Tuesday, November 15, 2011

Michigan Healthcare Law: Governor Signs New Law that Addresses Doctor Shortage

Michigan Gov. Rick Snyder has signed legislation aimed at helping alleviate Michigan's growing doctor shortage. The measure authorizes physician assistants to take on more responsibility for patient care.
The new law makes health care more accessible by authorizing licensed physician assistants under the close supervision of a doctor to prescribe controlled substances, except for Schedule I narcotics.

Physician assistants are already authorized to prescribe seven days worth of Schedule II medications and deliver other medical services such as conducting physical exams, obtaining medical histories and ordering tests. The state says by expanding the services they can provide, doctors will be able to focus their time on patients in the most need. Doctors will still have to sign off on every prescription written. The bill is now Public Act 210 of 2011.

Courtesy of http://www.wnem.com/story/15994929/governor-new-law-to-address-doctor-shortage-in-michigan#

Posted by Attorney Saif R. Kasmikha

Midwest Legal Partners, LLC

Friday, October 28, 2011

CMS Releases Final ACO Regulations-Providers are Happier

For the full rule, click on the following link below. The link is also provided at the end of the article:


Responding to complaints from organized medicine, the Centers for Medicare and Medicaid Services (CMS) published a final version of its regulations for accountable care organizations (ACOs), a cornerstone of healthcare reform, that lowers the bar for physicians to participate in them. Medical societies had called the first draft of regulations, released in March, too complex and financially risky for physicians.

ACOs consist of physicians, hospitals, and other providers in various combinations that attempt to coordinate the care of Medicare patients with the goal of improving its quality while reducing costs. Successful ACOs would share in any savings they produce for Medicare on top of their usual fee-for-service reimbursements.

However, medical societies ranging from the American Medical Association (AMA) to the American Academy of Family Physicians wondered whether any ACO will see those shared savings based on the draft regulations. Under the preliminary plan, ACOs would have had to meet 65 different quality measures, which organized medicine considered too many. They also said it was too much of a stretch that at least 50% of ACO primary care physicians must eventually qualify as meaningful users of electronic health record (EHR) systems. The final ACO regulations released today lowered the number of quality measures to 33 and eliminated the original EHR meaningful use requirement, but retained EHR use as a quality measure.

The changes came as a result of a strong and voluminous outpouring of more than 1,300 comments on the draft regulations that result in significant changes, notably:

-Providers will not be required to share downside risk in order to participate in an ACO and will be able to earn revenue sharing based on ACO savings earlier as opposed to Medicare retaining all the initial savings.

-Quality measures that ACOs will have to meet to qualify for performance bonuses have been reduced to 33 from 65.

-Community health centers and rural health clinics, which were not allowed to form ACOs in the draft proposal, will be allowed to lead ACOs.

-The ACOs will also be told up-front which Medicare beneficiaries are likely to be part of their system as opposed to not knowing which patients were in the ACO until the contract ended.

-The final rule provides a more a flexible starting date in 2012.

The role of community health and rural health centers is important because the new rule addresses another concern, which was that smaller medical practices would lack the capital necessary to invest in technology and other infrastructure needed to create and participate in an ACO. To combat this, CMS announced an Advance Payment Model whereby physician-led practices and rural hospitals participating in the Shared Savings Model could receive upfront payments for ACO participation. This money could then be used for building up the personnel or IT infrastructure needed to effectively participate in an ACO. The upfront payments would be paid back via future incentive earnings. The advance payments are only available to ACOs that do not include inpatient facilities with less than $50 million in revenue, or ACOs in which the only inpatient facilities are critical access hospitals and/or Medicare low-volume rural hospitals and have less than $80 million in total annual revenue.

“Today we have taken another step to improve healthcare for people with Medicare,” said HHS Secretary Kathleen Sebelius. “We are excited to give doctors, hospitals and other providers the flexibility and support they need to work together and focus on making sure patients get the care they need. This model of delivering care may not be right for everyone, but it provides new incentives for doctors, hospitals, and other healthcare providers to work together in new ways.”

“As a physician I understand the complexities of caring for a patient who may have multiple providers,” said Donald M. Berwick, MD, administrator of the Centers for Medicare & Medicaid Services. “This opportunity to coordinate care among providers could greatly improve the quality of care Medicare beneficiaries receive. We listened very carefully to the more than 1,300 comments we received on the proposed rule released this spring, and this final rule includes a number of improvements suggested by those comments that will strengthen the program,” Berwick said. “For example, the final rule will increase the incentives and streamline the Shared Savings Program, extending the benefits of the new program to a broader range of beneficiaries.”

The final ACO regulations did not placate organized medicine entirely. Medical societies said that for the sake of attracting more participants, a typical ACO's cut of Medicare savings should be bigger than what the draft regulations stipulated — 50% under track 1, and 60% under the higher-risk track 2. However, CMS would not budge from those percentages. Nor would it reduce the minimum saving rates established for track-1 and track-2 ACOs. Although they lost on these and other issues, several medical societies today gave a thumb's up response, by and large, to the framework now in place for ACOs.

"We are pleased that the final rule on Medicare ACOs includes many of the important changes recommended by the AMA," said AMA President Peter Carmel, MD, in a press release. “The AMA recommended that the risk and payment structure for potential ACOs should encourage participation by physicians in all practice sizes, and we are very pleased that this rule allows ACOs to share in every dollar of cost savings and includes an option that limits financial risk, which is important for many physician practices.” While the final rule reduced the number of quality measure by about half, Carmel added that “the AMA would have preferred even greater flexibility on which measures practices are required to report.”

Jack Lewin, MD, the chief executive officer of the American College of Cardiology, also praised CMS for listening to the input of organized medicine. "While we do not know for certain how many organizations will form as ACOs in the coming years," Dr. Lewin stated in a press release, "we remain encouraged since these changes make it more feasible for physicians and hospitals to consider participating."

While provider organizations generally hailed the announcement, America’s Health Insurance Plans took a more cautious approach, namely to the removal of the mandatory review of new ACOs for anti-trust violations by the Department of Justice and the Federal Trade Commission.

“Doing away with the mandatory review process raises concerns that provider market power may not be scrutinized sufficiently, potentially increasing healthcare costs for consumers and employers,” said Karen Ignagni, AHIP president and CEO in a prepared statement. “We urge the DOJ and the FTC to take steps to ensure the ACO process is transparent and there is vigorous oversight and enforcement of antitrust laws to protect consumers and employers from higher prices and cost-shifting that could result from increased provider consolidation.”

For the full rule, click on the following link below:


Posted by Attorney Saif R. Kasmikha

Midwest Legal Partners, LLC

Tuesday, September 20, 2011

Expansion of Physician-Owned Hospitals Faces New Challenges

This month’s edition of ABA Health eSource, through the ABA’s Health Law Section, published an article detailing the upcoming challenges for physician-owned hospitals and their expansion, including those who were already grandfathered in prior to its legal barriers under the Patient Protection and Affordable Care Act (“PPACA”).


Brief History
Stark law has many prohibitions focusing on physician self-referral. It also had and still has many exceptions. One of those exceptions was the whole-hospital exception. Physicians with ownership interest in a whole hospital, rather than just an acute care center or some other entity, were allowed to refer their patients to that hospital. The presumption was that a single physician’s interest in an entire hospital is so small that the referral is likely not to be financially incentivized. Congress, CMS, and other entities have been trying for years to do away with this exception because of the potential profitability in physician-owned hospitals, particularly those who receive a large volume of Medicare patients through referrals from their physicians and now investors. Many attempts were met with a veto from past administrations; even those including provisions that were slipped in unrelated defense bills to do away with the exception.

They still exist, but the exception does not
The PPACA amended the Stark Law by modifying the whole hospital exception. This exception now only applies to hospitals which the physician had an ownership interest on December 31, 2010, meaning they were grandfathered in for those who invested before that. As for those who were thinking about it and never got to it by that date, you’re out of luck. Grandfathered physician-owned hospitals, however, are subject to substantial restrictions under the PPACA. These restrictions include the following: a prohibition on increasing total physician ownership percentages, increasing the number of beds, operating rooms or procedure rooms. A process has been established under the PPACA whereby a grandfathered physician-owned hospital can seek an exception to these facility restrictions. That is the focus of the ABA Article. Additionally, grandfathered hospitals will have to have procedures in place whereby the referring physician-owners will have to disclose their ownership interests to their patients within a reasonable time. Grandfathered hospitals will also be required to file annual reports with the Secretary of Health and Human Services identifying the physician and non-physician owners. Lastly, these grandfathered hospitals will have to publically disclose the fact the hospital is partially physician owned via any public website of the hospital and in any of the hospital’s public advertising. Grandfathered physician-owned hospitals must have a provider agreement in place on or before December 31, 2010, and a hospital with no physician ownership as of March 23, 2010 will not qualify for the whole hospital Stark exception. The 224 page proposed rule mentioned in the article can also be found online.


Summary of the Article
The article covers the two exceptions to the expansion provision. They are the applicable hospital exception and the high Medicaid facility exception. The article states the guidelines for how a hospital qualifies for either exception or in some cases both exceptions. It also details how to submit such a request. However, the article also makes it clear that it is very difficult for a hospital to meet such exceptions.

“Expansion will be Difficult for Many Hospitals
As evidenced by the stringent exception criteria, few hospitals will qualify for an exception. For example, to meet the applicable hospital exception, a hospital will be required to show that it is located in an area that in which the population is growing more rapidly than in the remainder of the state. In addition, the applicable hospital must show that the area in which the hospital is located has a need for additional beds or operating/procedure rooms. These requirements may be difficult to meet in most markets. The high Medicaid facility exception will also be difficult to meet, as few physician-owned hospitals serve a large Medicaid population. Consequently, expansion of physician owned hospitals will be difficult to attain and most of such hospitals will be frozen at their baseline number of beds and operating and procedure rooms.”

Posted by Attorney Saif R. Kasmikha

Midwest Legal Partners, LLC

Friday, September 2, 2011

Free Transportation Still An Issue for Providers

It seems like a simple and beneficial service to patients. What is wrong with a hospital offering free transportation? Hospitals, their attorneys, and the government worry that it may be an inducement offered to patients that may ultimately serve to financially benefit the institution. Hospitals, clinics, imaging centers, and other institutions still seek legal counseling on whether offering free transportation violates any healthcare laws. Decisions over the past decade have not provided a clear-cut answer, but the trend has been leaning more in favor of the practitioners, including recently as of March 2011.


Legal Analysis: Section 1128A(a)(5) of the Act (the “CMP”) provides for the imposition of civil monetary penalties against any person who gives something of value to a Medicare or Medicaid program beneficiary that the benefactor knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of any item or service for which payment may be made, in whole or in part, by Medicare or Medicaid. The OIG may also initiate administrative proceedings to exclude such party from the Federal health care programs. Section 1128A(i)(6) of the Act defines “remuneration” for purposes of the section 1128A(a)(5) as including “the waiver of coinsurance and deductible amounts (or any part thereof) and transfers of items or services for free or for other than fair market value.”

For a very long time, the issue of free transportation (and transportation as a whole) has been anything but clear-cut in the healthcare field. On its surface, offering patients free transportations can be seen as an improper inducement and a violation of AKS. However, recent opinions have ruled otherwise. It is important to remember in the discussion of these opinions that the OIG has rendered advisory opinions and the conclusion may vary on a case-by-case basis. This means that they are only binding on the party being advised. It is also important to note that providing such a service is actually very common among healthcare providers. The notion that “everybody is doing it” is not a proper legal defense, but we have to analyze why the legal counsel of so many hospitals, clinics, etc. have approved this.

OIG Opinion No. 00-7, November 17, 2000

Free transportation services furnished by the requesting hospital to certain patients who received extended courses of treatment such as chemotherapy, dialysis, radiation therapy, cardio/pulmonary rehabilitation or other similar services is permissible given the specified conditions of the arrangement. The OIG indicates that it will not impose sanctions under the beneficiary inducement provisions of the civil monetary penalties (CMP) law or the criminal AKS as a result of this hospital’s free transportation services.

March 2007

OIG Advisory Opinion No. 07-02 - a hospital’s proposal to subsidize the cost of ambulance transportation for patients transported to the hospital from outside the hospital’s local area could implicate CMP and AKS violations. The key factor in that opinion was the fact that fees for such services were paid for by Medicare, and it was for ambulance transportation.

OIG Advisory Opinion No. 09-01, March 6, 2009

In March, 2009, the OIG issued an opinion on the following: This particular case involved a skilled nursing facility that proposed offering local transportation to friends and family of nursing facility residents. The facility is located in an area that is not easy to access and requires payment of a $9 toll to cross a bridge. The service was to be provided uniformly regardless of income level or the source of payment for the residents’ care. There would be no charge for the transportation services and the cost would not be claimed on any Federal health program cost report. The value of the service to the families and friends of each patient is estimated to be over $50 per year. The facility did not plan to advertise the service broadly and advertising would be limited to its normal service area. A written policy would govern the operation of the transportation program.

The OIG found that the particular transportation arrangement would not violate the Anti-Kickback Statute. The specific reasons given to approve this particular arrangement were (i) that the free transportation was not to assist patients to obtain care or for the benefit of referral sources to the facility, (ii) the program would be offered uniformly, regardless of the payment source for the services to the resident at the facility, (iii) the type of service is reasonable for the circumstances and is not a luxury item, (iv) the arrangement will only be offered and advertised locally and would not be used to expand the service area of the facility, (v) the marketing would be reasonably limited, (vi) local public transportation in the area is limited, (vii) the arrangement is consistent with the mission of providing quality care to patients, and (viii) the costs will not be claimed under any Federal health program.

Examples of potentially abusive arrangements: Noting the potential for abuse, the OIG stated that each free or below fair market value transportation arrangement must be evaluated on a case-by-case basis. The OIG then identified several analytical factors it considers in determining whether arrangements involving free transportation services will be viewed as problematic or of lesser concern. These factors include, but are not limited to, whether:

-Transportation is offered to patients based on criteria related to referrals such as diagnosis, condition, or treatment

-Luxury or specialized transportation such as limousines, airline travel, or ambulance transport is involved

-The geographic area covered by the program is limited to the Provider's historical service area, or includes longer distance transports offered to beneficiaries residing outside of that area, in which case the program might be used to expand the Provider's historical service area

-The program is necessary due to a lack of other means of affordable public transportation or other alternatives

-Marketing or advertising is used, which creates a greater risk that the arrangement is being offered as an inducement for referrals.

-Transportation is limited to trips to or from the offering Provider's premises, or whether transports are offered to a different Provider's site as a possible inducement for referrals from the latter Provider to the offering Provider

-Treatment of the costs of the free transportation are borne by the Provider and not shifted to federal health care programs

-The program is being used by a Provider of federally reimbursable services to gain access to beneficiaries for whom medically unnecessary services are rendered, such as Medicare or Medicaid mills that provide free transportation to attract patients

*The opinions did caution that while providing free transportation may have important and beneficial effects on patient care, it may also be a part of fraudulent or abusive schemes that lead to inappropriate steering of patients, overutilization and the provision of medically unnecessary services. These factors are instructive, but are clearly limited to the facts of this particular arrangement.

A more recent OIG opinion: A recent opinion lays out a fact pattern very similar to the hospital and more applicable. It has also been the subject of legal analysis and articles from many law firms.

OIG Advisory Opinion No. 11-02

On March 17, 2011, the OIG issued an opinion, posted March 24, 2011, on the following: A complimentary local transportation arrangement whereby a hospital would transport patients from physician offices located on, or contiguous to, the hospital’s campus to the hospital if the patients require further treatment and cannot transport themselves (the “Proposed Arrangement”). This is very relevant not only because it applies to a hospital, but because the opinion is very recent. The reasoning is roughly the same as the previous opinions, with the factors listed in the opinion.



-Transportation offered in a manner related to referrals e.g., selection of passengers based on diagnosis, treatment, or insurance coverage):

-Luxury or specialized transportation (e.g., airfare, limousines, ambulance transports may be improper inducements);

-Geographic area for transportation (e.g., offered to patients outside the service area, longer-distance transports are more suspect);

-Availability of other means of transportation (e.g., lack of affordable alternatives less suspect);

-Marketing or advertising of the service poses a greater risk of it being an inducement;

-Transportation destination other than to and from the offeror's premises poses a greater risk;

-Treatment of the costs of the free transportation in a manner that shifts the costs to the Federal healthcare programs is problematic; and

-Offeror also provides Federally payable items and services to the passengers (e.g., Medicare and Medicaid mills that offer free transportation to attract patients).


Overall, there is always potential for AKS violations and CMP. However, when structured the right way, the concept of free transportation can avoid such scrutiny by the OIG and other federal authorities.

Posted by Attorney Saif R. Kasmikha

Midwest Legal Partners, LLC

Monday, August 15, 2011

Individual Mandates One Step Closer to Supreme Court

On Friday, August 12, 2011, a federal appeal’s panel struck down a critical provision of the Patient Protectable and Affordable Care Act. The issue of whether the government can force individuals to buy their own health insurance has faced serious constitutional barriers and a series of conflicting judicial opinions. Thus far, 26 states have sued to stop the law from taking effect due to, among other factors, a provision requiring Americans to purchase their own health insurance if they can afford to do so.

With the varying court opinions on this, the issue may be heading to the U.S. Supreme Court. In the meantime, it will continue to be challenged as one of the most debatable topics of the Patient Protectable and Affordable Care Act. For the full article, click below:


For the full opinion, visit the following link below:


Scope of the Commerce Clause

Proponents of this provision, namely the White House, have argued that the legislative branch was well within its scope of authority to pass such a provision under the Commerce Clause. Historically, courts have ruled that Congress has broad, but not absolute powers, under the Commerce Clause. Proponents using the reasoning behind the Commerce Clause argue that this could have an aggregate effect on all Americans. When people elect not to purchase health insurance, it raises the premiums on everybody else not only for the health insurance of those who are insured, but on the overall cost of health care when the uninsured require emergency treatment that they did not pay for through any coverage. Another argument is that people are not required to purchase health insurance, as they can elect to pay a tax instead. However, this may amount to a penalty where both sides may argue as to its constitutionality.

Individual Mandates

In the 11th Circuit Court in Atlanta, Chief Judge Joel Dubina and Circuit Judge Frank Hull found in a 207-page opinion that lawmakers cannot require people to "enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die." The court issued a strong and lengthy opinion as to the precedent they would set if they allowed the individual mandate provision to stand. While proponents of the law and this provision argue that Massachusetts has a similar law in place, opponents, including the opinion of this court, argue that federal enforcement may be problematic. Opinions like this are also significant because courts often conclude that the individual mandate provision is not severable from the rest of the act and renders the entire health care bill invalid.

Posted by Attorney Saif R. Kasmikha

Midwest Legal Partners, LLC