Legal Issues

Fighting Misleading Advertising
Government Ramps Up Stark AND Anti-Kickback Enforcement
HIPAA 2018
Physician Employment Contracts
New Controlled Substance Law Goes Into Effect
Direct Supervision
FSDDS Fraud Alert
Patient Brokering
Billing in the Name of Another


Fighting Misleading Advertising

Christopher L. Nuland, Esq.
General Counsel

Recent events have called into question how those with minimal training can advertise cosmetic medical services with little or no training. Unfortunately, this trend is not new, and the FSDDS has worked diligently to protect the public and profession by promoting legislation and rules designed to ensure that misleading advertising is not used to fool the public.

For instance, in 1996 the FSDDS helped pass not only HB 699 (which places restrictions on aesthetic services provided in satellite offices), but also HB 587, the Truth in Medical Education (TIME) Bill. Under this law, any advertisement for health care services that names a practitioner must include the licensure under which the practitioner operates, and all a patients are entitled to have disclosed to them the licensure of any person providing treatment.

The TIME Bill also contained language in which the Legislature found a "compelling state need" to enact advertising laws that would prevent practitioners from misrepresenting their credentials to the public. As a result, the Board of Medicine's advertising rules received the backing they needed to withstand a constitutional challenge.

Under these rules, found at 64B8-11.001, physicians may not disseminate any misleading information in their advertising. Among the prohibitions is a requirement that a physician may not hold himself or herself out as a specialist unless they hold board certification by a board approved by the Board of Medicine (the FSDDS continues to fight to ensure that only those accrediting boards meeting the highest standards are approved by the Board of Medicine). Moreover, a physician may not advertising board certification without also disclosing the board granting such certification. While enforcement of these rules has been less than vigilant, the FSDDS recently appeared before the Board of Medicine, where the FSDDS received assurances that the Board would actively prosecute violations of these rules.

The FSDDS is working diligently to protect both the profession and the public by promoting the enactment of statutes and rules to require that all health care advertising is accurate and not misleading and continues to fight for the vigilant protection of these consumer-friendly laws.

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Government Ramps Up Stark AND Anti-Kickback Enforcement

Christopher L. Nuland, Esq.
General Counsel

Although the federal Stark Law (42 USC 1395nn) and Anti-Kickback Statute (42 USC 1320a-7b) have existed for over fifteen years, enforcement of the respective provisions has not always been vigilant. With the advent of health care reform and the much-publicized crackdown on Medicare fraud, however, enforcement of the Stark Law and related Anti-Kickback Statute has increased dramatically, and physicians are reminded that the failure to comply with its provisions can lead to hefty fines, disbarment from the Medicare program, and even criminal penalties.

The basic premise of the Stark law is that a physician may not refer a patient for the provision of "designated health services" (""DHS"- including clinical laboratory, diagnostic imaging, and a host of other services) if the physician has a financial relationship to the entity to whom the referral was made. Physicians should be aware that the definition of "financial relationship" is extremely broad, and includes "any remuneration, directly or indirectly, overtly or covertly, in cash or in kind."

The government has held that any benefit given to a physician for the referral of a patient for the provision of DHS is a violation of both the Stark law and the Anti-Kickback Statute. Such benefits include not only direct kickbacks, but also preferential pricing for those physicians who refer a minimum number of patients to a DHS provider. In other words, a lab that offers a referring physician a discount if he refers a certain number of specimens is actually providing a kickback to such a physician based upon the volume of referrals, which is explicitly prohibited under federal law.

With the advent of increased government enforcement of such provisions, physicians are urged to seek legal counsel before entering into any relationship with an outside entity for the provision of such designated health services.

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HIPAA 2018

Christopher L. Nuland, Esq.
General Counsel

When the HIPAA Privacy Rule went into effect in 2003, physicians created a new industry in the form of Compliance Programs designed to protect the privacy of Protected Health Information. Compliance rates were high, and the Office of Civil Rights (the federal agency entrusted with the enforcement of HIPAA) had only a handful of agents dedicated to HIPAA enforcement. Moreover, penalties for non-deliberate noncompliance were low, limited to only $1,000 for deficiencies that could be corrected in thirty days or less.

The lenient times of HIPAA enforcement ended in 2009 with the new Obama Administration and the enactment of the HITECH Act. Fines were increased to $10,000 per violation, and the number of enforcement personnel was also increased exponentially. Requirements for business associate agreements were heightened, and enforcement of the new Security Rules, which added 18 new standards to HIPAA compliance requirements. Perhaps more importantly, the Office of Civil Rights was charged with performing random audits (it had previously only responded to consumer complaints) targeting covered entities.

The results of these random audits have been troubling for physicians. While compliance rates for the Privacy Rule remain fairly high, few covered entities have performed the Risk Assessment required by the Security Rule. Moreover, few Business Associate Agreements have been modified to require Business Associates (those outside the practice who may have access to Protected Health Information) to protect such information to the extent required by HIPAA, report unauthorized disclosures, and mitigate the damage of any such disclosures.

In addition, by September 22, 2013, all covered entities (including all physicians) must not only amend their Business Associate Agreements, but also their Privacy Notice to include notices that the patient may obtain their records in electronic form, must be informed of any breach of their PHI, have marketing communications made to them only if authorized by the patient and to decline to have PHI delivered to health insurers if the patient pays for services in full without submitting a claim.

Fines for violating these standards have been increased to up to $1.5 million.

For these reasons, physicians are urged to review their HIPAA Corporate Compliance Plans to ensure that they include the latest information and can survive a government audit. FSDDS members having questions may always contact the FSDDS Legal Affairs Division at nulandlaw@aol.com.

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Physician Employment Contracts

Christopher L. Nuland, Esq.
General Counsel

Traditionally, both established physicians and their younger associates have solidified their employment relationship with a firm handshake. In today’s increasingly complex, competitive, and litigious health care market, however, a simple unwritten understanding is no longer sufficient to cover all of the possible points of contention that can emerge between members of the same practice. For this reason, written employment contracts are not essential to protect both the employer and employee in any practice environment.

Duties and Compensation

The two most essential elements of any employment contract, regardless of whether physicians are involved are the duties expected of the employee and the compensation that the employee can expect for performing those duties. With regard to the duties, the agreement should specifically state what type of medicine the employed physician is expected to practice, as many young endocrinologists have been disillusioned to find that they ultimately are forced to practice general internal medicine when they had thought that they would be focusing on endocrinology. In addition, the expected hours should be included in the agreement, along with the provisions for vacation, sick leave, and CME leave. With regard to compensation, the agreement should specifically state not only the salary that the associate might expect, but also the details of any incentive program that might be in place.

Termination and Amendment

At the beginning of any relationship both the employer and employee usually are wishing for and expecting a mutually beneficial long-term relationship, but studies have shown that business relationships in all fields have tended to decrease in duration over the last generation. For this reason, the term of the contract should be explicit, as should the terms by which the agreement should be amended (which should always require the written consent of both parties).

In addition, the agreement should state the reasons for which an agreement may be terminated. For instance, the employer may wish to be able to terminate the employment of a physician whose license has been suspended or revoked, or who fails after a certain number of attempts to become board certified. On the other hand, the employee may wish to be able to leave the employ of a physician who becomes bankrupt or fails t honor the terms of the employment contract.

Expenses

Unfortunately, Dermastology is an expensive business, and expenses continue to escalate even when reimbursements do not. Therefore, it is essential that the employment contract establish which party is to pay for the various expenses of operating the practice. Although responsibility for the various items may change depending on the contract, most practices will pay for office space, support personnel, equipment, and all state and federal fees (e.g., DEA registration, Board of Medicine licensing fees) and the fees associated with hospital staff privileges. Most employers also pay the full cost of malpractice insurance, although contracts differ greatly as to which party is to pay for “tail insurance” (which covers the departing physician for acts committed while he was employed but are reported after the period of employment). Again, these issues are best discussed at the commencement of the relationship, as opposed to the time in which they appear.

After Termination

As mentioned above, statistically most of today’s employment relationships end with the departure of the employee physician. Whereas physicians historically allowed departing physicians to continue their practice anywhere, today’s increasingly competitive health care market has forced many employers to insert restrictive covenants (also known as “non-compete clauses”) into their standard contracts. Although the American Medical Association Council on Ethical and Judicial Affairs has frowned upon such provisions, which prohibit a departing physician from competing with his former employer within a specific geographic areas for a specified period of time, Florida law explicitly allows for such provisions. Most of these covenants also prohibit the departing physician from soliciting existing patients of the practice for the same period of time during which the departing physician is proscribed from competing with the existing practice.

The issue of the ownership of the medical records also is likely to emerge upon termination of the business relationship, as the owner of the records is in a preferable position to retain the loyalty of patients. Both Florida Statue 456.057 and Florida Administrative Code 64B8-11.001 place the burden upon the treating physician to maintain the records; therefore, if the existing practice is to retain ownership of all patient records, which is customary, the departing physician should insist that the practice assume all legal responsibility for maintaining the records adequately.

Equity Opportunities

The goal of virtually every new associate is to become a partner in the practice (if the practice is a partnership), a shareholder (if the business is a corporation) or a member (if the business is a limited liability company). Yet the promise of obtaining an equity position can become a cause for resentment when the expectations of parties do not coincide. Because of this very real possibility, it is best upon commencement of the relationship to details the conditions upon which the an associate may acquire an equity interest in the practice. This portion of the contract should state with specificity when an invitation may be made and whether such an invitation is automatic or at the discretion of the current principals. While it may not be feasible to establish a “buy-in” price at the time the employment contract is signed, the method for calculating the amount should always be listed.

Conclusion

This brief article certainly has not described each and every provision that can or should be included in a physician employment agreement, but it has been designed to demonstrate the need to place such provisions in writing at the start of any such relationship. Friction is likely to develop during the course of even the best relationships, but such friction can be minimized if the resolution can be determined by reference to preset agreements as to how the relationship is to function.

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New Controlled Substance Law Goes Into Effect

NEW OPIOID LAW GOES INTO EFFECT ON JULY 1, 2018

This memorandum represents a quick summary, of the elements of a new Florida law (HB 21) that went into effect on July 1, 2018.

Mandatory Opioid Course

The law (HB 21) creates FS 456.0301, which requires every licensed practitioner with a DEA license to take a board-approved two hour course on prescribing controlled substances, to be completed no later than January 31, 2019, and every biennium thereafter. It should be noted that this course requirement is requirement of any practitioner with a DEA license, regardless of whether such a practitioner actually prescribes opiates or any other controlled substance.

As of the press date, the Florida Medical Association, Florida Osteopathic Medical Association, the Florida Academy of Family Physicians, and the Florida College of Emergency Physicians, as well as a few private entities, have been approved to provide the course.

New Limits on the Prescribing of Opiates

The new law limits the prescription of Schedule II opiates for “acute pain” (which includes surgical pain) to three days, although the prescription may be extended to seven days of the need for such extra time is both documented in the record and the actual prescription includes the words “Acute Pain Exception.” The law also requires the physician to query the Prescription Data Monitoring Program database through E-Force prior to prescribing ANY controlled substance (other than a Schedule V non-opiate).

While HB 21 goes into effect on Sunday, the Board of Medicine has only begun its process of drafting rules to implement the finer points of its interpretation. Stay tuned for developments as they occur.

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Direct Supervision

As part of the continuing efforts to rein in inappropriate dermatological care, the FSDDS in April 2010 led a coalition of health care providers opposing efforts to allow electrologists to perform laser hair removal without the benefit of an on-site physician. Backed by representatives from the Florida Academy of Phyiscian Assistants, the Florida Society of Plastic Surgeons, and the Florida Medical Association, FSDDS President Albert J. Nemeth, M.D. and General Counsel Chris Nuland convinced the Florida Board of Medicine to allow the current rule, which requires direct physician supervision of electrologists performing laser hair removal. to remain intact.

While this victory was important, it is but part of an ongoing struggle by the FSDDS to control what sees as the unlicensed practice of medicine in many medical spas. Whether it be laser hair removal by electrologists, dermal filler injection by nurses, or other medical procedures being performed by non-physicians, the FSDDS has consistently advocated that these paraprofessionals must operate under the direct supervision of a physician. Not only does direct supervision simply make sense from a patient safety perspective, but Florida explicitly states that medical assistants and electrologists performing laser hair removal work under the “direct supervision and responsibility” of the supervising physician. Moreover, nurses receive statutory protections from accusations of the improper practice of medicine only if they work under the direct supervision of a physician.

Although ARNPs and physician assistants are exempt from the direct supervision requirement, physicians are reminded why these professionals are called “physician extenders.” They are meant to be part of a physician-led team, and the physician therefore bears the ultimate responsibility for their actions. FSDDS members should always ensure that those who work under their licenses work only within the scope of their training and professional licensure.

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FSDDS Fraud Alert

As many are aware, state and federal investigators have increased their crackdown suspected fraudulent activity among physicians. Two of the targets of their attention are physicians paying for patients and physicians allowing extenders (Pas and ARNPs) to bill under the physician’s name.

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Patient Brokering

Florida State law makes it a felony to offer or receive any compensation in return for referring patients. For instance, were a company to offer physicians a supply of patients at a specified fee per patient, both the broker and physician would be subject to criminal penalties. It should be noted that the prohibition does not extend to flat fee marketing (e.g., paying for advertising space).

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Billing in the Name of Another

Medicaid has learned that many physicians routinely allow extenders to bill in the physician’s name, thereby reaping an additional 20% for such services. Unfortunately, not only is such conduct illegal, but Medicaid (and soon Medicare) regularly analyzes the number of services attributable to a single physician and will investigate when it feels that the number of services/physician exceeds the statistical norm.

For further information, please feel free to contact General Counsel Chris Nuland at nulandlaw@aol.com.