News / Resources

Topics covered in this issue of the Health Law Update include:

• Employee Facebook Postings Protected in Some Cases
• Liability for Negligent Referral
• Expanded Quality Improvement Organization Notice Requirement
• Ten Home Health Nurses Sentenced to Prison for False Documentation
• Federal Trade Commission Medical Identity Theft FAQs
• Events Calendar

EMPLOYEE FACEBOOK POSTINGS PROTECTED IN SOME CASES

An ambulance company, American Medical Response (AMR), fired an employee after she was caught criticizing her supervisor on Facebook. In response to a complaint from the International Brotherhood of Teamsters, the National Labor Relations Board (NLRB) issued a complaint against AMR in which it alleged the firing was illegal because the employee’s Facebook posting constituted a “concerted activity” for the purpose of collective bargaining or other mutual aid or protection with other employees which is a protected activity under the National Labor Relations Act (NLRA) and that AMR’s policies and procedures regarding blogging, Internet posting and communications between employees were overly broad.

AMR’s policy provided that “Employees are prohibited from making disparaging, discriminatory or defamatory comments when discussing the Company or the employee’s superiors, co-workers and/or competitors.”

The case has been closely watched as a test of how much latitude employees have to post comments about their employment from their home computers on social media sites. In a 2008 survey, eight percent of U.S. companies indicated that they had dismissed employees because of Facebook postings. The NLRA allows employees to discuss the terms and conditions of their employment with co-workers and others.

In contrast to the AMR case, in a December 2009 memorandum, the NLRB stated that no employee could reasonably construe Sears’ Social Media Policy to prohibit conduct permitted under the NLRA. Sears’ policy provided:

In order to maintain the Company’s reputation and legal standing, the following subjects may not be discussed by associates in any form of social media:

• Company confidential or proprietary information
• Confidential or proprietary information of clients, partners, vendors and suppliers
• Embargoed information such as launch dates, release dates and pending reorganizations
• Company intellectual property such as drawings, designs, software, ideas and innovation
• Disparagement of company’s or competitors’ products, services, executive leadership, employees, strategy and business prospects
• Explicit sexual references
• Reference to illegal drugs
• Obscenity or profanity
• Disparagement of any race, religion, gender, sexual orientation, disability or national origin

The NLRB found that Sears’ policy contained “sufficient examples and an explanation of purpose for a reasonable employee to understand that it prohibits the online sharing of confidential intellectual property or egregiously inappropriate language and not [NLRA] protected complaints about [Sears] or working conditions. The NLRB also pointed out that there had been no evidence that Sears implemented its policy in response to protected activities. Thus, it is clear from the different results in the AMR case and the Sears Memorandum that a provider’s social media policy for employees will be analyzed by the NLRB in a very context-specific manner.

AMR recently settled the NLRB case by agreeing to revise its policies and procedures to ensure that they do not improperly restrict employees from discussing wages, hours and working conditions with co-workers and others while not at work, and that they would not discipline or discharge employees for engaging in such discussions.

For more information, please contact Robert M. Wolin, or 713.646.1327, Ameena N. Ashfaq, or 713.646.1329, or John S. Mulhollan, or 216.861.7484.

LIABILITY FOR NEGLIGENT REFERRAL

A recent Texas case involving a dispute over an expert’s report in a medical malpractice claim serves as a reminder to providers that they should consider the competency and reputation of physicians and providers to whom they refer patients. In the Texas case, the plaintiff sued a physician, a clinic and others, individually and as representative of the patient’s estate, for the negligent referral of a patient to a physician who had a “well-known public history, both in the medical community and in the community at large, for incompetence and drug use.”

While the court only addressed the adequacy of the experts’ reports and was not called upon to address the negligent referral cause of action, the court quoted the experts’ discussion of the standard of care applicable to referrals.

The first expert stated that it was:

. . . incumbent upon a referring physician to exercise reasonable care in referring a patient to another physician, whether in the context of simply seeking a consultation from a physician in a different specialty or in the case of an outright transfer of care of the patient to another physician. Reasonable care in making such a referral at the bare minimum requires that the referring physician have a basic knowledge of the skills and professional reputation of the physician to whom the patient is being referred. In other words, it would fall below the standard of care for a physician to refer a patient to a physician of whom he had no knowledge.

Assuming that a referring physician has a basic understanding of the skills and professional reputation of the physician to whom the patient is being referred, the standard of care requires that a referring physician refrain from referring a patient to a physician with a well-documented history of drug use, malpractice, and repeated complaints by the board of medical examiners.

The second expert’s report suggested that a referring physician must be familiar with the contents of the Texas Medical Board’s newsletter, including the newsletter’s disciplinary action announcements, which set forth the numerous disciplinary actions taken by the Board against the doctor to whom the patient had been referred.

Therefore, providers should consider establishing a protocol for assuring that referrals are made to competent providers. Where a referral is mandated to be made to a select group chosen by a third party, such as a managed care payer, or the provider is required to give a patient a list of potential providers, such as Medicare’s home health and imaging provider lists, providers should consider adding a disclaimer that the potential providers are not endorsed by the provider.

For more information, please contact Robert M. Wolin, or 713.646.1327.

EXPANDED QUALITY IMPROVEMENT ORGANIZATION NOTICE REQUIREMENT

Healthcare providers and suppliers will be required to provide Medicare beneficiaries with a written notice describing the beneficiary’s right to report quality concerns to a state quality improvement organization (QIO), according to a proposed rulemaking by the Centers for Medicare and Medicaid Services (CMS). Currently, such notices only are required for Medicare hospital inpatients.

The proposed rule would make it a Condition of Participation or Condition for Coverage that the following providers and suppliers provide the right to contact a QIO notice to each Medicare beneficiary served:

• Clinics
• Rehabilitation agencies
• Public health agencies that provide outpatient physical therapy and speech-language-pathology services
• Comprehensive outpatient rehabilitation facilities
• Critical access hospitals
• Home health agencies
• Hospices
• Hospitals (including in connection with outpatient treatment)
• Long term care facilities
• Ambulatory surgical centers
• Portable x-ray service providers
• Rural health clinics
• Federally Qualified Health Centers

Providers and suppliers can submit comments to CMS on the proposed rule until April 4, 2011.

For more information, please contact Robert M. Wolin, or 713.646.1327.

TEN HOME HEALTH NURSES SENTENCED TO PRISON FOR FALSE DOCUMENTATION

The owner of a South Florida clinic arranged a scheme through which he received kickbacks of approximately $1300 per Medicare beneficiary from patient recruiters and home health agencies in return for having a physician write prescriptions, plans of care and medical certifications for unnecessary home healthcare and therapy services for Medicare beneficiaries.

The home health nurses, as a part of the scheme, falsified patient records to make it appear that the Medicare beneficiaries qualified for two to three skilled nursing visits per day. The Medicare beneficiaries did not need or qualify for the home health services. The nurses also received kickbacks for the Medicare patients they recruited for the home health agencies, even though they knew the patients did not qualify for the home health services. The nurses admitted that they created the false documentation so the Medicare program could be billed for the medically unnecessary services.

According to trial testimony, one of the nurses also paid kickbacks in return for ensuring that she would be assigned by the home health agencies as the nurse for the beneficiaries involved in the recruitment scheme. In many instances, the nurse did not provide any services to the assigned patients.

The nurses were convicted of conspiracy to commit healthcare fraud and sentenced to prison terms ranging from five months to 30 months for their roles. The convictions of these nurses should serve as a prime example of how important it is for nurses to assure that their documentation is accurate and to be aware they can be convicted even if they submit no claims or documentation to CMS themselves.

For more information, please contact Robert M. Wolin, or 713.646.1327, or B. Scott McBride, or 713.646.1390.

FEDERAL TRADE COMMISSION MEDICAL IDENTITY THEFT FAQs

The Federal Trade Commission recently released a frequently asked questions (FAQs) guide to medical identity theft for healthcare providers. The FAQs advise that if a provider learns that a patient may be a victim of medical identity theft, the provider should conduct an investigation, and if medical identity theft is found to have occurred, the provider should (1) notify everyone who accessed the patient’s medical or billing records, (2) correct any erroneous information in the medical records, and (3) assure that the provider, if it files consumer credit reports, follows the accuracy requirements under the Fair Credit Reporting Act. In addition, providers should review their data security practices and report any security breaches as required under the Health Insurance Portability and Accountability Act (HIPAA), according to the FAQs. Finally, the FAQs provide that patients should be informed of their rights under HIPAA.

For more information, please contact Robert M. Wolin, or 713.646.1327, or Ameena N. Ashfaq, or 713.646.1329.

EVENTS CALENDAR

February 18

Houston partner Susan Feigin Harris will speak on “Shifting Political Winds: The Impact on the Healthcare Industry” at the February meeting of the Healthcare Financial Management Association in Houston, Texas.

Houston partner Scott McBride will speak on “Healthcare Enforcement and Compliance” at the February meeting of the Healthcare Financial Management Association in Houston, Texas.

February 24

Houston partner Susan Feigin Harris will speak on “The Affordable Care Act: We Had the Audacity . . . Now What?” at the 12th Annual Conference on Emerging Issues in Healthcare Law sponsored by the American Bar Association in New Orleans, Louisiana.

Baker & Hostetler LLP publications are intended to inform our clients and other friends of the Firm about current legal developments of general interest. They should not be construed as legal advice, and readers should not act upon the information contained in these publications without professional counsel. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you written information about our qualifications and experience. © 2011 Baker & Hostetler LLP