On September 30, the Delaware Board of Medical Licensure and Discipline issued a proposed rule, “Use of Controlled Substances for the Treatment of Pain,” and has asked for comments preceding a public hearing in November. The proposed rule adopts the Federation of State Medical Board’s Model Policy for the Use of Controlled Substances for the Treatment of Pain and is meant to “alleviate licensed practitioner’s uncertainty, to encourage better pain management, and to minimize practices that deviate from the appropriate standard of care.”
The Board recognizes that the appropriate treatment of pain is fundamental to the practice of medicine, but it notes that practitioners may lack knowledge regarding pain management or may fear investigation or sanction by federal, state and local agencies, which have been focusing on pain management practices. These factors contribute to the “inappropriate treatment of pain.” The rule implies that the failure to become knowledgeable about treating pain is considered inappropriate just as the failure to follow statutory requirements in prescribing controlled substances. The proposed rule will consider the inappropriate treatment of a pain “a departure from standards of medical practice,” and such departures will result in investigations and potential discipline. Thus, the purpose of the proposed rule is to establish specific requirements for using controlled substances to treat chronic pain as well as the required safeguards to minimize risks of drug abuse and diversion. The comment period, which is open up to and including the date of the public hearing, November 1, 2011, is the provider’s opportunity to influence the final regulation.
The preamble to the rule states that the Board will not discipline a licensed practitioner for ordering, prescribing, dispensing or administering controlled substances “for a legitimate medical purpose and in the course of professional practice.” The prescribing of a controlled substance must be in the course of a practitioner-patient relationship and “should be based on a diagnosis of unrelieved pain.” The decision to prescribe controlled substances will be considered “a legitimate medical purpose” if it is based on “sound clinical judgment.” The takeaway for providers from the preamble is an emphasis on documentation. While the Board recognizes the place for controlled substances in the treatment of pain, the overriding concerns of abuse and diversion require extensive documentation of the practitioner-patient relationship. Under the rule:
“[t]he practitioner’s conduct will be evaluated to a great extent by the outcome of pain treatment, recognizing that some types of pain cannot be completely relieved, and by taking into account whether the drug used is appropriate for the diagnosis, as well as improvement in patient functioning and/or quality of life.”
The proposed rule requires a documented evaluation of the patient and a treatment plan. The benefits and risks of controlled substances must be discussed and if a patient is considered “high risk” for medication abuse, the patient must enter into a treatment agreement with the practitioner and submit to, among other conditions, random urine drug screening.
Importantly, the proposed rule does not envision the decision to treat pain with controlled substances as the end of the treatment continuum; practitioners shall review the course of pain treatment on a continued basis to determine whether alternative treatment modalities are more appropriate for the patient. This raises a few issues. First, it is possible that pain patients being treated with controlled substances may have different goals than their provider. There is any number of reasons that a patient may refuse alternative treatment options, such as invasive surgeries. Communication will be of the utmost importance, but the rule does not envision potentially common scenarios where the patient and practitioner disagree on the continued use controlled substances days, weeks, or months into the treatment relationship. And when patient and practitioner disagree during an ongoing treatment regimen, the specter of abandonment looms overhead.
Again, documentation requirements are stressed, and a section of the proposed rule addresses the maintenance of accurate and complete medical records. However, practitioners can look at these requirements as protective measures to assure compliance not only with appropriate standards of treatment, but also pain treatment coding and billing, which is receiving high levels of scrutiny from government payers and enforcement agencies.
A public hearing will be held on November 1, 2011 at 3:00 PM in the second floor conference room A of the Cannon Building, 861 Silver Lake Boulevard, Dover. Those in attendance will be invited to share their comments. Written comments may also be submitted to this address up to the date of the public hearing. For more information and to read the full proposed rule, visit http://regulations.delaware.gov/register/october2011/proposed/15%20DE%20Reg%20498%2010-01-11.htm.
Friday, October 14, 2011
Thursday, September 29, 2011
Delaware Health Insurers Required to Provide Free Coverage for Immunizations
As required by the federal Health Care Reform law (the Patient Protection and Affordable Care Act), the Delaware General Assembly passed amendments to the state’s insurance code requiring health insurance carriers providing coverage in Delaware to cover certain immunizations and preventive services without requiring enrollees to pay copayments, coinsurance or deductibles. Governor Markell signed the bill into law on September 23rd, and it applies to policies issuing or renewing after June 30, 2011. A complete list of the immunizations and services covered under the new law can be found at http://www.healthcare.gov/news/factsheets/2010/07/preventive-services-list.html
While the Delaware insurance code previously mandated coverage for many of these services, such as mammograms and colonoscopies at certain ages, it did not prevent insurers from imposing co-pays or other charges on individuals receiving them.
While the Delaware insurance code previously mandated coverage for many of these services, such as mammograms and colonoscopies at certain ages, it did not prevent insurers from imposing co-pays or other charges on individuals receiving them.
Friday, September 23, 2011
Fraud Investigations Aiming for the Top: Government Scrutiny of Health Care Executives
In his testimony before a House of Representatives subcommittee, Chief Counsel for the HHS-OIG Lewis Morris expressed the Federal Government’s frustration with repeat offenders and indicated a new strategy for fighting fraud and abuse among health care enterprises:
“We are concerned that the providers that engage in health care fraud may consider civil penalties and criminal fines a cost of doing business. . . . One way to address this problem is to attempt to alter the cost-benefit calculus of the corporate executives who run these companies. By excluding the individuals who are responsible for the fraud, either directly or because of their positions of responsibility in the company that engaged in fraud, we can influence corporate behavior without putting patient access to care at risk.
HHS, the Justice Department, and the Food and Drug Administration have been independently shifting their target to individual executives in health care fraud investigations and prosecutions. Executives at drug companies, medical device companies, nursing homes, and other health care groups now have more to worry about than the hefty fines their companies are forced to pay; these executives could face criminal charges even if they were not involved in the scheme and exclusion from the Federal programs.
Morris continued, saying that “when there is evidence that an executive knew or should have known of the underlying misconduct of the organization, OIG will operate with a presumption in favor of exclusion of that executive.” To be sure, exclusion from the federal programs is a career ender, as the enterprise would no longer be able to bill the federal programs with the excluded executive at the helm. The authority the OIG points to for this power is under section 1128(b) of the Social Security Act, which allows OIG to hold responsible individuals accountable for the misconduct of their organization. It is only recently, however, that OIG has been focusing on using this power on the top executives of these organizations. It used to be that only executives who had been charged and entered pleas were excluded. Last year, however, the inspector general excluded the owner/executive of drug manufacturer Ethex Corporation even though the Justice Department did not charge him.
But this theory was recently tested and HHS retreated. Howard Solomon, chief executive of drug company Forest Laboratories, received notice from HHS-OIG that he would be excluded from the Federal programs. Solomon received the letter because a Forest subsidiary pleaded guilty to marketing violations in 2010 and agreed to a $313 million settlement, but Solomon was not personally charged and there was never any alleged wrongdoing on his part. According to a press release from Forest, the “only basis given in the letter notifying Mr. Solomon of the potential action is that he is ‘associated with’ Forest.” Ultimately, after protest from the business community, HHS retreated from its exclusion letter.
Despite HHS backing down against Solomon and Forest, the climate of investigations and prosecutions against executives is still heating up. As Morris said in a May Associated Press interview, “[t]he behavior of a company starts at the top." In the ever growing culture of compliance coming out of Washington, it is more important than ever for executives to become involved in their organization’s ongoing compliance efforts, and to hold subordinates accountable for running a compliant organization.
“We are concerned that the providers that engage in health care fraud may consider civil penalties and criminal fines a cost of doing business. . . . One way to address this problem is to attempt to alter the cost-benefit calculus of the corporate executives who run these companies. By excluding the individuals who are responsible for the fraud, either directly or because of their positions of responsibility in the company that engaged in fraud, we can influence corporate behavior without putting patient access to care at risk.
HHS, the Justice Department, and the Food and Drug Administration have been independently shifting their target to individual executives in health care fraud investigations and prosecutions. Executives at drug companies, medical device companies, nursing homes, and other health care groups now have more to worry about than the hefty fines their companies are forced to pay; these executives could face criminal charges even if they were not involved in the scheme and exclusion from the Federal programs.
Morris continued, saying that “when there is evidence that an executive knew or should have known of the underlying misconduct of the organization, OIG will operate with a presumption in favor of exclusion of that executive.” To be sure, exclusion from the federal programs is a career ender, as the enterprise would no longer be able to bill the federal programs with the excluded executive at the helm. The authority the OIG points to for this power is under section 1128(b) of the Social Security Act, which allows OIG to hold responsible individuals accountable for the misconduct of their organization. It is only recently, however, that OIG has been focusing on using this power on the top executives of these organizations. It used to be that only executives who had been charged and entered pleas were excluded. Last year, however, the inspector general excluded the owner/executive of drug manufacturer Ethex Corporation even though the Justice Department did not charge him.
But this theory was recently tested and HHS retreated. Howard Solomon, chief executive of drug company Forest Laboratories, received notice from HHS-OIG that he would be excluded from the Federal programs. Solomon received the letter because a Forest subsidiary pleaded guilty to marketing violations in 2010 and agreed to a $313 million settlement, but Solomon was not personally charged and there was never any alleged wrongdoing on his part. According to a press release from Forest, the “only basis given in the letter notifying Mr. Solomon of the potential action is that he is ‘associated with’ Forest.” Ultimately, after protest from the business community, HHS retreated from its exclusion letter.
Despite HHS backing down against Solomon and Forest, the climate of investigations and prosecutions against executives is still heating up. As Morris said in a May Associated Press interview, “[t]he behavior of a company starts at the top." In the ever growing culture of compliance coming out of Washington, it is more important than ever for executives to become involved in their organization’s ongoing compliance efforts, and to hold subordinates accountable for running a compliant organization.
Health Care Practices Must Inform Employees of Labor Rights
On August 30, 2011, the National Labor Relations Board (NLRB) issued a final rule that will require all private employers, including health care practices, covered by the National Labor Relations Act (NLRA) to notify employees of their rights under the Act. This notification’s substance is included on a poster provided by the NLRB, which informs employees of their rights, among others, to join a union and collectively bargain. The poster may be downloaded and printed in either black-and-white or color, and must be posted in the workplace. In addition to physically posting the notice, if personnel rules are customarily posted on the Internet or an intranet site, the notification must also be posted there. Translated versions must be posted where at least 20% of employees are not proficient in English. A failure to post this notice will be deemed an unfair labor practice under the NLRA. The rule goes into effect on November 14, 2011.
Friday, September 16, 2011
Feds Deny Delaware Insurance Commissioner’s Application for Medical Loss Ratio Adjustment
In a September 9th letter the Centers for Medicare & Medicaid Services denied Delaware Insurance Commissioner Stewart’s application for an adjustment to the 80 percent medical loss ratio (“MLR”) standard applicable to the individual health insurance market in Delaware beginning in 2011 as a result of the federal health care reform legislation, the Patient Protection and Affordable Care Act (the “Act”). Section 1001 of the Act required issuers in the individual market to spend at least 80 percent of premium dollars on reimbursement for clinical services and activities that improve health care quality for enrollees. Beginning in 2011, if an issuer does not meet the 80 percent standard, it is required to provide rebates to enrollees.
The Act permits states to apply for adjustments to the 80 percent standard if applying that standard may destabilize the market for individual health insurance coverage in the state. Commissioner Stewart applied for an adjustment of the standard to 65 percent, 70 percent and 75 percent for the reporting years 2011, 2012 and 2013, respectively. Of the three largest issuers of individual health insurance coverage in the state, Blue Cross Blue Shield, Golden Rule, and Aetna, Blue Cross Blue Shield already meets the 80 percent standard but Golden Rule and Aetna do not and, according to media reports, threatened to pull out of the individual insurance market in Delaware if an adjustment was not obtained. Golden Rule and Aetna had not, however, provided the required 180-day notice of withdrawal from the Delaware individual market of the time of CMS’s decision. Some individual consumers and small business owners voiced objections to Commissioner Stewart’s application arguing it was a concession to the insurance companies and not in the best interest of Delaware consumers.
CMS, which has previously granted adjustment requests from five states and denied such a request from one state, North Dakota, denied Delaware’s request because the evidence presented did not establish that application of the 80 percent MLR standard would destabilize the Delaware individual market. Among other things, CMS found that Golden Rule and Aetna would remain “substantially profitable” even if they had to pay rebates as a result of not meeting the 80 percent MLR standard.
The Act permits states to apply for adjustments to the 80 percent standard if applying that standard may destabilize the market for individual health insurance coverage in the state. Commissioner Stewart applied for an adjustment of the standard to 65 percent, 70 percent and 75 percent for the reporting years 2011, 2012 and 2013, respectively. Of the three largest issuers of individual health insurance coverage in the state, Blue Cross Blue Shield, Golden Rule, and Aetna, Blue Cross Blue Shield already meets the 80 percent standard but Golden Rule and Aetna do not and, according to media reports, threatened to pull out of the individual insurance market in Delaware if an adjustment was not obtained. Golden Rule and Aetna had not, however, provided the required 180-day notice of withdrawal from the Delaware individual market of the time of CMS’s decision. Some individual consumers and small business owners voiced objections to Commissioner Stewart’s application arguing it was a concession to the insurance companies and not in the best interest of Delaware consumers.
CMS, which has previously granted adjustment requests from five states and denied such a request from one state, North Dakota, denied Delaware’s request because the evidence presented did not establish that application of the 80 percent MLR standard would destabilize the Delaware individual market. Among other things, CMS found that Golden Rule and Aetna would remain “substantially profitable” even if they had to pay rebates as a result of not meeting the 80 percent MLR standard.
Wednesday, September 7, 2011
Third Circuit Adopts Implied False Certification Liability under False Claims Act
“Men must turn square corners when they deal with the government.”
While Justice Holmes penned the above quote in a different context, it was recently invoked by the United States Court of Appeals for the Third Circuit in its decision to adopt the implied false certification theory for liability under the False Claims Act (“FCA”). In United States ex rel Wilkins v. United Health Group, the Third Circuit joined the Second, Sixth, Ninth, Tenth, Eleventh, and District of Columbia Circuits in recognizing that healthcare providers can be liable under the FCA if the provider makes a claim for payment without disclosing that it violated regulations that affect its eligibility for payment. For Delaware providers, this means compliance with federal health laws has taken on a new dimension of exposure and they must be more careful than ever in submitting claims to the federal programs.
By way of review, in order to establish a prima facie violation under the FCA, the Government or a relator—a qui tam plaintiff—must prove: (1) that the provider presented or caused to be presented a claim for payment; (2) that was false or fraudulent; (3) that the provider knew to be false or fraudulent. The Courts have identified two categories of false or fraudulent claims under the FCA: (1) factually false and (2) legally false.
A factually false claim is one that misrepresents the items or services provided. A legally false claim is where the “false certification” theory originates, where a provider knowingly and falsely certifies that it has complied with a statute or regulation that is a condition of government payment. In Wilkins, the Third Circuit has now adopted a further distinction, and yet another avenue for FCA liability: (1) express false certifications and (2) implied false certifications.
An express false certification is where the provider falsely certifies that it is in compliance with the regulations that are prerequisites to payment in connection with the claim, such as a certification that the provider holds the requisite license to provide the services. Alternatively, the implied false certification rests on the idea that the mere act of submitting a claim, without any words of certification at all, implies compliance with the preconditions to payment. The Third Circuit noted that it must be proven that had the Government been aware of the provider’s violations of the Medicare laws and regulations, it would not have paid the claim. To state this condition another way, under the implied false certification theory, it must be shown that compliance with the regulation allegedly violated was a condition of payment, and not simply a condition of participation in the federal programs.
Under the facts of Wilkins, the relators first alleged that United Health personnel violated Medicare marketing regulations. The Third Circuit affirmed the District Court and dismissed that count of the complaint because compliance with the Medicare marketing regulations is not a condition of payment. However, the relators also alleged that United Health’s subsidiaries violated the Anti-Kickback Statute (“AKS”), also forming the basis of FCA liability. The Third Circuit found that the relators stated a claim in this regard, because Medicare regulations require Medicare Advantage and Prescription Drug Plan providers to enter into agreements with CMS, affirmatively agreeing to comply with the AKS. Therefore, the Court reasoned that “[t]o plead a claim for relief under an implied certification theory, appellants were required to allege, as they did, that appellees submitted claims for payment to the Government at a time that they knowingly violated a law, rule, or regulation which was a condition for receiving payment from the Government.
Delaware healthcare providers must be more vigilant than ever in submitting claims to the Government under federal health care programs. To steer clear of potential FCA liability, Delaware health care providers must be in compliance with all the federal health care laws that they agreed to follow when entering into contracts with CMS; when dealing with Government, always turn square corners.
While Justice Holmes penned the above quote in a different context, it was recently invoked by the United States Court of Appeals for the Third Circuit in its decision to adopt the implied false certification theory for liability under the False Claims Act (“FCA”). In United States ex rel Wilkins v. United Health Group, the Third Circuit joined the Second, Sixth, Ninth, Tenth, Eleventh, and District of Columbia Circuits in recognizing that healthcare providers can be liable under the FCA if the provider makes a claim for payment without disclosing that it violated regulations that affect its eligibility for payment. For Delaware providers, this means compliance with federal health laws has taken on a new dimension of exposure and they must be more careful than ever in submitting claims to the federal programs.
By way of review, in order to establish a prima facie violation under the FCA, the Government or a relator—a qui tam plaintiff—must prove: (1) that the provider presented or caused to be presented a claim for payment; (2) that was false or fraudulent; (3) that the provider knew to be false or fraudulent. The Courts have identified two categories of false or fraudulent claims under the FCA: (1) factually false and (2) legally false.
A factually false claim is one that misrepresents the items or services provided. A legally false claim is where the “false certification” theory originates, where a provider knowingly and falsely certifies that it has complied with a statute or regulation that is a condition of government payment. In Wilkins, the Third Circuit has now adopted a further distinction, and yet another avenue for FCA liability: (1) express false certifications and (2) implied false certifications.
An express false certification is where the provider falsely certifies that it is in compliance with the regulations that are prerequisites to payment in connection with the claim, such as a certification that the provider holds the requisite license to provide the services. Alternatively, the implied false certification rests on the idea that the mere act of submitting a claim, without any words of certification at all, implies compliance with the preconditions to payment. The Third Circuit noted that it must be proven that had the Government been aware of the provider’s violations of the Medicare laws and regulations, it would not have paid the claim. To state this condition another way, under the implied false certification theory, it must be shown that compliance with the regulation allegedly violated was a condition of payment, and not simply a condition of participation in the federal programs.
Under the facts of Wilkins, the relators first alleged that United Health personnel violated Medicare marketing regulations. The Third Circuit affirmed the District Court and dismissed that count of the complaint because compliance with the Medicare marketing regulations is not a condition of payment. However, the relators also alleged that United Health’s subsidiaries violated the Anti-Kickback Statute (“AKS”), also forming the basis of FCA liability. The Third Circuit found that the relators stated a claim in this regard, because Medicare regulations require Medicare Advantage and Prescription Drug Plan providers to enter into agreements with CMS, affirmatively agreeing to comply with the AKS. Therefore, the Court reasoned that “[t]o plead a claim for relief under an implied certification theory, appellants were required to allege, as they did, that appellees submitted claims for payment to the Government at a time that they knowingly violated a law, rule, or regulation which was a condition for receiving payment from the Government.
Delaware healthcare providers must be more vigilant than ever in submitting claims to the Government under federal health care programs. To steer clear of potential FCA liability, Delaware health care providers must be in compliance with all the federal health care laws that they agreed to follow when entering into contracts with CMS; when dealing with Government, always turn square corners.
Wednesday, June 22, 2011
New Delaware Health Care Facility Inspection Law Goes Into Effect
Just six weeks after Governor Markell signed into law HB 47 authorizing the Division of Public Health to investigate and inspect unsanitary or unsafe conditions in certain facilities where invasive medical procedures are performed, the Division shut down a Dover dermatology practice after receiving 10 complaints from patients and former employees of the Center for Dermatology. On Monday, June 15th, six investigators—three each from the Division of Public Health and the Division of Professional Regulation—arrived unannounced at the Center and, after spending most of the day there, ordered the practice to close. The unsafe conditions observed by the investigators included the use of unsterilized equipment such as scalpels, forceps and tweezers, health care staff failing to wash their hands before treating patients, and improper storage of controlled substances. The Division of Public Health was also concerned that the Center could not produce a written list of its safety policies and procedures.
HB 47 was introduced in the General Assembly in the wake of the publicity surrounding the case of Dr. Kermit Gosnell, a West Philadelphia abortion provider who is accused of murder in connection with the deaths of seven infants and was associated with clinics in Wilmington and Dover run by Atlantic Women's Medical Services. The bill gives the Division of Public Health authority to inspect and investigate facilities or health care practices (physicians, dentists, podiatrists, chiropractors) performing procedures in which anesthesia or sedation is or should be used upon receiving a complaint from a patient or the occurrence of an “adverse event,” e.g., death, serious injury, or the initiation of a criminal investigation. Facilities excluded from the bill are hospitals, freestanding birthing centers, freestanding surgery centers, and freestanding emergency centers.
HB 47 also authorizes the Division of Professional Regulation to investigate and inspect unsanitary and unsafe conditions maintained by individuals licensed by the Board of Medical Licensure and Discipline, and provides that maintenance of an unsanitary or unsafe condition is “unprofessional conduct” under the Medical Practice Act.
In light of these developments health care practices are well-advised to review their written safety policies and procedures and take measures to ensure that the procedures are followed.
HB 47 was introduced in the General Assembly in the wake of the publicity surrounding the case of Dr. Kermit Gosnell, a West Philadelphia abortion provider who is accused of murder in connection with the deaths of seven infants and was associated with clinics in Wilmington and Dover run by Atlantic Women's Medical Services. The bill gives the Division of Public Health authority to inspect and investigate facilities or health care practices (physicians, dentists, podiatrists, chiropractors) performing procedures in which anesthesia or sedation is or should be used upon receiving a complaint from a patient or the occurrence of an “adverse event,” e.g., death, serious injury, or the initiation of a criminal investigation. Facilities excluded from the bill are hospitals, freestanding birthing centers, freestanding surgery centers, and freestanding emergency centers.
HB 47 also authorizes the Division of Professional Regulation to investigate and inspect unsanitary and unsafe conditions maintained by individuals licensed by the Board of Medical Licensure and Discipline, and provides that maintenance of an unsanitary or unsafe condition is “unprofessional conduct” under the Medical Practice Act.
In light of these developments health care practices are well-advised to review their written safety policies and procedures and take measures to ensure that the procedures are followed.
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