Author Archives: Matt Kinley

This is third in a series of new 2024 laws affecting healthcare in California. 
SB 670: Physicians and Surgeons: Drug Prescribing Privileges

This new law wades into the increasing regulation over physicians for prescriptions, especially pain killers. The Medical Board of California has increased investigations in this area. One hurdle to such investigations has been getting access to patient records without the consent of the patient or the patient’s family.

SB 670 permits the Medical Board to inspect and copy a deceased patient’s medical records without authorization or court order solely for the purpose of determining whether death was in violation of MPA. The Medical Board must declare in writing that it has been unsuccessful in locating or contacting the deceased patient’s representative after reasonable efforts.

The legislation met with quite a few reservations and is watered down from the original version. The Medical Board still may not see the records when the representative refuses to allow access. It also has a provision that refusal of a physician to participate in a Medical Board interview can be deemed “unprofessional conduct.”

Developments
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.

Healthcare
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.

Consolidation

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.

Consolidation
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.

California physicians need to understand the ramifications
of prescribing medication to patients who may not need them.  This is true
even if the physician is openly and publicly conducting medical examinations of
the patient, and thereby giving the impression that the physician has nothing
to hide and is prescribing the medication to patients with legitimate
needs. 

A Southern California physician, named Alvin Ming-Czech Yee,
recently agreed to plead guilty to charges of illegally prescribing drugs to
patients with whom he frequently conducted nightly meetings in Starbucks
stores.  In fact, Dr. Yee met with almost a dozen people almost every
evening between 7 and 11 pm in Starbucks stores throughout Orange County. 
During the meetings, Dr. Yee would perform short examinations, even checking
the pulse and blood pressure of patients.  One patient—an undercover DEA
agent—quoted Dr. Yee as saying: "Bet you never had your blood pressure
taken in a Starbucks before." 

Federal officials began to suspect wrongdoing when one of
Dr. Yee's patients, a 21-year-old woman, died of a drug overdose after he
prescribed drugs for her.  Further investigation revealed other suspicious
facts: approximately one-third of Dr. Yee's patients were 25 or younger; Dr.
Yee was charging patients $600 per meeting; Dr. Yee was prescribing highly
abused drugs such as OxyContin, Vicodin, Xanax, and Adderall; Dr. Yee's name
was associated with several other overdose deaths under investigation; and investigators
seized large quantities of commonly abused drugs from drug dealers in Seattle,
Phoenix, and Detroit whose prescriptions were linked to Dr. Yee. 

These facts, coupled with the unusual setting of his nightly
visits, led federal prosecutors to conclude that Dr. Yee was illegally selling
prescriptions to patients with no legitimate need for them.  The
government's medical expert, who reviewed Dr. Yee's practice of performing
cursory examinations in Starbucks stores, called it, "a front for drug dealing." 
Dr. Yee will likely spend the next 8 to 10 years in prison for his
actions.  Given the strict consequences, physicians need to be sure they
are prescribing medication to patient's who really need them and avoid
scenarios that might be perceived as “a front for drug dealing.”

By Pamela Tahim

The Affordable Care Act does not require businesses to provide health benefits to their workers, but larger employers face penalties starting in 2014 if they don't make affordable coverage available. This simple flowchart illustrates how those employer responsibilities work.

The Henry J. Kaiser Family Foundation provides this simple chart to figure out if you will pay a penalty for not providing healthcare coverage, or not providing the right healthcare coverage, for your employees. Generally, if you have fewer than 50 employees, you are generally exempt.

Physicians often ask about how to prepare their practice to
make it attractive for potential purchasers.  Given the current
environment in California, where hospitals are utilizing foundations to
“purchase” practices and other payers are looking for primary care
physicians.  This article from American Medical News gives excellent
pointers for building your practice.