Disability Income Insurance: How Today’s Decisions Impact Tomorrow’s Choices

Provided By:  Marnique Sparago, Northwestern Mutual

Doctors and dentists nationwide clearly understand the importance of having disability income insurance (DI) to protect the time and money they’ve invested in their profession. And most have considered at length what would happen to them, their incomes, their families and their careers if they suddenly found themselves injured or ill – leading them to seek the protection a DI policy provides.

So what’s the problem? DI is a complex buying decision – with varying stipulations in policy contracts that impact the type of benefits a policy owner might receive at time of claim. The problem is that busy medical and dental professionals can’t find the time to fully understand key concepts in their policies, and many would be surprised to find how those details could affect them at the time of claim.Continue reading

The Stark Law Regulations: A Review

The Stark Regs (1) forbid doctors and their immediate family members from referring their patients to businesses they own which provide “designated health services,” and (2) contains a long list of permitted financial relationships between health care providers.  The list of what constitutes a “designated health service” (DHS) includes PT, rehab, diagnostic imaging, clinical lab, DME, and home health.  A “physician” means an M.D., D.O., chiropractor, podiatrist, optometrist or dentist.  An “immediate family member” is a husband or wife; birth or adoptive parent, child, or sibling; stepparent, stepchild, stepbrother, or stepsister; father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law; grandparent or grandchild; and spouse of a grandparent or grandchild.  In short, if you or your family member owns a DHS, don’t refer to it.  Unless of course your situation falls within one or more of the gazillion exceptions.

A few key changes from the third set of revisions (so called Stark III) which affect physicians are helpful to keep in mind.  For instance, the way fair market value of physician compensation is determined  in the Stark II regs has been simplified and now depends on an amorphous consideration of the transaction, its location and other factors.  The clear formulas contained in Stark II was dropped and this makes the need for an expert FMV study even more compelling.Continue reading

Discounted Fee Organizations Have Surprising Regulation

[contact-form subject='[Jeffrey L Cohen%26#039;s Blog’][contact-field label=’Name’ type=’name’ required=’1’/][contact-field label=’Email’ type=’email’ required=’1’/][contact-field label=’Website’ type=’url’/][contact-field label=’Comment’ type=’textarea’ required=’1’/][/contact-form] percentageThe idea of an organization which provides discounted fees to patients is not a new concept.  Organizations like independent physician associations (IPAs), even accountable care organizations (ACOs) and simpler discounted fee plans will be surprised to know that Florida may require them to be licensed by the  Office of Insurance Regulation (OIR), even though they do not handle pre payments and do not collect premiums.  That’s perhaps the most startling aspect of the regulations—there is no financial risk involved, and yet Florida law seems to require regulation.

Pursuant to Fla. Stat. 636.202(2), a “discounted medical plan organization” means an entity which, in exchange for fees, dues, charges, or other consideration, provides access for plan members to providers of medical services and the right to receive medical services from those providers at a discount.  A “discount medical plan” means a business arrangement or contract in which a person, in exchange for fees, dues, charges, or other consideration, provides access for plan members to providers of medical services and the right to receive medical services from those providers at a discount.  Fla. Stat. 636.202(1).  A discount medical plan does not include any product regulated under chapter 627, chapter 641, or part I of chapter 636 (governing Prepaid Limited Health Service Organization).  Fla. Stat. 636.202(1), which of course is no comfort to providers looking to garner or protect market share by discounting services or by creating a collection of discount services providers, which is typical of IPAs and “networks.”

Before doing business in Florida as a DMPO, an entity must be legally organized in a compliant way and must be licensed by the OIR as a discount medical plan organization or be licensed by the office pursuant to chapter 624 [Florida Insurance Code], part I of this chapter [Prepaid Limited Health Service Organization], or chapter 641 [HMO, Prepaid Health Clinic]. Fla. Stat. 636.204(1) emphasis added.  Each discount medical plan organization must at all times maintain a net worth of at least $150,000.

Providers looking to provide discounted fee arrangements in a simple and effective manner many be surprised to know how complex that endeavor in fact is.  Moreover, the discounts will likely (and ironically) have to be reduced in order to bear the state licensure and financial viability fees.  Go figure!

OIG Shoots Down Physician Owned Distributorships (PODS)

Physician owned distributorships (PODs) have been the source of considerable controversy for years.  A couple years ago, they caught the attention of Congress.  Now, the Office of Inspector General of the Department of Health and Human Services (“OIG”) has issued a Fraud Alert making clear their dislike of PODs and sending a clear shot across the bow of those who are in that industry.

PODs distribute various things, most commonly surgical implants and devices, that are reimbursed by insurers.  A patient needs a spinal rod, a surgical implant/device company makes it and a distributor rep distributes it.  Device/implant companies usually contract with distributorships to sell their products.  Distributorships contract with reps who are paid commissions for sales.  Surgeons who actually order the devices sometimes think “Since I’m the one doing the surgery and ordering all this stuff, why can’t I earn something from that?  I’m not ordering anything I don’t need or that I don’t think is good for the patient.”  PODs are one way for physicians to financially benefit from the sales of devices and items their patients need, but they have never been more controversial than now.Continue reading

Protection from Lawsuits : Part I

By: Wayne Patton, FHLF co-counsel

In this three part series, I’m going to analyze ways in which you can insulate your assets from the legal system.  Part I (this article) will discuss why it’s important to be “judgment proof.” Part II will delve into different types of assets that need protecting. Part III will bring everything together in terms of establishing a plan.

Protection from Lawsuits

What is the best way to discourage a plaintifs’ attorney who works on contingency fees? The most effective method is to make sure you’re overlooked by them. Not having any assets is one way to make sure that happens. In the legal community, people without any assets are called “judgment proof.” Being judgment proof is an excellent way to protect assets from lawsuits. Attorneys want to make the easy money. They don’t want to waste time pursuing defendants that will be unable to pay.

Remove the Contingency Fee, Remove the Incentive to Sue

Again, most plaintiffs’ attorneys work on contingency fees. You’ve seen those guys on T.V.: “We don’t get paid unless you collect!”

Personal injury and malpractice attorneys do not receive upfront retainers from clients. They don’t bill by the hour either. The only way these lawyers get paid is by winning or settling cases and collecting. If a plaintiff’s attorney loses a case, they get no compensation and are often “out” the expenses of litigation (e.g. court costs). The same thing happens if they win but can’t collect.

It’s obvious that personal injury and malpractice claims attorneys must evaluate several factors when deciding whether or not to take on a new case. First, they must determine the likelihood of establishing liability (i.e. winning the case). Second, they have to determine if the defendant will be able to pay.

The defendant’s ability to pay is a critical factor. If a potential defendant is judgment proof, then they are not considered an easy target.  As the saying goes, “If you’ve got nothing, you’ve got nothing to lose.”  Pursuing a course of litigation against a judgment proof defendant would be a waste time and money for most personal injury and malpractice attorneys. Even if liability can be established, there is no way to collect. If there is no way to collect, there is no way to get paid. It’s that simple.

It’s All About the Money

Plaintiff’s attorneys are in the game to make money. It would be an absolute anomaly to see a lawsuit filed against a business or individual that does not have assets and the ability to pay.

The takeaway is that being judgment proof provides an excellent form of lawsuit protection for your assets. It’s an easy way to deter litigation. How this applies to a person with significant assets will be discussed in the third part of this series.

If you’d like to learn more about asset protection planning
, please call us today. Mention this article or that you found us through the Florida Healthcare Law Firm, and we’ll waive our customary $279 analysis fee.

Conducting Employee Background Checks – Why Do It and What the Law Allows

Making the right hiring decisions for your company is critical to your business success. But getting it right isn’t easy.

We all know the negative consequences of making the wrong hire – it can lower your team’s morale, hinder productivity, and even impact customer relations. But did you know that the cost of replacing an experienced worker who doesn’t work out can cost 50 percent or more of that individual’s salary and these costs go up if the employee has specialized skills such as nursing

There are many things you can do to ensure you make informed decisions and hire quality employees and one of them is to use Background checks.

Reasons to Conduct a Background Check

A pre-employment background check can not only save you money in the long run, it can also protect your business. How? If your employees come into direct contact with your patients (for example, in a care capacity) and cause harm to a patient, your practice can be liable if that employee has a criminal record. A background check can also provide insight into an individual’s behavior, character, and integrity.

Which Types of Background Checks Can and Should You Conduct

There are several background checks that you can consider as you build a profile of a future employee. Not all of them, however, are appropriate or even possible for every company. For example, how you may employ the information gleaned during a criminal background check when making hiring decisions varies from state to state. Furthermore, any check on an individual’s credit score or military service requires consent.

Stay Within the Law by Working with a Screening Firm

Many private screening firms will offer complete background checks while helping you stay compliant with the law, although you should concentrate only on checks that pertain to the job at hand unless you need to know every little detail about your next employee and have the budget to pay the costs.

Do Your Own Detective Work

While an outsourced screening firm can help you comply with the law and run the checks your business needs, there are still some basic checks that shouldn’t be ignored that you can do yourself:

  • Verify what’s on the Resume – Call colleges and universities to verify the degree earned and ask previous employers to confirm the applicant’s work history (not a reference just a yes/no confirmation of tenure).
  • Use the Web –You’re not looking for dirt on this one, but a quick web search can actually help you round-out the profile of your future hire, their interests, achievements, and even mitigate information that a formal background check has revealed.

 

HCRC Staffing can help with a full complete background check, please call us for details at 267-251-5275

Brian Torchin

Healthcare Recruitment Counselors LLC

255 South 17th ST suite 2703

Philadelphia PA 19103

www.healthcarerc.com

[email protected]

HIPAA Omnibus Final Rules and Penalties

On Friday January 25, 2013, the Department of Health and Human Services published the Final Rule modifying the HIPAA privacy, security, enforcement, and breach notification rules under the Health Information Technology for Economic and Clinical Health Act (“HITECH”) and the Genetic Information Non-Discrimination Act (“GINA”) as well as other modifications to the HIPAA rules. (See 45 CFR Parts 160 and 164, Federal Register Volume 78 Number 17.)

The omnibus rule actually contains four final rules. The first final modifications to HIPAA which were mandated by “HITECH” include modifications intended to improve the Rules which were issued as a proposed rule on July 14, 2010 include six modifications.

The first omnibus final rule includes direct liability modifications for business associates of covered entities for compliance with certain HIPAA privacy and security rule requirements. Strengthening of limitations on the use and disclosure of protected health information, expanded individuals’ rights to receive electronic copies of their health information, modification and redistribution of entities privacy practices protocols, modification of individual authorization forms and other requirements to facilitate research and disclosure of child immunization proof to schools as well as to enable access to decedent information and lastly the enforcement rules have been modified to address violations such as non-compliance with HIPAA rules due to willful neglect.

The second omnibus final rule adopts changes to the HIPAA enforcement rule that increase the civil monetary penalties in a tiered manner.

The third omnibus final rule involves the breach notification for unsecured protected health information under the “HITECH” act. This rule replaces the prior rules “harm” threshold with a more objective standard.

Finally, the fourth rule prohibits most health plans from using or disclosing genetic information for underwriting purposes.

These final rules take effect this month on March 26, 2013. Covered business entities and business associates must comply with the applicable requirements by September 23, 2013. The penalties for violating the final rules are now as follows:

TABLE 2 – CATEGORIES OF VIOLATIONS AND RESPECTIVE PENTALTY AMOUNTS AVAILABLE

Violation Category – Section 1176 (a)(1)

Each Violation

All such violations of an identical provision in a calendar year
(A)  Did Not Know(B)   Reasonable Cause

(C)   (i)Willful Neglect-Corrected

(C) (ii) Willful Neglect-Not Corrected

 $100-$50,0001,000-50,000

10,000-50,000

50,000

 $1,500,0001,500,000

1,500,000

1,500,000

Providers need to be aware of the penalties for violating the rules as we most recently reported to you the office of civil rights will not hesitate in sanctioning providers for violating the Act in amounts in excess of $1.5 million.

Portal not "Port-All"

doorBy: David Hirshfeld

Whether as a means of satisfying the Stage 2 “meaningful use” requirements of the HITECH Act, or in an effort simply to enhance the efficiency of their practices, many of our clients have been implementing electronic medical records software that includes patient portals.  A “patient portal” is an electronic doorway between patient and practice.  Portals often allow patients to check and download their own treatment records, and to use digital messages as a means of communicating with clinicians.  Portals can be awesome tools with which to enhance your practice, but they need to be implemented thoughtfully.

A portal is often an excellent way in which to add operational efficiencies that reduce costs, increase patient satisfaction, and increase positive outcomes; BUT, if not carefully monitored, they can become inadvertent points of entry for information, the meaning of which can only be appreciated when delivered in a face-to-face office visit, where other aspects of the patient’s condition would be evident (e.g. pallor, swelling, confusion).

Portals should be limited to more benign encounters, such as: patient registration, financial clearance, medical history, appointment scheduling / confirmation, specialty referrals, notification of test results, online bill payment, non-narcotic prescription renewals, follow-up of specific conditions for which there has been a course of in-person treatment that included an agreement as to the use of the portal for follow-up.

I recommend that practitioners train their patients how and to what extent they should use the portal by presenting patients with a “Terms of Use” agreement (that they must sign); and by reminding patients of the Terms of Use if and when they use the portal for an encounter that should have been handled by an in-office visit.

A good “Terms of Use” agreement ought to convey the following information to patients before they use the portal:

  • Identify the proper subject matter to be communicated through the portal and, just as important, the types of communications that should NOT be made through the portal.
  • In addition to communication, what other functions the portal will make available to the patient (e.g. what records can patients view, can they download, can they transmit to other providers, refill prescriptions, help practice to monitor an ongoing condition, etc.).
  • The portal is highly secure, more secure than conventional email, and should be the only way that patients should convey information to the practice other than in-person or, perhaps, on the telephone.
  • Everything conveyed to the practice through the portal will become part of the patient’s medical record.
  • Not only the physician, but other clinicians and practice staff may read communications made through the portal.
  • How quickly, and in what format, will the practice respond to patient communications made through the portal.
  • Whether and on what terms the practice will allow access to records of its minor patients.
  • How modifications to the “Terms of Use” and portal functionality will be conveyed to patients.
  • A primer, as simple as possible, on how to effectively use your practice’s portal.

Portals can be awesome tools with which to enhance your practice; but they need to be implemented thoughtfully, and in conjunction with patient training.

 

ACO Challenges Are Formidable

Final-ACO-RulesHanging this nation’s cost cutting/quality enhancing hopes on Accountable Care Organizations (ACOs) is bound to be frustrating and disappointing.  The ACO model seriously lacks sufficient real world grounding and is no magic pill.  Things like resources, operational capability and alignment (of financial incentives and direction) seem to have been overlooked or undervalued.

The ACO model is based on one fundamental assumption:  an expanded role of primary care physicians can slow cost increases and ensure better coordination of care.  That assumption is flawed for two reasons:  first, there is a large and growing primary care shortage; and second, the financial incentives in healthcare have driven a system based on acute, episodic interactions, leading to enormously fragmented clinical training and care.

We not only have inadequate resources to drive change away from acute, fee for services based care, but rather we lack resources that drive wellness. As one physician with a large hospital system recently said:  “We physicians are not trained to provide healthcare.  We’re trained to intervene when things go bad.”  Asking healthcare professionals and facilities to drive a model based on outcomes and resource consumption is theoretically possible, but a remarkable leap of faith (and training) is required, given they have made their livings off of sick people for so long.  That’s not to say that changing financial incentives from acuity to wellness and outcomes won’t work.  It’s just going to require training and proof that the players can make money with the new mandates.

As far as operations go, those with the greatest access to management, capital, IT and such are also the most expensive—hospitals.  It makes sense that the core objective of healthcare reform is to “squeeze the toothpaste tube” backwards from hospital to specialist to primary care physicians, but it’s a great leap of faith to expect that hospitals will or even can control costs.  In a healthcare system where providers admittedly are rewarded for doing more with more expensive things, the sharp turn required by the new law will require more than just a new law.  With all the current hospital-driven physician acquisitions, the increasing role of hospitals on the ACO issue looks at times more like turf guarding than any real cost-saving, quality enhancing move.

At the end of the day, all players have to answer the question “Did they reduce cost and enhance quality?”  It seems convincing that moving away from the fee for service model will change behavior.  We just need to make sure (1) there are sufficient resources to implement the change, and (2) financial and clinical issues are well balanced.  Time will tell, but meanwhile the current irony is that the most expensive link in the chain is best situated to actually operationalize the ACO concept.

Alignment is critical.  Financial alignment will require the players to believe they can all thrive in the new ACO model, yet physicians are historically leery of any hospital driven system.  In fact, given that hospitals are driving the ACO bus at the moment, the biggest fear among physicians is that they will be left out.  Even among physician-driven ACOs, the tension between primary care physicians and specialists is intense.  How much of any savings will go to primaries vs. specialists is no less divisive than the issue of the hospital/physician split of the shared savings.

Even more critical is the apparent lack of consideration given to the need for patient participation.  Where is the financial incentive for healthy patient choices and the disincentive for unhealthy patient choices?  Moreover, in a culture where more is more, why would anyone want to receive care from an organization that gets more by giving less?  Given further the ability of patients to wander in and out of ACOs and yet charge their ACO with the costs of non-ACO providers (who arguably have no stake at all in reducing expenses), the forecast for patient alignment is gloomy, but their buy in is critical.  It is difficult to see where patients have any stake in this change and would even be inclined to choose to be served by an ACO.  Many noted theorists have drilled on the glaring lack of patient alignment.  Rama Juturu and recent Wall Street Journal editorialists/economist Clayton Christensen have been outspoken about the need to enlist patients in the drive from intervention to prevention.  Patients that flock to ACOs (or whatever) will only do so if they see what’s in it for them.  The only thing an ACO can sell is results, outcomes.  And that’s gonna take time to measure and to sell.

At the end of the day, the threat of ACOs (and any vehicle to control healthcare costs more effectively) isn’t that they won’t work.  It’s that cost concerns will outstrip clinical ones.  While it can be argued that the employment of physicians by traditionally adverse players (like hospitals) will likely reduce the tension between them, it is precisely that tension that has always held the threat of “money over quality” at bay.  What will happen as hospitals and other healthcare players employ more and more physicians?  One can only hope that it is not silence and that, as found in some well established systems in the Midwest and West, respect for the different and necessary roles of ensuring both quality and economic survival will balance out, regardless of the healthcare delivery model that emerges.

Hospital Physician Recruitment on the Rise Again

In an effort to stay competitive, hospital physician recruitment deals are on the rise.  These arrangements are permitted under applicable federal law (the Stark Law) and are a core tool in hospitals’ tool chest.  These arrangements generally involve the hospital “loaning” to the physician or to a practice employing the doctor the costs associated with that doctor joining.  Since the ramp up costs associated with hiring or a physician just relocating to a new community can be steep (especially as payer contracts can take many months to set in place), hospital financial assistance can be critical.  How do they work?  Simple—

1.The hospital guarantees, based in part on MGMA salary surveys and other cost data sources, that the physician will collect at least $X each month for a period of normally up to 12 months;

2.The doctor agrees to remain in the hospital’s service area for 2-3 years, during which time, the amount loaned by the hospital is forgiven.

Though it may sound too good to be true, there are drawbacks, including:

1.There are pretty severe limitations placed on noncompetes for hospital recruited physicians which can be daunting to practices hiring them;

2.Unless carefully worded and negotiated, recruited physicians may find themselves with high expectations and little delivered in terms of the marketing and other support required to create a successful practice.  Not being financially successful is no defense to the requirement of staying in the hospital community for several years to write off the loan;

3. Some hospitals offset their business risk by taking any excess earnings (the collections exceeding the guaranteed amount) for months after the 12 month guarantee period, a period when collections should be substantially higher than during the early phases of the recruitment.

Practices entering into a hospital recruitment arrangement need to be careful in their physician contracts to pass as much financial risk as possible to the recruited doctor.  A recruited doctor that decides he or she no longer likes the new community can leave the practice holding the bag for a huge amount of money which has not yet been forgiven.

Recruited physicians need to be careful about the risk passed off to them in their employment contracts if they are joining an existing practice, since the practices typically benefit by receiving enough money to cover all of the new physician’s salary, benefits and overhead.