“Always a bridesmaid, never a bride” Might Work for Stark Liability but Not the Anti-Kickback Statute

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 them liable for conspiracy and FCA violations under the Anti-kickback Statute for arrangements under which Dr. Fonn purchased nearly all of his neurology devices and implants from the distributor owned and operated by his fiancée, Deborah Seeger.  The allegations included Dr. Fonn increasing his use of devices and participating in the distributorship’s negotiations with manufacturers.  Conspicuous consumption (including a yacht, plane and $230,000 entertainment center) may have contributed to the local relators, including physicians, filing the FCA suit.

The civil suit was stayed for a year in order for criminal prosecutors to pursue an indictment handed down by a grand jury.  At the request of prosecutors, the court dismissed the indictment, which led the civil case to resume and go to trial earlier this month.  The judgment amount is pending and could approach $5 million against Dr. Fonn and Ms. Seeger for the 228 Medicare and Medicaid claims presented at trial.

Incidentally, their nine-year marriage engagement may be attributed to the Stark law’s rule of equating a spouse with the referring physician (for which no Stark exception appears available in this case) and Missouri not being a common law marriage state.  A law school professor would be hard-pressed to write an exam question with more issue-spotting than the saga of Dr. Fonn and Deborah Seeger!

Is Your Hospital Compliant With the Revised Joint Commission Standards for Pain Assessment and Management?

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.

Among the revised standards are requirements for:

  • Identifying a leader or leadership team that is responsible for pain management and safe opioid prescribing.
  • Screening of patients for pain during emergency department visits and at time of admission
  • Identifying and monitoring patients at risk for adverse outcomes related to opioid treatment.
  • Establishing criteria to screen, assess, and reassess pain that are consistent with the patient’s age, condition, and ability to understand.
  • Involving patients in the developing of their treatment plans through setting realistic expectations and measurable goals and discussing objectives used to evaluate treatment progress.
  • Developing pain treatment plans based on evidence-based practices and the patient’s clinical condition, past medical history, and pain management goals.
  • Assessing and managing the patients’ pain and minimizing the risks associated with treatment.
  • Providing nonpharmacologic pain treatment modalities.
  • Involving the medical staff in pain assessment, pain management, and safe opioid prescribing through participation in the establishment of protocols and quality metrics, and review of performance improvement data.
  • Educating staff and licensed independent practitioners on resources and programs regarding pain assessment, pain management, and the safe use of opioid medications based on the identified needs of the patient population.
  • Acquiring equipment needed to monitor patients who are at high risk for adverse outcomes from opioid treatment.
  • Identifying opioid treatment programs that can be used for patient referrals.
  • Providing information to staff and licensed independent practitioners on available services for consultation and referral of patients with complex pain management needs.
  • Educating patients and their families on discharge plans related to pain management including, side effects of pain management treatment, and the safe use, storage, and disposal of opioids.
  • Collecting and analyzing data on pain assessment and pain management, including types of interventions and effectiveness.
  • Conducting performance improvement activities focusing on pain assessment and management to increase safety and quality for patients (e.g., tracking adverse events).
  • Facilitating practitioner access to Prescription Drug Monitoring Program databases.

The full text of the new and revised requirements is posted on The Joint Commission website and will be reflected in the Fall 2017 E-dition Standards and 2018 hard copy publication. Standards affected include: LD 04.03.13 (Eps 1-7), MS 03.01.03, MS.05.01.01 (EP 18), PC.01.02.07 (EPs 1-8), PI.01.01.01 (EP 56), and PI.02.01.01 (Eps 18 and 19).

Additional post related to pain and opioids:

Medical Board of California Circulates Opioid Prescriber Guidance

Don’t Forget HIPAA’s “Minimum Necessary” Rule When Making Health Information Disclosures

When Covered Entities or Business Associates or their counsel analyze whether a particular disclosure of Protected Health Information (or “PHI,” as defined in HIPAA) is permissible, they should be sure also to analyze whether the disclosure complies with HIPAA’s Minimum Necessary Rule (“MNR”), which is oft forgot. This issue arises when disclosing PHI in response to subpoenas, which HIPAA permits as long as the disclosing party receives satisfactory assurances that the requesting party has made reasonable efforts to obtain a protective order or to notify the individual(s) who is/are the subject of the disclosure and provide them with an opportunity to object. 45 CFR 164.512(e).

Set forth at 45 CFR § 164.502(b)(1), the MNR states:

When using or disclosing protected health information or when requesting protected health information from another covered entity or business associate, a covered entity or business associate must make reasonable efforts to limit protected health information to the minimum necessary to accomplish the intended purpose of the use, disclosure, or request.

The MNR does not apply in situations where it either does not protect the individual (such as when the disclosure is to the patient herself or to the OCR for investigatory or compliance purposes) or where the burden of compliance is outweighed by the purpose of the disclosure (such as when the disclosure is for treatment purposes). None of the MNR exceptions (the complete list is at 164.502(b)(2)) is implicated in the routine subpoena/court order context.

This means that a Covered Entity (or its counsel) should not simply copy the entire patient record pertaining to the issue before the court without ensuring that it only includes information minimally necessary to accomplish the intended purpose of the disclosure, which here would be to comply with the subpoena by disclosing the requested records, provided they are relevant. So, in one sense, the general relevance standard in litigation and the MNR are the same, and ordinarily if the information disclosed includes strictly relevant information, including PHI, the MNR should be satisfied.

On the other hand, unlike the general relevance standard, which does not prohibit a party from disclosing irrelevant information, the MNR explicitly prohibits disclosure of irrelevant PHI because such would not further the intended purpose of the disclosure. Therefore, under certain circumstances, it would seem that a Covered Entity responding to a subpoena could risk HIPAA sanctions by running afoul of the MNR for disclosing certain irrelevant PHI, but not be at risk of consequences related to breaching the plaintiff’s privacy. For example, in the routine slip-and-fall case, what if the treating physician recorded in the “social history” section of the history and physical examination that the plaintiff has a history of alcoholism, substance abuse or mental illness, all of which turns out to be responsive to the subpoena, but ultimately is determined to be irrelevant to the litigation. If the Covered Entity hospital had not redacted those references, the plaintiff will not likely be able to successfully sue the hospital for breach of privacy or emotional distress for improperly disclosing the PHI because it did so properly in response to the subpoena. For the same reason, the plaintiff could not succeed with a private right of action under state law (HIPAA not having a private right of action). However, the Covered Entity has probably violated the MNR and could face OCR scrutiny and possible penalties.

You can imagine how this could play out where, say, the defendant in the slip-and-fall case, a convenience store owner, happens to be a family friend, employer, neighbor or worse—an enemy—of the patient. If the store-owner’s attorney gave appropriate notice to the patient/plaintiff, she could not object because she filed a suit about which her health condition is now at issue, and she probably would not object anyway because she probably would not be thinking about that information being in her record or that her friend or enemy might see it. Or perhaps the subpoenaing attorney obtained a protective order. Either way, the hospital would provide the records to him, and his client could then easily learn about the plaintiff’s embarrassing social history, and she would have little recourse for damages other than the satisfaction of learning about whatever penalties the OCR may ultimately assess against the hospital.

How would you handle it?

Additional posts related to HIPAA

Press Release Mistake Leads to $2.4 Million HIPAA Penalty for Health System
OCR Issues $475,000 Fine for Untimely Reporting of HIPAA Breach


Medical Board of California Adopts New Regulations for Midwife Assistants

On September 21, 2017, the Medical Board of California adopted new regulations related to the training of midwife assistants, the administration of midwife assistant training, and the requirements for approved, midwife assistant certifying organizations. The Board took this action to implement and interpret Senate Bill 408 (2015), which added new requirements and prohibitions to the Licensed Midwifery Practice Act of 1993 under Business & Professions Code § 2516.5.


Business and Professions Code § 2516.5(a)(1) defines “midwife assistant” as:

A person, who may be unlicensed, who performs basic administrative, clerical, and midwife technical supportive services in accordance with this chapter for a licensed midwife or certified nurse-midwife, is at least 18 years of age, and has had at least the minimum amount of hours of appropriate training pursuant to standards established by the board for a medical assistant pursuant to Section 2069. The midwife assistant shall be issued a certificate by the training institution or instructor indicating satisfactory completion of the required training. Each employer of the midwife assistant or the midwife assistant shall retain a copy of the certificate as a record.

Section 2516.5 authorizes a midwife assistant to perform certain assistive activities under the supervision of a licensed midwife or certified nurse-midwife, including the administration of medicine, withdrawing of blood, and midwife technical support services. Midwife assistants are permitted to perform the following midwife technical support services under § 2516.5(b)(3):

(A) Administer medications orally, sublingually, topically, or rectally, or by providing a single dose to a patient for immediate self-administration, and administer oxygen at the direction of the supervising licensed midwife or certified nurse-midwife. The licensed midwife or certified nurse-midwife shall verify the correct medication and dosage before the midwife assistant administers medication.

(B) Assist in immediate newborn care when the licensed midwife or certified nurse-midwife is engaged in a concurrent activity that precludes the licensed midwife or certified nurse-midwife from doing so.

(C) Assist in placement of the device used for auscultation of fetal heart tones when a licensed midwife or certified nurse-midwife is engaged in a concurrent activity that precludes the licensed midwife or certified nurse-midwife from doing so.

(D) Collect by noninvasive techniques and preserve specimens for testing, including, but not limited to, urine.

(E) Assist patients to and from a patient examination room, bed, or bathroom.

(F) Assist patients in activities of daily living, such as assisting with bathing or clothing.

(G) As authorized by the licensed midwife or certified nurse-midwife, provide patient information and instructions.

(H) Collect and record patient data, including height, weight, temperature, pulse, respiration rate, blood pressure, and basic information about the presenting and previous conditions.

(I) Perform simple laboratory and screening tests customarily performed in a medical or midwife office.

Section 2516.5(c) specifically prohibits midwife assistants from administering local anesthetic agents or performing any clinical laboratory test or examination for which the assistant is not authorized. Finally, section 2516.5(d) prohibits a midwife assistant from being employed for inpatient care in a licensed general acute care hospital as defined in Health and Safety Code § 1250(a).


Among the new regulatory requirements, midwife assistants must maintain current certification in Neonatal Resuscitation from the American Academy of Pediatrics (Bus. & Prof. Code § 1379.02) and Basic Life Support from the American Heart Association or the American Safety and Health Institute (Bus. & Prof. Code § 1379.03), as well as training in infection control from the CDC (Bus. & Prof. Code § 1379.04).

Specific minimum hourly training requirements under § 1379(a) include:

(1) Five (5) clock hours of midwifery didactic training.

(2) Two (2) clock hours of training in administering oxygen by inhalation.

(3) Ten (10) clock hours of satisfactory demonstration of immediate newborn care.

In order to perform certain services, the following minimum training hours are required under § 1379(b):

(1) Five (5) clock hours of training on the device used for auscultation of fetal heart tones and ten (10) demonstrations of satisfactory placement of the device used for auscultation of fetal heart tones during labor or by stimulation.

(2) Ten (10) clock hours of training administering injections and performing skin tests, and satisfactory performance of ten (10) each intramuscular, subcutaneous, and intradermal injections, and skin tests.

(3) Ten (10) clock hours of training in venipuncture and skin puncture for the purpose of withdrawing blood, and satisfactory performance of ten (10) each of venipunctures and skin punctures for the purpose of withdrawing blood.

Organizations that certify midwife assistants must obtain Board approval, be not-for-profit, and meet specific standards listed under § § 1379.07-1379.09.

Is Your Surgery Center Ready for California’s Surprise Medical Billing Law?

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 Plan;
  • From an individual health professional (“Professional”);
  • Who does not have a contract with the Plan; and
  • Services are performed at (or as a result of) a contracted health facility (“Facility”).[1]

In such circumstances, the Enrollee may be billed no more than the same cost-sharing amount that the Enrollee would pay a contracted Professional for the same service (“in-network cost sharing amount”).   At the time of payment, the Plan must inform the Enrollee and the non-contracted Professional of the in-network cost-sharing amount owed by the Enrollee. Continue Reading

Medical Board of California Circulates Opioid Prescriber Guidance

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 Prescriber Guidance Letter was accompanied by a number of resources for providers facing these situations, including Strategies for High Risk Patients, Medication-Assisted Treatment Certification Programs, Local Addiction Recovery Services Locator, CURES information, Opioid Prescriber Resource Sheet, and Opioid Prescribing Guidelines.

The letter prominently displays the subtitle “Don’t Fire Your Patients Who May be Over-using Opioids.”  This request stands in contrast to most provider risk-avoidance guidance, which would suggest that terminating the patient from the practice is the best way to insulate the provider from regulatory scrutiny.  The Medical Board of California Expert Reviewer Guidelines regarding the treatment of pain focus on excessive prescribing concerns; gone are the days of concern for the undertreatment of pain.  Many pain contracts, for example, authorize the provider to terminate the patient from the practice for any breach of the agreement, including the patient’s overuse of medications, early filling of prescriptions, and the patient getting medications from other providers.  The rapidly evolving and constantly changing regulatory guidelines make it hard for prescribers to stay compliant. In addition, retrospective case reviews can be skewed when viewed through the lens of subsequently-released guidelines.

The Prescriber Guidance Letter acknowledges “providing safe and effective pain management can be challenging.”  The authors further recognize the difficulty in weaning patients off of opiate medications. “One of the most difficult situations for prescribers may be how to respond to patients with difficulty decreasing opioid intake or with other possible addiction symptoms.”  This recognition of the difficulty in getting patients off opiate medications and the important role physicians will need to play to reach a resolution to this issue serves as a counterpoint to the communications from other agencies, such as the federal Centers for Disease Control, which suggests the opioid epidemic is a “doctor-driven” problem and recommends no more than 3 days of opioid treatment.

Prescribers are surrounded by guidelines from various regulatory bodies, such as the Medical Board of California and the CDC, as well as academic bodies, such as The American Society of Addiction Medicine, regarding the safe and recommended approaches to treating patients with pain. These often-conflicting guidelines can lead to confusion as to the appropriate standard of care.


  • California is actively seeking to address the opioid epidemic.
  • Some patients have chronic pain and their opiate medications cannot simply be stopped cold-turkey.
  • Physicians must be an integral part of the solution, rather than abandoning their patients at the first sign of non-compliance.

Press Release Mistake Leads to $2.4 Million HIPAA Penalty for Health System

On May 10, 2017, the U.S. Health and Human Services Department Office for Civil Rights (“OCR”) announced an agreement whereby Memorial Hermann Health System (“MHHS”) will pay a $2.4 million penalty for releasing a patient’s name in a press release.  According to the resolution agreement, in September 2015, a patient at an MHHS clinic presented an allegedly fraudulent identification card to office staff.  The staff notified law enforcement and the patient was arrested.  Although notification to law enforcement did not violate the HIPAA rules, it wa a violation to include the patient’s name in the title of a press release regarding the incident and to disclose the patient’s protected health information (“PHI”) during meetings with an advocacy group, state representatives, and a state senator, in response to the events.

There are a number of lessons to be learned from this settlement:

  • Confirm that senior management, as well as workforce members and subcontractors, understand the HIPAA rules.
  • Thoroughly train press and communications personnel to be alert for information that is protected by HIPAA and must not be disclosed.
  • Review and regularly update HIPAA policies and procedures.
  • Obtain patient consent before disclosing patient names on a website or in a press release.
  • Do not discuss patient PHI with the media or public officials without patient consent.
  • Be sure to document, in a timely manner, any sanctions imposed upon workforce members who fail to comply with the entity’s privacy policies and procedures or violate the HIPAA rules.

The consequences of a HIPAA violation can be severe, so any entity that handles PHI should be diligent in HIPAA compliance.

Mealtime Waiver Decision is Good News for California Healthcare Employers Hungry for Clarity

Female Medical Professional Doctor or Nurse Eating Healthy Lunch
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”) [see our prior discussion re Gerard I here], partially invalidating healthcare meal waivers, was incorrect.

California Labor Code section 512(a) requires that two meal periods be provided for any employee working shifts longer than 12 hours.  However, Industrial Welfare Commission (“IWC”) Wage Order No. 5 carves out an exception to this requirement for employees in the healthcare industry.  The Wage Order permits healthcare employees to waive one of their two meal periods on shifts longer than 8 hours even when their shift exceeds twelve hours.

In Gerard I, the Court found that IWC Wage Order No. 5 was partially invalid to the extent it authorized second meal break waivers by healthcare workers on shifts longer than 12 hours.  Thus, Gerard I invalidated these meal period waivers.  In response to the uncertainty created by Gerard I, Governor Brown signed SB 327 as an emergency measure on October 5, 2015, effective immediately.  Although SB 327 confirmed that employees in the healthcare industry who worked shifts longer than eight hours could voluntarily waive their right to one of their two meal periods, even where shifts lasted longer than 12 hours, it only affected meal period waivers entered into on or after October 5, 2015.[1]  Now, as a result of Gerard II, healthcare employers in California will not face retroactive liability if they used such waivers prior to October 5, 2015.

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Stable or Fable: Will the Trump Administration Proposed Rule Save the Exchanges or Hasten Their Demise?

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 Health Care Act (AHCA) was introduced in the U.S. House of Representatives to repeal and replace key provisions of the Affordable Care Act (ACA) and make significant changes to federal funding for Medicaid.[2] On Friday, March 24, House Speaker Paul Ryan pulled the bill before a vote.[3]  In the aftermath of the bill’s withdrawal, President Trump predicted that if it were left in place, ObamaCare would explode.[4]  As recently as Sunday, April 2, however, the President tweeted that talks of repeal and replace of the ACA were ongoing and would continue until a deal was struck.[5] On Tuesday, April 4, House Speaker Paul Ryan said Republican lawmakers are having productive talks on a new healthcare reform bill.[6]

This on again, off again, action to attack the ACA leaves a great deal of uncertainty for healthcare providers.  That uncertainty is compounded by regulatory action that will affect the ACA in ways less visible to the public.  Apparently, Secretary Price is well aware of HHS’ options to make regulatory changes.  According to the Chicago Tribune, he remarked during the House Appropriations Committee hearing on his agency’s proposed budget that “[f]ourteen hundred and forty-two times the ACA said ‘the secretary shall’ or ‘the secretary may.’”[7]

Continue Reading