November - December 2014 Health Law Updates

 The Section website has been updated with articles on significant developments in the health law arena that may be of interest to you in your practice. These summaries are presented for general information only as a courtesy to Section members and do not constitute legal advice from The Florida Bar or its Health Law Section. On behalf of the Section, I extend my deepest appreciation to the following volunteers who have generously donated their time to prepare these summaries for your review:

Rodney Johnson, Esq.

Michael L. Smith, Esq.

Maria T. Santi, Law Student

Thank you.

Malinda R. Lugo, Esq.

You can download a copy of this month's update using the links below or read the updates in this article.

November December 2014 Health Law Updates (PDF)

November December 2014 Health Law Updates (DOCX)


Facility And Professional Licensure

1CNA Granted License Despite Incorrect Answer On Application

The Board of Nursing failed to prove that an applicant for a license as a Certified Nursing Assistant ("CNA") attempted to obtain that license by misrepresentation or deceit at a formal hearing before the Division of Administrative Hearings. Miller v. Board of Nursing, DOAH Case No. 14-0877 (June 30, 2014). The applicant submitted her application for licensure as a CNA in Florida through Prometric as required by the Board of Nursing. Page 2 of the application included the following question:

Have you EVER been convicted of, or entered a plea of guilty, nolo contendere, or no contest to, a crime in any jurisdiction other than a minor traffic offense? You must include all misdemeanors, felonies, and juvenile offenses, even if adjudication was withheld. Driving under the influence (DUI) or driving while impaired (DWI) is not a minor traffic offense for purposes of this question.

The application submitted through Prometric included a no response to the criminal history question. The applicant argued before the Administrative Law Judge that she had answered all the questions correctly on the application she completed. The applicant stated that she answered yes to the criminal history question. The applicant also argued before the Administrative Law Judge that the handwriting on page 2 of the application actually submitted to the Board through Prometric was considerably different from the handwriting on pages 1 and 3 of the application. The Administrative Law Judge found that the Board of Nursing failed to prove the applicant attempted to obtain the CNA license through misrepresentation or deceit. In a Final Order dated September 5, 2014, the Board of Nursing adopted the Recommended Order of the Administrative Law Judge and granted a CNA license to the applicant.

Reported by Michael L. Smith, Esq. 

New Telemedicine Rule

On October 27, 2014, the Florida Board of Medicine (“the Board”) published an update regarding telemedicine standards. The update gives notice that Rule 64B8-9.014 (Standards for Telemedicine Prescribing Practice) of the Florida Administrative Code (“F.A.C.”) was repealed effective October 26, 2014. As of this date, the new rule applicable to telemedicine is 64B8-9.0141, F.A.C., Standards for Telemedicine Practice.

The rule defines telemedicine, the standard of care to be used and relevant rules and regulations that apply when the practice of medicine by a licensed physician is done via electronic communications. The final rule can be accessed on this link: https://www.flrules.org/gateway/ruleNo.asp?id=64B8-9.0141.

Reported by Maria T. Santi, Law Student

Public Health

Menu of Doctor Shopping Laws. [The Public Health Law Program (PHLP) has published an inventory of state legal strategies to help assess doctor shopping laws. Doctor shopping is when a patient visits multiple healthcare practitioners to obtain controlled substances without the prescribers’ knowledge of the other prescriptions.

Legal Mechanisms Supporting Accountable Care Principles. Published in the American Journal for Public Health 2014;104(11):2048–51, this article provides the legal context for accountable care, the healthcare delivery mechanism through which providers, facilities, and public health professionals coordinate activities, avoid inefficiencies, and improve public health outcomes.

CDC National Health Report. CDC published a special MMWR supplement that uses data from 19 surveillance sources to provide recent trends in the nation’s health. The report reviews population health in the United States and provides an assessment of recent progress in addressing high-priority health issues. It identifies important public health successes and challenges to help guide national policy and programmatic efforts to improve health and quality of life.

Reported by Rodney Johnson, Esq. 

Transactions

Florida Statutes Chapter 608, the Limited Liability Company Act, was substantially revised through the enactment of Chapter 605, the Florida Revised Limited Liability Company Act (the “New Act”). All LLCs formed or registered to do business after January 1, 2014, must comply with the New Act. LLCs in existence prior to that date have until January 1, 2015, to comply with the New Act. The New Act has no impact on professional limited liability companies formed pursuant to Chapter 621. Thorough analysis of the New Act can be found in a series of four articles in the Florida Bar Journal appearing in September, 2013, through March 2014. A White Paper was also prepared by the Florida Revised LLC Act Drafting Committee of the Executive Committee of the Florida Bar.

There are some notable changes in definitions from the previous Act. “Managing member” has been deleted in an attempt to clarify the distinction between manager- managed and member-managed LLCs. Unless specifically provided to the contrary, LLCs will be deemed to be member-managed, meaning all members retain statutory apparent authority to bind the LLC. The definition of “member” has been revised in that it is no longer required that a member have any economic interest in the company in order to have voting or management rights. The definition of “operating agreement” now permits that it be maintained in any medium that can be “retrieved in a perceivable form”. That opens the possibility to establish or amend the terms of an operating agreement via email or any other number of forms of communication. As was pointed out in the Florida Bar article, that possibility speaks to the wisdom of having a strongly crafted integration clause limiting the manner in which the operating agreement may be adopted or amended.

Section 605.0105 establishes six essential functions of the operating agreement, including a list of 17 non-waivable statutory provisions. Included among them are the inability to exonerate or indemnify a member from liability for conduct involving bad faith, willful or intentional misconduct, or a knowing violation of the law. Section 605.0302 permits LLCs to file Statements of Authority with the Department of State to provide record notice of a person’s ability or limitations on a person’s ability to bind the LLC. The New Act also provides at least 10 new ways that a member can be disassociated from the LLC, including the ability of a member to withdraw at any time.

The changes in the LLC statute are significant. Anyone representing existing LLCs or involved in the formation of New LLCs would be well served by a careful review of the changes.

Reported by Charles Koval, Esq. 

July - September 2014 Health Law Updates

Dear Health Law Section Members:

The Section website has been updated with articles on significant developments in the health law arena that may be of interest to you in your practice. These summaries are presented for general information only as a courtesy to Section members and do not constitute legal advice from The Florida Bar or its Health Law Section. On behalf of the Section, I extend my deepest appreciation to the following volunteers who have generously donated their time to prepare these summaries for your review:

  • Martin Dix, Esq.

  • Rodney Johnson, Esq.

  • Adam Maingot, Esq.

  • Sheryl D. Rosen, Esq.

Thank you.

Malinda R. Lugo, Esq.

You can download a copy of this month's update using the links below.

pdf July August September 2014 Updates (PDF) (235 KB)

document July August September 2014 Updates (DOCX) (11 KB)

 


Life Sciences

Board of Pharmacy-Compounding Pharmacies

Effective June 22, 2014, Board of Pharmacy (Board), Rule 64B16-27.700(3)(g), Florida Administrative Code, requires all pharmacies that engage in office use compounding of sterile products intended for human use be in full compliance with 21 United States Code § 353b, which includes being registered as an outsourcing facility.

Reported by Martin R. Dix, Esq.

DEA-Tramadol

On July 2, 2014, the DEA published in the Federal Register the final rule placing tramadol into schedule IV of the Controlled Substances Act. This rule will become effective on August 18, 2014. All regulatory requirements applicable to schedule IV controlled substances will apply to tramadol beginning August 18, 2014.

Reported by Martin R. Dix, Esq.

FDA Issues New Medical Device Substantial Equivalence Guidance

On July 15, 2014, the U.S. Food and Drug Administration (FDA) issued draft guidance that outlines when a medical device is substantially equivalent to another device and can receive abbreviated FDA review.  According to the U.S. Food, Drug and Cosmetics Act, a new medical device is substantially equivalent to an existing "predicate" device when the new device:

  • Has the same intended use as the predicate device; and

  • Has the same technological characteristics as the predicate, or has different technological characteristics but is as safe and effective and does not raise different questions of safety and effectiveness than the predicate.

The new guidance focuses on the last step of the analysis – how FDA determines a device is as safe and effective as a predicate. The safety and effectiveness need not be identical. A new device can have increased safety and decreased effectiveness – or decreased safety and increased effectiveness – and still be considered substantially equivalent. When making these assessments, the FDA will weigh the benefits and risks of the new device versus the predicate. When considering benefits, the FDA will weigh:

  • Type of benefit;

  • Magnitude of the benefit;

  • Probability of the patient experiencing the benefit; and

  • Duration of the benefit.

When assessing risks, the FDA will consider:

  • Severity, types, number, and rates of harmful events associated with use of the device;
  • Probability of a harmful event;
  • Probability of a patient experiencing one or more harmful events;
  • Duration of harmful events; and
  • Risk from false-positive or false-negative results (for diagnostic devices).

The draft guidance may be accessed at:

http://www.fda.gov/medicaldevices/deviceregulationandguidance/guidancedocuments/ucm404770.htm

Posted by Sheryl D. Rosen; edited by Adam R. Maingot

Compliance

OIG Advisory Opinion 14-05-Pharmacies

The U.S. Department of Health and Human Services, Office of Inspector General (“OIG”) issued an Advisory Opinion 14-05 on July 28, 2014, which addressed a pharmaceutical manufacturer’s discounts to patients for a brand name medication dispensed by a mail order pharmacy. The program as described in the request would permit eligible patients to purchase the manufacturer’s brand-name drug for a discounted cash price from a mail order pharmacy that contracted with the manufacturer where neither the pharmacy nor the patient sought reimbursement from any third-party payor, government, or private payor. The OIG ultimately concluded that it would not impose sanctions under the civil monetary penalties statute or the Federal Anti-Kickback Statute against either the manufacturer or the pharmacy in connection with the program.

Reported by Martin R. Dix, Esq.

OIG Advisory Opinion 14-06-Specialty Pharmacies

The U.S. Department of Health & Human Services, Office of Inspector General (OIG) recently refused to bless a specialty pharmacy's request to pay a per-prescription fee to retail pharmacies for "support services" to be provided in connection with prescriptions transferred to the specialty pharmacy (OIG Advisory Opinion 14-06). The opinion had enumerated eight services to be provided by the transferring pharmacy. The OIG found that the per prescription fee could influence the retail pharmacy's decision to transfer prescriptions, that the proposed arrangement implicated the Anti-Kickback Statute ("AKS") and posed more than a minimal risk of fraud and abuse.

The OIG stated that the AKS was implicated because the specialty pharmacy would pay a per-prescription fee for support services each time the retail pharmacy referred a specialty drug prescription. In most pharmacy-to-pharmacy prescription transfers, there is no accompanying payment. The OIG noted that the specialty pharmacy paid the retail pharmacy for support services only when a prescription was transferred. Thus, the OIG found that such per-prescription fee is "directly linked" to business generated by the retail pharmacy, and could materially influence the retail pharmacy's referral decisions (whether to transfer the prescription). While the OIG recognized that the retail pharmacy's support services may benefit care coordination, it noted that the AKS is implicated if "one purpose" of the remuneration is to generate referrals (the "one purpose" test). Though the specialty pharmacy argued that it was paying fair market value for the services, the OIG found that there was a significant risk that the per-prescription payments were compensation to the retail pharmacy for generating referrals, rather than solely compensation for services provided by the retail pharmacies.

Most states allow pharmacies that are either commonly owned or have a contractual arrangement to engage in central fill arrangements, whereby an originating pharmacy receives the prescription, the prescription is shared with a dispensing pharmacy which dispenses the medication either directly to the patient or back to the originating pharmacy (similar to the arrangement described in the opinion above). Generally in a central fill arrangement, there is a sharing of pharmacy duties and responsibilities and some sort of sharing of the reimbursement for the medication. Since many state pharmacy boards allow central fill arrangements, these were usually not viewed as an improper payment for a referral. The above opinion casts doubt on these arrangements where there is a split of the reimbursement and when the drugs are reimbursed by a federal health care program (The AKS only applies when payment is made under a federal health care program). At a minimum, pharmacies engaging in such arrangements should make sure that the arrangements are commercially reasonable and justified such that they would not be viewed as a mere referral arrangement. And, while excluding or "carving out" federal programs does not always remove the Federal AKS risk, in this instance excluding federally reimbursed prescriptions completely may help insulate the central fill arrangements, at least from federal law.

Absent from the OIG's discussion was that many state prescription transfer laws and regulations only apply to refills and not to the transfer of the original prescription.

Reported by Martin R. Dix, Esq.

FACILITY AND PROFESSIONAL LICENSURE

Florida Department of Health –Medical Marijuana – Rule 64-4, FAC

The Department is proceeding with proposed rules implementing the "Charlotte's Web" bill allowing 5 dispensing organizations in the state to dispense non-euphoric medical marijuana. The rules follow the convoluted statute's requirements allowing the low THC medical marijuana. Among the requirements are:

  • Only 5 suppliers restricted to 5 regions in the state;
  • If more than one qualified supplier per region applies, there will be a "lottery";
  • Certified nurseries must own at least 25% of the business;
  • Medical marijuana only dispensed to FL residents;
  • $150,000 application fee and $5 million performance bond;
  • detailed application, licensing and inspection requirements; and
  • Successful licensees must start cultivation within 75 days of the award or must start distribution within 150 days.

Reported by Martin R. Dix, Esq.

Board of Pharmacy-Pharmacy Technician to Pharmacist Ratio

The Board of Pharmacy is proceeding with rule development to implement registered pharmacy technician to pharmacist ratios in various practice settings. The proposed ratios would be 3:1 in sterile compounding; 4:1 in a community pharmacy; and 6:1 in a data processing/mail order/central fill type setting. In contemplation of this possible rule change, the Board also proposed a rule on delegation and supervision of registered pharmacy technicians (64B16-27.4001) and revisited Rule 64B16-27.420 addressing delegable and non-delegable tasks.

Reported by Martin R. Dix, Esq.

Public Health

2014 APHA Meeting

The American Public Health Association’s (APHA) 142nd Annual Meeting, themed “Healthography: How Where You Live Affects Your Health and Well-Being,” will take place in New Orleans, November 15–19, 2014, at the Ernest N. Morial Convention Center. The advanced registration deadline is October 3, 2014. Registration fees increase after October 3.  

Reported by Rodney Johnson, Esq

 

May - June 2014 Health Law Updates

Dear Health Law Section Members:

The Section website has been updated with articles on significant developments in the health law arena that may be of interest to you in your practice. These summaries are presented for general information only as a courtesy to Section members and do not constitute legal advice from The Florida Bar or its Health Law Section. On behalf of the Section, I extend my deepest appreciation to the following volunteers who have generously donated their time to prepare these summaries for your review:

  • Joy Easterwood

  • Maria D. Garcia

  • Rodney Johnson

  • Michael Leeth

  • Timothy M. Moore

  • Michael Smith

  • Monica Rodriguez

Thank you.

Malinda R. Lugo, Esq.

You can download a copy of this month's update using the links below.

default May - June 2014 Health Law Updates (DOCX)

pdf May - June 2014 Health Law Updates (PDF)

Life Sciences

FDA Assessing Efficacy of Rules Regulating Drug Pricing Claims

On May 7, the Food and Drug Administration (FDA) announced that it will study “the impact of price comparison information in direct-to-consumer (DTC) and health care [sic] professional advertising for prescription drugs.” 79 Fed. Reg. 26,255, 26,255 (May 7, 2014).

Currently, prescription drug advertisers may use truthful, non-misleading information about the price of a drug and its competitor. That comparison should include context conveying that the drugs may not have comparable efficacy and safety and that the acquisition costs presented may not show the actual prices paid by consumers, pharmacies, or third-party payers. The FDA is concerned that “adding contextual information about efficacy or safety is not sufficient to correct the impression that the products are interchangeable and that price is the main factor to consider.” 79 Fed. Reg. at 26,256.

To investigate how price comparison and contextual information impact consumers and healthcare providers, the FDA will analyze reactions to one of three versions of an advertisement. Participants will be consumers who self-identified as having a diabetes diagnosis and physicians who are general practitioners or specialists; the FDA will exclude those who work in healthcare or marketing. One version of the advertisement will show price information about only the advertised product. The second version will show a price comparison. The third will show a price comparison and contextual information that the compared drugs may not have comparable efficacy and safety and the acquisition costs may not be the actual prices paid. Physicians will see an advertisement targeting healthcare providers; consumers will see a DTC advertisement. After watching an advertisement, participants will answer a questionnaire concerning the advertisement.

Reported by Timothy M. Moore, Esq.

Compliance

OIG Proposed Rules Expand Exclusions, Waiver Availability, Subpoena Power, and Limitations Period

In a May 9 notice of proposed rulemaking, the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) announced its intention to substantially revise regulations concerning exclusion from federal healthcare programs, waiver of exclusions, investigation of exclusion cases, and time limitations for seeking exclusion. 79 Fed. Reg. 26,810 (May 9, 2014). Many of the revisions are codifications or implementations of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 and the Patience Protection and Affordable Care Act of 2010.

Here are some of OIG’s proposed revisions:

New Exclusions

  • OIG will create a new permissive exclusion for those convicted of obstructing an audit related to (1) any offense described in the mandatory or the permissive exclusion provisions (42 C.F.R. §§ 1001.101 and 1001.201); or (2) the use of federal healthcare program funds whether received directly or indirectly.

  • OIG will create a new permissive exclusion for those that knowingly make or cause to be made any false statement, omission, or misrepresentation of a material fact in any application, agreement, bid, or contract to participate or enroll as a provider of services or supplier under a federal healthcare program.

New Waiver and Reinstatement Opportunities

  • OIG, under specific circumstances, will allow early reinstatement for those that OIG excluded because they lost their license due to professional competence, professional performance, or financial integrity. OIG seeks input on methods for providing early reinstatement other than the method OIG proposed in its notice.

  • OIG will expand waiver availability by allowing (1) administrators of federal healthcare programs to request a waiver; (2) requests to be made on behalf of those excluded under sections 1128(a)(1), (a)(3), or (a)(4) of the Social Security Act; or (3) a waiver if the requesting administrator determines that the exclusion would impose a hardship on any beneficiaries.

Revision of Aggravating and Mitigating Factors

  • OIG will increase the financial loss aggravating factor to a threshold of $15,000 or more.

  • OIG will increase the mitigating factor relating to misdemeanor offenses and loss to government programs to a threshold of $5,000 or less. OIG will do the same for the mitigating factor relating to other offenses and loss to government programs.

New Subpoena Authority

  • OIG may issue testimonial subpoenas during investigations of potential cases involving the exclusion statute.

Statute of Limitations

  • OIG will codify that exclusions are not subject to a limitations period.

Comments are due by July 8, 2014.

Reported by Timothy M. Moore, Esq.

Changes to Conditions of Participation for Hospitals related to Medical Staff

CMS published a final rule on May 12, 2014 updating the hospital conditions of participation related to the medical staff and the governing body (“Final Rule”). Specifically, the Final Rule addresses (1) the composition of the medical staff and governing body, (2) required consultation between the governing body and medical staff, and (3) requirements for a unified and integrated medical staff for multi-hospital systems. For more information please see: http://www.regulations.gov/#!documentDetail;D=CMS-2013-0019-0393

Reported by Monica Rodriguez, Esq.

OIG Proposes Substantial Reorganization, Clarification, and Expansion of CMP Rules

On May 12, the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) proposed significant revisions to its civil monetary penalty (CMP) rules. 79 Fed. Reg. 27,080 (May 12, 2014). OIG intends to overhaul the CMP rules’ organization, clarify its interpretation or application of various rules, and implement authority it received in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the Patience Protection and Affordable Care Act of 2010, and other legislation.

Here are some of the proposed revisions:

New Bases for CMPs, Assessments, and Exclusions

  • OIG may impose CMPs, assessments, and exclusion for (1) failing to grant OIG timely access to records; (2) ordering or prescribing while excluded; (3) making false statements, omissions, or misrepresentations in an enrollment application; (4) failing to report and return an overpayment; or (5) making or using a false record or statement that is material to a false or fraudulent claim.

  • OIG may impose CMPs or assessments against a Medicare Advantage or Part D contracting organization when its employees or agents, or any provider or supplier who contracts with it, engages in the conduct described in section 1857(g) of the Social Security Act.

Revisions to Method for Determining Penalty and Assessment Amounts and Exclusion Length

  • OIG intends to rely upon a non-exhaustive list of five primary factors to determine the amount of a CMP or an assessment and the length of exclusion. Those factors are (1) the nature and circumstances of the violation, (2) the degree of culpability of the person, (3) the history of prior offenses, (4) other wrongful conduct, and (5) other matters as justice may require. OIG will apply those factors to all determinations unless the subpart pertaining to the violation gives other factors.

  • OIG proposes an alternate methodology for calculating CMPs and assessments for those who (1) arrange or contract with an individual or entity for the provision of items or services for which payment may be made under a federal healthcare program and (2) knew or should have known that individual or entity was excluded from participating in federal healthcare programs.

  • For separately billable services and items, OIG may impose a CMP for each item or service.

  • For non-separately-billable services and items, OIG may impose a CMP for each day the CMP respondent employs, contracts, or arranges with the excluded person for a non-separately-billable service or item.

  • OIG will increase the claims-mitigating circumstance to $5,000.

  • OIG will make the claims-aggravating circumstance $15,000.

  • OIG will consider a new aggravating circumstance: whether the respondent’s level of intent to commit the violation was greater than the minimum intent required to establish liability.

  • OIG will consider corrective action to be a mitigating circumstance only if the respondent used the Self-Disclosure Protocol to disclose the violation to OIG and cooperated fully with OIG.

In this notice of rulemaking, OIG noted its intention to make additional rules concerning “[e]xclusion authorities (42 CFR parts 1000, 1001, 1002, 1006, 1007); inflation adjustment for CMPs (42 CFR part 1003); and safe harbors under the anti-kickback statute, a revised definition of remuneration in part 1003, and a codified gainsharing CMP (42 CFR 1001.952, 42 CFR part 1003).” 79 Fed. Reg. at 27,081.

Reported by Timothy M. Moore, Esq.

Changes to Conditions of Participation for Hospitals related to Medical Staff

CMS published a final rule on May 12, 2014 updating the hospital conditions of participation related to the medical staff and the governing body (“Final Rule”). Specifically, the Final Rule addresses (1) the composition of the medical staff and governing body, (2) required consultation between the governing body and medical staff, and (3) requirements for a unified and integrated medical staff for multi-hospital systems. For more information please see: http://www.regulations.gov/#!documentDetail;D=CMS-2013-0019-0393

Reported by Monica Rodriguez, Esq.

OIG Proposes Substantial Reorganization, Clarification, and Expansion of CMP Rules

On May 12, the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) proposed significant revisions to its civil monetary penalty (CMP) rules. 79 Fed. Reg. 27,080 (May 12, 2014). OIG intends to overhaul the CMP rules’ organization, clarify its interpretation or application of various rules, and implement authority it received in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the Patience Protection and Affordable Care Act of 2010, and other legislation.

Here are some of the proposed revisions:

New Bases for CMPs, Assessments, and Exclusions

  • OIG may impose CMPs, assessments, and exclusion for (1) failing to grant OIG timely access to records; (2) ordering or prescribing while excluded; (3) making false statements, omissions, or misrepresentations in an enrollment application; (4) failing to report and return an overpayment; or (5) making or using a false record or statement that is material to a false or fraudulent claim.

  • OIG may impose CMPs or assessments against a Medicare Advantage or Part D contracting organization when its employees or agents, or any provider or supplier who contracts with it, engages in the conduct described in section 1857(g) of the Social Security Act.

Revisions to Method for Determining Penalty and Assessment Amounts and Exclusion Length

  • OIG intends to rely upon a non-exhaustive list of five primary factors to determine the amount of a CMP or an assessment and the length of exclusion. Those factors are (1) the nature and circumstances of the violation, (2) the degree of culpability of the person, (3) the history of prior offenses, (4) other wrongful conduct, and (5) other matters as justice may require. OIG will apply those factors to all determinations unless the subpart pertaining to the violation gives other factors.

  • OIG proposes an alternate methodology for calculating CMPs and assessments for those who (1) arrange or contract with an individual or entity for the provision of items or services for which payment may be made under a federal healthcare program and (2) knew or should have known that individual or entity was excluded from participating in federal healthcare programs.

  • For separately billable services and items, OIG may impose a CMP for each item or service.

  • For non-separately-billable services and items, OIG may impose a CMP for each day the CMP respondent employs, contracts, or arranges with the excluded person for a non-separately-billable service or item.

  • OIG will increase the claims-mitigating circumstance to $5,000.

  • OIG will make the claims-aggravating circumstance $15,000.

  • OIG will consider a new aggravating circumstance: whether the respondent’s level of intent to commit the violation was greater than the minimum intent required to establish liability.

  • OIG will consider corrective action to be a mitigating circumstance only if the respondent used the Self-Disclosure Protocol to disclose the violation to OIG and cooperated fully with OIG.

In this notice of rulemaking, OIG noted its intention to make additional rules concerning “[e]xclusion authorities (42 CFR parts 1000, 1001, 1002, 1006, 1007); inflation adjustment for CMPs (42 CFR part 1003); and safe harbors under the anti-kickback statute, a revised definition of remuneration in part 1003, and a codified gainsharing CMP (42 CFR 1001.952, 42 CFR part 1003).” 79 Fed. Reg. at 27,081.

Reported by Timothy M. Moore, Esq.

FACILITY AND PROFESSIONAL LICENSURE

New Telemedicine Regulations Issued by the Florida Board of Medicine

The Florida Board of Medicine issued its “Standards for Telemedicine Practice” as two identical rules for osteopaths (Final Rule 64B15-14.0081) and allopaths (Final Rule 64B8-9.0141). The Board stated that: (i) the standard of care shall be the same whether in person or by telemedicine; (ii) Florida licensed physicians and physician assistants are responsible for the quality of the equipment and technology and its ability to enable them to meet or exceed the prevailing standard of care; (iii) controlled substances shall not be prescribed through telemedicine; (iv) adequate patient confidentiality and recordkeeping must be maintained; and (v) the physician-patient relationship may be established through telemedicine.

Notably, in defining Telemedicine, the Board explicitly excluded “the provision of health care services only through an audio only telephone, email messages, text messages, facsimile transmission, U.S. Mail or other parcel service, or any combination thereof” – signaling to the industry that these early iterations of telemedicine (most commonly, the telephone) isn’t adequate to meet these new standards. Whereas the ability to view the patient by webcam or smartphone would qualify as telemedicine, a mere phone conservation would not.

Further, on May 15 the Board signaled that it proposes to develop a rule amendment to potentially allow controlled substances to be prescribed in the limited circumstance of a hospitalized patient.

Reported by Matthew Leeth, Esq.

The Florida Agency for Health Care Administration (AHCA) Releases List of Recent Licensure Actions Against Medical Providers

AHCA recently released information regarding licensure actions and final orders against medical providers throughout the State of Florida for the month of May 2014. AHCA issued a significant number of final orders for failure to meet licensure requirements. The decisions reached in the final orders are varied, including denials of license renewal applications, revocations and surrendering of existing licenses, and a termination from the Medicaid Program. The sanctioned medical providers include seven entities in Miami-Dade County, two in Broward County and two in Orange County.

AHCA also issued an emergency suspension for The Four Seasons ALF Community, Inc., an assisted living facility (ALF) in Charlotte County, due to survey inspections, which found issues that caused a serious threat to residents.

A list of the specific, sanctioned providers is available at http://ahca.myflorida.com/Executive/Communications/Press_Releases/pdf/MayMonthlyFacilityActions.pdf. You may also find additional information regarding the final orders at http://apps.ahca.myflorida.com/dm_web/(S(jtrnl5fukcfknvhds5vtad1s))/default.aspx

Reported by Maria D. Garcia, Esq.

Convictions Directly Related to Licensure - Part I

The Board of Clinical Social Work, Marriage and Family Therapy and Mental Health Counseling will soon consider a Recommended Order from the Division of Administrative Hearings that recommends the Board issue a restricted license to a registered mental health counselor intern. Marion J. Gwizdala v. Department of Health, Board of Clinical Social Work, Marriage and Family Therapy and Mental Health Counseling, DOAH Case No. 13-4668 (April 29, 2014). Previously, the Board denied the application of a candidate seeking registration as a mental health counseling interne based upon the candidate's prior convictions for child molestation in 1976 and 1985. The Administrative Law Judge recommended the Board issue a restricted license to the candidate that would allow the candidate to only treat adult patients. The Recommended Order provides an analysis of what constitutes a conviction related to the practice of a profession. The ALJ explained that a conviction can directly relate to the practice of a profession even when the crime was not committed while practicing the profession, or when the conviction does not directly relate to the ability to practice the profession.

Despite the candidate's convictions, the ALJ recommended that the Board issue a restricted license to the candidate based in part upon the length of time since the candidate's convictions, the candidate's efforts at rehabilitation, the effect of the denial on the candidate's livelihood, and the candidate's involvement in community service. The Department of Health filed exceptions to the Recommended Order.

Submitted by Michael L. Smith, Esq.

Convictions Directly Related to Licensure Part II

The Board of Pharmacy will be considering a Recommended Order from the Division of Administrative Hearings that recommends the Board revoke the license of a pharmacist. Department of Health Board of Pharmacy v. Christopher Stephen Switlyk, R.Ph., DOAH Case No. 14-0883PL (June 23, 2014). The pharmacist pleaded guilty to one count of conspiring to violate 21 U.S.C. Sections 841(a)(1), 843(a)(2), 843(a)(3), and 856(a)(1). The pharmacist was charged with allowing his pharmacy to fill and dispense more than one million doses of Schedule II controlled substances based upon illegal prescriptions. The pharmacist claims that he should not have pled guilty and is seeking to have the conviction vacated or his sentence reduced. Not surprisingly, the Administrative Law Judge found the convictions were related to the pharmacist's practice of his profession.

Submitted by Michael L. Smith, Esq.

Altered Medical Records Creates Inference That Practitioner Conscious Of Guilt

A physician was found to have altered a patient's medical record with exculpatory evidence after the patient died, and it appeared a medical malpractice suit would be filed. Department of Health Board of Medicine v. Peter V. Choy, M.D., DOAH Case No. 13-4280 PL (April 15, 2014). The Recommended Order details numerous alterations the physician made in the medical record after questions were raised regarding the physician's care of the patient. The Administrative Law Judge found the physician's alteration of the record allowed the ALJ to infer that the physician was hiding something and conscious of his guilt. The ALJ found that the physician made deceptive, untrue and fraudulent representations in the practice of medicine by deliberately altering the patient record. The ALJ recommended that the Board revoke the license of the physician, which was within the penalty guidelines of the Board for the violations charged.

Submitted by Michael L. Smith, Esq.

Health Information Technology & Privacy

Legislative Update: The Florida Information Protection Act

On June 20, 2014, Governor Scott signed into law a complete overhaul of the Florida Information Protection Act (“FIPA”). Some of the highlights include:

  • An expansion of the definition of “Personal Information” to include an individual’s first name or first initial and last name in combination with an individual’s health insurance policy number or subscriber identification number and any unique identifier used by a health insurer to identify the individual.

  • The definition of “Personal Information” also includes a user name or e-mail address, in combination with a password or security question and answer that would permit access to an online account.

  • The notice requirements for a breach of security expand beyond notice to impacted individuals, and now require notice directly to Florida’s Department of Legal Affairs (DLA) for any breach affecting 500 or more individuals in the State of Florida, as expeditiously as possible, but no later than thirty (30) days after the determination of a breach or reason to believe a breach has occurred. Additionally, FIPA goes further to provide that upon the DLA’s request, the Covered Entity must provide:

  • Police report, incident report, or computer forensics report.

  • A copy of the policies in place regarding breaches.

  • Steps taken to rectify the breach.

  • Notice to impacted individuals must be made as expeditiously as practicable and without unreasonable delay, but no later than thirty (30) days after the determination of a breach or reason to believe a breach has occurred.

  • In the event of a breach of security of a system maintained by a Third-Party Agent, FIPA specifically requires notification to the impacted Covered Entity as expeditiously as practicable, but no later than ten (10) days following the determination of the breach or reason to believe breach occurred.

  • In order to rely on a risk of harm analysis when determining that notice is not required, a Covered Entity must first consult with local law enforcement agencies. Thereafter, any determination that notice is not required must be provided in writing to the DLA within thirty (30) days of such a determination.

  • Reasonable measures to protect and secure data in electronic form containing Personal Information are required of Covered Entities and Third-Party Agents. Each Covered Entity and Third-Party Agent must also take all reasonable steps to dispose, or arrange for the disposal, of customer records containing Personal Information within its custody or control when records are no longer to be retained by way of shredding, erasing, or otherwise modifying Personal Information in the records to make it unreadable or undecipherable through any means.

Reported by Joy Easterwood, Esq.

OCR Issues Reports to Congress

The U.S. Department of Health and Human Services, Office for Civil Rights (“OCR”), issued two Reports to Congress. The Reports include details on reported breaches and HIPAA Privacy, Security, and Breach Notification Rule Compliance in calendar years 2011 and 2012.  The Reports, along with the prior Reports, can be found at http://www.hhs.gov/ocr/privacy/hitechrepts.html.

Reported by Joy Easterwood, Esq.

Data Breach Results in Largest Settlement to Date

On May 7, 2014, the OCR announced that two health care organizations agreed to settle charges that they potentially violated the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) Privacy and Security Rules by failing to secure thousands of patients’ electronic protected health information (“ePHI”) held on their network. The monetary payments of $4,800,000 include the largest HIPAA settlement to date.

The settlement arose from a joint breach report filed by New York and Presbyterian Hospital (“NYP”) and Columbia University (“CU”) in September of 2010, related to a joint arrangement wherein NYP and CU operate a shared data network and a shared network firewall that is administered by employees of both entities. The shared network links to NYP patient information systems containing ePHI.

The breach was discovered when a complaint was received from an individual who found the ePHI of their deceased partner on the internet. The OCR announced that because of a lack of technical safeguards, deactivation of the server by a physician resulted in ePHI being accessible on internet search engines.

The OCR cited other findings, including that,

  • Neither NYP nor CU made efforts prior to the breach to assure that the server was secure and that it contained appropriate software protections.

  • Neither entity had conducted an accurate and thorough risk analysis that identified all systems that access NYP ePHI.

  • Neither entity had developed an adequate risk management plan that addressed the potential threats and hazards to the security of ePHI.

  • NYP failed to implement appropriate policies and procedures for authorizing access to its databases and failed to comply with its own policies on information access management.

This settlement provides a great reminder that when entities participate in joint arrangements of this sort, the OCR expects them to share the burden of addressing the risks to protected health information.

$3,300,000 of the settlement was paid by NYP and $1,500,000 was paid by CU. Both entities agreed to corrective action plans, which include undertaking a risk analysis, developing a risk management plan, revising policies and procedures, training staff, and providing progress reports.

The New York and Presbyterian Hospital Resolution Agreement may be found at: http://www.hhs.gov/ocr/privacy/hipaa/enforcement/examples/ny-and-presbyterian-hospital-settlement-agreement.pdf

The Columbia University Resolution Agreement may be found at: http://www.hhs.gov/ocr/privacy/hipaa/enforcement/examples/columbia-university-resolution-agreement.pdf

Reported by Joy Easterwood, Esq.

OCR Audits to Begin in the Fall

Earlier this year, the OCR announced their new audit protocol that will begin in the fall of 2014. As with the previous audits, Covered Entities will receive a notification and data request from the OCR.  However, this time Business Associates will also be part of the ongoing and permanent audit program, with Business Associate audits expected to begin in 2015. Unlike the pilot audits, the audits will be conducted by OCR personnel rather than a third party.

The next round of audits is expected to include 350 Covered Entities and 50 Business Associates.  1200 organizations (800 Covered Entities and 400 Business Associates) have, or soon will, receive pre-audit surveys from the OCR.These audits are expected to target compliance with HIPAA privacy and security standards, as well as adherence to breach notification rules and regulations.

Reported by Joy Easterwood, Esq.

Public Health

Hospital Legal Preparedness Resources

The Public Health Law Program’s http://www.cdc.gov/phlp/news/current.html#legal2">Hospital Legal Preparedness: Relevant Resources (http://www.cdc.gov/phlp/publications/topic/hospital.html) compiles CDC and external resources to help hospitals to consider the law when they prepare for and respond to emergencies.

CDC Public Health Law Program announces the publication of three accountable care resources describing accountable care frameworks and the legal provisions that support them. These resources can help practitioners understand how accountable care might impact public health and engage with accountable care entities in their jurisdictions.

Reported by Rodney Johnson, Esq.

Miscellaneous

Class Action Lawsuit on Copying Charges for Medical Records

The Thirteenth Judicial Circuit allowed a class action case to continue against a company that charged $1.00 per page for records for attorneys instead of $1.00 per page for the first 25 pages and 25 cents thereafter. See Allen v. Healthport Technologies, Case No. 12-CA-013154, Hillsborough County, Florida.

Reported by Monica Rodriguez, Esq.

HHS to End Fix Indemnity Coverage on Standalone Basis

On March 24, 2014 HHS published in the Federal Register a Proposed Rule establishing HHS’s desire to treat fixed indemnity insurance as an excepted benefit in the individual health insurance market.  This would require that fixed indemnity insurance be sold only supplemental to health insurance that qualifies as minimum essential coverage.  Fixed indemnity coverage, which pays the insured a fixed benefit for a health-related occurrence (e.g. visiting doctor or having an x-ray performed) irrespective of the amount charged by the provider.  This new regulation would prohibit carriers nationwide from offering these policies to individuals without first verifying that the insured has obtained minimum essential coverage as defined by the PPACA. 

Despite numerous negative comments submitted by carriers, agencies, lawyers, consumer protection groups, and even a few state regulators, the rule was made final May 16, 2014. HHS disagreed with these commenters, which cited concern, among other things, over (i) HHS’s statutory authority in the matter, (ii) the limitation of consumer choice, and (iii) the potential for constitutional challenge. HHS reiterated that it sought to address “stakeholder concerns” regarding the perceived marketing practices of fixed indemnity products to individuals without major medical coverage. Under the Final Rule, HHS will require carriers (or their agents, where appropriate) receive reasonable assurances from the Insured that they have a health plan providing minimum essential coverage prior to purchasing a fixed indemnity health policy. This requirement is slated to begin for policies issued on or after January 1, 2015, and for previously-issued policies, upon their first renewal occurring on or after October 1, 2016.

Reported by Matthew Leeth, Esq.

Florida State Senate Bill 1036 Set to Become Law Effective July 1, 2014

Senate Bill 1036 passed during the recent 2014 legislative session. The bill mainly addresses nursing education programs, and it will become law on July 1, 2014, as Chapter 2014-92, Laws of Florida. The new law will update regulations on licensure by examination, nursing programs’ curriculum and requirements for training programs. For example, it will require graduates of approved pre-licensure nursing education programs who do not take the licensure examination within a specified period after graduation to complete a licensure examination preparatory course, as specified under Florida law.

The bill language is available at http://laws.flrules.org/2014/92

Reported by Maria D. Garcia, Esq. 

April 2014 Health Law Updates

Dear Health Law Section Members:

The Section website has been updated with articles on significant developments in the health law arena that may be of interest to you in your practice.  These summaries are presented for general information only as a courtesy to Section members and do not constitute legal advice from The Florida Bar or its Health Law Section.  On behalf of the Section, I extend my deepest appreciation to the following volunteers who have generously donated their time to prepare these summaries for your review: 

Kimberly J. Donovan

Alina Denis Jarjour

Rodney Johnson

Monica Rodriguez

Thank you, 

Malinda R. Lugo, Esq.

You can download copies of the article in our document library using the links below:

default Download the April 2014 Health Law Updates (DOC Format)

default Download the April 2014 Health Law Updates (PDF Format)


Health Information Technology & Privacy

Proposed Florida Legislation Would Overhaul Florida’s Current Data Breach Statute, Including Expanding the Definition of Personal Information to Include Health Insurance Member Numbers.

The Florida Legislature is considering proposed legislation introduced as the Florida Information Protection Act of 2014. There are two nearly identical bills currently pending in the Florida Legislature: CS/CS/SB 1524 and CS/HB 7085. If enacted, this proposed legislation would repeal Florida’s current data breach statute, section 817.5681, Florida Statutes, and replace it with section 501.171, Florida Statutes. Health care entities should review the proposed act carefully as it is significantly different from the current law.

One of the changes that will affect the health care industry is the expansion of the definition of personal information to include data sets containing (1) an “individual’s health insurance policy number or subscriber identification number and any unique identifier used by a health insurer to identify the individual” and (2) an individual’s first name (or last name and first initial). In addition, the definition includes “any information regarding the individual’s medical history, mental or physical condition, or medical treatment or diagnosis by a health care professional” when coupled with the individual’s first name (or first initial and last name).

The proposed legislation requires notification of the “unauthorized access” of electronic data containing personal information. The covered entity must notify each individual in Florida whose personal information was either accessed or the covered entity reasonably believes was accessed no later than 30 days after there is reason to believe that a breach occurred or a determination is made that a breach occurred. However, the covered entity is not required to provide such notification if it reasonably determines after an investigation and consultation with relevant government authorities that the breach has not and will not result in identity theft or other financial harm to the affected individuals. The covered entity also would be required to notify the Department of Legal Affairs within the same time period if 500 or more individuals are affected. If the covered entity is required to notify more than 1,000 individuals of the breach, it also is required to notify the credit reporting authorities.

Only the Department of Legal Affairs is authorized to bring an action to enforce violations of the proposed act, which are treated as unfair or deceptive trade practices and subject to civil penalties. The proposed legislation expressly precludes a private cause of action.

Reported by Kimberly J. Donovan, Esq. 

Stolen laptops lead to important HIPAA settlements

Two entities have paid the U.S. Department of Health and Human Services Office for Civil Rights (OCR) $1,975,220 collectively to resolve potential violations of the Health Insurance Portability and Accountability Act(HIPAA) Privacy and Security Rules. These major enforcement actions underscore the significant risk to the security of patient information posed by unencrypted laptop computers and other mobile devices.

OCR opened a compliance review of Concentra Health Services (Concentra) upon receiving a breach report that an unencrypted laptop was stolen from one of its facilities, the Springfield Missouri Physical Therapy Center.OCR's investigation revealed that Concentra had previously recognized in multiple risk analyses that a lack of encryption on its laptops, desktop computers, medical equipment, tablets and other devices containing electronic protected health information (ePHI) was a critical risk.

While steps were taken to begin encryption, Concentra's efforts were incomplete and inconsistent over time leaving patient PHI vulnerable throughout the organization. OCR's investigation further found Concentra had insufficient security management processes in place to safeguard patient information.

Concentra has agreed to pay OCR $1,725,220 to settle potential violations and will adopt a corrective action plan to evidence their remediation of these findings.

OCR received a breach notice in February 2012 from QCA Health Plan, Inc.of Arkansas reporting that an unencrypted laptop computer containing the ePHI of 148 individuals was stolen from a workforce member's car. While QCA encrypted their devices following discovery of the breach, OCR's investigation revealed that QCA failed to comply with multiple requirements of the HIPAA Privacy and Security Rules, beginning from the compliance date of the Security Rule in April 2005 and ending in June 2012. QCA agreed to a$250,000 monetary settlement and is required to provide HHS with an updated risk analysis and corresponding risk management plan that includes specific security measures to reduce the risks to and vulnerabilities of its ePHI.QCA is also required to retrain its workforce and document its ongoing compliance efforts. The Resolution Agreements can be found on the OCR website at

http://www.hhs.gov/ocr/privacy/hipaa/enforcement/examples/stolenlaptops-agreements.html

OCR has six educational programs for health care providers on compliance with various aspects of the HIPAA Privacy and Security Rules. Each of these programs is available with free Continuing Medical Education credits for physicians and Continuing Education credits for health care professionals, with one module focusing specifically on mobile device security: http://www.hhs.gov/ocr/privacy/hipaa/understanding/training

Reported by Monica Rodriguez, Esq.

Life Sciences

Coming Soon: FDA's Final Guidance on the Use of Social Media to Advertise Drugs and Biologics

By no later than July 2014, as mandated by the Food and Drug Administration Safety and Innovation Act (FDASIA), the FDA must issue final social media advertising guidance to industry. Draft guidance: http://www.fda.gov/drugs/guidancecomplianceregulatoryinformation/default.htm was provided in January 2014 (and comments from the public relating to same closed in April 2014).

Creators of social media advertising for prescription drugs and biologics must have in place robust Internet advertising policies and monitoring processes, particularly since the soon-to-be-issued final guidance will no doubt add other compliance responsibilities not covered by the draft guidance.

The draft guidance makes clear that content relating to social media advertising or “interactive promotional media” (e.g., on blogs, microblogs, social networking sites, live podcasts, etc.) are to be submitted to the FDA Office of Prescription Drug Promotion (OPDP) at time of initial use and on an ongoing monthly basis (with the affected company listing all interactive sites for which it is responsible or in which it remains an active participant).

The FDA wants to review content that is owned, controlled, created or operated by regulated firms, including if such promotion occurs on third party sites (provided influence ("direct or indirect control") is exerted by the product maker on those third party sites). FDA provides examples of what it means by direct or indirect control: it is meant to include editorial control, preview or review privilege, or collaboration with the poster of the information. And, the FDA expects all stakeholders to keep track of all product-related communications made by their employee and agents, whether generated within or outside of the workplace, and whether posted via personal or company email or through some other means.

Industry, compliance and legal professionals look forward to having the final guidance, particularly for direction on topics not covered in the draft guidance, including: if and how a product may be mentioned on sites with limited message space, e.g., on Twitter given a regulated company’s responsibility to provide comprehensive information about a product, including safety information; how to treat public responses in social media forums suggesting a drug for off-label use; and how to manage / respond to / track / report adverse events raised in the social media.

With the arrival of the final guidance around the corner, drug and biologics companies will soon have a more complete roadmap to govern their US Internet advertising activities; at the same time, these opportunities for more product visibility come with increased regulatory responsibilities for drug and biologics makers to monitor, track and report.

Reported by: Alina Denis Jarjour

Public Health

  1. 2014 Public Health Law Conference. The 2014 Public Health Law Conference will take place October 16–17, 2014, in Atlanta, Georgia. The conference will gather public health and legal experts from across the country to examine and discuss today’s critical challenges in public health law. Find more information about the conference and learn how to get the early bird registration rate.

  2. Selected federal legal authorities pertinent to public health emergencies. The Selected Federal Legal Authorities Pertinent to Public Health, originally published in 2009, has been updated to reflect the legislative and regulatory changes of the past five years. Public health professionals can use this document as a brief overview of the types of legal authorities granted to the federal government to prepare for and respond to public health emergencies. Find more information and read Selected Federal Legal Authorities Pertinent to Public Health Emergencies  [PDF - 372KB].

  3. Fact sheet of state pharmacist collaborative practice laws. CDC’s National Center for Chronic Disease Prevention and Health Promotion, Division of Heart Disease and Stroke Prevention released a fact sheet of state pharmacist collaborative practice laws. The fact sheet includes details about how many states authorize collaborative drug therapy management by physicians and pharmacists, whether pharmacists can prescribe drugs or order and interpret laboratory tests, whether the Board of Pharmacy must approve collaborative practice agreements, and whether specialized training or continuing education is required. Find more information and read the fact sheet  [PDF - 227KB].

  4. National: FDA approves device to combat opioid drug overdose 

    Washington Post   (04/08/2014)   Brady Dennis

    The U.S. Food and Drug Administration (FDA) approved the first naloxone treatment designed to be used by laypeople and non-professional medical care providers. The treatment, a device named Evzio, is designed to administer the exact dose of Naloxone to patients who are known or suspected of overdosing on opioids such as OxyContin, Vicodin, and heroin.

    Naloxone, the standard treatment for opioid overdose, reverses the effects of opioid overdose. The new, pocket-sized device gives the user verbal prompts for use when activated. Symptoms of opioid overdose are changes in heart rate, extreme fatigue, and slowed breathing. Regulators and officials warned that the device should not be used in lieu of medical care for opioid overdose and that victims and care givers should still seek emergency care.

    Because opioid overdose symptoms usually appear and worsen quickly, allowing family members and care takers to administer Naloxone may save valuable time and therefore save more patients. The FDA estimates that the new device could prevent 16,000 deaths from prescription drug overdose annually.

    “For years, the lack of a lay-friendly delivery system has made it difficult to make naloxone broadly available to the public and to foster its use in non-medical settings, where it is often most urgently needed. [Evzio is] . . . an extremely important innovation that will save lives,” said FDA Commissioner Margaret A. Hamburg.

    [Editor’s note: Find more information and read the FDA’s press release about the first naloxone treatment specifically designed to be given by family members or care givers.

Prescription Drug Overdose Prevention

Prescription drug overdose in the United States is at epidemic levels. The Network and the CDC National Center for Injury Prevention and Control will host a workshop to discuss and examine legal and policy options to address this growing problem. Taking place at the Safe States Conference in May, the workshop will provide insights and best practices from public health attorneys and practitioners in states that have adopted overdose prevention initiatives.

Reported by Rodney Johnson, Esq.

 

February and March 2014 Health Law Monthly Updates

Dear Health Law Section Members:

The Section website has been updated with articles on significant developments in the health law arena that may be of interest to you in your practice.  These summaries are presented for general information only as a courtesy to Section members and do not constitute legal advice from The Florida Bar or its Health Law Section.  On behalf of the Section, I extend my deepest appreciation to the following volunteers who have generously donated their time to prepare these summaries for your review: 

Martin Dix   Joy Easterwood  Maria D. Garcia
 Rodney Johnson  Chip Koval  Aldo Leiva
Michael L. Smith    

 

 

 

 

Thank you, 

Malinda R. Lugo, Esq.

You can download a copy of this month's update using this link or read the updates on the following pages.


MISCELLANEOUS

Medical Malpractice Caps – Declared Unconstitutional

The Florida Supreme Court, Lewis, J., held that the statutory cap on wrongful death noneconomic damages recoverable in medical malpractice actions violates the right to equal protection under state constitution.  Estate of McCall v. United States, SC11-1148, 2014 WL 959180 (Fla. Mar. 13, 2014).  
The case stemmed from a lawsuit first heard by the court in February 2012, wherein a jury initially awarded a total of $2 million in pain and suffering damages to the decedent’s family, but pursuant to the statutory caps under Fla. Stat. § 766.118, the total amount for the multiple claimants was reduced to $1 million.

Reported by Joy Easterwood, Esq.

Obama Administration Extends Pre-Existing Condition Plan Again

The Obama Administration is extending the Pre-Existing Condition Insurance Plan until April 30 to give individuals more time to sign up for a standard health plan though the insurance exchanges. This is the third extension that has been given and open enrollment ends March 31.  In the extension notice, HHS urged members to sign up for an exchange plan before the end of open enrollment.

Reported by Joy Easterwood, Esq.

COMPLIANCE

U.S. v. Halifax Hospital Medical Center –$85,000,000.00 Settlement

A settlement in the amount of $85,000,000.00 was announced in United States et al. v. Halifax Hospital Medical Center et al., Case No. 6:09-cv-Orl-31TBS, Fla. Middle Dist.  This qui tam action was filed by a whistleblower and long standing employee of Halifax.  Her primary allegation was that Halifax violated the Stark Law by rewarding bonuses to employed physicians that were tied to their referrals of Medicare patients to the hospital.  In November, the court entered summary judgment against Halifax on the Stark Law claim.  Now, Halifax has agreed to pay $85,000,000.00 to resolve the allegations that they violated the False Claims Act by submitting claims to Medicare that violated the Stark Law. The tentative settlement is not yet finalized and is pending court approval.  As part of the settlement, Halifax agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General.

Reported by Joy Easterwood, Esq.


HEALTH INFORMATION TECHNOLOGY & PRIVACY

HHS Announces New Round of HIPAA Audits

On February 24, 2014, HHS announced a plan to survey a total of 1,200 organizations, consisting of 800 covered entities and 400 business associates, as a first step in selecting organizations for a new round of HIPAA audits.  Not all organizations that are chosen to participate in the survey will be audited, as the survey is intended to allow OCR to collect data regarding the number of patient visits, use of electronic information, revenue, and business locations of survey participants in order to assess whether the organizations should be audited. The forthcoming round of HIPAA audits are intended to supplement OCR’s regular compliance efforts through routine complaint and investigation measures, and will likely focus on security risk assessments, breach notification procedures, encryption, staff training, policies and procedures, and compliance program implementation. OCR will revise its existing audit protocols to reflect modifications introduced by the HIPAA Omnibus Rule.  See http://www.gpo.gov/fdsys/pkg/FR-2014-02-24/pdf/2014-03830.pdf for additional information.  

County Government Agrees to Settle Potential HIPAA Violations

On March 7, 2014, HHS announced the first-ever county government settlement of potential HIPAA violations. Skagit County, Washington, agreed to a $ 215,000.00 monetary settlement and to correct deficiencies in its compliance program. OCR investigated Skagit County after receiving a breach report that money receipts containing ePHI for seven individuals were accessed by unknown parties after the data had been moved to a publicly accessible County server.  The investigation revealed a much broader exposure of epHI (up to 1,581 individuals were impacted), as well as disclosure regarding testing and treatment for infectious diseases.  OCR also discovered general and widespread non-compliance of the HIPAA Privacy, Security and Breach Notification Rules by the County. 

Under the corrective action plan, Skagit County will ensure HIPAA compliance by confirming that it has in place written policies and procedures, documentation requirements, and training, as well as providing regular status reports to OCR. In announcing the settlement, HHS emphasized that the settlement is intended to send a strong message about the importance of HIPAA compliance to local and county governments, regardless of size. 

See http://www.hhs.gov/news/press/2014pres/03/20140307a.html for additional information. 

OCR Director Leon Rodriguez Nominated by President Obama to Serve as New Director of the United States Citizenship and Immigration Services

OCR Director Leon Rodriguez has been nominated by President Barack Obama to serve as the new director of the United States Citizenship and Immigration Services, and is likely to be confirmed for the new position by Summer 2014, subject to Congressional approval.  Mr. Rodriguez has led OCR since 2011 and has served as the primary spokesperson of OCR on clarification of HIPAA compliance strategies and audit preparation.  Although the leadership change comes at a crucial time for OCR, as long-awaited HIPAA audits of both covered entities and business associates are anticipated to commence in 2014, it is unlikely to delay or otherwise impact the audits.  Mr. Rodriguez’s successor is likely to be appointed by Kathleen Sebelius, Secretaryof HHS.  

See http://www.himss.org/News/NewsDetail.aspx?ItemNumber=27166&navItemNumber=17425 for additional information. 


LIFE SCIENCES

DEA

Hydrocodone combination products to be rescheduled as a Schedule II controlled substance.

On February 27, 2014 the U. S. Drug Enforcement Administration (DEA) published in the Federal Register a Notice of Proposed Rulemaking (NPRM) to move hydrocodone combination products (HCPs) from Schedule III to Schedule II. This NPRM proposes to impose the regulatory controls and sanctions applicable to Schedule II substances on those who handle or propose to handle HCPs. It could become law as early as May 2014. This means that these products:

  • Will have to be ordered with DEA 222s

  • Will need written prescriptions

  • Can't be refilled

  • Must be Reported through ARCOS

Board of Pharmacy

Board of Pharmacy Moving forward with adoption of USP 797 for Sterile Compounding

The Board of Pharmacy continues to move toward adoption of USP 797 as the standard for sterile compounding. This will amend and replace the current sterile compounding Rule 64B16-27.797, FAC. The Board is also moving toward adopting USP 795 for non-sterile compounding. Florida pharmacies performing sterile compounding after March 21, 2014, must have the new Sterile Compounding permit. There are exceptions.

The Board has also begun amendment of the rules to implement the requirement that pharmacy records be maintained for 4 years. It is also reviewing rules related to supervision of pharmacy technicians.

Rules amended in February 2014

Rule 64B16-28.450, FAC

The central fill rule was amended to allow hospitals to engage in central fill processing.

Rule 64B16-28.301, FAC

The rule addressing destruction of controlled substances at a long term care pharmacy was amended to allow a law enforcement officer as the second signatory.

Rule 64B16-28.810, FAC

The list of drugs dispensed by a special limited community permit was expanded to include multi-dose medicinal drugs such as inhalers that are not manufactured in a 3 day supply dosage form.

Rule 64B16-30.001, FAC

The disciplinary guidelines were finalized.

Reported By Martin R. Dix, Esq.

Drug Wholesale Distributors Advisory Council Meeting

The Drug Wholesale Distributor Advisory Council held its February in-person meeting in Tallahassee on February 27, 2014. Reginald Dixon indicated that because the Drug Quality and Security Act ("DQSA") was made law so late in the year (November 27, 2013), DBPR did not have time to prepare and vet comprehensive legislation to address the changes wrought by the DQSA. Thus, Florida will not have legislation addressing the DQSA this year. He did ask persons with questions about how the DQSA impacts Florida licensing and regulatory issues make their inquiries through the declaratory statement process.

The Council also reviewed information on how product registration is not economically feasible for hospital repackagers.

Recent Declaratory Statement Petitions

Publix Supermarkets, Inc. – Asking for an interpretation of Chapter 499, Florida Statutes' requirement that a retail pharmacy obtain a retail pharmacy wholesale distributor permit for distributions among pharmacies under common ownership considering the DQSA's preemption clause.

Safecor Health LLC- Asking whether a non-resident drug repackager may receive drugs purchased by a hospital and distribute them to Florida hospital locations under common control considering the DQSA's preemption clause.

Reported By Martin R. Dix, Esq.

PUBLIC HEALTH

CDC Public Health Law Program Externship.The CDC Externship in Public Health Law consists of 9–14 weeks of professional work experience, for academic credit, with CDC’s Public Health Law Program in Atlanta, Georgia. The program features rolling start and completion dates throughout the academic year. It exposes law students to the public health field, allowing for exploration of the critical role law plays in advancing public health goals. The unpaid externship is open to second and third year law students who are interested in exploring careers in public health law. Participants must receive academic credit. Applications for the summer 2014 program must be submitted by February 28, 2014; fall 2014 applications must be submitted by May 31, 2014; and spring 2014 applications must be submitted by November 1, 2014. Find more information and apply for the externship program.

ERISA issue brief. This issue brief is a summary of responses to technical assistance requests received by the CDC Public Health Law Program regarding the Employee Retirement Income Security Act of 1974 (ERISA) and its relationship to health benefit plans and state laws that address health system transformation. Find more information and read the ERISA Issue Brief  [PDF - 272KB].

LawAtlas maps. LawAtlas, part of Public Health Law Research, a national program of the Robert Wood Johnson Foundation based at Temple University, has published four new interactive LawAtlas maps: Medical Marijuana Laws for Patients; Communicable Disease Intervention Protocol; Insurance Billing Practices for Sensitive Health Services: Provider Immunity; and Insurance Billing for Sensitive Health Services: Limits on 3rd Party Billing. Find more information about LawAtlas and access other Public Health Law Research publications.

2014 Public Health Law Conference. The 2014 Public Health Law Conference will take place October 16–17, 2014, in Atlanta, Georgia. The conference will gather public health and legal experts from across the country to examine and discuss today's critical challenges in public health law. Find more information about the conference and learn how to get the early bird registration rate.

Reported By Rodney Johnson, Esq.


PROFESSIONAL AND FACILITY LICENSURE

Florida Medicaid Updates Provider General Handbook

The Florida Agency for Health Care Administration (AHCA) recently announced that Florida Medicaid will be updating the Provider General Handbook to requiring newly enrolling providers to have either a health care clinic license, or a certificate of exemption from licensure as a health care clinic. After the new changes are implemented, AHCA will announce its plan for existing health care providers to submit either the license or certificate of exemption. See http://www.fdhc.state.fl.us/MCHQ/Health_Facility_Regulation/HealthCareClinic/Index.shtml.

AHCA recommends that existing health care providers who require a license and presently do not hold one immediately obtain their health care clinic license. Information on health care clinic licensure and applicable exemptions are contained in Florida Statute §408.801 et seq. and Chapter 59A-33, FL. Administrative Code.

Florida Department of Health (DOH) Professional License Renewal Process Now Includes Continued Education Review

Physicians and other providers will find a new feature when renewing their professional license. DOH, Division of Medical Quality Assurance, will now automatically review their continuing education records in the electronic tracking system at the time of renewal to ensure compliance. If the records are current in the electronic system, physicians and other providers will be able to renew their license as usual. However, if records are not current, they will have to report their continuing education hours prior to renewing their license. Additional information is available at http://www.ceatrenewal.com/.

Reported By: Maria D. Garcia, Esq.

Revocation and $10,000 Fine for Stealing Patient Identities

An Administrative Law Judge with the Division of Administrative Hearings recently issued a Recommended Order with a recommended penalty of revocation and a fine of $10,000 against a licensed practical nurse. The Respondent was employed by Armor Correctional Health Services, Inc. as a licensed practical nurse providing services to inmates incarcerated by the Hillsborough County Sheriff's Office. The Respondent was stealing the personal information of inmates and selling the information for the filing of fraudulent federal tax returns. The Respondent agreed to provide the personal information of 20 to 30 inmates per week for the filing of fraudulent tax returns in exchange for half of the proceeds of the fraudulently obtained tax refunds.

The Administrative Law Judge found the Respondent engaged in unprofessional conduct in violation of Section 464.0181(h), Florida Statutes. The Administrative Law Judge also found the Respondent had employed a trick or scheme in or related to the practice of a profession in violation of Section 456.072(1)(m), Florida Statues. The penalty guidelines provide for a fine of $10,000 for any offense involving fraud.

The licensed practical nurse has also been criminally charged with multiple counts of fraudulent use of personal information.

Reported by Michael L. Smith, Esq.


Boise Hospital System Acquisition of Physician Group Successfully Challenged

The US District Court for the District of Idaho has ruled that a hospital system’s proposed acquisition of a multi-specialty group would increase the bargaining leverage for primary care physician services resulting in the potential to increase prices for those services. St. Luke’s Health System is based in Boise, Idaho. It includes a 400 bed hospital in Boise, and a 167 bed facility in Meridian. Meridian is approximately 13 miles east of Nampa, which is the home of Saltzer Medical Group, a 41 member multi-specialty group that includes 16 adult primary care physicians. Nampa is also the home of St. Alphonsus Health System and Treasure Valley Hospital. Those two facilities filed a motion for a preliminary injunction claiming that St. Luke’s acquisition of Saltzer would impact admissions to their facilities and ultimately reduce access to health care services in Nampa. Their motion was denied, but the Federal Trade Commission (FTC) and the Idaho Attorney General subsequently filed a complaint for permanent injunctive relief claiming that the combination of 7 primary care physicians already employed by St. Luke’s with Saltzer’s 16 primary care physicians would provide sufficient leverage to allow them to increase prices for their services, and would also increase costs of ancillary services by shifting them from office based to hospital based reimbursement levels.

This is the first litigated challenge by the FTC of a hospital’s acquisition of a physician group. The court noted that this was an extremely complex and difficult case. St. Luke’s argued that the acquisition would increase efficiencies and was consistent with the evolution of health care delivery systems. The court recognized those benefits, but determined that they were outweighed by the anti-competitive effects of the transaction.

Tremendous amounts of evidence and documentation were submitted to the court during the four week trial. Among them were business documents cited by the court as supporting its decision that the transaction was motivated at least in part by the opportunity to increase reimbursement rates. Those documents were not, however, the type of ‘smoking gun’ that might have been anticipated. They contained what could have otherwise been innocuous statements as to a healthcare system’s desire to increase its revenues. The court nonetheless found them to support the government’s position.

This transaction was not reportable to the FTC under the Hart-Scott Rodino Act, which obligates entities to notify the government of proposed acquisitions involving over $75.9 million. The government’s involvement demonstrates that they, and private plaintiffs, may pursue matters even though those thresholds are not met.

The court noted that even though patient outcomes might be improved through the transaction, the potential increase in bargaining power outweighed those benefits. The court further noted that the same benefits in healthcare delivery might be accomplished through affiliations and relationships that were short of a full merger. St. Luke’s intends to appeal the current ruling.

Reported by Chip Koval, Esq.

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