Health law is the federal, state, and local law, rules, regulations and other jurisprudence among providers, payers and vendors to the healthcare industry and its patient and delivery of health care services; all with an emphasis on operations, regulatory and transactional legal issues.
Litigation involving out of network claims by providers, also referred to as “non-participating” or “non-par”, continues to be rampant into 2019. Complexity of plan administration, increased state and federal rule making, and rising costs are resulting in increased litigation. A recurring issue: unpaid claims disputes.
Many physicians come to the conclusion that some contracts aren’t worth entering. More and more physicians are opting out of participating provider contracts or have chosen not to participate in the first place. Reimbursement is usually the prime reason. The law that controls much of the litigation surrounding these disputes is the Employee Retirement Income Security Act of 1974 (ERISA). ERISA is a federal law that sets minimum standards for most plans along with fiduciary responsibilities for plan sponsors. Under ERISA, a “Summary Plan Description” must be created for each plan that sets forth the rights and benefits of each plan member and importantly, how out-of-network reimbursement is determined. read more
As many know, out-of-network providers have much different appeal rights with commercial plans than in-network providers. It is important to understand each health plan’s appeal procedure as well as time requirements for an appeal may vary. However, the appeal process is still one of the most important tools providers have to get paid in the current environment of reduced reimbursements, caps on the number and frequency of services, bundled payments based on specific codes, delayed payments, daily errors in claims processing leading to denied claims, claw backs, and the list goes on. read more
In the healthcare business, giving a patient a break on a health insurance copay is often viewed as suspicious. The reasoning for the suspicion is that the financial incentive may give one provider a competitive advantage over another, or persuade a patient to seek services that might not be medically necessary. Moreover, any person who interferes with a patient’s obligations under his/her health insurance contract may be viewed as tortuously interfering with that contract. However, in an advisory opinion issued on December 28, 2016, the OIG opined that, in certain instances, a non-profit, tax-exempt, charitable organization could provide financial assistance with an individual’s co-payment, health insurance premiums and insurance deductibles when a patient exhibits a financial need.
The party requesting the advisory opinion was a non-profit, tax-exempt, charitable organization that did not provide any healthcare services and served one specified disease. The non-profit, tax-exempt, charitable organization is governed by an independent board of directors with no direct or indirect link to any donor. Donors to the non-profit, tax-exempt, charitable organization may be referral sources or persons in a position to financially gain from increased usage of their services, but may not earmark funds and or have any control over where their donation is directed. read more
Earlier this year, the Florida legislature passed prohibitions against balance billing by out-of-network providers for emergency services and where the patient goes to a contracted facility but does not have an opportunity to choose a provider such as emergency room physicians, pathologists, anesthesiologists and radiologists.
Specific reimbursement requirements went into effect on October 1, 2016 for certain out-of-network providers of emergency and non-emergency services, where a patient has no opportunity to choose the provider.
Under these circumstances, an Insurer must pay the greater amount of either:
(a) The amount negotiated with an in-network provider in the same community where services were performed;
(b) The usual and customary rate received by a provider for the same service in the community where service was provided; or
Cigna recently sued a Texas hospital, Humble Surgical for overpayments. Humble Surgical is an out-of-network (OON) provider. Cigna alleged fraudulent billing practices and that the hospital engaged in a scheme to defraud payors by waiving members’ financial responsibility.
While the suit involved many other allegations our article focuses on the arguments Cigna made on failure to collect co-payments, deductibles, and co-insurance and fee-forgiving practices by the hospital. There were several other issues raised that are important to various practices that Cigna has engaged in with out-of-network providers. Cigna has consistently audited South Florida providers alleging failure to collect patient financial responsibility or fee-forgiveness, then informing the provider that it was not entitled to any reimbursement because these practices fell within the exclusionary language of the member’s plan.
The suit brought under federal law, ERISA and also Texas common law seeking reimbursement for all overpayments. Cigna was seeking equitable relief including imposing a lien or constructive trust on fees paid to the hospital.
Humble Surgical counter sued against Cigna for nonpayment of patients’ claims, underpayment of certain claims and delayed payment of all claims in violation of ERISA, including other causes of action. Here’s what happened: read more
Addiction treatment providers continue to react to an assault by payers to run them “out of town.” The first round of attacks (in the Fall of 2014) focused on the practice of copay and deductible write offs. The phrase cooked up by lawyers for Cigna, “fee forgiveness,” wound its way into the courts system in Texas in a case (Cigna v. Humble Surgical Hospital, Civ. Action No. 4:13-CV-3291, U.S. Dist. Ct., S.D. Tex., Houston Division) against a surgery center, where Cigna argued that the practice of a physician owned hospital in waiving “patient responsibility” relieved the insurer from paying ANYTHING for services needed by patients and provided to them. Though the case did not involve addiction treatment providers, it gave addiction treatment lawyers a look into what was going to come. The same argument made in the Texas case was the initial attack by Cigna in a broad attack of the addiction treatment industry, especially in Florida.
As addiction treatment providers fielded Cigna’s “fee forgiveness” attack in the context of “audits,” providers held firm to the belief that justice would prevail and that they would soon restore a growing need for cash flow. “If we just show them that we’re doing the right thing,” providers thought, “surely they will loosen up the purse strings.” After all, this was a patient population in terrific need of help, with certain [untested] protection by federal law (the Mental Health Parity Act). read more
A Jacksonville compounding pharmacy has agreed to pay $3.775 million to settle false claims allegations that it defrauded TRICARE. MediMix Specialty Pharmacy billed TRICARE for compounding pain prescriptions that came from an improper referral source. MediMix’s top-prescriber over a period of five years was also married to one of MediMix’s senior vice presidents. MediMix itself was one of TRICARE’s top billers for compounded pain medications.
Since the federal law limiting physician self-referrals, 42 U.S.C. 1395nn (more commonly called the “Stark law”) does not apply to TRICARE, the government proceeded under a law entitled Administrative Remedies for Fraud, Abuse, and Conflict of Interest, 32 C.F.R. 199.9, which is applicable for claims submitted to CHAMPUS and TRICARE. This law is much more broad than the Stark law. While the Stark law contains specific exceptions, this law does not. read more
Does your healthcare entity have a governing Board? How involved is that Board in overseeing your business? Would your Board members be able to respond to questions about your business’ compliance-related activities? Recently, the Office of the Inspector General (“OIG”), in conjunction with a host of non-profit healthcare associations, released guidance on achieving compliance for healthcare governing boards. The guidance is not based on abstract principals of compliance, instead it points to applicable federal law, OIG guidance, case law, and sentencing guidelines.
Each and every healthcare organization, whether or not it accepts reimbursement from government payors, must have in place regulatory compliance measures designed to protect the population it serves, and the persons paying for and providing those services. All levels of a healthcare organization must be cognizant of their roles in the organization’s continuing commitment to compliance. Even Board members, who often do not experience the inner-workings of the entities they represent, have an obligation and duty to the organization to act in a manner that stressed compliance. Applicable federal and state laws, how they apply to an organization, and how the organization reacts to its obligations imposed by those laws, must be of paramount importance to a governing Board.
The OIG compliance guidance for healthcare Boards tracks 4 areas over which boards should have specific oversight: read more
March 25, 2015 Advisory Opinion No. 15-04 addresses a proposed arrangement involving a clinical/anatomic lab’s desire to position itself as the single lab recommended by practices.
The proposal arises in the context of the OIG Advisory Opinion process, which allows the OIG to opine on its view of how the federal anti-kickback statute might view a proposed arrangement. Though Advisory Opinions are not “law,” they do provide good insight into prosecutorial intent.
The clinical/anatomic lab (“Lab”) wanted to have agreements with physician practices to provide all their lab services. To deal with the fact that some commercial insurers have exclusive arrangements with labs, the Lab proposed that if a practice patient’s insurer required the patient to use another lab, the Lab would waive all fees for the affected practice patients and would not bill the patient, the medical practice or the patient. The Lab would provide its services to these “exclusive patients” for free, while billing all other patients (and/or their insurers, including governmental payers) its fee scheduled or contracted rates. The proposed arrangement would allegedly simplify things for the practices and keep lab results uniform. A practice patient would be required to use the Lab. The Lab’s services would simply be offered by the practices to their patients. The Lab stated that the provision of free services to certain practice patients would not provide any financial benefit to the practices, although the lab would provide the practice a limited-use interface. Samples would not be drawn in physician offices. read more
The case is a departure from the usual scenario, which involves (a) providers suing payers for payment and relying on state laws to do so, and (b) provides side stepping those state laws by successfully arguing that the federal ERISA law applies (which usually offers provides less favorable remedies). read more