Health Law

Published on: June 2, 2021

A Primer on Corporate Practice of Medicine

The Corporate Practice of Medicine refers to the practice of medicine by a corporate entity, rather than an individual practitioner. That is, the corporate entity employs physicians. Many states prohibit the corporate practice of medicine or otherwise regulate what types of entities may employ physicians. The rationale is often a desire that medical decision-making remain with the physician and should not be influenced by a non-physician employer. These regulations are the reasons that physician “employment” is often organized into physician groups or profession corporations.

Each state treats the corporate practice of medicine differently, but there are three general approaches. First, some states fully prohibit the corporate practice of medicine. These states do not allow physicians to be employed by non-physicians and only allow physicians to form professional corporations, professional associations, or professional limited liability companies (PLLCs) that are owned exclusively by physicians. For example, Michigan generally requires that all shareholders in a professional corporation or PLLC that engages in the practice of medicine must be licensed physicians. Some states may allow other types of licensed health professionals to own a professional entity that employs physicians.

Second, some states have no restrictions on the corporate practice of medicine or otherwise allow physicians to be employed by entities controlled by non-physicians.

Published on: May 26, 2021

CMS Delays Rule on Breakthrough Devices …Again.

by Wachler & Associates, P.C.

Recently, the Centers for Medicare & Medicaid Services (CMS) announced another delay of the implementation of the new rule for Medicare Coverage of Innovative Technology (MCIT) and discussed several concerns it had with the new rule, raising doubts that CMS would ever implement the new rule without significant changes.

The new rule, as currently written, provides for four years of national Medicare coverage of innovative medical devices starting on the date of FDA market authorization or a manufacturer chosen date within two years thereafter. The rule was initially published by CMS on January 14, 2021 and was set to take effect in March 2021. However, shortly after the transition to the Biden Administration, CMS delayed the effective date until May 2021 as part of its general freeze of new regulations pending review. On May 14, 2021, CMS announced it would further delay the implementation of the new rule until December 15, 2021.

In the May 2021 announcement of the delay, CMS expressed its concerns with the new rule. Specially, CMS expressed concern that the rule establishes a four-year commitment to Medicare coverage for all breakthrough devices that have a benefit category without a specific requirement that the device demonstrates a health benefit in the Medicare population or that the benefits outweigh harms. CMS expressed a desire for more evidence of benefits to Medicare beneficiaries prior to Medicare coverage of a device.

Published on: April 27, 2021

Are COVID-19 Liability Waivers by Patients Enforceable?

by Wachler & Associates, P.C.

In general, liability waivers can be a useful tool for businesses and individuals to avoid personal injury lawsuits and liability. Typically, liability waivers are associated with participating in a dangerous activity, such as skiing, boating, gym classes, or school activities. The individual participating in the activity signs the waiver, acknowledging that he or she accepts the risks associated with the activity and agrees to release the business or individual from liability related to these risks. However, in response to the COVID-19 pandemic, liability waivers by patients for COVID-19 related risks are becoming increasingly common. While these waivers are likely enforceable, providers should be aware of potential legal issues if patients are asked to sign COVID-19 liability waivers.

Each state evaluates the enforceability of liability waivers differently. For example, in some states, such as Louisiana, Virginia, and Montana, personal injury liability waivers are all invalid. However, in most states, including Michigan, these liability waivers are generally enforceable, subject to certain restrictions. In Michigan, parties may contract against liability for harm caused by ordinary negligence, but not gross negligence, or willful and wanton misconduct. Therefore, a party will not be protected from liability if it intentionally or recklessly engaged in the conduct that caused harm. Although not explicitly stated in laws or statutes in Michigan, other important factors for providers to consider in drafting these liability waivers include:

Clear language. The waiver should clearly state that the individual is releasing the business or provider from liability. The terms should also be easy for the parties to understand.

Published on: March 18, 2021

A Peak Inside the $1.9 Trillion COVID-19 Relief Bill

by Wachler & Associates, P.C.

On March 11, 2021, President Biden signed the $1.9 trillion American Rescue Plan, a legislative package to help fund vaccinations, provide immediate relief to families during the COVID-19 pandemic, increase COVID-19 testing and identify new and emerging strains of COVID-19. The final bill includes several sources of funding for COVID-19 response and other healthcare programs:

Development of a national vaccination program

The bill includes $20 billion for a nationwide vaccination program, in partnership with state and local authorities. The vaccination program will include the creation of community vaccination centers as well as mobile vaccination units. Under the plan, the Biden Administration will work with Congress to expand the Federal Medicaid Assistance Percentage (FMAP) to 100%, to ensure all Medicaid enrollees will be vaccinated.

Published on: March 12, 2021

COVID Testing Providers Face Hurdles for HRSA Reimbursement

by Wachler & Associates, P.C.

As part of the response to the COVID-19 pandemic, Congress provided funding for testing of patients without health insurance. To receive this reimbursement for testing, providers must attest that the patient is uninsured. However, it is not clear how providers must gather this information, exposing providers to risk of enforcement actions.

For claims for COVID-19 testing and testing-related items and services, a patient is considered uninsured if the patient does not have coverage through an individual, or employer-sponsored plan, a federal healthcare program, or the Federal Employees Health Benefits Program at the time the services were rendered. For claims for treatment for positive cases of COVID-19, a patient is considered uninsured if the patient did not have any health care coverage at the time the services were rendered. For claims for vaccine administration, this means that the patient did not have any health care coverage at the time the service was rendered.

The funding of testing for the uninsured is administered by the Health Resources & Services Administration (HRSA) under the COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine Administration for the Uninsured Program. Congress has allocated $2 billion to this program through The Families First Coronavirus Response Act (FFCRA) and the Paycheck Protection Program and Health Care Enhancement Act (PPPHCEA), as well as a portion of the Provider Relief Fund.

Published on: February 3, 2021

A Primer on Medicare Targeted Probe and Educate Reviews

by Wachler & Associates, P.C.

Targeted Probe and Educate (TPE) reviews are a popular audit tool for Medicare Administrative Contractors (MACs) to assess a healthcare provider or supplier’s compliance with Medicare billing requirements. A TPE review consists of up to three rounds of claims review, with education to the provider after each round. A provider or supplier navigating a TPE review should take care to comply with the program’s requirements and timelines and should be aware of the potential consequences of a review.

The Centers for Medicare & Medicaid Services (CMS) initially introduced TPE reviews as a pilot program in only a few jurisdictions. In 2017, CMS expanded the program nationwide and has continued to update and refine the program since its introduction.

A provider who is placed on a TPE review will first receive a Notice of Review letter. This letter will describe the reason that the provider has been placed on TPE review and will provide a brief outline of the process. This letter will not request medical records but will generally indicate that medical records requests will be forthcoming. This letter will likely warn that, if a provider/supplier fails to improve the accuracy of its claims after three rounds, the MAC will refer the provider/supplier to CMS for additional action, such as prepayment review, extrapolation of overpayments, referral to a RAC, or other disciplinary action. Providers should be aware that a TPE can lead to revocation of Medicare billing privileges and placement on the CMS Preclusion List.

Published on: February 1, 2021

CMS Codifies Definition of “Reasonable and Necessary” in Medicare Coverage Determinations

by Wachler & Associates, P.C.

On January 14, 2021, the Centers for Medicare & Medicaid Services (CMS) issued a final rule codifying a definition for “reasonable and necessary” coverage under Medicare Part A and Part B. CMS hopes codifying the meaning of “reasonable and necessary” will provide clarity and consistency to the current process of coverage determination for items and services under Part A and Part B. The final rule takes effect on March 15, 2021.

The definition of “reasonable and necessary” has three components: an item or service is required to be 1) safe and effective, 2) not experimental or investigational, and 3) appropriate for Medicare patients. Whether an item or service is appropriate for Medicare patients will be based on the duration and frequency deemed appropriate for the item or service and whether the item or service:

Is provided in accordance with accepted standards of medical practice

Published on: December 16, 2020

CMS Expands Telehealth Services and Flexibility for Non-Physician Providers

by Wachler & Associates, P.C.

On Tuesday, December 1, 2020, the Centers for Medicare & Medicaid Services (“CMS”) released the 2021 Physician Fee Schedule (PFS) final rule, confirming an expansion to telehealth coverage and the scope of non-physician providers. The use of telehealth services increased substantially during the COVID-19 public health emergency. Under the final rule, certain telehealth services will be covered when the COVID-19 public health emergency ends. In addition, the rule reduces administrative barriers to non-physician practitioners, allowing them to focus on providing quality healthcare and less on paperwork.

Prior to the COVID-19 pandemic, CMS estimates that 15,000 fee-for-service Medicare beneficiaries received a Medicare telemedicine visit each week. To address the increased need for healthcare services during the COVID-19 pandemic, CMS added 144 Medicare covered telehealth services. CMS estimates that between March and October 2020, 24.5 million beneficiaries and enrollees received a Medicare telemedicine service. Under the final rule, CMS added more than 60 telehealth services that will permanently be covered under Medicare. Although Medicare does not currently have legal authority to cover telehealth services for beneficiaries who are not located in rural areas, or permit telehealth services to be received in the home, these now permanently covered telehealth services will allow beneficiaries in rural areas, to continue to receive high quality health care and have more convenient access to care.

The final rule also seeks to reduce administrative obstacles for non-physician providers. This will increase efficiency, quality of care, and overall improve the healthcare experience for beneficiaries. The PFS final rule will make certain non-physician provider flexibilities that were established during the COVID-19 pandemic permanent so they may continue to provide care without additional Medicare restrictions. CMS finalized three main changes for non-physician practitioners:

Published on: December 14, 2020

HHS Proposes HIPAA Modifications to Better Serve Patients

by Wachler & Associates, P.C.

On December 10, 2020, the Office of Civil Rights (“OCR”) at the Department of Health and Human Services (“HHS”) announced a proposal to modify the Health Insurance Portability and Accountability Act (“HIPAA”) Privacy Rule. The overarching goal of the proposed rule is to get patients more engaged in their own healthcare, provide easier access to coordinated care, and reduce the burdensome regulations that have an impact on quality of care. HHS has recently rolled out a Regulatory Sprint to Coordinated Care, and the proposed modifications to the HIPAA rule support this measure.

The Regulatory Sprint facilitated a nationwide transformation to value-based care. The public had determined that there were far too many regulatory burdens to have sufficient coordinated care, which made it difficult for patients to have high quality value-based care. In response to this feedback, CMS proposed changes to the Anti-Kickback Statute, Civil Monetary Penalty rules, and the Physician Self-Referral Regulations. As such, the HIPAA rule was the next regulatory burden that needed to be addressed to further the Regulatory Sprint.

For a complete list of the proposed changes to the HIPAA rule, please see the HHS notice. Here are some highlights:

Published on: December 11, 2020

FDA Asserts Authority Over At-Home Collection Kits for COVID-19 LDTs

by Wachler & Associates, P.C.

Despite a determination by the Department of Health and Human Services (“HHS”) that laboratory developed tests (“LDTs”) do not require premarket approval, the Food and Drug Administration (“FDA”) has asserted that the at-home collection kit portion of a COVID-19 LDT does require FDA pre-market approval.

Testing by clinical laboratories is regulated by the FDA and by the Clinical Laboratory Improvement Amendments (“CLIA”), as administered by the Centers for Medicare & Medicaid Services (“CMS”). The FDA regulates medical devices, including in vitro diagnostic products (“IVDs”). The FDA considers LDTs to be IVDs that are intended for clinical use and are designed, manufactured, and used within a single laboratory. CLIA, on the other hand, regulates the laboratory itself and classifies LDTs as “high complexity tests,” with corresponding standards imposed on the laboratory. Importantly, regarding the LDT itself, CLIA requires only analytical validation, which can occur after testing has already begun. LDTs may also be subject to more stringent state and private sector oversight.

Historically, the FDA had exercised enforcement discretion and not regulated LTDs, but this began to change in recent decades. However, in August 2020, HHS directed that, absent rule and commenting and at least during the COVID-19 public health emergency, the FDA would not require premarket review and approval of LDTs. This allowed clinical laboratories to develop and begin using LDTs to test for COVID-19 without delaying for an FDA Emergency Use Authorization (“EUA”) or other approval. Some of these LDTs included at-home collection kits wherein the patient collected the sample at home, sometimes under the telemedicine supervision of a health care professional, and shipped it to the laboratory for testing.