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Searching for Articles published in February 2017.
Found 18 Results.

Liquidated Damages: A Tool for Teacher Retention?

Posted on February 7, 2017, Authored by Kevin J.T. Terry, Filed under Local Governments and School Districts

A common struggle for school districts across Wisconsin is how to attract and retain quality teachers and administrative staff.  In a post-Act 10 world where districts are free to recruit the best and the brightest from their neighboring school district, administrators and school board members wrestle with how to effectively retain quality teachers and soften the blow when quality teachers leave for a higher paying job.  The first place administrators often look is to the liquidated damages provision in the teacher’s individual contract. Liquidated damages are damages whose amount the district and the individual teacher agree upon during the formation of the individual teaching contract for the district to collect as compensation upon the teacher’s breach by resignation during the term of the contract.  Liquidated damages are not intended to be punishment for the teacher’s breach, but rather to permit the district to recover the cost of finding a replacement for the departing teacher.  Because courts have determined that specific performance, or forcing the teacher to continue under the terms of the individual teaching contract, is not an available remedy for the teacher’s breach, the liquidated damages provision identifies the agreed upon cost borne by the district upon a teacher’s breach.  The difficulty for districts is twofold:  (1) the cost to the district for a teacher’s breach is not the same for every departing teacher; and (2) while not the primary goal, liquidated damage clauses help to dissuade teachers from leaving employment and liquidated damage clauses that call for small monetary awards do not assist districts with retention.  So what should districts consider when reviewing the liquidated damages provision in their teaching contracts?  First, it is important to know that districts are able to vary these provisions depending on the individual teacher hired.  For example, in Wisconsin, we know that it is difficult to replace quality teachers in specific fields such as technology.  Districts may want to consider raising the liquidated damage amount for those types of teachers.  Second, the district should think about how it intends to enforce this liquidated damage clause.  At times, teachers will choose to breach their current contract and accept new employment in a neighboring district even though doing so is a violation of their current contract.  Additionally, at times, teachers do not make the required payments under the liquidated damages provision.  How will your district handle this scenario?  One option to consider is to utilize the small claims process rather than filing a lawsuit in district court.  Pursuing the collection of liquidated damages in small claims restricts district’s recovery to no more than $10,000 plus costs, however, it assures that a determination on the breach of contract claim will be reached much quicker than a traditional lawsuit.  Further, districts have had success recovering these costs in front of small claims court judges as these judges understand and are empathetic to the district’s position when a teacher breaches their contract and is not willing to pay costs he or she agreed to in the contract. At the end of the day, districts do not have many options to combat against a teacher who is seeking employment elsewhere and who is highly valuable to the district.  The liquidated damages provision is one of a handful of tools available to districts to attempt to retain the teacher and alternatively to soften the blow of the departing teacher.  It is important for districts to review their current individual teaching contracts and assess whether the liquidated damages amount is a sufficient reflection of the costs incurred by the district when a teacher departs.  Working with legal counsel is important when amending your individual teacher contracts and if your district needs assistance, please do not hesitate to contact myself or any of the members of the School Law Group at Ruder Ware.

Atlanta Dentist Goes to Jail for Medicaid Fraud - Do You Hear Me Now on Dental Practice Compliance?

Posted on February 21, 2017, Authored by John H. Fisher, II, Filed under Health Care

A few months ago, the Atlanta Journal-Constitution reported on the guilty plea of an Atlanta dentist for Medicaid fraud.  Just this week, the dentist was sentenced to serve a year and a half in federal prison. The dentist was alleged to have netted around $1 million in fraudulently obtained reimbursement from the Medicaid program.  As part of her plea agreement, the dentist agreed to forfeit her ill-gotten gains, including real estate she acquired using the funds. Some of the illegal activities alleged included: Having employees back-date claims for patients whose Medicaid eligibility had expired at the time the service was provided. Filing claims for services she provided on days she was not in the country; let alone in her office. The alleged activities appear to have been intentional and deliberate.  Even so, the situation is instructive on the type of risks to which a dental practice can be exposed.  Even if the dentist had not instructed employees to back-date billings it would be possible for an employee to do this on their own initiative.  The dentist under whose name the bill is submitted would still be responsible for the fraudulent billing.  Criminal intent might not be present in such a case, but repayment and potential civil penalties would certainly be assessed.  The government’s inquiry would likely focus on “what the dentist knew and when he or she knew it.”  The stakes riding on the outcome of that analysis would be potential jail time or at least enhanced penalties. So what is my point?  I recently wrote an article in which I described just some of the reasons a dental practice needs to have an effective compliance program in place.  Dental Practice Compliance Article.  The program should operate to educate staff on appropriate (and inappropriate) billing practices.  The program should include audits in areas of identified risk.  If a problem is discovered through proactive audit, appropriate corrective action should be taken promptly.  This may mean repayment and/or self-disclosure in some cases.  In other cases it may mean adjustment to policies and processes, additional training, or employee discipline.  It all depends on the circumstances. One thing is absolutely clear.  If there is a problem in your practice, you want to be the one who discovers it.  It is still not fun to deal with, but at least you are not under active scrutiny by criminal or civil enforcement agents, or even worse, a potential whistleblower.  The way to stay out in front of these issues is to have a compliance program that proactively looks for problems as a matter of routine. For some reason, many dental practices do not prioritize compliance.  Some practices believe compliance is mainly a “Medicare thing.”  That belief is wrong.  Medicaid and other governmental health programs apply, even when Medicare is not a significant source of revenue.  Compliance also goes beyond reimbursement issues.  A normal dental practice is subject to a host of federal and state statutes and regulations such as licensing requirements, insurance rules, OSHA regulations, DEA regulations, HIPAA, and state patient confidentiality laws, just to name a few.  Each of these areas present potential areas of risk and require mitigation through the operation of a systematic compliance program. I will leave it here and direct you to my previous blog article entitled “Should a Dental Practice Have a Compliance Program?” for more information.

House Republicans and Trump Administration File Joint Motion to Delay Suit Challenging Obamacare Subsidies

Posted on February 23, 2017, Authored by John H. Fisher, II, Filed under Health Care

An interesting development transpired Tuesday, February 21, 2017 in a case pending in Federal District Court in the District of Columbia that challenges subsidy payments from the Federal Treasury to support Obamacare.  The case was originally filed by House Republicans in 2014 challenging the constitutionality of the Obama administration’s authorization and payment of funds from the U.S. Treasury to subsidize insurance companies helping keep deductibles and other out of pocket costs low for low-income consumers. In May of 2016, the District Court ruled that the subsidies required Congressional authorization and the administration violated the separation of powers clause of the Constitution when it directed the payment of the subsidy funds.  The District Court issued a stay against enforcement of its order invalidating the payments to permit the Obama administration to appeal the decision.  This is where the case sat when President Trump took the oath of office. The positioning of this case changed in a very interesting way when President Trump was sworn into office in January.  At that time, President Trump was substituted as the defendant in the case.  This found the Trump administration as defendant in a case challenging the authority of his predecessor.  As defendant, the Trump administration could simply discontinue the payment of subsidies to insurers and the case would be over.  Stopping the subsidies would make the case moot.  Ending the subsidies would certainly seem to be consistent with the Trump administration’s desire to end Obamacare.  It would also seem to be consistent with the desire of House Republicans who brought the lawsuit to end the subsidies to start with.  The impact of discontinuing the cost sharing payments would likely create additional uncertainty in the insurance markets and further destabilize the Obamacare program.  Some have gone so far as to suggest ending the multi-billion dollar subsidies would create chaos in the insurance market, sharply increase premiums, and result in the withdrawal by some insurers from the program.  Taking away the subsidies would certainly require insurance companies to absorb losses attributable to low income individuals. On January 21, 2017, House Republicans and the Trump administration, who are now opposing parties in the lawsuit, filed a Joint Motion to delay a ruling in the case.  The purpose for making the joint motion was “to allow time for a resolution that would obviate the need for judicial determination” of the appeal.  The Joint Motion asks the court to extend the enforcement stay indefinitely. From a legal standpoint, the positioning resulting from the change in President is very interesting.  I will leave it to the pundits to debate what this development means or potentially signals regarding the future of Obamacare.  It is clear that Republicans (President Trump and the House Republicans) share a common goal to repeal Obamacare, yet find themselves on opposite sides of a significant Obamacare case.  It is possible the parties did not want to be seen as the owner of additional chaos to likely result from a decision on the merits or from discontinuing the subsidies by Presidential decree.  It does seem unusual that House Republicans would draw back from the result they requested at the inception of the case right at the moment their objective can be easily obtained.  With Trump in office, the objectives of the Republican House would have been met by simply ending the subsidy payments.  This is completely within the power of President Trump. Stay tuned.  This is bound to get even more interesting.

Federal Reserve Reports Moderate Pace Growth, Rising of Inflation, and Potential Increase in Federal Funds Rate

Posted on February 16, 2017, Authored by Jeremy M. Welch, Filed under Banking and Financial Matters

Chairwoman Janet Yellen presented her semi-annual report to the Senate Committee on Banking, Housing and Urban Affairs on February 15th where she testified that she expects the economy to continue to expand at a moderate pace with inflation gradually rising to two percent.  She also stated that the monetary policy remains accommodative and strengthening due to an improving job market, where the unemployment rate is 5 points lower than it was in 2010, increasing consumer spending, and rising incomes. Members of the Committee and critics questioned the past policies of the Federal Reserve in keeping interest rates near zero for an extended period of time, purchasing huge amounts of bonds, and whether that actually led to a healthy economy or created the slowest economic recovery since World War II ended.  Clearly members of the Senate Committee, as well as President Trump, do not agree with all of the actions of the Federal Reserve.  Also, in the next few months President Trump will nominate three members of the seven member Board of the Federal Reserve, which may result in a change in the direction taken by the Federal Reserve and Chairwoman Yellen’s term ends in January 2018.  Although the Federal Open Market Committee maintained the federal funds rate for most of 2016 (until the increase in December) Chairwoman Yellen stated that if employment and inflation continue to evolve as expected there will be additional increases of the federal funds rate in 2017. Chairwoman Yellen also testified that she believes the recent uptick in the markets is due to an anticipated shift in fiscal policy by President Trump that market participants believe will stimulate growth and raise earnings.  We will have to wait and see whether there are any shifts in the current fiscal policies and whether those changes will actually increase growth and profitability.  Based on the testimony of Chairwoman Yellen, as well as the comments and questions by the Senate Committee and the previous comments by President Trump, it seems likely there will be increases in the federal funds rate in 2017.

Independent Hearing Officer Training Program - 3/17/17

Posted on February 8, 2017, Authored by ,

Dudley Tower main floor conference room 500 N 1st Street Wausau, WI  54403 Online registration available here! Or register by contacting Shannon Jacobson at: or (715) 845-4336. We look forward to seeing you. This program will provide training to human resource professionals and others who are interested in serving as an Independent Hearing Officer under the Grievance Procedure Policy that has been adopted by local governments throughout the State of Wisconsin.  The presenters will present background information regarding the hearing process and the steps to be taken by the IHO to conduct an informal hearing on an employee grievance.  The presentation will also focus on different aspects of interpreting personnel policy language as well as addressing the standards for review of an adverse employment decision.  The presenters have multiple years of experience representing public sector employers in employee discipline proceedings and employment termination matters.   The seminar will be held at the Dudley Tower in Wausau, Wisconsin at 8:00 a.m. with registration beginning at 7:30 a.m.  Light breakfast and refreshments will be provided.

Annual CWSHRM Human Resources & Labor Law Conference - 2017

Posted on February 28, 2017, Authored by ,

Holiday Inn & Suites, Rothschild, WI Presented by Central Wisconsin Society for Human Resource Management and Ruder Ware - HRCI and SHRM credit approved 5.75 total credits (2.5 business credits) Keynote Presentations: Andy Masters, CSP, M.A. Hr Leadership Lessons from H-O-L-L-Y-W-O-O-D - Magical imagery of Hollywood is used to help HR Leaders DEVELOP and EMPOWER their organizations in this challenging era of having to do more with less. This program cites research from Harvard Business Review, Deloitte, and Glassdoor to provoke REAL organizational change from every attendee. Strategic leadership in the New Economy - Leaders face new pressures to produce more with less, leading many to fall into the “do-it-all-myself” trap. A “Control Freak” culture is dangerous and damaging to any organization. Learn what you and your organization should do to develop and empower millennials and all future leaders to avoid this damaging environment. Morning Legal Workshop: Sara Ackermann, Ruder Ware Attorney Everything You Need to Know About Non-Compete, Non-Solicitation, Confidentiality, and Trade Secret Agreements - Sara sees herself as a member of a company's HR team. Clients utilize her varied background by treating her as a consultant and advisor on employment law topics. Sara counsels HR professionals on the development of proactive policies, procedures, and protocols drafted to retain talent and create a positive work environment. Sara has previous experience working inside a corporation so she understands the myriad of employment issues that HR professionals and business owners face every day. Her focus is on providing proactive advice by identifying issues before they arise so her clients can minimize their risk and avoid the expensive legal fees associated with litigation. Afternoon Legal Workshop: Kevin Terry, Ruder Ware Attorney Accommodation, Accommodation, Accommodation - Sick, Disabled, Religious, Transgender, Pregnancy & More! - Kevin’s legal practice focuses on providing counsel to clients in matters relating to labor and employment law, municipal law, and school law. Some of Kevin's experience includes providing counsel on all aspects of the employer-employee relationship, including employment handbooks, employment contracts, unemployment compensation, Family Medical Leave Act, Americans with Disabilities Act, and defense of employers in state and federal employment discrimination claims. Closing Presentation-Andy Masters Returns: Humor in the Workplace:  Not Just How, But Why! Andy Masters, CSP, M.A. Additional information on presentations and speakers is available on CWSHRM’s website. Included in the event registration fee is a continental breakfast starting at 7:30, lunch, and midday snacks.  A vegetarian option can be selected at the time of registration. $150 for CWSHRM Members $175 for non-CWSHRM Members $60 for full-time college students Seating is limited, please register early at Eventbrite. Registration deadline is March 31st.  Early registrants will receive a free autographed copy of Andy Masters' best selling book, "Things Leaders Say:  A Daily Guide to Help Every Leader Empower and Inspire"

The Case of the Very Very Impossibly Long, Terrible, Horrible, No Good, Very Bad Day

Posted on February 28, 2017, Authored by John H. Fisher, II, Filed under Health Care

How Fraud and Abuse Cases Arise in a Medical Practice It is no secret many doctors work very long days.  Some days are worse and some are better than others.  As a compliance lawyer, my job is to attempt to prevent doctors from having Terrible, Horrible, No Good, Very Bad Days.  In my experience, this type of day happens when the Office of Inspector General shows up at your door asking for all sorts of information about your billing practices.  Sometimes, the OIG appears based on analysis of statistics that indicate anomalies in your practices.  One anomaly, which I describe more below, results from analysis indicating you have been working Very Very Impossibly Long Days.  The Terrible, Horrible, No Good, Very Bad part comes later, when you are investigated for billing fraud. Individuals who are involved in billing and coding know very well how difficult and subtle the process is.  Coding must reflect what has been recorded in the medical record.  Some areas of coding are very nuanced.  In some practices, the difference between a correct and a fraudulent billing can be as subtle as how deep the skin was penetrated when removing a lesion. I've read recent articles that seem to indicate the biggest worry facing medical practices is a review by a Recovery Audit Contractor and a return of an identified overpayment.  This may have been the case several years ago, but enforcement practices have changed over the years and the volume of cases impacting physicians has greatly increased in recent years.  Even if criminal standards are not present, civil cases can be nearly as devastating to a physician personally and financially. When I talk about an increase in fraud and abuse prosecutions, I do not mean to imply the target of prosecution is a criminal.  In my experience that is rarely the case.  In the Fraud and Abuse area there is “fraud,” meaning a deliberate attempt to overbill or inflate reimbursement, and there is “abuse,” which can occur without the physician having actual knowledge anything wrong has occurred.  In fact, some cases of “abuse” are based on imputing knowledge of a circumstance that a government enforcement agency believes a provider “should know” through the diligent operation of an effective compliance program. I certainly have had people come to me to assist them in situations that could be fraudulent.  The more typical case involves a much more subtle oversight, failure to diligently conduct proactive auditing, inadequacy in documenting the medical file, or the failure to take prompt action after initially discovering an error.  These types of things fall more in the category of “stuff that happens” rather than deliberate fraud.  Even though not fraudulent, these types of occurrences can be viewed as “abusive” and can result in investigation and penalties if not handled properly.  Most of these things can be prevented by engaging in a proactive compliance program, but that is another story. So, what type of thing triggers the Federal government to really start digging into your business; and not with a happy face?  There can be a variety of circumstances that commence “special” treatment by government enforcement.  An example of this type of situation involves what I refer to as the “very, very long and impossibly difficult day.”  This type of day occurs when your coding would indicate you worked more hours than exist in a day.  An example of when this can occur involves coding for procedures that involve cumulative time components that add up to indicate that you worked an impossible number of hours. You can also catch the eye of government enforcers when you perform more of certain types of procedures than norms would indicate.  In other-words, if you show statistics that are outliers from the usual practice, it is very possible you will be asked to explain these deviations at some point in your career.  You might be able to explain the situation, but this is how you get the attention of the Federal government. Another typical case involves a billing problem you discover and self-disclose.  Federal law requires a known overpayment be repaid within 60 days after it is discovered.  Failure to meet this time limitation subjects the overpayment to imposition of additional penalties under the False Claims Act.  The application of the FCA effectively triples the amount of overpayment and adds between $11,000 and $22,000 per claim to the price tag.  A simple overpayment can easily become a false claim if repayment (or self-disclosure) is not made within 60 days of when you gained knowledge. Recent legal changes make it much more likely this will occur at some point.  Increases in False Claims Act penalties and other available sanctions has made health care fraud prosecution a profitable business for the Federal government.  Reports indicate that Federal enforcement agencies receive an 8 time return on every dollar they spend on pursuing health care fraud.  This was before the recent increases in federal penalties.  Federal enforcement agencies do not tend to wait for proof that they can convince a jury of your guilt before pursuing a case.  Instead, they use civil enforcement to leverage a settlement instead of requiring criminal burden of proof.  If you are facing potential False Claims Act penalties, you are strongly motivated to settle with the Office of Inspector General. When the types of problems that cause you to have a Terrible, Horrible, No Good, Very Bad Day occur or are discovered, it is critical they be handled properly starting at the moment of discovery.  The situation is not going to go away on its own.  The only solution is to proactively handle the situation with the hope you will avoid exposure to more damages than the simple overpayment amount.  This all needs to be done on an immediate timeframe.  There is little time to waste.  In reviewing these situations, I sometimes find there is an ambiguity in the rules or an incorrect application of the rules that resulted in a perceived problem.  The first step is confirmation that proper procedures were used to determine the overpayment.  Once confirmed, a decision must be made whether to self-disclose to the government or whether a repayment can be made without formal self-disclosure.  This decision is often complicated and may require development of additional facts through investigation.  It is critical the investigation be performed properly to avoid further potential risk exposure.

Compliance Officer and Legal Counsel Relationships

Posted on February 9, 2017, Authored by John H. Fisher, II, Filed under Health Care

I am often asked my opinion whether a general counsel can also serve in the role of compliance officer.  At first blush, it seems the general counsel would be a perfect fit for the role because of general knowledge of regulations applicable to the organization.  Clients are often surprised when I tell them it is not appropriate to assign the compliance role to the general counsel.  In fact, there is a lot of support for the proposition that assigning these responsibilities to legal counsel makes a compliance program less effective.  It also runs the risk of making the general counsel less effective in the legal counsel role. The reason legal counsel should generally not fill the compliance role arises from differences in the role each professional plays within an organization.  Legal counsel is an advocate for the organization.  When compliance issues come up, legal counsel advocates the position of the client.  The compliance officer on the other hand, is responsible for proactively looking for compliance problems and designing appropriate ways to correct discovered problems.  The roles go hand in hand in many ways, but what happens when it is legal counsel who structured a deal in a manner that does not comply with applicable regulations?  In cases like this, legal counsel is in an inherent conflict of interest. In all but the very smallest organizations that clearly cannot absorb the cost of two separate functions, there presents increased compliance risk to the organization for legal counsel to also be the prime individual responsible for compliance within the organization. Dividing the compliance and legal counsel functions is clearly the “best practice” when it comes to organizational compliance.  This conclusion is supported by comments from the Office of Inspector General (OIG), reading the Federal Sentencing Guidelines (FSG), the position taken by the government in Corporate Integrity Agreement fraud and abuse settlements, and general ethical standards that apply to the general counsel. The case for dividing the functions of legal counsel and compliance officer and creating a separate compliance office with direct line of authority to the Board or a Committee of the Board is quite compelling. In fact, many organizations who previously ran the compliance role through the office of general counsel are now reviewing this practice and making changes to their organizational structure and compliance plans. A study done by the American Health Lawyers Associations and the Office of Inspector General in 2004 concluded at that time, only 20% of health care organizations polled had their compliance function under the authority of their legal counsel’s office.  It is safe to say in view of more recent pronouncements by the OIG and by comments made in the Supplemental Compliance Guidance for Hospitals released in 2005, the percentage of “dual role” organizations is now less than that figure. The first source to be examined when defining the role of the compliance officer within an organization is the FSG. The FSG do not specifically mention a compliance officer per se, but require the compliance and ethics program be assigned to “high-level” personnel. As organizations first began creating compliance programs in response to the FSG, oftentimes the responsibility was assigned to legal counsel.  This seemed to be a natural outgrowth of the function of the office of legal counsel. In that regard, it made organizational sense because the office of legal counsel had resources and personnel in place to implement the compliance program without creating an entirely new organizational division. Over time, the assignment of compliance functions to legal counsel began to raise questions and concerns whether legal counsel was in fact “high level” personnel.  Additionally, questions were raised as to the degree that giving legal counsel the dual role of compliance officer and legal counsel sufficiently conveys the appearance of the importance the organization placed on compliance. As a result, some lawyers and compliance experts began to question whether creating a “dual role” compliance officer put the organization at risk of not receiving benefits afforded under the FSG if the organization was ever in a position to need these benefits. The OIG made its position clear for legal counsel to not exercise a dual role. An examination of many recent Corporate Integrity Agreements entered between providers and the OIG clearly demonstrates the OIG’s position on this matter. Most CIAs outline the role and position of the compliance officer in the organization. The standard language used by the OIG is as follows: “The Compliance Officer shall be a member of senior management of [Provider], shall make periodic (at least quarterly) reports regarding compliance matters directly to the Board of Directors of [Provider], and shall be authorized to report on such matters to the Board of Directors at any time. The Compliance Officer shall not be or be subordinate to the General Counsel or Chief Financial Officer.” [Emphasis Added] Although the FSG do not affirmatively address dual role situations, Commentary to the Sentencing Guidelines state “applicable industry practice or the standards called for by any applicable governmental regulations” are factors to be considered. Failure to follow these standards “weighs against a finding of an effective compliance and ethics program.” At the same time, both the FSG and the OIG Compliance Guidance recognize size of the organization is a factor in judging the level of compliance. This recognizes that in cases where an organization is small and fewer resources are available, the organization can meet its obligations without necessarily creating a structure that separates the roles between legal counsel and the compliance office. However, there is no precise definition of whether an organization is a “small organization” that can fulfill its compliance functions in less formal ways or a “large organization” that will be expected to devote suitable resources to create a completely separate compliance function. This uncertainty leaves an organization’s board of directors without precise guidance concerning an appropriate structure given the size and nature of its organization.  At the same time, best practice, given available resources, is to separate the compliance and legal counsel functions.  The potential consequences of failing to use an appropriate structure for the size of the organization is increased penalties in the event of organizational criminal misconduct; so the consequences can be quite serious.

Autodialing and Pre-Recorded Messages: the TCPA’s Trap for Unwary Lenders and Debt Collectors

Posted on February 27, 2017, Authored by Paul J. Mirr, Filed under Banking and Financial Matters

In February 2015, a federal judge approved a $75 million Telephone Consumer Protection Act (“TCPA”) class settlement involving Capital One and three debt collectors.[1] The plaintiffs (debtors) alleged that Capital One and debt collectors called their phones to collect credit card debts using an automatic telephone dialing system or an artificial or pre-recorded voice without their prior consent. While this is an extreme example, it demonstrates the danger of using automated dialing systems or an artificial or pre-recorded voice to make collection calls, especially considering that the TCPA does not provide a cap on potential damages.  While the TCPA limits damages to $1,500 per call, plus attorneys' fees, there is no cap on the number of telephone calls you may be responsible for in a class action lawsuit.  Exposed to unlimited liability for improper calls, lenders and debt collectors must make sure that all use of automatic dialing systems or pre-recorded messages strictly complies with the TCPA and with recent FCC interpretations that broaden the TCPA’s scope. The TCPA The TCPA[2] was enacted in 1991 to protect consumers from aggressive telemarketing calls and faxes. It regulates calls and transmissions using automatic telephone dialing systems (“ATDSs”) and certain artificial or pre-recorded voice calls. Prior consent from the phone owner is not necessary for debt collection calls to residential landlines, even if the calls use ATDSs or pre-recorded voices because the FCC has held that debt collection calls are not “telemarketing calls.” However, with a few exceptions, the TCPA prohibits businesses from using ATDSs or pre-recorded voices to call consumers’ cell phones without the consumers’ “prior express consent,” regardless of whether the calls are for telemarketing or not. A “call” includes text messages. Businesses may call (or text) customers’ cell phones with the help of ATDSs and pre-recorded messages for purposes such as providing authentication codes and notifying customers of certain financial emergencies, but, as will be discussed later, lenders must still be careful to comply with the TCPA’s fairly stringent regulations when doing so. “Automatic Telephone Dialing System” The TCPA defines an ATDS as “equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers” (emphasis added). This definition includes equipment that has the capability to store or produce and dial random or sequential numbers, even if it is not presently used for that purpose. Even if not currently using the function, businesses need to check into their equipment’s capabilities to ensure that, if the equipment does have ATDS capacity, they are getting customers’ consent prior to making artificial or pre-recorded calls (or texts). “Prior Express Consent” General best practice is for businesses to get a customer’s consent at the beginning of a relationship and to reaffirm the consent whenever possible. Regarding debt collection, a 2012 FCC Report and Order clarified that ATDS and pre-recorded message calls to cell phone numbers provided by the called party in connection with an existing debt are considered to be made with prior express consent. However, the cell number must be obtained “as part of the transaction that resulted in the debt owed.” This means that each time a borrower takes out a new loan, the cell number will need to be re-obtained by the lender in order to have consent to use an ATDS or pre-recorded message. The caller has the burden to prove that it used ATDSs or pre-recorded messages with the consent of the called party. Revocation of Consent Consumers may revoke their consent at any time and through “any reasonable means.” The revocation may be orally, in writing, or through “any manner that clearly expresses a desire not to receive further messages.” Callers are not allowed to restrict the means by which consumers may revoke consent.  Thus, it is a good idea for lenders and debt collectors to have a consent tracking system in place. Liability for Calling Reassigned Wireless Numbers This issue comes up when a caller uses an ATDS or pre-recorded message to call a cell phone number for which it previously had consent but which number was subsequently reassigned to another person who did not consent. The TCPA provides a safe harbor, allowing a caller with a “reasonable basis” for believing it has consent to make one call after reassignment without incurring liability. This “one call” safe harbor only applies when the caller has obtained express consent from the previous owner of the cell number. Damages for Violations Unintentional violations of the TCPA can result in damages of $500 per call, plus the plaintiff’s attorneys’ fees and costs. Willful or knowing violations can increase damages to $1,500 per call.  The ability to collect attorneys’ fees makes pursuit of class actions attractive to plaintiff’s attorneys. Exceptions The TCPA does exempt ATDS and pre-recorded messages concerning the following from its express consent requirements, so long as the calls are not charged to the recipient: Transactions and events that suggest a risk of fraud or identity theft; Possible breaches of the security of customers’ personal information; Steps consumers can take to prevent or remedy harm caused by data security breaches; and Actions needed to arrange for receipt of money transfers. These exemptions are subject to a few conditions, including stating the name and contact information of the caller at the beginning of the call, keeping the calls concise, offering an easy means for called parties to opt out, and making no more than three calls per event over a three-day period to an affected account. Although the TCPA does not explicitly exempt them, the FCC has held that texting dual-authentication log-in codes to customers in order to set up an online account is not a violation of the TCPA’s restrictions as long as the one-time message is sent immediately after the customers’ requests for the texts. Recommendations Given the TCPA’s strict guidelines regarding ATDS and pre-recorded message calls, the following are a few recommendations that can help prevent lenders and debt collectors from incurring the unlimited per-call penalties: Obtain customers’ consent at the beginning of the relationship and re-affirm it as often as possible; All credit applications should request borrowers’ cell phone numbers and should specifically state that, by providing a cell number on the application, the borrower consents to the use of ATDSs and pre-recorded messages; Credit applications should require borrowers to agree to give the lender notice when their cell phone numbers change. Although this will not absolve lenders of liability to number assignees who have not consented, it will give lenders an action against the borrower for damages that it may have to pay the assignee; Re-obtain cell phone numbers and consent each time a borrower takes out a new loan; Have a live person make the first call to verify that a cell number has not been re-assigned to a party that has not given consent; Maintain procedures to track revocations of consent; Do not call borrowers’ cell numbers if the numbers were not provided on the application that underlies the specific debt being collected; Make sure agreements with third-party debt collectors contain provisions related to indemnification of the lender for all damages that may result from the third party’s violation of the TCPA, and that your third-party debt collector provides you a certificate of adequate insurance; and When in doubt, use live operators and non-auto-dialers when contacting customers or collecting debts. [1] $75M Capital One TCPA Class Deal OK’d, Bloomberg Law (Feb. 23, 2015),!. [2] 47 U.S.C. § 227 (2012).

Willful Permit-Required Confined Space Entry Citation Upheld by the Seventh Circuit

Posted on February 9, 2017, Authored by Russell W. Wilson, Filed under Employment

On February 1, 2017, the United States Court of Appeals for the Seventh Circuit affirmed the decision of the Occupational Safety and Health Review Commission (“Commission”) which imposed serious willful citations under the permit-required confined space entry standard.  In doing so the Seventh Circuit discussed imputed knowledge to the employer, foreseeability of a supervisor’s misconduct, and willful violations.  The case is Dana Container, Inc. v. Secretary of Labor, 2017 WL 430079. Dana Container, Inc. (“Dana”) provides tank cleaning services and has its own permit-required confined space (“PRCS”) safety program.  In 2009 a supervisor disregarded Dana’s safety program and entered a dirty tank in order to kick open a clogged valve so as to allow the tank to drain chemical residue.  No entry permit was applied for or issued, no atmospheric testing of the tank was performed, no harness or respirator was worn, and no attendant stood ready to attempt rescue. The supervisor lost consciousness.  Fortunately, a worker spotted the unconscious supervisor and called the fire department, which rescued the supervisor. First, in order to impose a serious violation, the employer must know that the problem existed.  The Seventh Circuit upheld the Commission’s determination that the supervisor’s actual knowledge of his own misconduct imputed his knowledge to Dana.  “This path for imputing knowledge is common in employment law.”   Whether Dana’s PRCS safety program was adequate is not material when knowledge of a violation is imputed to the employer. Second, Dana argued that its PRCS safety program demonstrated that the supervisor’s misconduct was unforeseeable and unpreventable.  The Commission, however, examined Dana’s PRCS records and took a different view.  The Commission determined that nearly all of the tank entry permits contained errors and omissions.  For example, some permits had exceeded the maximum duration of exposure by more than one hour.  Some lacked air testing monitoring, and others failed to show how long the permits were valid.  Some failed to state whether employees had reviewed material safety data sheets; some did not identify entrants and attendants.  These might have been actual deficiencies, failures of documentation, or a combination of the two.  In any event there was no documentation that Dana ever took action or followed up on the deficiencies.  The Commission concluded Dana’s PRCS safety program was inadequate. Finding that the Commission’s determination was supported by credible evidence, the Seventh Circuit ruled that the supervisor’s misconduct was both foreseeable and preventable.  “Even in the face of a robust written program, lax disregard of the rules can send a message to employees that a company does not make safety a priority.  In such an environment, conduct such as Fox’s is reasonably foreseeable.” Finally, the Seventh Circuit reviewed its 2016 ruling in Stark Excavating, Inc. v. Perez, 811 F3d. 922, 928-29, where a good faith defense to a willful violation involving a trench collapse was not recognized where the employer had violated its own safety rules and policies.  Likewise, in Dana Container, the Seventh Circuit ruled that Dana’s violation of its own PRCS safety program defeated a defense of good faith and supported the Commission’s determination that the serious violation was also willful. The Dana Container case serves as a cautionary tale reminding employers that their safety policies and procedures must not merely meet OSHA standards.  Rather, safety policies and procedures must be robustly and comprehensively written, painstakingly adhered to, and swiftly acted upon whenever noncompliance is detected.

CMS Issues Proposed Rule to Increase Patients’ Health Insurance Choices for 2018

Posted on February 17, 2017, Authored by John H. Fisher, II, Filed under Health Care

On February 17, 2017, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule aimed at reforming and stabilizing the individual and small group health insurance markets. When (or if) finalized, the proposed rule would make changes to special enrollment periods, the annual open enrollment period, guaranteed availability, network adequacy rules, essential community providers, and actuarial value requirements.  CMS states its belief that the proposed regulations would provide more flexibility to states and insurers, give patients access to more coverage options, and stabilize individual and small group health insurance markets while future reforms are being debated. The primary changes proposed in the regulations include: Expansion of pre-enrollment verification of eligibility to individuals who newly enroll through special enrollment periods in Marketplaces using the platform. CMS intends this proposed change to help make sure that special enrollment periods are available to all who are eligible while requiring individuals to submit supporting documentation, a common practice in the employer health insurance market. The intent is to help place downward pressure on premiums, curb abuses, and encourage year-round enrollment. Addressing potential abuses by allowing an issuer to collect premiums for prior unpaid coverage, before enrolling a patient in the next year’s plan with the same issuer. This will incentivize patients to avoid coverage lapses. Adjustments to the de minimis range used for determining the level of coverage by providing greater flexibility to issuers to provide patients with more coverage options. Reaffirming the traditional role of states to serve their populations by moving network adequacy reviews to the states. When reviewing QHPs, CMS would defer network adequacy reviews in states with the authority and means to assess issuer network adequacy. Statement of CMS’ intention to release a revised proposed timeline for the QHP certification and rate review process for plan year 2018. The revised timeline would provide issuers with additional time to implement proposed changes that are finalized prior to the 2018 coverage year. These changes will give issuers flexibility to incorporate benefit changes and maximize the number of coverage options available to patients. Shortening of the upcoming annual open enrollment period for the individual market. For the 2018 coverage year, CMS proposes an open enrollment period of November 1, 2017, to December 15, 2017. The stated intent is to align the Marketplaces with the Employer-Sponsored Insurance Market and Medicare.  This may help lower prices for Americans by reducing adverse selection. Obviously, all of the regulations pertaining to the Affordable Care Act are up in the air pending potential Congressional action on the underlying statutes.  Given the current uncertainty, CMS appears to be moving forward with revisions to the health care program that it intends to add stability to costs and operation.  The last day for public comments to be received on the proposed regulations is March 7, 2017. My analysis of these regulations…this could get interesting.

Trump Administration Withdraws Transgender Guidance

Posted on February 23, 2017, Authored by Kevin J.T. Terry, Filed under Local Governments and School Districts

On February 22, 2017, one day before briefs were submitted to the Supreme Court in a case involving a transgender student in Pennsylvania, the Trump Administration, through the Department of Justice (DOJ) and the Department of Education (DOE) changed the landscape, once again, for transgender students in Wisconsin and for School Districts looking to adopt legally compliant policies. By issuance of a “Dear Colleague” letter, the DOJ and DOE have withdrawn statements of policy and guidance reflected in two significant documents: Letter to Emily Prince from James A. Ferg-Cadima, Acting Deputy Assistant Secretary for Policy, Office for Civil Rights at the Department of Education dated January 7, 2015; and, Dear Colleague Letter on Transgender Students jointly issued by the Civil Rights Division of the Department of Justice and the Department of Education dated May 13, 2016. The previously issued guidance documents took the position that Title IX’s prohibition of discrimination on the basis of “sex” requires Districts to afford a transgender student access to restroom and locker room facilities, among other things, consistent with their gender identity, rather than the gender assigned to the student at birth. Employers interested in this news should remember that this Dear Colleague letter does not directly impact guidance and policy statements previously issued by the EEOC and OSHA which require employers to permit employees to utilize restroom facilities consistent with their gender identity. Through yesterday’s Dear Colleague letter, this Administration asserted that it will not rely on the views expressed by the DOJ and DOE under the Obama Administration. To support this change of course, the Dear Colleague letter cites conflicting case law interpretation of Title IX and ongoing federal litigation in Texas which resulted in a nationwide injunction prohibiting the enforcement of the guidance documents. For school district administrators, board members, teachers, students and parents, the February 22, 2017, Dear Colleague letter offers little in terms of answers to questions related to the education and rights of transgender students. In an attempt to provide clarity on this Administration’s interpretation of Title IX, the Dear Colleague letter does note that: “This withdrawal of these guidance documents does not leave students without protections from discrimination, bullying, or harassment. All schools must ensure that all students, including LGBT students, are able to learn and thrive in a safe environment.  The Department of Education Office for Civil Rights will continue its duty under law to hear all claims of discrimination and will explore every appropriate opportunity to protect all students and to encourage civility in our classrooms. The Department of Education and the Department of Justice are committed to the application of Title IX and other federal laws to ensure such protection.” It is clear that Districts must protect transgender students from discrimination, bullying, and harassment. It is equally clear that, at this time, guidance regarding the treatment of transgender students, and particularly with respect to restroom and locker room access, remains inconsistent. The Supreme Court received briefing in Gloucester County School Board v. G.G. today. As a result of yesterday’s Dear Colleague letter, the Court may choose to exercise a number of options. It may send the case back to the 4th Circuit for it to weigh in more fully on Title IX or they could forge ahead and rule on that question themselves. We should know more about which direction the Court chooses to pursue when they hear oral argument in the case next month, if not before. If you have questions as to how this news affects your District and its policies, please do not hesitate to contact me or any member of the Ruder Ware School Law team.

CMS Recommendations Regarding Protection from Cybersecurity Risks

Posted on February 22, 2017, Authored by John H. Fisher, II, Filed under Health Care

On January 13, 2017, the Centers for Medicare & Medicaid Services (CMS) issued Recommendations to Providers Regarding Cyber Security.  In general, the Recommendations are intended to remind providers and suppliers to keep current with best practices regarding mitigation of cybersecurity attacks.  The Recommendations contain an interesting discussion of some of the current cyber threats that exist to the health care industry. CMS released these recommendations in consideration of Executive Order (EO) 13636, “Improving Critical Infrastructure Cybersecurity” which was released by President Obama.  The EO directed agencies to issue new regulations addressing cybersecurity risks, “if current regulatory requirements are deemed to be insufficient…to mitigate cyber risk.”   Though CMS considers existing regulations adequate, it is addressing the specific cybersecurity risk by implementing a number of non-regulatory activities and recommendations to enhance cybersecurity of private sector critical infrastructure partners. Existing emergency preparedness regulations applicable to health care providers do not specifically address elements of cybersecurity.  However, the regulations require providers and suppliers to have an emergency plan and risk assessment that focus on capacities and capabilities critical to preparedness for a full spectrum of emergencies or disasters.  Even though cybersecurity is not specifically called out, that risk should certainly be considered and addressed by health care providers as part of their risk assessment and compliance with existing regulations. CMS encourages facility leadership to work collaboratively with various management and outside resources to develop systems to manage cyber-attacks. The practical part of the release contains a variety of recommendations to health care providers.  Many of the recommendations involve training staff to use alternative “paper” systems to prevent interruption in the event of a cyber-attack. Some of the recommendations CMS made include the following: Facility leadership should review current policies and procedures to ensure adequate plans are in place in the event of an attack. For instance, most IT Directors and policies within facilities require systems be shut down, and have specific timelines to notify appropriate State and Federal agencies and State Health Departments. Facilities should research best practices and mitigation methods and implement steps that provide adequate protection against a cyber-attack. Facilities should consider retraining staff to include use of non-electronic methods, such as written discharge instructions, care planning, and medical records, to be used as an alternative to electronic records in the event of an attack. Some providers also encouraged staff to familiarize themselves with knowledge of the paper medication administration record (MAR) process, and the transmission of laboratory and radiology orders on paper-based requisition forms that are hand delivered to departments for processing. Cybersecurity risk should be considered in the development of their emergency plans, risk assessments, and annual training exercises. Consider pre-programing phone/fax numbers into the fax machine to avoid any delay in the event computer systems are inaccessible. Consider conducting table-top exercises focused on cybersecurity and how to continue operations in the event of a cyber-attack. Consider establishing or adapting communication plans that can be implemented to identify alternative communications methods in the event existing means of communication are inaccessible. The CMS recommendations conclude by referencing a variety of external resources providers can consider when implementing procedures to address cybersecurity risks.

Home Health Agency Final Conditions of Participation Revisions Released by CMS

Posted on February 14, 2017, Authored by John H. Fisher, II, Filed under Health Care

The Center for Medicare and Medicaid Services has issued a final rule that revises and modernizes the Conditions of Participation (COP) for Home Health Agencies.  The Final Rule can be found in its entirety at: Final Home Health Rule (CMS-3819-F). The new Rule describes the conditions Home Health Agencies (HHA) must meet in order to participate in the Medicare and Medicaid programs. The new Rule reflects some significant changes in the rules that apply to Medicare HHAs and require HHAs to take a solid look at their policies, procedures, and operations to be certain they comply with the new requirements by the effective date of July 13, 2017. The changes reflected in the new Rule are intended by CMS to be an integral part of an overall effort to achieve broad-based, measurable improvements in the quality of care furnished through the Medicare and Medicaid programs, while at the same time eliminating unnecessary procedural burdens on providers.  The new Rule generally focuses on the care delivered to patients, reflects an interdisciplinary view of patient care, allows HHAs greater flexibility in meeting quality care standards, and eliminates unnecessary procedural requirements.  The primary coverage areas of the new Rule include: A focus on assuring the protection and promotion of patient rights. Enhancement of the process for care planning, delivery, and coordination of services. Building a foundation for ongoing, data-driven, agency-wide quality improvement. Expansion of patient rights requirements that enumerate rights of home health agency patients and steps that must be taken to assure those rights. Expansion of comprehensive patient assessment requirements focusing on all aspects of patient wellbeing. A focus on measures intended to assure patients and caregivers have written information about upcoming visits, medication instructions, treatments administered, instructions for care the patient and caregivers perform, and the name and contact information of a home health agency clinical manager. New requirements to promote an integrated communication system to help ensure patient needs are identified and addressed, care is coordinated among all disciplines, and there is active communication between the home health agency and the patient’s physician(s). New standards for a data-driven, agency-wide quality assessment and performance improvement (QAPI) program that continually evaluates and improves agency care for all patients at all times. Enhanced infection prevention and control requirements with a focus on the use of standard infection control practices, and patient/caregiver education and teaching. Streamlining of some of the requirements relating to skilled professional services which emphasize appropriate patient care activities and supervision across all disciplines. An expanded patient care coordination requirement for a licensed clinician to be responsible for all patient care services, such as coordinating referrals and assuring that plans of care meet each patient’s needs at all times. Revisions to simplify the organizational structure of home health agencies while continuing to allow parent agencies and their branches. Revised personnel qualifications for home health agency administrators and clinical managers. Other Home Health Agency Changes Announced by CMS In addition to the revised conditions of participation, here are a few additional items impacting home health agencies that have recently been announced by CMS: TEP Summary Report for Refinement of the Pressure Ulcer Measure.  A summary report for the refinement of percent of residents or patients with pressure ulcers that are new or worsened (Short-Stay) (NQF #0678) has been made available through the HHA IMPACT Act Downloads and Videos webpage.  This report summarizes proceedings from a follow-up cross-setting pressure ulcer TEP meeting, which included in-depth discussion on the following topics: Obtaining input on updates to the cross-setting pressure ulcer measure in post-acute care settings; Obtaining feedback regarding potential updates to measure specifications and items used to calculate the quality measure; and Refining the cross-setting approach to data collection for pressure ulcers in post-acute care settings. Changes Under Consideration to Quality of Patient Care Star Ratings.  During a National Provider Call on January 19, 2017, CMS described a change under consideration to the Quality of Patient Care calculation algorithm.  CMS is considering replacing the Influenza Immunization Received for Current Flu Season measure with the claims-based Emergency Department Use without Hospitalization measure.  The slides from the call, which provide additional information, are available on the call detail page. Public comment on the change will be accepted through February 20, 2017. Update to Home Health Compare.  The first 2017 update for HH Compare is scheduled for late January 2017.  This update will include the Quality of Patient Care star rating and quality measure values shown in the preview reports distributed in early October, via CASPER.  Six measures have been dropped from the public-facing HH compare site during the January 2017 refresh, as finalized in the 2017 HH PPS rule.  However, these measures will still appear on the preview reports for another few refresh cycles, because of production processes. The six process measures that have been removed from the HH QRP include (i) Pain Assessment Conducted; (ii) Pain Interventions Implemented during All Episodes of Care; (iii) Pressure Ulcer Risk Assessment Conducted; (iv) Pressure Ulcer Prevention in Plan of Care; (v) Pressure Ulcer Prevention Implemented during All Episodes of Care; and (vi) Heart Failure Symptoms Addressed during All Episodes of Care.

Confidentiality of Alcohol and Drug Abuse Patient Records - Final Rule Revising Regulations

Posted on February 17, 2017, Authored by John H. Fisher, II, Filed under Health Care

The Department of Health and Human Services (HHS) has released a final rule to update and modernize the Confidentiality of Alcohol and Drug Abuse Patient Records regulations effective February 17, 2017. The new regulations contain special confidentiality restrictions relating to information pertaining to patients receiving treatment for a substance use disorder under a Federal program.  These regulations maintain the core philosophy and confidentiality protections but make changes that are intended to better align the patient privacy protection with advances in the health care delivery system. The 30-year old regulations of patient records in Federal Alcohol and Drug Abuse programs impeded the ability of patients receiving these services to participate in the benefits from new integrated health care models.  The new regulations are intended to permit these patients to obtain the benefits of integrated delivery systems while, at the same time, protecting the confidentiality traditionally associated with these programs. Some of the main revisions that were included in the new regulations include: The general restrictions provided by the rule continue to apply to a federally assisted program and holds itself out as providing, and provides, substance use disorder diagnosis, treatment, or referral for treatment.  For example, an identified unit within a general medical facility is subject to the requirements of the regulations if it holds itself out as providing, and provides, substance use disorder diagnosis, treatment, or referral for treatment. For the first time, the restrictions on confidentiality contained in the rule are extended to individuals or entities who receive patient records from other lawful holders of patient identifying information.  Patient records subject to the protection of the regulations now include substance abuse disorder records in the possession of ‘‘other lawful holders of patient identifying information.’’  This is the first time the law has been extended to records held outside of Federal Alcohol and Drug Abuse programs. Upon request, patients who have included a general designation in the ‘‘To Whom’’ section of their consent form must now be provided a list of entities to which their information has been disclosed pursuant to the general designation. Part 2 programs are required to have in place formal policies and procedures addressing security, including sanitization of associated media, for paper and electronic records.  The obligation to maintain such a program is now expanded for the first time to “other lawful holders” of patient identifying information. The required Notice to Patients of Federal Confidentiality Requirements may be provided in either paper or electronic form.  Previous regulations did not clearly permit providing this notice by electronic means.  The new regulations also permit electronic signatures be used when permitted by state law. Technical language changes were made to the consent requirements (§ 2.31).  These language changes should be integrated into policies and procedures. A prohibition on re-disclosure applies to any information that would directly or indirectly identify an individual as having been diagnosed, treated, or referred for treatment for a substance use disorder.  Other health-related information may be shared or re-disclosed if permissible under other applicable laws, for example, HIPAA and applicable state law. The regulations contain an exception that permits disclosure in the case of medical emergencies.  Revisions were made to the medical emergencies exception to make it consistent with the statutory language and to give providers more discretion to determine when a ‘‘bona fide medical emergency’’ exists. The exception that existed in previous regulation relating to certain research activities are revised to permit protected data to be disclosed to qualified personnel for the purpose of conducting scientific research.  In order to take advantage of the exception, the researcher must provide documentation of meeting certain requirements related to other existing protections for human research. Audit and evaluation requirements have been revised in the new regulations to permit an audit or evaluation necessary to meet the requirements of a Centers for Medicare & Medicaid Services (CMS) regulated accountable care organization (CMS regulated ACO) or similar CMS regulated organization (including a CMS-regulated Qualified Entity (QE)), under certain conditions. The above are some of the primary changes contained in the new regulations.  Compliance and/or Privacy professionals should review their existing policies and practices to assure they are consistent with the new regulations.  This is also a good time to perform an overall review of confidentiality restrictions and practices that are applicable to individuals receiving treatment for a substance use disorder.  For the first time, providers (and other individuals) who may be lawful recipients of protected information must make certain they have adopted an effective program to assure protection of such information.

Department of Justice Issues Principles of an Effective Compliance Program

Posted on February 24, 2017, Authored by John H. Fisher, II, Filed under Health Care

The Department of Justice issued a directive entitled “Evaluation of Corporate Compliance Programs.”  The document provides insight into the analysis used by the DOJ to assess the effectiveness of a corporate compliance program when making sentencing recommendations under the United States Sentencing Guidelines. The document references the Principles of Federal Prosecution of Business Organizations included in the United States Attorney’s Manual.  The Principles describe specific factors prosecutors are required to consider when conducting investigations, making charging decisions, and negotiating potential plea agreements.  The factors considered by prosecutors have become known as the “Filip Factors.” Primary factors identified in the Filip Factors include “the existence and effectiveness of the corporation’s pre-existing compliance program” and the extent of the organization’s efforts “to implement an effective corporate compliance program or to improve an existing one.” The DOJ states that it evaluates compliance efforts on an individual basis in the context of the investigation that triggers the investigation.   A rigid formula is not used to assess compliance efforts.   Instead, the DOJ considers the specific risk profile of the company being investigated and whether the company effectively takes actions to mitigate the specific risk that applies to its operations.  Although individualized determinations of compliance program effectiveness are made by prosecutors, certain common questions are relevant to the determination of compliance effectiveness.  The outline provided by the DOJ identifies some common issues, topics, and questions it uses to assess compliance program effectiveness. We will be posting follow-up blog articles summarizing some of the factors identified by the DOJ as indicating compliance program effectiveness.  Stay tuned!

Wisconsin DHS Prohibits Maneuvers and Techniques in Community Based Programs

Posted on February 10, 2017, Authored by John H. Fisher, II, Filed under Health Care

The Wisconsin Department of Health Services (DHS) released a memo specifying maneuvers or techniques that may not be used at any time in community based programs and facilities. DHS deems the prohibited maneuvers or techniques to "present an inherently high risk of serious injury and even death."  Providers are directed by DHS to immediately discontinue use of any of the listed maneuvers.   See “Prohibited Restrictive Measures in Community-Based Programs and Facilities” - Division of Quality Assurance Memo: 17-01 Prohibited maneuvers, techniques, and procedures that may not be used under any circumstances include: Any maneuver or technique that does not give adequate attention and care to protection of the head. Any maneuver or technique that places pressure or weight on the chest, lungs, sternum, diaphragm, back, or abdomen. Any maneuver or technique that places pressure, weight, or leverage on the neck or throat, on any artery, or on the back of the head or neck, or that otherwise obstructs or restricts the circulation of blood or obstructs an airway, such as straddling or sitting on the torso, or any type of choke hold. Any maneuver or technique that involves pushing into a person’s mouth, nose, or eyes. Any maneuver or technique that utilizes pain to obtain compliance or control, including punching, hitting, hyperextension of joints, or extended use of pressure points. Any maneuver or technique that forcibly takes a person from a standing position to the floor or ground. This includes taking a person from a standing position to a horizontal (prone or supine) position or to a seated position on the floor. Any maneuver or technique that creates a motion causing forcible impact on the person’s head or body, or forcibly pushes an individual against a hard surface. The use of seclusion where the door to the room would remain locked without someone having to remain present to apply some type of constant pressure or control to the locking mechanism. DHS explains in the memo that the ultimate goal is to replace such interventions with trauma-informed systems and settings, positive behavior supports, and non-coercive intervention strategies.  DHS promotes recovery and healing that is consumer-driven, person-centered, trauma-informed, and recovery-based. In addition to describing measures that are completely prohibited, DHS states that restrictive measures that are not prohibited may only be used in emergency situations in which there is an imminent risk of serious harm to self or others, or as part of an approved plan.  Situations in which the person’s behavior was foreseeable based on his or her history are not considered an emergency.   Even restrictive measures that are not directly prohibited must be avoided whenever possible and may only be used after all other feasible alternatives, including de-escalation techniques, have been exhausted.  When necessary, restrictive measures may only be used with the minimum amount of force needed, and for the shortest duration possible, to restore safety. Facilities should review their policies and practices to assure compliance with the guidelines set forth in the memo. Additional staff training should be conducted to assure compliance with these standards.   Additionally, providers should become familiar with the changing standards of care and best practices focused on building skills and techniques to de-escalate and redirect behaviors that present safety concerns, and work earnestly to promote a trauma-informed culture of care.

Chiropractic Service Overpayment for Lack of Medical Necessity

Posted on February 27, 2017, Authored by John H. Fisher, II, Filed under Health Care

Recent OIG Release Emphasizes Need for Compliance Policies Specific to Provider Risks The Office of Inspector General recently published results of its audit of Medicare claims for chiropractic services made by a chiropractic group in Kansas.  The review concluded the groups received over $725,000.00 in overpayments in calendar years 2011 and 2012. In its report, the OIG made a comment that should resonate with providers of all types: These overpayments occurred because [the provider] did not have adequate policies and procedures to ensure that the medical necessity of chiropractic services billed to Medicare was adequately documented in the medical records. The OIG recommended the provider refund $369,335.00 to the Federal Government.  The provider objected to the OIG’s recommendation to refund the overpayment that was identified by the OIG.  The provider argued the services billed were all medically necessary and were adequately documented as such.  The OIG issued detailed findings which upheld its initial recommendations, including the recommendation the provider repay amounts identified as overpayments. The OIG’s findings detail the documentation requirements applicable to substantiate the medical necessity to support billing for manual manipulation of the spine.  This analysis provides a useful review that can be integrated into chiropractic billing policies. The OIG stresses the absence of adequate policies and procedures describing the required medical record documentation to support billing the Medicare program for manual manipulation of the spine.  It is worthy of note that the OIG stresses the need for policies to address specific billing issues relevant to the provider’s practice and operations.  General billing policies will not suffice.  Providers should identify the areas of risk that are specific to their practices and detail applicable requirements in policies and in staff training. Providers should identify areas of billing applicable to the nature of their proposed services.  In the OIG report at issue, chiropractic services were specifically involved.  In my experience, providers generally know what billing issues pertain to their practices and where their most significant compliance risk lies.  Policies specific to these areas should be created based on published CMS billing requirements.  Employees should be trained on these policies. It is never enough to simply adopt policies.  The policies must be put into active operation to identify and reduce errors and associated fraud and abuse liability.  The policies can form the center of staff and provider training, auditing and monitoring, and corrective action based upon detected deficiencies.  The policy should be periodically reviewed and updated based on changes in legal requirements or billing standards, and detected errors in provider compliance or operation.  These activities are central to the operation of an effective compliance program.  If there are errors in the system, they will be detected before they become more difficult and costly to solve.  If errors somehow “get through” the system, the provider will have a great deal more credibility with the government when attempting to work out a solution.  In most cases, systematic compliance efforts will reduce or eliminate potential exposure for civil monetary penalties and/or False Claims Act liability if the provider is forthright in their disclosure to the Federal Government. It is also worth noting the OIG did not, and theoretically could not, make a determination as to whether the claimed services were in fact “medically necessary.”  Upon review of a claim, the only available evidence of medical necessity is what the provider documents in the medical record at the point of service.  The OIG could only analyze what was in the medical record and compare that information to the specific documentation requirement laid out in Medicare regulations. The OIG concluded the “medical review contractor found…that the medical records did not indicate that the services provided a direct therapeutic relationship to…the beneficiary’s symptoms.”  Specifically, the OIG concluded the services did not provide a reasonable expectation of recovery or improvement.  This is specifically required under the applicable provider manual sections (in this case Manual Chapter 15, section 240.1.3).