Proposed CN Rules on Hospital Change of Control & Transparency

November 5, 2013 By

The Washington State Department of Health recently released its proposed rules and letter to Governor Inslee with regard to his directive to open rule making on the Certificate of Need (“CN”) hospital change of control regulations and transparency.  The catalyst for these modifications is the recent spate of affiliations among Washington state hospitals.  The Department of Health was instructed to consider “how the structure of affiliations, corporate restructuring, mergers, and other arrangements among health care facilities result in outcomes similar to the traditional methods of sales, purchasing and leasing of hospitals.”  The current rules require a CN for any “sale, purchase, or lease” of a hospital, but does not provide a definition to explain what is encompassed by a “sale, purchase, or lease”.   The Department of Health has issued its proposed rules creating a definition of “sale, purchase, or lease” in WAC 246-310-010 as follows:

“Sale, purchase, or lease” means any transaction in which the control, either directly or indirectly, of part or all of any existing hospital changes to a different person including, but not limited to, by contract, affiliation, corporate membership restructuring, or any  other transaction.”  WAC 246-310-010(54) (proposed)

The Governor’s directive also focused on transparency for consumers:

The Department’s rulemaking process shall also consider ways to improve transparency for consumer information and ease of use, specifically the Department shall ensure hospitals supply non-discrimination, end of life care and reproductive health care policies; and the Department shall ensure that consumers have access to the policies on its webpage. The Department’s rulemaking process shall also consider the factors in RCW 43.06.155, the principles and policies in the implementation of health reform, including the guarantee of choice for patients.

As a result of comments received from stakeholders, the Department of Health determined that the submission and posting of hospital access policies should be located in the hospital licensing rules, rather than in the CN rules.  The proposed rules suggest adding new provisions to the hospital licensing regulations, specifically WAC 246-320-141 governing patient rights and organizational ethics:

(5) No later than sixty days following the effective date of this section, every hospital must submit to the department its policies related to access to care:
(a) Admission;
(b) Nondiscrimination;
(c) End of life care; and
(d) Reproductive health care.
(6) The department shall post a copy of the policies received under subsection (5) of this section on its web site.
(7) If a hospital makes changes or additions to any of the policies listed under subsection (5) of this section, it must submit a copy of the changed or added policy to the department within thirty days after the hospital approves the changes or additions.
(8) Hospitals must post a copy of the policies provided under subsection (5) of this section to its own web site where it is readily accessible to the public, without requiring a login or other restriction.
The Department of Health is soliciting feedback and hosting a hearing on November 26, 2013 at 1 PM to review the proposed rules.  It expects to file permanent rules on December 10, 2013.
If you have any questions regarding these proposed rules or Certificate of Need in general please contact Elana Zana.
Filed Under: Certificate of Need, Washington Tagged With: , , , ,

Guidance on Refill Reminders and Enforcement Delay until Nov. 7th

September 22, 2013 By

The Office of Civil Rights recently released guidance related to the new HIPAA marketing requirements and refill reminders.  The guidance includes several FAQs and examples to help navigate the new HIPAA marketing/refill reminder rules.  In conjunction with the release of this guidance (and as a result of a lawsuit filed by Adheris, Inc.), HHS has decided to delay enforcement of the refill reminder requirements until November 7, 2013.  This enforcement delay is only with regard to the refill reminder rules and does not apply to the rest of the HIPAA requirements which will be enforced starting September 23, 2013.

Pursuant to HIPAA, a covered entity or business associate must receive a patient’s written authorization before using or disclosing PHI to make a marketing communication to him/her – unless another exception otherwise applies.  The new HIPAA marketing definition includes a generally common sense definition of marketing, with certain limited exceptions.  The new marketing rule creates an explicit exception “to provide refill reminders or otherwise communicate about a drug or biologic that is currently being prescribed for the individual, only if any financial remuneration received by the covered entity in exchange for making the communication is reasonably related to the covered entity’s cost for making the communication.”  The focus of the guidance is on two key phrases within the definition:  (1) whether the drug is  “currently being prescribed” and (2) whether there is financial remuneration and if so if it is “reasonably related to the covered entity’s cost of making the communication”.

The guidance identifies the following as satisfying the first requirement that the drug is currently being prescribed:

WITHIN EXCEPTION

• Refill reminders.

• Communications about generic equivalents of a drug being prescribed.

• Communications about a recently lapsed prescription (one that has lapsed within the last 90 calendar days).

• Adherence communications encouraging individuals to take prescribed medicines as directed.

• Where an individual is prescribed a self-administered drug, communications regarding all aspects of a drug delivery system.

NOT WITHIN EXCEPTION

• Communications about specific new formulations of a currently prescribed medicine.

• Communications about specific adjunctive drugs related to the currently prescribed medicine.

• Communications encouraging an individual to switch from a prescribed medicine to an alternative medicine.

With regard to the second prong, whether there is financial remuneration and if so whether it is related to the cost of making the communication, HHS provides the following information:

WITHIN EXCEPTION

• Communication does not involve remuneration.

• Communication involves only non-financial or in-kind remuneration, such as supplies, computers, or other materials.

• Communication involves only payment from a party other than the third party (or other than on behalf of the third party) whose product or service is being described in the communication, such as payment from a health plan.

• Remuneration involves payments to the covered entity by a pharmaceutical manufacturer or other third party whose product is being described that cover the reasonable direct and indirect costs related to the refill reminder or medication adherence program, or other excepted communications, including labor, materials, and supplies, as well as capital and overhead costs.

• Remuneration involves payments to a business associate assisting a covered entity in carrying out a refill reminder or medication adherence program, or to make other excepted communications, up to the fair market value of the business associate’s services.  The payments may be made by a third party whose product is being described directly to the business associate or through the covered entity to the business associate.

NOT WITHIN EXCEPTION

• Communication involves financial remuneration other than as described above.

The guidance then provides a series of examples and FAQs that are quite helpful in explaining what is and what is not permissible under the refill reminder exception to the marketing rule.  Though refill reminders are permitted, a covered entity should be careful to ensure that it is following the exception requirements or it should request patient authorization for such communications.  For more information about HIPAA and the marketing rule specifically please contact Elana Zana.

 

Filed Under: Compliance, HIPAA, HITECH Tagged With: ,

Copier Hard Drive Breach Costs Plan $1.2 Million

August 15, 2013 By

Yesterday, HHS announced a new HIPAA related settlement with Affinity Health Plan for $1,215,780 related to PHI maintained on leased copy machines.  This settlement follows an OCR investigation prompted by Affinity’s breach report filed on April 15, 2010.   Affinity became aware of the breach following notice from CBS Evening News.  Apparently, CBS purchased a photocopier previously leased by Affinity as part of an investigative report.  CBS then notified Affinity that the copy machine contained PHI on its hard drive.  Affinity reported that an estimated 344,579 individuals were affected by this breach.

OCR determined that Affinity improperly disclosed PHI when it returned its copy machines to the leasing agents without erasing the data on the copier hard drives.  Additionally, Affinity failed to include the copy machine hard drives in its HIPAA mandated risk analysis required by the Security Rule and failed to implement policies and procedures for wiping the hard drives when returning the photocopiers to its leasing agents.  Affinity also entered into a corrective action plan with the OCR to retrieve all hard drives contained on copy machines previously leased that remain in the possession of the leasing agent.

Covered Entities (and now business associates) need to make sure that all electronic devices, including copy machines, medical equipment computers, mobile phones, tablets, etc. are incorporated into their HIPAA Security Policies and Procedures and are evaluated to ensure that PHI is wiped prior to returning or selling any such devices.  The FTC has issued a report on safeguarding data stored in hard drives of digital copiers and NIST has also issued guidance on media sanitation.

For more information regarding how to comply with the HIPAA Security Rules please contact Elana Zana.

Filed Under: Health Information Technology, HIPAA, HITECH Tagged With: ,

SRDP Settlement: Improper EHR Donation Arrangement Among Violations

August 8, 2013 By

Last month CMS settled several violations of the self-referral statute (aka Stark Law) with an Ohio hospital, including a failure to appropriately structure a donation arrangement for electronic health records (EHR) .  The hospital disclosed under the Self-Referral Disclosure Protocol that it may have violated the Stark Law with regard to several arrangements with certain physicians, including arrangements for EKG interpretations, medical director services, Vice-Chief of Staff services, and hospital services (no specifics provided in CMS release).  The settlement was for $265,565.  The SRDP, which was included in the ACA, was created as a mechanism for providers to self-report potential Stark law violations.

The EHR donation arrangement to the Stark and Anti-Kickback laws permits hospitals to enter into certain arrangements with physicians for the donation of EHR related software and services.  The donation arrangement exception is scheduled to expire on December 31, 2013, however CMS has proposed extending the exception through 2016.  If CMS does not extend the exception, existing donation arrangements will have to convert to fair market value for shared technology and services.

If you have questions regarding the SRDP or structuring a EHR donation arrangement please contact Elana Zana.

Filed Under: Anti-Kickback/Stark, EHR, Hospitals, SRDP Tagged With: , ,

Washington Certificate of Need Program Commences Rule Making: Consumer Transparency in Affiliations & Dialysis

July 24, 2013 By

The Washington State Certificate of Need Program has announced its commencement of the rule-making process related to hospitals and dialysis.  This action is in response to the directive issued last month by Governor Inslee instructing the CN Program to expedite rule making related to the corporate restructuring, affiliations, acquisitions and mergers occurring in hospitals across the state.  His directive requires that:

The Certificate of Need process should be applied based on the effect that these transactions have on the accessibility of health services, cost containment, and quality, rather than on the terminology used in describing the transactions or the representations made in the preliminary documents.

The Department’s rulemaking process shall also consider ways to improve transparency for consumer information and ease of use, specifically the Department shall ensure hospitals supply non-discrimination, end of life care and reproductive health care policies; and the Department shall ensure that consumers have access to the policies on its webpage. The Department’s rulemaking process shall also consider the factors in RCW 43.06.155, the principles and policies in the implementation of health reform, including the guarantee of choice for patients.

In response to this directive, the CN Program has released concept rules to implement the directive.  These concept rules contain two significant modifications:

1.  A new defined term in WAC 246-310-010: “Sale, purchase, or lease” means any transaction in which the control, directly or indirectly, of part or all of any existing hospital changes to a different person, including but not limited to by contract, affiliation, corporate membership restructuring, or any other transaction.

This change is significant, as the “sale, purchase, or lease” of all or part of an existing hospital is subject to the CN rules and review.  The new definition expands the applicability of the CN rules and review.  Whereas previously affiliations were typically reviewed under Determinations of Reviewability, the expanded definition would subject such transactions to CN approval.

2.  A new section which collects hospital policies, maintains the policies and list of limitations on certain services online, and requires all hospitals to submit these policies and lists within 60 days of the effective date of the new rule.  The proposed new section is reproduced below:

New Section WAC 246-310-XXX Collection of Hospital Policies

1) Every hospital must submit to the department its following policies related to access to care:

a) Admission;

b) Non-discrimination;

c) End of life care; and

d) Reproductive health care.

2) If the effect of one or more of a hospital’s policies required under subsection (1) of this section limits or excludes access to services authorized by law, the hospital must submit to the department a list of services that are limited or not available at the facility.

3) The department shall post a copy of the policies received under subsection (1) of this section and lists received under subsection (2) of this section on its website.

4) If the hospital makes changes to any of the policies listed under subsection (1) of this section, it must submit a copy of the changed policy to the department within thirty days after the hospital approves of the changes.

5) No later than sixty days following the effective date of this rule each hospital must submit to the department the documents identified under subsections (1) and (2) of this section.

These proposed rules will have an impact on future transactions and existing hospitals.  The proposed revisions will be discussed at an August 5th workshop located at the Department of Health.

If you would like further information about these proposed rules or certificate of need in general please contact Elana Zana.

Filed Under: Certificate of Need, Compliance, Hospitals, Washington Tagged With: , , ,

After Ten Years of Litigation Physician Awarded $100,000 in Damages

July 15, 2013 By

On December 19, 2002, Dr. Granger was summarily suspended following an adverse outcome in a cardiac surgery case.  His privileges were restored on January 10, 2003.

Granger sued the hospital in February 2003.  The case went through a nine day trial resulting in a $3.9 million verdict for Granger.  The verdict was upheld on appeal but damages were reduced to $2,994,000.

In June 2013, the Louisiana State Supreme Court affirmed the decision that the hospital was not entitled to federal or state peer review immunity and reduced the damage award to $100,000.

The decision is somewhat confusing in its handling of federal peer review immunity but is instructive on a number of points nonetheless.  After the twenty-one day suspension was lifted, Granger requested a hearing to challenge the suspension which the hospital refused.  Granger’s lawsuit challenged this refusal and ultimately sought damages for it on breach of contract and negligent misrepresentation theories.

Following reinstatement of his privileges in 2003, the hospital continued its investigation of, and peer review actions regarding, Granger until his medical staff appointment and privileges expired.  Highlights of this extended period of peer review activity and action included:

  • A letter from the medical staff president misstating/overstating a Board resolution approving a six month probationary period with a requirement for self-referred evaluation.  (Be precisely accurate in these communications)
  • A telephone conversation between Granger and the chief of staff, secretly recorded by Granger, in which the chief of staff agreed that improper motives could have been behind the suspension. (There is no off-the-record)
  • Recommendation by the MEC, with subsequent Board approval, that Granger’s privileges terminate if he fails to self-refer for evaluation. (An adverse recommendation with no notice or hearing process afforded Granger.)

Ultimately no further action was taken.  Granger did not apply for reappointment and his medical staff membership and privileges expired on July 31, 2003.  Based on his failure to reapply, the Court vacated the lost income component of the damage award leaving only $100,000 for general breach of contract and negligent misrepresentation damages.

For more information on this case and peer review generally please contact Greg Montgomery.

Filed Under: Peer Review Tagged With:

Stolen Laptop Leads to Stanford’s Fifth HIPAA Breach

June 26, 2013 By

Earlier this month Stanford reported its 5th HIPAA breach since 2009.  This is Stanford’s third largest breach, affecting nearly 13,000 patients.   A broken laptop containing protected health information of pediatric patients was stolen from a restricted area of the Lucile Packard Children’s Hospital at Stanford.  The laptop was un-encrypted and contained patient information including: name, medical record number, age telephone numbers, surgical procedures and treating physicians.  Though the laptop had a broken screen, there is still the possibility of extracting the data from the computer.

Stanford’s other breaches include a disclosure  of 20,000 patient records when a subcontractor of a business associate placed patient information on the web seeking assistance with using Excel, the data was left on the website for nearly a year.  This breach has resulted in a $20 Million class action law suit under California law.

Earlier this year, Stanford announced its largest breach, affecting 57,000 patient records when an unencrypted laptop with patient information was stolen from a physician’s car.  In addition, Stanford reported a breach in 2012 of 2,500 patient records following the theft of an unencrypted laptop from a physician’s office.  Lastly, in 2010, Stanford was hit with a fine after failing to notify the state of California of the theft of a laptop by an employee containing over 500 patient records.

Considering Stanford’s previous breaches, encryption of its laptops would be a good course of action to prevent future HIPAA data breaches.  Stanford has reported that it now encrypts its laptops, but the one that was most recently stolen was unencrypted because the screen was broken.

Lessons learned from Stanford’s misfortunes:  encrypt all PHI and destroy broken devices (remember though broken, the data is still valuable to thieves).

For assistance with  HIPAA and/or the breach notification rules please contact Elana Zana.

Filed Under: Compliance, HIPAA, HITECH, Hospitals Tagged With: , , ,

Deadline for Avoiding the eRx Payment Adjustment Approaching at End of the Month

June 18, 2013 By

The June 30, 2013 deadline to participate in the Electronic Prescribing Incentive Program (“eRx”) and avoid the 2014 eRx payment adjustment is fast approaching.  Eligible Professionals (“EP’) looking to avoid the 2% payment adjustment in 2014 (payment adjustment means that EPs will only receive 98% of his/her Medicare Part B Physician Fee Schedule amount for covered professional services),  must either participate in the eRx program, fall under the exclusion criteria, or file for a hardship exemption by June 30, 2013.  Information regarding participation in the eRx program can be found here.

Exclusions

The following EPs will not be subject to the 2014 eRx payment adjustment if any one of the following applies:

  1. EP successfully participates in the eRx program during the 2012 12-month reporting period (1/1/12 – 12/31/12).
  2. EP is not an MD, DO, podiatrist, Nurse Practitioner or Physician Assistant.
  3. EP does not have at least 100 Medicare Part B PFS cases containing the encounter code in the measure’s denominator between 1/1/2013-6/30/2013.
  4. EP does not have 10% or more of their charges as Medicare Part B PFS allowable charges for encounter codes in the measure’s denominator during between 1/1/2013-6/30/2013.
  5. EP does not have prescribing privileges and reported GT8644 on a payable Medicare Part B service on at least once on a claim between 1/1/2013-6/30/2013.
  6. EP submits at least 10 eRx and reports the G-code G8553 between 1/1/2013-6/30/2013.
  7. EP achieves Meaningful Use under the Medicare or Medicaid EHR Incentive Program during 2012 or between 1/1/2013-6/30/2013 (and attests before 6/30/2013).
  8. EP demonstrates by registration of their intent to participate in the Medicare or Medicaid EHR Incentive Program during the 1/1/13-6/30/13 reporting period.
  9. EP submits one hardship exemption G-code via any payable Medicare Part B PFS claim between 1/1/2013-6/30/2013.
  10. EP request and CMS approves a hardship exemption.

Hardship Exemptions

EPs may be exempted from the payment adjustment if it is determined that compliance would result in a significant hardship.  Hardship exemptions must be submitted by June 30, 2013.  Such exemptions include:

  1. EP’s inability to electronically prescribe due to state, federal or local law or regulation. (Submit using the Communication Support Page)
  2. EP prescribes fewer than 100 prescriptions in a six month payment adjustment reporting period.  (Submit using the Communication Support Page)
  3. EP practices in a rural area without sufficient high speed internet access .  (Submit using the Communication Support Page or use G8642 in at least one claim between 1/1/13-6/30/13)
  4. EP practices in an area without sufficient available pharmacies for eRx.  (Submit using the Communication Support Page or use G8643 in at least one claim between 1/1/13-6/30/13)
  5. EP achieves Meaningful Use under the Medicare or Medicaid EHR Incentive Program.
  6. EP demonstrates their intent to participate in the Medicare or Medicaid EHR Incentive Program during the 1/1/13-6/30/13 reporting period.
  7. EP does not have prescribing privileges between 1/1/2013-6/30/2013.  (File at least one claim with G8644 on a payable Medicare Part B service between 1/1/13-6/30/13)

Requesting a Hardship Exemption

To submit a hardship request, EPs must access the Communication Support Page located here (look at upper-left hand corner once on the site).  CMS suggests that when submitting a hardship, EPs should provide detailed justifications for the hardships.

Those hardships with G-codes may also be submitted by EPs on a claim with a payable Medicare Part B service during the six-month reporting period (1/1/13-6/30/13).

EPs that achieve Meaningful Use under the Medicare or Medicaid EHR Incentive Program or demonstrate their intent to participate in the Medicare or Medicaid EHR Incentive Program during the 1/1/13-6/30/13 reporting period will be determined by CMS through review of the EHR Incentive Program Attestation and Registration system.  CMS will automatically determine if these exemptions apply.

Group practices participating in 2013 eRx GPRO must indicate hardship exemptions during self-nominations/registration or submit an exemption request via the Communication Support Page (listed above).

For more information on eRx or other incentive programs please contact Elana Zana.

 

Filed Under: e-Prescribing, EHR, Medicare Tagged With: , , ,

EHR Incentive Program Meaningful Use Stage 1 Updated

June 11, 2013 By

CMS has recently published a tip sheet consolidating for eligible professionals and hospitals the revisions made to the Stage 1 meaningful use measures that are effective in 2013.  These changes modify the following meaningful use objectives:

  • Public Health Reporting Objectives
  • Electronic Exchange of Key Clinical Information
  • Computerized Physician Order Entry (CPOE)
  • Record and Chart Changes in Vital Signs
  • Electronic Prescribing
  • Electronic Copy of and Electronic Access to Health Information (changes only applicable starting in 2014)

Some of the changes in the measures are required, while others are optional for 2013 but become required for 2014.  To view the Stage 1 changes tip sheet click here.

At the same time CMS also revised its Stage 1 Meaningful Use table of contents and tip sheets for each objective/measure for eligible professionals and hospitals/CAH.

If you have questions regarding the Medicare or Medicaid EHR Incentive Programs or meaningful use generally please contact Elana Zana.

Filed Under: EHR, Health Information Technology, HITECH, Hospitals, Medicaid, Medicare Tagged With: ,

A Window into Hospital Charges – Medicare Releases Data on Charges and Reimbursements

May 9, 2013 By

On Wednesday, Medicare released on extensive spreadsheet documenting the average hospital charges and associated Medicare payments for 100 most common Medicare inpatient services.  The release of this data is unprecedented and provides consumers a valuable tool in assessing the cost of treatment.  The data provides insight into the cost for these procedures on both a local and national basis; permitting users to download the data and manipulate it by hospital, region, state, or a variety of other means.  To access the Excel file released by Medicare click here.

The data highlights the discrepancies in hospital charges and reimbursements both nationally and locally.  The release of this information is aimed at providing consumers a better understanding of the cost and reimbursements associated with these procedures.  As explained by HHS Secretary Sebelius “Currently, consumers don’t know what a hospital is charging them or their insurance company for a given procedure, like a knee replacement, or how much of a price difference there is at different hospitals, even within the same city.  This data and new data centers will help fill that gap.”  This data is in addition to the hospital comparison tool previously released by Medicare.

The release of this data has made both national and local news headlines: Puget Sound Business Journal, New York Times, US News and World Report.

Filed Under: Health Reform, Hospitals, Medicare, Washington
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