Articles Posted in Healthcare Reform

to-sign-a-contract-2-1221951-mIn making a decision to pursue medicine and healthcare as a livelihood, it is likely that most physicians today did not contemplate the extent to which legally binding contracts would govern and impact their professional lives. Few other careers carry the same potential for commitment to so much paper and binding agreements that simultaneously foster professional opportunities and create hazardous legal and professional risks (for example, a non-compete agreement that bars future employment needed to avoid selling the house and moving; a contract with a hospital system that memorializes a compensation arrangement but, unbeknownst to the doctor when he signs, violates STARK law). In this day, all physicians should be mindful of the critical importance of good contracting principles and practices.

Physician employment

The healthcare industry, perhaps more dramatically than other industries, is prone to changes, trends, and developments. A sustained trend has been physician employment (versus private practice ownership). In the 1990s, with the evolution of HMOs, the industry trended toward high levels of physician employment, a trend that petered out some during the 2000s with decreasing physician employment as HMOs dissolved. In recent years, however, the healthcare industry returned to a strong trend toward physician employment driven by numerous factors derived from healthcare “reform.” Whether the current physician employment trend is more permanent than the last one is unknown, but some experts predict that the high level of physician employment is here to stay. As reported last year in the Dallas/Forth Worth Healthcare Daily, some experts believe that physicians’ need for stability with regard to future income will drive a lasting employment trend.

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mobile-phone-in-hand-1438231-1-mHigh on the list of trends in the healthcare industry in 2016 is the advancement of technology in the diagnosis and treatment of disease and medical conditions. According to a recent online article in Healthcare Finance, thirty-two percent of consumers in 2015 had at least one health, medical or fitness app on their mobile devices. Such apps can be useful for primary care and chronic disease management, among other areas. Telemedicine will continue to grow in 2016 as well, with physicians and other health providers consulting and treating patients remotely. Providers increasing their use of technology can expand the geographic reach of their practice to include a greater number of patient consumers. Indeed, the Affordable Care Act anticipates and encourages the use of telemedicine and other remote technologies as an efficient and cost-effective method for expanding the reach of healthcare services.

Of course, with the increasing use of technology in healthcare comes attendant legal and compliance concerns, ranging from issues of patient privacy and cybersecurity to state regulatory and medical ethics requirements governing patient care, billing and reimbursement.

Providers considering increasing their use of telemedicine and other technology in the provision of services should first evaluate the legal and regulatory issues carefully, understanding that federal and state entities have specific definitions, compliance and legal requirements governing these practices. Some concerns as to this mode of healthcare delivery are as follows:

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The U.S. Centers for Medicare and Medicaid Services (CMS) issued a Final Rule earlier this week, which created prior authorization rules applicable to particular durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). The impetus for the rule is CMS’ determination that prior authorization will curb past issues with unnecessary utilization of DMEPOS, saving the government money and enhancing the care of Medicare beneficiaries.

Atlanta and Augusta Business and Healthcare Law Firm

The Social Security Act (the Act) authorizes CMS to periodically revise its list of DMEPOS that is subjected to unnecessary utilization and to develop a prior authorization process for such items. See the Act, § 1834(a)(15). CMS broadly considers “unnecessary utilization” to include “the furnishing of items that do not comply with one or more of Medicare’s coverage, coding, and payment rules.” The Final Rule creates a Master List of specific DMEPOS potentially subject to prior authorization. The so-called “Master List,” together with pertinent other information regarding the list, can be accessed via this link. An items presence on the Master List does not automatically create a prior authorization requirement. CMS will implement a subset of items on the Master List, a “Required Prior Authorization List,” which will be published in the Federal Register with 60 days’ notice before implementation.

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1084630_question_mark_1Open Enrollment Season for federal and state exchanges offering insurance coverage in the “Health Insurance Marketplace” for 2016 began this month, and will run through January 31, 2016. During this period, individuals may newly enroll with, renew or change their health insurance plans or providers. In fact, more than 543,000 people have already obtained coverage in the Marketplace during the first week of open enrollment for 2016. Thirty-four percent of those were new consumers, per a report by the federal Centers for Medicare and Medicaid Services.

According to an article published by “Shots,” the online channel for health stories from the National Public Radio Science Desk, the occasion of Open Enrollment Season has prompted many consumer questions about details of enrollment and available marketplace plans, including the impact of high deductible plans; options in obtaining in- and out-of-network health services; and confronting cost increases in marketplace health plans.

Some guidance provided in response to consumer questions are as follows:

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The United States Department of Health & Human Resources (HHS) is promoting what it styles as “affordability and choice” in the Health Insurance Marketplace used by US consumers to buy health insurance mandated by the Affordable Care Act (ACA). Tomorrow, the Open Enrollment Period for shopping health insurance coverage within the Health Insurance Marketplace begins. In a 33-page report, entitled “2016 Marketplace Premium Landscape Issue Brief 10-30-15 Final,” issued yesterday, HHS indicates that the ACA is “continuing to promote competition, choice and affordability in the Marketplace for plan year 2016.”

Atlanta/Augusta Georgia Business and Healthcare Law Firm

As new and prior enrollees weigh options available in the Health Insurance Marketplace to determine what insurance plans may best suit their needs and resources, they should consider the “premiums, deductibles, out-of-pocket costs, provider network, formulary, and customer service” particulars of the various plan options, according to the report. The HHS report outlines “Key Findings,” which include those summarized as follows:

  • The ACA promotes access to affordable health insurance plans
  • Shopping saves money: about 86 percent of enrollees “can find a lower premium plan in the same metal level before tax credits by returning the Marketplace to shop for coverage.
  • About 72 percent of current enrollees can find a plan for $75/month, or less, after factoring tax credits.
  • About 57 percent of current enrollees can find a plan for $75/month or less within their metal level.
  • Next year, a 27-year-old with $25,000/year income will on average receive an annual tax credit of $1,164, compared to $972 this year. A family of four with an income of $60,000 will on average receive an annual tax credit of $5,568, compared to $4,848 this year.
  • The average consumer has 10 insurance issuers in his/her state. On average, enrollees can pick from 5 issuers for coverage next year.

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1238683_untitledExorbitant inflation of the price of prescription medication is a lingering concern for U.S. patients unable to afford to pay for the medication they need. According to a 2013 study by Walgreens, four out of ten senior citizens delay prescription refills or skip doses to save money.

The recent dramatic price increases of certain specialty pharmaceutical drugs has prompted recent action by federal prosecutors, according to articles by MSN and the Wall Street Journal.

The MSN article notes that two pharmaceutical companies: Valeant Pharmaceuticals International and Turing Pharmaceuticals, described as among the “worst offenders” in so-called drug “price gouging” received formal requests from prosecutors investigating their drug pricing and other business practices.   This action followed a Congressional hearing last summer addressing Valeant’s price increases of Isuprel, a drug used to treat cardiac arrest, and Nitropress, a blood pressure drug. The cost of Isuprel increased more than 600%, from $215 to over $1,300, while the cost of Nitropress increased more than 300%, from$257 to just over $800 per vial. Turing made waves last summer when it purchased the marketing rights to Daraprim, used to treat an infection that can be life threatening in infants and patients with diseases such as AIDS and cancer, raising the price of the 60-year old drug from $13.50 to $750 a pill. Responding to public criticism, its CEO, Martin Shkreli, agreed to lower the price of the medication, but never did so.

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dark-dollar-2-1193021-mMany employers planning ahead as to their employee health benefit plans are considering modifying or eliminating employee flexible spending accounts (FSAs), according to an article this week in the Atlanta Business Chronicle. The Affordable Care Act (ACA) will begin to tax high-cost employer health insurance at 40 percent on benefits over a set threshold in 2018. The Chronicle notes that numerous other news sources have cautioned that this upcoming tax, known as the “High Cost Plan Tax” or “Cadillac Tax,” will cause employers to rethink their offering of employee FSAs, with some employers capping the amounts their employees may place in the accounts, and other employers eliminating FSAs altogether. See Wall Street Journal article; Politico article; Healthline article. The intent behind the ACA’s Cadillac Tax was to discourage employers from offering premium health insurance plans that drive up healthcare costs and to generate revenue to help pay for coverage of the uninsured.

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usa-dollar-bills-1431130-mAbout two-thirds of Georgia hospitals can expect to be fined for excessive Medicare readmissions, according to a recent article in the Atlanta Journal. According to our Georgia business and healthcare law firm’s research, this places Georgia hospitals well above the national average of 54% of hospitals facing similar fines. The fines are imposed by way of reduced Medicare reimbursement rates for those hospitals with excessive readmissions (readmissions within 30 days of discharge).

Medicare fines imposed as penalties against hospitals with too many patients returning in a month’s time for follow-up treatment, are part of healthcare reform. For the past several years, the federal government has promoted a program to reduce Medicare readmissions, for purposes of improving patient treatment outcomes and saving money. The federal readmission penalty program reflects a strong effort to remove a financial incentive to hospitals for readmitting sick patients. A 2013 article referenced an estimate of The Medicare Payment Advisory Commission (MedPAC), which advises Congress, that 12 percent of Medicare patients may be readmitted for potentially avoidable reasons. “Averting one out of every 10 of those returns could save Medicare $1 billion,” MedPAC says. The readmission penalty program strives to modify hospital behavior by replacing previous financial incentives with financial penalties for avoidable patient readmissions, so that hospital administrators and providers work affirmatively to keep patients healthier and avoid untimely readmissions. Statistics comparing hospital performance as to the readmission reduction program are available on a website maintained by the Centers for Medicare and Medicaid Services (CMS), called “Hospital Compare.”

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medical-doctor-1314902-mRecent articles by ProPublica and NPR spotlight the absence of reporting requirements by pharmaceutical companies of their payments to nurse practitioners and physician assistants under the Affordable Care Act’s (ACA) Physician Payment Sunshine Act. The two web articles reference a case in which a Connecticut nurse practitioner pled guilty to accepting $83 million in kickbacks “from a drug company in exchange for prescribing its high-priced drug to treat cancer pain. In some cases, she delivered promotional talks attended only by herself and a company sales representative.” Because the law does not require reporting of industry payments to nurse practitioners such as this Connecticut provider, if not for the lawsuit, the public might have remained unaware of such payments to her and others like her.

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u-s--supreme-court-1-745242-mThis week in a 6 to 3 ruling, the United States Supreme Court issued its decision in King versus Burwell, a case brought as a major threat to the viability of the Affordable Care Act (ACA). Congress, health providers, Supreme Court and Affordable Care Act watchers and more than 6.4 million consumers who benefit from health coverage assistance in the form of federal subsidies under the Affordable Care Act (ACA) had anxiously awaited a ruling in the case following the presentation of oral arguments in March.

Justice John Roberts issued the majority opinion, stating: “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.”

Plaintiffs in the King case had argued that the language of the ACA allows for certain subsidies only as to state-established exchanges, but not as to federally-established exchanges. This premise challenged the Internal Revenue Service interpretation that U.S. Treasury regulation 26 C.F.R. § 1.36B provides for tax subsidies as to both federal- and state-established health insurance exchanges, not just exchanges established by the states. The Plaintiffs’ rationale was that their more narrow interpretation of the ACA revealed Congressional intent in establishing tax subsidies as incentives for states to benefit their citizens by creating health exchanges.

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