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:

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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.

January 2014 Health Law Monthly Updates

The following are brief summaries prepared by section volunteers of new developments in Florida and Federal health care law that may be of interest to members of the Health Law Section. The 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.      

THIRD PARTY PAYOR

Fight Against United Healthcare’s Termination of Providers

Throughout the nation, and especially in Florida, United Healthcare is terminating participating providers from its Medicare Advantage network. United Healthcare has cited “significant changes and pressures in the health-care environment,” and “pressure from the federal government” for launching its termination initiative. In an attempt to combat the terminations, Connecticut’s Fairfield County Medical Association and the Hartford County Medical Association filed suit against United Healthcare seeking a temporary restraining order and a preliminary injunction to prevent United Healthcare from terminating Connecticut providers from its Medicare Advantage network.

On December 5, 2013 Judge Stefan R. Underhill, U.S. District Court for the District of Connecticut, entered a preliminary injunction against United Healthcare ruling that the physician organizations proved that they would suffer irreparable harm if removed from United Healthcare’s Medicare Advantage network. Immediately thereafter, United Healthcare appealed the ruling, which is now pending before the United States Court of Appeals for the Second Circuit. Although the preliminary injunction was rendered in Connecticut, many Florida providers are paying close attention to the outcome of the case. Additionally, the Florida Medical Association (FMA) has signed on to a brief amici curiae arguing that the preliminary injunction was proper. Erin VanSickle, a FMA spokeswoman, was reported to have stated in an email, “The Florida Medical Association has a substantial interest in ensuring that United not be permitted to unilaterally terminate any physician, either in Connecticut or elsewhere, in the way it has sought to do.” Oral argument before the United States Court of Appeals for the Second Circuit is currently set for January 21, 2014.

The impact of this ruling on Florida physicians can be followed at the FMA’s UnitedHealthcare Action Center, which is located online at: http://www.flmedical.org/UHC.aspx

Submitted by R. David Evans

HIPAA

First HIPAA Settlement for Failure to Have Breach Notification Policies

On December 26, 2013, the U.S. Department of Health and Human Services Office for Civil Rights (“HHS OCR”) announced that a Northeastern dermatology practice has agreed to pay HHS a $150,000 settlement related to potential HIPAA Security Rule violations. The settlement is the result of an investigation into the theft of an unencrypted thumb drive containing the protected health information of over 2,000 patients. OCR alleged that the medical practice did not conduct an accurate and thorough risk assessment of potential risks to the confidentiality of patient information until a year after the theft. Also, OCR alleged that the practice did not have written policies and did not train its workforce on breach notification requirements until several months after the theft. This is HHS’ first settlement arising from the failure to have policies in place to address the breach notification requirements of the Health Information Technology for Economic and Clinical Health (HITECH) Act enacted in 2009.

More information is available at: http://www.hhs.gov/ocr/privacy/hipaa/enforcement/examples/apderm-agreement.html 

Accretive Health, Inc. Data Breach Leads to 20 Year Settlement with FTC

On December 31, 2013, the U.S. Federal Trade Commission (“FTC”) announced that Accretive Health, Inc., (“Accretive”) agreed to settle charges that the company’s inadequate data security measures exposed sensitive consumer information to the risk of theft or misuse. Accretive provides medical billing and revenue management services to hospitals. In 2011, one of Accretive’s unencrypted laptops was stolen from an employee’s car. Under the settlement agreement, Accretive must establish and maintain a comprehensive information security program designed to protect the security, confidentiality, and integrity of personal information of consumers. Accretive must have the program evaluated initially and then every two years by a certified third-party. The settlement will be in force for twenty years. This is not the first settlement arising out of the theft of the unencrypted laptop. In July 2012, Accretive settled with the Minnesota Attorney General, who sued the company alleging violations of HIPAA and state privacy and debt collection laws. Accretive agreed to pay $2.5 million, ceased business operations in the state, and cannot reenter Minnesota for six years without the agreement of the Attorney General.

More information on the FTC settlement is available at:

http://www.ftc.gov/news-events/press-releases/2013/12/accretive-health-settles-ftc-charges-it-failed-adequately-protect

On January 7, 2014, the U.S. Department of Health and Human Services published a Notice of Proposed Rulemaking to remove unnecessary legal barriers under the HIPAA Privacy Rule that may prevent states from reporting certain information to the National Instant Criminal Background Check System (NICS). The NICS helps to ensure that guns are not sold to those prohibited by law from having them, such as felons, those convicted of domestic violence, and individuals involuntarily committed to a mental institution. According to HHS, the NICS is only as effective as the information that is available to it. 

The proposed rule, which is part of the Obama administration’s efforts to curb gun violence, permits (but does not require) states and certain covered entities to disclose to the NICS the minimum necessary identifying information about individuals who have been involuntarily committed to a mental institution or otherwise have been determined by a lawful authority to be a danger to themselves or others or to lack the mental capacity to manage their own affairs. The proposed permission focuses on those entities who perform the relevant commitments, adjudications, or data repository functions. The limited information to be reported to NICS will not include clinical, diagnostic, or other mental health information. The proposed rule would not change the existing permitted uses and disclosures of PHI under the HIPAA Privacy Rule. Comments on the proposed rule are due by March 10, 2014.

More information is available at:

http://www.hhs.gov/ocr/privacy/hipaa/understanding/special/NICS/index.html

Reported by Elizabeth F. Hodge, Akerman, LLP

 FACILITY LICENSURE

Compounding Pharmacies: Ongoing Developments

A. The Drug Quality and Security Act

With more than sixty-four confirmed deaths and seven hundred and fifty-one reported cases of fungal meningitis linked to the 2012 New England Compounding Center outbreak, the federal government has acted. Last November, President Barack Obama signed the Drug Quality and Security Act (the “Act”) into law focusing additional attention on compounding pharmacies. H.R. Res 3204 113th Cong. (2013).  The Act is comprised of two distinct sub-parts: (a) the Compounding Quality Act; and (b) the Drug Supply Chain Security Act.

Under the Compound Quality Act, certain compounding pharmacies are encouraged to register with the Food and Drug Administration (FDA) as an “Outsourcing Facility” and submit to: (a) enhanced labeling requirements; (b) new FDA inspection and quality requirements; (c) specific adverse event reporting requirements; and (d) additional costs, including an initial registration fee of $15,000.

Although FDA Outsourcing Facility registration with is completely voluntary, industry analysts suggest that hospitals and other providers may limit future purchases to registered entities.  In a December 2013 press conference, the FDA publically encouraged healthcare providers and health networks to purchase product from FDA-registered outsourcing facilities.

B.         The Florida Response

Florida regulators have progressively overhauled licensure process for compounding pharmacies in this state. Effective September 2013, Florida pharmacies that engage in the preparation of sterile compounded products must to obtain a Special Sterile Compounding Permit. See Fla. Admin. Code r. 64B16-28.100(8).  The standards of practice for compounding sterile preparations may be found in Rule 64B16-27.797, Florida Administrative Code.

To obtain the new Special Sterile Compounding Permit, an applicant must (a) already hold another pharmacy permit; and (b) submit form DH-MQA 1270, 5/13, titled Sterile Compounding Pharmacy Permit Application. Therefore, if the licensee currently holds a combined Community/Special Parenteral & Enteral permit, or a combined Special Closed/Parenteral & Enteral permit, it will be required to apply for the Special Sterile Compounding Permit and maintain the two separate permits.

In addition to the new permitting requirements, the Florida Board of Pharmacy announced in December that it intends to further modify amend Florida’s Administrative Rules for compounding pharmacies to address: (a) “any necessary or needed changes of a technical or substantive nature”; (b) changes necessary to conform with the recently enacted Federal CQA; and (c) changes needed in relation to the allowable quantity of compounded drugs for Office Use Compounding. Fla. Admin. Code r. 64B16-27.700.  Although the scope of the proposed changes are unknown, it is very likely that additional changes will take place in 2014.

Submitted by Adam R. Maingot

Second DCA: Agency Improperly Rejected the ALJ’s Recommended Order

In Bridlewood Grp. Home v. Agency for Pers. with Disabilities, 2D13-43 (Fla. 2d DCA Dec. 20, 2013), Bridlewood Group Home (“Bridlewood”) appeals a final order revoking its license to operate. The Agency for Persons with Disabilities (“APD”) sought revocation of Bridlewood’s license after a Bridlewood employee (“Sanders”) sexually battered a disabled patient at the group home in 2010.

Sections 393.0673(1)(b), 393.13(3)(a) and (3)(g), Florida Statutes (2010), and Florida Administrative Code Rules 65G-2.012(6)(a) and (15)(b), instruct: (1) persons with developmental disabilities have the right to be free from abuse, neglect, and exploitation; (2) a licensee is subject to disciplinary action if they are responsible for the abuse, neglect, or exploitation of a vulnerable adult; (3) facilities shall take reasonable precautions to protect their clients from injurious behavior; and (4) facilities shall be equipped to assure safe care and supervision for their clients. See §§ 393.0673(1)(b), 393.13(3)(a) & (3)(g); Fla. Admin. Code R. 65G-2.012(6)(a) & (15)(b).

In the administrative law judge’s (“ALJ”) recommended order (“RO”), the ALJ determined that APD failed to present any evidence that Bridlewood: (1) inadequately screened, trained, or supervised Saunders or (2) inappropriately took any action involving Saunders’ hiring, training, or supervision. Accordingly, the ALJ held that there was no evidence that Bridlewood, the licensee, was somehow responsible for the sexual battery committed by one of its employees by way of negligent supervision or otherwise.

APD then filed exceptions to the ALJ’s RO and, thereafter, adopted one of the exceptions, finding that the license revocation was warranted. See Fla. Stat. § 120.57(1)(l) (2010); see also Verleni v. Dep’t of Health, Bd. of Podiatric Med., 853 So. 2d 481, 483 (Fla. 1st DCA 2003) (holding that an agency may reject the findings of fact in a RO, when the agency states with particularity that the findings are not based on competent substantial evidence).

Ultimately, the Second DCA determined that APD failed to address the ALJ’s findings of fact as they related to Bridlewood’s conduct leading up to the incident.  Instead, the Court held that APD simply alleged that: (1) the ALJ “improperly rejected uncontroverted material facts” related to the post-incident handling of the sexual battery; (2) the “ALJ lack[ed] the expertise to determine the credibility of a witness with a developmental disability when such witness’s credibility is called into question by another person with a close personal relationship with the witness”; and (3) it was APD which had “special expertise and experience” to review such situations. Citing Heifetz v. Dep’t of Bus. Regulation, Div. of Alcoholic Beverages & Tobacco, the Court determined that APD failed to abide by the standard of review required when an agency reviews an ALJ’s RO. See 475 So. 2d 1277, 1281 (Fla. 1st DCA 1985) (“An “agency may not reject the [ALJ’s] findings unless there is no competent, substantial evidence from which the finding could reasonably be inferred. The agency is not authorized to weigh the evidence presented, judge credibility of witnesses, or otherwise interpret the evidence to fit its desired ultimate conclusion.”) (internal citations omitted). The case was reversed and remanded with instructions.

Submitted by Adam R. Maingot

PROFESSIONAL LICENSURE

Third DCA Reverses Scrivener’s Error and Affirms Department of Medicine Final Order.

The Department of Health (“Department”) filed an administrative complaint against Dr. Castellon, a licensed medical doctor, alleging that: (1) a 35 cm x 35 cm surgical sponge was left in a patient operated on by Dr. Castellon; (2) the sponge was readily palpable; and (3) a subsequent operative procedure was necessary to remove the sponge. Section 456.072(1)(cc), Florida Statutes (2012), subjects a physician to discipline for leaving a foreign body in a patient. See Castellon v. Dep’t. of Health, Bd. of Medicine, 3D13-642 (Fla. 3d DCA Jan. 22, 2014).

Dr. Castellon elected an informal hearing under section 120.57(2), Florida Statutes (2012) and did not dispute the findings of fact. During the hearing, Dr. Castellon established the following mitigating facts: (1) a forty-year record devoid of disciplinary actions; (2) the complete recovery by the patient; and (3) that three assistants (one of them a surgeon licensed in Nicaragua, but not yet licensed in Florida) had confirmed through four sponge counts that all sponges had been removed before Dr. Castellon began to close the incision site.

Despite Dr. Castellon’s reliance argument, all ten panel members voted to enter the findings in the Department’s final order regarding the enumerated act and the discipline to be imposed.  See Abram v. Dep’t. of Health, Bd. of Medicine, 13 So. 3d 85 (Fla. 4th DCA 2009) (determining that findings related to a non-strict liability statute are expressly permissive rather than mandatory). Pursuant to section 456.072(2)(d), Florida Statutes (2012), the Board may impose an administrative fine of up to $10,000 for each occurrence of 456.072(1)(cc). Ultimately, the Board’s final order imposed costs (not fines) in the amount of $5,000.00.

Upon review, the Third DCA determined that the final order’s imposition of costs (rather than a fine) was a mere scrivener’s error, and that because (1) Dr. Castellon did not dispute the facts sufficient to establish a prima facie violation of section 456.072(1)(cc); and (2) that the panel unanimously voted to impose a penalty pursuant to section 456.072(2)(d), that the Third DCA would affirm the panel’s findings and conclusions. The Court specifically noted that it found no misinterpretation of law, no procedural error, and no abuse of discretion.

Submitted by Adam R. Maingot

December 2013 Health Law Monthly Updates

Dear Health Law Section Members:

Below are updates 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 volunteers who have generously donated their time to prepare these summaries for your review. 

Thank you, 

Malinda R. Lugo

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

default December 2013 Health Law Monthly Updates  (DOC)

 


 

THE FLORIDA BAR HEALTH LAW SECTION

December 2013 Health Law Monthly Updates

LIFE SCIENCES

Generic Drug Labeling Change Proposed by FDA is Significant and Will Likely Negate Preemption of State Failure-to-Warn Claims in Generic Drug Cases

Under current law, an individual can bring a product liability action for failure to warn against a brand name drug company, i.e., the NDA (New Drug Application) holder, but generally not against a generic manufacturer, the holder of an ANDA (Abbreviated New Drug Application). 

 Federal preemption stems from FDA regulations that do not permit the holder of an approved ANDA to change labeling to add new safety information the generic company becomes aware of until and unless the brand name company that holds the NDA for the reference listed drug (RLD) modifies the labeling.  This interpretation was affirmed by the U.S. Supreme Court in 2011 in the Pliva, Inc. v. Mensing case.  The Court, however, left the door open when it added “Congress and the FDA retain the authority to change the law and regulations if they so desire.” 

In November 2013, the US Food and Drug Administration (FDA) began the process to do just that when it published a proposed rule that will require generic drug companies to update the labeling of their drugs in light of new safety risks even though the RLD labeling for those products has different information on warnings, precautions, contraindications, adverse reactions and the like.  

Under the proposed regulation, when the ANDA holder has “newly acquired information” that presents “sufficient evidence of a causal association” between the unlabeled warning and the approved generic drug, the generic manufacturer must submit a Changes Being Effected (CBE-0) supplement to its ANDA and immediately change its label.  Also, the ANDA holder will be required to send the NDA holder both the labeling change and a copy of the information supporting the change.  Any changes ultimately approved by FDA would affect both the generic label and the RLD holder’s labeling. 

The FDA has noted that “if this proposed regulatory change is adopted, it may eliminate the preemption of certain failure-to-warn claims with respect to generic drugs.” 

Interested parties wishing to provide input on the proposed rule must submit comments by January 13, 2014. The full text of the proposed rule is available at this link.

The Pliva v. Mensing, 131 S.Ct. 2567 (2011) decision is available at this link: http://www.supremecourt.gov/opinions/10pdf/09-993.pdf.

Submitted by Alina Denis Jarjour

New Regulations for Compounding Pharmacies

In the wake of the 2012 meningitis outbreak which was tied to a contaminated compounded medication, compounding pharmacies have garnered more regulatory attention nationwide.  Florida is no exception and in 2013, the Florida Department of Health promulgated new regulations directed at just these types of pharmacies. 64B16-28.100(8), Florida Administrative Code, proposed in January 2013 and effective September 23, 2013, creates a requirement for compounding pharmacies to obtain a special sterile compounding permit by application to the Florida Department of Health. The application/license fee is waived for existing pharmacies which obtain the permit on or before March 21, 2014 (180 days after the effective date of the Rule requiring the permit) and is $225 for new facilities.  Compounding pharmacies must also comply with the previously-existing dictates of 64B16-27.700 and 64B16-27.797, Florida Administrative Code, which define “compounding” and create standards of practice for compounding. Stand-alone Special Parenteral/Enteral and Special Parenteral/Enteral Extended Scope pharmacies are exempted from this new permit requirement.

On December 20, 2013, the Department of Health noticed its proposal to open Rule 64B16-27.700 (defining “compounding”) for development in light of the recently-enacted federal Compounding Quality Act. This new law, signed by President Obama on November 27, 2013, is directed at both large and small-volume compounding pharmacies.  It clarifies existing oversight and imposes higher standards of quality for compounders of all sizes. Furthermore, the law creates the designation of “outsourcing facility” for larger-scale compounding pharmacies which can allow for certain exemptions from new requirements. In addition to the foregoing, the law creates future responsibilities for the federal Food and Drug Administration.

In addition to noticing the rule development proposal, the Department of Health has also proposed a bill which would require certain disclosures from all non-resident pharmacies and would allow Florida to either send or hire inspectors to out-of-state compounding pharmacy facilities which send compounded drugs into Florida, with the pharmacy footing the bill.  Florida regulators previously had no authority to inspect these out-of-state pharmacies, even though they send drugs into the state.  In light of all the new developments in the regulation of compounding pharmacies, it is particularly important for attorneys representing compounding pharmacies to keep tabs on the state and federal legal and regulatory developments that are sure to arise in the coming months and years. 

Submitted by Melanie R. Leitman

THIRD PARTY PAYOR

Westside EKG Associates v. Blue Cross and Blue Shield of Florida, Inc., Case No. 01-16184(07), pending in the Seventeenth Judicial Circuit in and for Broward County, Florida. In an order entered on September 26, 2013, the trial court interpreted certain provisions of the Florida prompt pay statutes (Sections 641.3155, 627.6131, Florida Statutes). This trial court order has not been appealed, but it is significant because there are very few cases interpreting these statutory provisions.

The Florida prompt pay statutes govern the processing of certain clean claims submitted by Florida providers to insurers and HMOs. If a claim is governed by the prompt pay statutes, the applicable insurer or HMO is required to take one of three actions within a prescribed number of days after receiving a claim submitted by a provider: (1) pay the claim, (2) notify the provider that the claim is denied, or (3) notify the provider that the claim is contested and provide an itemized list of additional information or documents required to process the claim. Id.

Plaintiff, a provider group, argued when an insurer or HMO paid less than the provider’s full billed charges, the payment constituted a “contest” (the third option) and required Defendants to provide a list of additional information or documents necessary to process the claim.

Defendants, an insurer and two HMOs, asserted that payment of less than the provider’s full-billed claim constituted a “payment” (the first option) because it was a final adjudication of the claim and no additional information or documentation was required to process the claim.

The Court was “persuaded by the Defendants interpretation that a payment of less than the billed charge is still a ‘payment’ and is not a ‘contest’ of a submitted claim.” September 26, 2013 Order. Thus, Defendants were not required to provide an itemized list of additional information or documents when paying a provider, even if the payment was less than the provider’s full billed charges. The Court stated that “Plaintiff has remedies in the event of underpayment. Seeking damages for alleged violations of the prompt pay statutes is not one of them.” Id.

Submitted by Kimberly J. Donovan

Qui Tam Relators: On the Outside, Looking In. United States ex rel. Myers v. Shands Healthcare, No. 3:08-cv-00441-J-16HTS (M.D. Fla.) (filed under seal Apr. 30, 2008) By Barbara Bolton Litten

Shands Teaching Hospital & Clinics Inc., Shands Jacksonville Medical Center Inc. and Shands Jacksonville Healthcare Inc. (“Shands”) agreed to pay $26 million to the federal government and the State of Florida to resolve whistleblower allegations of false claims to Medicare, Medicaid and other federal health care programs. The relator’s complaint alleged violations of the Federal False Claims Act, conspiracy to violate the False Claims Act, and violations of the Florida False Claims Act. The relator in this case was not an employee – as so often is the case. Instead, the relator was an outside healthcare consultant hired by Shands to conduct a payor audit of its network of healthcare providers. The allegations in this case underscore the importance of designing compliance programs that both anticipate and recognize potential whistleblowers and developing appropriate responses to false claims allegations. In addition, health care entities should fully investigate outside consultants before retaining, review and/or revise the contract with the outside consultants to address concerns identified by the outside consultant, and maintain and establish a good working relationship with outside consultants.

The relator was Terry L. Myers, founder and President of YPRO Corporation (“YPRO”), a nationwide health care consulting firm. According to the complaint, YPRO’s primary services include coding audits, medical necessity audits and clinical documentation improvement audits. Shands contracted with YPRO to perform on-site Medicare and Commercial payor review of observation services and one-day inpatient stays at six Shands hospitals in June, 2006. Allegedly, the audits revealed systemic serious billing, coding and compliance issues occurring on a daily basis, which resulted in overbilling to and overpayment by Medicare, Medicaid, and other federal health care programs.

Myers’ complaint alleges that after completion of the audits and distribution of audit reports highlighting allegedly improper claims, YPRO offered quotes to Shands for future medical necessity training and other needed coding and compliance education that YPRO could provide. Shands elected to perform their own corrective action plan internally. The corrective action plan did address “adjustments” for the overpayment identified by the 2006 YPRO audit but YPRO never observed any action actually taken. Myers allegedly discussed the need for self-disclosure of overpayments with Shands, but never saw any evidence of self-disclosure. Shands contracted with YPRO for an audit in 2007 to reassess the same issues. YPRO alleged that the results of the 2007 audit were significantly worse than the 2006 audit and that overbilling and overpayments increased and under-billing decreased. YPRO recommended continued monitoring and another audit which Shands declined.

In its August 19, 2013 press release reporting the Shands settlement, the Department of Justice (“DOJ”) described the False Claims Act as one of the most powerful tools available to the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, a partnership between the DOJ and the U.S. Department of Health and Human Services focused on reducing and preventing Medicare and Medicaid financial fraud.

Submitted by Kimberly J. Donovan

COMPLIANCE

OIG Advisory Opinion No. 13-18 – on a Proposed Arrangement between a City and a Supplier of Emergency Ambulance Services.

The Office of Inspector General (OIG) issued an unfavorable advisory opinion regarding a proposed arrangement between a City and a supplier of emergency ambulance services (Requestor). Under the proposed arrangement, the City required the Requestor to provide the following: (1) free emergency ambulance service to individuals insured by the city’s insurance, (2) equipment, (3) free EMS training, (4) discount on emergency ambulance services for uninsured senior citizens, and (5) replenishment of medical supplies used by the city during delivery of care to patients transferred by ambulance.

The OIG’s legal analysis focused on the anti-kickback statue, specifically where remuneration is paid to induce or reward referrals of items or services. The opinion stated that the provision of free services and equipment, which were the city’s expenses to incur, would fall into the language of the anti-kickback statute. However, the opinion went on to say that by billing the City directly at fair market value for services would not implicate the anti-kickback statute. Regarding the free EMS training, the Requestor proposed an annual free EMS class that would be open for anyone to attend. The OIG stated that “this offering of free, open, pre-existing training would present a minimal risk under the anti-kickback statute”. Instead of providing discounts to uninsured seniors the Requestor would continue its policy of offering charity care based on need. The OIG found that this aspect of the proposed arrangement presented only a minimal risk and of fraud and abuse under the anti-kickback statue. Replenishment of supplies, to be distinguished from stocking of the city’s inventory, is regarded as part of the general ambulance service and payment for them would be included in the Medicare payment rate for transport. Therefore, replenishment of supplies would present only a minimal risk of fraud and abuse under the anti-kickback statute.

The primary concern of the OIG under the proposed arrangement was the donation of equipment to the city which was to be evaluated by a compliance officer on a case-by-case basis. The OIG stated that “in the absence of established, objective criteria and other safeguards against potential fraud and abuse, there is significant risk that donation of equipment by the Requestor would be tied to the contract award”. Therefore, OIG could not conclude that this aspect of the proposed arrangement would present a minimal risk of fraud and abuse under the anti-kickback statute.

In its opinion, OIG considered the proposed arrangement as a whole and as such could not conclude that the proposed arrangement would present a minimal risk of fraud and abuse in connection with the anti-kickback statute. The opinion states that the proposed arrangement could potentially generate prohibited remuneration under the anti-kickback statute, which could potentially lead to administrative sanctions.

The full text of OIG Advisory Opinion No.13-18 is available at:

https://oig.hhs.gov/compliance/advisory-opinions/#2013

Submitted by Judy-Ann Smith, Judy-Ann Smith Law Firm, P.A.

HIPAA

HIPAA Violation Results in $1.44 Million Jury Verdict Against Walgreens, Pharmacist

An Indiana Superior court jury awarded $1.44 million to a Walgreen’s customer based on violations of privacy and confidentiality of health information. HIPAA does not create a private cause of action, however, it is being used to establish a standard of care for providers. The plaintiff in this case filed suit based on allegations that a Walgreens pharmacist accessed, reviewed and shared customer prescription history with others and the information was then used to intimidate and harass the customer. The plaintiff/customer claimed that the pharmacist and Walgreens breached their duty of confidentiality and privacy.

The plaintiff argued at trial that although HIPAA does not create a private cause of action, it does establish a standard of care for confidentiality and privacy of patient health information. Therefore, because the pharmacist violated HIPAA, the pharmacist also breached the standard of care. Further, since the pharmacist was acting within the scope of her employment Walgreens was also liable.

HIPAA is becoming an important aspect of establishing a standard of care in negligence and professional liabilities involving improper disclosure of health information.

Source: Mondaq Business Briefing, August 16, 2013, by Cory J. Fox.

Full article is available at this link.

Submitted by Judy-Ann Smith, Judy-Ann Smith Law Firm, P.A.

PUBLIC HEALTH

The CDC has announced publication of its December 2013—Public Health Law News at:

http://www.cdc.gov/phlp/news/current.html

Submitted by Rodney M. Johnson

October and November Health Law Update

Dear Health Law Section Members:

Below are updates 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 volunteers who have generously donated their time to prepare these summaries for your review.

Thank you,

Malinda R. Lugo

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

default October-November 2013 Health Law Monthly Updates (DOC)

default October-November 2013 Health Law Monthly Updates (PDF)  

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