Who Are You

The Indiana Court of Appeals has found that a diagnostic imaging center using an independent contractor radiologist could be held liable for negligence of the radiologist.  Harold Arrendale found himself with a diagnosis of arteriovenous fistula.  Apparently, Mr. Arrendale had earlier sought diagnosis and treatment from an MRI center which had an independent contractor agreement with a radiologist.  Mr. Arrendale sued the MRI center and the contract radiologist for failing to diagnose and treat the fistula.

While Mr. Arrendale did not claim the MRI center was in and of itself negligent, it claimed that the radiologist they used was negligent and since Mr. Arrendale had no idea when using the MRI center (sent to by his primary physician) that the radiologist was not an employee, it was reasonable for Mr. Arrendale to assume the radiologist was an employee or agent of the MRI center.

The Court held that since Mr. Arrendale had not been clearly told the radiologist was not an employee, it was reasonable for Mr. Arrendale to assume the radiologist was an employee and therefore the MRI center could be held vicariously liable.  The Court seems to indicate that had the MR center clearly informed Mr. Arrendale that the radiologist who would be reviewing the MRI scan was not an employee, then it was possible that the MRI center could claim it is not responsible.

This case is one of several where Courts are struggling to define the various liabilities and rights of parties involved in these arrangements of hospitals, primary care physicians, specialists, MRI centers and similar things where frankly the patient has no clue and no idea who owns what and what reasonable expectation of care, connection and coordination the patient is to receive from this increasingly complex healthcare ownership and provider universe.

Fraud Again

The Department of Justice filed criminal charges against 42 doctors and nurses and almost 100 other medical professionals for alleged healthcare fraud schemes totally $1.4 Billion.  The fraud claims involved telehealth services, Covid-19 fraud, substance abuse treatment facilities, illegal opioid distribution schemes and other schemes.

In one instance, the DOJ claims that certain of the Defendants in telemedicine paid doctors and nurse practitioners to order unnecessary DME, testing and ordered medications either without patient interaction or with insufficient telephonic interaction with patients never before met or seen.  DME providers, testing laboratories and pharmacies then “purchased” those orders for kickbacks and bribes, the government alleges, and submitted over $1.1 Billion in false claims to Medicare and other government insurers.  According to the filings, the Defendants then allegedly spent the money on vehicles, yachts and real estate.

Nine other Defendants are alleged to have utilized the Covid-19 pandemic and submitted over $28 Million in false billings.  On the one hand with the billions of healthcare dollars flowing through the government systems, it is not unexpected there would be fraud.  On the other hand, the level of fraud is sometimes breathtaking.

Concentration

The AMA has performed a study regarding concentration in the healthcare industry.  The AMA’s analysis found that 73% of MSAs (Metropolitan Statistical Areas) are very concentrated.  The AMA used the Federal Trade Commission and Department of Justice (FTC/DOJ) guidelines, and in nearly 91% of markets, a single insurer had market share exceeding 30% and in 46% of MSAs, a single payors market share was at least 50%.  As we all remember learning in grade school, in high school and in college, market concentration generally leads to monopolistic behavior and that we, as a society, believe this is unwise and harmful.  According to the authors of the AMA study “It appears that consolidation has resulted in the possession and exercise of health insurer-monopoly power-the ability to raise and maintain premiums above competitive levels-instead of passing any benefits obtained through to consumers.”  The authors also note that where there is significant concentration, physicians are paid less than in non-concentrated markets.  This alone should cause physicians and hospitals to question whether the continued consolidation in the market is beneficial not only to themselves but to the entire healthcare system.

AETNA Class Action Suit

An action was filed in the United States District Court in the Central District of California which alleges AETNA is not following the Health Parity and Addiction Equity Act.  The Complaint claims that AETNA’s standards for mental health providers to receive coverage and payment is higher and more stringent than for surgical or physical healthcare providers and benefits.

The attorney filing the class action suit claims the standards AETNA is using for determining coverage and payment for mental health services and facilities do not exist for physical, surgical or non-mental healthcare benefits.  This will be an interesting case to follow since any outcome against AETNA will probably have national implications.

This newsletter is edited by Paul Wallace of Jones • Wallace, LLC, a member of 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.