Category: Physicians Practice

A number of doctors are being asked to either invest in, or sign personal services contracts with, ancillary services providers including compounding pharmacies, home healthcare agencies, and skilled nursing centers.  While these arrangements can have self-referral and anti-kickback statute implications, there are also several “non-health law” considerations.  

I asked Robert Feiger, JD, LLM, a tax and business formation lawyer, to share some of the basic legal implications of these arrangements.

Martin Merritt: What are some of the “non-health law” legal implications that doctors need to be aware of when offered a chance to invest, or work for, an ancillary service provider?

Robert Feiger: First of all, most investment offers are offers to become a passive participant in the profits and losses of a pass-through entity, such as a limited liability company, subchapter S corporation, or limited partnership.  Typically doctors are informed by the people forming these entities that their investments are safe because they meet the Medicare and Medicaid small business “safe harbor,” by keeping the percentage of physician investors below the 40 percent threshold. 

The principals of such businesses may not be entirely forthcoming with investors and doctors need to be aware.  While doctors are typically shielded from personal liability from passive investments in pass-through entities, when a doctor makes a referral to a company in which he also has invested, he has done something “active.” Thus, the limited liability he would otherwise enjoy from such a passive investment would not be available if the “active” referral violates Stark Law or the Anti-Kickback Statute.

MM:  Are there other ways the law distinguishes “activities” in these doctor-service provider relationships?

RF: Another typical problem is one of treatment of a doctor as an “employee” verse an “independent contractor.”  The IRS has a 20 point checklist of factors to balance for determining whether a person is an independent contractor or an employee.  The primary question is one of “control”  (whether a company hiring a doctor maintains enough control over the work for the doctor to be considered an  employee).  Though these rules are intended only as a guide and the IRS says the importance of each factor depends on the individual circumstances, they should be helpful in determining whether a company wields enough control to show an employer-employee relationship with a doctor. 

MM: In health law, the difference between a bona fide employee and a “personal services contractor” can be of crucial significance in compliance with Stark Law and the Anti-Kickback Statute. Is the distinction also important in tax and business law?

RF: Incorrectly designating an “employee” as an “independent contractor” could have state and federal tax consequences, workers’ compensation insurance consequences, and tort law liability implications.  Withholding for bona fide employees is different than independent contractors.  Many employers find the tax burden is lower for independent contractors. However, this designation is subject to “reclassification,” either by the IRS or a state taxing authority. 

MM: Sometimes, doctors are approached about investing in an ancillary services company, and then become a medical director or consultant.  Does this change in roles carry any legal significance?

RF:  Generally speaking, tort reform laws vary from state to state, but doctors must be aware that changes in roles can mean changes in exposure to liability.  We previously discussed that a doctor’s status from passive “investor to “referring doctor” can have legal implications. So too, when a doctor who may be a passive investor becomes either a W-2 or 1099 independent contractor of a company, his status changes to an “active” participant.  Tort liability may not attach to a passive investment, but liability may attach to harm caused from negligence in actively carrying out certain functions.  It is always best to consult an attorney before entering into any such business arrangement, whether it is passive or active.

Robert Feiger is a law partner in Dallas-based law firm Friedman & Feiger.  The foregoing is for informational purposes only and does not constitute legal advice.

Read Article on Physicians Practice

I asked Karin Zaner, a director with the Dallas law firm Kane Russell Coleman & Logan PC, to share her tips for how physicians can best deal with the hospital peer review process.

Martin Merritt: Peer review can be one of the most traumatic experiences for a physician. What tips can you share with physicians to guide them through the process?

Karin Zaner: My experience in medical peer review began in 1999, when my firm represented Dr. Lawrence Poliner in his federal court lawsuit against Presbyterian Hospital of Dallas and obtained a $366 million verdict, which was the ninth largest jury verdict in the country in 2004. This verdict was later reversed by the 5th Circuit due to federal peer review immunity — a real life lesson showing the clear lack of legal accountability in peer review. I now advise my physician clients on a wide variety of health law matters, including determining the best strategy to protect a physician’s record when a peer review occurs. When a physician faces peer review (whether due to standard of care or an allegation of disruption), that physician must respond quickly and with credibility. Here are my 10 tips.

Tip 1: Get the bylaws of the organization. Bylaws contain crucial deadlines and due process rights. Insist these be followed.
Tip 2: Hire legal counsel. Whether behind the scenes or on the front lines, getting counsel involved early can limit mistakes and minimize damage.
Tip 3: Respond in writing in a factual tone. Communicating medical facts with corroborating evidence helps the committee understand the case and get your side of the facts into the peer review file.
Tip 4: Maintain credibility. Do everything you can to present the medical facts in an unbiased and reasoned tone. Avoid becoming defensive and do not exaggerate — credibility is key.
Tip 5: Be there for every meeting. Take full advantage of every opportunity to make a personal connection and explain the medical facts to the committee.
Tip 6: Don’t resign or let privileges lapse. If the review is focused on you, to avoid a negative report to the state licensing board or the federal data bank, assume an “investigation” exists and get legal help before you resign or let your privileges lapse.
Tip 7: Understand your legal options. The law in your state may provide options for litigation, but they will be very limited. Consult with counsel to be sure you understand your rights.
Tip 8: Do everything necessary to win at the “fair hearing” stage. Spend your resources on counsel, expert witnesses, and services that will maximize the chance of getting your privileges back at the hospital at the “fair hearing” level.
Tip 9: Look for opportunities for resolution. While preparing for the hearing, be creative and flexible in determining a resolution you can live with.
Tip 10: Practice where you are welcome. Practicing medicine is hard enough. Practicing medicine under a microscope is a recipe for disaster. If it is clear the hospital is not a good fit for you, make your exit with the help of legal counsel.

MM: Do you have any additional thoughts for our readers?

KZ: The best way to succeed in the peer review process is to avoid problems in the first place. Document the medical record well. Respect the healthcare team, which means heading off complaints of disruption. Respect your patients as, even though you meet the standard of care, hospital administration must deal with patient complaints of rudeness. Choose your hospital carefully, and consider maintaining privileges at more than one hospital if your subspecialty requires it. Be active on medical staff committees, which will help you diffuse problems as they surface. Taking care of your patients is not enough — you also have to pay attention to the business and political atmosphere at the hospital. If you cannot resolve conflicts informally, take your practice elsewhere with the help of legal counsel.

Read Article on Physicians Practice

With so many physicians thinking about starting concierge medical practices, I asked financial planner Jason Hull for his thoughts. His firm, Hull Financial Planning, focuses on entrepreneurs and small businesses.

Martin Merritt: Dropping out of the health insurance rat race is the number one topic at medical practice seminars I attend. What are you seeing from a financial planning viewpoint?

Jason Hull: I’m seeing that this is a growing trend. Physicians want to take back the practice of medicine, avoid the pitfalls of Stark Law, and the uncertainty of post-payment audits.

MM: What tips can you provide our readers who are considering transitioning to concierge practices?

JH:  As much as we entrepreneurs wish it was the “Field of Dreams” scenario where we could build it and they will come, simply opening up an office will not guarantee success.

There are a lot of variables to keep in mind when deciding whether to form a concierge practice, and when deciding what type of concierge practice to form. Here are five of the big ones:

• Convenience. Patients who can see a doctor right away in a location convenient that is to them are more likely to use that doctor. Concierge practices should ensure they provide patients with access to benefits that they can’t get at a normal general practitioner’s office.

• Price. More and more patients are paying attention to the costs of medical care, not just the costs of their health insurance. If they can get the same treatment for less, without a significant increase in inconvenience, they’ll choose the cheaper option. That differentiates the strategies of running a high-end high-touch concierge practice compared to a low-cost a la carte concierge practice.

• Value. If you can give patients a special experience, then they are more likely to stay loyal, and tell their friends. Think about medical tourism. People are paying less for certain elective procedures overseas, and they are getting a spa week in the deal. They are getting both price and value. Consider what you can do to make the patient experience memorable, particularly if you’re offering a high-touch concierge practice.

• Specialization. If you’re the only pain management specialist within a hundred mile radius, then you’ll own the market, at least until another pain management specialist moves nearby. The same applies for either high-end concierge or low-cost concierge services.

• Referrals. If you’re a specialist, then most of your business comes from referrals from general practitioners. Do you have enough referral sources who would refer to your concierge practice? Furthermore, do you have enough pull so that they would refer patients to you rather than the doctor to whom they currently refer patients?

MM: What is the difference between a high-end high-touch concierge practice and a low-cost a la carte concierge practice? 

JH:  Low-cost membership concierge practices tend to provide a la carte basic healthcare services aimed at patients who have high-deductible insurance or no insurance.

High-end membership concierge practices provide on-call specialized services for a smaller number of patients who pay a value-added retainer fee for the availability and convenience.

The revenue and expense models for both are vastly different.

MM: What are some other considerations physicians need to take before opening a concierge practice?

JH: There are four more big considerations. They are: 

1. Are you going to go it alone or with others? If you’re bringing in other doctors, how much of a book of business will they be expected to bring in? How will you share costs and revenues? Will it be a PLLP or PLLC?

2. What are your projected cash flows? You’re going to have to hire staff to handle the other aspects of running the practice. How much will they cost? How many patients do you need to bring in to cover your expenses (including paying yourself and/or your partners)? How long will it take for you to get insurance reimbursements?

3. Where will your patients come from? Can you bring in your current patients without violating non-compete agreements? How will you get the word out about your practice? Will you rely on advertising, location, referrals, or a combination of all of those sources? How long will it take to get a steady stream of patients?

4. Do you have enough cash in the bank to cover a worst-case scenario? My motto as an entrepreneur is to plan for the best and prepare for the worst. What happens if you hire staff, sign a lease, pay for insurance, and only a trickle of patients come in? Will you be able to pay the bills? How long until you will have to cut the cord?

Dallas, Texas, provides a microcosm of a problem affecting most major metropolitan areas in the United States: uncompensated care.  Dallas County Judge Clay Jenkins, who holds an administrative position over the fourth most uninsured county in America, speaks almost daily with HHS Director Kathleen Sebelius and White House staff about the problems posed by the uninsured in metropolitan areas.

In November 2013, President Obama visited Dallas County to observe first hand, Judge Jenkins’ Affordable Care Act Coalition, a grassroots effort supported by hospitals, concerned citizens and interdenominational religious groups to enroll Americans under the reform law.

I recently sat down with Jenkins to explore how what’s happening in Dallas County has larger implications for medical practices across the nation.

Martin Merritt: How big is the problem of uninsured in Dallas County?

Clay Jenkins: It is a huge problem. If the Dallas-Fort Worth metroplex were one combined county, we wouldn’t be the fourth largest, but the most uninsured county in America. A staggering 672,000 individuals are uninsured in Dallas County, which represents more than 28 percent of our citizens. Of that number, 506,000 qualify for a subsidy, which brings affordable, quality insurance into their grasp.

Texas hospitals provide over $5 billion a year in uncompensated care. Texans pay for this care through local property taxes, increased premium costs, and higher medical costs. Dallas County citizens pay more taxes to cover uncompensated care than for all other county services combined. Our county hospital, Parkland Hospital, provided $685 million in unreimbursed care in FY 2012.

MM: So you developed the ACA Coalition, tell us about it.

CJ: The Dallas County ACA Coalition has been in existence since August 2013, and is successful because of the many different Dallas-area organizations participating. My office’s role in chairing the coalition is to empower our government and private partners in the healthcare, faith, business, and grassroots communities to synergize efforts to comprehensively approach enrolling citizens and their children in the health insurance marketplace.

MM: You say there is no downside for physicians or individuals who need health plans?

CJ: As you know, studies are steadily finding that lack of access to care leads to shorter and less healthy lives. So, anything that increases access to care is a good thing. For physicians, there is a long-term benefit in decreasing the amount of uncompensated care and building a healthier patient population. As to differences in these policies and others, in Texas, the biggest difference to consumers is the network of care, which tends to be narrower for subsidized policies. For providers, the reimbursement rates can be lower with subsidized policies.

MM: How has the White House responded to the coalition’s work?

CJ: The White House is a tremendous partner providing us with extensive resources and information. While we have been a focal point of the White House’s efforts to export our work in Dallas County to other metro areas, we have also been able to pick up best practices and ways to improve our efforts while working with the White House and HHS.

Read Article on Physicians Practice

As I work to close out the books from 2013, I am struck at how much “bad debt” I am forced to write off. A lot of this debt is $5 and$10 deductibles and co-insurances from in-hospital patients our primary-care pediatrician will never see again having cared for the newborn only for a few days after his birth. Some comes from families that have been dismissed from our practice for non-payment. The dollar amounts are too low to justify sending multiple statements and, even for the larger amounts, the legal risk of reporting to the credit bureau via a collection agency is too high, so I write them off. And it bothers me.

It bothers me for many reasons. First, all those small dollar amounts add up to big numbers and ‘ my performance bonus goes out the window. Second, why shouldn’t these people have to pay their bills when I pay all my bills? Lastly, and here is what I want to talk about in this post, the insurance company’s intent to have the patient have some “skin in the game”  is all for naught.

I understand why insurance companies are pushing more and more of the cost of healthcare onto the patients. Although not without controversy, I agree with the “skin in the game” concept that when patients recognize how much one provider cost versus another, the patients may make more fiscally conservative decisions (then again, they may not). Still, knowledge is power and all that after-school special junk and I get it. In real life, though, a significant number of patients are never feeling that pain of payment because we, the providers, have limited power to collect. The patient is getting away without having to pay their portion; a cost that was intended to encourage the patient to not over utilize or to pick lower-cost providers.

A surprisingly high number of our patients “forgot their wallet at home” or state “my ex-husband will send a check” leaving us with a significant amount of accounts receivable. Now I know some of you out there will say, “We don’t see anyone without a copay. We send them to the ATM across the parking lot or make them reschedule.”  I, personally, am way too risk adverse to enforce such a policy. What if that patient has a seizure or other medical emergency between the time you turned them away and the time of their rescheduled appointment? Providing timely medical care is not the same thing as selling someone a loaf of bread and the liability associated with each reflects that. We see patients at the time of their scheduled appointment and then chase them for the copay or deductible after. If we didn’t, we risk a patient’s health and open ourselves to a lawsuit that we’d lose.

Chasing after, however, is mostly a losing game. I was recently at an industry event where the speaker pointed out a rise in the number of providers being sued (and losing) because they erroneously sent a patient to a collection agency that reported to the credit bureaus; the error was the insurance company’s error, not that it mattered. That was enough for me to stop reporting to collection agencies. While I will eventually dismiss families for failure to pay (for more on how to dismiss patients the right way, I highly recommend this blog post by attorney Martin Merritt),  I stop short of reporting to the credit bureaus. It’s too much risk over mostly small-dollar amounts. Of course here again the patient gets away without paying and the insurance company’s intended behavior doesn’t happen.

Here’s my solution: Insurance companies should collect co-insurance and deductibles and not leave it to hospitals and doctors’ offices.

Hear me out:. If the insurance companies collected the patient-owed portion, there would be a number of benefits. First, collections are better administered by insurance companies. As I’ve already explained, providers are bad at it, which defeats the primary purpose (i.e., patient picks cheaper provider). The insurance companies have the administrative staff plus the power (i.e., cancelling a policy) if patients do not pay.

There would be a secondary benefit in that one way to cut healthcare costs is to increase the accuracy of diagnosis. Providers can best diagnose a patient when there is a good doctor-patient relationship and nothing hurts that relationship more than making your doctor the insurance company’s collection agent. After all, patients already have grave animosity toward the insurance companies. Adding on collections can’t worsen that relationship, but it can lift a huge cloud off of a patient’s feelings toward his doctor. It is bad enough doctors lecture us on exercise, smoking, and drinking. Being handed a huge bill (as determined by our insurance company, not our provider) just adds fuel to the fire and makes the patient less likely to be honest with the provider or take her advice to heart.

The more I think about it, the more astounded I am that no insurance company has implemented this yet. At the very least, I’d think the insurance provider would want the providers to report non-payment, but I’ve never been asked to do so. Patients should have “skin in the game” and know that their medical choices have consequences, both individual as well as communal. That said, until the insurance companies collect these fees themselves, I don’t see the impact as being significant enough.

As the tax year ends, it’s time for physicians to think about retirement planning. To help, I asked wealth manager Scott Wisniewski to offer some tips.

Martin Merritt: What types of retirement savings plans are available?

Scott Wisniewski: The type of plan available to a physician will depend on his employment status.  For those that are W-2 (taxes withheld by an employer), a 401(k) may be an option for saving for retirement.  Physicians that are self-employed and receive 1099 income as an independent contractor have more options for contributing to retirement such as a SEP IRA, solo/individual 401(k), profit sharing plan, and cash balance plans.

MM: What are the advantages/drawbacks of each, especially concerning the amounts available to contribute each year?

SW: Below are the IRS’ annual limits for contribution amounts in 2013 and 2014:

W2 employees:
401(k)/403(b): $17,500 (or $23,000 if age 50 or over)

1099/Self-Employed:
SEP-IRA: Lesser of 1) 25 percent of compensation, or 2) $51,000 (for 2013; $52,000 for 2014)
Solo 401(k): Combination of 1) 100 percent of compensation up to $17,500 for 2012 and 2014; or $23,000 if age 50 or over and 2) employer contributions up to 25 percent of compensation as defined by the plan (for self-employed individuals, compensation is defined as net earnings from self-employment after deduction both one-half your self-employment tax, and contributions for yourself). Total contributions, not counting catch-up contributions, cannot exceed $51,000 for 2013 and $52,000 for 2014. 

Cash Balance Plan:
Below are illustrative 2013 plan year contribution limits for combination plans under near optimum conditions:

*Different amounts will result for each plan combination, depending on normal retirement age, interest rates and credits, employee group demographics, and benefit levels for non-highly compensated employees.

A consideration: A business owner who is also employed by a second company and participating in its 401(k) plan should bear in mind that the limits on elective deferrals are by person, not by plan.

As you can see, the plan limits can vary.  The advantage of all of the plans is that contributions are made tax-free, therefore the higher the contribution the lower taxable income will be.  Also, the account grows tax-free.  On the other hand, you can’t access the funds before age 59.5, except for some limited circumstances, without paying a 10 percent penalty (plus the taxes due).  Also, depending on which plan you participate in, the calculations can be complex. 

Consulting with a tax adviser and financial adviser is recommended. 

The most complex of all is a cash balance plan.  The average physician probably won’t benefit from one simply because they don’t make enough. 

For self-employed individuals establishing a plan, the investments held within the account must be self-selected or consultation with a financial adviser should occur.    

MM: How much should a physician contribute?

SW: It will vary based on a number of factors such as age, income, debt, risk appetite, current standard of living, etc. 

What is certain is physicians get a late start to the retirement game.  Because they typically do not start earning relatively higher levels of income until their early thirties, their retirement goals call for a higher contribution rate.  It is not rare for a physician to contribute more than 20 percent to 30 percent of her pre-tax income toward retirement. 

Attempt to build a portfolio that equates to 20 times your annual income pre-retirement.  We find many physicians are unaware of the considerations that must be accounted for when making retirement projections.  Most individuals aren’t armed with the information as to how much needs to be contributed and what end (portfolio) value specific assumptions will achieve (age, investment returns, volatility, contribution rate, etc.).  A competent financial adviseradviser should be able to compute different outcomes that will assign a probability to each scenario.

Be aware that the more that is contributed toward tax-deferred retirement accounts the lower taxable income will be.  If a physician’s federal and state marginal income tax rate is 40 percent, and his annual income is $250K per year, contributing $50K toward a SEP-IRA could knock $20K off his tax bill.

Read Article on Physicians Practice

Last week’s discussion of the ethical and contractual considerations when patient copayments are routinely forgiven left on unanswered question: “What efforts to collect coinsurance payments are required of you, in keeping with you obligations to the patient and the insurance plan.” In a recent case filed in Houston federal court, North Cypress Medical Center v. Cigna, 4:09-cv2556, an insurance plan refused to pay between $20 million and $30 million in out-of-network hospital charges because the medical center did not seriously attempt to collect coinsurance payments from patients.

The controversy centered on language in the insurance contract to the effect that Cigna would not be obligated to pay any amount for which the patient was not obligated to pay. At the time of admissions, the medical center informed patients that the patient would remain responsible for any amounts which were not covered by insurance. In other words, the patient actually incurred the debt and was obligated to pay it. However, Cigna sent out 62 survey letters to patients and 27 reported that if they were billed at all, the amount of the bill was closer to the “in-network” rates. Cigna argued that it does not matter that some patients sign forms stating they are responsible for the bill, if in reality, the patient was never under any serious threat of collection activities. The court sided with Cigna and the case is being appealed.

The court did not state what collection efforts would have changed the outcome, but seemed to be persuaded by two factors:

1. The medical center ignored the “in-network/out of network” cost-savings structure of the health plan. Cigna wrote the plan in a way to discourage out-of-network utilization. The medical center appears to have frustrated this plan provision. If the medical center did attempt to collect, Cigna successfully argued it attempted to collect too little.

2. The specific evidence persuaded the courts that patients were never in any imminent danger, in the real world, of being required to pay the bill.  

So what must you do, in the real world so to speak, in addition to creating a bill and sending it to patients? Until a more solidly developed body of case law exists, the best course of action is to simply ask each insurance company to tell you what is expected of you. This places the insurance company in a somewhat delicate position. If the insurance company is too harsh, demanding, for example, that you turn each patient over to collection agencies or worse, file a lawsuit, this might have negative consequences for the insurance company. People might not wish to do business with such a company.

Hopefully, the insurance company has already though of an answer and will be happy to tell you what it is.

Read Article on Physicians Practice

At one time in America, there was no such thing as “health insurance.” Patients negotiated directly with hospitals and doctors, and paid what they could, often on a sliding scale, according to ability. Eventually, health insurance entered the market, easing the burden of healthcare costs.

It didn’t take long to realize the ordinary rules of supply and demand would not apply, if the insurance company, not the patient, was responsible for the bill. Copayments, deductibles, and coinsurance developed as a check against overutilization. If the patient had some “skin” in the game, this would provide some disincentive, though not absolute, but some hedge against over-use. This protective requirement, though necessary, is at times at odds with AMA Code of Ethics Opinion 8.03, which holds: “The primary objective of the medical profession is to render service to humanity; reward or financial gain is a subordinate consideration.”

In the current economy, as available dollars are becoming scarce, insurance carriers have begun checking up on the collection of copayments, deductibles, and coinsurance. With greater regularity, physicians and hospitals are receiving letters requesting proof, in perhaps five randomly selected cases, that the provider has collected, or sufficiently attempted to collect the portion of fees which is the patient’s responsibility. This comes as a shock to many providers, who in keeping with Opinion 8.03, and the historical tradition of sliding scales, based upon ability to pay, have subordinated financial ability to pay in favor of the higher duty to care for the patient’s need.

It is important to understand, however, forgiveness of copayments could land you in hot water. Therefore, doctors must understand the rules regarding waiver of copayments. AMA Opinion 6.12 addresses the ethical considerations:

Opinion 6.12 – Forgiveness or Waiver of Insurance Copayments

Under the terms of many health insurance policies or programs, patients are made more conscious of the cost of their medical care through copayments. By imposing copayments for office visits and other medical services, insurers hope to discourage unnecessary healthcare. In some cases, financial hardship may deter patients from seeking necessary care if they would be responsible for a copayment for the care. Physicians commonly forgive or waive copayments to facilitate patient access to needed medical care. When a copayment is a barrier to needed care because of financial hardship, physicians should forgive or waive the copayment.

A number of clinics have advertised their willingness to provide detailed medical evaluations and accept the insurer’s payment but waive the copayment for all patients.

Physicians should be aware that forgiveness or waiver of copayments may violate the policies of some insurers, both public and private; other insurers may permit forgiveness or waiver if they are aware of the reasons for the forgiveness or waiver. Routine forgiveness or waiver of copayments may constitute fraud under state and federal law. Physicians should ensure that their policies on copayments are consistent with applicable law and with the requirements of their agreements with insurers.

Where the insurance contract requires a doctor to make reasonable attempts to collect the patient’s portion, an open question surrounds the definition of “reasonable attempts to collect the debt.” Historically, doctors could satisfy the requirement by sending at least three letters attempting to collect the debt. However, the Office of Inspector General (OIG) has taken the position that the routine waiver of copayments could constitute a criminal kickback in Medicare cases.

This has emboldened private insurers, who are relying upon this contractual provision as a basis for a post-payment recoupment audit. If a provider cannot demonstrate efforts to collect from the patient, the carrier may demand a refund for any benefits paid across a large patient population.

Providers should be aware of this new emphasis upon patient responsibility. My advice would be to proactively get ahead of the problem. Contact your insurance representative to find out what is expected of you and document the response. By all means, if you are a physician and you receive a letter from an insurance carrier requesting proof of attempts to collect, do not ignore it. A failure to cooperate could constitute grounds for termination of the contract with the payer.

Because this emphasis upon collection of copayments is a fairly recent phenomenon, even if you have been deficient in the past, you may be able to satisfy the carrier by demonstrating a corrective plan of action going forward.

Read Article on Physicians Practice

On November 28, President Obama signed into law the Drug Quality and Security Act (formerly HR 3204) which strengthens the provisions of the Food, Drug, and Cosmetic Act relating to the safety of compounding pharmacies. The new law is important to physicians both as prescribers of compounding pharmaceuticals, and as potential passive investors in compounding pharmacies.

The Food and Drug Administration (FDA) immediately outlined plans to encourage large-scale compounding pharmacies to register with the agency and agree to increased federal regulations. The oversight comes in response to a fungal meningitis outbreak last year that killed 64 people and sickened more than 750 others across the country. The source of the outbreak was traced to tainted steroid injections mixed by the Framingham, Mass.-based New England Compounding Center.

A section of the new Drug Quality and Security Act allows large drug-compounding plants, which mix ingredients to make a custom blend of medicine, to register as “outsourcing facilities” and be subject to FDA oversight, including inspections and compliance with “current good manufacturing practices.”

“We will be encouraging healthcare providers and health networks to consider strongly purchasing compounded products from FDA-registered and regulated facilities,” FDA Commissioner Margaret Hamburg said, according to USA Today. “This will be a critical step they can take to better assure the health and safety of their patients.”

Outsourcing facilities will also be required to report specific information about the products they compound, including a list of all the products compounded during the previous six months, and details about the source of the active ingredient, as well a report known as adverse effects.

“We can say that it will be difficult for us to identify a compounding pharmacy that chose not to register as outsourcers and that try to hide out in the category of traditional compounders,” she says. “In those cases, we won’t be able to do proactive inspections of them. We’ll have to wait until we hear about them through either an adverse quality or report complaint.”

That has been a chief criticism of compounding pharmacy law. The federal government lacked the authority to regulate local compounding pharmacies, and state and local governments lacked the sophistication and budget to protect the public from unsafe manufacturing practices.

In fact currently, according to Janet Woodcock, director of the FDA’s Center for Drug Evaluation and Research, the FDA doesn’t know for certain how many compounding pharmacies exist in the U.S., USA Today notes. She adds that the number could range from 700 businesses to 1,000 such businesses. Hopefully this new law will improve reliability and safety of compounding pharmaceuticals.

Read Article on Physicians Practice

An “elevator speech” describes your business in the time it takes to ride down an elevator. Everyone in business needs one. As a health lawyer, my elevator speech used to involve “medical ethics,” and perhaps a mention of “Stark Law,” and “denial of doctors’ health insurance claims.” Now I simply say, “My law practice focuses on keeping doctors out of the jail house, poor house, and nut house … and I haven’t lost one yet.” 

After the Affordable Care Act (ACA), all the “ill” that insurance companies once visited upon the insured, merely got transferred to the backs of doctors. 

The ACA sought to prevent the denial of coverage on the basis of “pre-existing conditions.” Gone would be the rescission of the insurance contract for some failure on the part of the insured. Horror stories abound, such as the patient who failed to disclose a cough in an application, which led to the rescission of the patient’s policy 15 years later, when the patient got sick and needed benefits.

When a door closes, however, a window usually opens, as is the case with insurers under the ACA.  Instead of pouring over the insurance application looking for a reason to deny coverage, carriers now pour over the doctor’s chart, looking for a reason to recoup payment across a large portion of the doctor’s paid claims. Any ambiguous contract provision may be seized upon as an excuse to deny payment for services provided in good faith.

So it comes as something of a relief this week (at least “relief” from all the accusations and blame), when UnitedHealthcare candidly announced the reason for termination of contracts with Medicare C providers across 10 states.

The company cited “significant changes and pressures in the health-care environment,” and “pressure from the federal government.” (Translation, “We just can’t pay our bills.”) Thank you! If you are going to do something rotten (like fail to pay your bills, or fire someone because you don’t have enough money to pay them), at least try to be honest, and leave them with a little dignity.

Trouble is, United isn’t broke. UnitedHealth Group reported a third-quarter profit of $1.57 billion last month. Chief Executive Stephen J. Hemsley has issued cautious outlooks for 2014, citing expected cuts in Medicare payments tied to the Affordable Care Act. So United had to fire doctors in 10 states because sooner or later, it might not be able to afford to keep them.

There is a difference between “predicting” insolvency and “experiencing” it. United promised to take care of people and it didn’t. One would think it might have a better reason.