Posts in Managed Care.

California’s new Office of Health Care Affordability recently adopted emergency regulations (Final Regulations) implementing the Health Care Market Oversight Program, required under California’s Health Care Quality and Affordability Act (HCQAA). HCQAA, which created the Office of Health Care Affordability (OHCA), requires “health care entities” to provide written notice of certain “material change transactions” to OHCA. (Cal. Health & Safety Code § 127500 et seq.) OHCA may then conduct a cost and market impact review (CMIR), with the overarching goal of ...

Managed Care Plans Take Note: OIG’s Managed Care Strategic Plan

With the tremendous growth of managed care over the last several years, the Medicare and Medicaid programs have had to transform how they fund health care for approximately 100 million enrollees. According to the Department of Health & Human Services’ Office of Inspector General (OIG), 2022 saw half of Medicare enrollees receive coverage through Medicare Advantage plans. As a result, government spending on Medicare Advantage was $403B, or about 50% of all Medicare funds. Similarly, 81% of current Medicaid enrollees receive some component of their coverage through managed ...

Introducing Nossaman’s Newest Podcast: Legal Prescriptions

We are excited to announce the launch of our newest podcast, Legal Prescriptions. This audio series will explore recent developments impacting healthcare companies and professionals, including legislation, reform, managed care, litigation, regulatory compliance and privacy. In addition to the innovative minds at Nossaman, we look forward to welcoming industry experts to the conversation to lend their perspectives.

In our flagship episode, I chat with John Puente, who served as Deputy Director and Chief Counsel to the California Department of Health Care Services (DHCS ...

CA DHCS Announces New MLR Requirements on Subcontractors, Including IPAs, RBOs and RKKs

California’s Department of Health Care Services (DHCS) is in the final stages of establishing new Medical Loss Ratio (MLR) requirements in Medi-Cal Managed Care. Most significantly, the guidelines specify that the MLR program, which previously applied to Medi-Cal managed care plans, will now also apply to certain of their subcontractors, including risk-bearing providers. … 

California Health Plans and Insurers, It’s Time to Prioritize Mental Health Parity Compliance

A recent California First District Court of Appeal (“Court”) decision, Futterman v. Kaiser Foundation Health Plan, Inc., (“Futterman”) has shed light on potential liabilities for noncompliance with the State’s mental health parity requirements.1

As background, the COVID-19 pandemic served as a catalyst for increasing already soaring behavioral health care demand, by intensifying mental health and substance use conditions across the country. In a 2020 survey by the California Health Care Foundation, Californians ranked mental health treatment as their top ...

The COVID-19 Public Health Emergency Has Ended - Now What for Managed Care Plans?

May 11, 2023 marked a milestone in the pandemic response with the expiration of the federal COVID-19 Public Health Emergency (PHE). The expiration of the PHE marks an end to the wide-reaching efforts undertaken by the federal government through emergency declarations, congressional and regulatory actions that provided flexibilities for the healthcare industry to ensure continuous delivery of health services during the PHE. As the Centers for Medicare & Medicaid Services (CMS) explained, while some of these changes are extended or made permanent, others are not. Medicare ...

CMS Attempts to Reduce Appointment Times for Medicaid and CHIP Patients - How Will This Impact Your Managed Care Plan?

A recent survey found that the average wait time for a new patient to see a physician in 15 of the largest cities in the U.S. was 26 days, up from 24.1 days in 2017. Timely access to health care providers has long been an issue, but appears to be worsening in certain geographies and provider types. Until recently, timely access to care was regulated at the state level; however, in April, the Centers for Medicare & Medicaid Services (CMS) unveiled its proposed rule to address the issue. The Notice of Proposed Rulemaking Managed Care Access, Finance, and Quality (CMS-2439-P) (NPRM) only ...

Posted in Managed Care
DMHC and DHCS Fine L.A. Care $55 Million in Enforcement Actions

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 ...

Posted in Managed Care
Understanding the HHS 2023 Proposed Rule

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. 

Posted in Managed Care
Don’t Forget the “PC” in the “Friendly PC” Model

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 ...

Posted in Managed Care
California Begins to Question the “Friendly PC” Model

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 ...

How to Prevent an OFAC Sanction When Responding to a Ransomware Attack

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 ...

Posted in Managed Care
What to Expect When Selling a Physician Practice

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 …

Can Businesses That Rent Office Space Enforce COVID-19 Protocols on Landlords?

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 ...

Can a Healthcare Provider Require Employees to Take a COVID-19 Vaccine?

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 … 

New Disclosure Requirements for Those that Contract with ERISA Group Health Plans

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 … 

Cities Consider Creating Their Own Public Health Departments

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 … 

Posted in Managed Care
Yes! Even You May Be a Health Care Service Plan….

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 ...

Understanding the Department of Managed Health Care’s Response to COVID-19

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 ...

Posted in Managed Care

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 ...

Posted in Managed Care

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 ...

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 ...

Posted in Managed Care

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 ...

Posted in Managed Care

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 ...

Posted in Managed Care

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.

A new California law (AB 72) limits the amount that out-of-network surgeons and other health care professionals may bill patients for covered non-emergency services provided at a contracted facility, such as an ambulatory surgery center.  California’s surprise medical bill law went into effect on July 1, 2017.  It is intended to prevent a consumer from receiving an unexpected medical bill from a non-contracted provider as follows:

  • A patient who is enrolled (Enrollee);
  • In a health care service plan or health insurance policy (Plan);
  • Receives health care services covered by the ...

Recently, the Medical Board of California circulated an open letter, known as a Prescriber Guidance Letter to all practitioners in California who prescribe opiates.  The letter was authored by a statewide workgroup on Prescription Opioid Misuse and Overdose Prevention.  The workgroup includes the Medical Board of California, the Board of Pharmacy, the California Department of Public Health, the DEA, DMV, California Department of Justice, California Health and Human Services, California Society of Addition Medicine, and California Healthcare Foundation, among others.

The ...

Posted in Managed Care

In a rare move, the California Court of Appeal reversed itself and validated a California hospital’s policy of allowing healthcare workers to waive an otherwise mandatory second meal period on shifts longer than 12 hours.  In reversing itself, the California Court of Appeal in Gerard v. Orange Coast Memorial Medical Center (Gerard II) held that its previous decision in Gerard v. Orange Coast Memorial Medical Center (Gerard I), partially invalidating healthcare meal waivers, was incorrect.

California Labor Code section 512(a) requires that two meal periods be provided for any ...

Posted in Managed Care

A proposed rule intended to stabilize the individual and small group insurance markets was issued on February 17, 2017, only a week after the Senate confirmed Tom Price as the Secretary of the U.S. Health and Human Services Department (HHS).[1] Although the proposed rule is intended to stabilize these markets, it may make it more difficult for individuals to obtain and maintain health insurance coverage, thereby reducing the number of people who are insured.

This is a turbulent time for American healthcare. Within weeks after the publication of the proposed rule, the American ...

On January 19, 2017, the Federal Trade Commission announced a settlement which would resolve allegations that competing ophthalmologists violated federal antitrust laws when they refused to negotiate contracts with MCS Advantage, Inc. (MCS), a Medicare Advantage Plan, and Eye Management of Puerto Rico (Eye Management), MCS’s network administrator.

According to the complaint, the charges arise from an arrangement between Eye Management and MCS entered into in April, 2014.  Eye Management agreed to create and manage a network of ophthalmologists to provide services to MCS enrollees and to do so at a cost savings to MCS.   Eye Management planned to replace MCS’s existing contract with each individual ophthalmologist with a new contract between Eye Management and the ophthalmologist at a lower reimbursement rate. In early June 2014, Eye Management sent a proposed contract to every ophthalmologist contracted with MCS at the time. These contracts offered payments at rates that were about 10% lower, on average, than the rates under the existing contracts between MCS and each ophthalmologist.

Posted in HIPAA, Managed Care

As the clock struck midnight on New Year’s Eve, a number of new California laws took effect.  Here are three that California hospital executives need to know:

  • Notice of Observation Status (SB 1076)

    When a patient is being cared for in an inpatient unit of a hospital (or in an observation unit) the hospital must provide the patient with a written notice when the patient is in observation status.  The notice must inform the patient that the observation care is being provided on an outpatient basis and that this may affect the patient’s health care coverage reimbursement.  There are also ...

Our Health Law Ticker is a one-stop resource for everything new and noteworthy in healthcare law. We cover recent developments in healthcare legislation, healthcare reform, Medicare/Medicaid, managed care, litigation, regulatory compliance, HIPAA, privacy, peer review, medical staffs and general business operations for healthcare companies and licensed healthcare professionals.

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