Category Archives: Compliance Law Care

State by State Prescription Drug Legislation

prescription+medicineAs many of my readers know, particularly including those who are lawyers, tracking pending legislation affecting the pharmaceutical and medical device industries on both a state by state and federal basis can be an especially daunting task.  Obviously, these industries are highly regulated, and as each new issue presents itself, the federal and state legislatures do what they do best:  legislate some more!  The result is a highly complex, almost rainbow-like color scheme of regulations that are often inconsistent, contradictory and sometimes, well, nonsensical (my apologies in advance to the decision makers).

With the help of Matthew Samsa, a summer associate at Benesch, I have located a fabulous tracking source that I can’t help but share.  I’d suggest that you check out the 2007 Prescription Drug State Legislation tracker, hosted by the National Conference of State Legislatures, which is the “Forum of America’s Ideas.”  So, for example, what does Colorado have to say about pedigree legislation?  According to the site, legislation was just passed that “[w]ould regulate prescription drug wholesalers; including requiring criminal history background checks of applicant representatives, updating requirement for maintaining and retaining “pedigree” records to prevent or diversion to unauthorized buyers.” The site further mentions the following status information:  “Filed 3/6/07; passed Senate 4/2/07; passed House 4/12/07; amended and sent to governor 5/15/07.”

Of course, I can’t make any representations or warranties about the accuracy of the content and how often the site is updated (if only I could write without including a disclaimer).  I can say, however, that this site may make tracking state legislation affecting the pharmaceutical industry a far more manageable task.

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On Site Drug Testing Are You In Compliance?

health care complianceDoes your organization have a culture of compliance? What are your compliance standards, policies, and procedures?  Who oversees your compliance program? How is compliance education and training conducted?  How do you monitor for compliance irregularities and how often do you conduct audits?  How does an employee report a compliance issue and how is the investigation handled?  What is your response to a compliance issue.  How do you prevent it from happening again?

Say for instant, you want to know about onsite drug testing, because believe me, there are potential employees, who search for how long does methadone stay in your system for a drug test. You want to make sure your company is in compliance.

Drug and Alcohol testing has become a mainstay in Corporate America. This is due in part to the effect that drugs and alcohol have on an employee’s safety, productivity, and quality of work. Let us bring the test site to your door so you no longer have to worry about delays in the workforce.

offers drug and alcohol on-site testing services to corporations, small businesses, education facilities, law enforcement, and everyday individuals. We offer pre-employment, post accident, return to work and follow-ups, reasonable suspicion, random drug and alcohol testing and hair analysis services.

So check with your local and state rep, to make sure your in compliance.

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Medical Residents Considered Employees, Not Students, Under Federal Tax Law

Medical Residents Considered Employees, Not Students, Under Federal Tax LawOn January 11, 2011, the United States Supreme Court, in an unanimous opinion authored by Chief Justice Roberts, upheld a Treasury Department rule that established that medical residents are full-time employees, not students, for purposes of federal income taxation and Social Security coverage.

The case considered a federal law, namely the Federal Insurance Contributions Act (FICA), which exempts students from paying Social Security taxes. In 2004, the Treasury Department issued a rule that essentially stated medical residents were not students and therefore that their wages were taxable under FICA.

Petitioner Mayo Foundation for Medical Education and Research argued that this was an improper rule, and that medical residents should be treated as students under the plain language of the statute. In announcing the decision, the Court focused on the question of whether residents were “workers who study or students who work.”

The Court held that the Department’s regulation was a permissible interpretation of an ambiguous statute, and therefore that medical residents would be treated as employees for purposes of federal taxation and Social Security coverage under FICA. Chief Justice Roberts wrote, “The department certainly did not act irrationally in concluding that these doctors… are the kind of workers that Congress intended to both contribute to and benefit from the Social Security system.”

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Michigan Court of Appeals Rules State Law on Patient Privacy Trumps HIPAA In Certain Circumstances

HIPAA CompliantA new published health law opinion from the Michigan Court of Appeals could have some far reaching effects on HIPAA litigation.

In the case of Isidore Steiner, DPM, PC v Marc Bonanni, Dr. Bonanni was employed by Isadore Steiner, DPM, PC and his contract included a non-competition and non-solicitation provision. After Dr. Bonanni left his employment with them, Isidore Steiner, DPM, PC sued him for allegedly violating the non-solicitation provision of the contract and stealing their patients. In order to prove their allegations, Isidore Steiner, DPM, PC sought Dr. Bonanni’s patient list during the discovery portion of the case.

The Michigan Court of Appeals found that the patient list was not discoverable as it was privileged under Michigan law. The Michigan Court of Appeals held on April 7, 2011 that Michigan law protects the very fact of the physician-patient relationship from disclosure, absent patient consent; this means that the name, address, and contact information is protected from disclosure in litigation. The Court found that HIPAA (which would have allowed for disclosure) does not preempt state law on this matter because state law is more stringent.

Generally, HIPAA requires patient consent for the disclosure of protected health information, just as Michigan state law does. In litigation, however, HIPAA has special provisions that allow for the disclosure of protected health information in response to a subpoena or court order if the provider receives adequate assurances that notice was provided to the patient or that reasonable efforts were made to secure a QPO. However, Michigan law does not have such an exception and requires the patient’s consent to reveal private patient information. Thus, it would seem that non-solicitation provisions in employment contracts may potentially lose some of their weight unless a violation can be proven without reference to patient information. If an ex-employee violates this contractual provision, the employer does not have access to the ex-employee’s patient list to prove its allegations of violation of the employment contract under this latest Michigan Court of Appeals ruling.…

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Health Care Employers feel the Pain of H1N1 Vaccination Policies

H1N1 Vaccination PoliciesMany Hospitals and other employers in the health care industry are discussing the benefit of H1N1 vaccinations for their employees. Some are even considering mandating that employees receive the vaccination. After all, if your employees are “at will,” then you can impose new conditions of employment on them at any time.

On many levels, mandating the vaccine for health care workers makes sense. After all, OSHA mandates that employers provide their employees with a safe place to work. Doesn’t a mandatory vaccination ensure a safer place for employees to work? A healthy workforce also means less absenteeism. And, the idea of mandatory vaccinations isn’t totally foreign to health care: think TB vaccinations. I also compare a mandated vaccination to drug testing: somewhat invasive, but for the common good.

On the other hand, mandatory vaccinations raise many legal issues. For instance, if your workforce is unionized, then this would require negotiations with the union before implementation, as it affects the terms and conditions of employment. If you are non-unionized and have many employees opposed to the mandatory vaccination, a mandate may be what pushes employees to organize. Another consideration is that some have asserted that the vaccination is untested and potentially dangerous. If an employee is vaccinated over his/her objection, that may create liability for the employer if the employee experiences an injury or serious side effects from the vaccine.

While there are many good reasons to mandate the H1N1 vaccine, an employer who moves in this direction is definitely treading onto unsettled legal grounds.…

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OIG Work Plan – FY 2009

health care lawLast week, the Office of Inspector General (OIG) published its “Work Plan” for federal fiscal year 2009. Many health care providers use the annual OIG Work Plan as a road map to guide their annual compliance efforts and this has always been a strategy that I have supported.

Although I usually suggest that compliance officers and the health care providers they represent look not just at the current year’s Work Plan but the past two or three years Work Plans, collectively, I think it is very important for health care providers to be aware of what the OIG thinks it should pay attention to, in any particular year. Its also noteworthy to understand how the OIG’s focus changes from year to year and over time.

Of particular note in this year’s Work Plan is the continuation of some significant reviews and the initiation of others that are in areas where health care providers often struggle.

They include OIG’s review of:

Provider-Based Status for Inpatient and Outpatient Facilities
Hospital Owned Physician Practices Billed as Outpatient Services
Provider Bad Debt Allocations
Medicare Secondary Payer Compliance
Diagnostic X-rays Performed in Hospital Emergency Departments
EMTALA Compliance
Never Events
Physician Services Performed by Non-Physicians
Medicare Payments for Sleep Services
Services Performed by Clinical Social Workers
Outpatient Physical Therapy Provided by Independent Therapists
Payments for Colonoscopy Services

Given some of the questions that I have received from clients in the past six months, I see EMTALA Compliance and Medicare Payments for Sleep Studies as particularly interesting and suggestive of the fact that OIG and CMS think that providers are not doing things correctly in these areas.

Your compliance committee should take the time to review the new OIG Work Plan and modify its compliance focus accordingly.…

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FTC Red Flag Rules – Regulation From A New Direction

healthcare law infoIt never ceases to amaze me the number of varying directions from which hospitals and health care providers get regulated!

The most recent federal agency to jump on the health care regulation bandwagon appears to be the Federal Trade Commission (FTC). On November 9, 2007, the FTC, in conjunction with federal bank regulators, issued a set of regulations intended to combat identity theft. These regulations are commonly referred to as the “Red Flag Rules.” The Red Flag Rules require financial institutions and other “creditors” to implement a program designed to detect, prevent and mitigate identity theft in connection with the creation and maintenance of “covered accounts.”

Many hospitals and health care providers began to pay attention to these regulations a few months ago when word started to “eek out” that the Red Flag Rules might apply to hospitals and other health care providers. While the application of these rules to any specific transaction will depend upon the specifics of the transaction at issue, what does seem pretty clear at this point is that if you are affiliated with a health care provider that periodically allows patients to pay for their medical services through a series of payments, over time, that health care provider is likely a “creditor” and needs to comply with the Red Flag Rules. Health care providers should, with very limited exception, expect to comply with the Red Flag Rules as of November 1, 2008.

Compliance with the Red Flag Rules is, in many ways, tied to your HIPAA compliance program and the policies and procedures health care providers already have in place. Similar to the HIPAA Security and Privacy Regulations, the Red Flag Rules deal with access to information in patient medical records and billing account records and the extent to which those records may be accessed and used to commit identity fraud.

To begin your compliance efforts, look to identify points of access or entry into patient records or accounts that might lend itself to identify theft. Form a committee or task force made up of representatives from: HIM, HIPAA privacy and security, patient accounts, patient registration, pharmacy and the emergency department. Ask this group to brainstorm the points of access to relevant patient information and to analyze specific examples and experiences with patient identity theft to begin to develop a sense of where your identify theft risk lies.

Next, look at your existing privacy and security policies developed as part of your HIPAA compliance efforts and then evaluate what changes or additions need to be made to those policies in order to minimize your identity theft risk. In addition, you may need to revise policies or add new policies that will alert you to identity theft when it occurs and guide your response to patient identity theft.

Other things you will need to do over time as you build your Red Flag Rules compliance program will include demonstrating Board approval and oversight of your program and amending your existing business associate agreements so that your business associates are contractually obligated to be your partners in this effort.

In addition to resources being developed by the American Health Lawyers Association, the AHA and other organizations, your compliance counsel should be available to assist with the development of a Red Flag Rules compliance program.…

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Employee Free Choice Act — What’s in a Name?

 employee free choice actAlthough union membership overall continues to be weak, particularly in the private sector, there may be some changes on the horizon. Recent press accounts state that the overall percentage of union membership has increased for the second year in a row. While still well below peak levels of approximately 35 percent in the 1950’s, the number of union members rose from 311,000 in 2007 to 428,000 in 2008. In addition, the change in the political landscape in Washington makes it more likely that legislation friendly to organized labor will pass and become law.

Most notable of these pro-labor legislative proposals is the ironically named “Employee Free Choice Act”. Throughout the history of the National Labor Relations Act, the heart of the unionization process has been the right of employees to decide if they wanted a union through a secret ballot election conducted by the National Labor Relations Board (NLRB). If passed, the Employee Free Choice Act will eliminate those elections.

Under current law, a union must provide evidence to the National Labor Relations Board that at least 30 percent of the employees want to be represented by a union. This “showing of interest” is usually accomplished by getting employees to sign an “authorization card” saying they want the union. The cards are then presented to the NLRB (the employer never sees them). If at least 30 percent of the employees have signed the cards, the NLRB schedules a secret ballot election. If a majority of the employees voting by secret ballot want unionization, then the union is certified as the representative of the employees.

The so-called “free choice” legislation eliminates the election portion of the process and requires that if a majority of employees sign a card, then the union is certified. No election is held. While these cards have been used for years for the “showing of interest”, they are considered to be notoriously unreliable as a true indicator of the employees’ wishes. The card signing process is not private and significant pressure can be brought to bear on employees to sign the cards. Under the proposed legislation, these cards will be the sole basis for certifying a union as the employees’ representative.

In addition to the “card check” portion of the proposed legislation, the bill will require employers to begin negotiations within 10 days of the first “written request for collective bargaining” by a newly certified union. If agreement on a contract is not reached after 90 days, then either party can request mediation. If there still is no contract after 30 days of mediation, the dispute will be referred to “an arbitration board”. This board will be able to impose a contract on the parties for a two year term. In other words, wages, benefits, terms and condition of employment for two years will be set by an outside arbitration panel.

The bill also calls for triple backpay to employees who are terminated in violation of the National Labor Relations Act while a union is attempting to organize the employer and during negotiations of the first agreement. The NLRB will also be able to seek an injunction forcing reinstatement of a terminated employee before there is a ruling on the appropriateness of the termination. In some cases, there can be $20,000 in civil penalties for each violation of the statute. Violations of the statute by unions do not increase penalties.

The Employee Free Choice Act has widespread support among Democratic members of Congress and President Obama has stated that he will sign the bill if it is passed. Business groups are strongly opposed to the bill and battle lines have been drawn. We will watch to see if it passes the Senate and becomes law.

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