Holland & Hart Healthcare Law Blog

ILLINOIS SUPREME COURT CLOBBERS (TORT REFORM) CAPS.

    Bucking a trend in other states, the Illinois Supreme Court held this week that state liability caps imposed on non-economic damages in medical malpractice cases violated the Illinois constitution’s separation of powers clause.  It found that the legislatively imposed caps was too bold an intrusion on the powers of the judicial  branch. A number of states have already passed similar statutes that have been upheld by the highest courts in those states. See Garhart v. Columbia/Health One, LLC, 95 P 3d 571, 581-82 (Colo. 2004); Judd v. Drezga, 103 P 3rd 135 (UT 2004) and Kirkland v. Blaine County Medical Center, 49 P 3rd 115, 121-22 (ID 2000).

MONTANA SUPREME COURT AFFIRMS INJUNCTION AGAINST HOSPITAL SUSPENSION OF PHYSICIAN WHO DENIED IT ACCESS TO HIS FAMILY’S PRIVATE MEDICAL RECORDS.

 The Montana Supreme Court affirmed the issuance of a preliminary injunction restraining Community Medical Center, a hospital in Missoula, Montana for suspending the medical staff privileges of a hospitalist whose only offense was to refuse to grant unrestricted access to his family’s medical records to a hospital subcommittee. The physician designated as “Dr. Doe,” in the case of John Doe, M.D. v. Community Medical Center, Inc., DA08-0397, decided on November 24, 2009, asserted that that Community Medical Center  (“CMC”) breached the terms of its contract with him embodied in CMC’s medical staff bylaws and policies by summarily suspending his privileges with no demonstration of “ a substantial likelihood of imminent impairment of the health or safety of any patient, perspective patient, employee or other person present in the medical center” –the sole designated basis for summary suspension at CMC.

10th Circuit Affirms Summary Dismissal of Nephrologists’ Monopolization Shootout in the Streets of Durango.

Dr. Mark F. Bevan has a thriving nephrology practice in Farmington, New Mexico. Mercy Medical Center of nearby Durango, Colorado repeatedly invited him to provide kidney dialysis and other nephrology  services in’ Durango, which he declined.   The hospital then with the financial support of the  Southern Ute Indian Tribe hired a different nephrologist to practice his craft in Durango. Under the pre-existing bylaws of the Hospital, the hiring of the new doctor automatically resulted in the cancellation of Dr. Bevan’s consulting privileges at the hospital. Consulting privileges were designed for the purpose of filling gaps in physician coverage. He was left with the status of being a member of the consulting staff. He then applied for active staff privileges at the hospital , but found it difficult to ethically meet the requirement in the by-laws that he reside within 30 minutes of the hospital. The hospital, in an attempt to pre-empt and residential success by Dr. Bevan, granted the new physician the exclusive right to practice nephrology at the hospital. Dr. Bevan responded with a claim of monopolization and attempted monopolization of the nephrology physician services in Durango in violation of Section 2 of the Sherman Act.

 

CMS ISSUES MEMORANDUM REGARDING HOSPITAL EMTALA OPTIONS IN EVENT OF H1N1 FLU PANDEMIC.

On August 14, 2009, CMS issued a memorandum on requirements of hospitals under the Emergency Medical Treatment and Labor Act (“EMTALA”) in the event of a surge in hospital emergency room visits for H1N1 influenza treatment. EMTALA requires all hospitals to provide an appropriate medical screening examination on presentation to determine whether the patient has an Emergency Medical Condition. If it determines that one exists, the hospital must treat and stabilize the patient within its capacity or transfer a patient to a hospital that has a capability and capacity to stabilize the condition. In anticipation of a surge in emergency room visits CMS issued additional guidance for hospitals to comply with EMTALA.

IOWA HOSPITAL COUGHS UP $4.5M TO FEDS TO SETTLE STARK CLAIM THAT IT OVER COMPENSATED EMPLOYED DOCS.

In 2005 a group of physicians from Cedar Valley Medical Specialists in Cedar Valley, Iowa raised concerns with Sen. Charles Grassley, then Chairman of the Senate Finance Committee and with the IRS that Covenant Medical Center in Waterloo, Iowa was over compensating some of its employed physicians. According to 990s filed by Covenant with the IRS orthopedic surgeons Dr. Gary Knudson and Dr. Richard Naylor were paid $2.4 Million and $1.00 Million respectively for their services in 2002.  Dr. Victor Lawrinenko received $2.1 Million.

TEXAS “WHISTLE BLOWER” NURSE INDICTMENTS RAISE EYE BROWS.

 Things happen differently in West Texas where it can rain red mud. In Winkler County Memorial Hospital in Kermit, Texas two nurses who consider themselves as “patient advocates” have been indicted by Winker County Attorney, Mike Fostell for violation of Texas Penal Code 39.06, the misuse of official information, a third degree felony with the possible sentence of ten years.  Their crime?  They filed an anonymous complaint to the Texas State Board of Medicine concerning Dr. Rolando Arafiles, in which they assert that Dr. Arafiles improperly encouraged patients to purchase herbal remedies from him and wanted to use hospital supplies for a procedure in the home of a patient.  The nurses provided medical file numbers of six patients to the board.  The action of the nurses was in direct violation of a hospital board requirement that all physician complaints be filed with the hospital first before being reported to a state agency.

 

GENERAL COUNSEL LIABILITY IN HEALTH CARE ETHICS AND COMPLIANCE OVERSIGHT.

It is not easy being General Counsel for a health care system and growing more difficult with the advent of Corporate Integrity Agreement and Public Securities Obligations.  It is also dangerous and unwise to accept responsibility for Chief Compliance Officer as well as Chief Legal Officer. The ongoing travails of Christi R. Sulzbach, Esq. former Executive Vice President and General Counsel and Chief Compliance Officer of Tenet Healthcare Corporation is a case in point. Ms.Sulzbach, who resigned her position at Tenet in 2003, settled a case brought against her by the Securities Exchange Commission. arising out of a Tenet scheme to defraud Medicare by over reporting its costs so as to increase Medicare payments under its enhanced payment program for “Outlier” patient conditions.  Tenet settled for 10 Million Dollars several years ago. 

THE INTERNET, MYSPACE, MEDICAL PRIVACY AND FAMILY FEUDS.

        Two recent and unrelated cases this month involved the unlawful access to private medical records and the posting of them on the internet on MySpace in order to inflict pain in the prosecution of family feuds. Both feuds involved Asian families. In Hawaii, Rhonda Wong-Fernandez, a 22 year old mother of three small children, plead guilty to a felony charge of unauthorized use of a computer to access confidential records. Ms. Wong Fernandez was a friend of the victim’s sister in law who was feuding with the victim.  She obtained access to the medical records of the victim who was suffering from HIV at the Straub clinic and published them three times on MySpace. At one time she stated that “I hope she dies.” The victim did die in April.  Although the prosecutor requested a one month jail sentence, the judge disagreed and sentenced her to one year in jail, five years probation and 200 hours of community service. The judge ordered her taken into custody immediately and refused a request to defer the start of her sentence until she could provide for her 5 month old child.

     

TWENTY-FIVE STEPS IN DEFENSE OF RAC AUDITS.

Recovery Audit Contractors (RACs) are in the process of saddling up for the nationwide roll out of their Medicare payment recoupment mission. Here are twenty-five recommended proactive steps to circle the wagons and defend the RAC threat.

1. Develop and implement a written audit defense plan- the government bounty hunters are coming your way and they will be looking for the  low lying fruit.

2. Select an audit team or responsible persons depending upon the size of your organization. Including if appropriate internal audit, billing and coding, medical records, risk management and the CFO.

3. Assign specific team member responsibilities in dealing with anticipated audit issues.

4. Consider running an internal pre-audit to identify vulnerabilities such as “medical necessity” and “duplication of services.”

RAC AUDITS AND NEW FEDERAL FALSE CLAIMS ACT EXPOSURE.UNDER THE FRAUD ENFORCEMENT RECOVERY ACT OF 2009 (“FERA”).

The federal squeeze of health care providers is underway. Federal Medicare recovery “bounty hunters,” the Recovery Audit Contractors (“RAC”), are marshalling resources for the anticipated, algorithm primed, data mining hunt for Medicare overpayments from hospitals, physicians, DME companies, hospices and other providers, which is likely to bloom in the second half of this year. Those that attempt to mislead the government or its computer toting agents in order to limit the harvest are facing additional potential exposure under the Federal False Claims Act, 31 U.S.C. §3729-3733 (“FCA”).