Bad Week for Affordable Care Act--Cancellation Notices and Extension on Mandates.

If you like your current healthcare plan....

A selling point that was often repeated by President Obama was "If you like your doctor, you can keep your doctor. Period. If you like your plan, you can keep your plan. Period." While those on both sides of the political aisle discuss whether this was a lie, the fact is many Americans cannot keep their plans, even if they like it. Numbers ranging from hundreds of thousands, to millions of Americans received cancellation notices from their insurance companies. They cannot keep their health plan as it currently stands.

http://www.cbsnews.com/8301-505263_162-57609737/obamacare-more-than-2-million-people-getting-booted-from-existing-health-insurance-plans/

In the State of Michigan alone, approximately 140,000 people have received their notices.

Extension on Employer Mandate

The requirement for employers with over 50 employees to ensure every full-time worker by January 1, 2014 or pay $2,000 per full-time worker (excluding the first 30 employees) is still technically law, but the IRS will refrain from enforcing tax penalties until January 1, 2015. Sources close to the White House, including posts on the White House web page, cite the concerns of businesses as its main reason for the extension. However, it still urges employers to voluntarily comply if they can, and/or use this extended time to prepare. In either case, it gives health care/employment attorneys more time to consult their business clients as their businesses grow.

Extension on Individual Mandate

The individual mandate has been extended to March 31, 2014. The extension only applies to 2014. In 2014, the penalty is $95 per adult and $47.50 per child (up to $285 per family) or 1% of family income, whichever is greater. In 2015, penalty is $325 per adult, and $162.50 per child (up to $975 per family), or 2% of family income, whichever is greater. From 2016 and beyond, penalty is $695 per adult, $347.50 per child (up to $2,085 per family), or 2.5% of family income, whichever is greater. This extension may be very helpful as the individual mandate can prove costly, since it is designed for and will mostly affect young, healthy Americans who have, to this point, chosen not to pay for healthcare that they feel they don't need. Since insurance companies can no longer turn people down due to pre-existing conditions, the individual mandate curbs any incentive for young Americans to wait until they get sick to get coverage. 

The changes listed above may be tentative, but extensions may be recurring if the ACA continues to run into roadblocks like those experienced this week.    

THIS PAST WEEK IN LEGAL HEALTHCARE NEWS—May 20, 2013

The OIG published its latest special advisory bulletin on the effect of exclusion from participation in Federal health care programs. Revenue generated from billing state and federally funded health programs remains a significant portion for healthcare providers and suppliers and in many cases, the lifeline of an institution or practice. For individual doctors, exclusion from the program means more than having to shut down a practice, like it would for a hospital or a group practice. For an individual physician, exclusion can render that doctor unemployable, even if the scope of that exclusion is relatively narrow. Employers don’t want the liability, and potential employees are scarred by the screening process that could expose them as being on the OIG List of Excluded Individuals and Entities (LEIE). For a full report of the bulletin, click the link below.

http://oig.hhs.gov/exclusions/files/sab-05092013.pdf

A Detroit-area adult day care center owner was sentenced to serve 40 months in prison for billing for unnecessary psychotherapy services, or services that were not provided, as part of a health care fraud conspiracy which led to more than $19 million in fraudulent Medicare billings. In addition to the prison term, the sentence included 2 years of supervised release, and about $600,000 in restitution. It was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

To learn more about the specifics of this bust, click the link below.

http://www.justice.gov/opa/pr/2013/May/13-crm-544.html

A Detroit-area home health care agency owner was sentenced to 60 months in prison for causing the submission of over $1 million in false and fraudulent billing to Medicare as part of a $13.8 million health care fraud conspiracy. The agency paid and directed the payment of sums to doctors to refer patients for home health care services that were not medically necessary and/or never rendered. Multiple entities and providers were involved. The scheme goes further, as the owner paid and directed the payment of various medical professionals, including nurses, physical therapists, and physical therapy assistants, to create fictitious patient files to document home health services purportedly provided, that were never rendered.  Fictitious patient files were signed, purporting to have given physical therapy services at all three home health care agencies that were in fact never rendered.

For more information on the sentencing, click the link below.

http://www.justice.gov/opa/pr/2013/May/13-crm-548.html

Since their inception in March 2007, strike force operations in nine locations have charged more than 1,480 defendants who collectively have falsely billed the Medicare program for more than $4.8 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov

Medicare fraud is very real, and government agencies and investigators are careful and patient when making their apprehensions. It is very easy to be lured into becoming a co-defendant without knowing the full extent of what business plan you are being asked to take part. You could be a victim/co-defendant simply through a referral process that, unbeknownst to you, could be a serious violation.

We offer counseling on ways to help your business flourish legally and ways to avoid engaging in any unlawful proposed arrangements. 

Contract Basics from ICLE Seminar by Scott Scarbrough

Contract Basics A to Z

With the wealth of information available on the internet, there are numerous standard contract forms that can be downloaded and filled in with the details of a particular agreement.  There are forms for the sale of property, rental of property, lease of property, or a license for the use of software, and even experienced attorneys often take these forms and simply edit, cut and paste to fit a particular situation at hand   In fact, so many contracts are created from stock contract forms with boilerplate clauses that not only may one or both parties not understand what they are actually agreeing to, but the lawyer who drafted the contract might not realize the ramifications of some components of the contract. 

While stock contract forms are an excellent time saving tool, it is important to understand the implications of each and every term in a contract.  This blog will take on the common steps of contract drafting; discuss the importance of each section, the traditions, assumptions, benefits and risks of boilerplate clauses, and implications of these elements of the written contract.    

This, the first column of this blog series will explore the basics of a contract; the importance of the client interview, ethics, communications, and the engagement letter.  Following weeks will explore the most common components of a written contract, the preamble, recitals, words of agreement, definitions, covenants, conditions, representations, warrantees, boilerplate clauses, end games, remedies, and ADR clauses.

The Initial Client Interview:

A client meets with the attorney to engage the attorney in drafting a contract.  What are the primary issues the attorney should be considering in this first interview?  Are there any conflict of interest issues with helping this client?  What other questions should he/she be asking the client?  Fortunately, the answers come from ethic laws that bind all us attorneys and from common sense in considering what the attorney is being asked to do in drafting the contract.

On the ethics front, the number one complaint filed against attorneys with the bar association is for lack of communications with the client, followed closely by claims of unreasonable fees.  The easiest way to insure your client’s satisfaction is to manage their expectations for communication and to explain in detail the fee structure during the initial client interview.  By following up writing, in an engagement letter to the client, the attorney not only insures the client understands the fees and communication expectations are documented, but the attorney satisfies Wisconsin’s Rules of Professional Conduct for Attorneys.  (WI 20 SCR 1.5 expressly mandates that an attorney prepares an engagement letter confirming, in writing, the nature and scope of the representation, if the fees will exceed $1000.)

[Practice Tip:  The engagement letter should be provided to the client within a reasonable time. The detail and specificity of the letter depends on the nature of the client-lawyer relationship, the work to be performed, and the basis and rate of the fee.  Additionally, a lawyer should detail in writing, before or within a reasonable time after commencing the representation, the basis or rate of the fees and expenses to be charged to the client.]

            On the contract drafting front; what are the specifics of the contract that the client wishes the attorney to draft?  In order to ask the right questions, an attorney needs to understand what is in a contract.  Remember, there are two basic components/requirements of a contract; 1.  A promise or a set of promises (a commitment to do/not do something) that the law will enforce (a court will award a remedy for the failure to perform), and 2.  Contains an Offer, Acceptance, and Consideration, plus all the other equally important elements of: how, when, where, why, and what if.

           

            In future weeks, this blog will discuss the common components of a contract, in order to understand the how, when, why, and what if.  Next week we will tackle the traditional Preamble, Recitals, and Words of Agreement.  Following weeks will review the Definitions, Covenants and Conditions, Representations and Warrantees (which are frequently misunderstood and mis-used), Endgames and Remedies, and then finally end with a series of blogs concerning the benefits and cautions of Boilerplate clauses.

Input is always appreciated.  If there are any questions, comments, insights, concerns with this blog, please contact, J. Scott Scarbrough, Esq. at JScottScarbrough@MidwestLegalPartners.com.

  Published by J. Scott Scarbrough