Healthcare Business Today

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The Steps American Healthcare Companies Must Consider to Expand Globally

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By Robert W. Courtney

It’s well-known around the world that despite its many breakthrough technologies and advances in healthcare, the United States lags behind other countries when it comes to coverage, cost, and quality. However, as healthcare companies rush to address these challenges driven by consumers in the US, they must realize that anything viable in America likely has potential overseas, assuming the right steps for international expansion are taken.

For many entrepreneurs and healthcare leaders who firmly believe in their product, they must consider America as only a slice of the pie when it comes to revenue potential. For example, the medical device market is expected to reach $150 billion in 2017 in the U.S. alone, a tremendous figure that demonstrates rapid growth. However, when looking outside America, the global medical device market is set to reach close to $400 billion. Now, while there are thousands of companies in this industry each targeting their own respective market segment, their revenue opportunity grows significantly when efforts go international. 

Establishing operations abroad requires the same foundation and principles to do so in the United States, but with the increased need for adaptation to local culture and business practices, and increased need for partners that can be trusted. [Read more…]

Big Data: Medical Billing Fraud and Abuse Claims Increasingly Based on Data Analysis

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By Ingrid S. Martin

With medical billing fraud and abuse cases increasingly driven by data analysis, it has never been more important for healthcare providers to carefully assess the claims data they provide to the government. 

In analyzing billing data, government investigators are looking for providers with suspect billing patterns, including high utilization of expensive billing codes, being a top biller for any particular code, or billing in a manner that is different from other providers of the same type. 

For example, a Tennessee pain management clinic recently drew the attention of federal investigators because it was an outlier in its billing for urine drug screens.  The clinic paid $312,000 to resolve allegations that it was ordering medically unnecessary screens in violation of the federal False Claims Act. 

To avoid these kinds of entanglements, healthcare providers need to monitor and to analyze their own claims data.  The key questions healthcare providers need to ask are: What billing codes are they most commonly using?  Are the people choosing which codes to bill properly qualified and up to date?  Does the electronic medical records system make it easy for providers to capture necessary information to support the billing?

To minimize the risk that auditors and investigators will find a basis to allege overpayment or fraud, and to help prevent drawing their attention in the first place, healthcare providers should include some simple steps in their compliance programs. [Read more…]

New 340B Rule in Place; Understanding the Implications

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By Kenneth Maxik, MBA, MBB, FACHE

It’s a new year and that brings new challenges for hospitals enrolled in the 340B Drug Pricing Program after the Centers for Medicare & Medicaid Services (CMS) formally implemented a new rule that cuts the reimbursement to certain covered entities by $1.6 billion.

The 2018 Medicare Hospital Outpatient Prospective Payment System (OPPS) Final Rule was finalized in November 2017 and immediately met with resistance. A number of hospital associations and several health systems joined to sue CMS – claiming the changes would reduce access to care – and a bipartisan bill was introduced before the House seeking to reverse the ruling. Due to a procedural issue, the lawsuit was deemed premature since damages had not yet been incurred, and CMS’s rule went into effect on Jan. 1, 2018, per the original time frame.

Despite efforts to halt the rule continuing into 2018 – the same complainants plan continued legal action – all 340B hospitals covered under OPPS must now comply with the new CMS rule.

For a clearer picture on the potential impacts for hospitals, patients, staff and health care programs, here is what you need to know: [Read more…]

Even More at Stake Than Meets the Eye with Potential HIPAA Violations

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Alexa GreenbaumBy Alexa Greenbaum

A federal court in New Mexico recently declined to dismiss tort claims asserted by a registered nurse against her employer, a government-run hospital, where she obtained treatment for a sexual assault. In denying the motion to dismiss, the court effectively rejected the federal government’s attempt to escape claims based on invasion of privacy for the disclosure of information regarding the assault (G.R. v. United States).

However, the court withheld ruling on the government’s motion to dismiss plaintiff’s claim for “negligence per se” based on the violation of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Instead, the court certified for the New Mexico Supreme Court the question of whether the claim fails, as there is no private right of action afforded by HIPAA. This case serves as a valuable reminder for hospitals of the broad implication of liability for disclosing private information, including the potential impact of HIPAA violations beyond mere regulatory enforcement.  

Alleged Disclosure of Treatment Leads To Court Battle

The plaintiff sued her employer, Gallup Indian Medical Center, for the dissemination of information relating to treatment she received there after she fell victim to a physical and sexual assault. Her lawsuit claims the hospital disclosed private details of the assault to coworkers who were not her direct care providers. Specifically, G.R brought tort claims for public disclosure of private facts, intentional infliction of emotional distress, negligence, and negligence per se. The claim for negligence per se – a theory whereby an act is considered automatically negligent because it violates an existing statute – was premised on the hospital’s alleged HIPAA violation.

The hospital moved to dismiss G.R.’s claims for negligence, negligence per se, and public disclosure of private facts, but the court permitted the claims for negligence and public disclosure to proceed. It found no legitimate public interest was served in publicizing the nurse’s assault, and therefore greenlighted her privacy claim. In sum, the court did not take lightly the government’s attempt to avoid liability for disclosure of private information. It declined to rule on the negligence per se claim, however, and specifically avoided answering the question of whether a HIPAA violation may legally set the standard of care for such a cause of action. [Read more…]

When Does a Deed Need Criminal Defense?

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When does a deed need criminal defense?

The offense is an act of an active subject – perpetrator – directed against a social value defended by the criminal law which, in most cases, belongs to a person – an act that is an outward manifestation of the individual, which he had representation at the time of committing or should have had. Stuart Criminal Defense attorney tells you several criteria that distinguish a deed from a criminal act. These are the provision in the criminal law, guilt, unjustified deeds and imputability.

It is noteworthy and remembered that the assembly of a single element does not automatically lead to the conclusion that such an act is an offense, but these traits must be cumulatively met to be an offense.

If a criminal law does not incriminate an act, then it cannot constitute an offense. Thus, by the criminal law rule, it is necessary to lay down the conditions for the existence of the crime, without this legal element being unable to continue the analysis of a criminal offense.

The act committed by a person must correspond to the abstract model described by the criminal law, this principle is called the typical. In other words, the offense implies the existence of a legal framework that attributes to the actual deed the character of the act provided by the criminal law.

By this aspect of the provision in the criminal law, the offense is distinguished from the other forms of legal illicit.

[Read more…]

Airing the Hospital’s Dirty Laundry

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Developments In Keeping the Evaluation of Adverse Incidents Confidential
— Hospitals across the country should take note of these developments in Florida in order to understand best practices for protecting their internal reviews and evaluations.

In 2004, the availability of hospital records regarding adverse incidents in Florida changed dramatically. Prior to that date, statutes that protected the confidentiality of the peer review process § 395.0193 and § 766.101, credentialing § 395.0191, risk management reports of adverse incidents § 395.0197 and risk management reports of quality assurance § 766.1016, provided hospitals with confidentiality in their internal review.

The courts recognized that these privileges were “[d]esigned to provide that degree of confidentiality necessary for the full, frank medical peer evaluation… .” Crugar v. Love, 599 So. 2d 111 (Fla. 1992). The legislature had determined that without the privilege, the peer review process would not be honest and beneficial. Feldman v. Glucroft, 522 So. 2d 798 (Fla. 1988). These statutory privileges had the effect of preventing the discovery of otherwise relevant information in litigation. Holly v. Auld, 450 So. 2d 217 (Fla. 1984).

With the passage of what has become known as Amendment VII, public policy was flipped to the position that “disclosure of information [ ] will allow patients to better determine from whom they should seek health care, evaluate the quality and fitness of heath care providers currently rendering service to them, and allow them access to information gathered through the self-policing process during the discovery period of litigation… .” Florida Hospital Waterman, Inc. v. Buster, 932 So. 2d 344 (Fla. 5th DCA 2006). Under Amendment VII, a patient was given a right to access records of any adverse medical incident and any record made or received in the course of business. The language of the Amendment was interpreted broadly to confer upon any person who is receiving or has received medical care the right of access to any document pertaining to medical negligence, intentional misconduct, and any act of neglect of a facility or provider which caused or could have caused injury or death to a patient. Florida Hospital Waterman, Inc. v. Buster, 984 So. 2d 478 (Fla. 2008). There is no limitation on whether the adverse incident is the same or similar to the incident being litigated. Ampuero-Martinez v. Cedars Healthcare Group, 139 So. 3d 271 (Fla. 2014). Many asked if there was any confidential evaluation that a hospital could perform.

Soon after Amendment VII was enacted, some hospitals began attempting to build confidentiality through the involvement of an attorney in the review of an adverse incident. Courts have since determined that Amendment VII does not vitiate the opinion work-product privilege, but it does supersede the fact work-product privilege. Fla. Eye Clinic, P.A. v. Gmach, 14 So. 3d 1044 (Fla. 5th DCA 2009). Because of this distinction, it is not enough for a hospital’s attorney to simply be present during an adverse incident review. Conferring privilege through work-product requires the attorney to inject her mental impressions, conclusions, opinions and theories. Even opinions communicated by the hospital’s employees to the attorney are not protected from Amendment VII. Acevedo v. Doctors Hosp. Inc., 68 So. 3d 949 (Fla. 3d DCA 2011).

Another avenue for obtaining confidential evaluation of an adverse incident is an external medical review. The application of Amendment VII to external medical reviews for purposes of litigation was recently reviewed, and the Second District held that external medical reviews maintain confidentiality. Bartow HMA, LLC v. Edwards, 175 So. 3d 820 (Fla. 2d DCA 2015). The court determined that an external medical review done for litigation was not a record “[m]ade or received in the course of business,” nor was it a record pertaining to an adverse incident because it was not a functional equivalent of a facility’s internal peer review. However, the external review cannot be used as a vehicle to outsource the internal peer review, as the court noted that their decision would have been different if there was no internal peer review of the incident.

Also important is that the Second District has clarified that documents pertaining to adverse medical incidents in general, but not related to a specific adverse medical incident, are not covered under Amendment VII. Bartow HMA, LLC v. Kirkland, 171 So. 3d 783 (Fla. 2d DCA 2015). For example, the court specified that general policies regarding handling of patient cases, reports from departments that do not reference adverse incidents, credentialing committee reports, committee minutes regarding hiring and hospital development plans, and documents generally related to handling sentinel events are not covered under Amendment VII.

Arguably, the most valuable tool in keeping adverse incident reviews confidential is the use of a Patient Safety Evaluation System (PSE) pursuant to the federal Patient Safety and Quality Improvement Act (PSQIA). In 2005, the federal PSQIA was signed into law, and it embraced policy opposite to that embodied by Amendment VII. It conferred confidentiality on a review to encourage providers to share information without fear of liability. The PSQIA provides for confidential review of medical errors when facilities opt to create a PSE that collects information and forwards it to a Patient Safety Organization (PSO) for evaluation and feedback. The PSO must also share information with the Network of Patient Safety Databases. The First District Court recently held that documents put into the PSE for reporting to a PSO are confidential, preempting Amendment VII. Southern Baptist Hosp. of Fla., Inc. v. Charles, 178 So. 3d 102 (Fla. 1st DCA 2015). The First District held that this confidentiality also applies if the document serves the dual function of satisfying a state reporting requirement—such as incident reports required under § 395.0197.

In conclusion, while there are limited avenues for a hospital to keep their review of adverse incidents confidential, a hospital does have the ability to maintain some level of confidentiality through use of the tools outlined above. It is vital to know what information remains protected and what information is not covered by Amendment VII so that plaintiff’s counsel is not provided unnecessary ammunition in litigation.

As of right now, every other state has a statute in effect which insulates the peer review process from litigation discovery.  However, Florida too had a broadly written statute which, until Amendment VII was enacted, provided strong confidentiality of the peer review process.  As happened in Florida, the protections in other states could be wiped out with a similar constitutional amendment.  In states which have public referendums to enact constitutional amendments, there is no guarantee the majority of the electorate will know or understand the implications of such an amendment on the candidness and effectiveness of the peer review process.  In addition, courts in many states have nibbled around the edges of the privilege for unusual circumstances such as statements made by the attending physician, criminal cases, and employment disputes.  Should the privilege continue to erode in your state, hospitals there should take note of these developments in Florida in order to understand best practices for protecting their internal reviews and evaluations.

David R. Bear is an associate in the Health Care Department in the Orlando, Florida office of Marshall Dennehey Warner Coleman & Goggin. He focuses his practice on the defense of hospitals, medical providers including physicians and nurses, assisted living facilities, and businesses in matters involving medical malpractice, premises liability, and long-term care. He may be reached at drbear@mdwcg.com.

Medical Foods: The Need for Reform in the 21st Century 

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Deepti Kulkarni HeadshotScott Bass HeadshotBy Scott Bass and Deepti Kulkarni

Despite growing scientific evidence demonstrating the role of nutrition in managing disease and other health conditions, the Food and Drug Administration (FDA) has failed to embrace the regulatory category delineated for “medical foods.”  In our view, FDA’s unwillingness is primarily driven by the unfounded fear that, if left unchecked, the marketing of ineffective medical foods would run rampant, resulting in adverse impacts. Consequently, the agency has narrowly construed the definition of medical foods and thereby prohibited the marketing of numerous nutritionally beneficial food products as “medical foods”.

While FDA’s intentions might be good, its current approach leaves consumers without access to beneficial products and discourages promising research and development in products that have the potential to significantly improve public health and reduce healthcare costs.

Regulatory History

FDA publicly recognized the concept of medical foods in the early 1970s when it determined that Lofenalac—a powdered formula for infants with phenylketonuria, an inherited metabolic disorder—should be classified as a food for special dietary use rather than as a drug. Subsequently, the agency implemented changes to its labeling regulations, further recognizing and encouraging the development of such foods.  But, it wasn’t until 1988 that an official definition for “medical foods” was established. Specifically, Congress defined a “medical food” as “a food which is formulated to be consumed or administered enterally under the supervision of a physician and which is intended for the specific dietary management of a disease or condition for which distinctive nutritional requirements, based on recognized scientific principles, are established by medical evaluation.” Less than a year later, FDA outlined the types of food that would fit within the definitional scope, which included formulas for inherited metabolic disorders, nutritionally complete and incomplete formulas, and oral rehydration products.    [Read more…]