Virtually every week, our business and healthcare law firm is engaged to provide advice and assistance concerning a physician employment agreement, either as counsel to the physician or for an employer/hospital or medical practice. “Restrictive covenants,” including non-competition agreements, are desired by the majority of employers and therefore included in their proposed form of employment agreement. Physicians most often prefer, however, if they had their druthers, not to be restricted in their ability to work following the expiration or termination of a job. Hence this section of the proposed employment agreement, particularly those with more broad and onerous non-compete provisions, can be the source of tension on the front end of the employment relationship. Restrictive covenants also show up in a variety of other contractual arrangements, including medical practice ownership agreements (e.g., shareholder agreements, operating agreements), joint venture contracts, and medical director agreements.
By press release on September 19, 2017, Massachusetts Attorney General Maura Healey announced the expansion of a pending review of an opioid related scheme to include additional manufacturers and distributors of opioids. The investigation has been undertaken by a 39-member bipartisan group of state attorneys general, which was first announced earlier this past summer. Our business and health care law firm follows developments in the pharmaceutical industry and our Country’s opioid addiction and overdose crisis that has led to many thousands of deaths and, in particular, related issues in Georgia and South Carolina.
The FDA has announced that it will begin requiring opioid manufacturers to provide more training for healthcare providers. At present, manufacturers must provide training about long-acting, extended release opioids to prescribers. In the future, the manufacturers of short-term and immediate release opioids will also be required to provide the same type of training. The training will be available to physicians, nurses, and pharmacists.
This change was brought about by the continuing high rate of drug overdose incidents by prescription drug abusers, particularly those abusing opioid painkillers. The training was previously only required by makers of long-acting opioids. However, the FDA stated statistics show that today the vast majority, 90% to be exact, of opioid pain medication prescriptions are for the short-acting variety. It has been found that abusers of opioids are misusing the short-acting, immediate release versions as well as the long-acting types. After becoming addicted to the commonly prescribed short-acting versions of the medication, most abusers graduate to higher doses of the prescription drugs or move to illegal drugs, which present a lower cost alternative.
In late 2016, the 21st Century Cures Act was passed to assist the FDA in keeping pace with the rapid changes in health care technology. Our business and healthcare law firm, follows developments in the healthcare industry.
Among other things, this Act amended the definition of a “device” in the Food, Drug, and Cosmetic Act to remove some medical software functions. The immediate result is that the FDA must draft new guidance for its oversight of software for medical devices.
Healthcare Technology Lawyers
Included in the concept of “Digital Health” are health information technology, wearable devices, personalized medicine, mobile health and telemedicine. The FDA has recognized that these technologies are used to reduce cost and inefficiencies, improve care and access, and better tailor medicine to the individual patient. Furthermore, patients can use the technology on their own to track and manage their own health activities. The FDA acknowledged that new technology allows unprecedented opportunities for people to obtain and potentially share information that can result in significant improvements in health care.
If you are like most of the healthcare industry, the answer is “yes” according to a recent study by the United States Department of Health and Human Services. The department’s Health Care Industry Cybersecurity Task Force report, a result of the work of 21 cybersecurity experts, was issued in late spring and found that this most private of information is at significant risk of being compromised by malware or cyber hacking. “HHS task force says healthcare cybersecurity in ‘critical condition’,” according to Jessica Davis from Healthcare IT News.
The task force reported that the health care industry was breached by cyberattacks more often than any other industry in 2015. Combined with the increase in ransomware attacks the following year, the report found that sensitive patient information is at high risk of attack. The report listed several contributing factors. These include the idea among smaller entities that they are relatively safe from these attacks, because attackers target larger health care providers. This has proven false. Because the health care industry is so interconnected and interdependent, the industry’s cyber safety is only as “secure as the weakest link.” Id. Basically, if the would-be attacker can gain access to anyone within the system, it can probably access all who do business within that system. Furthermore, the report found that due to staffing shortages, three-fourths of hospitals do not have anyone dedicated to these security issues.
Georgia physicians seeking licensure in other states hope to benefit soon from a more streamlined process. In fact, a bill was recently introduced in the Georgia House of Representatives to allow Georgia to join the growing number of states participating in the Interstate Medical Licensure Compact. (House Bill 637). Such a bill, if passed by both houses of the legislature and signed into law by the Governor, would greatly simplify the process for Georgia physicians to obtain licenses in other member states, allowing a wider population of patients access to their services and expertise. This type of bill would not change the existing methods of obtaining a license in Georgia but would provide an additional route. Although the bill was not voted on, the effort indicates this type of change may be on the horizon.
The United States only holds about 5% of the world’s population yet is consuming 99% of the word’s hydrocodone, 80% of the world’s oxycodone, and 65% of the world’s hydromorphone; all powerful narcotics. Those statistics show themselves in the most disheartening of ways with an opioid epidemic that has 1.3 million Americans needing hospital care for opioid related issues and over 30,000 dying from opioid overdoses in one year alone, with the number climbing every year. The nation’s opioid crisis also costs the U.S. over $70 billion a year when accounting for healthcare costs, productivity loss, addiction treatment and the costs of criminal justice actions and resources. The nation’s epidemic has garnered a federal response in the form of CDC guidelines that are discouraging primary care physicians from prescribing opioids as a first line of defense (or only line of defense) for patients with chronic pain and instead encouraging the use of non-opioid and even non-drug treatments for pain. A DEA response shortly thereafter indicated production quotas would be enforced for Schedule II pain medications, reducing the production of some medications by a quarter or even a third.
Traditionally a hallmark of success for many physicians, physician ownership of medical practices continues to decline, for now, according to a recent study by the American Medical Association (AMA). The AMA recently issued the results of a survey, entitled Policy Research Perspectives, Updated Data on Physician Practice Arrangements: Physician Ownership Drops Below 50%.
Physician and Medical Practice Attorneys
The survey evaluated, among other things, whether physicians fall into one of four categories as to a physician’s “main” practice: (1) whether the physician is an owner, employee, or independent contractor of the medical practice; (2) the type of medical practice; (3) ownership structure of the practice; and (4) how many physicians are in the practice. The information and data reviewed spanned the period from 2012 to 2016. The survey results confirm a continued trend favoring employment and larger practices. 2016 was the first year with survey results demonstrating that less than half of practicing doctors (about 47%) own their own practice. Surveying over 30,000 physicians, the survey excluded physicians who work less than 20 hours/week providing patient care or are Federal employees.
A Denver area Federally Qualified Health Center (FQHC) must pay $400,000 in fines and implement a corrective action plan for HIPAA violations that resulted from a hacker’s breach into the health center’s employee emails. The breach led to theft of electronic protected health information (ePHI) of 3,200 individuals. Although the HIPAA violations were a result of a malicious breach, Metro Community Provider network (MCPN) was found at fault by OCR officials after OCR’s investigation showed MCPN did not conduct a risk analysis of its ePHI environment and waited another two months after discovery of the breach to conduct a risk analysis. MCPN had no system of risk management in place to determine what vulnerabilities the center was susceptible to.
Georgia Healthcare and HIPAA Compliance Lawyers
The HIPAA Privacy Rule was enacted to protect patient health information and secure for patients more control over the use of their private information. Under Federal law, healthcare businesses have a strict obligation to protect the information of patients. While there is no private cause of action for violations of HIPAA, complaints can be filed with the Office of Civil Rights (OCR) of the Department of Health and Human Services (HHS), states’ Departments of Health, federal third-party Payors (Medicare, TRICARE, VA, etc), state licensing boards, and, in some cases, state law may provide a cause of action for individuals under specific state privacy laws. Such complaints can lead to investigations, fines and other negative consequences for a healthcare professional or practice.
The Eleventh Circuit Court of Appeals denied an appeal and upheld the convictions of a physician assistant and a patient recruiter in Florida for their actions in allegedly defrauding the Medicare program of $200 million in false claims. Both the physician assistant, Roger Bergman, and the patient recruiter, Rodolfo Santaya, worked for American Therapeutic Corporation based out of Miami. ATC provides psychiatric care for patients with mental illness.
Bergman was alleged to have submitted false claims to the Medicare program by falsifying patient documents to make it appear that the patients were eligible for the programs offered at ATC, but in fact they were not. In addition, Bergman submitted false patient documentation that stated Medicare-eligible care was given to patients when no such services were ever provided. Claims for payment from the Medicare program for false or ineligible services were billed by ATC and paid out to the company. Santaya’s alleged role in the fraud scheme was to go to low-income neighborhoods, apartment complexes, and retirement homes to recruit disabled or elderly patients to ATC, receiving up to a $45 kickback for each patient obtained. The patients brought in by Santaya would be ineligible for the outpatient psychiatric care provided by ATC or did not even have medical needs necessitating psychiatric care at all. Santaya was alleged to have focused only on Medicare beneficiaries in his recruitment efforts and instructed the patients to lie about their symptoms in order to administer billable services to them. The subject convictions and sentences affirmed by the Eleventh Circuit are 15 years for Bergman and 12 years for Santaya.