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In May of this year, the United States Court of Appeals for the Fifth Circuit absolved Lakeview Regional Medical Center (“Lakeview”) of any liability, and reversed a damage award against it, in a lawsuit that had been brought against Lakeview and a physician group practice by Kadlec Medical Center, a hospital located in the state of Washington. Kadlec sued Lakeview and a physician practice for over $8 million in damages, on the grounds that Kadlec was forced to settle a malpractice lawsuit due to the negligence of an anesthesiologist who was impaired at the time of the malpractice. Kadlec’s claim was that Lakeview and the physician group practice knew of the physician’s impairment when he was on the medical staff of Lakeview, were asked about his performance before he was credentialed at Kadlec, and did not disclose the prior impairment and disciplinary action that had resulted.
Continue Reading Federal Court of Appeals Absolves Louisiana Hospital of Liability in Failure to Report Physician Impairment While on the Medical Staff

In a report issued September 17, 2008, the GAO commented that the Department of Health and Human Services (HHS) has made substantial strides in devising a national plan for protecting the privacy of patients’ electronic personal health information, but that HHS still needs to do more to ensure key privacy principles are fully addressed. The GAO’s remarks were contained in a report issued to the U.S. Senate Committee on Homeland Security and Governmental Affairs of a follow-up study by the GAO regarding the Office of the National Coordinator of Health IT’s efforts to insure the privacy of electronic personal health information exchange within a nationwide health information network.Continue Reading GAO Issues Report on HHS Privacy Plan for Electronic Health Information

In a recent case, the Fifth Circuit emphasized the legislative purpose in the Health Care Quality Improvement Act (HCQIA) to improve the quality of health care by protecting physicians who participate in peer review actions, finding they were entitled to immunity from monetary damages.

In Poliner v. Texas Health Systems, — F.3d — (5th Cir. 2008), 2008 WL 2815533, an interventional cardiologist sued Presbyterian Hospital and several physicians for damages related to a restriction of his privileges during a peer review investigation. At trial, the jury found in favor of Dr. Poliner on various claims and awarded nearly $90 million in defamation damages and $110 million in punitive damages. The district court reduced the damages to $33 million, including prejudgment interest.Continue Reading Fifth Circuit Reverses $33 Million Judgment Against Physicians and Hospital Arising From Peer Review Actions

In the September 20, 2008 issue of the Louisiana Register, the Louisiana State Board of Medical Examiners amending the rules governing dispensation of medications. The amended rules now forbid dispensing physicians from dispensing any controlled substance or drug of concern, unless the physician practices at a governmental facility or a licensed abuse or addiction treatment facility, or is engaged in a regulated clinical research project or investigational study.
Continue Reading Amended Rules Governing Dispensation of Medications

The Office of Inspector General issued Advisory Opinion No. 08-10 on August 19, 2008 regarding a proposal for a physician group practice to lease a facility owned by the practice on a part-time basis to other physician groups for the groups to provide certain radiation therapy treatments to their patients. The physician group practice that owns the facility had requested this advisory opinion from the OIG on whether the OIG considers the proposed part-time (i.e., block) leases of the facility to other physician groups would generate prohibited remuneration under the Federal anti-kickback statute. 

Continue Reading OIG Issues Advisory Opinion on Proposed Block Lease of Free-Standing Cancer Treatment Center

On June 10, 2008, Michael O. Leavitt, Secretary of the Department of Health and Human Services (DHHS) announced that Louisiana was one of twelve (12) communities chosen to participate in an Electronic Health Records Medicare Demonstration Project. The project will last five (5) years and will provide physicians with financial incentives to use certified electronic health records (EHRs). Incentive payments for the entire 5-year period may reach $58,000 per physician and $290,000 per practice.
Continue Reading Louisiana Chosen to Participate in Electronic Health Records Medicare Demonstration Project

In Advisory Opinion No. 08-05, issued February 15, 2008, the OIG concluded that an arrangement whereby a pharmaceutical company placed electronic kiosks in physician offices would not generate prohibited remuneration under the anti-kickback statute. Further, the OIG opined that the arrangement would not violate the federal prohibition against giving anything of value to a Medicare or Medicaid beneficiary that is likely to influence the beneficiary’s selection of a particular provider.
Continue Reading OIG Opines Favorably on Electronic Kiosks Provided by Pharmaceutical Manufacturer

The Louisiana Supreme Court issued its new opinion after a rehearing in Borel v. Young, again affirming the Third Circuit’s ruling and dismissing the lawsuit against late-added physician defendants, but on different grounds. The supreme court’s decision on rehearing solved an apparent dilemma for the plaintiffs created by the original opinion: the plaintiffs were precluded from filing suit until after the medical review panel had rendered an opinion but, in any case, were required to file suit within three years of the alleged medical malpractice. Since the three year period could not be suspended during the pendency of the medical review panel, the plaintiffs faced the possibility that their claims would be barred by the three-year peremptive period before the panel convened to consider their claims.
Continue Reading Louisiana Supreme Court’s Rehearing of Borel v. Young

The Centers for Medicare and Medicaid Services (“CMS”) recently issued on June 8, 2008 an advisory opinion in which CMS addressed whether a proposed physician ownership in a diagnostic center complies with the rural provider exception to the Stark Law. CMS concluded that the facts of the proposed physician ownership in the diagnostic center would satisfy the rural provider exception, but CMS also cautioned that meeting the elements of the rural provider exception is an ongoing requirement and must be continuously satisfied during the period of a physician’s ownership interest.
Continue Reading CMS Issues Stark Law Advisory Opinion on Physician Ownership and the Rural Provider Exception to the Stark Law

On April 16, 2008, the Louisiana Third Circuit Court of Appeal upheld a trial judge’s application of a 35% minority discount in determining the fair market value of the interest of a partner withdrawing from a limited liability partnership (LLP). It appears that the Supreme Court has been asked to consider this case, but has not yet made a determination of whether to do so. Accordingly, this decision may or may not be final, and although it did not involve a health care entity, it is instructive for health law purposes.
Continue Reading Louisiana Decision on Sale of Minority LLP Interest Absent Liquidation Has Health Care Provider Implications