Provider Pays $750K To Settle HIPAA Business Associate Rule Breach Charges

April 21, 2016

Health Care Providers, Health Plans, Healthcare Clearing Houses & Business Associates Should Verify Plan’s HIPAA Business Associate Rule Compliance

Health care providers as providers and as health plan sponsors, health plans and their sponsors, health care clearinghouses and  their business associates should reconfirm and ensure they can prove they have all required business associate agreements  in place and otherwise properly are administering all policies, practices, safeguards and procedures for handling, using and disclosing electronic and other protected health information in accordance with the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules (Privacy Rule) in light of the April 20, 2016 Department of Health & Human Services Office of Civil Rights (OCR) announcement of its latest resolution agreement settling charges against a health care provider for sharing protected health information with a business associate without first implementing the required business associate agreement.

OCR Charges Brought For Business Associate Agreement Violations

HIPAA’s Privacy Rules generally apply to “covered entities,” which under HIPAA are health plans and insurers, health care providers, health care clearinghouses (Covered Entities) and “business associates,” which are individuals or entities that perform services that aid the  Covered Entity to perform its duties as a Covered Entity.

The Resolution Agreement and Corrective Action Plan (Resolution Agreement) with Raleigh Orthopaedic Clinic, P.A. of North Carolina (Raleigh Orthopaedic) announced by OCR on April 20th requires Raleigh Orthopaedic to pay $750,000 to settle  charges OCR it violated the Privacy Rule by handing over protected health information of approximately 17,300 patients to a potential business partner without first executing a business associate agreement.

Raleigh Orthopaedic is a provider group practice that operates clinics and a surgery center in the Raleigh, North Carolina area. OCR initiated its investigation of Raleigh Orthopaedic after receiving a breach report on April 30, 2013.  OCR’s investigation indicated that Raleigh Orthopaedic violated the Privacy Rules by releasing the x-ray films and related protected health information of 17,300 patients to an entity that promised to transfer the images to electronic media in exchange for harvesting the silver from the x-ray films.  Raleigh Orthopaedic failed to execute a business associate agreement with this entity before turning over the x-rays and PHI.

OCR says this sharing of the x-ray files and other protected health information by Raleigh Orthopaedic violated the Privacy Rules.

Specifically, the Privacy Rules prohibit Covered Entities and their business associates from using, accessing and disclosing protected health information except as specifically permitted in the Privacy Rules. As part of these rules, the “Business Associate” requirements of the Privacy Rule prohibit Covered Entities from disclosing or allowing business associates to use, and business associates from receiving or using protected health information unless the parties first enter into a written business associate agreement that complies with the requirements of the Privacy Rules.

The Resolution Agreement settles OCR charges that Raleigh Orthopaedic violated this Business Associate Agreement requirement by sharing the x-rays and other protected health information with the service provider without first entering a business associate agreement. Under the Settlement Agreement, Raleigh Orthopaedic must pay a $750,000 payment, as well as revise its policies and procedures to: establish a process for assessing whether entities are business associates; designate a responsible individual to ensure  business associate agreements are in place prior to disclosing PHI to a business associate; create a standard template business associate agreement; establish a standard process for maintaining documentation of a business associate agreements for at least six (6) years beyond the date of termination of a business associate relationship; and limit disclosures of PHI to any business associate to the minimum necessary to accomplish the purpose for which the Covered Entity hires the business associate.

Although the Resolution Agreement only addresses charges OCR brought against the Covered Entity, Raleigh Orthopaedic, business associates need to keep in mind that both Covered Entities and business associates now are responsible for ensuring compliance with the business associate agreement requirements of the Privacy Rules since the Stimulus Bill amended HIPAA to make most provisions of the Privacy Rule directly applicable to business associates as well as Covered Entities.

 Take Aways For Covered Entities & Their Business Associates 

OCR’s announcement of the Resolution Agreement includes a strong message for other Covered Entities and business associates of the importance of taking seriously their responsibility under the Privacy Rule to ensure that the business associate agreement requirements of the Privacy Rule are met before business associates are allowed to receive, access or use protected health information. The announcement quotes Jocelyn Samuels, Director of the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) as stating.  “It is critical for entities to know to whom they are handing PHI and to obtain assurances that the information will be protected.” and “HIPAA’s obligation on covered entities to obtain business associate agreements is more than a mere check-the-box paperwork exercise.”

In light of the Business Associate Rule and Director Samuels’ comments, Covered Entities and business associates alike should review the adequacy of their documentation, policies and practices regarding dealings with service providers who are or could collect, receive or use electronic or other protected health information to propose or perform services in the capacity as a business associate. Certainly both Covered Entities and business associates to ensure that they possess and are able to produce if needed signed business associate agreements for each current business associate agreement as well as that appropriate policies, practices and procedures are in place to ensure that all required business associate agreements are implemented before any disclosure or use of protected health information to the business associate in the future.  As part of these activities, both Covered Entities and business associates also should ensure their policies and practices appropriately provide for the retention of signed copies of all business associate agreements and other records, and the implementation of all other processes and procedures required to position the entity to be able to demonstrate it not only had policies requiring compliance, but appropriately implemented and administered those policies in accordance with the Privacy Rule.

When conducting this review, Covered Entities and business associates also generally should consider the advisability of also reviewing their business associate agreements and the adequacy of these arrangements in light of any other contractual confidentiality and or contractual rights and commitments, regulatory requirements and other operational and risk management concerns that impact or interrelate with the relationship between the business associate and the Covered Entity. It is important to ensure that appropriate steps are taken to evaluate and properly integrate the confidentiality and other commitments that the Privacy Rules mandate a business associate agreement include with audit, performance assessment, and other data access or disclosure, trade secrets, confidentiality, performance standards and guarantees, indemnity and other contractual obligations of other agreements that could impact or be impacted  by the business associate agreements. Steps also should be taken to incorporate appropriate processes and procedures for ensuring that the Covered Entity and members of its workforce understand and consistently administer and document their use of appropriate processes to ensure that the business associate agreement and other requirements of the Privacy Rules are fulfilled.  In the case of employer sponsored plans subject to the Employee Retirement Income Security Act of 1974, for instance, the selection and proper oversight of business associates and the management of plan data both are subject to the fiduciary responsibility rules of ERISA.  Meanwhile, insurers, business associates and other plan vendors also generally should anticipate that beyond HIPAA, they also may be subject to data security, privacy and other mandates and exposures under state HIPAA-like rules for protected health information, as well as other obligations under insurance, data security, identity theft, breach, privacy and other state laws.

The process of evaluating the adequacy of current arrangement and considering the advisability of changes to tighten existing practices in many cases will result in the discovery and discussion of potentially sensitive information about the adequacy of current or past compliance with the Privacy Rules or other matters. For example, it is possible that in the course of review, parties may be unable to locate a signed business associate agreement governing a relationship that the Privacy Rules require be subject to a business associate agreement or in the course of review, information indicating breaches of protected health information or other Privacy Rule violations may have occurred.  For this reason, most Covered Entities and their business associates will want to consider arranging for this review and analysis to be conducted within the scope of attorney-client privilege by or under the direction of qualified legal counsel with HIPAA experience that has entered into a business associate agreement with the Covered Entity or business associate.

About The Author

The author of this update,Cynthia Marcotte Stamer, is a noted Texas-based management lawyer and consultant, author, lecturer and policy advocate, recognized as among the “Top Rated Labor & Employment Lawyers in Texas” by LexisNexis® Martindale-Hubbell® and as among the “Best Lawyers In Dallas” for her work in the field of “Tax: Erisa & Employee Benefits” and “Health Care” by D Magazine who works, writes and speaks extensively about HIPAA and other data privacy and security concerns.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation,  Ms. Stamer’s legal and management consulting work throughout her career has focused on helping health industry, insurance and other organizations and their management use the law and process to manage people, process, compliance, operations and risk. Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer helps public and private, domestic and international businesses, governments, and other organizations and their leaders manage their employees, vendors and suppliers, and other workforce members, customers and other’ performance, compliance, compensation and benefits, operations, risks and liabilities, as well as to prevent, stabilize and cleanup workforce and other legal and operational crises large and small that arise in the course of operations.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Ms. Stamer helps health industry and other organizations manage. Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce management operations and compliance. She supports her clients both on a real time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.  Well-known for her extensive work with health care, insurance and other highly regulated entities on corporate compliance, internal controls and risk management, her clients range from highly regulated entities like employers, contractors and their employee benefit plans, their sponsors, management, administrators, insurers, fiduciaries and advisors, technology and data service providers, health care, managed care and insurance, financial services, government contractors and government entities, as well as retail, manufacturing, construction, consulting and a host of other domestic and international businesses of all types and sizes.  Common engagements include internal and external workforce hiring, management, training, performance management, compliance and administration, discipline and termination, and other aspects of workforce management including employment and outsourced services contracting and enforcement, sentencing guidelines and other compliance plan, policy and program development, administration, and defense, performance management, wage and hour and other compensation and benefits, reengineering and other change management, internal controls, compliance and risk management, communications and training, worker classification, tax and payroll, investigations, crisis preparedness and response, government relations, safety, government contracting and audits, litigation and other enforcement, and other concerns.

A Fellow in the American College of Employee Benefit Counsel, Ms. Stamer also brings to the table extensive knowledge and experience to help employers and other employee benefit plan sponsors; health, pension and other employee benefit plans, their fiduciaries, administrators and service providers, insurers, and others design legally compliant, effective compensation, health and other welfare benefit and insurance, severance, pension and deferred compensation, private exchanges, cafeteria plan and other employee benefit, fringe benefit, salary and hourly compensation, bonus and other incentive compensation and related programs, products and arrangements. She is particularly recognized for her leading edge work, thought leadership and knowledgeable advice and representation on the design, documentation, administration, regulation and defense of a diverse range of self-insured and insured health and welfare benefit plans including private exchange and other health benefit choices, health care reimbursement and other “defined contribution” limited benefit, 24-hour and other occupational and non-occupational injury and accident, ex-patriate and medical tourism, onsite medical, wellness and other medical plans and insurance benefit programs as well as a diverse range of other qualified and nonqualified retirement and deferred compensation, severance and other employee benefits and compensation, insurance and savings plans, programs, products, services and activities. As a key element of this work, Ms. Stamer works closely with employer and other plan sponsors, insurance and financial services companies, plan fiduciaries, administrators, and vendors and others to design, administer and defend effective legally defensible employee benefits and compensation practices, programs, products and technology. She also continuously helps employers, insurers, administrative and other service providers, their officers, directors and others to manage fiduciary and other risks of sponsorship or involvement with these and other benefit and compensation arrangements and to defend and mitigate liability and other risks from benefit and liability claims including fiduciary, benefit and other claims, audits, and litigation brought by the Labor Department, IRS, HHS, participants and beneficiaries, service providers, and others.  She also assists debtors, creditors, bankruptcy trustees and others assess, manage and resolve labor and employment, employee benefits and insurance, payroll and other compensation related concerns arising from reductions in force or other terminations, mergers, acquisitions, bankruptcies and other business transactions including extensive experience with multiple, high-profile large scale bankruptcies resulting in ERISA, tax, corporate and securities and other litigation or enforcement actions.

Throughout her career, Ms. Stamer has advised these and other clients about health care, health plan, financial information, trade secret, privacy and other related compliance, data breach response and remediation and related compliance, risk management and related concerns.  In the course of this work, Ms. Stamer has accumulated an impressive resume of experience advising and representing clients on HIPAA and other privacy and data security concerns. The scribe for the American Bar Association (ABA) Joint Committee on Employee Benefits annual agency meeting with the Department of Health & Human Services Office of Civil Rights for several years, Ms. Stamer has worked extensively with health plans, health care providers, health care clearinghouses, their business associates, employer and other sponsors, banks and other financial institutions, and others on risk management and compliance with HIPAA and other information privacy and data security rules, investigating and responding to known or suspected breaches, defending investigations or other actions by plaintiffs, OCR and other federal or state agencies, reporting known or suspected violations, business associate and other contracting, commenting or obtaining other clarification of guidance, training and enforcement, and a host of other related concerns. Her clients include public and private health plans, health insurers, health care providers, banking, technology and other vendors, and others.

Beyond advising these and other clients on privacy and data security compliance, risk management, investigations and data breach response and remediation and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. She also is the author of numerous highly acclaimed publications, workshops and tools for HIPAA or other compliance including training programs on Privacy & The Pandemic for the Association of State & Territorial Health Plans, as well as HIPAA, FACTA, PCI, medical confidentiality, insurance confidentiality and other privacy and data security compliance and risk management for Los Angeles County Health Department, ISSA, HIMMS, the ABA, SHRM, schools, medical societies, government and private health care and health plan organizations, their business associates, trade associations and others.

Ms. Stamer also is deeply involved in helping to influence the Affordable Care Act and other health care, pension, social security, workforce, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations. She both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally.  A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas, Ms. Stamer annually leads the Joint Committee on Employee Benefits (JCEB) HHS Office of Civil Rights agency meeting and other JCEB agency meetings.  She also works as a policy advisor and advocate to many business, professional and civic organizations.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation,  Ms. Stamer’s legal and management consulting work throughout her career has focused on helping health industry, insurance and other organizations and their management use the law and process to manage people, process, compliance, operations and risk. Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer helps public and private, domestic and international businesses, governments, and other organizations and their leaders manage their employees, vendors and suppliers, and other workforce members, customers and other’ performance, compliance, compensation and benefits, operations, risks and liabilities, as well as to prevent, stabilize and cleanup workforce and other legal and operational crises large and small that arise in the course of operations.

Throughout her career, Ms. Stamer has advised these and other clients about health care, health plan, financial information, trade secret, privacy and other related compliance, data breach response and remediation and related compliance, risk management and related concerns.  In the course of this work, Ms. Stamer has accumulated an impressive resume of experience advising and representing clients on HIPAA and other privacy and data security concerns. The scribe for the American Bar Association (ABA) Joint Committee on Employee Benefits annual agency meeting with the Department of Health & Human Services Office of Civil Rights for several years, Ms. Stamer has worked extensively with health plans, health care providers, health care clearinghouses, their business associates, employer and other sponsors, banks and other financial institutions, and others on risk management and compliance with HIPAA and other information privacy and data security rules, investigating and responding to known or suspected breaches, defending investigations or other actions by plaintiffs, OCR and other federal or state agencies, reporting known or suspected violations, business associate and other contracting, commenting or obtaining other clarification of guidance, training and enforcement, and a host of other related concerns. Her clients include public and private health plans, health insurers, health care providers, banking, technology and other vendors, and others.

Beyond advising these and other clients on privacy and data security compliance, risk management, investigations and data breach response and remediation and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. She also is the author of numerous highly acclaimed publications, workshops and tools for HIPAA or other compliance including training programs on Privacy & The Pandemic for the Association of State & Territorial Health Plans, as well as HIPAA, FACTA, PCI, medical confidentiality, insurance confidentiality and other privacy and data security compliance and risk management for Los Angeles County Health Department, ISSA, HIMMS, the ABA, SHRM, schools, medical societies, government and private health care and health plan organizations, their business associates, trade associations and others.

Ms. Stamer also is deeply involved in helping to influence the Affordable Care Act and other health care, pension, social security, workforce, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations. She both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally.  A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas, Ms. Stamer annually leads the Joint Committee on Employee Benefits (JCEB) HHS Office of Civil Rights agency meeting and other JCEB agency meetings.  She also works as a policy advisor and advocate to many business, professional and civic organizations.

Author of the thousands of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer also is a highly sought out speaker and industry thought leader known for empowering audiences and readers.  Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, Modern Healthcare, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications. Ms. Stamer also regularly serves on the faculty and planning committees for symposia of LexisNexis, the American Bar Association, ALIABA, the Society of Employee Benefits Administrators, the American Law Institute, ISSA, HIMMs, and many other prominent educational and training organizations and conducts training and speaks on these and other management, compliance and public policy concerns.  She will share updates on HIPAA and other health care and data security concerns when returns to speak and chair at the 4th Annual Healthcare Privacy and Security Forum scheduled on May 20, 2016 in Los Angeles.

Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer presently serves on an American Bar Association (ABA) Joint Committee on Employee Benefits Council representative; Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the ABA RPTE Employee Benefits & Other Compensation Committee, its current Welfare Benefit Plans Committee Co-Chair, on its Substantive Groups & Committee and its incoming Defined Contribution Plan Committee Chair and Practice Management Vice Chair; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; current Vice Chair of the ABA TIPS Employee Benefit Committee; the former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications. She also previously served as a founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association. For additional information about Ms. Stamer, see here or contact Ms. Stamer directly by email cstamer@solutionslawyer.net  or by telephone at (469) 767-8872.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also may be interested reviewing other Solutions Law Press, Inc.™ resources at www.solutionslawpress.com such as:

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©2016 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press. All other rights reserved.


OCR’s Proposed Sex & Other Discrimination Rules Spell Headaches & New Risks For Health Care Providers, Insurers & Others

September 3, 2015

November 6, 2015 is the deadline for health care providers, health insurance exchanges, Medicare Advantage plans, Medicaid Advantage plans, health insurers providing coverage in the health insurance marketplaces, their contractors and other concerned parties to comment on a proposed rule on Nondiscrimination in Health Programs and Activities published today by the Department of Health and Human Services (HHS) to implement the federal prohibition against sex discrimination in health programs and activities enacted under Section 1557 of the Patient Protection and Affordable Care Act (ACA) and tightening other nondiscrimination requirements that generally apply to Health Insurance Marketplaces, any health program that HHS itself administers, and any health program or activity, any part of which receives funding from HHS, such as hospitals that accept Medicare patients or doctors who treat Medicaid patients, and health insurance issurers participating in the Health Insurance Marketplaces, Medicare or Medicaid Advantage Plans and other entities covered by the HHS Office of Civil Rights (OCR) civil rights rules (covered entities) and various other programs and activities administered by HHS’ Office of Civil Rights (OCR).

Since OCR already aggressively investigates and enforces federal prohibitions against discrimination based on race, color, national origin, disability, age and sex against covered entities as part of the Obama Administration’s broader civil rights agenda, covered entities can look forward to OCR’s adoption of the proposed rules to add even more teeth and fire to the already aggressive enforcement by OCR of health care providers, insurers and other parties subject to the civil rights laws enforced by OCR. See. e.g., Health Care Employer’s Discrimination Triggers Medicare, EEOC Prosecutions; Genesis Healthcare Disability HHS OCR Discrimination Settlement Reminder To Use Interpreters, Other Needed Accommodations For Disabled; OCR Settlements Show Health Care & Disabled Housing Providers Face Growing Disability Discrimination Risks Given the often multimillion dollar penalties and other heavy sanctions that OCR already has imposed against a long and ever-growing list of state and other health care, child care, elder care, insurance and other entities for violating the discrimination or other civil rights rules administered by OCR, health care and other providers, Medicare and Medicaid Advantage and other insurers, and other covered entities generally will want both to carefully review and comment as appropriate on the proposed rules, as well as review and tighten as advisable their existing practices to reduce the risk of being sanctioned, excluded or both for violation of these nondiscrimination and other civil rights requirements by OCR. In this respect, covered entities will want both to evaluate their risks and responsibilities under the specific rules about Section 1557’s sex discrimination prohibits, as well as changes that more broadly affect the interpretation and enforcement of the nondiscrimination rules enforced by OCR generally.

Sex and Gender Identity Discrimination

Concerning the new prohibition against sex discrimination added by Section 1557 of the ACA, the proposed rule expressly provides that covered entities must treat woman equally with men in the health care they receive generally as well as specifically comments on the obligations of covered insurers with respect to sex discrimination including gender identity. While other provisions of the ACA bar certain types of sex discrimination in insurance, for example by prohibiting women from being charged more than men for coverage, the proposed regulation makes clear that the protections of Section 1557 reach even more broadly to prohibit sex discrimination both in the health coverage patients obtain as well as in the health services they seek from providers.

Not unexpectedly in light of the Supreme Court’s ruling in Obergefell and the Obama Administration’s proactive agenda on the advance of rights for lesbian, bisexual, gay and transsexual (LBGT) individuals, the proposed rule makes clear that OCR construes prohibited sex discrimination under Section 1557 to include discrimination based on gender identity as well as to address various coverage and care practices that OCR views as prohibited sex discrimination of LBGT individuals. In this respect, the proposed rule makes clear HHS’s commitment, as a matter of policy, to preventing discrimination based on sexual orientation by providing, among other things that Individuals may not be subject to discrimination based on gender identity by any covered entities including insurance policies and their issuers. OCR also highlights various policy provisions and other practices by insurers that it views as prohibited sex discrimination against transsexual individuals such as categorical exclusions on coverage of all care related to gender transition.  Similarly, the proposed rule also states that health care providers, insurers and other covered person must treat all individuals consistent with their gender identity, including in access to facilities. Beyond the already proposed safeguards against sex discrimination based on gender identity, OCR also requests comment on how a final rule can incorporate the most robust set of protections  against discrimination that are supported by the courts on an ongoing basis.

Other Nondiscrimination Rule Expansions

Beyond its requirements relating to sex discrimination, the proposed rule also addresses a host of other concerns relating to the civil rights rules more generally. As an initial matter, the proposed rule invites individuals in protected classes to file complaints and pursue other enforcement by confirming that OCR interprets Section 1557 as allowing individuals to seek legal remedies for discrimination under Section 1557. While OCR already has been allowing this in practice, this blessing of the right of individuals to seek legal remedies unquestionably will encourage the filing of more complaints and other private actions.

The proposed rule also would add more teeth to the already aggressive enforcement by OCR of its position that covered entities must accommodate community deficiencies of persons with cognitive, speech, hearing or other disabilities and English proficiency limitations on their ability to communicate on health care matters by establishing more detailed minimum standards for the provision of language services, such as oral interpreters and written translations to persons with limited English proficiency and to provide individuals with hearing or other disabilities affecting their ability to communicate to provide auxiliary aids and services, including alternative formats and sign language interpreters, and the accessibility of programs offered through electronic and information technology.  These proposed requirements are designed to provide more teeth and compliance with OCR’s expectation that covered entities will affirmatively act to offer accommodations needed to ensure the ability of individuals to communicate when the individual’s ability to understand or respond is impaired by disabilities or limited English proficiency.

Also, the proposed regulations specifically addresses various practices by Medicare and Medicaid Advantage plans and other insurers offering coverage in the marketplace that OCR views as discriminatory. For instance, the proposed rule states that insurers participating or offering coverage through any Health Insurance Marketplace cannot engage in any marketing practices or benefit designs that discriminate on the basis of race, color, national origin, sex, age, or disability.  This prohibition would extend to all the plans of insurers participating in the Marketplace are covered by the proposed rule.

Beyond the already proposed expansion in the current regulatory expectations, OCR also invites input about additional requirements to broaden the safeguards in the proposed regulations by requesting comment on whether Section 1557 should include an exemption for religious organizations and what the scope of any such exemption should be as well as comment on how a final rule can incorporate the most robust set of protections  against discrimination that are supported by the courts on an ongoing basis.

Unquestionably these and other changes proposed in the proposed regulation likely will impact the practices and risks of virtually all covered entities. The proposed rule is open for public comment through November 6, 2015. Covered entities and other interested persons will want to promptly review the specifics of the proposed regulation in light of OCR’s already existing investigation and enforcement activities and their current or contemplated practices. To the extent appropriate, covered entities will want to ensure that they carefully prepare and submit all revelevant comment or other feedback promptly submitted on or before the November 6, 2015 comment deadline. Whether or not a covered entity elects to comment of the proposed regulations, however, all covered entities also should begin tightening and adapting their existing policies and practices to respond to the positions revealed by the proposed regulations, as OCR’s enforcement activities reflect that OCR will act to enforce many of these expectations even as it pursues adoption of the proposed regulations in final form.

For More Information Or Assistance

If you need assistance reviewing or responding to these or other health care related risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, may be able to help. Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, Board Certified in Labor & Employment Law, and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 28 years experience advising health industry clients about these and other matters. Her experience includes more than 23 years experience advising and defending hospitals, nursing home, home health, rehabilitation and other health care, housing, insurance and other  clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to discrimination and other charges from OCR, HUD, EEOC, DOJ, private claimants and others.  She also advises and assists a broad range of health industry and other clients to respond to and defend Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR, CMS & other HHS agencies, Department of Labor, IRS, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns.  The scribe for the American Bar Association (ABA) Joint Committee on Employee Benefits annual agency meeting for several years with OCR.  Ms. Stamer also works extensively with health care providers, health plans and insurers, health care clearinghouses, their business associates, employers, banks and other financial institutions, and others on risk management and compliance, investigations, defense, and other actions by plaintiffs, OCR and other federal or state agencies, reporting known or suspected violations, business associate and other contracting, commenting or obtaining other clarification of guidance, training and enforcement, and a host of other related concerns.  Her clients include public and private health care providers, health insurers, health plans, technology and other vendors, and others.  In addition to representing and advising these organizations, she also has conducted training on discrimination and other civil rights, pandemic and other contagious disease, HIPAA, FACTA, PCI, medical confidentiality, insurance confidentiality and other privacy and data security compliance, quality, reimbursement, and a broad range of other industry internal controls, compliance, risk management, employment, patient safety, staffing, credentialing, board governance, antitrust, contracting and other legal and operational concerns for a multitude of clients and associations ranging from the Association of State & Territorial Health Plans, Los Angeles County Health Department, ISSA, HIMMS, the ABA, the American Health Lawyers Association, the Medical Group Management Association, SHRM, schools, medical societies, government and private health care and health plan organizations, their business associates, trade associations and others.

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.  You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see here.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns.

Other Helpful Resources & Other Information

We hope that this information is useful to you.   If you found these updates of interest, you also be interested in one or more of the following other recent articles published on the Coalition for Responsible Health Care Reform electronic publication available here, our electronic Solutions Law Press Health Care Update publication available here, or our HR & Benefits Update electronic publication available hereYou also can get access to information about how you can arrange for training on “Building Your Family’s Health Care Toolkit,”  using the “PlayForLife” resources to organize low-cost wellness programs in your workplace, school, church or other communities, and other process improvement, compliance and other training and other resources for health care providers, employers, health plans, community leaders and others here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail by creating or updating your profile here. You can reach other recent updates and other informative publications and resources.

Examples of some of these recent health care related publications include:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here.THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2015 Cynthia Marcotte Stamer, P.C. Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


New HIPAA Settlement Highlights Internet Applications Safeguards, Whistleblower & Management Oversight Compliance Risks

July 10, 2015

Health care providers, health insurers, group health plans and health care clearinghouses (Covered Entities), their business associates and their leaders need to ensure the adequacy of the security of internet portals and applications used to create, use, access or disclose protected health information (PHI) and should establish and administer ongoing procedures to monitor and maintain adequate PHI security on an ongoing basis in light of a new Health Insurance Portability & Accountability Act (HIPAA) Privacy, Security and Breach Notification Rule (“HIPAA Rules”) Resolution Agreement with St. Elizabeth’s Medical Center (SEMC) announced today (July 10, 2015) by the Department of Health & Human Services Office of Civil Rights (OCR). Concurrently, the Resolution Agreement also reaffirms the growing involvement of employees and other workforce members as HIPAA “whistleblowers” as well as the need for Covered Entities, business associates and their leaders to ensure that they include and administer documented requirements for board reporting and oversight in their HIPAA compliance and risk management activities.

To settle OCR charges that the Brighton, Massachusetts’s based hospital system violated the HIPAA Rules resulting from OCR’s investigation of a November 16, 2012 complaint made to OCR by SEMC workforce members, SEMC has agreed to pay $218,400 and to implement a “robust corrective action plan” to correct deficiencies in its HIPAA security and other compliance revealed in the investigation.

According to OCR, OCR opened the investigation after employees complained to OCR  that SEMC violated  HIPAA by allowing workforce members to use an internet-based document sharing application to share and store documents containing electronic protected health information (ePHI) of at least 498 individuals without having analyzed the risks associated with such a practice. According to OCR, its investigation of the complaint revealed among other things that:

  • SEMC improperly disclosed the PHI of at least 1,093 individuals;
  • SEMC failed to implement sufficient security measures regarding the transmission of and storage of ePHI to reduce risks and vulnerabilities to a reasonable and appropriate level; and
  • SEMC failed to timely identify and respond to a known security incident, mitigate the harmful effects of the security incident, and document the security incident and its outcome. Separately, on August 25, 2014, SEMC submitted notification to HHS OCR regarding a breach of unsecured ePHI stored on a former SEMC workforce member’s personal laptop and USB flash drive, affecting 595 individuals. A review of detailed corrective action plan imposed under the Resolution Agreement provides helpful insights about some of the steps that OCR is likely to expect Covered Entities and business associates to take to meet its security expectations for internet applications and portals. Beyond imposing a $218,400 penalty (“Resolution Amount”) against SEMC, the Resolution Agreement requires among other things that SEMC in accordance with the Resolution Agreement and to OCR satisfaction.

In announcing the Resolution Agreement, OCR Director Jocelyn Samuels sent a clear message to Covered Entities and their business associates to confirm and maintain the adequacy of security of internet portals and applications used in connection with PHI. “Organizations must pay particular attention to HIPAA’s requirements when using internet-based document sharing applications,” said OCR Director Jocelyn Samuels. “In order to reduce potential risks and vulnerabilities, all workforce members must follow all policies and procedures, and entities must ensure that incidents are reported and mitigated in a timely manner.”

  • To self-assess the adequacy of its policies and workforce and operations compliance with HIPAA including conducting unannounced audits of SEMC workforce members’ familiarity and compliance with SEMC policies and procedures on transmitting ePHI using unauthorized networks; storing ePHI on unauthorized information systems, including unsecured networks and devices; removal of ePHI from SEMC; prohibition on sharing accounts and passwords for ePHI access or storage; encryption of portable devices that access or store ePHI; security incident reporting related to ePHI;
  • The adequacy of workforce compliance with these policies by conducting unannounced site visits to various SEMC departments, inspections of certain laptops, smartphones, storage media and other portable devices as well as on workstations and other devices containing ePHI;
  • To identify and report to OCR any material compliance issues with the policies and recommendations for improving these policies and procedures, oversight and supervision, or training;
  • Develop and implement to OCR satisfaction corrections to policies, practice and training along with oversight mechanisms reasonably tailored to ensure that all SEMC workforce members follow such policies and procedures, and only use and disclose ePHI appropriately;
  • Collect and retain for OCR review and approval certain documentation of compliance; and
  • Conduct documented investigations of potential violations, redress and report to OCR about investigations and violations.

First, management should take special note that members of the SEMC workforce made the complaint to OCR that prompted OCR’s investigation.

As in other health care compliance areas, required workforce training coupled with HIPAA’s anti-retaliation and whistleblower protections provide encouragement if not incentives for disgruntled or well-meaning employees or other workforce members and business partners of covered entities or business associates make complaints about suspected HIPAA or other compliance concerns internally or to OCR. Management needs to take appropriate steps to ensure that its policies and processes include appropriate privacy and human resources procedures to manage both its HIPAA compliance obligations and potential retaliation and other human resources exposures that can result if these concerns are mishandled.   Employee & Other Whistleblower Complaints Common Source of HIPAA Privacy & Other Complaints.  Effective health plan and employer HIPAA and human resources compliance, reporting internal investigation and risk management policies and practices are critical to manage both HIPAA and other compliance exposures and the retaliation and other human resources risks that inevitably arise when employees or other workforce members or business partners raise compliance concerns or participate in compliance investigations internally or externally.

Second, the Resolution Agreement also reflects the clear expectation that management of Covered Entities and business associates make compliance with HIPAA a priority. Consistent with its recent practice, the Resolution Agreement requires management oversight and accountability for ensuring compliance with the Resolution Agreement and HIPAA by requiring an officer to attest to the fulfillment of the requirements of the Resolution Agreement. This emphasis upon requiring leadership oversight and prioritization of HIPAA compliance tracks the broader general expectations regarding responsibilities for management and boards concerning compliance with HIPAA and other federal health care increasingly articulated by HHS and other federal agencies enforcing laws subject to the Federal Sentencing Guidelines like HIPAA, See e.g. Practical Guidance for Health Care Governing Boards on Compliance Oversight. While OCR officials have indicated that the need for officer attestation like that required by the Resolution Agreement may not be required in all cases, the inclusion of these requirements coupled with these other developments sends a strong message that Boards and other management should ensure that their processes include appropriate evidence and document retention of management oversight.

For More Information Or Assistance

If you need assistance reviewing or responding to these or other health care related risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, may be able to help. Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, Board Certified in Labor & Employment Law, and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 27 years’ experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. The scribe for the American Bar Association (ABA) Joint Committee on Employee Benefits annual agency meeting with the Department of Health & Human Services Office of Civil Rights, Ms. Stamer has worked extensively with health care providers, health plans, health care clearinghouses, their business associates, employers, banks and other financial institutions, and others on risk management and compliance with HIPAA and other information privacy and data security rules, investigating and responding to known or suspected breaches, defending investigations or other actions by plaintiffs, OCR and other federal or state agencies, reporting known or suspected violations, business associate and other contracting, commenting or obtaining other clarification of guidance, training and enforcement, and a host of other related concerns. Her clients include public and private health care providers, health insurers, health plans, technology and other vendors, and others. In addition to representing and advising these organizations, she also has conducted training on Privacy & The Pandemic for the Association of State & Territorial Health Plans, as well as HIPAA, FACTA, PCI, medical confidentiality, insurance confidentiality and other privacy and data security compliance and risk management for Los Angeles County Health Department, ISSA, HIMMS, the ABA, SHRM, schools, medical societies, government and private health care and health plan organizations, their business associates, trade associations and others.

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see here.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns.

Other Helpful Resources & Other Information

We hope that this information is useful to you. If you found these updates of interest, you also be interested in one or more of the following other recent articles published on the Coalition for Responsible Health Care Reform electronic publication available here, our electronic Solutions Law Press Health Care Update publication available here, or our HR & Benefits Update electronic publication available here. You also can get access to information about how you can arrange for training on “Building Your Family’s Health Care Toolkit,” using the “PlayForLife” resources to organize low-cost wellness programs in your workplace, school, church or other communities, and other process improvement, compliance and other training and other resources for health care providers, employers, health plans, community leaders and others here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail by creating or updating your profile here. You can reach other recent updates and other informative publications and resources. Examples of some of these recent health care related publications include:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication see here. THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS. ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2015 Cynthia Marcotte Stamer, P.C. Non-exclusive license to republish granted to Solutions Law Press, Inc. All other rights reserved.


IRS Publishes 2014 Branded Prescription Drug Fee Guidance

August 5, 2013

The Internal Revenue Service (IRS) today released Notice 2013-51. “Branded Prescription Drug Fee; Guidance for the 2014 Fee Year,” which contains guidance on the branded prescription drug fee imposed under section 9008 of the Patient Protection and Affordable Care Act (ACA) for the 2014 fee year.

Branded Prescription Drug Fee Background

ACA requires that covered entities that engage in the business of manufacturing or importing branded prescription drugs pay the branded prescription drug fee.  The Branded Prescription Drug Fee Regulations in 26 C.F.R. Part 51, published on August 18, 2011 (76 FR 51245), provide the method by which each covered entity’s annual fee is calculated. These regulations also define terms for the administration of the fee.

Regulation section 51.2T(g) defines fee year as the calendar year in which the fee for a particular sales year must be paid and section 51.2T(m) defines sales year as the second calendar year preceding the fee year.

Section 51.3T of the Regulation requires that annually, each covered entity may submit a completed Form 8947, “Report of Branded Prescription Drug Information,” in accordance with the instructions for the form. Generally, the form solicits information from covered entities on National Drug Codes, orphan drugs, designated entities, rebates, and other information specified by the form or its instructions. The form is to be filed by the date prescribed in guidance published in the Internal Revenue Bulletin.

Section 51.6T provides that for each sales year the Internal Revenue Service (IRS) will make a preliminary fee calculation for each covered entity and will tell each covered entity of this calculation by the date prescribed in guidance published in the Internal Revenue Bulletin. This notification will also include additional prescribed information. As used in this notice, “notice of preliminary fee calculation” includes the additional prescribed information.

Section 51.7T provides that upon receipt of its preliminary fee calculation, each covered entity will have an opportunity to dispute this calculation by submitting to the IRS an error report with prescribed information. Sections 51.7T(b) and (c) set out the information that a covered entity must submit to support each asserted error. Section 51.7T(d) provides that each covered entity must submit  reports and error reports, if anyin the form and way required by the IRS.

Section 51.8T provides that the IRS will send each covered entity its final fee calculation no later than August 31st of each fee year and also provides that covered entities must pay their fee by September 30th of the fee year.

2014 Deadlines & Procedures

Notice 2013-51 provides guidance for covered entities for 2014 on:

  • Submission of Form 8947, “Report of Branded Prescription Drug Information,”
  • The time and manner for notifying covered entities of their preliminary fee calculation,
  • The time and manner for submitting error reports for the dispute resolution process; and
  • The time for notifying covered entities of their final fee calculation.

For the 2014 fee year, the Notice states that a covered entity that chooses to submit Form 8947 must file the form by November 1, 2013.

For the 2014 fee year, the Notice states that the IRS will mail each covered entity a paper notice of its preliminary fee calculation by March 3, 2014. This mailing will include a National Drug Code (NDC) attachment (NDC attachment) that lists the covered entity’s NDCs and the sales data reported to the IRS by each government program pursuant to Regulation section 51.4T.

A covered entity may request that the IRS send a CD-ROM with the NDC attachment in Microsoft Excel format. The covered entity must make this request by February 17, 2014. The Notice instructs that this request must be made either by telephone to Ingrid Taylor at (908) 301-2118 or Mi Lim at (312) 292-3775 (not toll-free calls) or by email to it.bpd.fee@irs.gov. If a covered entity makes this request timely, the notice says the IRS will mail the covered entity its notice of preliminary fee calculation on paper and the NDC attachment on paper and CD-ROM by March 3, 2014.

For the 2014 fee year, the Notice also states a covered entity that chooses to submit an error report regarding its preliminary fee calculation must mail the error report by May 15, 2014. When the IRS mails each covered entity a notice of its preliminary fee calculation by March 3, 2014, the IRS will also send each covered entity a template on a CD-ROM that the covered entity must use to prepare its error report. All completed templates and the supporting documentation must be submitted on a CD-ROM and sent by mail as instructed in the Notice.

The Notice also indicates that the IRS will notify each covered entity of its final fee calculation for 2014 by August 29, 2014, after which each covered entity must pay this fee by September 30, 2014 in accordance with Regulation section 51.8T(c),

 

For More Information Or Assistance

If you need assistance responding to regulatory, enforcement or other developments, reviewing or tightening your policies and procedures, conducting training or audits, responding to or defending an investigation or other enforcement action or with other health care related risk management, compliance, training, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, may be able to help. Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her presentations and programs include How to Ensure That Your Organization Is In Compliance With Regulations Governing Discrimination, as well as a wide range of other workshops, programs and publications on discrimination and cultural diversity, as well as a broad range of compliance, operational and risk management, and other health industry matters. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.  You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here. If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see  here.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here.  THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.  

©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


CMS Publishes FY 2014 Final Inpatient Psychiatric Facility Prospective Payment Rule

August 5, 2013

Medicare payments to inpatient psychiatric facilities (IPFs) will rise by 2.3% for fiscal year (FY) 2014 under the final Inpatient Psychiatric Facilities Prospective Payment System (PPS) Updated for Fiscal Year Beginning October 1, 2013 (FY 2013) posted by the Centers for Medicare & Medicaid Services (CMS) July 29 here.

The notice updates the prospective payment rates for Medicare inpatient hospital services provided by inpatient psychiatric facilitates for discharges occurring during the fiscal year (FY) beginning October 1, 2013 through September 30, 2014.

Highlights of the final 2014 IPFPPS adjustments under  42 CFR 412.428 include the following:

  • The FY 2008-based Rehabilitation, Psychiatric, and Long Term Care (RPL) market basket update of 2.6 percent adjusted by a 0.1 percentage point reduction as required by section 1886(s)(2)(A)(ii) of the Social Security Act (the Act) and a 0.5 percentage point reduction for economy-wide productivity as required by section 1886(s)(2)(A)(i) of the Act.
  • The fixed dollar loss threshold amount in order to maintain the appropriate outlier
  • percentage.
  • The electroconvulsive therapy payment by a factor specified by CMS.
  • The national urban and rural cost-to-charge ratio medians and ceilings.
  • The cost of living adjustment factors for IPFs located in Alaska and Hawaii, if
  • appropriate.
  • The description of the ICD-9-CM and MS-DRG classification changes discussed in
  • the annual update to the hospital inpatient PPS regulations.
  • Use of the best available hospital wage index and information regarding whether an adjustment to the Federal per diem base rate is needed to maintain budget neutrality.
  • The MS-DRG listing and comorbidity categories to reflect the ICD-9-CM revisions effective October 1, 2013.
  • Retaining the 17 percent adjustment for IPFs located in rural areas, the 1.31 adjustment factor for IPFs with a qualifying emergency department, the coefficient value of 0.5150 for the teaching adjustment to the Federal per diem rate, the MS-DRG adjustment factors and comorbidity adjustment factors currently paid to IPFs for FY 2013.

IPFs, their operators, management and investors should review the new rules, update their practices and budgets and make other arrangements to respond effectively to the Rule.

For More Information Or Assistance

If you need assistance responding to regulatory, enforcement or other developments, reviewing or tightening your policies and procedures, conducting training or audits, responding to or defending an investigation or other enforcement action or with other health care related risk management, compliance, training, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, may be able to help. Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her presentations and programs include How to Ensure That Your Organization Is In Compliance With Regulations Governing Discrimination, as well as a wide range of other workshops, programs and publications on discrimination and cultural diversity, as well as a broad range of compliance, operational and risk management, and other health industry matters. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.  You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here. If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see  here.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law

 

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here.  THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.  

©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


CMS Publishes FY 2014 Final Inpatient Psychiatric Facility Prospective Payment Rule

August 1, 2013

Medicare payments to inpatient psychiatric facilities (IPFs) will rise by 2.3% for fiscal year (FY) 2014 under the final Inpatient Psychiatric Facilities Prospective Payment System (PPS) Updated for Fiscal Year Beginning October 1, 2013 (FY 2013) posted by the Centers for Medicare & Medicaid Services (CMS) July 29 here.

The notice updates the prospective payment rates for Medicare inpatient hospital services provided by inpatient psychiatric facilitates for discharges occurring during the fiscal year (FY) beginning October 1, 2013 through September 30, 2014.

Highlights of the final 2014 IPFPPS adjustments under  42 CFR 412.428 include the following:

  • The FY 2008-based Rehabilitation, Psychiatric, and Long Term Care (RPL) market basket update of 2.6 percent adjusted by a 0.1 percentage point reduction as required by section 1886(s)(2)(A)(ii) of the Social Security Act (the Act) and a 0.5 percentage point reduction for economy-wide productivity as required by section 1886(s)(2)(A)(i) of the Act.
  • The fixed dollar loss threshold amount in order to maintain the appropriate outlier
  • percentage.
  • The electroconvulsive therapy payment by a factor specified by CMS.
  • The national urban and rural cost-to-charge ratio medians and ceilings.
  • The cost of living adjustment factors for IPFs located in Alaska and Hawaii, if
  • appropriate.
  • The description of the ICD-9-CM and MS-DRG classification changes discussed in
  • the annual update to the hospital inpatient PPS regulations.
  • Use of the best available hospital wage index and information regarding whether an adjustment to the Federal per diem base rate is needed to maintain budget neutrality.
  • The MS-DRG listing and comorbidity categories to reflect the ICD-9-CM revisions effective October 1, 2013.
  • Retaining the 17 percent adjustment for IPFs located in rural areas, the 1.31 adjustment factor for IPFs with a qualifying emergency department, the coefficient value of 0.5150 for the teaching adjustment to the Federal per diem rate, the MS-DRG adjustment factors and comorbidity adjustment factors currently paid to IPFs for FY 2013.

IPFs, their operators, management and investors should review the new rules, update their practices and budgets and make other arrangements to respond effectively to the Rule.

For More Information Or Assistance

If you need assistance responding to regulatory, enforcement or other developments, reviewing or tightening your policies and procedures, conducting training or audits, responding to or defending an investigation or other enforcement action or with other health care related risk management, compliance, training, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, may be able to help. Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her presentations and programs include How to Ensure That Your Organization Is In Compliance With Regulations Governing Discrimination, as well as a wide range of other workshops, programs and publications on discrimination and cultural diversity, as well as a broad range of compliance, operational and risk management, and other health industry matters. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.  You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here. If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see  here.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here.  THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.  

©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


CMS Publishes FY 2014 Final Inpatient Rehab Facility Prospective Payment Rule

August 1, 2013

Inpatient Rehabilitation Facilities (IRFs) take note.  The Centers for Medicare & Medicaid Services yesterday (July 31, 2013) published its final Inpatient Rehabilitation Facility (IRF), Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2014 Final Rule (Rule). The Rule, which with its preamble is 272 pages, among other things:

  • Updates the prospective payment rates for (IRFs) for federal fiscal year (FY) 2014 (for discharges occurring on or after October 1, 2013 and on or before September 30, 2014) as required by the statute.
  • Revises the list of diagnosis codes that may be counted toward an IRF’s “60 percent rule” compliance calculation to determine “presumptive compliance,” update the IRF facility-level adjustment factors using an enhanced estimation methodology;
  • Revises sections of the Inpatient Rehabilitation Facility-Patient Assessment Instrument,
  • Revises requirements for acute care hospitals that have IRF units;
  • Clarifies the IRF regulation text regarding limitation of review;
  • Updates references to previously changed sections in the regulations text; and
  • Revises and updates quality measures and reporting requirements under the IRF quality reporting program.

The regulatory amendments in this Rule generally are effective as follows:

  • Its revisions to the list of diagnosis codes used to determine presumptive compliance under the “60 percent rule” are applicable for compliance review periods beginning on or after October 1, 2014; and
  • The updated IRF prospective payment rates are applicable for IRF discharges occurring on or after October 1, 2013 and on or before September 30, 2014 (FY 2014).
  • The changes to the Inpatient Rehabilitation Facility-Patient Assessment Instrument, the amendments to §412.25, and the revised and updated quality measures and reporting requirements under the IRF quality reporting program are applicable for IRF discharges occurring on or after October 1, 2014.

IRFs, their operators, management and investors should review the new rules, update their practices and budgets and make other arrangements to respond effectively to the Rule.

For More Information Or Assistance

If you need assistance responding to regulatory, enforcement or other developments, reviewing or tightening your policies and procedures, conducting training or audits, responding to or defending an investigation or other enforcement action or with other health care related risk management, compliance, training, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, may be able to help. Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her presentations and programs include How to Ensure That Your Organization Is In Compliance With Regulations Governing Discrimination, as well as a wide range of other workshops, programs and publications on discrimination and cultural diversity, as well as a broad range of compliance, operational and risk management, and other health industry matters. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.  You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here. If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see  here.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here.  THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.  

©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


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