Archive for Legal Watch

Five Things to Consider When Selling Your Practice to a Private Equity Firm

Five Things to Consider When Selling Your Practice to a Private Equity Firm

By Howard Bogard, Burr Forman

A growing number of physicians are selling their medical practices to private equity firms in order to “monetize” their practice, as well as to access capital and obtain operational efficiencies. In the Southeast, we are seeing consistent private equity activity in the specialties of anesthesiology, gastroenterology, dermatology, ophthalmology, oncology, ENT, and internal medicine, as well as others. 

 Private equity firms generally use capital from wealthy individuals, pension funds and university endowments to invest in various industries with the goal of obtaining a return on investment of 20% or more.  To start, the private equity firm will purchase a large, well-managed (“platform”) medical practice and thereafter will acquire additional practices in order to increase the number of employed physicians throughout a defined geographic area.  The goal is to grow revenue and decrease cost and then sell the practices within three to seven years of acquisition.

 If you are considering a sale to a private equity firm, there are several things to consider:

  1. Valuation of the Practice.  A private equity firm generally determines the purchase price for a medical practice based on a multiple of EBITDA (earnings before interest, taxes, depreciation, and amortization) as a measure of the operating performance of the practice. The multiple can run anywhere from 4 to 12 times EBITDA, with a platform or larger practice obtaining a multiple on the higher end of the range.
  2. Payment of the Purchase Price.  The purchase price is typically a combination of cash plus “roll-over” equity in the buyer from 10% to 30% of the total purchase price.  For example, if the total purchase price is $10 million, $8 million could be paid in cash at closing and $2 million paid as equity in the buyer.  When the buyer sells, the physicians receive a return on their roll-over equity.  A portion of the purchase price may also be paid by a promissory note with payment contingent on the physicians meeting certain revenue benchmarks.  
  3.  Expect a Change in Compensation. After closing, the physicians will become employees of the private equity buyer. In return for a large up-front purchase price, typically a physician will be paid less in annual compensation as compared to pre-closing compensation amounts, although “guaranteed” salaries for a period of time can be negotiated.  Compensation is based on a variety of factors, including collections from personally performed services, plus a percentage of ancillary revenue and/or a percentage of overall profits. Physicians considering a private equity sale should analyze and compare their expected compensation over a three to five year period in private practice versus the same period under a private equity model, to include the up-front payment.
  4. Penalties for Early Departure.  Typically, a private equity firm will require the selling physicians to sign a five-year employment agreement. In the event a physician leaves employment for certain reasons within a defined time period, the departing physician will be required to repay some of the purchase price he or she received (a “claw-back”).  Typically, the claw-back period runs from three to five years after the start of employment, with more money repaid in the first year of the claw-back as compared to the last year. In addition, the selling physicians are required to sign non-compete and non-solicitation/no-hire agreements that restrict the physician’s ability to compete with the private equity buyer in the event the physician leaves the practice.
  5. Loss of Control.  One of the benefits of being in private practice is that the physician owners make the decisions.  If a practice sells to a private equity firm, a management company (owned by the private equity firm) will manage the practice and will have authority to make essentially all operating decisions, other than clinical/medical decisions, which remain within the control of the physicians.  Oftentimes, there is a clinical management board or committee comprised of physicians and private equity representatives that has authority to address certain issues.  However, if the practice is well run and profitable (hence the reason the private equity firm is interested in the practice), in my experience, the private equity firm does not make significant changes without first consulting with the physicians.

Howard Bogard is a Partner at Burr & Forman LLP and chairs the firm’s Health Care Practice Group.  Howard can be reached at 205-458-5416 or at hbogard@burr.com.

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The Effect Differing Medical Opinions Have On Falsity and Scienter in False Claims Act Lawsuits

The Effect Differing Medical Opinions Have On Falsity and Scienter in False Claims Act Lawsuits

By: Jim Hoover with Burr Forman, LLP

There is currently a circuit split among the Federal Circuit Courts of Appeals regarding the effect differing medical opinions have on the elements of falsity and scienter in False Claims Act lawsuits.  

Earlier this year the Third Circuit Court of Appeals ruled that conflicting medical opinions can create a genuine dispute of material fact on “falsity” in a False Claims Act action. The case is United States v. Care Alternatives. This holding directly conflicts with the Eleventh Circuit’s September 2019 decision in United States v. AseraCare, which held that a mere difference in medical opinion between physicians regarding a patient’s prognosis was not enough to establish falsity under the FCA. In Care Alternatives, the Third Circuit rejected AseraCare and found that conflicting physician testimony about the validity of physician’s certifications was sufficient to raise a dispute of material fact regarding the element of “falsity.” The Third Circuit sought to make clear that in its Circuit, findings of falsity and scienter must be independent from one another for purposes of FCA liability. According to the Third Circuit, the scienter element helps limit the possibility that providers will be exposed to liability under the FCA any time the Government or relator can find an expert who disagreed with the certifying physician’s medical prognosis.

Former employees of Care Alternatives filed a qui tam action against the hospice provider, alleging the hospice had improperly admitted patients who were not eligible for Medicare’s hospice benefit and directed employees to falsify Medicare certifications in order to meet the eligibility requirements. The relators’ physician opined that in 35% of the sample cases he reviewed a reasonable physician would not have certified the patient as terminally ill with a prognosis of six months or less based on the accompanying documentation. Reviewing the same sample set, Care Alternatives’ physician disagreed, finding that a reasonable physician could reasonably certify each case. Thus, there was a disagreement among the parties’ experts. The United States District Court for the District of New Jersey agreed with AseraCare by adopting and applying AseraCare’s holding that an “objective falsehood,” something more than a retrospective difference of opinion, was required to create a genuine dispute of fact.

On appeal, the Third Circuit Court of Appeals disagreed and reversed and remand the case for consideration of the other elements of FCA liability, particularly the element of scienter. The Third Circuit noted it is well-established that subjective opinions can be false, and applied this reasoning to the FCA’s falsity element. The Third Circuit opined that AseraCare’s “objective falsity” standard improperly conflated falsity with scienter, i.e., that the whistleblower prove a certifying physician was making a knowingly false certification. The Third Circuit held that these elements must be considered separately, and the purpose of the scienter requirement is to limit the possibility that a provider could be found to violate the FCA any time the Government or a relator could find an expert who may establish falsity simply by disagreeing with a physician’s prognosis.

Thus, in the Third Circuit a determination that a claim was false does not immediately trigger FCA liability. Relators must still establish that the provider knew the claim was false when the claims was submitted. Unfortunately, however, one of the big problems for False Claims Act defendants is credibility determinations are typically reserved for the jury thus almost forcing the False Claims Act case to trial.  

Because of the circuit court split, a United States Supreme Court opinion is needed to resolve the differing circuits’ approaches. In the meantime, the key takeaway for health care providers across the country is these differing standards will be fought in FCA cases where defendants have made reasonable subjective judgments.  The arguments should focus on both the falsity element and the scienter element.  

Jim Hoover is a partner at Burr & Forman LLP and works exclusively within the firm’s Health Care Practice Group and predominantly handles healthcare litigation.

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Identifying The Proper Documentation For End of Life Care

Identifying The Proper Documentation For End of Life Care

By Angie C. Smith

In the midst of this global pandemic, there have been stories about prioritizing patient care based on the patient’s ability to recover.  The stories are heartbreaking and highlight the need for people to have important discussions regarding advance care planning before they get sick and are unable to direct their own care.  Further, it is essential that the patient’s choice for end of life care be the driving force for withdrawing or withholding life-sustaining treatment.  To ensure that occurs, healthcare practitioners need to be able to identify the documentation necessary to implement patient choice regarding end-of-life care.  This article will examine the most common types of documentation that a healthcare practitioner can look for when implementing end-of-life care.

Advance Directive/Living Will

The most obvious documentation for expressing a patient’s wishes for end-of-life care is the Living Will or Advance Directive.  Under Alabama Code § 22-8A-4, any competent adult may execute a living will directing the providing, withholding, or withdrawing of life-sustaining treatment.  If a healthcare provider determines that a patient has a living will, the provider should confirm that it meets the following requirements:

  • In writing;
  • Signed by the person making the advance directive or in the person’s presence and at his direction;
  • Dated; and 
  • Signed by two or more witnesses who are at least 19 years of age, neither of whom shall be the person who signed the advance directive on behalf of the person making the advance directive, appointed as the health care proxy in the advance directive, related to the declarant by blood, adoption, or marriage, entitled to any portion of the estate of the declarant, or directly financially responsible for declarant’s medical care.

Once a healthcare provider or facility confirms the living will meets the above requirements, it will then need to determine whether the advance directive is in effect.  For the living will to take effect, the patient’s attending physician must make a determination that the patient is no longer able to understand, appreciate, and direct his or her medical treatment, and two physicians – one the attending physician and another physician – personally examine the patient and diagnose and document in the medical record that the individual has a terminal illness or injury or is in a state of permanent unconsciousness.  

After determining the advance directive applies, next establish the patient’s wishes.  Sounds easy enough but sometimes the forms can be incorrectly checked or the statement by the patient may be vague.  If the patient used the form contained in Alabama’s statute, there are Yes or No questions that guide the provider.  The form covers terminal illness and permanent unconsciousness and whether the patient wants life-sustaining treatment, defined as “drugs, machines, or medical procedures that would keep [the patient] alive but would not cure [the patient], or artificial food and hydration.”    

Another important provision on Alabama’s form Advance Directive is the designation of a healthcare proxy.  A health care proxy is a competent adult designated to make decisions regarding providing, withholding, or withdrawing life-sustaining treatment and artificial hydration and nutrition.  If a health care proxy is designated, the advance directive form also provides instructions for the health care proxy.   There are three options:  (1) the  health care proxy must follow the instructions on the form; (2) the health care proxy should follow instructions on the form and make any decisions not covered by the form; and (3) allows the health care proxy to make the final decision even if contradictory to what the patient requests.  

Durable Power of Attorney

A durable power of attorney or health care durable power of attorney may also provide guidance to a healthcare provider in evaluating a patient’s end of life care.  If a patient has a durable power of attorney that designates a health care proxy, a healthcare provider should ensure that the language in the power of attorney specifically allows the attorney-in-fact/agent to make health care decisions providing, withholding and withdrawing life-sustaining treatment.  To say that the agent can make health care decisions alone is not sufficient to allow the agent to make decisions related to withdrawing life support or providing artificial hydration nutrition, as examples.  Additionally, the durable power of attorney should be executed in the same way that an advance directive is executed.  In other words, it must have two witness signatures who are not related by blood or marriage, not entitled to take under the patient’s estate and are not financially responsible for the patient’s healthcare.  

Surrogate
If a patient does not have an advance directive or the advance directive does not apply to the circumstances or the patient does not have a healthcare proxy as described above, another option for making end of life decisions for a patient who is unable to make those decisions is a health care surrogate.  Under Alabama law, an individual can act as a health care surrogate in consultation with the patient’s attending physician.  If a family member wishes to make end-of-life decisions regarding withholding and withdrawing life-sustaining treatment, she must complete a certification and may determine whether to provide, withdraw or withhold life-sustaining treatment or artificially provided nutrition and hydration.  The law dictates a hierarchy for choosing the appropriate person to serve as a surrogate as follows:   

  1. a guardian where the order of guardianship authorizes the guardian to make decisions regarding withholding of life-sustaining treatment;
  2. the patient’s spouse, unless legally separated or party to a divorce proceeding;
  3. adult child;
  4. one of the patient’s parents;
  5. adult sibling;
  6. any one of the patient’s surviving adult relatives who are of the next closest degree of kinship; or 
  7. if the patient has no known relatives and none can be found after reasonable inquiry, an ethics committee acting unanimously may make those decisions. Where an ethics committee is convened to make decisions regarding life-sustaining treatment, the health care provider is required to notify the Alabama Department of Human Resources.  

The surrogate must certify under oath that she has contacted the persons in a class equal to or higher than the surrogate and that person has either consented or expressed no objection to the surrogate acting as a surrogate or to the decision.  The certification should be included as part of the medical record.  The form can be found here.   

Portable Do Not Resuscitate Order 
Although commonly used by health care providers in the state for years, it was not until 2016 that there was a reference in Alabama’s laws to “Do Not Resuscitate” orders, which allow health care providers to withhold cardiopulmonary resuscitation to a patient who is experiencing cardiac arrest.  Since 2016, Alabama not only defines a DNR order but also allows for a Portable DNR to follow a patient from facility to facility.  Upon admitting a patient to a facility, a health care provider should ask the patient or the patient’s family if a Portable DNR exists.  There is a specific form that must be used and requires proper execution to be implemented.  The form can be found here.  

A properly executed Portable DNR requires the signature of one of the following:  the patient; a representative of the health care provider based on instructions in an advance directive; a health care proxy or an agent under a health care POA, or a surrogate (discussed above).  A physician must also sign the form, and it should be maintained in the patient’s medical record along with any supporting documentation, e.g. the advance directive or power of attorney.  Once properly executed, it can be used by any health care provider.

Although this list may not be exhaustive, and certainly a verbal request related to end of life care should be honored, these are some of the most common forms of documentation that can assist healthcare providers in implementing the wishes of their patients.

Angie Cameron Smith is a partner at Burr & Forman, LLP practicing exclusively in the firm’s Health Care Industry Group.

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What if No One was On Call?

What if No One was On Call?

2020 Legislative Recap

Over the past few months, “unprecedented” has become an oft-used term. Though the outbreak of infectious disease has been seen throughout history, the COVID-19 pandemic halted nearly all aspects of normal life, sparing not even the 2020 Regular Session of the Alabama Legislature.

When it was all said and done, only a handful of bills were passed by each Chamber, with most left hanging in the balance. However, that’s not to say the 2020 Session was without action on important health-related items; in fact; negotiations persisted well through the shutdown.

Had the Medical Association not been “on call” during these times, the health and welfare of physicians, patients and practices could have been in jeopardy. 

*Click the button below to download a pdf version*

COVID-19 Related Items

If no one was on call . . . physicians, their staff, and their practices could have no protection from COVID-19 frivolous lawsuits. The Association worked with both Sen. Arthur Orr (R-Decatur) on legislation (SB330) as well as the Ivey Administration on an executive order along with other health and business organizations. While time ran out on the legislation during the 2020 Session, the efforts with the Governor’s office were successful and on May 8, Gov. Ivey issued an executive order providing liability protection to physicians for care whose provision to patients was negatively affected or impacted by COVID-19 and/or the state’s response to the pandemic.  A summary of the executive order is available here.  Despite the issuance of this order, however, the Association will continue advocating for passage of Sen. Orr’s legislation, whether in a subsequent special session in 2020 or later.

If no one was on call . . . executive orders could have been issued giving out-of-state telehealth corporations unfair business advantages over Alabama medical practices.  Instead, out-of-state physicians providing telehealth to Alabama patients didn’t get special treatment and had to follow the same rules as physicians living, working, and paying taxes in Alabama.

If no one was on call . . . executive orders could have been issued allowing the far-reaching, unnecessary, and dangerous scope of practice expansions.  When the pandemic hit, a countrywide effort ensued from national non-physician associations seeking to advance their own specific scope-expansion agendas.  These groups urged their state-level counterpart organizations to push governors to broadly expand scopes of practice in response to COVID-19, but despite this, the Ivey Administration wisely maintained physician-led, team-based care as the standard for Alabama.

If no one was on call . . . parity in payments for telehealth services may not have occurred.  Parity in reimbursements for the same care provided in-person and via telehealth (especially telephonically) has long been an advocacy priority for the Association.  The Association applauded the Blue Cross Blue Shield of Alabama decision to temporarily cover telephonic services by physicians beginning mid-March.  Alabama Medicaid followed suit, and finally, after weeks of the Association and other allied groups petitioning Congress and Medicare regarding coverage for telephonic-only visits for seniors, CMS also agreed to cover telephonic-only telehealth. Moving forward, the Association supports making permanent these improvements in coverage of telehealth services  If insurers do so voluntarily, legislation may not be ultimately necessary.

Moving Medicine Forward in 2020

For many organizations, major policy proposals and legislative initiatives fell by the wayside during the 2020 Session. However, the Medical Association saw the achievement of two top-priority funding requests (MMRC and BMSA) that were put into place in this session.

If no one was on call . . . the Maternal Mortality Review Committee (MMRC) could not have received vital funding. The Association spearheaded a coalition of stakeholders – which included March of Dimes, the American College of Obstetricians and Gynecologists, the American Academy of Pediatrics, and Johnson & Johnson – to bring awareness to the issue of increasing maternal mortality rates in Alabama and spotlight the impact this committee could have to reverse that trend if properly staffed and resourced. Gov. Ivey included funding for the MMRC in her initial budget request, and legislators maintained the funding in the final budget.

If no one was on call . . . the Board of Medical Scholarship Awards could not have received a significant funding increase. The Association worked with BMSA and the Alabama Academy of Family Physicians (AAFP) to explain how additional funding would expand the impact of this already highly successful program which awards scholarships to physicians and in turn they agree to practice in an underserved area. Gov. Ivey agreed, and the final budget included a $500,000 increase for the BMSA.

If no one was on call . . .  support could not have grown for improving the existing rural physician tax credit. SB195, supported by the Association, would have amended the out-of-date definition of “rural” and strengthened the current residency requirement. The bill was passed by the Senate Committee, but died as a result of the session being cut short. This tax credit is a significant tool for attracting and retaining physicians for rural Alabama communities.

If no one was on call . . .  support for strengthening Alabama’s athletic trainer statute as it relates to physician supervision and care continuity could not have grown. Prior to the session, the Association worked closely with the Athletic Trainers Association in drafting SB93 to better define the practice of athletic training, ensure appropriate physician supervision and allow joint-promulgation of athletic trainer rules. The bill passed the Senate but stalled in the House due to the shortened session.

Scope Creep – Replacing Education with Legislation

Many people would like to be a physician, but few are willing to endure medical school, residency, and all the other various education and training requirements to become an M.D. or D.O. Instead of pursuing higher education, non-physicians are pursuing legislative changes as an end-around-means to practice medicine. The Association opposes any scope of practice expansions that could endanger quality care for patients.

If no one was on call . . . the physician referral requirement for physical therapy could have been abolished. As introduced, SB104 & HB145 would have abolished the need for a medical diagnosis before a physical therapist could begin providing therapy to a patient.  After consultation with many of our specialties most-involved with issuing PT referrals, the Association led negotiations to firmly maintain the importance of medical diagnosis but to also: (1) extend the current timeframe for which a referral is good from 90 to 120 days; (2) allow therapy without a referral for patients with a diagnosed chronic condition for which therapy is appropriate and who is under physician management for the condition; and, (3) allow therapy for without referral for restorative exercises so long as the patient does not initially present with new on-set pain, illness, or injury.  The bill did not pass but will return.

If no one was on call . . . standards for true collaboration within practice agreements could have been abolished. While SB114 originally would have allowed an “unlimited” number of nurse practitioners a physician could supervise, the Association, understanding that one-size-doesn’t fit all when it comes to practicing medicine,  negotiated a more prudent ratio of 9-to-1 of nurse practitioners. physician assistants or nurse-midwives for each collaborating or supervising physician while also preserving that physician’s autonomy and authority regarding patient care decisions within each collaborative or supervisory arrangement.  The bill did not pass, but will return.

If no one was on call . . . optometrists could have begun performing eye surgeries using scalpels and lasers as well as eye injections.  SB66 would have allowed optometrists, who do not undergo any surgical residencies anywhere in the U.S., to perform surgeries and injections on the eye and would also have given the Alabama Board of Optometry the sole power to define and regulate what is considered to be the practice of optometry, taking all authority away from the Legislature to define it. The bill was unfortunately rammed through the Senate Health Committee by its chairman, Jim McClendon, an optometrist himself (watch this video). The bill did not pass, but will return.

If no one was on call . . . a newly-created state board could have unilaterally set the scope of practice for imaging technologists and potentially increased costs to medical practices utilizing medical imaging.  Among other things, SB171 provided for the licensing and regulation y of health care personnel performing radiologic imaging or radiation therapy for diagnostic or therapeutic purposes. While this is not problematic on its face, the bill could have increased costs for medical practices and dangerously expanded the scope of practice for non-physicians. While the bill did not receive a vote in committee, it is expected to return.

If no one was on call . . . podiatrists could have been granted the ability to perform surgery on the ankle and lower leg. HB198 would have allowed podiatrists who have completed as few as 2-years of podiatry residency (significantly less than either a general orthopaedist or an orthopaedic surgeon specializing in the ankle) to perform ankle surgery. The legislation failed to receive a vote in committee but will return.

Beating Back the Lawsuit Industry

Plaintiff trial lawyers are constantly seeking new opportunities to sue doctors. Alabama’s medical liability laws have long been recognized for ensuring a stable legal climate and fostering fairness in the courtroom. Yet, year after year, personal injury lawyers seek to undo those laws and allow more frivolous lawsuits to be filed against physicians.

If no one was on call . . . physicians could have been held liable for emergency medical treatment decisions of individuals believed to be a threat to themselves or others.  Instead, physicians were protected in a revised version of the legislation, which aimed to create a process for immediate treatment of individuals believed to need mental health care.  The bill did not pass but will return.

If no one was on call . . . physicians participating in a pilot project “needle exchange” program could have been held liable for helping program enrollees.  Instead, revisions allowed physicians referring patients to the program and being referred patients from the program to be protected if following certain rules.

If no one was on call . . . athletic trainers and possibly other health professionals could have lost existing legal protections they currently enjoy under one proposed change to the athletic training legislation.  Instead, an amendment to the legislation allows athletic trainers and other health professionals to maintain the same level of liability protection they have at present. 

If no one was on call . . . physicians could have been held liable for the health of patients under their care who chose to use cannabis for medicinal use in the proposed medical cannabis bill.  Instead, an amendment was adopted removing this language. The bill did not pass but will return.

If no one was on call . . . physicians could have been held liable for school system employees’ decisions regarding following portable DNR orders for minor students.  Instead, an agreement was reached to ensure physicians cannot be held liable for the actions of those not under their supervision or authority in carrying out DNR orders.  The bill did not pass but will return.

If no one was on call . . . physicians could have been held liable for the actions of school system employees if the physician helped create a “seizure action plan” for a minor child with a seizure disorder.  Instead, physicians were protected for helping create such plans of action for school employees to follow for children with seizure disorders.  The bill did not pass but will return.

Other Legislation of Interest

Medical Cannabis. . . This much-discussed legislation, (SB165) sponsored by Sen. Tim Melson (R-Florence), an anesthesiologist, would provide for the regulation by the state, from “seed to sale”, of cannabis for medicinal use. After surveying its members, the Association found Alabama physicians believe if cannabis for medicinal use is legalized, then the growth, cultivation and sale of cannabis should be highly regulated by the state, and any physician involvement should be regulated not by some new state agency, but by the Board of Medical Examiners. As a direct result of Alabama physicians’ survey responses, the Association worked to bring the legislation in line with the areas of broad medical agreement on the topic. The bill passed the Senate but stalled when it reached the House.  It will return.

If no one was on call . . . various bills establishing standards of care in the law for physicians to follow or be penalized could have become law.  Instead, no such legislation passed, but the Association works on bills of this type every time the legislature comes into session.

If no one was on call . . . physicians could have been charged with manslaughter or murder if a patient experiences a deadly overdose that involved a drug the physician prescribed.  The legislation, intended to target drug dealers, was revised to protect physicians.

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Lights, Camera, Action…No!

Lights, Camera, Action…No!

By: Kelli Carpenter Fleming, Esq.

The Office for Civil Rights (“OCR”), the entity responsible for HIPAA compliance and enforcement, has issued a series of guidance documents regarding the interplay of HIPAA and the COVID-19 pandemic. The most recent guidance serves as a reminder to health care providers to follow the requirements of HIPAA when speaking with the media or allowing filming within the office or facility. This has even greater importance due to the increased amount of media attention on healthcare providers and the facilities treating COVID-19 patients. 

The recent guidance reminds health care providers that the HIPAA Privacy Rule is not altered during the COVID-19 public health emergency. HIPAA does not permit a health care provider to give media and film crews access to facilities where patients’ protected health information (“PHI”) will be accessible without the patients’ prior authorization. Even during the current COVID-19 public health emergency, health care providers are still required to obtain a valid HIPAA authorization from each patient whose PHI will be accessible to the media. Consistent with past guidance, OCR reminds providers that masking or obscuring patients’ faces or identifying information before broadcasting a recording of a patient is not sufficient. According to the guidance, by way of an example, “a covered hospital may not allow media personnel access to the emergency department where patients are receiving treatment for COVID-19, without first obtaining each patient’s authorization for such filming.”

We have seen at least two (2) previous OCR investigations regarding inappropriate disclosure of PHI to film crews (in 2016 and 2018), both of which were resolved with corrective action plans and monetary settlements. I would not be surprised if we see additional future OCR enforcement actions in this regard in light of the increased media coverage surrounding COVID-19. 

The recent guidance may be found here.

Kelli Fleming is a partner at Burr & Forman, LLP practicing exclusively in the firm’s Health Care Industry Group.

Posted in: Coronavirus, Legal Watch, MVP

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Gov. Ivey Provides Physicians Liability Protections from COVID-19

Gov. Ivey Provides Physicians Liability Protections from COVID-19

Today, Gov. Ivey issued an executive order protecting physicians, their staff, and their practices from lawsuits related to COVID-19. The governor’s order, the eighth such supplemental emergency order issued by her administration since the pandemic began, provides a “safe harbor” for services affected by COVID-19 or Alabama’s response to the pandemic and from other COVID-19 related claims.

“As one of many Alabamians on the front lines of this pandemic, I thank Gov. Ivey for working with the Medical Association to provide this much-needed liability protection for these unprecedented circumstances affecting care provisions that are far beyond any of our control,” Medical Association President John Meigs, Jr., M.D., said.

The order provides immunity for treatment that resulted from, was negatively affected by or was done in response to the COVID-19 pandemic or the State’s response to the pandemic unless proven by clear and convincing evidence that a health professional acted with wanton, reckless, willful, or intentional misconduct – a standard significantly higher than simple negligence. Importantly, the liability protections in today’s order apply retroactively to March 13, 2020, and will remain in place until the COVID-19 public health emergency is terminated.

Protecting physicians, their staff, and medical practices from COVID-19 lawsuits has been a priority of the Medical Association since Alabama entered a state of emergency in mid-March. In addition to the governor’s office, the Association has worked with multiple other organizations on today’s order and appreciates the expertise of the Birmingham law firm of Starnes, Davis and Florie during those negotiations. Click the button below to view a summary of the proclamation.

Posted in: Advocacy, Coronavirus, Legal Watch

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COVID-19 State Liability Protection Bill to Be Filed

COVID-19 State Liability Protection Bill to Be Filed

Alabama State Senator Arthur Orr (R-Decatur) is preparing to file a bill today to provide liability protection to physicians, health facilities and businesses from claims arising from COVID-19 and the state’s response to the pandemic. 

“These are unprecedented times and the Legislature must take swift action to protect physicians and businesses from COVID-19 frivolous lawsuits,” Sen. Orr said.  “We cannot wait to pass this legislation, as every day that goes by without these protections in place could mean these entities have unknown liability exposure for situations and dynamics far beyond their control.”

Medical Association President John Meigs, M.D., thanked Sen. Orr for his willingness to bring forward the legislation. 

“Practices of every specialty of medicine have been affected by this pandemic, from both the care-provision aspects but also the economic and business side.  The association appreciates Senator Orr’s leadership and willingness to bring this critical legislation forward,” Dr. Meigs said. 

The bill has widespread support among the health care and business communities.  The Legislature may meet as few as five legislative days this week but has as many as 14 at its disposal.  Most of the focus this week will be on local bills and the two state budgets, but the Medical Association is also encouraging legislators to take up Sen. Orr’s bill as a top priority.  

Posted in: Advocacy, Legal Watch, Liability

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Summary of Liability Protection from Starnes, Davis Florie, LLP

Summary of Liability Protection from Starnes, Davis Florie, LLP

Starnes, Davis, Florie, LLP has drafted a summary with some guidance on documentation for physicians concerning some protection in response to potential liability issues facing physicians during the COVID-19 declared emergency.  Governor Ivey’s March 13, 2020 Proclamation declared a state public health emergency.  The Proclamation grants certain immunity from lawsuits if a provider in a covered “health care facility” is practicing pursuant to an “alternative standard of care” plan.  The “alternative standard of care” must be set forth in the “health care facility’s” emergency operation plan, and the specific language or “standards of care” may differ from facility to facility.  Starnes suggests documenting the circumstances surrounding each patient and the reasons for clinical decisions.  [LINK to previous article].  Personnel and a facility are entitled to limited immunity when practicing consistent with those methods outlined in the alternative standard of care.  Physicians should look to the hospital for the specific protective language.

The PREP Act provides limited immunity for the administration or use of covered countermeasures to treat, diagnose, cure, prevent, or mitigate COVID-19.  The PREP Act covers providers for the administration or use of any antiviral, any other drug, any biologic, any diagnostic, any other device, or any vaccine used in the treatment of a COVID-19 patient.  

See Summary Here.

This information is not intended to provide legal advice, and no legal or business decision should be based on its content. No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers.  Read full disclaimer.

Posted in: Legal Watch, Uncategorized

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Summary of Telehealth Waivers as of April 1, 2020

Summary of Telehealth Waivers as of April 1, 2020

By: Jim Hoover, Burr & Forman, LLP

The changes made to the requirements for telehealth services since the start of the COVID-19 pandemic have been swift and substantial. For the first several weeks, it seems changes were made almost daily.  As time has passed, the changes to telehealth have stabilized enough that a summary of the current telehealth issues is possible. However, changes may still be forthcoming so the following is a summary of the significant topics related to providing telehealth services as of the date of this article. Physicians should continue to monitor announcements related to telehealth requirements as changes will surely continue to evolve. 

Medicare – On March 30, 2020, the Centers for Medicare & Medicaid Services (CMS) announced additional temporary expansion of telehealth services to Medicare beneficiaries. CMS’s announcement of this new reimbursement flexibility builds on its prior expansion of telehealth services to address the COVID-19 pandemic. Prior to the March 30, 2020 announcement, CMS announced the following: (1) the patient location requirement was being waived to allow the patient to be in their home or other location; (2) the audio-video link can be something as simple as Skype, FaceTime or Facebook Messenger video calls. However, the audio-video link has to be a real-time audio and a one-to-one video connection, and cannot be public-facing; (3) the patient cost share can be waived at the providers’ discretion; and (4) CMS stated it will not audit to verify that there is an established patient relationship.

CMS announced in its March 30, 2020 announcement that it is now also allowing Medicare beneficiaries to receive care via telehealth by: (1) adding more than 80 services to the list of services payable under the Medicare Physician Fee Schedule when furnished via telehealth, including emergency department visits, initial nursing facility and discharge visits, critical care services, home visits for new and established patients, and physical and operational therapy services; (2) allowing clinicians to provide Virtual Check-In services to new patients in the same manner as they previously could provide only to established patients; (3) allowing licensed clinical social workers, clinical psychologists, physical therapists, occupational therapists, and speech language pathologists to provide e-visits; (4) allowing clinicians to provide certain services by audio phone only to their patients; (5) allowing clinicians to provide Remote Patient Monitoring, for acute or chronic conditions, to both new and established patients; (6) removing certain frequency limitations on Medicare telehealth; (7) expanding the use of telehealth to certain home health and hospice services; and (8) expanding the definition of “homebound” so that when a physician determines that a Medicare beneficiary should not leave the home due to suspected or confirmed COVID-19, the patient can qualify for the Medicare Home Health benefit.

Medicare Miscellaneous Issues – Patient consent may be obtained annually and obtained by ancillary staff.  Direct Supervision of services, such as incident-to services, normally require that the supervising/billing physician be in the office suite and immediately available. However, for the duration of the PHE, direct supervision can be provided by real-time interactive audiovisual technology.

Billing

Medicare – As an initial matter, telephone calls are still not the same as telehealth for Medicare purposes. A full list of the Compliant List of Medicare Telehealth and the Medicare Telehealth Code List for 2019-2020 is located on CMS’ website at the following address https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/Telehealth-Codes.

CMS is allowing payment for certain codes related to telehealth services because as an example, CMS recognizes that some problems can be handled over the phone without a face-to-face, but may require more than the 5-10 minutes. The codes for established patients for physician or other qualified professionals (nurse practitioners or physician assistants) include 99441 (requires 5-10 minutes of medical discussion), 99442 requires 11-20 minutes of medical discussion), 99443 (requires 21-30 minutes of medical discussion). Practitioners should report the E/M code that best describes the nature of the care they are providing. Previous guidance was to use POS 02 that will cause payment to be made at the lower facility rate. Alternatively, providers can choose to use the POS code that most accurately reflects where the service is performed and append modifier 95. This will cause payment to be made at the higher non-facility rate.

Alabama Medicaid – Medicaid normally requires separate credentialing for providers performing telehealth; however, that restriction has been waived for the time period for dates of service from 3/16/2020 – 4/16/2020. Medical providers may bill established patient evaluation and management codes 99211, 99212 and 99213 for telephone consultations. Psychologists and behavioral health professionals should bill 90832, 90834, 90837, 90846, 90847 and H2011. Verbal consent must be obtained and documented in the medical record. These visits will count against the patient’s office visit limit of 14 visits per year.

Blue Cross and Blue Shield of Alabama – is allowing providers to bill for telephone call treatment of existing patients under the established patient office visit codes for dates of service from 3/16/2020 – 4/16/2020. They are allowing codes up to 99213 with place of service code 02 for telehealth. No modifier is required. The physician should be the one speaking with the patient — not the office staff.

HIPAA – Over the past several weeks, the Office for Civil Rights (“OCR”) has issued several notices regarding HIPAA in light of the current COVID-19 pandemic. The OCR issued a Notification of Enforcement Discretion for Telehealth Remote Communications during the COVID-19 Nationwide Public Health Emergency. OCR stated that it would relax its enforcement actions with regard to compliance with certain aspects of HIPAA (and not enforce penalties) in order to allow providers to better treat their patients via telehealth. A health care provider that wants to use audio or video communication technology to provide telehealth to patients during the public health emergency can use any non-public facing remote audio or video communication product that is available to communicate with patients. Health care providers may use applications that allow for video chats, including Apple FaceTime, Facebook Messenger video chat, Google Hangouts video, or Skype, to provide telehealth without risk that OCR might seek to impose a penalty for noncompliance with the HIPAA Rules. However, communication applications that are public facing should not be used. OCR further stated that it would not impose penalties against health care providers for the lack of a Business Associate Agreement with video communication vendors. The above applies to telehealth provided for any reason, regardless of whether the telehealth service is related to the diagnosis and treatment of health conditions related to COVID-19. The OCR also issued additional guidance in the form of frequently asked questions (FAQs) which are available at https://www.hhs.gov/sites/default/files/telehealth-faqs-508.pdf.  

State Licensure – Most states have greatly relaxed or streamlined their licensing requirements and application process to make it easier for physicians to provide telehealth services across state lines. However, the application process and requirements for each state differ so it is extremely important for physicians to check with each state. For example, the state of Tennessee requires the practitioner to complete and submit an application, which can be found at: https://www.tn.gov/content/dam/tn/health/documents/cedep/novel-coronavirus/Boards-Executive-Order-Form.pdf. The determination is made on a case by case basis. It appears most applications are being approved by the Tennessee Department of Health because as of the end of March 2020 the Department had received 61 applications and approved 59 applications, denied one, and one was under review. The State of Florida, for purposes of preparing for, responding to, and mitigating any effect of COVID-19, permits health care professionals not licensed in Florida to provide health care services to a patient located in Florida using telehealth, for a period not to exceed 30 days unless extended by order of the State Surgeon General. The exemption applies only to out of state health care professionals holding a valid, clear, and unrestricted license in another state or territory in the United States who are not currently under investigation or prosecution in any disciplinary proceeding in any of the states in which they hold a license.

While the telehealth waivers and notifications have slowed down in recent days, it is still very important for physicians to keep updated on the various requirements from state licensing authorities and payors.

Jim Hoover practices with Burr & Forman LLP and works exclusively within the firms Health Care Industry Group and primarily handles healthcare litigation and compliance matters.

Posted in: Legal Watch, Medicaid, Medicare, Technology

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The Privacy Vulnerabilities of Zoom Software and Potential Alternatives

The Privacy Vulnerabilities of Zoom Software and Potential Alternatives

Over the past month, as more nationwide “Shelter at Home” orders have been issued and more companies have transitioned to telework, the need for online meetings and webinars has skyrocketed. To accommodate this new way of doing business, many have turned to a platform called Zoom. The problem? No one bothered to read the fine print.

For those in the healthcare field, privacy is paramount. Yet, by using Zoom, users are seceding any and all content displayed or vocalized to the company. In Zoom’s own privacy statement, some of the “Customer Content” it collects includes “information you or others upload, provide, or create while using Zoom.”[i]  Additionally, Zoom also collects personal information like your name, physical address, email address, phone number, job title, employer.[ii]  And, even if you don’t make an account with Zoom, it will collect and keep data on what type of device you are using, and your IP address.[iii]

Now, while Zoom has recently updated its privacy policy and is taking steps to make the platform more secure, there are issues beyond the data mining mentioned above. On Monday, for instance, the Boston office of the Federal Bureau of Investigation issued a warning[iv]  saying that it had received multiple reports from Massachusetts schools about trolls hijacking Zoom meetings with displays of pornography, white supremacist imagery and threatening language — malicious attacks known as “zoombombing.”[v]

So, what’s the solution? Below are a few good alternative platforms to use instead Zoom:

  • Apple FaceTime (only available on iPhone and Macs)
  • Skype (available on all devices) (recommended)
  • Google Hangouts (available on all devices)
  • GoToMeeting (available on all devices)
  • Jitsi (available on all devices)
  • RemoteHQ (available on all devices)

[i] https://zoom.us/privacy

[ii] Id; see also https://protonmail.com/blog/zoom-privacy-issues/

[iii] Id.

[iv] https://www.fbi.gov/contact-us/field-offices/boston/news/press-releases/fbi-warns-of-teleconferencing-and-online-classroom-hijacking-during-covid-19-pandemi; see also https://www.nytimes.com/2020/04/02/technology/zoom-linkedin-data.html?partner=IFTTT

[v] https://www.adl.org/blog/what-is-zoombombing-and-who-is-behind-it; see also https://www.nytimes.com/2020/04/02/technology/zoom-linkedin-data.html?partner=IFTTT

Posted in: Coronavirus, HIPAA, Legal Watch, Management, Scam

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