The Health Law Ticker

As healthcare grows increasingly complex, delivery structures continue to evolve.  A popular arrangement is the “Friendly PC” model, where large medical groups are backed by private equity or health system investment and administrative support.  But courts and lawmakers have become concerned that certain Friendly PC arrangements encroach on physician autonomy and violate the century-old prohibition on the corporate practice of medicine (“CPOM”).  A recent lawsuit—American Academy of Emergency Medicine Physician Group, Inc. v. Envision Healthcare Corporation ...

While hospital medical staffs have traditionally handled most of California’s peer review activity, recent trends are forcing more and more medical groups to wrestle with reporting and fair hearing obligations when disciplining physicians—or else face costly litigation from doctors and six-figure fines from the Medical Board of California.

Broadly speaking, peer review is how healthcare entities—including medical groups—determine whether a physician is qualified to practice in a particular healthcare setting and perform ongoing assessments of that ...

In a shift from prior policy, the Centers for Disease Control and Prevention (CDC) proposed on February 22, 2022, new guidelines for prescribing opioid painkillers. The new guidance largely avoids figures on dosage strength and length of prescription and warns against abruptly or rapidly discontinuing pain pills for chronic pain patients. It directs physicians to individualize the process and use their best judgement in determining whether to prescribe opioids, and when they do, to start with the lowest effective dosage. The proposed guidelines encourage physicians to weigh ...

The California Department of Managed Health Care (DMHC) on March 4, 2022, assessed the largest penalty against a health plan in the Department’s history. DMHC and the California Department of Health Care Services (DHCS) jointly announced the results of enforcement actions against Local Initiative Health Authority for Los Angeles County, more commonly known as L.A. Care. The penalties assessed by DMHC and DHCS against L.A. Care include $55 million in fines, which consist of a $35 million fine from DMHC and a $20 million sanction from DHCS. The amount is by far the largest penalty ...

The Department of Health and Human Services (HHS) released its Notice of Benefit and Payment Parameters for the 2023 Proposed Rule on January 5, 2022. Generally, the proposed rule aims to bolster the regulatory framework supporting the marketplace and expand access to health insurance coverage options. 

As private equity firms, health systems and entrepreneurs in the medical delivery space seek to gain a level of control over physician practices, many choose to operate under the “Friendly PC” model, especially as many states place restrictions on the corporate practice of medicine.  Under this model, the professional corporation employs the physicians and the non-clinical assets are owned by the health system or private equity firm or related management company, which also employs the non-clinical employees. That management company then has an agreement with the Friendly ...

Bill SB 642 is currently under consideration by the California State Legislature and would, if enacted, severely restrict use of the Stock Restriction Agreement and similar arrangements used in the “Friendly PC” model. It would also require significant restructuring of arrangements that use this model for physician integration or practice acquisition in California. During the first legislative session of 2021 2022, SB 642 was passed by the three committees in the California State Senate that considered the bill, and it was placed on the suspension calendar for ...

Newly enacted Assembly Bill 1184 (“AB 1184”) will effectuate revisions to the Confidentiality of Medical Information Act that will require significant changes to the operational practices and risk management assessments of health care providers and insurers. AB 1184's changes to the Confidentiality of Medical Information Act reflect a shift toward compartmentalizing the medical information of a patient, enrollee or insured individual (“Enrollees”) away from the policyholder – whether that policyholder is the spouse, guardian or parent of the Enrollee. The new ...

A ransomware attack is a major threat affecting all sectors of business, including healthcare. Organizations typically follow state and federal privacy laws as part of their ransomware prevention and response measures. Beyond these privacy laws, every organization should also be aware of U.S. sanctions law in its response to a ransomware attack.

As a reminder, on October 1, 2020, the U.S. Department of Treasury Office of Foreign Asset Control (OFAC) issued an advisory warning regarding the risk associated with making a ransomware payment. Federal laws prohibit U.S. persons or ...

The California Supreme Court has addressed yet another brick in the anti-SLAPP wall protecting the medical peer review process from challenges by disgruntled physicians and delivered a mixed-bag opinion, with one holding favoring peer reviewers and the other favoring the plaintiff physician. Readers of this blog are familiar with the ever-shifting battlefront between peer reviewers and reviewed physicians over the former’s use of the anti-SLAPP statute (Cal. Code Civ. Proc., § 425.16) to protect their review process from legal challenges by physicians. … 

For various reasons, a medical group may decide that it is time to sell their practice. This could be due to reduced reimbursements, increased operational complexities or the desire to “cash out” and retire. When considering a sale, practice leadership should take the following steps to ensure maximum benefit to the physicians in the practice …

As the COVID-19 vaccine rollout continues, and the rate of newly recorded infections is starting to decline, many California counties are moving to less restrictive tiers and lifting restrictions applicable to the business environment. A hot topic for many employers has been developing COVID-19 protocols and vaccine requirements for employees returning to corporate office buildings. (See “Can a Healthcare Provider Require Employees to Take a COVID-19 Vaccine?” for protocol guidelines.) Some healthcare businesses that utilize both traditional office space and medical ...

Congress and the Biden Administration are grappling with an economic stimulus bill that will touch many segments of American life, including health care, if it passes in the Senate. This has many clients wondering what impact the Biden Administration will have on the healthcare sector from a regulatory perspective. Early indications point to a focus on four issues that continue to resound: the Affordable Care Act (“ACA”), COVID-19-related regulatory relief, lowering prescription drug prices and restricting the occurrence of surprise billing … 

As pandemic restrictions begin to lift and the prospect of employees returning to the workplace becomes a reality, many employers are wondering, whether they can or should make the COVID-19 vaccine a mandatory requirement as a condition of employment or continued employment. The short answer is, per recent EEOC guidance, employers can require employees to be vaccinated, subject to certain exceptions, requirements and caveats discussed below. However, a critical issue is whether employers should mandate COVID-19 vaccinations … 

Included within the 5539 pages of statutory changes in the Consolidated Appropriations Act, 2021 (the COVID-19 relief bill signed into law at the end of December 2020) are important new “transparency” laws that affect third party administrators and other providers who contract with ERISA-regulated group health plans for certain brokerage and consulting services … 

In response to public health restrictions ordered by county health departments and the resulting disruption of local business, a number of California cities are exploring whether or not to create their own health departments. While city health departments were common in California during the 1800s and early 1900s, most cities deferred this governmental function to the better-equipped county … 

On September 29, 2020, California Governor Gavin Newsom signed Assembly Bill 890 into law, launching significant changes to the scope of practice for Nurse Practitioners (“NPs”) over the next few years.

Effective January 1, 2021, NPs who meet certain education and training requirements will be able to perform certain functions without standardized procedures in specified healthcare settings where one or more physicians … 

Faced with an ongoing public health emergency that threatens to overload healthcare systems, many states, including California, have developed or revisited their crisis care guidelines to address a potential COVID-19 patient surge. Many of these provide a framework, guided by ethical principles and a commitment to treating patients with equity, for hospitals, county health departments and healthcare providers to plan for the potential allocation of critical care resources (such as ventilators) should they become scarce … 

On October 24, 2018, Congress passed the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (the “SUPPORT Act”), two sections of which constitute the Eliminating Kickbacks in Recovery Act of 2018 (“EKRA”). EKRA was codified at 18 U.S.C. § 220.

Similar to the Anti-Kickback Statute, EKRA was enacted to address abusive payment arrangements but intended for the context of opioid epidemic treatment and recovery efforts. Specifically, EKRA prohibits the knowing and willful (1) solicitation or receipt of ...

California Governor Gavin Newsom’s March 30th Executive Order authorized the Department of Consumer Affairs to issue waivers of certain laws and regulations pertaining to healthcare licensees. On April 14th, the Department of Consumer Affairs issued Waiver Order 20-04, waiving certain key restrictions on physician assistants’ (“PAs’”) supervision.

The waiver order “only applies if” a PA moves to a hospital or practice setting “to assist with the COVID-19 response”; or, if no supervising physician is available to supervise the PA pursuant to a practice ...

On April 21, 2020, the United States Senate passed the Paycheck Protection Program and Health Care Enhancement Act (the Act). The House is expected to pass the Act and send it to the President on April 23, 2020. Broadly speaking, the Act amends the CARES Act to provide additional funding for the Paycheck Protection Program, hospitals and providers, and includes funding for coronavirus testing.

The Act provides an additional $75 billion on top of the $100 billion appropriated in the CARES Act for the Public Health and Social Services Emergency Fund of the Department of Health and Human ...

On March 28, 2020, the Centers for Medicare & Medicaid Services (“CMS”) announced that the agency would provide relief to Medicare providers and suppliers by expanding the Accelerated and Advance Payment Program for the duration of the COVID-19 public health emergency.  According to CMS’ guidance, to qualify for accelerated or advance payments, the provider or supplier must:

• Have billed Medicare for claims within the prior 180 days
• Not be in bankruptcy
• Not be under active medical review or program integrity investigation
• Not have any outstanding delinquent Medicare ...

Well, not exactly. However, in an expansion of regulatory oversight, the Department of Managed Health Care (DMHC) finalized a new rule last year broadening the scope of “person[s]” required to obtain a license under the Knox-Keene Act. The new rule, 28 CCR Section 1300.49, is likely the most significant policy development in California managed care oversight since the enactment of laws governing risk bearing organizations in the late 1990s. Absent legislative or further regulatory action, any entity accepting any amount of global risk in exchange for a prepaid or periodic ...

On March 5th, the Department of Managed Health Care (DMHC) issued its first COVID-19 related All-Plan Letter (APL 20-006) regarding screening and testing. The DMHC directed all full service commercial and Medi-Cal health care service plans to immediately reduce cost-sharing to zero for all medically necessary screening and testing for COVID-19. Of note, the APL directed that health plans “ensure” provider networks are adequate to handle an increase in the need for healthcare services, including offering access to out of network services as COVID-19 cases increase. The ...

Many medical staffs are wondering whether they may conduct remote peer review committee meetings in the interest of supporting social distancing efforts during the COVID-19 pandemic. While it is certainly reasonable to do so, the medical staff must ensure that they have appropriate safeguards in place prior to conducting such meetings. Below we have provided the answer to some questions that may arise when deciding whether to conduct peer review meetings remotely.

Do the governing documents already allow for meetings to be conducted by telephone or video?

Medical staffs should ...

Recognizing the need to empower healthcare providers to reach those most at risk during the COVID-19 pandemic, the Department of Health and Human Services’ Office for Civil Rights recently issued a notification announcing that it will not impose penalties for noncompliance with HIPAA Rules against those healthcare entities who utilize video and voice applications to provide telehealth services.

During this national emergency, covered healthcare providers can use any non-public facing application to communicate with patients, such as Apple FaceTime, Facebook Messenger ...

In response to the outbreak of COVID-19, we are closely monitoring guidance issued by local, state and federal authorities, as well as information distributed by the Centers for Disease Control and Prevention and the World Health Organization. We are dedicated to helping clients address business disruptions, anticipate potential challenges and mitigate risk associated with irregular operations. We are available to assist in a number of core areas that may impact public agencies and businesses in this rapidly changing environment. Please visit our COVID-19 Response Team page ...

The start-up segment of our healthcare regulatory practice is focused on companies bringing digital health tools to market. As part of the efforts of the U.S. Food and Drug Administration (“FDA” or the “agency”) to clarify its regulatory stance on digital health tools, the agency released a revised guidance in 2019 entitled, Policy for Device Software Functions and Mobile Medical Applications - Guidance for Industry and Food and Drug Administration Staff (the “Guidance”) ...

For more than 15 years, the process of selecting a hearing officer for a medical staff peer review proceeding has been strongly influenced by the decision in Yaqub v. Salinas Valley Memorial Healthcare System 122 Cal. App. 4th 474 (2004). That decision held that a hearing officer in a peer review proceeding was disqualified for a financial bias based upon the hearing officer's “long–standing and continuous relationship" with the hospital, which created a “possible temptation" to favor the hospital.

The court disqualified the hearing officer despite the fact that “there ...

In anticipation of its November Board meeting this past week, the Medical Board released its Medical Board Staff Report along with a long-awaited draft of the enabling regulations for its Physician Health and Wellness Program.

While the re-establishment of a Physician Health and Wellness Program is a positive development, the new Program is structured in a way which fails to encourage physicians with substance abuse problems to enter the Program voluntarily at an early stage of their addiction ...

As of January 1, 2020, when a patient (or their representative) submits a written allegation of sexual abuse or sexual misconduct to a health care entity, that entity must report the allegation to the appropriate state licensing agency (e.g., the Medical Board of California) within 15 days of receipt. (SB 425, codified at Cal. Bus. & Prof. Code Section 805.8) After making its way through the state legislature with little to no opposition from state lawmakers, California Governor Gavin Newsom signed this bill into law on October 12. The purpose of the bill was to not only accelerate the process in which state licensing boards receive notification about these serious allegations, but also to expand the types of entities that must report these events ...

The Medical Board of California (“MBC”) began this project in 2013 when it required coroners to inform it of deaths resulting from opioids.  The influx of coroners’ reports triggered an intense enforcement effort by the MBC to mine the data in the CA Department of Justice’s Controlled Substance Utilization Review and Evaluation System (“CURES”) to identify physicians who prescribed for the persons identified in death certificates.  The MBC has conducted a veritable deluge of formal investigations of physicians and has filed an unprecedented number of accusations based on this single source.

The U.S. Supreme Court is now in its summer recess and we anecdotally have heard of Justice “sightings” in Europe and beyond.  This last session of the Court addressed many issues capturing both the political and popular imagination.  Less headline-grabbing and relatively modest in length (at only nine pages) was Justice Clarence Thomas’ opinion for a unanimous Court in Cochise Consultancy, Inc. et al. v. U.S. ex rel. Hunt.  (587 U.S. ____ (2019))  It directly impacts our healthcare compliance practice here at Nossaman by interpreting the statute of limitations for a False Claims Act (“FCA”) case so as to stretch it as long as possible.

On July 22, 2019, the California Supreme Court issued its long-awaited opinion in Wilson v. CNN.¹  The primary question before the court concerned the application of the anti-SLAPP statute, Civil Procedure Code Section 425.16, to employment, discrimination, and retaliation claims.  The factual scenario before the court involved a journalist who alleged that his employer, CNN, denied him promotions, gave him unfavorable assignments, and ultimately fired him for unlawful discriminatory and retaliatory reasons.²  The employer responded by contending that the journalist was ...

On May 7, 2019, the California Supreme Court heard oral arguments in Wilson v. Cable News Network, Inc., et al., where plaintiff was a producer at CNN who sued the media giant for employment discrimination, retaliation, wrongful termination, and defamation after he was terminated for alleged plagiarism.  Wilson is of particular importance to the healthcare community, including hospitals, medical staffs, peer review committees, and practitioners, because it will impact the application of anti-SLAPP Special Motions to Strike under Civil Procedure Code Section 425.16 in suits ...

A Civil Investigative Demand, often referred to as a CID, is a pre-litigation mechanism used to collect information and evidence for use in civil false claims act and other investigations. CIDs are typically lengthy documents, broadly drafted, invasive, and even frightening. In the past decade since the passage of the Fraud Enforcement and Recovery Act of 2009, CIDs have been issued at exponentially higher rates than in years past, and have become more comprehensive and more aggressive.

While this post will focus on Department of Justice CIDs in federal health care cases, CIDs are ...

Effective January 1, 2019, Health & Safety Code Sections 11161.5, 11162.1, and 11165 were amended to, among other things, provide that the Department of Justice implement a system by which prescription forms for controlled substance prescriptions should each have a uniquely serialized number."

The statutory amendments established the way in which the prescription forms must be printed, the various features that the prescription forms must include, and the way in which the dispenser of controlled substances must report the serial number to the Controlled Substance Utilization ...

It is well-documented that California is facing a shortage of primary care providers.  The Californians most affected by these shortfalls are largely low-income, Latino, African American, and Native American and located in rural areas as well as in California’s largest and fastest-growing regions—the Inland Empire, Los Angeles, and the San Joaquin Valley.  Newly-proposed legislation aims to address this problem by permitting California’s nurse practitioners to practice under certain conditions without physician supervision.

Assembly Bill 890 was introduced by ...

In a decision affecting California hospitals, medical groups, medical staffs, and physicians, the California First District Court of Appeal has concluded that a physician’s notice and hearing rights apply to situations where a hospital directs a medical group of a closed department to remove a physician from the hospital schedule.

In Economy v. Sutter East Bay Hospitals, Sutter Hospital operated a closed anesthesia department pursuant to a contract with East Bay Anesthesiology Medical Group (East Bay Group).  The exclusive contract required all physicians providing ...

In a decision that facilitates flexible staffing practices for healthcare employers, the California Supreme Court recently held that healthcare workers can legally waive a second meal period when they work shifts longer than 12 hours. Gerard v. Orange Coast Mem'l Med. Ctr., 430 P.3d 1226 (Cal. 2018). The high court’s decision finally and conclusively resolves a contentious and technical dispute over labor enactments that had been the subject of several prior appellate rulings. See our prior discussion re Gerard II here.

Plaintiff healthcare workers alleged that their ...

On September 19, 2018, Governor Jerry Brown signed into law the Patient’s Right to Know Act of 2018 (SB 1448), which will require practitioners to notify their patients when they are placed on probation on or after July 1, 2019 for the following offenses:

• The commission of any act of sexual abuse, misconduct, or relations with a patient or client;

• Drug or alcohol abuse directly resulting in harm to patients or to the extent that such use impairs the ability of the practitioner to practice safely;

• Criminal conviction directly involving harm to patient health; or

• Inappropriate ...

There is a host of new, ever changing, and conflicting guidelines from a multitude of regulators and academic societies. This evolving and uncertain landscape is making the life of a practicing pain physician in the midst of today’s nationwide opiate epidemic…painful.

Here are 10 tips to help you avoid Medical Board discipline when prescribing opiates:¹

1.  Don’t Prescribe Opiates Unless…

• The patient has exhausted all reasonable alternatives

• There is medical indication

  - Recently documented objective evidence of/consistent with patient’s pain complaints

• You have ...

Starting October 2, 2018, health care practitioners authorized to prescribe, order, administer, or furnish a controlled substance must query, or consult, the Controlled Substance Utilization Review and Evaluation System (CURES) database and run a Patient Activity Report (PAR) on each patient the first time the patient is prescribed, ordered, or administered a Schedule II-IV controlled substance. First time is defined as the initial occurrence in which a health care practitioner intends to prescribe, order, administer, or furnish a controlled substance to a patient and has ...

On Friday, June 22, 2018, a Florida Appeals Court handed down its decision in Omulepu v. Department of Health Board of Medicine.  The case involved a doctor's appeal from a decision by the Florida Department of Health, Board of Medicine to revoke a plastic surgeon's right to practice medicine.  The main issue on appeal was the effect of the doctor's invocation of his Fifth Amendment right not to incriminate himself.

In criminal proceedings, a defendant's invocation of his Fifth Amendment privilege cannot be used against him.  Juries are instructed in criminal cases that they cannot draw ...

This is the second installment of a two-part series on the Bipartisan Budget Act. Part I discussed the Bipartisan Budget Act’s effect on Medicare Advantage health plans.

The Bipartisan Budget Act of 2018 (the Act), signed into law on February 9, 2018, contains an amendment that should cause physicians and healthcare providers to take note. Section 50404 of the Act, titled Modernizing the Application of the Stark Rule under Medicare, codifies recent Centers for Medicare and Medicaid Services (CMS) regulations and corresponding preamble that went into effect on January 1, 2016 ...

This is the first installment of a two-part series on the Bipartisan Budget Act. Part II will discuss the Bipartisan Budget Act’s effect on the federal Stark Law.

Prior to adjourning for spring recess, Congress passed and the President signed into law on March 23, 2018, omnibus appropriations legislation that funds the government for the remainder of the fiscal year – through September 30. As part of the earlier negotiations to reach the budget deal, Congress passed and the President signed into law on February 9, 2018, the Bipartisan Budget Act, which included dozens of ...

Unfortunately, 2017 will most likely be remembered as the Year of Sexual Harassment. Notwithstanding that AB 1825 mandated harassment prevention training in California in 2004, the statute was amended to require training on bullying and abusive conduct in 2015 (AB 2053), and recently to require training in 2018 on gender identity, gender expression, and sexual orientation (SB 396), sexual harassment continues to permeate the work place.  Given the profound impact sexual harassment has on individuals and workplaces, it is time for change.

As a new year begins, this is an ...

SynerMed, a Southern California-based physician management company, will be shutting down, per an email from its CEO earlier this month. Recently, the company had come under increasing scrutiny by health plans and California state regulators, including an investigation by the Department of Managed Health Care.

According to the company-wide email, audits conducted by health plans had found several system and control failures within medical management and other departments. Additionally, the California Department of Managed Health Care’s investigation has been publicly ...

Last Thursday, a jury in federal district court in St. Louis handed down a verdict in a False Claims Act (FCA) case that presents a laundry list of the challenges which can arise in a FCA case.  This one includes kickback allegations, Stark issues, both state and federal claims, individual liability, civil-criminal cooperation, a criminal indictment (later dropped), and even family law.  The defendants are neurologist, Dr. Sonjay Fonn, and his fiancee of nine years, Deborah Seeger, as well as their respective medical practice and medical device distributorship.

The verdict found ...

On January, 1, 2018, The Joint Commission’s (TJC) new and revised pain assessment and management standards go into effect for TJC accredited hospitals. The changes to the standards stem from a review commenced by The Joint Commission in 2016 to bring the preceding accreditation standards into alignment with leading practices in pain assessment and management, and the safe use of opioids. In light of these standards, hospitals and their medical staffs should review their current policies, protocols, and procedures to ensure their practices comply with the new TJC requirements.