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. …