A court in the Southern District of New York (“SDNY” or the “Court”) recently released an important decision applying the Supreme Court’s landmark Escobar ruling to a qui tam action involving percentage fee arrangements for billing agents.  Among other claims, the City of New York (“the City”) and its billing agent, Computer Sciences Corporation (“CSC”) allegedly used an illegal incentive-based compensation arrangement for CSC’s services when billing New York Medicaid for services provided to eligible children under New York’s Early Intervention Program (“EIP”).   EIP provides “early intervention services” to certain children with development delays using federal funds provided under the Individuals with Disabilities Education Act.  EIP allows municipalities like the City to pay providers directly for EIP services and then seek reimbursement from other payors, like third party payors and New York Medicaid.

Continue Reading Implied False Certification Theory Fails in FCA Case Against Billing Agent

New York State Attorney General Eric Schneiderman recently announced that his office had reached a $2.5 million settlement in a federal False Claims Act (FCA) case with Trinity HomeCare and its related entities.  The case, filed as a qui tam action in federal district court in the Eastern District of New York, alleged that Trinity’s violations of New York’s Medicaid regulations in the delivery of hemophilia drugs resulted in its submission of false claims to the New York Medicaid Program, in violation of both the federal and state FCAs.

The Trinity settlement may seem relatively insignificant, especially in comparison to other FCA cases which settled for billions, not millions, of dollars.  But the Trinity case may be more representative of the future of FCA enforcement.  Indeed, there are five current FCA trends evidenced by the Trinity case. Continue Reading Trinity Homecare Settlement: Five False Claims Trends

New York’s Emergency Medical Services and Surprise Bills law went into effect yesterday, which means consumers who receive out of network (OON) emergency services will no longer have to pay more than their usual in-network obligations, regardless of the network status of the treating physician, and any disputed portions of the bill must be settled by the physician and the health plan.

Consumers will be protected from surprise bills, and not be responsible for more than their in-network copayment, coinsurance or deductible, if they sign an assignment of benefits form to permit their provider to seek payment from the consumer’s health plan and send the form to the plan with a copy of the bill that they believe constitutes a surprise bill.  Once the health plan pays the provider an amount that it determines is reasonable, the provider can dispute that amount through the independent dispute resolution (IDR) process. The IDR entity will make a determination within 30 days of receipt of the dispute.

The law not only protects consumers against large bills from OON physicians for services rendered in an emergency room, but also from bills received from OON providers in cases where a patient has been referred to the OON provider by a participating physician without the required consent.  In regulations issued by the Department of Financial Services (DFS) on December 31, 2014 and adopted yesterday (http://dfs.ny.gov/insurance/r_prop/rp200t.pdf), DFS made several key clarifications, including defining the term “health care provider” to include home health agencies and clinical laboratories.  DFS also clarified that a surprise bill that results from a referral without the required patient consent includes instances in which a “participating physician sends a specimen taken from the patient in the participating physician’s office to a non-participating laboratory or pathologist.”  The consent necessary to avoid a surprise bill is “explicit written consent of the insured acknowledging that the participating physician is referring the insured to a non-participating referred health care provider and that the referral may result in costs not covered by the health care plan.”

Last week, in anticipation of the law’s enactment, DFS issued guidance to (i) insured and uninsured consumers in order to assist them in understanding when they have received a surprise bill and how to protect against responsibility for such bill, and (ii) providers so that they understand not only the meaning of “surprise bill” but their notice and hold harmless responsibilities, and when and how to proceed with the IDR process.

While there are other important aspects of the law that patients, providers and plans should be aware of, including disclosure obligations relating to plan and hospital affiliations and pricing (summarized in more detail in our prior blog post), the cornerstone of the law is protecting consumers from the financial devastation that can come from receiving a bill for out of network services. Time will tell whether all of the other players in the healthcare space view the law as the equitable solution it is intended to be.

Written by: Nili S. Yolin

New York became the 22nd state to sign into law legislation that will require commercial and Medicaid plans to provide coverage of telehealth and telemedicine services.  The law, originally intended to take effect on January 1, 2015, will become effective on January 1, 2016.

In addition to providing definitions for telemedicine (two-way audio video communications, including video conferencing) and telehealth (telephone and remote patient monitoring), the new law defines the scope of eligible distant site providers to include not just physicians, physician assistants, and hospitals, but also dentists, home care and hospice agencies, nurses, midwives, podiatrists, optometrists, ophthalmic dispensers, psychologists, social workers, and speech language pathologists and audiologists.

Although the law does not place any restrictions on the site at which a patient is located at the time telemedicine or telehealth services are provided, it permits insurers to delineate appropriate settings for such services.

Continue Reading New York Passes Telemedicine Reimbursement Legislation

Written by:  Nili S. Yolin

The Nonprofit Revitalization Act brought sweeping changes to the laws that govern not-for-profit corporations in New York.  Our colleagues Anthony E. Hubbard and Daniel E. Wilcox have authored an Advisory that provides an in-depth summary of key provisions of the Act that have recently gone into effect.  As discussed in a prior Advisory, the Act represents the first time in more than four decades that the New York Not-for-Profit Corporation Law has undergone any significant change, which regulators and industry insiders alike hope will strengthen nonprofit governance and accountability, mitigate excessive administrative burdens, and improve audit and financial reporting requirements.  Click here to read the full Advisory.

Written by: Bridgette A. Wiley

Many states prohibit or limit the corporate practice of medicine (CPOM), either through statute or common law.  These states generally bar a business corporation from practicing medicine or employing a physician to provide professional medical services.  As a matter of public policy, the CPOM doctrine intends to ensure that medical decisions are based on the sound and independent judgment of medical professionals.  Its purpose is to enable medical professionals to act in the best interests of the patient, without the influence of “corporate owners,” whose goals are presumed to be maximizing their own profits.

The CPOM doctrine has existed since the early 20th century, but its continuing vitality is evidenced not only by periodic litigation, but also by recent scrutiny from state regulatory agencies.  My colleagues Andrew Roth and Kim Gold recently published an article about New York’s CPOM doctrine in the New York Law Journal.  The article, Corporate Practice of Medicine: An Old Doctrine Breathing New Life, examines the history of the CPOM doctrine, and the litigation and administrative scrutiny that has taken place in New York, demonstrating that the corporate practice of medicine prohibition is alive and well.  It also provides practical advice for practitioners advising corporations and other unlicensed entities in structuring transactions which involve the provision of health care to ensure compliance with the CPOM rules.

Written by: Nili S. Yolin

Last month, a woman sued a health plan, claiming that she was intentionally misled about which physicians were participating providers in the company’s online health insurance exchange established under the Affordable Care Act.  The petitioner alleged that the plan displayed the names of the physicians on its website, and that she even checked with the plan to ensure that those physicians were in the network.  Unfortunately, after she and her family were treated by those providers, she received an out-of-network bill.

Starting in 2015, New York consumers will have an added layer of protection against out-of-network billing when healthcare providers will be obligated to provide patients with their plan affiliations prior to the provision of non-emergency services, and verbally at the time of the appointment. 

Known as the “Emergency Medical Services and Surprise Bills” law, new legislation passed in the 2014-15 New York State budget includes greater transparency of out-of-network (OON) charges and network participation, as well as broader availability of a patient’s right to go OON if the insurance plan’s existing network is insufficient and, most heralded, safeguards against “surprise bills” from OON physicians. Below are some of the key provisions in the new law.

Continue Reading New York Enacts Out-Of-Network Transparency and Coverage Reform

Written by: Kimberly J. Gold

In the largest Health Insurance Portability and Accountability Act (HIPAA) settlement to date, two New York hospitals have agreed to pay $4.8 million to settle allegations that they failed to secure thousands of patients’ electronic protected health information (ePHI) held on their shared network.

The U.S. Department of Health & Human Services Office for Civil Rights (OCR) investigated New York-Presbyterian Hospital (NYP) and Columbia University (CU) after the organizations reported a breach involving 6,800 individuals’ ePHI, including patient status, vital signs, medications, and laboratory results.

The organizations are separate covered entities for HIPAA purposes that operate a shared data network linked to the hospital’s information system.

Continue Reading New York Hospitals to Pay Record $4.8 Million for HIPAA Data Breach

Last week New York Governor Andrew Cuomo signed the Nonprofit Revitalization Act of 2013 into law, triggering the first overhaul of the New York Not-for-Profit Corporation Law in over 40 years.  The new law takes effect on July 1, 2014, and its provisions apply to nonprofits incorporated in New York, while its financial reporting and auditing sections also apply to nonprofits that engage in charitable solicitation in New York from other states. The Nonprofit Revitalization Act does not target executive compensation reform, but it makes significant changes to the operation and governance of nonprofit organizations.

Click here to read Mintz Levin’s Health Law Alert discussing the new law and its impact on nonprofits.

After withdrawing nearly identical proposed legislation one day earlier, on January 18, 2012, New York Governor Andrew Cuomo issued an Executive Order directing certain New York State agencies, including the Department of Health, to promulgate regulations that limit the compensation of executives of entities that receive state funding or payments from the state. Such regulations must be promulgated within ninety days of the date of the Executive Order.

The Executive Order calls for an overall compensation limit of $199,999 per executive, but that limit may be adjusted by each agency with the approval of the Director of the Budget, provided that the compensation does not exceed Level I of the Federal government executive compensation guidelines promulgated by the U.S. Office of Personnel Management (“OPM”). Further, the operative sentence calling for a compensation limit is qualified by the phrase “to the extent practicable.”

Continue Reading Cuomo Issues Executive Order Regarding Limits on Executive Compensation