Healthcare Law Briefs

Meeting the Challenge of Health Law

	What's Inside
	Fraud and Abuse Updates
	OIG Advisory Opinion Allows Hospital/ Radiology Groups Open MRI Joint Venture
	CMS to Withdraw Proposal to Limit Physician Ownership in Specialty Hospitals
	PA Emergency Department Regulations
	California Physician Sues Blue Cross of California for Wrongful Plan Termination
	State Peer Review Immunity is "Qualified"

Healthcare Law Briefs

*READ PAST ISSUES OF THE HEALTHCARE LAW BRIEFS

1. Fraud and Abuse Updates

PATH Audit Settlements Continue: Albert Einstein Healthcare Network, based in Philadelphia, Pennsylvania, agreed to a $2,000,000 settlement arising out of the audit program for physicians at teaching hospitals, relating to inpatient services from January 1995 through June 1996.
Submitting False Information to Auditors Justifies Sentencing Enhancements: The First Circuit Court of Appeals held that the sentence, which included a four year prison term and a $730,000 penalty, of the owner and operator of the Maine Ambulance Company was properly enhanced under the U.S. Sentencing Guidelines. The sentence was enhanced because the owner submitted false information in the audit that produced the federal indictment. The owner argued that the audit was a district matter from the criminal proceedings; the appellant court saw it the other way.

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2. OIG Advisory Opinion Allows Hospital/ Radiology Groups Open MRI Joint Venture

OIG Advisory Opinion 03-12, posted May 29, 2003, states that OIG will not prosecute the proposed hospital/physician joint venture, despite the fact it does not satisfy the small investment investment safe harbor because of the hospital's ability to generate referrals. Under the proposed arrangement, the hospital and the radiology groups, which is the provider for the hospital-based services, will jointly own an open-MRI imaging facility, 51/49% respectively. The radiology group will assign the office and equipment leases; the hospital will provide the management and technologist. Although the hospital would be in a position to general referrals, thereby precluding safe harbor qualification, the OIG concluded it would not prosecute because of representations that hospital affiliated physician references were estimated at less than 10%, and would not be tracked, and those affiliated physicians would be advised annually of that situation.

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3. CMS to Withdraw Proposal to Limit Physician Ownership in Specialty Hospitals

The Centers for Medicare & Medicaid Services is withdrawing plans to propose a rule that would have limited the circumstances in which doctors could refer patients to specialty hospitals in which they had financial interest, an agency spokesman told BNA. CMS announced the initial proposal May 27 in its semiannual regulatory agenda (68 Fed. Reg. 30213). The rule would have clarified the whole hospital exception in the physician self-referral regulation--commonly known as the Stark rule--with the intent of preventing many doctors from investing in niche provider facilities, such as heart hospitals and orthopedic centers. The spokesman would not say why CMS was withdrawing the proposal just weeks after it was announced.

June 18 -- BNA's Health Care Daily Report

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4. PA Emergency Department Regulations

On June 7, 2003, the Pennsylvania Department of Health issued revised regulations listing the drugs approved for use by advanced life support (ALS) ambulance services and defining the scope of practice for Pre Hospital Practitioners. You can access these items at Pennsylvania Bulletin, Vo. 33, No. 23, June 7, 2003, pp 2713 - 2718 or obtain a copy by contacting Mike Cassidy at mcassidy@tuckerlaw.com.

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5. California Physician Sues Blue Cross of California for Wrongful Plan Termination

In Nordella v. Blue Cross of California, Cal. Super. Ct. BC 297291, an urgent care physician is suing Blue Cross of California (BCC) for wrongful termination from BCC's provider network, alleging breach of contract, interference with contractual relations, negligent and intentional infliction of emotional distress, violation of due process, and violation of public policy based upon California statue. BCC has averred that Dr. Nordella's termination was predicated upon improper billing practices.

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6. State Peer Review Immunity is "Qualified"

The Health Care Quality Improvement Act provides immunity forum liability for peer review participant from claims based upon federal law, assuming certain standards are met. This does not cover state action. Most states have similar peer review immunity statutes, but the standards would be different. A Connecticut Court recently concluded that several physicians were not entitled to immunity because they could not rebut the allegations of malice. Chadha v. Charlotte Hungerford Hospital, Conn. App. Ct. No. AC 22395 (May 27, 2003).

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>For more information about the topics presented in this newsletter please contact one of the Healthcare Attorneys: