Monthly Archives: May 2013

HIPAA: Business Associates and Business Associate Agreements

Health care
professionals working with personal medical information face major compliance
obligations under the newest rules related to “protected health information
(“PHI”).  The Omnibus rules were issued by the Department of
Health and Human Services issued last January (the “Final Rule”).

The Final Rule
sets requirements and authorizes substantially increased penalties for
violations of HHS’ regulations under the Health Insurance Portability and
Accountability Act of 1996
(HIPAA) and the 2009 Health Information Technology
for Economic and Clinical Health
(HITECH) Act. Particularly in light of those
increased penalties, HIPAA covered entities (health plans, health care
clearinghouses, and most health care providers) and their “business associates”
— which are now directly subject to HHS regulations — should be actively
reviewing their new responsibilities under the Final Rule.

The Final Rule’s
significant aspects relating to business associates are:


  • Make
    subcontractors (and sub-subcontractors, sub-sub-subcontractors, etc.) of
    HIPAA business associates themselves “business associates” and thus
    directly subject to most provisions of the HIPAA Privacy Rule, as well as
    the HIPAA Security Rule and HHS’ Breach Notification Rule;
  • Eliminate
    the “risk of harm” standard that HHS previously prescribed as a criterion
    for determining when it is necessary to notify individuals about a breach
    of security affecting their PHI; and
  • Require
    amendments to Notices of Privacy Practices, business associate agreements,
    and a variety of policies and procedures entailed in complying with the
    Privacy Rule.

With limited
exceptions, compliance with the Final Rule’s provisions is required by
September 23, 2013.

The HHS has
compiled extensive information about the business associates at their WEBSITE .

The site
includes a generic, sample agreement for business associates.  The sight
warns that not all of the sample should be used and parts should be modified to
set the exact situation. This agreement is a good start for complying with the

 By Matthew L. Kinley, Esq


The United States Congressional Research Service has issued this helpful white paper answering employers questions about the new penalities for failure to provide appropriate insurance.  The paper, called POTENTIAL EMPLOYER PENALITIES UNDER THE PATIENT PROTECTION AND AFFORDABLE CARE ACT, does not provide any new information, but it is a good source for those people who want to familiarize themselves with the requirements. 

Home Healthcare vs. Personal Care: When is a license required?

When does
an organization that provides home services such as companionship or personal
need a state license? What is the difference between home health care
services and other care provided to seniors or medically challenged

California, there is no clear answer. 
Under Health and Safety Code section 1475(b), "All organizations
that provide skilled nursing services to patients in the home shall obtain a
home health agency license issued by the department." Skilled nursing is
defined as services provided by a registered nurse or licensed vocational
. (Health and Safety Code section 1427(b).   A "home health agency" includes
"a private or public organization, including, but not limited to, any partnership,
corporation, political subdivision of the state, or other government agency
within the state, which provides, or arranges for the provision of, skilled
nursing services, to persons in their temporary or permanent place of
residence."  Under this statute,
activities that require medical or professional judgment require a license.

There are
thousands of companies that are providing "personal care." This is
care provided to people who may need help with their day to day activities,
including bathing, shopping, cooking and cleaning.  These individuals who have no training and
they do not have any experience or education in health care related tasks.  They likewise have no bonds which could be utilized to pay in the event of some sort of damage or abuse, such as financial elder abuse.  As long as they avoid medically intensive
activities, they do not require a license.


organizations without licenses cannot, 
under Health and Safety Code section 1476:


Represent itself to be a home health agency by its name or advertisement,
soliciting, or any other presentments to the public, or in the context of
services within the scope of this chapter imply that it is licensed to provide
those services or to make any reference to employee bonding in relation to
those services.


(2) Use
the words
home health agency, home health, home-health, home health, or in-home health, or any combination of those terms, within its name.


(3) Use
the words
skilled or nursing, or any combination of those terms within its name, to
imply that it is licensed as a home health agency to provide those


persons can help with
prescribed drugs.

interpretations of the Controlled Substances Act permits a companion to handle
a drug prescribed for his or her employer in ways which are consistent with the
prescription short of actual administration of the drug and which do not
constitute the practice of medicine or nursing. 

question arises as to what is meant by "administering the drug."   This again is a gray area.  In a telephone conversation with the
Department of Healthcare, I was told that in investigations about licensure
requirements, the state investigators often will look at the condition of the patient.  Is the patient directing the unlicensed care
provider?  Could the patient administer
the drugs themselves?  Is the patient
providing direction to the care provider? 
If the patient is unable to direct such care, it is likely the care
requires a license.

 A home
care companion may administer non-prescription drugs to his or her employer in
the employer
s home under the domestic
administration of family remedies, but this only extends only to the
administration of nonprescription drugs in
the domestic environment. It does not authorize a companion to participate, by
advice or otherwise, in the diagnosis or decisions regarding the drug to use or
its dosage made by the employer or his or her physician. Nor does it authorize
the companion to administer controlled substances of any kind.

The same
questions arise with home based equipment, including oxygen, sleep apnea
machines,  dialysis machines, catheters
of various kinds, and gastrostomy feeding, among many others.  This provides a scenario for disaster for the
non-licensed care provider and the patients they serve.

Take for
example, gastrostomy feeding.  In such
cases, a surgical opening into the stomach is made which allows a tube to be
inserted in the stomach through the abdominal and stomach walls. This allows
food and fluid to be instilled directly into the stomach from outside the body
when swallowing is impossible because of complete obstruction of the esophagus.
It is also sometimes used temporarily after operations on the esophagus or for
postoperative decompression in preference to nasogastric intubation. During
gastrostomy feeding the patient must be upright lest the danger of aspiration
or regurgitation occur. Precaution is required in handling the gastrostomy tube
which has been either fastened in place with sutures or has been anchored in
place with tape depending on the type of gastrostomy tube used, a
small-diameter rubber, perforated tube or a Foley catheter.

 With the
gastrostomy feeding itself, one first instills a clear liquid to make sure the
tube is open and, again, feeding is gentle using gravity or slow infusion. At
all times the tube must be kept open, because should it become clogged or
blocked, or accidentally removed, further intervention will be necessary to
replace it. The task of feeding is not in itself particularly difficult, but it
does require a studied knowledge and understanding of the principles involved,
an ability to recognize signs of potential complication, and an appreciation
for the potential for yet another intervention on the weakened patient.

the requirements for such care, the California Attorney General advised that
such conduct requires "substantial scientific knowledge and technical
skill."  Even though many people
complete such procedures at home, home care providers are not allowed under the
law to provide such service without a license. 
As stated by the Attorney General, "We are bolstered in this
assessment by title 42, Code of Federal Regulations, section 409.33(b)
governing Medicare eligibility for payments for skilled nursing services
Levin tube and gastrostomy
as services which qualify as
skilled nursing services. Stedman
s Medical Dictionary, 5th ed.,
defines Levin tube as a tube introduced through the nose into the upper
alimentary canal.  Accordingly these
procedures come within the statutory definition of the practice of nursing and
therefore may only be performed in California by licensed nurses and


California Legislature is currently reviewing bills to license home care
providers who do work other than healthcare. This article in California Healthline details some of the most recent efforts.

proposed regulations could serve to clarify when a license is required, but
will certainly drive up the cost of such care, making it out of reach for many
of our seniors and medically challenged.   Questions about whether a license is required should be directed a lawyer with knowledge of these regulations.

Nursing Home: Prostitutions and Drug Ring by Senior Patients

What's the liablity for senior patients who run a prostitution and drug ring out of a nursing home?  check out this case from New Jersey:

“Covered California” — What is this? How does it affect me?

California's health exchange, which is a market place for
health insurance, has a new name – Covered California.  This exchange
will allow individuals and small business to join together as long large pool
to get choices of health insurance.

Covered California makes its debut this October, offering
health insurance plans that conform to the Affordable Care Act (ACA), also
known as Obamacare.  Covered California's primary purpose will be to
insure the millions of people in California who are currently uninsured due to
preexisting health conditions or who can't afford health insurance.  

Here are some commonly asked questions about Health Reform
and our State Exchange:

Who benefits from "Covered California"

People who cannot afford health insurance.  If your
previous year's modified adjusted grow income is within 400% of the federal
poverty level, and you are an American citizen, you might qualify for an
advanced tax credit, which would reduce the amount that you would pay for
health insurance.  

Do I have to buy my health insurance through Covered

No, you can choose to go through Covered California, go direct
to your health insurer, or go to your favorite licensed Insurance Broker.
 No matter which avenue you choose, you will pay the same premium, unless
you qualify for a subsidy due to low income.   You must go through Covered
California to get a subsidy.

Will my current health plan change?

Yes, existing plans will change starting in January 2014.
 In order to participate in a state or federal government health insurance
exchange, insurance companies will be required to offer plans that fit within
levels of coverage called the "metal" plans.  While each plan
must carry the same scope of benefits, the value of the benefits will vary, and
the premiums will vary by insurance company.   

      Plan Level      
           Insurance Covers      
           You Pay





Catastrophic plans will be offered to young adults under 30
and individuals who've been exempted from the individual mandate because
there's no available affordable coverage.

 How long can I keep my current plan?

For most small business health plans, the change to the
"metal" plans will occur at the  renewal periods throughout
2014.  For individual/family plans, it depends on your existing insurer.
 Some insurers are beginning advertise the fact that you can keep your
existing plan until December 2014.

For more information, visit the Health section of Lisa Davis' website.

Submitted by Lisa Davis, Insurance Solutions for Life as a guest post.

Healthcare Real Estate Trends

both inside and outside the healthcare industry are shaping the future of
medical real estate and several trends are emerging. We continue to see a
flight to quality within the medical office market as practices seek to upgrade
facilities and increase efficiency. The healthcare industry is working to meet
the demand of a rapidly changing environment and companies are getting creative
and more resourceful.

practitioners readily anticipate the significant increase in demand for medical
services expected over the next decade. Shifting demographics and new heath
care legislation are expected to expand the patient base. As a result, job
creation in the healthcare field is  expected
to mirror the increased demand. In response to the anticipated industry growth,
the Urban Land Institute estimates the demand for medical office buildings
(MOBs) will increase 19 percent by 2019. The recent spike in demand for quality
medical space is indicative of that trend.


While health
care real estate is subject to the broad economic factors that affect the
commercial real estate market as a whole, it also feels the effects of ever
increasing levels of regulatory compliance. The Patient Protection and Affordable
Care Act (PPACA)  requires hospitals and
practitioners to invest significantly in the implementation of many new systems
and procedures. The cost associated with the move to electronic medical records
(EMR) alone has led many physicians to seek the security of larger hospital
systems that are able to help absorb the cost and coordinate the transition.

of health care providers is arguably the most influential trend in the medical
real estate market. Fueled by the low cost of capital, larger healthcare systems
are being created via mergers, acquisitions and strategic partnerships. Competition
for market share along with the increase in the number of insured individuals
should keep demand for medical office property on a steady rise for the next
several years.

Repurposing and New Opportunities

As demand
for medical real estate grows, many of the larger providers will find space is
limited. In infill markets such as Orange County, we expect to see a shift
toward repurposing of existing buildings, including office, industrial and
large retail. Repurposing allows health care systems to speed time to market at
a lower cost than building a new facility.

In a related
theme, non-medical real estate properties have seen an influx of medical
activity over the last few years. Individual physicians as well as
hospital-affiliated practices have discovered the benefits of well-situated
retail centers. These smaller spaces provide a cost effective option for health
care users looking to take advantage of the visibility, lower lease rates and
high parking ratios generally associated with retail product. Retail locations
offer patients convenient access, build brand awareness and also help drive
more patients to larger operations. Established practices have also found relief
from the higher cost of medical real estate by leasing in strategically located
office product.

Trends going
forward will vary by region and state. In Orange County, we expect to see lease
rates stabilize and recover as vacancy continues to decline. Landlords are
already cutting back on tenant improvements allowances and rent abatement, both
of which are precursors to rising lease rates. 
Physicians find themselves struggling to make tough decisions. Many want
to remain flexible in their leases while they navigate a changing environment,
but the chance to lock in a low lease rate with an attractive tenant
improvement package offered on longer leases is just as tempting.

The changing leasing environment presents a new
set of challenges to physicians and real estate brokers alike. It is prudent to
have all lease documents reviewed by an attorney familiar with healthcare to
ensure compliance with state and federal laws anti-kickback statutes. For more
information please see here.

Submitted by Stacey Hall on behalf of Lee & Associates Commercial Real Estate Services, Inc. as a guest post.



This is the fourth and final in series of articles about changing or
terminating a practice.  This article focuses on notifications to
patients when a doctor retires or goes to another practice.

What to do with patients' records when a physician leaves?    Even if there is a provision with the physician in his employment contract, is it a legally valid agreement to provide the physician and the patient with continuing access to the records?

of Records

The departing physician and the practice need to
come to a written agreement about who is the custodian of the records and the
conditions under which the departing physician will be granted access to the
records of the patients he or she treated. Consult an attorney who is familiar
with health care, insurance and contract law for assistance in drafting the
agreement or contract.


custodianship agreement should state whether patient authorization is needed
for the departing physician to access his or her former records or to obtain a
copy of those records for his or her health care operations (such as a medical
malpractice allegation). If not specified in the agreement, state law may
determine whether patient authorization is needed for the departing physician
to access or copy these records. Generally, physicians should be allowed access
to the records of patients they treated. The records provided should reflect
care up to and including the day of the physician


custodianship agreement should specify the access process, contents of the
records to be copied and who pays for copies of the records provided.


security. The custodian of the records has a legal duty to maintain the
security, integrity and confidentiality of the records, and to comply with
state law and HIPAA regulations about patient and third party access. 


access to records. When the departing physician continues to treat patients from
his or her previous practice and needs access to their records, the priority
should always be patient safety and well-being in order to avoid delays in
diagnosis or treatment. Juries will not be sympathetic to physicians or
practices that impede access to health care information for business or
financial reasons. A list of the patients treated by the departing physician
should be given to each party, in order to simplify requests for access to and
copies of the records. The list should specify the date of the physician
s departure.


Get the
s authorization. If the
patient will be transferring care to the departing physician, try to obtain a
written authorization from the patient before providing a copy of the medical
record. If you do not have a copy of an authorization, do not delay transfer of
the records as long as you can verify and document the purpose of the
disclosure and the identity of the party requesting it.