Category Archives: Current Affairs

FORMERLY ILLICIT BUSINESSES COME INTO MAINSTREAM

Law Firm publishes “The Week in Weed”

State ballot measures and state legislatures have slowly but steadily legalized the use of marijuana.   The specifics of the law have specific ramifications for people and businesses even if they never roll a joint.

As one example, Federal law still prohibits the use and sale and marketing of marijuana.  Professionals advising employers, banks, and health care providers have unique issues in determining reactions to events.  For example, should a bank do business with an organization marketing and selling marijuana?  Can an accountant provide an appropriate audit?  Can a lawyer help create a corporation for a weed based business?

Can a physician work for one?  Most medical marijuana clinics fail to utilize doctor ownership, thus potentially violating the corporate practice of medicine doctrine in California.

The Week in Weed provides an on-going discussion of the ethical and legal issues of a weed business.  In a recent report that independent investment is slow to embrace the business but:

“Overall funding to cannabis-centered startups has ballooned in the past two years, up over 90% since 2014 despite a slight decrease in 2016′s investment levels.

While private investment to the industry remains siloed among a select group of cannabis-focused investors, institutional investors such as Founders Fund, Y Combinator, and 500 Startups are slowly taking notice.”

Keeping up to date in marijuana laws will be a state by state job.   The rules will be complex because of the intersection of state and federal law.

By Matt Kinley, Esq.  See his profile at KinleyLawPractice.com

 

KINLEY TO SPEAK ON “WHO OWNS PATIENT DATA”

R-HEALTH BY THE HEALTH MANAGEMENT INTEREST GROUP SEEKS TO EDUCATE ON THE DANGERS AND OPPORTUNITIES IN PATIENT DATA

University of California, Riverside. HIPAA and the Hi-Tech regulations impose burdens on healthcare providers on how private health information can be utilized.  Given the potential penalties for missteps, this is an important topic for the healthcare industry to grasp.  Tickets are still available!

As a recent Office of Civl Rights Report recently pointed out, 2016 was a record year for enforcement: “OCR has been on a tear, settling 11 cases in 2016 with resolution agreements and corrective action plans. The agency also won a decision by an administrative law judge in an enforcement action contested by a home healthcare and medical equipment supplier (see OCR Slaps Home Health Provider with Penalty.”

Private Health Information must be maintained and utilized in ways that protect the information from exposure.

Matt Kinley is a health care attorney and founder of Kinley Law Practice in California. You can contact him at matt@kinleylawpractice.com.

 

WHAT ABOUT A MANAGEMENT SERVICES ORGANIZATION?

AVOIDING THE PROHIBITION AGAINST NON-PHYSICIAN OWNERSHIP OF MEDICAL ORGANIZATIONS

A management services organization (“MSO”) is an entity which would contract with a physician or a medical corporation owned and operated by physicians. The MSO could be owned by non-physicians.  The physician or medical corporation can pay the MSO for everything. Employees would work for the MSO; the MSO would pay for the lease.  The MSO would pay for all significant expenses and receive a fee for its services.

The Corporate Practice Medicine Doctrine (CPOM) is strong in California. Under this doctrine, physicians must control clinical decisions. The concern is that if business entities owned by non-physicians are permitted to control the rendering of care, they will subordinate clinical care to commercial considerations and profits. The objective, therefore, is to prevent non-physicians and non-physician-owned business entities from influencing treatment decisions.

This presents a significant constraint to physician business ventures. Specifically, if physicians or other clinical personnel work for entities other than professional medical corporations, they may be exposed to disciplinary risks, as well as to forfeiture of revenues.. For non-physician business partners, violating the CPOM may also bring both civil and, in extreme cases, potential criminal liability for engaging in medical practice without a license.

MSO

In California, the solution for avoiding violations of the CPOM in business ventures in which physicians work with businesses owned by unlicensed persons is a contractual relationship between the physician entity and the unlicensed business entity, or a “management services organization (MSO).” This is a business vehicle that permits unlicensed persons to provide services to physicians and their professional medical corporations. In its simplest form, an MSO provides basic practice support services to physicians and professional medical corporations via a contractual relationship, commonly known as a management services agreement. These services frequently include activities such as billing and collection, administrative support in certain areas, and electronic data interchange (e.g. electronic billing). Some MSO’s provide a broader set of services: the MSO may purchase many of the assets in a medical practice, such as office space or equipment. MSO’s can employ office support staff, and assist with a wide range of non-clinical functions. MSO’s can also assist in functions such as marketing. Often, MSO’s can reduce costs by bringing economies of scale and professional management experience into physician practices, thereby improving operational efficiency and reducing overhead costs.

the MSO must be carefully considered and constructed.  Review and application of relevant laws and regulations is a must.

By Matt Kinley, Esq. of the Kinley Law Practice

Kinley Law Practice starts January, 2017

QUALITY HEALTH LAW ADVICE

The California Healthcare Law Blog was created several years ago to keep the healthcare industry abreast of new developments in health law.  It’s been an amazing journey!  It’s culminated in a new law firm, Kinley Law Practice, committed to supporting health care entities with quality advice.  Give me a call at 562.715.5557 or email me at matt@kinleylawpractice.com with comments or questions.

 

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Sterilize Your Potential Liability

Is your business compliant with OSHA’s Bloodborne Pathogens Standard?

If you operate a business with employees that are exposed to blood or other potentially infectious materials (OPIM), your business is subject to OSHA’s Bloodborne Pathogens Standard (BPS) under the Code of Federal Regulations. In spite of its attempt to simplify these requirements on its online fact sheet, OSHA imposes a minefield of regulations for small to midsize businesses to navigate. This post provides a brief overview of the Bloodborne Pathogens Standard and what it means to your business.

Have an Updated Plan

All good businesses have a plan right? Well, OSHA adds to your plans by requiring an “exposure control plan.” 29 C.F.R. 1910.1030 (c)(1). Under this plan, employers must create a catalogue that classifies the employee positions in the company by the level of blood and OPIM exposure. 29 C.F.R. 1910.1030 (c)(2)(i)(A). Also, this plan must detail the tasks and procedures performed by each classification of employee that causes their exposure. 29 C.F.R. 1910.1030 (c)(2)(i)(C).

The Bloodborne Pathogens Standard not only requires the employer to have an exposure control plan but also requires that it be updated annually “to reflect changes in tasks, procedures, and positions that affect occupational exposure, and also technological changes that eliminate or reduce occupational exposure.” OSHA, OSHA’s Bloodborne Pathogens Standard, OSHA Fact Sheet.

In order to make these updates to the satisfaction of OSHA, the employer must also document in their plan that they both considered and begun using safer medical devices to minimize occupational exposure and engage with their employees “in identifying, evaluating, and selecting effective engineering and work practice controls.” OSHA, OSHA’s Bloodborne Pathogens Standard, OSHA Fact Sheet,  And we’re just getting started.

Don’t Discriminate

It is imperative under the Bloodborne Pathogen Standard that the precautions used to prevent an exposure incident are universal. 29 C.F.R. 1910.1030 (b). As OSHA explains, this means “treating all human blood and OPIM as if known to be infectious for bloodborne pathogens.” OSHA, OSHA’s Bloodborne Pathogens Standard, OSHA Fact Sheet.

Be Well Stocked With the Right Equipment

The Bloodborne Pathogen Standard requires the examination, maintenance, and routine replacement of “engineering controls.” 29 C.F.R. 1910.1030 (d)(2)(ii). What are engineering controls you ask? They are “controls . . . that isolate or remove the bloodborne pathogens hazard from the workplace” such as sharps disposal cleaners and self-sheathing needles among others. 29 C.F.R. 1910.1030 (b). In other words, take the garbage out on a regular basis. Employers must also provide appropriate personal protective equipment (PPEs) for employees with occupational exposure such as “gloves, gowns, laboratory coats, face shields or masks and eye protection, and mouthpieces, resuscitation bags, pocket masks, or other ventilation devices.” 29 C.F.R. 1910.1030 (d)(3)(i). These PPEs must be provided by the employer at no cost to its employees. Id.

Take Preventative and Remedial Measures

Hepatitis B vaccinations must be made available to all employees with occupational exposure after they have received training and within 10 working days of their initial assignment. 29 C.F.R. 1910.1030 (f)(2)(i). Should there be an exposure incident, you must “make available post-exposure evaluation and follow-up to any occupationally exposed worker who experiences an exposure incident.” OSHA, OSHA’s Bloodborne Pathogens Standard, OSHA Fact Sheet. The procedures the employer must follow after an exposure incident can become complicated with consent and health-related confidentiality issues regarding investigations of the source individual and the employee.

The requirements surrounding warning labels and signs communicating hazards are lengthy enough to warrant their own blog post. The main takeaway from the BPS requirements for labels and signs is this: Anything that comes into contact in any way with blood or OPIM must have a label or sign that warns against the dangers of exposure. As the Code of Federal Regulations states, warning labels must be affixed to “containers of regulated waste, refrigerators and freezers containing blood or other potentially infectious material; and other containers used to store, transport or ship blood or other potentially infectious materials. 29 C.F. R. 1910.1030 (g)(1)(i). There are also specific regulations relating to warning signs for all entry ways in HIV and HBV research laboratories and production facilities. See 29 C.F.R. 1910.1030 (g)(1)(ii).

This post only scratches the surface of OSHA’s Bloodborne Pathogens Standard. If you run a business that exposes its employees to blood and other potentially infectious materials, you must comply with these regulations under federal law. Operating a healthcare facility is no simple task even before considering regulations such as the Bloodborne Pathogens Standard. Protect your business and ensure you are complying with these detailed requirements.

By Matt Kinley,Esq., LLM, CHC

562.715.5557

California Physicians May Be Asked to Help with Assisted Suicide

PHYSICIANS CAN OPT OUT OF ASSISTED SUICIDE LAW

California was the most recent state to adopt the End of Life Option Act, codified at Health & Safety Code section 443. It basically allows a competent patient who has been diagnosed with a terminal illness to seek and obtain a prescription for the necessary drugs to be self administered.  The law is effective on June 9, 2016.

Aid-in-dying legislation has passed in Oregon, Washington, Vermont, and Montana.   Doctors in those states are permitted to prescribe drugs to terminal patients that they will use to end their lives.  The patients must meet certain requirements and undergo a set process to receive the medication.

California’s procedures, like the other states, seek to protect terminal patients from rash decisions or over-anxious relatives.  While patients may designate agents to make all sorts of health care decisions on the patient’s behalf, an agent is not able to request aid-in-dying drugs on behalf of a patient, and therefore these drugs cannot be requested through an advanced healthcare directive.

The  Act allows doctors, medical groups and hospitals to opt out of the law.    Most, if not all, religious hospitals are expected to reject the law.  Physicians are not required to prescribe life ending drugs to patients.  The California Medical Association dropped it’s opposition to the bill.  According to news reports, the state of California will pay for the costs of the drugs to be utilized.

According to the Act, the “aid-in-dying drug” means a “drug determined and prescribed by a physician for a qualified individual, which the qualified individual may choose to self-administer to bring about his or her death due to a terminal disease.”  The Act does not describe what the appropriate drug might be.

Health and Safety Code section 443.22 provides the physician with a checklist to be used if a patient seeks the end of life drug.  See, AttendingPhysicianChecklist

To summarize the requirements, in order for a person to seek aid-in-dying drugs, they must meet the following criteria:

  • The patient must be at least 18 years old
  • They must have capacity to make medical decisions
  • Diagnosed with a terminal illness by an attending AND consulting physician
  • The individual must voluntarily express the wish to receive the aid-in-dying drug
  • They must request the drug twice orally—such requests should be made 15 days apart
  • Must request by written request which is signed/dated and witnessed by two adults
  • Must be California resident (and provide proof of such residency)
  • Must have physical and mental ability to self-administer the drug
  • The decision must be confirmed that it is not due to coercion or undue influence
  • The attending physician must offer the qualified individual to withdraw or rescind the request

Upon filling the aid-in-dying prescription, the patient must complete a “Final Attestation for an Aid-in-Dying drug to End My Life in a Humane and Dignified Manner” form 48 hours prior to self-administering the drug.

Developments in the law should be closely monitored as it is likely that that state regulators may develop more detailed and specific standards when facing a terminal patient seeking end of life drugs.

By Matt Kinley,Esq., LLM, CHC

562.715.5557

COVERED CALIFORNIA TRANSITIONING TO VALUE PAYMENTS

HEALTHCARE PROVIDERS SHOULD PREPARE FOR END OF FEE FOR SERVICE PAYMENTS

Introduction

Medicare reimbursement has slowly changed from a system primarily based on fee for service to a system paying for treatment of a population.  Physicians and other providers who have relied on Medicare have seen payments reduced and general income levels decline as a result.

Covered California and Value Payments

Reinforcing the view that medical care can be less expensive if incentives are put in place for providers, Covered California has always promoted the utilization of value payments over fee for service for physicians and other healthcare providers.  They view it as a method to reward quality care and patient satisfaction, even though it is having the effect of reducing payments to providers, making medicine more corporate medicine and driving smaller practices out of business.  This has happened with similar Medicare reforms.

The Model QHP Contract

The Covered California Board has been considering its contract with Qualified Health Plans (“QHP”) for the coming years.  A review of the 2017 Qualified Health Plan Contract and Attachments shows that the Covered California Board is continuing its advance to reform payment models under the Healthcare Exchange.

The Qualified Health Plan Model Contract (“Model Contract”) is the agreement entered into between the Qualified Health Plans (“QHP”) and Covered California. The contract sets the terms for the QHP  operate under in order to participate in California’s healthcare exchange.  These contracts have become the major method by which Covered California promotes its major policy initiatives, such as appropriate healthcare networks and payment reform to healthcare providers.

The Model Contract specifically references federal policy on incentivizing quality by tying payments to providers by measuring performance. When providers meet specific quality indicators or enrollees make certain choices or exhibit behaviors associated with improved health, providers receive a higher level of payment.    Such policy requires quality reporting, care coordination; chronic disease management, patient-centered care, evidence based medicine and health information technology. (Quality Improvement Strategy: Technical Guidance and User Guide for the 2017 Coverage Year.)

Attachment 7 to the QHP Model Contract

Attachment 7 to Covered California 2017 Model Contract provides the meat of the policy.  According to Attachment 7, QHPs are to work with Covered California to create healthcare networks that are based on value.   By working with Covered California, all QHPs will share data which they have received from providers across the state.  The plan also contemplates meetings where best practices are discussed.

QHPs Must Select Healthcare Providers Who Are Utilizing Quality Measurements

Under Attachment 7, all plans must include “quality” measurements in the selection and utilization of providers, including “clinical quality, patient safety and patient experience and cost.” Covered California will carefully monitor the plans to assure that that  QHPs only contract with providers and hospitals that demonstrate quality care.

QHPs are to ensure that providers which are serving enrollees with conditions that require highly specialized management have “documented special experience and proficiency based on volume and outcome data.”   Attachment 7 further specifically requires the submission of the Consumer Assessment of Healthcare Providers and Systems, developed by the Agency for Healthcare Research and Quality.  The CAHPS requests information from the consumer experience, including:

  Asking about aspects of care for which a patient or enrollee is the best or only source of information.

  Asking about the aspects of care that patients say are most important.

  Asking patients to report on the health care they receive.

  Reflecting input from a broad spectrum of stakeholders, including patients, clinicians, administrators, accrediting bodies and policymakers.

Finally, Attachment 7 promotes the use of Patient-Centered Medical Homes as well as integrated care models, with quality and patient satisfaction as key data points; population-based care, including integrated care; utilization of electronic health record technology, including utilization of data for results management and clinical decision support and patient support.

2017 continues the trend toward value added care.  Physicians and other providers should start preparing practices for this new payment models if they intend to continue in medicine.

By Matt Kinley,Esq., LLM, CHC

562.715.5557

 

 

Los Angeles Medical Association: Navigating the Hornet’s Nest of Reimbursement

Matt Kinley Speaks to Los Angeles County Medical Association on March 23, 2016.  Contact Mr. Kinley at mkinley@tldlaw.com if your interested in attending.

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HHS TO CREATE NEW CYBERSECURITY REGULATIONS FOR HEALTH CARE

CONGRESS DIRECTS ACTION IN HEALTHCARE CYBERSECURITY

In December of 2015 Congress passed a 2000-page spending bill which was enacted into law. Included in the text was the Cybersecurity Information Sharing Act of 2015 (CISA). While that legislation received most of the headlines, the spending bill also implemented some major developments in the field of privacy for the healthcare industry. Section 405 of Title IV directs the Department of Health and Human Services (HHS) to develop best practices for organizations in the healthcare industry.

The legislation mandates HHS to report to Congress regarding the preparedness of the health care industry in responding to cybersecurity threats. This includes identifying the HHS official responsible for coordinating threat efforts and including plans on how HHS divisions communicate with one another regarding threats. Congress also mandated a one-year task force to plan a threat reporting system in real time, and to prepare a cybersecurity preparedness information for dissemination in the healthcare industry. Most notably, HHS has been directed to collaborate with other governmental entities and experts to establish a best practices standards specific to healthcare cybersecurity. The intent is to create an industry standard and cost-effective method to reduce cybersecurity risks for healthcare organizations.

Inclusion of Section 405 of the Cybersecurity Act of 2015 reinforces the federal government’s well-established priority of protecting personal health information. Protection is necessary because of the high value of personal health information on the black market. According to the The Insurance Journal, a complete health record containing a patient’s entire health profile can fetch as much as $500. The value is based on the ability of lawbreakers to fraudulently bill insurers for medical services. Compared to industries like the credit card payment industry—which has implemented its own cybersecurity standards—the healthcare industry is woefully behind in its efforts to protect valuable private information.

Healthcare facilities, both public and private, should stay ahead of HHS and develop their own internal policies, security measures, and best practices to protect confidential information of their patients. While guidance form HHS in the future will help establish industry standard best practices, healthcare providers should evaluate their cybersecurity needs and work with experts—attorneys, technologists, and governmental agencies—to stay ahead of the curve. Undoubtedly the attention given to healthcare cybersecurity in the next years will increase the scrutiny on healthcare providers who fail to meet industry standards.

By Matt Kinley,Esq., LLM, CHC

562.715.5557

Fraud Alert Issued by OIG Puts Medical Directorships Under Suspicion

Make Sure Your Medical Directorship is Legal

HHS’s Office of Inspector General’s Fraud Alert issued in June of this year  puts an often-used tool for compensating physicians in the regulatory cross hairs. “Medical directorships,” or the payment of a physician for overseeing clinics or other medical services, will violate the Federal and state Anti-Kickback statutes if “even one purpose of the arrangement is to compensate a physician for his or her past or future referrals.”

Compensation arrangements between hospitals, physician groups and other medical providers that contemplate management or directorships by a physician should be carefully evaluated by competent counsel. OIG has said that it will be reviewing such arrangements with particular interest. If a violation is found, the result could include criminal, civil and regulatory fines, and exclusion from federal health care payment systems.

Some of the elements of an appropriate directorship or management position for a physician might include a written contract for at least a year with a salary that constitutes a fair market value for services actually provided. Such an agreement should be backed up by salary surveys or other documentation that the compensation is based on similar positions within the community.

By Matt Kinley,Esq., LLM, CHC

562.715.5557