

October 5, 2012/in Employee Benefits, Employment

By Kevin Selzer, Holland & Hart LLP

Educational reimbursement programs are a common employee benefit among health care organizations. Programs can be established to assist employees in paying for tuition, books and fees in the pursuit of continuing education while on the job. If your organization sponsors such an arrangement, is it getting the best bang for its buck? If structured correctly, these arrangements can provide tax-favored benefits from both an employee and employer perspective.

Generally, if an organization pays for an expense on behalf of an employee, the tax rules require the employee be taxed on the amount paid by the organization. If an educational assistance program meets certain requirements, however, the benefits may be tax free to the individual and the employer can avoid paying FICA and FUTA taxes on the value of the expense. There are currently two tax-favored structures available to health care organizations regarding educational assistance.

The first is a formal educational assistance program, often called a 127 plan, named after the section of the Internal Revenue Code which gives it beneficial tax treatment. Generally, a 127 plan must:

have a written plan document;
provide only educational assistance (i.e. no choice between cash or benefits);
limit the amount of tax-free benefits paid on a calendar year basis to $5,250; and
not discriminate in favor of highly compensated employees.

Educational coursework reimbursed under a 127 plan does not have to be work-related but sports, games or hobby-related courses are generally not eligible (unless part of a degree program). Both graduate and undergraduate programs are currently eligible under a 127 plan. In addition, there may be other important provisions that should be included in the written plan to reflect the mutual understanding of the terms between the parties, although not necessarily required from a tax perspective.

The second tax-favored arrangement is an educational reimbursement working condition fringe benefit. Unlike a 127 plan, this type of arrangement does not require a written plan document, does not have an annual dollar limitation and discrimination is not an issue, but the types of eligible activities are narrower in scope. The educational course is required to be job-related and either (1) expressly required by the employer or by law to remain in the occupation, or (2) maintains or improves job skills for the occupation.

Note that the employer-provided tax benefits under Section 127 are slated to expire on December 31, 2012 unless Congress acts to extend Section 127 as it has done for many years (sometimes retroactively).

If you would like more information on implementation of or compliance with these programs, or would like to discuss the specifics of your organization’s arrangements and ways to make them more tax favorable, please contact the Holland & Hart Employee Benefits Practice Group at 303-295-8094, or alternatively at kaselzer@hollandhart.com.

For questions regarding this update, please contact
Kevin Selzer
Holland & Hart, 555 17th Street, Suite 3200, Denver, CO 80202
email: kaselzer@hollandhart.com, phone: 303-295-8094

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.

Carving Out Federal Programs Does Not Preclude Anti-Kickback Liability

September 24, 2012/in Fraud and Abuse

by Kim C. Stanger, Holland & Hart LLP

The federal Anti-Kickback Statute (“AKS”) prohibits offering, paying, soliciting or receiving remuneration to induce referrals for items or services payable by federal health care programs unless the transaction fits within a regulatory safe harbor. 42 U.S.C. § 1320a-7b. AKS violations are felonies, resulting in penalties of $25,000 per violation and up to 5 years in prison in addition to civil penalties. AKS violations are now also False Claims Act violations, resulting in additional civil penalties.

To avoid AKS concerns, some transactions have been structured to carve out federal health care programs, e.g., remuneration is paid for non-Medicare or Medicaid business, but the remunerative arrangement does not apply to items or services payable by Medicare or Medicaid. The theory is that because the remuneration does not apply to federal healthcare programs, the AKS does not apply.

The Office of Inspector General (“OIG”) recently reaffirmed that such “carve out” arrangements do not necessarily protect the participants from AKS liability:

The OIG has a long-standing concern about arrangements under which parties “carve out” Federal health care program beneficiaries or business generated by Federal health care programs from otherwise questionable financial arrangements. Such arrangements implicate, and may violate, the anti-kickback statute by disguising remuneration for Federal health care program business through the payment of amounts purportedly related to non-Federal health care program business.

OIG Advisory Opinion No. 12-06 at p.6-7. Accordingly, the OIG declined to render a favorable opinion as to an arrangement that would have allowed certain payments for only those patients referred for non-federal program business.

Unless the transaction can fit within one of the AKS regulatory safe harbors in 42 C.F.R. § 1001.952, the test for an AKS violation remains whether “one purpose” of a transaction is to induce referrals for items or services payable by Medicare, Medicaid or other federal health care programs. United States v. Greber, 760 F.2d 68 (3d Cir. 1985), cert. denied, 474 U.S. 988 (1985). While carving out federal programs may help, it does not insulate participants from AKS violations. Healthcare providers and other potential referral sources or recipients may want to review any “carve out” arrangements to ensure that they truly satisfy the AKS.

For questions regarding this update, please contact
Kim C. Stanger
Holland & Hart, U.S. Bank Plaza, 101 S. Capitol Boulevard, Suite 1400, Boise, ID 83702-7714
email: kcstanger@hollandhart.com, phone: 208-383-3913

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.

Hospital Faces Religious Discrimination Claims for Firing Vegan Employee Who Refused a Flu Shot

Paying for Call Coverage

Employee Education Subsidies: Tax Implications

Carving Out Federal Programs Does Not Preclude Anti-Kickback Liability

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