Category Archives: Tredway, Lumsdaine & Doyle, LLP

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





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






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


TLD Partner Matthew Kinley Speaks with Healthcare Risk Management on Corporate Negligence

As my firms healthcare practice chair,  I had the chance to share my insights with American Society for Healthcare Risk Management on the role of corporate negligence in medical malpractice cases.

You can read the full article posted by Healthcare Risk Management here:  TLD – Healthcare Risk Management 11-2014

Source: Healthcare Risk Management, published by AHC Media, Atlanta. Phone: (800) 688-2421. Email: Web


Home Healthcare: What to know about trust administration

This article was originally published on the LivHome Blog.

The Rules of Trust Administration
Top Ten Trust Administration Rules to Keep You out of Trouble
By Mark Doyle, Esq. and Monica Goel, Esq., Partners at Tredway, Lumsdaine & Doyle

People have become educated to know that estate planning is important. Without it, your life savings and estate will go through the cost and expense of probate court. With estate planning, you can do advanced tax planning to avoid the cost and expense of probate, avoid costly estate taxes, and ensure smooth transition of assets to your heirs.

Trust administration is just as important. When someone passes away, it’s imperative that the proper trust administration is done to carry out the terms of the Trust. This is demonstrated in the recent Wall Street Journal article “When Dad Amasses a Fortune.”
Now more than ever, it’s important to understand how trust administration works.  Here are 10 simple rules to follow:

1. Determine:  Who is the client?

It is extremely important to know who your client is. If you are meeting with the Successor Trustee of a Trust, meet with them alone. Do not meet with beneficiaries and give them the impression that you represent them as well or the “Trust.” You represent the Trustee of the Trust.

When a non-client believes that an attorney is their attorney, there is a risk that the non-client is now owed fiduciary duties by that attorney. If representation of the non-client presents a conflict of interests with the attorney’s current clients, then the attorney may be facing another potential ethical violation in representing conflicting interests without proper disclosure, or alternatively, the attorney is forced to withdraw from representing both clients whose interests’ conflict. Thus, it is just as important for an attorney identify to whom they owe fiduciary duties as it is for the attorney to identify to whom they do not owe such duties in order to prevent an unintended attorney/client relationship.

2. Avoid Conflicts of Interest

Be wary of known, unknown, and actual conflict of interest. You cannot represent both the Trustee and beneficiaries of the Trust. Make sure to obtain a conflict waiver if representing co-trustees. Be sure they understand that you will have to withdraw as counsel if a conflict arises between them. If you are the drafting estate planning attorney of the Trust, you cannot represent beneficiaries in their attempt to contest the Trust. Be cautious if it appears you may be a percipient witness in the matter.
An attorney has the following duties, among others, to the client he or she represents: undivided loyalty, avoiding representing adverse interests, keeping the client informed, and maintaining client confidences. Undivided loyalty and avoiding representation of conflicting interests goes hand in hand. A conflict of interest is broadly defined as a situation that interferes with a lawyer’s ability to fulfill basic duties to a client. State Bar Formal Opinion No. 1982-69.

Conflicts of interest may arise in probate and trust proceedings because of the interrelatedness of parties and the multiple roles of individual parties and beneficiaries, fiduciaries, or business associates. Consideration of potential conflicts is particularly important, because, as is common, the attorney may have represented the decedent, decedent’s spouse or family members or consulted with decedent in business transactions and these parties may have conflicting interests with regard to decedent’s estate. In trust and probate cases in particular, a conflict of interest may arise after the representation has been accepted, requiring independent counsel for the various interested persons.

3. Know the Process

We break down the trust administration process into 3 stages:
1. Notification and Marshaling Assets
2. Inventory & Appraisal
3. Allocation or Distribution

On the death of settlor/trustee, Probate Code Section 16061.7 requires that the Successor Trustee send out a notification to all heirs at law regarding their rights to obtain copies of the Trust documents and contest them. The Trustee is required to give Notice to all beneficiaries under the Trust and all heirs of the decedent. This Notice is required to be sent within 60 days of the decedent’s death. Upon the first death, the successor Trustee is only required to provide the irrevocable terms of the Trust. Some attorneys send the terms of the Trust with the Notice, although not required. If any possible litigation is anticipated, the Notification should be sent via certified mail.

It is important to obtain a new tax payer identification number for the Trust as the assets cannot remain in the social security number of the decedent nor in that of the Trustee. Complete the IRS Form SS-4. This form is required to be executed by the successor trustee prior to obtaining a taxpayer identification number for any subtrust(s) which are required to be funded. The successor Trustee will appoint the attorney as the “Third Party Designee” in order to obtain the new identification number over the IRS website.

During the initial client meeting, you should have been provided with most of the date of death statements requested in your initial confirmation letter. However, it is unlikely that any appraisals have been completed.

If an estate tax return is anticipated to be filed, a certified appraisal should be obtained based on the market value of any real property as of the date of death. Any stock holdings are valued based on the average of the high and low stock price on the date of death. The Trustee may also need to obtain the value of specific items of personal property of the decedent, such as coins, stamps, jewelry, vehicles, farm equipment, art and antiques. In determining the title of the various assets, you will want to determine if any small estate affidavits need to be prepared under Probate Code Section 13100. If a probate needs to be commenced or a petition under Hegstaad could remedy any assets not held properly in the name of the Trust.

Affidavits Re: Death of a Trustee or Co-Trustee must be recorded to allow new Successor Trustee to take title to property. Declarations must be recorded in the County where the decedent owned property. The County Assessor requires a Preliminary Change in Ownership Report to prevent reassessment upon change in Trustee. Claim for Reassessment Exclusions for Transfers Between Parents and Children must be submitted separately to each County where the decedent owned property passing to children as beneficiaries. These forms should be sent via certified mail and request the assessor confirm and return a copy of the same as proof of receipt. Failure to timely submit these forms can result in reassessment of real property and a substantial increase in annual property taxes. California Proposition 58 permits exclusion from reassessment of real property passing to children limited to the principle residence of the parent and or the first $1,000,000 of other real property. A similar exemption is available for transfers between grandparents and grandchildren only when the parent of the grandchild has predeceased the grandparent and the deceased parent was not married at the time of death.

Trust Certifications and instructions need to be provided to any financial institutions managing accounts in the name of the Trust. Since the surviving spouse is most likely named as a Co-Trustee on the accounts, the re-registration should simply involve removing the deceased spouse’s name and changing the taxpayer identification number. Not all financial institutions have the same policies and the successor trustee may be required to complete new account applications and establish new accounts.

Be sure to conclude the administration with either a sub-trust allocation agreement or distribution agreement. Strongly advise Trustees to prepare and circulate a Distribution Agreement. These agreements set forth distribution provisions. They often contains waiver of formal accounting. They set forth the value of Trust assets and distributions to individual beneficiaries or sub-trusts. When making distributions, they contain release of liability for Trustee and provides for final trust termination.

4. Know your Limits

Only take cases you are comfortable handling. If the matter requires litigation or tax expertise which you don’t have, you may need to refer the case out or associate in counsel. Do not take cases you are not experienced in handling.

5. Communicate
Communicate with your client. Make sure they understand their fiduciary duties to all beneficiaries, keep meticulous records for an accounting, and invest prudently.
Beneficiaries of an irrevocable Trust are entitled to an accounting of the Trust assets at least annually. This accounting can be waived in writing and is not required if the sole trust beneficiary and the trustee are the same person. Other people who have a future interest in the trust, even though the interest is remote, may demand and receive an accounting each year. Trust beneficiaries also have the right to request certain information such as assets on hand, sales, purchases, etc., from the trustee.

The successor trustee(s) should be advised to gather all of the decedent’s mail. Provide the post office with a certified death certificate and copies of the trustee provisions of the Trust. In this regard, a Trust Certification should suffice. The mail is essential to gathering as much information as possible regarding the assets of the decedent, especially if the decedent did not keep organized files. Request the successor trustee to bring as much information as possible to the initial meeting. The determination of their relevance can be determined by the attorney.
6. Act with Diligence

Time is of the essence. Be sure to follow up with your client and be cognizant of deadlines including the due date for the estate tax return and deadline to exercise a disclaimer. Although the length of administration is a “reasonableness period,” the longer it drags out the more likely suspicion and litigation are likely to erupt.
7. Identify Sub Trusts and Need for Administrative Trust

Trust administration is in most cases a transfer of assets which is by its nature a taxable event.
Income produced by trust assets will continue during the period of trust administration so a timely decision should be made regarding how income will be reported. Usually obtaining valuation of the assets and handling of bequests will prevent an immediate funding of marital, bypass or children’s sub trusts. In the meantime a decision must be made between either the pass through method or administrative trust method.

Under the pass through method the trust is ignored and the all trust income is taxed to the sub trusts or beneficiaries beginning with the date of death. If the estate is not large or if funding will occur within the calendar year the pass through approach saves costs and administrative time.

The administrative trust approach treats the trust estate as a separate taxpayer between the date of death and the date that the separate trusts are funded. Under this approach a separate taxpayer identification number is obtained and a 1041 fiduciary tax return filed for the administrative trust.

7. Comply with Tax Filing Requirements

Under IRC 6075(a) an estate tax return IRS Form 706 must be filed within nine months after the date of the decedent’s death. Although the return is due within nine months, an automatic filing extension of an additional six months is available. The automatic extension does relief the taxpayer of the obligation to pay estate tax due within nine months of the decedent’s death.
While a return is only due for a decedent whose gross estate exceeds the applicable exclusion amount (currently $5,250,000.00) other factors including the portability election may require filing. See Below. Generation Skipping Tax Elections are also required on a timely filed estate tax return.

9. Be Aware of the New Portability Election.

The new portability election IRC 2010(c) allows the surviving spouse to add the deceased spouse’s unused exemption amount at the second death.
This is some cases will allow a married couple to avoid using the traditional A/B trust. It gives married couples more flexibility in deciding how to use their exclusion amounts. Under IRC 23 For example, the first spouse to die could give everything to the other spouse without incurring estate tax by virtue of the unlimited marital deduction and the estate could transfer the unused exclusion to the survivor to use in making gifts or at death. However, use of a traditional two-trust plan combining a marital deduction trust with a credit shelter trust may be preferable. A credit shelter trust can prevent post-transfer appreciation in the value of the assets from being subject to estate tax on the survivors’ death. By contrast, an exclusion transferred to a surviving spouse is fixed and may not be sufficient to shield post-transfer appreciation from tax. In addition, a credit-shelter trust can protect assets from being squandered by the surviving spouse and protect against creditors. To take advantage of the portability election the surviving spouse must file a timely estate tax return for the deceased spouse.

10. Understand the Impact of Trust Funding on Income/Property Tax

Under IRC 1014 the basis of property inherited is stepped up to fair market value at the date of decedent’s death. For a couple in California with community property the entire value of the community estate receives a step up. Exceptions to this important benefit include retirement assets and assets gifted prior to death. When administering a trust also note that assets funded into an exemption trust will not receive another step up on the surviving spouse’s death.
In California careful attention needs to also be paid to avoid a real property tax assessment on the transfer to heirs. Staying within the parent child exclusion rules for Prop 13 is critical and appropriate claims should be filed with any title transfers.





What’s the difference: Physician Assistant v. Nurse Practioner

As the need for health care has expanded, there has been an increase in demand for employees and professionals in the medical field. Therefore, there are a variety of health care jobs and careers. Two key positions in the health care field that have contributed to addressing the looming physician gap are Physician Assistants and Nurse Practitioners. Because both job descriptions have notable similarities, there can be some confusion between the differences in purpose and the roles between a Physician Assistant and Nurse Practitioner. However, there are notable differences.

In California, both Physician Assistants and Nurse Practitioners are regulated according to state regulations. The main difference between a Physician Assistant and Nurse Practitioner is the education received. Physician Assistants are trained more similarly to that of a Physician where a Nurse Practitioner skills are advanced under the nursing-centric education model. Physician Assistants get extensive training in treatment and diagnosing ailments for patients and conversely, the nursing-centric education model that Nurse Practitioners are exposed to focuses on a holistic approach to management of patients.

A Physician Assistant is a medical professional who has been authorized to practice medicine. Specifically, a Physician Assistant can conduct physical examinations, diagnose patients, provide treatment including setting broken bones, obtain medical histories, perform procedures, assist in surgery, and make regular rounds in hospitals and nursing homes. Physician Assistants must be certified to practice. Generally, masters programs for Physician Assistants are modeled on the medical school curriculum combining both classroom lectures and clinical training. Physician Assistants must be supervised by a Physician as established by Title 16 of the California Code of Regulations Section 1399.545. Moreover, a Physician Assistant may only provide medical services in which they are competent to perform and which are consistent with their education (Cal. Code Regs. tit. 16, § 1399.540).

On the other hand, a Nurse Practitioner is a registered nurse with an advanced education—usually a masters degree in nursing. A Nurse Practitioner specializes in disease prevention, promotion of health and education, and diagnosis and management of chronic diseases. Nurse Practitioners utilize a holistic approach to management of patients and overall care. Title 22 of the California Code of Regulation Section 51170.3 requires that Nurse Practitioners be licensed and certified under the Board of Registered Nursing. Moreover, Nurse Practitioners can further specialize and hold themselves out as family or pediatric Nurse Practitioners (Cal. Code Regs. tit. 22, § 51170.3). Unlike that of a Physician Assistant, in California, Nurse Practitioners do not need to be under direct supervision of a Physician.

As the demand for medical treatment grows, the importance of mid-level practitioners including Physician Assistants and Nurse Practitioners increases. It is apparent that there are overlapping skills between the two careers, however, a Physician Assistant concentrates on medical treatment whereas a Nurse Practitioner provides overall care management for patients.

Proposed Federal and State Regulations Push to Widen Narrow Networks

Physicians and patients in California have complained about the effects of narrow networks under Covered California, California’s Exchange under the Accountable Care Act. Pursuant to the concept, health insurers contract with fewer doctors and hospitals, pay them less money, and give them more patients. The expectation is that because of quality and cost metrics, medical care will become more efficient. This has translated into patients losing their doctors, or finding that their doctors are no longer under the same plan as their hospital. There are widespread reports that patients cannot find specialists. In short, patients’ choice has been greatly limited.

Federal and State Regulators.    Federal regulators are proposing that networks be widen. While the state exchanges were thought to be best ran by local boards with few federal regulations, the new regulations from HHS show an increase in federal assertion of power over this issue.  According to Kaiser Family Foundation’s Karen Pollitz, who commented on an earlier version of the rules, the move away from allowing individual exchanges to monitor participating plans is a big change. “It’s much more specific, and it’s going to involve a lot more direct federal oversight,” she told the Wall Street Journal.

While prior regulations only required that there be “reasonable access” to providers, the proposed regulations specify a percentage of how many providers must be in a certain network. For example, CMS will require insurers to have contracts with at least 30% of “essential community providers in their service areas.” See the proposed regulations, here.

David Jones, the California Insurance Commissioner, is likewise seeking to expand existing network adequacy rules in California.  The Department of Insurance held a meeting in December seeking comment but proposed rules have not been released.

Covered California itself has declared that it will do nothing to expand the exchanges and instead will work with insurers to manage the narrow networks.   Increases in the size of the networks, and inclusion of high cost providers, will raise premium rates under the plans, something the Covered California Board is seeking to avoid.

Matt Kinley, Esq.   877.923.0971.





Meet Harrington and Talon. Both Californians who attempted to take care of their medical needs by purchasing insurance from Blue Shield of California. Harrington purchase through Covered California, the ACA Exchange in California. He read through the many assurances that the plan had a vast network of physicians and other providers. Talon purchased through Blue Shield’s website. He likewise was assured that the plan was supported by appropriate healthcare providers.

Both Harrington and Talon have sued Blue Shield in a class action lawsuit in a California court. Both claim they had medical treatment by finding providers listed with Blue Shield. Talon said he only found out he had a Covered California plan after trying to get payments for his treatment. Blue Shield refused to pay for either Talon’s or Harrington’s treatment.

The lawsuit reflects the growing concern in California and elsewhere about the networks of physicians provided by the Exchanges. In order to keep costs down, the insurance companies have designed plans that have fewer providers who will take more patients for a reduced payment. I have had scores of doctors tell me about their attempts to provider providers under the Covered California’s plans. They are unable to find specialists to do things like set broken arms or consult on troubled pregnancies. This is compounded by the requirement that doctors make sure that make referrals that are within the networks.

The lawsuit by Harrington and Talon is just another step in the process to determine if the Accountable Care Act will function with narrow networks. Without the narrow networks, it is unclear if exchanges, which require insurance companies to insure everyone, regardless of previous conditions, can operate in an economically efficient manner.

By Matt Kinley, Esq.

Contact at 562.715.5557



By: Pamela Tahim

1) Legally Required Amendments – 28 California Code of Regulations Section 1300.71(m) allows Qualified Health Plans (QHPs) to make material modifications to the underlying contracts so long as they provide 45 days advanced notice with the opportunity to terminate the underlying agreement if the physician does not agree. This is how QHPs are contracting with Physicians to be part of the Exchange, rather than by entering into new contracts.
a) Some Physicians are not aware that they are part of the Exchange and should confirm whether they received this Amendment by calling or emailing the QHPs. Physicians should also determine whether they agree to legally mandated amendments (i.e., to be part of Covered California and the applicable rate schedules.)
b) If a Physician does not agree to an amendment, the Physician should review the underlying contract with the QHPs to determine whether they have time to opt out of the amendment or the entire contract. If there is not time to opt out, Physicians should find out what other options they have.
2) Payment – QHPs will reimburse the Physician according to a fee schedule, typically attached to the Agreement. Language in Agreements: “In exchange for the provision of Covered Services to Members, QHP shall pay Provider the lesser of (i) the applicable reimbursement rates set forth in Exhibit B thereto, or (ii) Provider’s billed charges, in either case, less the Member’s applicable Copayment.”
a) Reimbursement rates may vary depending on the type of health plan the patient is enrolled in. Physicians are advised to get all fee schedules. Understand your patient population and the issues that will come from a different population from the Exchange, to make sure that the pricing is sufficient to cover costs. Physicians are recommended to check each Health Plan’s website on the first day of each calendar quarter for updated pricing.
b) Physicians are required to use their “best efforts” to accept electronic methods of payment and receive related explanation of benefits via electronic funds transfer. This means Physicians will need to take steps to make sure they can accept electronic methods of payment to prevent being in breach of the contract with the QHPs.
3) Physicians are Required to Collect Copayments, Deductibles and Coinsurance – Only Physicians are responsible for collecting copayments, deductibles, and co-insurance. This can create collections issues with grace periods under the ACA.
a) Physicians should be aware that depending upon the type of plan selected, a patient can have significant cost-sharing for copays and deductibles with an Exchange. This may result in greater incidence of bad debt and increased administrative costs due to increased collection efforts.
b) Physicians should require copays at the time of service.
c) Physicians should implement a policy to check the insurance eligibility of each patient prior to seeing them.
d) Physicians should implement a policy to require copayments and deductibles be paid prior to seeing a patient unless there is an emergency situation.
e) Physicians should consider hiring a billing/collection company to assist with the above.
4) Termination of Contracts – The contracts with the QHPs have two ways of terminating, either mutually without cause, or unilaterally if it is for cause. Generally, either party may terminate the contract without cause by providing fair written notice (typically 120 days prior). Generally the term of the contracts is for one year with automatic renewal annually.
If the termination is for cause, the QHP must give notice of deficiency to cure. There are provisions that allow for immediate termination, which Physicians should review and make sure they are aware of. Physicians can terminate the contract if a legally required amendment causes financial hardship. Physicians are advised to review termination clauses associated with exchange products carefully because for some contracts such as Blue Cross and Blue Shield, if they did not opt (in/out) prior to the deadline under the QHP, then they have to opt out of the entire PPO Plan.
5) Dispute Resolution Procedures – Contracts with the QHPs have specific dispute resolution procedures that require the Physician to first file a complaint with the QHP’s internal grievance department, meet and confer, and then use binding arbitration if not resolved by the prior methods. If the Physician does not follow this process, the QHPs can argue that the Physician failed to exhaust the administrative remedies and be barred from pursuing his/her claim.
6) Out of Network Referrals – Contracts with QHPs have very strict provisions regarding out of network referrals and it can be a breach of the contract with the QHP if it is not followed. Generally QHPs require Physicians to refer patients to participating providers unless written authorization has been granted in advance by the QHP, unless it is an emergency.
7) Nondiscrimination Clauses – Contracts with QHPs have nondiscrimination clauses so that Physicians cannot deny care to patients simply because they are enrolled in Covered California.
8) Compliance with state and federal laws – Physicians should be aware of their obligations to have an up to date Health Insurance Portability and Accountability Act (HIPAA) and Electronic Medical Records (EMR) compliant system or they will be in breach of the contract with the QHP.
9) Maintenance of Malpractice Insurance and Medical License – Physicians are obligated to maintain their medical license free from any restrictions or limitations and also to maintain medical malpractice insurance, or they will be in breach of the contract and could be terminated for cause without the ability to cure.
10) QHP’s Policies and Procedures – Physicians are generally required to comply with all QHP’s policies and procedures, so it is highly recommended that they obtain a copy of the QHP’s Provider Manuals and review them.


Regulatory Backdrop for Direct Primary Care: The Future of Concierge Medicine Under the Accountable Care Act.

How does the Accountable Care Act deal with cash practices?

Actually, quite well. Well, sort of.

The ACA authorizes HHS to permit qualified health plans (QHPs) to provide coverage through a qualified “direct primary care medical home” plan. The plan has to provide coverage that meets certain criteria (as developed by the Secretary of HHS) and that the QHP, meeting all other applicable requirements, ensures coordination of such services with the entity offering the QHP. Huh?
With respect to implementing guidance, this provision was addressed in 2012 in CMS Exchange/QHP final regulation, in which CMS codified the treatment of direct plans. The provision authorizes QHP issuers to provide coverage through a direct PCMH that meets the standards established by HHS, provided that the QHP meets all standards otherwise applicable. CMS in its final rule addressed comments raised during the proposed rule-making process relative to what those standards might look like, noting in the final rule that direct PCMHs need not be accredited in order to participate in QHP networks. However, CMS “encourage[d] QHP issuers to consider the accreditation, licensure, or performance of all network providers.”

CMS opted in the final rule not to set firm requirements or thresholds
that would necessitate that QHP issuers contract with a specified number or percentage of direct PCMHs. Thus, CMS in its final rule, does not direct that Exchanges create incentives for contracting with direct PCMHs; instead CMS “encourage[s] Exchanges to promote, and QHP issuers to explore innovative models of delivery along the care spectrum.” Thus, there does appear to be an opportunity for Exchanges and QHP issuers alike
to promote and include such models, but per the final guidance on this provision, there is no obligation to do so.

In California, Covered California does not explicitly recognize direct primary care.  There are attempts in the legislature to allow for these cash practices. However, it is generally agreed that practices that accept monthly payments for primary care — similar to the way insurance covers health care, but without the insurance—will pass muster in the state. Instead of filing claims through an insurer, participants — individuals and employers — pay a monthly membership fee directly to their health care providers.

The newer primary care models could come in many flavors:

• Hybrids that offer fee-for-service insurance or a flat monthly fee (not insurance);
• Access model, which charges members an annual or monthly fee for providing enhanced services and bills insurance companies; and
• Qliance’s brand of care, the direct practice model, which charges a flat fee for unrestricted access to primary care services and does not bill insurance.

Does the cash practice make sense?  Take a look at the practices on Yelp that have taken the leap.

By Matt Kinley, Esq.