FTC Suspending Enforcement of the “Red Flag Rules” Until May 1, 2009

 

            The FTC has announced that it is suspending enforcement of the “Red Flag Rules” until May 1, 2009.  This will give organizations more time to develop and implement their written programs for identity-theft prevention.  The rules require that financial institutions and creditors have a written program to prevent, detect, and diminish identity theft.  The rules will also apply to many health care organizations.  They were originally scheduled to take effect on November 1, 2008.  During the FTC’s outreach efforts regarding the rules, officials determined that some entities did not know they were covered and had not started any efforts to comply with the rules.  The delayed enforcement will allow all entities covered by the rules, including many health care organizations, to make sure that they are in full compliance by May 1, 2009.

 

 

 

 

© 2008 Parsonage Vandenack Williams LLC

 

For more information, contact info@pvwlaw.com

Institutional Review Boards for Clinical Trials

       In the United States, clinical trials are reviewed and approved by institutional review boards (“IRBs”).  IRBs are most often composed of physicians, scientists, and lay people.  They review study protocols and consent documents in order to make sure that the participants’ rights are protected, and that the particular study does not pose a burdensome or unnecessary risk to the participants. 

      It is very important for those conducting and participating in clinical trials to know that not all IRBs are equal.  Many IRBs have trouble keeping up with their workload, which could mean that protocols developed by well-regarded doctors and professors at some major institutions are basically automatically approved by the IRBs.  Other IRBs may prove ineffective due to the mix of characters on the board, with lay people intimidated by the stronger personalities in the medical field. 

     Clinical trial providers and their sponsors should screen IRBs as a regular risk management practice.  Sponsor companies may want to prequalify IRBs.  Sponsor companies may also attempt to determine whether all of the members of an IRB are qualified to be on the board.  Companies should try to select IRBs that are working toward accreditation.  Seeking out IRBs that meet these standards is certainly in the best interests of the sponsor.  Sponsors clearly want IRBs to approve their study, but if the IRB does not perform its job properly and something goes wrong during the clinical trial, the sponsor company could be held liable.  As such, screening IRBs is a positive preventive measure that all clinical trials providers and sponsors should consider implementing as a necessary part of their clinical trial procedure.[1]

 

[1] Jill Wadlund, Heading Off a Clinical Trial Liability Lawsuit, APPLIED CLINICAL TRIALS, vol. 12, no. 4, pp. 50-53.

 

 

© 2008 Parsonage Vandenack Williams LLC

 

For more information, contact info@pvwlaw.com

 

“How-To” Guide for E-Prescribing Released

            On October 7, 2008, a coalition of health care stakeholders released a “how-to” guide to help providers make informed decisions regarding how and when to transition from paper to electronic prescribing systems.  The guide is called A Clinician’s Guide to Electronic Prescribing.  It was issued by eHealth Initiative (“eHI”) in cooperation with the American Medical Association, the American Academy of Family Physicians, the American College of Physicians, the Medical Group Management Association, and the Center for Improving Medication Management.

 

Electronic prescribing is an efficient way to improve health care delivery, decrease medication errors, and prevent potentially dangerous drug interactions.  But the transition from a paper system to an electronic system can be difficult.  The newly-released guide is intended to eliminate some of the confusion about e-prescribing and help physicians begin to realize some of the benefits that e-prescribing can bring to both their patients and their practices.

 

The first part of the guide targets office-based clinicians who are new to the idea of e-prescribing and are looking for a basic understanding of e-prescribing – what it is, how it works, what the benefits and weaknesses are, and the current environment impacting its widespread adoption.  The second part targets those office-based clinicians who are ready to use e-prescribing as a part of their practices.

 

To view the guide, click here.

 

 © 2008 Parsonage Vandenack Williams LLC  

 

For more information, contact info@pvwlaw.com

 

How to Avoid a Clinical Trial Liability Lawsuit

 Over the past few years, litigation against the clinical trial industry has significantly increased.  The most well-known suit was filed against the University of Pennsylvania by the family of Jesse Gelsinger, an 18-year-old man who died after participating in a 1999 gene therapy trial.  Later information revealed that the investigator in charge of the trial held a majority interest in a biotech company that stood to make millions of dollars if the experiments proved successful.  While some of the financial interests were disclosed to the family, major issues were raised regarding whether Gelsinger received unbiased medical information.  Cases like Gelsinger can no longer be treated as isolated incidents. 

 

Although only a few cases receive lots of publicity, many others are not usually publicized.  The targets of litigation are most often the clinical investigators and research institutions that conducted the trials.  However, the companies that sponsor trials also face risks when something goes wrong.  For this reason, pharmaceutical companies need to take aggressive measures to make sure that the clinical trials they sponsor are not looked at with disfavor and to protect themselves against even the appearance of conflicts of interest.  The more steps that sponsor companies take towards a best practice approach to conducting clinical trial, the better their insurance program may be, and the less likely they are to face a potential lawsuit.

 

Some companies may view the trend toward litigation as a short-term issue.  But based on the growing number of clinical trial and the increasing level of interest in this form of litigation by plaintiff law firms, it is most likely a continuing trend.  Thus, companies involved in the clinical trials and their sponsorship must take legal and other measures to protect themselves from potential liability and to avoid conflicts of interest.  Clinical liability insurance can help to offset some, but not all, of the cost related to an occurrence that leads to an expensive liability lawsuit.

 

By following the best practice procedures, companies will have more leverage to obtain a better liability insurance program.  Additionally, sponsor companies might have more success in finding subjects when they have a positive reputation for excellent clinical trial safety efforts.   And finally, investors will place greater importance on the way that companies manage clinical trial liability exposures and will likely prefer those companies that show top-notch research processes and integrity.[1]

 

[1] Wallund, Jill.  Heading Off a Clinical Trial Liability Lawsuit, Applied Clinical Trials, vol. 12, no. 4, 50-53 (April 2003).

 

 

© 2008 Parsonage Vandenack Williams LLC

 

For more information, contact info@pvwlaw.com

 

 

 

 

 

Compliance Risks Escalate with the Use of Electronic Medical Records Systems

Health care providers truly appreciate electronic medical record (“EMR”) templates because they make documentation faster and easier.  However, abuses such a cloning and “exploding” notes are putting reimbursement and compliance at risk.  If too much information is replicated from one EMR to the next, there is very little to distinguish patient encounters, which undermines physician attempts to establish medical necessity — the foundation of Medicare reimbursement — and might implicate quality of care.

Although Centers for Medicare & Medicaid Services (“CMS”) has not adopted a position on templates, the agency has noted that they are supposed to encourage physician documentation, and not do most of the work.  The problems with templates have become a hot issue because EMR systems are becoming more popular.  Moreover, physicians are constantly working to comply with Medicare’s 1995 or 1997 evaluation and management documentation guidelines.  However, experts warn that prepopulated templates and cloning may be too easy to help.  Cloning may work for certain elements of the history, but it should not be used for the history of present illnesses, the exam, or the medical decision-making portion.

Medicare carriers do not like the use of so-called “default documentation” because they really cannot tell what kind of work is performed in each encounter if the records are so similar.  Also, payers want the documentation to support medical necessity, but it is difficult for physicians to document medical necessity because it is a cognitive process.  Carrying forth documentation that is not relevant to what the physician did, through the use of cloning or prepopulated templates, is not eligible to receive payment because it is not medically necessary.  The government is becoming increasingly aware of this because EMR is becoming so widely used.

Specific Medicare concerns include the possibility that defaulted documentation may cause a provider to overlook significant new findings, as well as the possibility that the provider’s computerized documentation program defaults to a more extensive history and physical examination than is medically necessary to perform on a given day, and does not specifically set forth new findings and changes in a patient’s condition.

In some instances, prepopulated templates and cloned records hardly appear to describe the patient at all.  When a patient goes to see a doctor and the EMR for the visit is cut and pasted from the previous medical encounter, all vital signs, history and physical, and review of systems are carried over from the patient with the intention of updating it. 

It is important for physicians to take the time to customize medical records to the greatest extent possible, even in a template system, in order to make it clear to auditors that they are not carbon-copy records.  This will allow physicians to benefit from the efficiency of EMR, but also to maintain full compliance with Medicare’s standards.  Document the patient’s primary complaint, which should carry through to the physical exam and the history, and that should support decision making and medical necessity.[1]

[1] Report on Medicare Compliance, May 28,2007.

 © 2008 Parsonage Vandenack Williams LLC  

 

For more information, contact info@pvwlaw.com

 

 

Congress Mandates Mental Health Parity in Insurance Coverage

Amidst the throes of the financial bailout, Congress has approved legislation requiring insurers and employers to cover mental illness, including alcohol and drug addiction, at levels on par with physical illness. 

For example, the bill requires parity in deductibles, co-pays, and out-of-pocket expenses, and it will eliminate limits insurers commonly impose for mental illness, such as 30 visits or 30 days in hospital, in the absence of similar limits for medical and surgical coverage.

The new law does not force employers or health plans to cover mental illness or alcohol or drug abuse.  And it does not apply to employers with fewer than 50 employees.  Many states already have some form of parity law, but self-insured employers have not been reached by state parity laws. 

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 was saved from death upon Congressional adjournment when it ended up getting tacked onto the bailout bill in the Senate, which then passed in the House.

  

 

© 2008 Parsonage Vandenack Williams LLC

 

For more information, contact info@pvwlaw.com

 

Health Care Providers’ Deadline to Implement “Red Flag Rules” Identity Theft Programs Is November 1, 2008

Health care providers have until November 1, 2008, to implement programs to address the issue of identity theft, a growing problem that can have particularly disastrous results in the medical context.  This requirement is imposed by amendments — known as the “Red Flag Rules” — to the federal Fair and Accurate Credit Transactions Act.

In short, a Red Flag Rules program must be designed to identify, detect, and respond to “red flags,” namely those patterns, pratices, or specific activities that could indicate identity theft.

Many health care providers are not aware of the Red Flag Rules because the implementing regulations were jointly promulgated by the Federal Trade Commission (FTC) and various federal banking regulators rather than CMS or other agencies providers are likely to monitor. 

The Red Flag Rules apply to “creditors” that have ”covered accounts.”  Although the definitions of these terms are complex, and are not crystal clear, the definitions themselves and FTC guidance indicate that health care providers would fall within the relevant definitions and therefore be subject to enforcement by the FTC under the Fair Credit Reporting Act.

The five basic required elements of a Red Flag Rules program are as follows:

1.)  Identify red flags (for example, by considering billing practices and any history of suspicious patient information activity)

2.)  Detect red flags (for example, by having authentication processes to verify patient identity, changes of address, etc.)

3.)  Respond to red flags (for example, by seeking verification or monitoring patient accounts when suspicious activity occurs, and involving law enforcement when warranted)

4.)  Update the program (for example, by responding to changes in methods of identity theft, incorporating new developments in identity theft prevention, and responding to alerts from law enforcement) 

5.)  Approval and Oversight (the program must have the initial approval of the entity’s board of directors or similar governing body, it must be overseen by an employee of at least senior management level status, it must include staff training, and it must include oversight of service provider arrangements)

The Red Flag Rules afford entities flexibility in designing programs appropriate to their size and complexity and the nature and scope of their operations.

 

 

© 2008 Parsonage Vandenack Williams LLC

 

For more information, contact info@pvwlaw.com

How to Avoid Stark Issues When Choosing Service Providers

According to a new Department of Health and Human Services report, in 2005, those doctors who ordered the most magnetic resonance imaging (“MRI”) services for their patients were more prone to have a medical practice or other form of business relationship with the provider performing the service.  The analysis of physicians reimbursed by Medicare for MRI services determined that 25% of the payments went to physicians who had a connection to the performer of the service.  In fact, just 5% of those physicians (the most frequent users of MRI) accounted for 55% of the MRIs ordered.  The study also found that in 2005, Medicare paid for about 2.6 million MRI services under the Medicare physician fee schedule.  The report concludes, “As more services are performed in these settings, doctors are increasingly in a position to order services from parties with which they have a medical practice or other business relationship. In these circumstances, doctors may have conflicts of interest, financial or otherwise.”[1]

 

As the DHHS study shows, doctors need to make sure to check for all conflicts of interest, financial or otherwise, when ordering services from outside parties.  In light of the new phase of the Stark Law, Stark III, it is important for all doctors to assess their relationships with current and potential service providers to ensure that they comply with the Stark Law and any other applicable rules.  By covering all of your bases, you will be able to obtain the services you need for your practice and develop longstanding business relationships with trusted providers, while at the same time feel confident that no conflicts exist.

 

 © 2008 Parsonage Vandenack Williams LLC

For more information, contact info@pvwlaw.com