PRENATAL DRUG TESTING VS. MANDATORY REPORTING – NEW INDIANA LAW

Healthcare providers often offer drug screens to mothers to attempt to deal with drug addiction issues in prenatal women. Indiana law had required a doctor or caregiver, who becomes aware of such tests, to be a “mandatory reporter” and contact authorities if any such addictive activities will subject a child to “abuse”. Obviously, this all comes together with babies born with drug dependencies.

A new law creates a shield for expectant mothers and their healthcare providers and prohibits such reporting to law enforcement authorities without the patients consent, or a court order requiring such disclosure.

WHAT IS “KNOWING” FOR HEALTHCARE FRAUD?

A divergence continues between various federal courts regarding the level of knowledge and intent required to make filing a false billing a “knowing” act. Some courts have indicated that knowing is simply the intentional filing of a claim since the filing of a claim requires only that you intend to be reimbursed. Other federal courts have recently required more, some intent to break CMS rules or some disregard for those rules. The Fifth Circuit recently dismissed a whistle blower action involving Kaner Medical Group. The Fifth Circuit Court of Appeals said that the whistle blower failed to show that a handful of incorrect billings relating to allergy testing and allergy immunotherapy rose to the level required. Interestingly, the Fifth Circuit Court of Appeals said a finding of “negligence or gross negligence” was not sufficient.

We are hopeful that this issue will be addressed in the Seventh Circuit (Indiana – Illinois) in a clear manner that will provide more guidance.

ANTHEM SLAYS IRONY

Anthem recently sued Express Scripts. Express Scripts is one of the largest “drug benefit provider” managers in the United States. It was filed in federal court in New York, and seeks $15 billion in damages for uncompetitive pharmacy pricing.

In an Anthem press release, Anthem said, “Under the Agreement, Express Scripts is obligated to negotiate in good faith to insure Anthem is receiving competitive benchmark pricing.”

Anyone who has ever attempted to negotiate with Anthem over rates for healthcare providers may find Anthem’s outrage over refusal to negotiate in good faith irony at its best.

HOSPITAL IT SECURITY

Recently, a hospital was the subject of an IT attack, which effectively shut down its computers. The hackers apparently have demanded a “ransom” in order to free the hospitals computers. While this has happened to other industries, it is one of the first hospital ransom attacks publicly disclosed.

The fact that the hospitals system was able to be breached will raise questions under HIPAA security rules which require covered entities and business associates to implement appropriate administrative, physical and technical safeguards to protect the confidentiality, integrity and security of electronic information, and particularly electronic PHI. Also, as we had discussed before, HIPAA security rules require organizations to have conducted a risk analysis of electronically held information.

This latest reported attack will probably be a benchmark case for determining the OCR’s current enforcement methodology.

What would be helpful, more so than fines imposed on this particular hospital, would be technical standards published that list what are adequate safeguards and what is an adequate risk analysis. The concept of waiting until organizations are the victims of the breach or a ransom attack, and then fining these organizations for having been subject of an attack, seems to be counterproductive, and a bit of “piling on.”

While we understand penalizing organizations that simply don’t even try to have cyber security or policies or procedures or risk analysis, punishing those who have made an attempt, even though it turns out to be insufficient, seems unfair where CMS has never published standards or lists of what is an adequate cyber security framework and what is an adequate risk analysis.

HHS ENFORCEMENT REPORT

Recently, HHS released its annual executive summary of its heroic efforts to try to stop healthcare fraud and abuse. The executive summary notes that the program is in the 19^th year of operation and touts its own success.

Avoiding the issue of whether the program is a success or a farce, the executive summary indicates that the Department of Justice opened 983 new criminal healthcare fraud investigations in its FY 2015. It notes 613 defendants were convicted of healthcare fraud related crimes during that year. That same year, DOJ opened 808 new civil healthcare fraud investigations and had 1,048 of those actions pending at the end of its fiscal year.

One might fairly ask HHS, if you have battled healthcare fraud for 19 years and yet you keep finding more fraud each year – are you winning or losing?

INDIANA HOSPITAL PRICING

Several years ago, the Indiana Supreme Court upheld the practice of healthcare pricing secrecy. It upheld a hospital’s “Charge master” rate use in a situation where a patient was charged substantially more as an uninsured individual.

The Indiana Supreme Court upheld charging uninsured patients more, and even worse, an undisclosed amount more. The fact that such charges were not available to the patient or the patient’s family and were kept secret, did not, in the Indiana Supreme Court’s opinion, affect the enforceability of an agreement with the hospital to pay whatever the hospital wanted to charge.

Recently, the Indiana Court of Appeals expressed hope that the Indiana Supreme Court will re-visit this issue. In the case before the three-judge panel of the Court of Appeals, the Court held that the patient, under the facts and laws applicable to that particular case, could present evidence regarding the reasonableness of a hospital’s pricing, including presenting evidence of far lower rates paid by insured patients for the same services. Judge Najam, a member of the panel, stated “Charge master rates are not per se reasonable when they are, first, confidential, and second, incomprehensible.”

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.