No Text

CMS has clarified that texting may not be used to place patient orders for medication or tests on any platform.  It does not matter whether the platform is secure or not.  Texting is now not allowed when treating Medicare and Medicaid patients.  Therefore texting of orders by physicians on Medicare or Medicaid patients is simply no longer allowable.

This comes despite previous indications such as in May 2016 that use of texting in healthcare would be acceptable.  Most hospitals have policies requiring encryption for PHI transmitted outside of the hospital or hospital IT system.  However, physicians and clinicians regularly use text message over open cellular networks to discuss patient issues, to place treatment and testing orders, etc.

We expect there to be further clarification on this since the fact of the matter is texting is being used.  CMS’ indication that even a secure or encrypted platform is not allowable for texting raises real world, practical issues that must be resolved.

Thirty Days to Pay, 2 Years to Complain

• An Indiana insurer is required to notify a provider of any deficiencies in a submitted claim in 30 days or less for a claim filed electronically and “describe any remedy necessary to establish a clean claim.”
• The failure of an insurer to notify a provider of deficiencies within the 30 day time period establishes the submitted claim is a clean claim.
• An insurer is required to pay any clean claim within 30 days after the date of submission electronically.
• If the insurer fails to either pay or deny a claim as required above, the insurer is required to pay the provider interest on the amount of the claim paid.  Interest accrues beginning 31 days after electronic submission.  The interest rate is established as the average investment yield on state money for the state’s previous fiscal year (currently 1% per year).
• An insurer may not request a repayment of an overpayment or adjust a claim more than 2 years after the date on which an overpayment on a provider claim was made.  Similarly an insurer may not be required to correct an under payment to a provider more than 2 years after the date of claim payment.  These sections do not apply in cases of fraud by the provider or insurer.

Generic Approval

Ascension along with three other not-for-profit health systems announced it is creating its own generic drug company.  There are still several matters to be determined including whether to start a new company, acquire an existing generic drug maker or simply sign contracts with existing generic drug companies for direct supply.

Participants in the venture indicate the problems are not only from profiteering by drastically marking up existing generics, but also supply and availability issues.  This has been tried before and has had mixed success.  However, the breadth and depth of the Ascension group and their capital resources indicate this may be a serious attempt to address pricing and supply issues.

Amazon’s Move

Amazon, Birkshire Hathaway and JP Morgan Chase recently announced their a partnership to attack healthcare costs.  It is unlikely any of the moves Amazon and its partners will make will be of any direct benefit to you or me but it is a fascinating look at the frustration American business has with higher and higher costs of healthcare with no apparent increase in beneficial outcomes.

Coupled with moves like Ascension’s attack on generic drug costs and supplies discussed above, it appears the end, or at least the defanging of Obamacare, has lead businesses to start looking at their own solutions.  Many speculate Amazon’s initial moves will be against the drug supply chain.  In other words, how will Amazon attack the approximate ¼ of healthcare costs that go directly for drugs?  Will it open its own manufacturing/generic side company like Ascension and its partners?  Will it work downstream in the pharmacy benefit manager area?  Will it open its own clinics for Amazon, Birkshire Hathaway and JP Morgan Chase employees?

No one knows yet, but like the Ascension moves, Amazon and its partners appear to be trying to change the entire discussion about healthcare costs and their future.

This newsletter is edited by Paul Wallace of Jones • Wallace, LLC, a member of the American Bar Association Healthcare Law Section and the American Health Lawyers Association who has been representing physicians and healthcare practices for over 25 years.  Mr. Wallace assists physicians, practices and hospitals in contract items, federal legal compliance, practice entity creation, estate and wealth planning and similar issues.  Please feel free to call if you have any questions on this newsletter or legal matters at (812) 402-1600 or pwallace@joneswallace.com.