February 1, 2001 Legislative News

JCAHO
Sedation and Anesthesia Informed Consent
Stark II
HIPAA
HCFA and Nurse Anesthetists
Medicaid
HCFA New Rules for Medicare+Choice Enrollees
Prompt Payment Law
Whereís the Money to Go
California Labor Laws
San Francisco Children and Free Insurance
Left Hand, Right Hand and HCFA
More New California Laws

JCAHO

Happiness is getting it done at once. The JCAHO is starting a pilot program in California, Illinois and Michigan for the combined inspection in hospitals over 150 beds of JACHO and HCFA. This will be effective January 17, 2001. Hospitals will need more staff available to answer questions and shepherd all the people that will be present for the combined inspection. The two entities will tour together but survey independently. It is possible that the JCAHO surveyors will be tougher than previously since there will be someone looking over their shoulder. This will take the [place of the HCFA validating survey now done on a random basis within 60 days of the JCAHO inspection. There will also be a shift this year to focus on individual patients and the following of care plans from admission through post discharge instead of the organizational PI system.

In a separate memo JCAHO revised the standards for voluntary PPO accreditation. The new rules place less emphasis on continuity of care and more on accreditation of practitioners. I assume JCAHO is trying to find more ways to raise money.                                     Top

Sedation and Anesthesia Informed Consent

Patients need to agree to the care they receive. This entails informed consent for all procedures including sedation and anesthesia, procedures, and the administration of blood. The physician doing the procedure or anesthesia is charged with the task of giving the necessary information to the patient or the patientís surrogate. This includes but is not limited to the type of procedure or anesthesia, the benefits, risks and alternatives including what may happen if the treatment is not performed along with the answering of any questions. This discussion needs to be documented in the patientís office or hospital record depending where the information was given. The hospital consent form is only to have the patient state that a qualified person has done the informed consent. It is not to take the place of an informed consent discussion. A special situation occurs if one with a "DNR" order has a procedure as to whether or not that order is to be rescinded during the procedure. RI.1.1-1.2.7, TX .2.2, TX.5.2-.5.2.2                             Top

Stark II

Physicians have one year to get it together. This law relates to referral for labs, PT, OT, radiology, radiation therapy, home health, outpatient prescription drugs, DME, inpatient and outpatient services, parenteral care, and prosthetics, many by specific CPT code. It is imperative that all arrangements between physicians and the above entities are done for fair market value. A healthcare attorney should scrutinize all relationships with which physicians have an economic interest. Some of the final rules are easier to meet than the proposed rules. There is a loosening of the direct supervision rule so that a physician does not have to be present when the referred service is performed. Individual physicians may now refer to entities in the same building if they do not own the unit. Group practices may have centralized services off-site as long as no one else uses that site. Any service performed by the physician is not to bee considered a referral. If an urologist, not a technician, does an ultrasound in his office this is not a violation. Lithotripsy billed by a hospital is now included in the Stark II prohibitions. Group practice is now defined as a practice where the physicians spend 75% of their time with patients. These groups may pay their physicians a bonus based on individual productivity but not on referrals of the above services when not personally performed. Physicians may be paid for leased equipment as long as the lease is a long term one (one year) and is at fair market rate without regard to how many referrals the physician make. Physicians may also refer to entities with which they have compensation arrangements as long as these arrangements are no more than if they were not in a position to refer. Violations may be up to $15,000 per violation and removal from Medicare and Medicaid as well as not paying for any serves obtained by the violation.

The Justice Department has stated they have recouped from 1997 to 2000 about $1.5 billion dollars from general fraud cases and $840 million of that was from health care. The Department has increased funding for healthcare fraud by $120 million this year. Last year the government won $486 million from Fresenius Medical Care. They have just settled a criminal case against HCA for $65 million. The question is, where does this money go? It does not go back to the healthcare pool to pay for needed care or to help the uninsured. It goes back into the general fund or to the victim fund that pays for anti-crime programs. Think about it. The money came out of the Medicare Fund to pay for the presumed care and then when recovered does not go back to the Medicare Fund. Is it any wonder the Medicare fund may run out of money?                                                 Top

HIPAA

The new HIPAA privacy regulations signed into law by President Clinton and that go into effect in two years will for the first time allow medical records to be used for marketing and fundraising. Healthcare providers will be allowed to share information with drug companies for targeted educational promotions, such as pharmacies giving prescription information to business associates for educational promotions. There will be not prior patient consent needed for the release of this type of information. The patients will have to be told how the marketers or fundraisers got their personal information, the financial benefits and why the patient was targeted for the promotion. They can say no but only after being contacted. The Clinton administration states that the new rules are a deterrent to misuse of medical records, except for the above exceptions. The exceptions for the above were because of intense lobbying by the hospitals and pharmaceutical companies. The HHS denies the lobbying had anything to do with the passing of the targeted exceptions. One of the lead members of Congress that helped push for the exception was Rep. Ellen Tauscher (D-Calif.), my congressperson. Most medical ethicists are not for the regulation and it is possible that President Bush may override this rule.

Texas has already proposed regulations to override the exceptions. Shouldnít California do the same?

Modern Physician reported that physicians should not immediately purchase new equipment to comply with HIPAA. There is still a comment period available, so some areas may change. The major costs would be in new software that would comply with the privacy standards. Since these rules do not come in for two years, there is time to purchase at a later date.                                      Top

HCFA and Nurse Anesthetists

HCFA has reversed the rule that requires nurse anesthetists to be supervised by anesthesiologists for Medicare patients. This turf battle continues in the name of public safety. HCFA has lifted the supervision requirement on nurse practitioners. The lifting of the rule was proposed by HCFA in 1997 and is now coming for approval. The individual states and the individual hospitals may make rules to the contrary.                                    Top

Medicaid

HHS (Clinton) has issued new rules regarding Medicaid patient protections. These include requiring the states to assure continued care if a Medicaid individual switches between fee- for Ėservice and managed care plans or between managed care plans. The states are prohibited from door to door solicitation of potential Medicaid beneficiaries. The states must pay for all emergent care no matter where received. The definition of emergent care is the prudent layperson standard, not an insurerís definition. All Medicaid managed care organizations must make expedited assessments on those people at risk for special health needs. Medicaid capitation rates must be actuarially sound. What a novel idea! If a population has chronic illnesses, the cap rate is higher.

President Bush has put a hold on all Clintonís last minute regs that have not been published in the Federal Register.                                    Top

HCFA New Rules for Medicare+Choice Enrollees

HCFA has published in the 1/24/01 Federal Register new rules for Medicare C enrollees. These include HMOs will need to give four days written notice prior to discontinuing pre-authorized care from home health services. The notice will have to state the reason for the discontinuation and how the enrollee may appeal. If there is an appeal the service must continue until after the hearing. The burden at the hearing would be on the HMO to support its decision. The enrollee may request a copy of his/her case file from the organization. If the organization did not provide proper and full notice the care would continue no matter the decision by an Independent Review Entity.         Top

Prompt Payment Law

Michiganís governor vetoes a bill that would have provided timely payment to providers by private health plans. Michigan already has this law for Medicaid payments. The governor believes the judiciary and not the legislature should settle these issues. Forty states have passed similar legislation, including a stringent law in California. Iowa and Colorado are taking up the issues during this year.

In the opposite vein Georgia has fined Cigna $300,000 for violation of the Georgia prompt payment laws. Cigna will also be placed under scrutiny for two years and fined again if necessary. This is only the latest and the largest in a series of fines levied in Georgia since June 1999 for lack of prompt payment.

Whereís the Money to Go

Congress is not happy. They passed a bill giving $11 billion over five years to HMOs for the purpose of keeping them in the Medicare program. The HMOs state the money will go to pay increased fees to providers to keep them in the HMOs. Rep. Stark states "we were flimflammed by the HMOs." The House initially stated the money could only be used to reduce the premiums paid, reduce co-payments, enhance benefits or prevent the reduction in future years. Later it was changed to allow the use of the money to increase payments to providers. Nice to see the providers arenít the only ones being flimflammed by the HMOs.

Congress has found that Medicare has a surplus as part of the $5.6 trillion general surplus. The Democrats want to use this surplus to pay down the national debt. President Bush and the Republicans want to add prescription benefits to Medicare with the Medicare surplus. Sounds backwards, but itís not.                                         Top

California Labor Laws

The new regulations you should know about are the new posters you are required to have, the unenforceability of employment arbitration agreements under Pinedo v Premium Tobacco, the increase in the minimum wage to $6.25, the new OSHA standards, and the independent contractor reporting requirements. The latter state that all business required to give a 1099 must make reporting requirements as well. The information must be reported to the EED within twenty days of makinga contract for $600 or there is no contract.   Top                      

San Francisco Children and Free Insurance

The San Francisco Public Health Department is presenting its plan for free health insurance for San Francisco children who donít qualify for other state or federal programs. This will affect approximately 5000 children at a cost of $4 per month per child or $5.7 million per year. This laudable plan would be financed via the general fund, cigarette settlement money, taxes or a combination of all. San Francisco, in 1998, already passed Proposition J, which created universal health coverage for their uninsured residents. I wonder if city money or tax dollars are used for the program if another ballot issue will need to be passed.

The day following the above story, the SF Chronicle states that the Department of Health is requesting an additional $22 million just to maintain staffing and services. Sounds like the SF Dept. of Health wants it cake and eat it too.                                 Top

Left Hand, Right Hand and the HCFA

The Charlotte Gazette reports that contrary to earlier stories that the Florida HCFA peer review organizations gave out the name of a Florida physician after performing a patient requested peer review hearing, they in fact were never told to do so by the HCFA. The paper states it continues to be the policy not to disclose the physician names if the physician requests the information be non-disclosed. Top

More New California Laws

California has passed over a thousand new laws. In the arena of employment law and sexual harassment some are the new minimum wage law and penalties only affects those that are paid on an hourly basis and not those on salary. The ADA law in California (Fair Employment and Housing and Unruh) has been greatly expanded so that those who now qualify no longer need to have a "substantial impairment" of "one or more major life activity". The new law removes the substantial impairment portion so potentially only trivial impairment may qualify a person under the California ADA rules. Here, as opposed to the federal ADA, mitigating circumstances such as eyeglasses shall not be considered. Since I have myopia and wear glasses to correct it, I am now covered under the new rules. These are the same brilliant minds that brought you supply side utility deregulation without doing anything to the demand side. In the sexual harassment category California now allows co-workers instead of just supervisory personnel to be liable for sexual harassment. The employer is only liable if they knew or should have known about the harassment and failed to act. Therefore, the co-worker may be liable and the employer may not be liable.                             Top

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DISCLAIMER: Although this article is updated periodically, it reflects the author's point of view at the time of publication. Nothing in this article constitutes legal advice. Readers should consult with their own legal counsel before acting on any of the information presented.