The Louisiana Department of Health and Hospitals (“DHH”) has settled a class action lawsuit filed on behalf of Medicaid beneficiaries receiving Long Term Personal Care Services (“LT-PCS”). The class action is pending in the U.S. District Court, Middle District of Louisiana. The presiding federal judge has issued preliminary approval of the settlement. A final approval hearing is scheduled for February 17, 2012.

The class action alleged that the reduction of maximum weekly service hours available to Medicaid beneficiaries eligible for LT-PCS services violated the Americans with Disabilities Act and sought declaratory and injunctive relief to prohibit the implementation of the reduction to service hours. The class action alleged that the LT-PCS recipients were at risk of being forced to enter a nursing home as a result of the cuts to service hours, which is exactly what the LT-PCS program was designed to prevent.

The court defined the class of plaintiffs as follows:

“Louisiana residents with disabilities who have been receiving Medicaid-funded services through the LT-PCS program; who desire to reside in the community instead of a nursing facility; who require more than 32 hours of Medicaid-funded personal care services per week in order to avoid entering a nursing facility, and who do not have available (including through family supports, shared living arrangements, or enrollment in the ADHC [Adult Day Health Care] waiver) other means of receiving personal care services.”

While the class action was pending, DHH allowed LT-PCS recipients who were receiving the maximum number of weekly service hours to request expedited access to the Community Choice Waiver Program. The Community Choice Waiver Program provides a variety of services, including personal care services, to assist beneficiaries to avoid institutional placement and to remain in their homes and communities.

As a part of the settlement, DHH has agreed to extend this option to additional class members currently approved for less than the maximum 32 hours per week of services, but who were receiving more than 32 hours per week at the time the reduction in hours became effective. DHH will offer Community Choice Waiver Program slots to class members who apply for the program, if the class members can show that, without the additional services, they would be at serious risk for institutional placement. DHH will also request approval from the federal government for an additional 200 Community Choice waiver slots. Any slots not filled by class members will be added to the pool of slots made available to those who are on the waiting list for waiver services.
 

The Department of Health and Human Services, Office of Inspector General ("OIG"), recently issued an advisory opinion in which the OIG concluded that an arrangement between a primary care physician and an allergy testing and immunotherapy laboratory company ("Company") could potentially generate prohibitive remuneration under the Federal Anti-Kickback Statute possibly resulting in administrative sanctions. Under the arrangement, the Company and the physician would enter into an exclusive contract for the Company to provide allergy testing and immunotherapy laboratory services and related items within the physician’s medical offices. The Company would provide all necessary laboratory personnel, equipment, supplies, training, and billing and collection services to the physicians. The Company would also assist the physicians with marketing allergy services by providing patient education materials and reviewing patient files to identify candidates for laboratory services. In return, the physicians would provide space within their offices to operate the laboratory, administrative staff to schedule patients, general medical office supplies and furniture, general liability and malpractice insurance, as well as physician supervision and interpretation of laboratory results. The physician would bill for the laboratory items and services under the physician's provider identification number and pay the Company a fee equal to 60% of the physician's gross collections from allergy testing and immunotherapy items and services.

The OIG analyzed the arrangement with regard to the Federal Anti-Kickback Statute. The Anti-Kickback Statute is violated when a person knowingly and willingly offers, pays, solicits, or receives any remuneration to induce or reward referrals for items and services reimbursable by a federal healthcare program such as Medicare and Medicaid. A violation of the Anti-Kickback Statute is a felony punishable by a maximum fine of $25,000, imprisonment of up to five (5) years, or both. Further, any person convicted of violating the Anti-Kickback Statute is automatically excluded from all federal healthcare programs. There are, however, some "safe harbors" or exceptions for various payment and business practices identified by the government that would not be prosecuted.

The OIG found that the proposed arrangement would not qualify for a safe harbor protection under the Anti-Kickback Statute because: 1) the services would be provided on an as-needed basis, and 2) to meet a safe harbor, the aggregate compensation to be paid under the contract must be set forth in advance and not take into account the volume or value of any business generated between the parties. Because the physician pays the Company a percentage of the gross "collections" of the allergy tests and immunotherapy items and services, the charges would not be set in advance and would be based, in part, on volume. The OIG found that percentage compensation arrangements are "inherently problematic" under the Anti-Kickback Statute because they relate to the volume and value of business generated between the parties, rather than the fair market value of the services provided. The OIG was also concerned that review of patient files to identify candidates for allergy testing services is a marketing activity that could encourage physicians to order medically unnecessary tests, possibly risking patient harm. Additionally, the fee structure could also create over utilization.

The Company asserted that the arrangement would comply with the "in-office ancillary services exception to the physician's self referral law," the Stark Law. However, the OIG stated that even if the arrangement were to comply with the Stark Law, the compliance would not affect the OIG's analysis under the Anti-Kickback Statute as the statutes are independent legal authorities and "each transaction or arrangement must be separately evaluated under both statutes." The OIG concluded that the proposed arrangement could potentially generate remuneration under the Anti-Kickback Statute and the OIG could potentially impose administrative sanctions.
 

CMS released 2011 recovery results for the Recovery Audit Contractor (RAC) Program. The 2011 figures reflect a significant increase over the amounts recovered or returned to providers in 2010. Through four quarters (October, 2010 through September, 2011), RAC contractors recovered a total of $797.4 million in overpayments, with $141.9 million in underpayments returned to providers. The recovery amounts increased with each quarter of the fiscal year, from $82.9 million in the first quarter to $277.1 million in the last quarter.

By comparison, the total overpayments collected in fiscal year 2010 were $75.4 million, with $16.9 million in underpayments returned to providers. The 2011 figures represent a 90.5% increase over the overpayment amounts recovered in 2010. Similarly, the 2011 figures represent an 88.1% increase over the underpayment amounts returned to providers in 2010.

One of the top issues identified by the RAC contractor for Region C, which encompasses Louisiana, was medical documentation to support acute inpatient admissions related to neurological disorders. Another top issue for Region C was billing for durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) provided during an in-patient hospital admission, an issue identified by the RAC contractor as billing for bundled services separately.

Beginning January 1, 2012, CMS will launch a new three year Recovery Audit Prepayment Demonstration project. The new demonstration project will allow RAC contractors to conduct pre-payment claims reviews, in addition to post-payment claims reviews, so that errors are detected before claims are paid and monies must be recovered.
 

On November 16, 2011, Louisiana Department of Health and Hospitals’ (“DHH”) Secretary Bruce Greenstein announced that the Centers for Medicare and Medicaid Services (“CMS”) had approved an amendment to Louisiana’s Medicaid State Plan to implement the Coordinated Care Networks (“CCN”) also known as “Bayou Health.” The movement by DHH toward CCNs began in February, 2011, when DHH issued a Notice of Intent to provide for the implementation of the CCNs. On June 20, 2011, DHH issued the final rules for the CCNs. DHH has since awarded contracts to five private insurers who will administer the CCNs. The Coordinated Care Network Program Prepaid (“CCN-P”) contracts were awarded to:

1. Louisiana Healthcare Connections, Inc.
2. Amerihealth Mercy of Louisiana, Inc.
3. AmeriGROUP Louisiana, Inc.

The Coordinated Care Network Program Shared Savings (“CCN-S”) contracts were awarded to:

1. UnitedHealthcare of Louisiana, Inc.
2. Community Health Solutions of America, Inc.

Implementation of the CCNs is in three phases, based on Geographic Service Area (“GSA”). The first GSA where the CCN will be implemented is Region 1, which includes the New Orleans area, and Region 9- St. Helena, Livingston, Tangipahoa, Washington, and St. Tammany Parishes. Phase 1 will begin on February 1, 2012. Phase 2 of the CCN implementation includes: Region 2- East and West Feliciana, East and West Baton Rouge, Point Coupee, Iberville, and Ascension Parishes. Phase 2 will go into effect April 1, 2012. Phase 3 will go live on June 1, 2012 and include the remaining parishes in the Southwest, Central and North Louisiana regions.

According to DHH, most of the state's Medicaid and LaCHIP recipients (an estimated 865,000 of the current 1.2 million enrollees in Medicaid) are required to be enrolled in a CCN. The mandatory enrollees will be permitted to choose only one CCN. Choice letters are to be mailed to Medicaid recipients in GSA1 on December 15, 2011. If mandatory enrollees do not select a CCN, an enrollment broker or "choice counselor" will assist the enrollee in finding the CCN that best meets the enrollee’s priorities and preferences. An enrollee will be assigned to the CCN that his/her community care physician has joined. MAXIMUS Health Services Inc. has been awarded the contract to be the CCN enrollment broker. The mandatory recipients cannot be treated by providers who are not enrolled in a CCN unless it is an emergency or the services are not available within the CCN network. Medicaid providers are not obligated to join a CCN and can contract with as many CCNs as they so desire.
 

In less than a month, the Louisiana Department of Health and Hospitals will begin enforcement of its new Home and Community-Based Service Providers Minimum Licensing Standards. The new regulations, which were published in the June 2011 Louisiana Register, contain one set of licensing standards that apply to providers of the following community-based services: Adult Day Care, Family Support, Personal Care Attendant (PCA), Respite Case, Substitute Family Care, Supervised Independent Living (SIL) and Supported Employment. While many provisions in the new regulations mirror requirements previously contained in DHH’s Personal Care Attendant Services licensing standards, the following are some of the notable regulatory changes that existing providers must comply with by the October 1, 2011 enforcement date (note that this article does not address all regulatory changes, including the changes to administrator qualification and other core staffing requirements):
 

• Number of Governing Body Members. The new licensing regulations require all providers to have a governing body that is comprised of three or more persons. Previously, no minimum number of members was required. Providers are still required to have documentation identifying all governing body members by name, address, terms of membership, office title and terms of office. Additionally, the governing body must continue to hold at least two formal meetings a year.
   
• Liability Insurance. All providers must have documentation of liability insurance coverage for any vehicle used to transport clients, whether the vehicle is owed by the agency or any of its employees. The personal liability insurance of the provider’s employees cannot be substituted for the required coverage. Previously, the regulations merely provided that the provider ensure that any vehicle used to transport clients carried a sufficient amount of current liability insurance.
   
• Driver Histories and Driving Course Completion. Providers are required to have documentation of successful completion of a safe driving course for each employee who transports clients. The new regulations mandate that each employee shall complete a safe driving course within 90 days of hiring, every three years thereafter, and within 90 days of the provider’s discovery of any moving violation. Additionally, providers are required to run a driving history record at the time of hiring and annually thereafter for each employee. Existing providers should ensure that all current employees complete a safe driving course and that a driver history report has been run on all current employees prior to the October 1, 2011 enforcement deadline.
   
• Unannounced Quarterly Supervisory Visits. Direct care staff supervisors are now required to make an onsite supervisory visit at least once per quarter for each direct care staff member. Additionally, the regulations state that supervisory visits should occur more frequently if dictated by the ISP; as needed to address worker performance; to address a client’s change in status; or to assure services are provided in accordance with the ISP. Providers should note that a quarterly unannounced visit is required for each direct service worker, not for each client served by the agency. Thus, if one client is being serviced by four direct care workers, the agency is required to conduct four unannounced visits to that client’s residence during the quarter. We have spoken with DHH regarding this requirement and have learned that all quarterly visits do not have to be completed by the October 1, 2011 compliance date. However, DHH expects providers to have a procedure in place by October 1 for conducting the unannounced visits and expects that at least one quarterly visit per employee will be accomplished between October 1, 2011 and December 31, 2011.

Several cases challenging the constitutionality of the Patient Protection and Affordable Care Act (the “ACA”) are traveling through the country in route to the United States Supreme Court. One of those cases, entitled Thomas More Law Center v. Obama, 2011 WL 2556039 (6th Cir. 2011), has become the subject of a petition by the Law Center asking the Supreme Court to review the Sixth Circuit decision. The petition was filed on July 26, 2011.

The Sixth Circuit upheld the constitutionality of the ACA. The court there determined that the “insurance mandate” included in the ACA was a proper exercise by Congress under the Commerce Clause of the United States Constitution. Numerous other appellate court cases have been decided since the passage of the ACA on March 23, 2010. Most of those cases have held that the requirement that all persons maintain insurance coverage is unconstitutional, but they have disagreed on whether or not the remainder of the law is severable and, therefore, may go forward. The petition by the Thomas More Law Center to the United States Supreme Court, is seeking a decision prior to the Supreme Court’s recess in the summer of 2012. Considering the political climate and the effect that this decision might have on voting in 2012, if the Supreme Court decides to take the case, the timing of its decision on the merits may be most important.

Since 2003, Louisiana, through the Department of Health and Hospitals (“DHH”) and the Medicaid Program, administers home and community-based health services (“HCBS”) available to disabled citizens. The HCBS includes several programs, one of which is the Long Term Personal Care Services (“LT-PCS”) program. The LT-PCS program provides disabled citizens with a personal care worker to assist with performing personal care or household chores that the disabled citizen would otherwise be unable to perform, in order to avoid being institutionalized. Individuals who do not qualify for LT-PCS or who seek additional or alternative services may enter one of Louisiana’s waiver programs: Elderly and Disabled Adults, Adult Day Health Care, Program of All-inclusive Care for the Elderly, or Money Follows the Person for individuals transitioning from nursing facilities. However, these programs have limited slots, geographical or age limits, and long waiting lists. An individual may be moved to the top of the priority list and immediately obtain a waiver, if the individual has had a hospital stay in excess of 30 days or has been treated in a nursing facility for 120 consecutive days.

On September 22, 2010, Helen Pitts and other plaintiffs filed suit against DHH and Secretary Bruce Greenstein (“Defendants”) for declaratory and injunctive relief to prohibit the implementation of the reduction in weekly service hours, claiming the Act violated Title II of the Americans with Disabilities Act (“ADA”) and Section 504 of the Rehabilitation Act of 1973, by unlawfully discriminating against them by depriving them of at-home assistance necessary to remain “integrated” into the community. Pitts et al v. Greenstein, 2011 WL 2193398 (M.D. La. 2011). Plaintiffs contended the average cost of services for an individual in the LT-PCS program is less than the cost of maintaining the individual in a nursing home.

DHH and Greenstein filed a motion for summary judgment, seeking to have the lawsuit dismissed. They contended the reduction did not discriminate against the plaintiffs under the ADA or Section 504 of the Rehabilitation Act of 1973, because there was a comprehensive and effective plan in place to provide disabled individuals with HCBS. The Defendants pointed to the combination of HCBS and waiver programs that would ensure disabled individuals were not forced into nursing facilities. They also contended that, even if the reduction did discriminate against the plaintiffs, the claims failed because plaintiffs did not meet their burden of showing that returning to the 42-hour weekly maximum for services hours was a reasonable modification to the plan for reduction of service hours to 32 hours per week. In response, the Plaintiffs asserted the State’s plan increased their risk of institutionalization, because the waiver programs were either not available in their geographic area or had a long waiting period to qualify. The plaintiffs argued that, in order to move to the top of the waiting list for the waiver programs, they had to be subjected to institutionalization—the very situation the ADA was designed to prevent.

The court denied the Defendants’ motion for summary judgment, finding genuine issues of material fact as to whether maintaining the prior 42 hours per week maximum for services was a reasonable modification or a fundamental alteration for purposes of the Plaintiffs’ ADA claims. The court stated that Louisiana’s current plan plainly violated the ADA by creating a greater risk for institutionalization for those disabled individuals who require more than 32 hours per week of assistance.

The plaintiffs also sought certification of a class action for all Louisiana residents with disabilities who are recipients or prospective recipients of Medicaid-funded services through the LT-PCS program, who want to and are able to continue to reside in the community rather than in an institution with appropriate Medicaid-funded LT-PCS services, and who are at risk of institutionalization because of the planned reduction in the maximum number of service hours available under the LT-PCS program. The Defendants opposed the certification, arguing that the defined class was overly broad, that plaintiffs’ claims were not typical of the remaining class members, and that the plaintiffs had conflicting interests with the remaining class members such that the plaintiffs would not fairly and adequately represent the interests of the remaining class members. The Defendants argued that the class was overly broad because it included: 1) individuals who did not require more than 32 hours per week of services; 2) individuals who, if they did require more than 32 hours per week, had access to waiver programs or other means to secure supplemental care; or 3) required more than 42 hours of weekly services.

The court agreed the class should be defined to exclude those individuals who did not require more than 32 hours per week of services and those who could receive the necessary supplemental care through alternative sources. The court refused to exclude those individuals who required more than 42 hours per week of services, since those individuals would be at risk for institutionalization if their service hours were reduced even more. Thus, the court defined the class as follows:

“Louisiana residents with disabilities who have been receiving Medicaid-funded services through the LT-PCS program; who desire to reside in the community instead of a nursing facility; who require more than 32 hours of Medicaid-funded personal care services per week in order to avoid entering a nursing facility, and who do not have available (including through family supports, shared living arrangements, or enrollment in the ADHC [Adult Day Health Care] waiver) other means of receiving personal care services.”

The court also found that the class was sufficiently numerous, because 28% of the 12,000 individuals currently receiving LT-PCS services receive in excess of 32 hours per week of services. In addition, the court noted there were countless future members of the class who may not yet qualify for LT-PCS but who may wish to preserve their rights on the issue of the reduction of the service hours. Finally, many of the class members faced severe financial hardship due to their conditions and lacked the financial resources to bring suit individually to protect their rights.

The court found all class members were at risk of being forced to enter a nursing home as a result of the reduction in weekly service hours. The court likewise found there were common issues of law and fact as to each of the class members, including whether the Defendants violated the ADA or Section 504 of the Rehabilitation Act of 1973 by lowering the maximum weekly service hours from 42 to 32 hours or by requiring individuals to submit to an extended stay in a nursing facility to immediately qualify for critical, supplemental services through the waiver programs. Another common issue was whether the State’s waiver programs were sufficient to fill the void created by the reduction in service hours.

The court also found the plaintiffs’ claims and the Defendants’ defenses to those claims were sufficiently typical to the claims and defenses applicable to the remaining class members. Both the plaintiffs and the remaining class members claim that the reduction in service hours increases their risk of institutionalization; the waiting lists for the waiver programs do not move fast enough to provide the supplemental care required to avoid institutionalization; and they must submit to the very institutionalization they want to avoid to be moved to the top of the waiver waiting lists. Finally, the court found the plaintiffs would fairly and adequately represent the claims of the remaining class members. The court granted the plaintiffs’ motion to certify the class.

For the many LT-PCS providers and recipients, this class action case will be important to monitor to see whether the court rules Louisiana cannot limit the LT-PCS services hours to a maximum of 32 per week. If so, the state will incur increased costs for the program. It remains to be seen how Louisiana would cover these costs in the current budget-cutting environment and what other changes to this and the other home and community based programs may be made.
 

Act 337 of the Regular Session of the 2011 Louisiana Legislature enacted an amendment to Louisiana R.S. 37:1285(A) to add new subsection (A)(32), which provides an additional ground for physicians to be disciplined by the Louisiana State Board of Medical Examiners (the “LSBME”). The new ground relates to a physician holding herself/himself out to the public as being certified by a public or private board or using the phrase “board certified”. In order for a physician to use the phrase “board certified” with the public, all of the following criteria must be met:

(a) The full name of the board from which the physician received certification and the name of the specialty or subspecialty is included in the advertisement;

(b) The board that provides the certification meets any of the following qualifications:

(i) It is a member board of the American Board of Medical Specialties or an American Osteopathic Association certifying board;

(ii) The board has been approved by the LSBME;

(iii) The board requires an Accreditation Council for Graduate Medical Education or American Osteopathic Association approved postgraduate training program that provides complete training in that specialty or subspecialty.

(c) If the physician advertises and does not meet the criteria articulated above, the physician must list his or her qualifications for performing the advertised medical procedure or procedures.

The bill was signed by Governor Jindal on June 29, 2011. It will become effective August 15, 2011.

Complying with this new enactment is important, because failure to do so provides grounds for discipline of a physician, which may include refusal to issue, suspension, revocation, or other disciplinary action against the license of a physician by the LSBME.
 

On June 21, 2011, a Federal Grand Jury in Virginia filed an indictment against a physician for criminal violations of the Health Insurance Portability and Accountability Act (“HIPAA”). The indictment alleges three (3) counts of unauthorized disclosure of a patient’s individually identifiable health information to an agent of the patient's employer. The indictment alleges that the physician provided the patient in-patient mental health treatment at a psychiatric care center in August and September 2007.

Each count charges that in February 2008, the physician knowingly and in violation of HIPAA disclosed the patient’s protected health information under the false pretense that the disclosure was necessary because the patient was a serious and imminent threat to the safety of the public, when the physician, in fact, knew the patient was not a serious and imminent threat to the public.

Because the alleged disclosures were made under “false pretenses,” if found guilty, the physician could face a fine of not more than $100,000.00 or imprisonment of not more than five (5) years, or both per violation.

In Oliver v. Magnolia Clinic, 2010-2785 (La. 3/25/11), 57 So. 3d 308, the Louisiana Supreme Court vacated a Third Circuit ruling that nurse practitioners were not covered by the Louisiana Medical Malpractice Act and did not benefit from the cap on damages. The Supreme Court remanded the case to the Third Circuit for an en banc consideration in order to obtain a majority opinion on the issues presented.

Upon original hearing, two judges of a five judge panel of the Third Circuit ruled the Medical Malpractice Act’s inclusion of nurse practitioners within its ambit violated the equal protection guarantees of the Louisiana Constitution and La. R. S. 40:1299.41(A)(1) and was, therefore, unconstitutional. Two judges on the panel ruled that the inclusion of nurse practitioners as health care providers entitled to the protection of the Medical Malpractice Act did not go into effect until the amendment of the statute in 2009. Because the alleged malpractice of the nurse practitioner occurred in 2000-2001, the statute did not cover the defendant nurse practitioner, and she was not entitled to a cap on the damages awarded at trial.
 

One judge dissented and opined the cap on damages did not violate the equal protection clause of the Louisiana Constitution, without addressing whether the inclusion of nurse practitioners in the Medical Malpractice Act was constitutional. His opinion was that the legislature, not the court, had the responsibility and the authority to fix the problem of the present day value of the $500,000 cap (as compared to the value when enacted). Because there was no clear majority ruling, the Supreme Court remanded the case for an en banc consideration.

The facts established at trial showed that the nurse practitioner was a high school graduate who had obtained a diploma in nursing from a hospital and was certified by the hospital as a pediatric nurse practitioner in 1977. She was “grandfathered” in as a nurse practitioner without having to obtain the current requirement of Baccalaureate and Masters of Science in Nursing. The nurse practitioner opened a solo practice and entered a collaborative agreement with a physician. However, the nurse practitioner never collaborated with her collaborating physician, as required.

The nurse practitioner treated the plaintiff’s baby during the first fourteen months of her life for numerous complaints and saw the baby 32 times during the first year. When the mother asked to have a physician see the baby, the nurse practitioner told her she only needed to see a physician for a hospital admission. Finally, in November, 2001, the mother took the baby to Women’s and Children’s Hospital in Lake Charles, where the baby was seen by the nurse practitioner’s collaborating physician. After running tests, the physician referred the baby to Texas Children’s Hospital for specialized care.

The baby was diagnosed with neuroblastoma. The nurse practitioner’s records documented signature symptoms of neuroblastoma in the baby at six months. The evidence at trial showed that, if neuroblastoma is diagnosed within the first year of life, the child has a 90% chance of an event free survival. However, because the neuroblastoma diagnosis was made when the plaintiff’s baby was over one year old, the baby suffered permanent injuries, and her quality of life was severely diminished.

At trial, the jury rendered a verdict in favor of the plaintiffs and awarded $6,000,000 in general damages; $629,728.24 in past medical expenses; $3,358,828.00 in future medical expenses; and $33,000 to the father and $200,000 to the mother for loss of consortium. The plaintiffs then filed a Petition for Declaratory Relief asserting the Medical Malpractice Act was unconstitutional. The Louisiana Patient’s Compensation Fund intervened to challenge the constitutional attack.

The trial court initially found the Act was constitutional, except for the inclusion of nurse practitioners as qualified health care providers. On reconsideration, the trial court found that the plaintiffs did not challenge the Medical Malpractice Act on the basis that the definition of a qualified health care provider was overly inclusive. Thus, the trial court found the constitutional challenge on that ground was not properly before the court and reinstated the cap on the damages.

On appeal, the plaintiffs argued the cap on damages violated several provisions of the Louisiana Constitution, but the Third Circuit addressed only the equal protection challenge. The Third Circuit relied on Supreme Court cases for the proposition that the “rational basis” to support the constitutionality of the Medical Malpractice Act offered by the State required a greater showing in cases involving severely or catastrophically injured victims. The court found that the Act created two classes—one class of medical malpractice victims who could receive full recovery for the injuries they sustained and another class of medical malpractice victims who, because of the severe injuries, could not receive full recovery. Thus, this statutory classification of victims disadvantaged or discriminated against one class by reason of or because of their physical condition, calling into question the equal protection rights of this class of victims.

The State had to show the law does not arbitrarily, capriciously, or unreasonably discriminate against the disadvantaged class, by demonstrating the legislative classification furthers a legitimate state objective. In this case, the State offered no evidence to refute the finding that the cap discriminated against the plaintiffs by limiting their damages to $500,000, less than the full recovery of their general damage and other awards. The State pointed to the stated purpose in lowering malpractice insurance costs for health care providers, which furthered the State’s legitimate objective in assuring accessible and affordable health care for its citizens. The State also pointed to the benefits to the plaintiffs from the increased likelihood that their healthcare providers would have malpractice insurance; the victim’s future medical expenses would be paid; and assurances that the claims would be paid from a solvent Patient Compensation Fund.

The Third Circuit rejected the evidence presented by the State, including expert testimony, that the cap still served a legitimate state interest. The Third Circuit relied on evidence that studies could not determine whether caps on damages had any impact on the amount of premiums charged by insurers. Nor did the State show there was a shortage of physicians in Louisiana or a correlative need for nurse practitioners to operate and own “walk in” clinics to make health care more affordable or available to Louisiana citizens.

The Third Circuit indicated that the medical profession would benefit for years to come in treating the victim of the nurse practitioner’s malpractice, while the plaintiffs would be subject to the ever dwindling value of the damages recoverable under the cap. The Third Circuit was very critical of the ability of the nurse practitioner, who held no advanced degrees and who failed to collaborate with a physician as required, to benefit from a limitation of her liability and to continue to operate a clinic and potentially subject other patients to substandard care, based on what the court described as gross negligence and incompetence.

The Third Circuit affirmed the trial court award of past medical expenses and judicial interest, as well as the future medical expenses, to be paid by the Patient’s Compensation Fund. The Third Circuit concluded the cap, to the extent it included nurse practitioners, violated the equal protection guarantees of the Louisiana Constitution and La. R. S. 40:1299.41(A)(1) and, thus, was unconstitutional. The Third Circuit reinstated the jury’s award of damages.

Because the Supreme Court vacated the Third Circuit ruling and remanded the case to the Third Circuit for an en banc hearing, it would appear at this time that nurse practitioners are covered by the Medical Malpractice Act, at least for alleged malpractice occurring on or after the effective date of the 2009 amendment to add nurse practitioners to the definition of covered health care providers. This case warrants close monitoring on the issue of whether nurse practitioners are covered by the Medical Malpractice Act, particularly considering the number of cases where the Third Circuit has found provisions of the Act to be unconstitutional.
 

In accordance with the Patient Protection and Affordable Care Act, the Secretary of the United States Department of Health and Human Services (the “Department”) issued its report to Congress on the National Strategy for Quality Improvement in Health Care on March 21, 2011 (“National Quality Strategy”). The Department will use the National Quality Strategy to develop programs, regulations, new initiatives, and tools for evaluating the Federal health care efforts.

The National Quality Strategy is based on three (3) broad national aims:

1. Better care by making healthcare more patient-centered, reliable, accessible, and safe;
2. Healthy people/healthy communities by improving the health of the U. S. population with supportive proven interventions to address behavior, social, and environmental determinants of health in addition to delivering higher-quality care;
3. Affordable care by reducing the cost of quality healthcare for individuals, families, employers, and government.

1. Making care safer by reducing harm caused in the delivery of care;
2. Insuring that each person and family is engaged as partners in their care;
3. Promoting effective communication and coordination of care;
4. Promoting the most effective prevention and treatment practices for the leading causes of mortality, starting with cardiovascular disease;
5. Working with communities to promote the wide use of best practices to enable healthy living; and
6. Making quality care more affordable for individuals, families, employers, and governments by developing and spreading new healthcare delivery models.

The National Quality Strategy is designed to be updated annually by the Agency for Healthcare Research and Quality based on information from providers and communities that deliver high quality, affordable care. The National Quality Strategy is designed to be a “broad roadmap” and does not include in the “first-year Strategy” any agency-specific plans, goals, benchmarks, or standardized quality metrics even though such details are required by the Affordable Care Act. Instead, these types of details will be developed with additional collaboration and engagement of participating agencies and private sector consultation. The 2012 report to Congress on the National Quality Strategy will include additional detail on how the federal agencies will address the priorities and goals in “agency-specific strategic plans.”

The 2011 report to Congress did identify 10 principles to be used when designing specific initiatives to achieve the National Quality Strategy’s three aims:

1. Payment arrangements to offer incentives that foster better health, promote quality improvement and greater value while creating an environment that fosters innovation. The report anticipates that new payment incentives and delivery models will be launched under Medicare and Medicaid.
2. Public reporting to offer consumers and payers the ability to compare costs, review treatment outcomes, assess patient satisfaction, hold providers accountable. The report refers to www.healthcare.gov website as an example of improvements to transparency.
3. Quality Improvement/Technical Assistance such as the use of quality improvement organizations (“QIOs”) that work with physicians, hospitals and others to “disseminate research evidence to the point of care, share best practices and technical assistance.” The report indicates that the Department is contracting with QIOs to “drive quality improvement through collaboratives at the State level.”
4. Certification, accreditation, and regulation by State, Federal, or federally-approved accrediting organization in order for consumers to know that a clinician or organization meets certain quality standards for health services. An example given in the report is that provider participation in public programs will be conditioned on “more rigorous screening” to ensure that providers meet “appropriate standards.”
5. Consumer incentives and benefit designs to promote better health such as financial assistance for tobacco cessation programs and “value-based insurance” to incentivize consumers to choose high quality, efficient providers.
6. Measurement of care processes and outcomes using consistent, nationally-endorsed measures to provide timely, actionable, and meaningful information. The Department will develop ways to align measurement efforts with “value-based purchasing programs” with a move toward outcomes and patient experience.
7. Increased use of electronic records in order to cut health care costs, reduce paperwork, improve outcomes, and give patients more control over their healthcare. The report references the substantial financial incentives for the adoption and meaningful use of certified electronic health record technology provided for the by the 2009 HITECH Act and the efforts of the Office of the National Coordinator for Health Information Technology on engaging the private sector to make health information exchange a reality.
8. Timely evaluation and feedback to providers to improve through the use of new innovations in delivery and payment such as private patient safety organizations (“PSOs”).
9. Training, professional certifications, and workforce and capacity development to provide for quality improvement and a new generation of health care professionals. The report makes reference to the $1.5 billion over 5 years to expand the National Health Service Corps (“NHSC”) in addition to the $300 million investment already made by the 2009 American Recovery and Reinvestment Act. The NHSC provides physicians, nurse practitioners, physician assistants, and other health professionals with loan repayment and scholarships who work in underserved communities.
10. Promotion of innovation and rapid-cycle learning via the Center for Medicare and Medicaid Innovation, which supports new models of care and innovative practices for Medicare, Medicaid, and CHIP beneficiaries.

In 2011, the Federal Interagency Working Group on Health Care Quality comprised of senior-level members of Federal departments and agencies with jurisdiction over health care quality and improvement will begin working on disseminating strategies, goals, models, and timetables to advance the priorities outlined in the National Quality Strategy. A complete copy of the 2011 report to Congress on the National Quality Strategy can be found at www.healthcare.gov.
 

The United States Court of Appeals for the Fifth Circuit in U.S. v. Isiwele, No. 10-4037 (5th Cir. 3/7/2011) considered an appeal in a Medicare/Medicaid fraud case where the defendant was convicted of multiple counts of healthcare fraud and conspiracy to pay kick-backs in connection with a scheme to fraudulently bill Medicare and Medicaid for power wheelchairs. Some of the issues on appeal were whether the District Court correctly applied the “loss amount,” “mass marketing,” and “abuse of trust” enhancements for sentencing.

The defendant was a Medicare/Medicaid durable medical equipment provider who allegedly used a recruiter to go into elderly and low income communities to gather billing information from beneficiaries after Hurricane Katrina. The defendant was tried and found guilty on 16 counts of healthcare fraud and one count of conspiracy to pay illegal remunerations in violation of 18 U.S.C. §1347 and 42 U.S.C. §1320a-7b(b)(2)(A). For sentencing, the District Court applied a 14-level increase to the defendant's base offense level on the basis of the "loss amount" occasioned by the fraud. The loss amount was calculated according to the amount billed to Medicare and Medicaid. However, the defendant argued on appeal that the proper “loss amount” was the total amount of payment for the wheelchairs by Medicare and Medicaid. The District Court also applied a 2-level increase to the offense level for the use of "mass marketing" and another 2-level increase for an "abuse of trust" based on the defendant's status as a DME supplier for Medicare and Medicaid. The District Court sentenced the defendant to 97 months imprisonment and 3 years of supervised release and was ordered to pay a $1,700.00 special assessment and restitution in the amount of $201,397.34.

On the issue of the "mass marketing" enhancement, the Fifth Circuit Court of Appeals found that mass marketing is not limited to just mass communication methods, but also contemplates face-to-face marketing intended to reach a large number of persons. The Court of Appeals cited to the 2009 Mauskar case in which it upheld the application of a mass marketing enhancement to a physician who conspired to defraud Medicare/Medicaid by falsely certifying that ambulatory patients needed power wheelchairs. In the earlier Mauskar case, recruiters were used to target elderly beneficiaries and escort them to the defendant's clinic for evaluation and issuance of false certificates of medical necessity. In Mauskar the mass marketing enhancement for sentencing was applicable to the offenses as the mass marketing efforts of the recruiters was "relevant conduct constituting part of the offense of healthcare fraud.” The Court of Appeals adopted this same reasoning and held that the defendant in the Isiwele case was eligible for the mass marketing sentencing enhancement on the basis of his recruiters' face-to-face recruitment of Medicare/Medicaid beneficiaries.

The Court of Appeals further found that because the defendant was a DME supplier, he was in a “relationship of trust” with Medicare/Medicaid. As a result, the Court of Appeals upheld the District Court’s application of a two-level "abuse of trust" sentencing enhancement to the offense level.

The United States Supreme Court on March 21, 2011 denied a writ application by a physician who was appealing the lower Federal court’s decision dismissing the physician's civil rights action against the University of Illinois where the physician alleged numerous violations of his constitutional rights. See Abcarian v. McDonald, 617 F.3d 931 (7th Cir. 2010), writ denied, No. 10-913 (2011). The physician had been the head of the Department of Surgery at the University when he was notified that a lawsuit was being contemplated against him due to the death of a former patient. The physician alleged that when the University learned of the potential lawsuit it conspired with other defendants to discredit the physician's reputation and executed a settlement agreement with the deceased's family. The physician further alleged that the settlement agreement was a step in a conspiracy to destroy his reputation because the settlement agreement was entered merely so the defendants could report the settlement of the medical malpractice claim to the Illinois Department of Financial and Professional Regulation and the National Practitioner Databank. The physician filed suit alleging free speech, equal protection and procedural due process claims against the defendants.

The physician also argued that the defendants violated his equal protection rights by reporting the settlement involving him, but not the settlement of a medical malpractice claim against another physician. The Court of Appeal held that the District Court correctly dismissed the equal protection claim because under the law the defendant had no discretion in deciding whether to report the settlement. Because the defendants lacked discretion to report the settlement, the Court found that there is little risk of the kind of discriminatory action addressed by the 14th Amendment.

The physician also alleged that defendants violated his procedural due process rights by reporting the settlement to state and national authorities. The physician alleged the defendants defamed him and infringed his liberty to pursue his chosen occupation. However, the Court of Appeals held that in order for the physician to have a due process claim, the physician must plead a constitutionally relevant tangible loss of his employment opportunities and that his good name, reputation, honor, or integrity was called into question in a manner that makes it virtually impossible for him to find new employment in his chosen field. The physician in this case could not meet his burden because he still had his job at the University as a physician and a professor.

The physician had only alleged fear that he would not be able to be employed at additional healthcare institutions in the future. The Court of Appeals found that a physician cannot be denied liberty to pursue a particular occupation when he continues to hold the same job and the same occupation. The Court of Appeals also held that while a physician has a property interest in a medical license free from formal disciplinary sanction imposed without due process, a physician does not have a due process right to be exempt from the formal disciplinary processes itself.

The Court of Appeals decision upholding the dismissal of the physician’s civil rights claims is final due to the U.S. Supreme Court denying the physician’s writ application.
 

The following proposed regulations and documents were issued on March 31, 2011:

Centers for Medicare & Medicaid Services (CMS)

CMS issued a proposed rule that would implement Section 3022 of the Affordable Care Act related to Medicare payments to providers of services and suppliers participating in Accountable Care Organizations (ACOs) under the Medicare Shared Savings Program. Under the provisions in Section 3022 for ACOs, providers of services and suppliers can continue to receive traditional Medicare fee-for-service payments under Part A and B, and be eligible for additional payments based on meeting specified quality and savings requirements.

The CMS proposed rule for ACOs is available online at the CMS web site here. 

CMS and the Department of Health and Human Services (HHS) Office of Inspector General (OIG) jointly issued a notice with comment period outlining proposals for waivers of the Stark Law, the Federal Anti-kickback statute, and certain provisions of the civil monetary penalty law to specified arrangements involving Accountable Care Organizations (ACOs) in the new Medicare Shared Savings Program. CMS and OIG also solicited public comments on Section 3021 of the Affordable Care Act, which authorizes HHS to waive the same fraud and abuse laws as necessary solely for the purposes of carrying out Section 1115A of the ACA regarding the testing of certain innovative payment and services delivery models by the Centers for Medicare and Medicaid Innovation.

The CMS and DOJ joint notice with comment period is available online at the electronic inspection desk of the Federal Register here. 

Federal Trade Commission and Department of Justice

The Federal Trade Commission (FTC) and U.S. Department of Justice (DOJ) issued a joint statement about how the agencies will enforce U.S. antitrust laws in regard to ACOs. The joint proposed Policy Statement solicits public comment on the antitrust agencies’ proposed guidance to ensure that newly formed collaborative care organizations, known as ACOs, can be established to provide services to Medicare beneficiaries and patients with private health insurance, without raising competitive concerns. The proposed Policy Statement would create an antitrust “safety zone” for certain ACOs and establish expedited antitrust reviews for others.

The Antitrust Policy Statement by the FTC and DOJ is available online

Internal Revenue Service (IRS)

The Internal Revenue Service (IRS) issued a notice requesting comments regarding the need for guidance on participation by tax-exempt organizations in the Shared Savings Program through ACOs. The IRS notice is available online.

The Patient Protection and Affordable Care Act that was promulgated in March, 2010, includes provisions for creating Accountable Care Organizations (“ACO”). An ACO is an “organization” that is intended to manage the care of a minimum of 5,000 Medicare beneficiaries, with the purpose of improving outcomes to those beneficiaries. In the event an ACO is capable of achieving that goal, the resulting savings to the Medicare program will be shared by the federal government and the ACO.

How an ACO may be structured is left to the imagination and ability to appropriately structure an ACO arrangement. The federal government has not identified what an ACO structure must be. It may, for example, include relationships among hospitals, physicians/physician organizations, home health agencies, rehabilitation agencies, or any single or a combination of any of these types of providers. An ACO may even contain a payer component.
 

The question that many providers face is whether they should be on the forefront of the determination of how ACO’s might look, or whether they should “sit back” and let the “dust settle” before embarking on the development of any ACO arrangement. There are pluses and minuses related to taking either one of these positions. Whether a health care provider should be proactive or “sit back” may depend on its strength of ability to negotiate and the leverage it holds in the market place. In any event, it is hopeful that proposed ACO regulations will be released in the first half of this year. Hopefully, federal government guidance on what might be acceptable ACO arrangements will be helpful. Many stakeholders eagerly await the issuance of these proposed rules.
 

The following hospitals were included in the settlements announced on January 4, 2011: Lakeland Regional Medical Center, Lakeland, Fla. ($1,660,134.49); Decatur General Hospital, Decatur, Ala. ($537,892.88); St. Dominic-Jackson Memorial Hospital, Jackson, Miss. ($555,949.35); Seton Medical Center, Austin, Texas ($1,232,955.91); Greenville Memorial Hospital, Greenville, S.C. ($1,026,764.01); Presbyterian Orthopaedic Hospital, Charlotte, N.C.($637,872.57); and The Health Care Authority of Lauderdale County and the City of Florence, Ala., d/b/a the Coffee Health Group, d/b/a Eliza Coffee Memorial Hospital ($676,038.00).

The background to these cases was a $75 million settlement in 2008 by Medtronic Spine LLC, the corporate successor to Kyphon Inc., to settle allegations under the FCA that it caused the submission of false claims to Medicare. The government had alleged that Kyphon caused the submission of fraudulent claims for its kyphoplasty procedure, which is a minimally-invasive surgery used to treat compression fractures of the spine caused by osteoporosis, cancer or benign lesions. In that case, the qui tam relators, former Kyphon, Inc. employees, alleged that Kyphon Inc. encouraged hospitals to administer kyphoplasties on an inpatient basis, rather than a less costly but clinically appropriate outpatient basis, to maximize the reimbursement they could receive from the Medicaid and Medicare programs. Subsequent to the Kyphon, Inc. settlement, the U.S. Attorney’s office in Buffalo, New York began to investigate individual hospitals that administered kyphoplasties and which became known as the “kyphoplasty initiative”.

 In a September 2010 letter to the DOJ and U.S. Attorney’s office in Buffalo, New York, the American Hospital Association (AHA) expressed concerns regarding the use of data analysis to flag billing errors and/or overutilization in the “kyphoplasty initiative” and that information would be converted into a presumption of liability under the False Claims Act. The AHA had previously explained to Congress regarding amendments to the FCA in the health care reform legislation that the FCA does not apply to billing errors, mistakes or even non-culpable over-utilization. The AHA asked that the DOJ/HHS Health Care Fraud Prevention and Enforcement Action Team (otherwise known as the “HEAT Strike Force”) undertake a policy review of enforcement initiatives proceeding under the FCA, beginning with the DOJ’s kyphoplasty initiative. AHA representatives were scheduled to meet with DOJ representatives on January 24, 2011 to discuss these issues.
 

The Health Care Reform Legislation contains two separate provisions mandating compliance programs. Section 6401(a) of the ACA requires a provider of medical or other items or services or a supplier, as a condition of enrollment in Medicare, Medicaid or the Children’s Health Insurance Program (“CHIP”), to establish a compliance program that contains certain core elements. Section 6102 of the ACA specifically requires Medicare skilled nursing facilities (“SNF”) and Medicaid nursing facility (“NF”) to have an effective compliance and ethics program in preventing and detecting criminal, civil, and administrative violations. SNFs and NFs are subject to both compliance plan requirements under sections 6102 and 6401(a).
 

CMS specifically requested comments on the use of the seven elements of an effective compliance and ethics program as described in the U.S. Federal Sentencing Guidelines Manual (www.ussc.gov/) as the basis for the core elements of the required compliance programs for Medicare, Medicaid and CHIP enrollment. CMS noted that these seven elements include:

• The development and distribution of written policies, procedures and standards of conduct to prevent and detect inappropriate behavior;
• The designation of a chief compliance officer and other appropriate bodies (for example a corporate compliance committee) charged with the responsibility of operating and monitoring the compliance program and who report directly to high-level personnel and the governing body;
• The use of reasonable efforts not to include any individual in the substantial authority personnel whom the organization knew, or should have known, has engaged in illegal activities or other conduct inconsistent with an effective compliance and ethics program;
• The development and implementation of regular, effective education and training programs for the governing body, all employees, including high-level personnel, and, as appropriate, the organization’s agents;
• The maintenance of a process (i.e., hotline) to receive complaints and the adoption of procedures to protect the anonymity of complainants and to protect whistleblowers from retaliation;
• The development of a system to respond to allegations of improper conduct and the enforcement of appropriate disciplinary action against employees who have violated internal compliance policies, applicable statutes, regulations or Federal health care program requirements;
• The use of audits and/or other evaluation techniques to monitor compliance and assist in the reduction of identified problem areas; and
• The investigation and remediation of identified systemic problems including making any necessary modifications to the organization’s compliance and ethics program.

CMS also requested public comments regarding the following:

• The extent to which providers and suppliers already incorporate each of the seven U.S. Federal Sentencing Guidelines elements into their compliance programs or business operations. CMS noted in its interested in how and to what degree each element has been incorporated effectively into the compliance programs of different types of providers and suppliers considering their risk areas, business model and industry sector or particular provider or supplier category.
• Any other suggestions for compliance program elements besides the seven elements described above considering provider or supplier risk areas, business model and industry sector or particular provider or supplier category including whether external and/or internal quality monitoring should be a required for hospitals and long-term care facilities.
• The costs and benefits of compliance programs or operations including aggregate or component costs and benefits of implementing particular elements and how these costs and benefits were measured.
• The types of systems necessary for effective compliance, the costs associated with these systems and the degree to which providers and suppliers already have these systems including, but not limited to, tracking systems, data capturing systems and electronic claims submission systems.
• The existence of and experience with state or other compliance requirements for various providers and suppliers and foreseeable conflicts or duplication from multiple requirements.
• The criteria CMS should consider when determining whether, and if so, how to divide providers and suppliers into groupings that would be subject to similar compliance requirements including whether individuals should
• have different compliance obligations from corporations.
• Available research or individual experience regarding the current rate of adoption and level of sophistication of compliance programs for providers or suppliers based on their business model and industry sector or particular
• provider or supplier category.
• How effective compliance programs have been for varied providers and suppliers and how the level effectiveness was measured.
• The extent to which providers and suppliers currently use third party resources, such as consultants, review organizations, and auditors, in their
• compliance efforts.
• The extent to which providers and suppliers have already identified staff responsible for compliance and for those who already have staff responsible
• for compliance, the positions of these staff.

A reasonable timeline for establishment of a required compliance program for various types and sizes of providers and suppliers, assuming the compliance program core elements were based on the aforementioned U.S. Federal Sentencing Guidelines’ seven elements of an effective compliance and ethics program, considering business model and industry sector or particular provider or supplier category.

CMS noted that it does not intend to finalize compliance plan requirements when the other proposals in this proposed rule (i.e., new provider screening and enrollment requirements) are finalized, and that CMS intends to do further rulemaking on compliance plan requirements.

Comments may be submitted to CMS at the following addresses:

Electronically: 

http://www.regulations.gov

Regular Mail:

Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS–6028–P
P.O. Box 8020
Baltimore, MD 21244–8020

By express or overnight mail:

Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS–6028–P, Mail Stop C4–26–05, 7500 Security Boulevard, Baltimore, MD 21244–1850
 

The Patient Protection and Affordable Care Act (the Act) included a new requirement that nursing homes have in operation a compliance and ethics program within 36 months of the effective date of the Act, or by March 23, 2013. The Secretary and the Inspector General of the Department of Health and Human Services must promulgate regulations by March 23, 2012 for an effective compliance and ethics program. The formality of the program, including the establishment of written policies and procedures to be followed by employees, will depend on the size of the organization. An organization that operates five or more facilities will be expected to have a more formal program.

1. The organization must establish compliance standards and procedures to be followed by its employees and other agents that are reasonably capable of reducing the prospect of criminal, civil, and administrative violations.
    
2. Specific individuals within high-level personnel of the organization must be assigned overall responsibility to oversee compliance of the standards and procedures and have sufficient resources and authority to assure compliance.
    
3. The organization must use due care not to delegate substantial discretionary authority to individuals whom the organization knew, or should have known through the exercise of due diligence, had a propensity to engage in criminal, civil, or administrative violations.
    
4. The organization must take steps to communicate effectively its standards and procedures to all employees and other agents. The organization may accomplish this component by requiring participation in training programs or by disseminating publications to employees and other agents that explain in a practical manner what is required by the compliance and ethics program.
    
5. The organization must take reasonable steps to achieve compliance with its standards. The organization may accomplish this component by utilizing monitoring and auditing systems reasonably designed to detect criminal, civil, and administrative violations by its employees and other agents. The organization should also have in place and publicize a reporting system whereby employees and other agents could report violations by others within the organization without the fear of retribution.
    
6. The standards must be consistently enforced through appropriate disciplinary mechanisms, including, as appropriate, discipline of individuals responsible for the failure to detect an offense.
    
7. After an offense has been detected, the organization must take all reasonable steps to respond appropriately to the offense and to prevent further similar offenses, including any necessary modification of its program to prevent and detect criminal, civil, and administrative violations.
    
8. The organization must periodically re-assess its compliance program to identify modifications necessary to reflect changes within the organization and its facilities.
    

By December 31, 2011, the Secretary of HHS must establish and implement a quality assurance and performance improvement program for facilities and must establish standards relating to quality assurance and performance improvement. The Secretary must also provide technical assistance to facilities on the development of best practices in order to meet standards. Not later than one year after the date on which regulations are promulgated to carry out these requirements, a facility must submit to the Secretary of HHS a plan for the facility to meet the standards and implement best practices, including how to coordinate the implementation of the plan with quality assessment and assurance activities under the Social Security Act, Sections 1819(b)(1)(B) (requirements relating to provision of services by a skilled nursing facility) and 1919(b)(1)(B) (relating to provision of services by a nursing facility, including nursing homes), as applicable.
 

Sections 1819(b)(1)(B) and 1919(b)(1)(B) require the nursing facility to maintain a quality assessment and assurance committee, composed of the director of nursing services, a physician, and at least three other members of the facility’s staff. The quality assessment and assurance committee must meet at least quarterly to identify issues with respect to which quality assessment and assurance activities are necessary and to develop and implement appropriate plans of action to correct identified quality deficiencies.
 

Although the deadline for the regulations for the required compliance and ethics programs is still over a year away, nursing homes should start now to develop, implement, and assess their compliance and ethics programs by incorporating at least the minimum requirements dictated by the Act. Nursing homes should also begin to develop their plans to meet standards for quality assessment and assurance activities.
 

The Nursing Home Residents’ Bill of Rights (La. R. S. 40:2010.8) was amended effective June 8, 2010 to provide more freedom and more choice to residents and to remove some reasonable restrictions imposed by nursing homes.

Nursing homes must now provide the right to “immediate access” to certain state and federal government workers, the resident’s individual physician, immediate family members or other relatives of the resident, the resident’s clergy, and other visitors. The prior version of the statute required nursing homes to have flexible visiting hours and to allow for visitation. The new version of the statute allowing for immediate access does not take into consideration visiting hours. However, the nursing home may impose “reasonable restrictions” to protect the security of all residents and may change the location of visits to assist in care giving or to protect the privacy of other residents. The nursing home must also provide “reasonable access” to any resident by any entity or individual that provides health, social, legal or other services to the resident.
 

The new version of the Bill of Rights states the resident has the right to be free from physical or chemical restraints imposed for discipline or convenience and not required to treat the resident’s medical symptoms. The new version deleted the reference to physical and chemical restraints authorized by a physician or necessitated by emergency. The new version also removed the requirement that the physician be consulted immediately if physical or chemical restraints are used and also removed the requirement that a qualified licensed nurse must apply the restraints and document the circumstances for the use of restraints. Under the new version, there is no explicit prohibition from using physical or chemical restraints for the resident’s protection or safety or for treatment of medical symptoms.

The new version of the Bill of Rights removes the qualification that a resident may be excluded from participation in community-based activities if medically contraindicated, as documented by the resident’s physician. The only restriction to the resident’s participation in community-based activities now appears to be if the participation would violate infection control or quarantine laws or regulations. What remains unanswered is what liability the nursing home may face, if a resident is injured while participating in a community-based activity in a situation where participation was otherwise medically contraindicated.

The resident has the right to retire and rise in accordance with his personal preference. The new version of the Bill of Rights removes the qualifications that the resident’s schedule may not disturb other residents or disturb the posted meal schedules. The new version also removes the provision that the nursing home staff may request that the resident must remain in a supervised area, unless retiring and rising. The new version removes the consideration that the patient’s schedule for rising and retiring may be based on medical considerations as documented by the resident’s physician.

The new version presents several unanswered questions, such as whether the nursing home must provide meals outside the regularly scheduled times, if the resident has retired during the scheduled meal time; what should be done if the resident’s medications are scheduled to be given during a time when the patient has chosen to retire; and what happens if the resident disturbs other residents, as a result of his personal choice to be awake and active when most other residents are sleeping.

The newly revised Bill of Rights provides the nursing home residents with more freedom and more choice in personal and medical decision making, but the new provisions leave unanswered what ramifications the residents’ decisions may have on the nursing homes’ schedules of operation and potential liability.
 

ACOs will be accountable under three year contracts with CMS for the quality, cost and overall care of at least 5,000 Medicare beneficiaries assigned to the ACO. Medicare beneficiaries will be assigned to an ACO based on the selection of primary care service providers. Each ACO will be required to have a sufficient number of primary care professionals to care for the assigned Medicare beneficiaries.

An ACO must establish a mechanism for shared governance and a formal legal structure to receive and distribute payments for shared savings among the following types of providers:

• Physicians in group practice arrangements
• Networks of individual practices of physicians
• Partnerships or joint venture arrangements between hospitals and physicians
• Hospitals and their employed physicians
• Other groups of providers of services and suppliers as the Secretary determines appropriate

The workshop will be held at CMS Headquarters in Baltimore, Maryland, and is open to the public. The announcement by the FTC noted that to facilitate providers’ efforts to develop ACOs that will provide high quality, lower-cost care to their patients, the workshop will address and solicit public comments on the legal issues raised by various ACO models being considered by health care providers.  

A notice will be published by the agencies in the Federal Register with additional details on the workshop and the topics to be covered during the day-long workshop. The deadline to submit comments to be included in the discussion at the workshop is September 27, 2010, and the public may submit comments to the agencies before the workshop.

A copy of the FTC’s announcement on the ACO workshop may be obtained here.