Significant Regulations Added Regarding Arbitration Agreements in Long-Term Care Facilities that Accept Medicare and Medicaid Patients

Long-term care facilities, i.e., nursing homes, that accept Medicare and Medicaid patients will be subject to some significant changes in regulations on their ability to enter into arbitration agreements with patients.

New Rules and Requirements:

The changes are as follows:

  1. Pre-dispute binding arbitration agreements are prohibited;
  2. The facility cannot require the resident to sign a post-dispute arbitration agreement as a condition of the resident’s continuing to stay at the facility;
  3. The ability to enter into post-dispute arbitration agreements with patients are subject to the following regulations:
    1. The facility must explain the agreement to the resident in a form, manner, and language that the resident understands and have the resident acknowledge that he or she understands the agreement;
    2. Guardians or representatives of the resident cannot consent to an agreement for binding arbitration on the resident’s behalf unless that person was allowed to do so under state law and has no financial interest in the facility;
    3.  The agreement cannot contain any language prohibiting or discouraging the resident or any other person from communicating with federal, state, or local officials regarding any matter;
    4.  The facility must inform the resident that he or she is waiving his or her right to a jury trial;
    5.  The facility must provide for the selection of a neutral arbitrator and a venue convenient to both parties; and
    6.  Any agreement for binding arbitration must be separate and distinct from any other agreement or paperwork addressing any other issues.

The new rules, when first proposed by the Department of Health and Human Services, met with a myriad of comments from the public – legal officials, medical care providers, and politicians.  The Department stood firm in its proposal, and the new regulations will take effect on November 28, 2016.

Looking Ahead:

The Department addressed one comment in a manner that leads us to believe that we should be on the lookout for similar changes in the next few years.  The commenter pointed out that other Medicare and Medicaid healthcare providers utilize arbitration agreements regularly.  Therefore, the commenter asked, why were other providers not subject to the same requirements as long-term care facilities?  In response, the Department stated that regulations on the use of arbitration agreements by other providers are “beyond the scope of this rule.”  However, it continued, “we will retain this comment for review in case there is future rulemaking in this area.”

As always, medical professionals and facilities providing care to Medicare and Medicaid patients need to be vigilant about new and/or changing regulations affecting their practice.

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Court of Appeals Carefully Distinguishes Medical Malpractice From Ordinary Negligence In Case Resulting In Wrongful Arrest

After writing a prescription for 120 pills of hydrocodone, Tami Carter’s doctor decided to change the quantity from 120 to 180.

When she took the prescription to Walgreens, an employee assumed that Ms. Carter altered the prescription and called her doctor’s office to verify the prescription. The on-call physician, a different person than the prescribing doctor, was not aware of the change and did not verify if his partner had done so.

When Ms. Carter returned to Walgreens, she was arrested on the spot.

She filed two claims: one against the prescribing physician for altering the prescription rather than writing a new one; the other against the medical practice for failing to verify the change.

The Court of Appeals dismissed the claim against her doctor, finding that the claim called into question his professional judgment in altering the quantity of pills prescribed, and that Ms. Carter did not attach an expert affidavit to her complaint as required in Georgia for a medical malpractice case.  The Court reiterated that “[the] resolution of whether an act or omission sounds in simple negligence or medical malpractice depends on whether the conduct…involved a medical judgment.”  Her claim against the practice, on the other hand, did not suffer the same fate.

The Court found that failing to make an effort to verify the prescription, or having a procedure in place to do so, did not involve professional skill or judgment.  Thus her claim against the practice was permitted to go forward.

There have been a number of cases involving the distinction between ordinary negligence and medical malpractice recently.  While hospitals and many large medical groups have in-house counsel to help guide and counsel practice procedures in order to avoid these types of cases from ever arising, most of the smaller medical practices do not have that luxury. It would be wise to pay attention to these types of decisions as they come out as they tend to be very fact-intensive, and can help prevent avoidable claims against the practice.

*The case is Carter v. Cornwell, 2016 Ga. App. LEXIS 528 (Sept. 21, 2016).

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Liability Insurers May Be Liable To Double Payment For Failure To Reimburse Medicare Providers

In a case of first impression in the 11th Circuit, the Court of Appeals held that a private insurance company operating as a Medicare Advantage Organization can sue a primary payor that refuses to reimburse the MAO for a secondary payment.

Prior to 1980, Medicare paid for all medical treatment within its scope and left private insurers to pick up the rest.  In 1980, in an effort to lower Medicare costs, Congress enacted the Medicare Secondary Payer Act (MSP), which inverted that system: private insurers paid first and Medicare paid what was left.

42 U.S.C. § 1395y(b)(2)(B), entitled “Conditional payment,” describes the manner in which Medicare can make a conditional payment notwithstanding its status as secondary payer.  When the primary plan does not fulfill its duties, the government may make a payment conditioned on reimbursement from the primary insurer.  If the primary insurer does not reimburse the government, then it is liable in the amount of twice the payment owed.

Under the Medicare Advantage program, private insurance companies can operate as Medicare Advantage Organizations.  As a MAO, the insurer agrees to provide Medicare benefits in return for a per capita fee from the government.

In this case, Mary Reale was injured at a condominium complex and brought suit against the complex.  Humana, as a MAO, covered Mrs. Reale’s medical bills.  In the meantime, Mrs. Reale settled with the complex and its insurer, Western Heritage Insurance Co.  Because the MSP provides that Medicare payments are secondary if any other insurer, including a tortfeasor’s insurer, is liable, Humana sought to recover from Western Heritage.  Western Heritage refused to pay, arguing that the Medicare statute only allows the Secretary of Health and Human Services to make conditional payments.

The Court looked to the regulations governing the Centers for Medicare & Medicaid Services.  Under 42 C.F.R. §422.108(f), an MAO “will exercise the same rights to recover from a primary plan…that the Secretary exercises under the MSP regulations….”  The Court then applied 42 U.S.C. § 1395y(b)(3)(A), which provides that, if a primary insurer fails to reimburse the Government, then damages “shall be in an amount double the amount otherwise provided.”  Therefore, the Court upheld an order awarding Humana twice the amount it was originally owed by Western.

*The case opinion can be found at Humana Medical Plan, Inc. v. Western Heritage Ins. Co., 2016 WL 4169120 (11th Cir. Aug. 8, 2016).

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Shoulder Dystocia: The Oft-Litigated Medical Claims – How to Avoid Liability and Do It Right

A Federal judge in the Middle District of Georgia entered an astounding $6,000,000 verdict for a family whose child suffered a brachial plexus injury following a delivery complicated by shoulder dystocia.  Coleman v. United States, 2016 U.S. Dist. LEXIS 102915, 1:14-CV-168(WLS) (M.D. Ga. 2016).

The judge’s finding emphasizes two things that all OB/GYNs, nurses, and other medical professionals in the field of obstetrics and gynecology should note:

(1) Review the mother’s medical history as early as possible; and
(2) Do not pull on the child’s head.

In Coleman, the mother had three prior vaginal deliveries, two of which were complicated by shoulder dystocia.  The same Nurse Midwife involved with the delivery in this case was involved in those two prior deliveries and actually documented the relevant medical history herself.  She did not, however, inform the delivering physician or the mother about the prior shoulder dystocias.

During labor, the doctor used a vacuum extractor one he realized that the child’s fetal heart rate was low.  When the head delivered, he recognized the dystocia and called for the McRoberts maneuver and the application of suprapubic pressure.  The doctor and nurse then “pulled on [the child’s] head three times.”

The Court found that the Defendants had a duty to: (1) evaluate the mother’s medical background and relay the information to the appropriate parties; (2) consider the appropriate approach to her fourth pregnancy in light of her two prior instances of shoulder dystocia; and (3) use appropriate maneuvers when made aware of the shoulder dystocia.

The Court determined that they breached their duty by not reviewing the mother’s relevant medical history when it was clearly available and would have allowed them to make a timely, thoughtful, and effective professional decision of how to handle the pregnancy and labor.  The doctor and nurse also breached the duty of care by “pull[ing] on [the child’s] head three times during…labor.”

According to the Court, their failure to review the mother’s prior medical history caused the child’s injuries because they otherwise would have identified a C-section as the safest manner to deliver the child, per the Defendant-Doctor’s own admission.  Additionally, the Defendants offered no evidence to refute that they “pulled on [the child’s] head three times during…labor,” causing the child’s injuries.

In all, the judge awarded the child nearly $6,000,000 in damages and another $400,000 to the parents.  OB GYNs, nurse midwives, and other medical professionals in the field of obstetrics and gynecology take note of the message this Federal judge has made loud and clear.

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Final Rule Implementing Section 1557 of the Affordable Care Act: What All Health Care And Coverage Providers Need To Know

All health care providers, programs, and insurers that receive funding from the Department of Health and Human Services need to immediately comply with the requirements imposed by Section 1557 of the ACA.  (Covered insurance companies and group health plan providers have until January 1, 2017 to come into compliance).  Section 1557 was implemented on July 18, 2016, and it prohibits discrimination based on race, color, national origin, sex, age, or disability in federally-funded health programs.  It is the first federal civil rights law to prohibit discrimination based on sex in such programs.  This article will focus on what is needed to comply with the gender and language-related aspects of Section 1557.

What Is Required

Under Section 1557, affected providers and insurers may not deny care or coverage based on gender, gender identification, or pregnancy.  In addition, covered programs and activities must treat individuals consistent with their gender identification.  While the rule does not include a religious exemption, it does not displace existing protections for religious freedom and conscience.

Covered entities are also required to take reasonable steps to provide meaningful access to non-English speakers likely to be encountered in their territory.  This may require looking into local demographics and program statistics.  Covered entities are encouraged to develop and implement a comprehensive language access plan consistent with the rest of the Act.

Procedural Requirements

Grievance Procedure: All covered entities with 15+ employees must have a grievance procedure and compliance coordinator.  For some, this may prove to be an expensive addition to operating costs.  Grievance procedures typically impose timing requirements not only for the complainant, but for the group’s response as well.  Compliance coordinators need to know the company’s policies, standards, and rules inside and out.  They must also receive training in the new grievance procedure and know the requirements for the coordinator and for the complainant.

Language Notices: In addition to implementing a grievance procedure, covered entities are also required to provide notices and taglines advising patients and consumers of the availability of free language assistance services.  The taglines must be provided in the top 15 non-English languages spoken in the State.

Health care and coverage providers need to immediately move into compliance with the requirements of Section 1557.  The rule allows violations to be directly challenged in federal court.  To avoid unnecessary litigation fees and costs, become familiar with the new requirements and avoid any delay in making the necessary additions.

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