MEDICARE FINALIZES 2013 PHYSICIAN PAYMENT SCHEDULE

By: Ralph Levy, Jr.

On November 1, 2012, the Centers for Medicare & Medicaid Services (CMS) finalized previously announced changes to the Medicare Physician Fee Schedule (MPFS) for services furnished by physicians during calendar year 2013. These payment changes will affect different specialties in different ways. For example, payments to family physicians will increase by approximately 7% and to other practitioners (including primary care physicians) between 3% and 5%. By contrast, CMS will reduce payments for services to physicians with certain other specialties during 2013 (for example, a 2% payment reduction to cardiologists and a 3% reduction to radiologists).

Included within the proposed payment schedule will be a new separate payment (if billed properly using a specific billing code) to a patient's community physician or practitioner (typically, a primary care physician, but other physicians such as cardiologists or oncologists could be entitled to the payment) for the coordination of care of patients during the first thirty (30) days after discharge from a hospital or nursing home stay. This payment for "transition care management" represents the first time that CMS has proposed to pay for the care required of patients as they transition back into the community after a stay at a hospital or skilled nursing home. This discharge transition care payment represents 4% of the proposed 7% increase in payments to family practitioners. In its prior announcement that accompanied the proposed regulations that are now final, CMS noted that this payment for discharge transition care management dovetails with the Affordable Care Act mandated program to reduce payments to hospitals that have excess readmissions for certain conditions.

CMS also indicated that unless Congress acts to postpone (or repeal) the previously scheduled payment reductions under the Sustainable Growth Rate (SGR) methodology, payments under MPFS will be reduced by approximately 27%. Since 2003, SGR cuts have solution has been adopted by Congress.

Also included within the final rules are changes to several previously implemented quality reporting initiatives, and as authorized by the Affordable Care Act, a program in which physician groups can participate on a voluntary basis through which their payments will be adjusted based on the quality and cost of care they provide to their patients. Groups with 100 or more eligible professionals that elect not to participate in the physician quality reporting program will be subject to a 1% payment reduction.

In a separate but related announcement, on November 6, 2012, CMS also finalized a previously proposed rule that will result in CMS-funded payments during both 2013 and 2014 to physicians (including osteopaths) who are engaged in family medicine, general internal medicine, pediatric medicine and related subspecialties, and who treat Medicaid patients in an amount at least equal to the reimbursement rate for those physician services if provided to Medicare patients. The objective of this rule, which implemented a provision in the Affordable Care Act, is to incentivize primary care physicians to continue to treat Medicaid patients. These supplemental payments will be fully funded by CMS, with CMS to reimburse the states for 100% of the cost of the supplemental payments.

EMPLOYMENT LAW NEWS

OHIO COURT RULES THAT A COURT CANNOT COMPEL A TERMINATED EMPLOYEE TO RETURN PHI TO THE FORMER EMPLOYER

By: Tatiana Melnik

In a July 2012 decision by an Ohio District Court, Cabotage v. Ohio Hospital for Psychiatry LLC, the Court ruled that it did not have the jurisdiction under HIPAA to compel Ms. Cabotage, a former employee, to return stolen records to the Ohio Hospital for Psychiatry, LLC (OHP) and Behavioral Centers of America, LLC (BCA), her former employer. However, citing its inherent authority, the Court precluded Ms. Cabotage from using the stolen records against the Defendants without first requesting that such documents be produced through normal discovery methods.

BCA employed Ms. Cabotage as a registered nurse at OHP. During her employment, she became suspicious that the Medical Director was engaged in illegal activities and began to document her suspicions. She recorded her observations on forms that listed patient information and she took the records home. She shared the records with the Department of Health and Human Services which declined to pursue a claim against OHP. Ms. Cabotage also contacted a patient's family member allegedly without authorization. OHP subsequently terminated Ms. Cabotage's employment for "fraternizing with patients' families outside of work," and she filed suit alleging violations of the False Claims Act, Ohio's Nurses Whistleblower Act, and Ohio's public policy. Through discovery requests, OHP learned that Ms. Cabotage had PHI and filed a Motion for Return of Confidential Patient Information, arguing that HIPAA requires OHP to seek the return of the documents. Ms. Cabotage, on the other hand, argued that she needed the documents in order to support her claims.

In denying OHP's motion, the Court ruled that HIPAA does not confer jurisdiction upon the Court "to remedy violations private parties bring to its attention." That is, by asking the Court to compel Ms. Cabotage to return the documents, OHP was asking the Court to enforce HIPAA. Because HIPAA does not provide a private cause of action, the court could not enforce HIPAA. Instead, HIPAA confers jurisdiction on the Secretary of Health and Human Services. "Thus, to the extent Plaintiff's continued possession of the documents at issue violates HIPAA, the Secretary of Health and Human Services (HHS), not this Court, is the only party authorized to enforce the Act."

Nevertheless, the Court relied upon its inherent authority and ruled that Ms. Cabotage was precluded from using the documents she stole because the documents contained sensitive and possibly privileged information of third-parties who were not parties to the litigation between her and her former employer. Instead, Ms. Cabotage was required to use normal discovery means to request the disclosure of the documents, at which point OHP could seek a protective order for its patient records.

This case serves as a reminder to covered entities and business associates that HIPAA cannot be used as both a shield and a sword. That is, just as HIPAA does not grant a private right of action to patients, it similarly does not grant a private right of action to covered entities and business associates. Thus, those seeking to redress violations of HIPAA must file a complaint with the Office of Civil Rights, which is the division of HHS responsible for enforcing HIPAA, and may not use the courts to fight such battles.

ANTITRUST NEWS

INSURER'S ANTITRUST ACTION AGAINST PHYSICIANS AVOIDS DISMISSAL

By: James M. Burns

On September 17, 2012, Judge Gustavo Gelpi, District Court Judge for the District of Puerto Rico, denied the defendants' motion to dismiss plaintiff's complaint in Humana Health of Puerto Rico v. Vilaro. In this case, Humana alleged that the defendant, Dr. Vilaro, in concert with several other physicians, unlawfully colluded during the course of their contract negotiations with Humana. Specifically, the Court noted that Humana had alleged that the physicians "included one another in attempted negotiations with Humana via email, copied one another on each other's notification of termination to [Humana], and jointly provided a table setting forth proposed higher rates that were required as a condition to continue providing services to [Humana] patients."

In rejecting the doctors' motion to dismiss the complaint, the Court held that defendants' actions "ostensibly reflect concerted behavior, rather than unilateral conduct," and that "collective efforts to boycott and price-fix offend Section 1." In addition, the Court held that because Humana's complaint "satisfactorily alleges consequent injuries to itself and the community due to defendants' refusal to treat certain patients," Humana had also adequately pled an antitrust injury. Accordingly, the defendants' motion to dismiss Humana's complaint was denied, permitting the case to proceed towards trial.

GENERAL NEWS

DICKINSON WRIGHT ANNOUNCES HEALTHCARE BLOG

The Healthcare group at Dickinson Wright now has a weekly blog post. The goal of the blog is to give you up-to-date information in between issues of the Healthcare Legal News. You can visit the blog at www.dwhealthlawblog.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.