News / Resources

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

• Anticipated Surge Due to H1N1: CDC and CMS Respond to Concerns
  • New EMTALA Guidelines
  • Guidance for Business, Employers and Schools
• The Joint Commission Issues Sentinel Event Alert Addressing Culture of Safety
  • Maintaining a Culture of Safety
  • Evaluation and Strategic Planning
• Stark Settlement on Employed Physician Compensation
• Mona Just Wanted to Have Funds—Medicare Burst Her Baubles
• New York Law Journal: Electronic Health Records: Facing the Issues
• Events Calendar

ANTICIPATED SURGE DUE TO H1N1: CDC AND CMS RESPOND TO CONCERNS

While the initial fears associated with the virulence and effects of the H1N1 virus on the population have not materialized, the prevalence of the disease and its anticipated spread throughout the U.S. population has generated much concern over the disruptive nature the disease will have to business. In addition, questions have been raised about the ability of the U.S. healthcare system to manage the surge in resources required to treat an increased number of patients, while preventing the continued spread of the disease. The Centers for Disease Control and Prevention’s (CDC) Advisory Committee on Immunization Practices has identified the following five key populations recommended to receive the vaccine when it becomes available: (1) pregnant women; (2) people who live with or care for children younger than six months of age; (3) healthcare and emergency medical personnel; (4) individuals between six months and 24 years of age; and (5) individuals 25-64 years of age who are at higher risk due to chronic disease or who are otherwise immunocompromised.

New EMTALA Guidelines

New Emergency Medical Treatment and Active Labor Act (EMTALA) guidance from the Centers for Medicare and Medicaid Services (CMS), intended to reassure the provider community and public health officials of existing flexibility under EMTALA when planning for the anticipated surge in emergency department (ED) services required to address an H1N1 outbreak, was transmitted on August 14, 2009. The CMS guidance addresses concerns voiced by hospitals about compliance with EMTALA during an H1N1 outbreak by reminding the provider community that an EMTALA-mandated medical screening examination does not need to be an extensive workup in every case and may take place outside the ED, at other sites on the hospital’s campus. Redirection and logging of patients may take place outside the entrance to the ED, but CMS cautions that the individual performing the screening must be qualified to recognize individuals who are in immediate need of treatment in the ED. In fact, the guidance contemplates that hospitals may set up screening at off-campus, hospital-controlled sites and may direct the public to such sites for screening of “influenza-like illness.” However, CMS makes clear that a hospital may not tell individuals who already have come to the ED to go to the off-site location for the medical screening examination. In extreme circumstances, a waiver of EMTALA may occur, but only if the President declares an emergency or disaster under the Stafford Act or National Emergencies Act or the Secretary of the U.S. Department of Health and Human Services declares a public health emergency or invokes her waiver authority.

Guidance for Business, Employers and Schools

Additionally, amid reports this month that the availability of the much-anticipated H1N1 vaccine will be delayed, the CDC posted guidance for businesses and employers and for school administrators (K-12) to plan and respond to the 2009-2010 influenza season. These guidelines are designed to encourage employers and businesses to develop policies and procedures to decrease the spread of the disease while maintaining business continuity during the flu season.

Baker Hostetler is working with employers to advise them with respect to their obligations under the Americans with Disabilities Act and the Family and Medical Leave Act relating to issues, such as the creation of flexible worksites, including telecommuting, testing of employees, school closure and its impact on the employee base, the identification of key employees and the use of personal protective equipment under the OSHA laws.

For more information, please contact Susan Feigin Harris, or 713.646.1307.

THE JOINT COMMISSION ISSUES SENTINEL EVENT ALERT ADDRESSING CULTURE OF SAFETY

According to The Joint Commission (TJC), 50 percent of all sentinel events reported during 2006 were, at least in part, a result of “inadequate or ineffective leadership.” In response, TJC issued a Sentinel Event Alert on August 27, 2009, recommending healthcare organization leadership take fourteen specific actions aimed at continually improving safety. Recognizing that human error is inevitable, the recommendations focus on a systemic approach to safety. These recommendations address this human element, through the culture of the organization and its response to adverse events, as well as the system element, through an organization’s safeguards and procedures designed to catch human error before patient or employee harm is caused.

Maintaining a Culture of Safety

A “safety culture” is created, TJC suggests, through adoption of a code of conduct for all employees; facilitating regular and frank communication among leadership, risk management and front-line patient care staff on issues of safety; encouraging patient input through communication of their experiences and perceptions to leadership; and recognizing and rewarding staff for work that improves safety. Incorporating safety as a measurable part of evaluations, for staff through senior leadership, and maintaining a transparent, consistent and just process for handling adverse event reports, also are encouraged by TJC as means to address the human aspect of safety.

Evaluation and Strategic Planning

At the system level, TJC advocates both constant evaluation and strategic planning. The organization should regularly monitor and analyze adverse events, conduct root cause analyses, look for patterns, identify latent hazards and weaknesses and revise the policies, procedures and system defenses accordingly. The organization as a whole also should address issues of safety in its strategic planning, by making a visible commitment of time and money to improving safety systems and processes. Such issues should be prioritized and addressed according to a timeline, with the highest priority items getting immediate attention.

Through addressing both the human and system factors affecting safety, TJC believes the healthcare community will move closer to the “zero-defect” approach to safety seen in other high-risk industries such as aviation and nuclear energy, thereby reducing risk and strengthening the defenses against preventable patient harm.

For more information, please contact Emily E. Williams, or 216.861.7373.

STARK SETTLEMENT ON EMPLOYED PHYSICIAN COMPENSATION

In conclusion of an investigation apparently initiated in 2005, Covenant Medical Center (Covenant) in Waterloo, Iowa, has agreed to pay $4.5 million to settle allegations relating to its financial relationship with employed physicians. The government alleged that Covenant violated the Stark Law, and thereby submitted false claims in violation of the False Claims Act, by paying five employed physicians who referred patients to Covenant for treatment commercially unreasonable compensation in amounts alleged to be far in excess of fair market value. The U.S. Department of Justice stated in its press release that the “physicians were among the highest paid hospital-employed physicians not just in Iowa, but in the entire United States.” The physicians included orthopedic surgeons and a gastroenterologist and the compensation received by some of the physicians reportedly exceeded $2 million.

Covenant has denied the allegations and any wrongdoing and contends that the physician’s compensation reflected their exceptionally high level of productivity.

For more information, please contact Donna S. Clark, or 713.646.1302.

MONA JUST WANTED TO HAVE FUNDS—MEDICARE BURST HER BAUBLES

Mona Khan stood by as her husband, Iftakhar, was sentenced for healthcare fraud. Mona had been well paid by Michigan Rehabilitation and Pain Management (MRPM), her husband’s enterprise, despite the fact that she did nearly no work. Mona was listed on MRPM’s cost reports as its Executive Director, working 2,340 hours per year providing “overall supervision of fiscal and community relations.”

Unfortunately, Mona signed Exhibit 6 to MRPM’s cost reports which included the false information regarding her position and salary with MRPM. Exhibit 6 also included an attestation that the salary information was “correct to the best of [her] knowledge and belief . . . [and] that anyone who misrepresents or falsifies this essential information may . . . be subject to fine or imprisonment.”

Not surprisingly, the government contended that Exhibit 6 to the cost report was a false claim in its own right and a false statement made for the purpose of getting a false claim paid. The court agreed and held that Mona’s cost report certification violated the False Claims Act in both respects.

The court then went on to hold that even if the False Claims Act judgment were held to be unsustainable on appeal, Mona Kahn’s act of endorsing her paychecks when she knew she had not performed any services as an employee allowed the government to recover much of the money paid to her under theories of unjust enrichment and payment by mistake.

It is important to remember that the government may, in some cases, have the ability to recover funds from a third party who receives funds from a tainted transaction, especially if they have significant involvement in the transaction.

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

NEW YORK LAW JOURNAL: ELECTRONIC HEALTH RECORDS: FACING THE ISSUES

New York partner Peter Brown, national leader of Baker Hostetler’s Technology Law Practice, co-authored a column, “Electronic Health Records: Facing the Issues,” which was published in the August 12, 2009, edition of the New York Law Journal. The column, co-authored with Richard Raysman, a partner at Holland & Knight, also appeared on Law.com’s “Legal Technology” website.

According to the authors: “Over the past decade, electronic transactions have slowly supplanted paper-based systems in many industries. For example, individuals and Wall Street brokerage firms employ electronic trading; federal and state taxpayers increasingly e-file their returns; and attorneys e-file pleadings and federal court documents. However, a physician jotting notes on a paper chart, which will then be stored in a large filing cabinet, remains the norm. In February, President Barack Obama signed a $787 billion economic stimulus bill, the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-005, 123 Stat. 115 (2009), which contains the Health Information Technology for Economic and Clinical Health Act encouraging health care providers to adopt electronic medical records. With billions of dollars allocated toward the digitalization of health care, the era of electronic medical records has begun in earnest.”

Brown and Raysman provide detail on both the “legislative and administrative initiatives contained within the stimulus package to promote the use of health information technology and electronic health records in Medicare and Medicaid.” According to the authors, “state governments are also encouraging, and in some cases, mandating the adoption of interoperable electronic health records,” as well.

However, according to Brown and Raysman, “there are numerous barriers to expanding the use of electronic medical records.” The article details some of the barriers, including cost to providers, personnel training and privacy issues. The authors conclude the article discussing the options providers have to consider when implementing a new electronic records system, including cloud computing, which is ultimately about “furnishing computing resources on a subscription basis from a provider that handles infrastructure and system management such that customers can access their applications and data freely.”

For more information, please contact Peter Brown, or 212.589.4660.

EVENTS CALENDAR

September 18

Houston partner Susan Feigin Harris will present “Healthcare Reform: A Study in Policy, Politics and a Sign of the Times” to the Healthcare Financial Management Association—Texas Gulf Coast Chapter in Houston, Texas.

Cleveland partner Steven Eisenberg will speak on “From LeBron to Shaq: Expanding the Footprint of an Integrated Delivery System Through a Strategic Growth Plan” at the Ohio Hospital Association 2009 Fall Conference and Annual Meeting in Newark, Ohio.

September 22

Columbus and Orlando partner Rick Siehl will present “Legal Implications of Wellness Programs” to the Healthy Ohio Business Council at the OhioHealth Westerville Campus in Westerville, Ohio.

October 12

Houston partner Scott McBride will present “The Torture RAC: Managing Overpayment Issues and Disputes” at the Texas Health Law Conference sponsored by the State Bar of Texas and Texas Hospital Association in Austin, Texas.

October 13

Houston partner Donna Clark will speak on “Fraud and Abuse and Stark Law Update” at the Texas Health Law Conference sponsored by State Bar of Texas and Texas Hospital Association in Austin, Texas.

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. © 2009 Baker & Hostetler LLP