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Prescription Monitoring Program Now Accessible By Delegates

Posted in Health Law

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By Jennifer J. Thomas

The Louisiana Board of Pharmacy has revised the rules on access to patient information maintained by the Prescription Monitoring Program (“PMP”). Historically, only persons authorized to prescribe or dispense controlled substances or drugs of concerns could access the PMP. The Board recently revised the PMP rules to now allow a “delegate” of the prescriber or dispenser access to the PMP records. A delegate is defined as a person authorized by a prescriber/dispenser who is also an authorized user to access and retrieve program data for the purpose of assisting the prescriber/dispenser and for whose actions the authorizing prescriber and dispenser retains accountability. Each delegate must register for their own account which will be linked to the supervisor’s account. The prescribers and dispensers are responsible for supervising their delegate’s activities.

The goal of the PMP is to improve the State of Louisiana’s ability to identify and inhibit the diversion of controlled substances and drugs of concern. The information maintained on the PMP is used to report suspected violations of any law to State and Federal Law Enforcement agencies as well as to assist prescribers with the treatment of their patients. All dispensers of controlled dangerous substances and drugs of concern are required to submit information to the PMP, including both prescriber and patient information. Failure to report prescription information to the PMP will result in a referral to the prescriber or dispenser’s professional licensing board for administrative sanctions.

The Louisiana Board of Pharmacy has issued a PMP Delegate Registration and Request Guide with instructions for prescribers, dispensers and their delegates on how to register for a delegate account. More information can be found at the Louisiana Board of Pharmacy website www.labp.com

 

Lights, Camera, Action: A Spotlight on Louisiana Location Agreements for Motion Picture, Television, and Commercial Productions

Posted in Film and Entertainment

By Meg Alsfeld Kaul

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Louisiana has become a primary hub for motion picture, television and commercial productions over the last ten years. With the rise of filming occurring in this state, production companies are always looking for locations to shoot their projects. You may have heard of friends, family or neighbors who have been approached by a location scout looking to use their home or business as a “location” for a film or TV project. While it is exciting to become involved with a production, it does not come without some risks. If approached to use your home or business, the following considerations may help you assess whether or not you would like to rent your home or business to a production company. It is also helpful to hire an entertainment attorney to review any agreements provided to you.

Always Get It In Writing. Make sure that any agreement to lease your home or business is in writing. Often production companies will give you their “standard” agreement—but that does not mean you have to keep every provision included within this agreement. Therefore, if you and/or your attorney are not comfortable with some of the provisions, you should make the necessary changes. Remember that a standard agreement can always be altered.

Research. You may want to do some research on the production company and the parent or related companies to the contracting entity to ensure the people you are dealing with are reputable. It also helps to know whether the project has been funded. You can contact Louisiana Economic Development’s entertainment division and ask the film department if they are aware of the production or production company to determine if the project is in fact legitimate.

Insurance. Ask for a copy of their insurance certificate. You should be named as an additional insured. If they are going to do any heavy construction on your property and/or major alterations to your home, you should seek the advice of an attorney or insurance agent to ensure that the insurance obtained is sufficient.

Set a Timeline. Even though a project may only “film” at your location for two days, the production will require time to set up and wrap the location. So what may start as a “two day shoot” may also include two days for prep and then three days for clean-up, totaling a week’s worth of your time. Therefore, you will want to get that timeframe spelled out with as much specificity as you can. Ask for specific dates, as you don’t want to close your business unless they’re actually going to show up on that date, or plan to be out of your home for five days when it is really going to be ten. A location agreement will also provide for some additional days in the future if they need to do “reshoots” or things of that nature. You will want to ask for advanced notification for these future days in the agreement as well.

Pricing. You should be properly compensated. This will include being compensated for the days of prep and wrap. If you own a business, be prepared to provide a number for how much it will cost to close down your business per day. The production company should clean and restore your property after they wrap, but you may also ask for a cleaning stipend up front to hire someone additionally to clean your home or business. If you would like to have a representative of your business or someone from your family on site while they are filming, you may request a “site representative” fee which may be an hourly fee or based on a per day rate. In addition, the production company should compensate your hotel expenses and provide a per diem if the company is renting out your house.

Changes and Restoration. Production companies are probably going to tailor your location to fit the needs of the project. If they are filming inside of your home, these changes could be anything from building artificial walls within your living room, to removing all your furniture and storing it in a separate location, to adding moss and trees to your exterior or building a garage in the backyard. You will want to know in advance what they plan to do inside and outside of your home or business, how they plan to care for your things if they move them, and how they’ll put it all back together after they are done. Most importantly, you want to ensure that they will fix what they damage. For instance, if they are removing your plants in the front yard or building a shed on top of your grass, you will want to put it in writing that they will replant your plants or replace them if they have died since removal, or that they will restore or re-sod your grass if, upon removal of the shed structure, your grass underneath has died. You’ll also want to be able to do a site inspection of your home or business after they have wrapped and notify them immediately of any issues or damage to the property. The production company should be responsible for any damage they cause, except for normal wear and tear incurred with the permitted uses of the property.

Permission. If you are one of several owners of a building, or are simply leasing a house, you will want to get the consent to lease the location from every owner. Simply providing the consent as a tenant in a house without the landlord’s consent could land you in some hot water, especially if anything happens to the house.

Consider Your Neighbors. If, for example, you know your neighbors are particular about noise, have a new baby, or you share a backyard or common area, you may want to approach them about the potential production. Productions are loud. They involve a ton of crew members and equipment. It will also mean that a lot of extra vehicles, trucks and trailers will be on or around your location. If they are shooting at night, it may involve bright lights and lots of noise at unattractive hours. So giving the neighbors a heads up is usually a good move in order to keep the peace during filming and after the crew leaves.

Seeing your home or office on a big screen is exciting and can be well worth the hassle of being inconvenienced for a few days. You should be prepared to ask the right questions, map out the details in advance, and hire an attorney to review the paperwork. There is always a chance that something valuable could break or it could take them longer to film than anticipated. However, the rental fees are typically generous and the bragging rights of seeing your home on screen are priceless!

 

CMS and ONC Issue Final Rule Modifying Meaningful Use Requirements

Posted in Health Law

By Lyn Smith Savoie

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On August 29, 2014, the Centers for Medicare & Medicaid Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC) issued a final rule modifying the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs. While CMS is responsible for managing the EHR incentive programs and meaningful use, ONC is responsible for creating and maintaining an EHR certification program. The final rule includes the following significant changes: (1) the issuance of various options providers may use to meet the 2014 reporting requirements; (2) extension of the deadline for implementation of Stage 3 for certain providers; and (3) modification of the reporting requirements for Clinical Quality Measures (CQMs) to reflect a provider’s choice of certified electronic health record technology (CEHRT).

2014 Reporting Options:

Due to product availability delays, CMS and ONC recognized that many providers may have difficulty fully implementing the 2014 Edition CEHRT to meet meaningful use. As a result, CMS and ONC developed the following three options providers can utilize for their 2014 meaningful use attestations:

Option 1: Utilize 2011 Edition CEHRT. Eligible professional (“EPs”), eligible hospitals (“EHs”) and critical access hospitals (“CAHs”) may use the 2011 Edition CEHRT for the 2014 EHR reporting period and must meet the meaningful use objectives and measures for Stage 1 that were applicable during the 2013 payment year, regardless of the provider’s current stage of meaningful use.

Option 2: Utilize a Combination of 2011 and 2014 Edition CEHRT. The second option for EPs, EHs, and CAHs who were impacted by the delays is to utilize a combination of 2011 Edition CEHRT and 2014 Edition CEHRT for their 2014 reporting period. These providers may choose to meet (a) the 2013 Stage 1 objectives and measures; (b) 2014 Stage 1 objectives and measures, or (c) for those providers scheduled to begin Stage 2 in 2014, the Stage 2 objectives and associated measures.

Option 3: Utilize 2014 Edition CEHRT for 2014 Stage 1 Objectives and Measures Instead of Stage 2 Objectives and Measures. For some EPs, EHs, and CAHs, the 2014 Edition CEHRT availability delays resulted in the inability to fully implement all the necessary Stage 2 objectives and measures for the 2014 reporting period. Consequently, CMS and ONC are permitting providers scheduled to begin Stage 2 for the 2014 EHR reporting period to attest to the Stage 1 objectives and measures.

Under all three options, the EP, EH or CAH utilizing the alternative reporting measures for 2014 must attest that it was “not able to fully implement” 2014 Edition CEHRT due to “delays in 2014 Edition CEHRT availability.” CMS and ONC did not intend for the alternative reporting options to be broadly utilized by providers. Therefore, the final rule provides guidance on the terms “not able to fully implement” and “delays in 2014 Edition CEHRT availability,” which limit who can attest to meeting these requirement.

The final rule lists the following examples of situations that would not be permissible reasons to “not be able to fully implement” 2014 Edition CEHRT and, therefore, would not be grounds to use the optional reporting requirements: (a) failure to implement due to financial issues, such as the costs of implementing, upgrading, installing, or testing; (b) experiencing personnel problems, such as staff changes and turnover; and (c) inaction or delay by the provider, including waiting too long to engage a vendor or the provider’s inability or refusal to purchase requisite software updates. Regarding “delays in 2014 Edition CEHRT availability, CMS and ONC clarified that this term refers specifically to one or more delays related to the development, certification, testing and release of an EHR product by the EHR vendor or developer, not from merely whether the software is certified and then installed or not.

The above-mentioned attestation options are not available to providers who have fully implemented 2014 Edition CEHRT.

Stage 3 Implementation Extension:

Another significant change in the final rule was the finalization of the proposed delay in the deadline for implementation of Stage 3 meaningful use requirements for those providers who became meaningful users of EHR in 2011 or 2012. Originally set for January 1, 2016, the Stage 3 deadline has not been delayed until January 1, 2017. The delay is intended to provide CMS and ONC with the opportunity to focus on successful implementation of the Stage 2 requirements. The Stage 3 objectives and measures, as well as reporting criteria, will be defined in future rulemaking.

CQM Submissions for 2014:

In light of the 2014 reporting changes, CMS and ONC also adjusted the CQM submission requirements. For providers who choose to attest to the 2013 Stage 1 objectives and measures, they must also report the CQMs that were applicable for 2013. Similarly, those providers choosing to attest to the 2014 Stage 1 or Stage 2 objectives and measures must also report the 2014 CQMs in the manner required for 2014.

The reporting options set forth in the final rule only apply to the 2014 reporting period. No changes have been made to reporting requirements for 2015. Providers must use 2014 Edition CEHRT for the 2015 reporting period and for subsequent years.

 

Louisiana Second Circuit Holds that Routine Nonsurgical Medical Treatment Does Not Require Compliance with the Louisiana Uniform Consent Law

Posted in Medical Malpractice

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By Karen M. Fontana

William McDougald et al. v. St. Francis North Hospital Inc. No. 48,955 (La. App. 2nd Cir. April 9, 2014) 137 So.3d 1233 writ denied 2014-0815 (La. 6/3/14), 140 So.3d 1191.

In this medical malpractice wrongful death action, the plaintiffs contended that the defendant physician breached the standard of care in temporarily discontinuing the patient’s Plavix and aspirin in anticipation of orthopedic surgery without informing the patient of the associated risks. The patient died of a myocardial infarction several days after stopping the medications and just one day before the planned surgery.

Ms. McDougald was a 58 year old woman with a history of heart disease and smoking and had undergone placement of stents as her heart disease advanced. The patient had been maintained on Plavix and aspirin for over two years since her last stent placement in 2007. In 2009, Ms. McDougald planned to undergo knee surgery and was referred to defendant, her cardiologist, for a medical clearance.

Evidence was presented at trial that medical clearance was provided after the defendant’s head nurse (1) spoke with the patient’s primary care physician to confirm that the patient had not presented with any cardiac issues in the preceding year; (2) confirmed this with the patient directly as well; and then (3) discussed with the patient the need to temporarily discontinue the Plavix and aspirin seven days prior to the planned knee surgery. Nurse Gibson stamped the defendant physician’s signature on the clearance for the knee surgery. The patient was not seen by the defendant physician as part of this surgical clearance.

Ms. McDougald’s family filed a PCF claim alleging that the defendant physician committed malpractice by failing to inform Ms. McDougald of the risks associated with the cessation of Plavix and aspirin, including the possibility of death. Plaintiffs alleged that the physician had a duty to inform the patient of these risks pursuant to the Louisiana Uniform Consent Law (LUCL), La. R.S. 40:1299.40. Plaintiffs contended that the defendant physician never spoke to Ms. McDougald and therefore breached the standard of care by failing to obtain informed consent.

The Medical Review Panel found that the order to discontinue Plavix was appropriate because the accepted practice guidelines for Plavix therapy after stent placement called for 12 months of administration only and it had been two years since Ms. McDougald’s last stent. The panel further found that the standard of care did not require a doctor to discuss the discontinuance of Plavix because the risk of having a stent thrombosis due to discontinuation of Plavix was so minimal that it was not a material risk.

At time of trial, the court ruled that the Louisiana Uniform Consent Law did not apply to the decision to discontinue medications prior to surgery. However, the issue of informed consent was again raised during argument over jury instructions. Plaintiffs again sought a jury instruction regarding the LUCL and the general principles of its disclosure requirements.

Ultimately the trial judge accepted the defense argument that informed consent was not required when temporarily stopping medications such as Plavix or aspirin for surgery. Defendant successfully argued that physicians are not required to comply with the informed consent law when undertaking routine actions. Further defendant had argued that, even if the informed consent law were found to be applicable, a physician is only required to disclose a material risk, and plaintiff bears the burden of establishing materiality.

After jury verdict was returned for the defense, plaintiffs appealed arguing the trial court had erred in finding the LUCL to be inapplicable. The Louisiana Second Circuit affirmed the trial court decision, confirming that La. R.S. 40:1299.40 did not apply to the facts of this case and thus lack of informed consent was not an issue.

In rejecting the application of the informed consent statute to these facts, the Second Circuit cited with approval the Third Circuit decision in Novak v. Texada, Miller, Masterson & Davis Clinic, 514 So.2d 807 (La. 1987) which found that the administration of a flu shot did not fall within the scope of La. R.S. 40:1299.40 because it was a routine procedure not requiring written consent. The Second Circuit also cited the Third Circuit’s decision in Daniels v. State, through Department of Health & Human Resources, 532 So.2d 218 (La. App. 3d Cir. 1988) which held that the nonsurgical treatment of a closed wrist fracture was a routine medical procedure in which surgery was not involved and to which the informed consent statute did not apply.

Thus, in McDougal, the Second Circuit concluded that “the clearance of a patient for surgery and the recommendation that the patient should cease taking Plavix and aspirin seven to ten days prior to surgery is a routine, nonsurgical decision made on a daily basis. It is not a ‘medical or surgical procedure’ as contemplated in the LUCL to which the duty of informed consent applies.” Emphasis added. Thus the appellate court affirmed the trial court determination that the LUCL did not apply to the facts of this case and lack of informed consent was not an issue.

Plaintiffs often argue for the application of the LUCL requirements to physician decisions regarding selection of medications and other nonsurgical treatment decisions. This Second Circuit’s decision provides further support for limitation on the scope of the Louisiana Uniform Consent Law and its required disclosures. Where the challenged medical decision is a routine, nonsurgical decision such as the cancellation of a medication; or a decision to pursue nonsurgical treatment options, according to the Second and Third Circuits, physicians will not have to demonstrate compliance with the Louisiana Uniform Consent Law.

Of course there is no brightline as to what will be deemed a routine medical decision, and the materiality of risks of all treatment decisions must be assessed on a case by case basis. However, this Second Circuit opinion offers important clarification on the scope of the LUCL and its application in the clinic or non-operative setting.

 

 

 

Electing Portability – It’s Not Too Late to File

Posted in Estate Planning, Tax, and Probate Law

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By Wendy B. Horton

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 was signed into law on December 17, 2010, and included a key provision – providing for “portability” between spouses of the unified credit. On January 2, 2013, the American Tax Relief Act of 2012 (“ATRA”), was signed into law, including a provision making portability a permanent feature.

Generally, portability allows a surviving spouse to elect to take advantage of any unused portion of the unified credit of his or her predeceased spouse, provided that the deceased spouse died on or after January 1, 2011. Thus, a surviving spouse will be provided a larger exclusion amount to be used for his or her own gift or estate tax purposes. The portable amount that can be used by a surviving spouse is referred to as the “deceased spousal unused exclusion amount” (“DSUE amount”).

Historically, the applicable exclusion amount, or the maximum dollar amount the unified credit will allow to be transferred tax free at a decedent’s death are as follows: $5,000,000 in 2011; $5,120,000 in 2012; and $5,250,000 in 2013.

Assume for example that Jack and Jill are married. In 2011, Jack makes multiple taxable gifts in an amount equaling $3,000,000. In 2013, Jack dies having no taxable estate and is survived by Jill. Jack is considered to have used only $3,000,000 of the $5,250,000 exclusion available in 2013. Thus, Jack has $2,250,000 remaining. A timely filed estate tax return with a portability election will allow Jill to use not only her entire $5,250,000, but also the remaining $2,250,000 from Jack. Thus, Jill will be able to transfer up to $7,500,000 tax free.

One caveat of portability is that in order for a surviving spouse to use the predeceased spouse’s DSUE amount, the executor or representative of the predeceased spouse’s estate must file a federal estate tax return and affirmatively elect portability. Although estate tax returns are not required to be filed unless a decedent’s gross estate exceeds the basic exclusion amount, for decedents dying on or after January 1, 2011, an estate tax return must be timely filed, even if no estate tax is due, in order to affirmatively elect portability.

Estate tax returns generally are required to be filed within nine months after the date of a decedent’s death, unless an executor claims the available six-month extension. An estate tax return filed solely for the election of portability must meet the same filing deadline. However, there is good news for executors of the estate of decedents dying in 2011, 2012, or 2013, who were not required to file an estate tax return and who in fact did not file an estate tax return – portability may still be elected even if the deadline for filing the estate tax return has passed.

In order to file an estate tax return electing portability, an executor can file the otherwise late return with a notation at the top which provides: “FILED PURSUANT TO REV. PROC. 2014-18 TO ELECT PORTABILITY UNDER § 2010(c)(5)(A).” The deadline for filing an otherwise late return filed in this manner is December 31, 2014.

 

Protection of Trademarks from Cybersquatters

Posted in Intellectual Property

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By Bill Caughman

In 1999, the Internet Corporation for Assigned Names and Numbers (“ICANN”) adopted the Uniform Domain-Name Dispute-Resolution Policy (UDRP) which established a system for dispute resolution between owners of internet domain names and trademark owners. The UDRP allows a trademark owner to file a complaint with various administrative bodies, such as the National Arbitration Forum, by which the trademark owner asserts their rights and requests that offending domain names, including those held by cybersquatters, be either cancelled or transferred to the trademark owner as the rightful owner of a given trademark.

While the UDRP is certainly less expensive and less time consuming than formal litigation in court, the proceedings usually take many months and expenses can be substantial. In 2013, a new system for dispute resolution was implemented called the Uniform Rapid Suspension System (URS). This system has been expanding in use and coverage; only recently URS became applicable to .us top level domains. The URS is intended to provide certain trademark owners with an alternative to the UDRP. Under the URS, when a trademark owner files a complaint, the registrar of the domain name immediately locks the domain to prevent modification or transfer. The registrar will then provide notice to the domain owner of the complaint, and the domain owner has 14 days to file a response. If there is no response from the domain owner (which is frequent for cybersquatters), then the domain is immediately suspended. Once the domain is suspended, when a person enters the domain name into a search engine, they will be redirected to a URS placeholder page showing that the domain is suspended. This remedy is different from the UDRP where the domain can be terminated or transferred to the trademark owner, but it does shut down the offending site much faster, and the fees are typically less under the URS procedure.

There are some additional limitations of the URS process. A trademark owner desiring to use the URS must be the owner of a mark consisting of a word only, as opposed to a trademark on a design, symbol or other feature that is ordinarily protectable under trademark law. Additionally, the burden of proof under the URS is “clear and convincing” which is a higher standard than the “preponderance of evidence” standard under the UDRP.

For the right situation, the URS is another tool to help trademark owners protect their rights in the ever expanding world of internet domain names.

 

ONC Report on Surge in Use of Electronic Health Records (“EHR”)

Posted in Health Law

by Linda G. Rodrigue

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Two recent studies published by the office of the National Coordinator for Health Information Technology (the “ONC”) suggest that the use of electronic health records among physicians and hospitals has greatly increased. The study is based on information collected in calendar year 2013.

According to ONC, approximately 78% of office-based physicians have adopted some form of electronic health record. Almost 50% of these record systems have advanced functionalities. Similarly, ONC reported that almost 60% of hospitals had adopted EHR systems with advance functional capabilities by 2013, a 400% increase since calendar year 2010.

The United States Department of Health and Human Services (“HHS”) believes that these findings are the result of the “meaningful use” program. Meaningful use is a program that incentivizes Medicare payments for using electronic technology in the performance of certain functions (for example, electronic prescribing). Meaningful use has been introduced in stages. Stage 1 involved more “in-house” electronic functionality, while Stage 2 addresses sharing information with other entities. There is still, according to HHS, a great need for improvement in Stage 2 implementation.

Karen DeSalvo, M.D., MPH, who heads the ONC, stated recently that HHS continues to focus on the goal of “an interoperable health system that enables nationwide health information exchange.”

 

What is Process Safety Management (PSM) and What is a Risk Management Program (RMP) ?

Posted in Process Safety Management

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By Lee Vail

Both OSHA’s Process Safety Management (“PSM”) and EPA’s Chemical Accident Prevention regulations are regulatory programs developed to address process safety in the “Process Industry.” A “Process” is defined broadly and includes any activity that uses, stores, manufactures, handles or moves hazardous chemicals. Since the definition is broad, it includes much more than refineries and chemical plants, and unless exempt, includes any facility with an inventory of hazardous chemicals above an established threshold.

PSM, which was promulgated in 1992 under authority of the Section 304 of the Clean Air Act (“CAA”), is administrated by the Occupational Safety and Health Administration. PSM regulations are codified at 29 CFR 1910.119. In addition to other requirements, the EPA’s Chemical Accident Prevention regulations (colloquially referred to as the Risk Management Program or “RMP”) require the development of a Risk Management Plan (confusingly also abbreviated as “RMP”). RMP (the program) was promulgated in 1996 under Section 114(r) of the CAA and the Emergency Planning and Community Right-to-Know Act of 1986 (“EPCRA”) by the Environmental Protection Agency (“EPA”). RMP regulations are codified at 40 CFR Part 68. Although different regulations developed by different agencies under separate authority, these programs contain a lot of overlap.

More on PSM, RMP, RAGAGEP, PSI and PHA:

 

 

 

American Arbitration Association Requires Registration of Consumer Arbitration Clauses

Posted in Alternative Dispute Resolution, Business and Corporate, Business Litigation, General Litigation

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By Linda Perez Clark

Beginning September 1, 2014, the American Arbitration Association (“AAA”) will require that any business using or intending to use the AAA rules in a consumer contract register the arbitration clause with the AAA. Upon submitting the clause, the AAA will review it for “material compliance” with the AAA’s due process standards contained in its Consumer Due Process Protocol and its newly-adopted Consumer Arbitration Rules (which will replace the AAA Consumer-Related Disputes Supplementary Procedures effective September 1, 2014).

If the AAA is satisfied that such compliance has been met, then the business will be included in the AAA’s publicly-accessible Consumer Clause Registry, which will contain a copy of the arbitration clause along with the business’s name and address. If the clause is determined non-compliant, then the AAA may decline to administer the case, and the parties may then submit their dispute to the appropriate court.

The AAA rules further require that the clause be submitted for registry at least 30 days before the planned effective date of the contract; but if a business does not submit its arbitration clause for review in advance of an arbitration being filed, the AAA will conduct a review at that time, for an expedited fee of $250, in addition to the standard initial registry fee of $650. The AAA also requires payment of a yearly, non-refundable fee of $500 to keep each clause registered. Any different arbitration clauses used by the same business or its subsidiaries must be separately registered and maintained, and any subsequent changes to a registered arbitration clause must be resubmitted. The AAA rules also provide that it will decline to administer an arbitration if the business has failed to pay the required fees.

An arbitration clause that satisfies the Federal Arbitration Act, along with a class action waiver, can effectively impede the use of class actions seeking recovery for individual de minimus claims. The U.S. Supreme Court has validated the enforceability of arbitration clauses for such purposes in a series of recent cases. It is therefore important to ensure that the clause is well drafted, and properly registered with the AAA so that it won’t be set aside when the business needs it most.

The AAA registry process can be found on their site at www.adr.org.

 

CMS Will Expand the Medicare Demonstration Requiring Prior Authorization for Power Mobility Devices to Twelve Additional States, Including Louisiana

Posted in Health Law

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by Deborah J. Juneau

CMS published its notice of intent in the July 29, 2014 Federal Register to expand the demonstration regarding prior authorizations from DME suppliers seeking payment for Power Mobility Devices from the original seven states to an additional twelve states. Louisiana is one of those states.

The original states included in the demonstration were California, Florida, Illinois, Michigan, New York, North Carolina and Texas. The expanded demonstration will include Louisiana, Pennsylvania, Ohio, Missouri, Washington, New Jersey, Maryland, Indiana, Kentucky, Georgia, Tennessee, and Arizona. According to CMS, these states have high expenditures and improper payments for Power Mobility Devices, based on 2012 billing data. The effective date for the expanded demonstration begins on October 1, 2014.

CMS initially implemented the demonstration in the original seven states that had a perceived history of high levels of improper payments and incidents of fraud related to Power Mobility Devices. The objective of the demonstration was to develop improved methods for investigation and prosecution of fraud and recovery of improper payments. Per CMS, the data accumulated from the demonstration could be used to detect collaboration between ordering physicians and suppliers in submitting fraudulent claims for Power Mobility Devices. Investigators will use changes in billing practices to determine whether to investigate a supplier. Specifically, CMS intends to analyze data pertaining to suppliers who no longer bill for Power Mobility Devices or who have a significant decrease in billing, as well as physicians or treating practitioners who have a high volume of submissions for Power Mobility Devices. CMS will also analyze data regarding HCPCS codes that show a dramatic increase in use.

Pursuant to the demonstration, a request for prior authorization and all relevant documentation to support medical necessity, as well as a written order for the covered item, must be submitted when one of the following HCPCS codes for a Power Mobility Device is ordered: Group 1 Power Operated Vehicles (K0800-K0802 and K0812); all standard power wheelchairs (K0813-K0829); all Group 2 complex rehabilitative power wheelchairs (K0835-K0843); all Group 3 complex rehabilitative power wheelchairs without power options (K0848-K0855); pediatric power wheelchairs (K0890 and K0891); and Miscellaneous power wheelchairs (K0898).

In order to be affirmed, the request for prior authorization must meet all applicable rules, policies, and National Coverage Determinations/Local Coverage Determinations requirements. Upon receipt of the complete request for prior authorization, CMS will conduct a complex medical review and will attempt to postmark the notification of the decision with the prior authorization number within ten business days. If a subsequent prior authorization request is submitted following a non-affirmative decision on the prior request, CMS will attempt to provide notification of the decision on the request within 20 business days. A request for expedited review in an emergency situation may be submitted, if the healthcare practitioner clearly documents, with supporting rationale, that the standard time frame (10 days) would seriously jeopardize the beneficiary’s life or health. In that case, CMS will provide notice of the decision within 48 hours of the complete submission.

If the prior authorization request is not affirmed, the claim will be denied upon submission by the supplier. The denial is subject to appeal by the beneficiary. Suppliers must issue an Advance Beneficiary Notice to the beneficiary prior to the delivery of the item in order for the beneficiary to be held financially liable when a Medicare payment denial is expected for the Power Mobility Device.

CMS also plans to assess a 25% payment reduction in the newly added demonstration states after the first three months of the expanded demonstration. CMS will assess a 25% payment reduction on those suppliers whose claims are determined to be payable but who did not first receive a prior authorization decision for the item. The supplier must submit the prior authorization number on the claim in order to not be subject to the 25% reduction in payment. For capped rental items, the payment reduction will be applied to all payments in the series. The 25% reduction in payment is not transferable to the Medicare beneficiary and is not subject to appeal. The payment reduction will not be applied to competitive bid contract suppliers.

DME suppliers and healthcare practitioners should be aware of this expanded prior authorization requirement that will go into effect on October 1, 1014, as well as the associated consequences for failure to obtain prior authorization for Power Mobility Devices. Suppliers and practitioners’ billing practices will be scrutinized by CMS to determine whether billing practices changed in relation to the demonstration and, if so, that could lead to an investigation by CMS.

 

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