At Chambliss' annual seminar, attorneys from the Health Care Group provided an overview of the significant developments in health care law. The review specifically highlights key legal issues affecting our local community, including the current state of health care following the Supreme Court's landmark decision earlier this summer. Topics Include: 1. Termination of the patient relationship 2. Lessons from the government settlements with Chattanooga hospitals 3. Update on Tennessee health care laws and ACA

1. HEALTH LAW
SEMINAR
October 17, 2012
Chambliss, Bahner & Stophel, P.C.
1000 Tallan Building Two Union Square
Chattanooga, TN 37402
(423) 756-3000
cbslawfirm.com
© 2012 Chambliss, Bahner & Stophel, P.C.
All Rights Reserved

2. LEGAL ASPECTS OF THE
PRESCRIPTION DRUG
ABUSE PROBLEM AND
DIVERSION
Alix C. Michel and David J. Ward

3. Prescription Drug Abuse is
an Epidemic
• The toll our nation's prescription drug abuse
epidemic has taken in communities
nationwide is devastating…we all share a
responsibility to protect our communities
from the damage done by prescription drug
abuse.
Gil Kerlikowske
3

6. Staff and Employee Vetting
6

7. Drug Diversion Hep C Outbreak
- Traveling medical technician who was charged in
July with causing an outbreak of Hep C in New
Hampshire.
- A dozen hospitals in seven states are scrambling to
identify people who might have been infected.
- A hospital official in Arizona said he had been fired
from her facility in April 2010, after he was found
unresponsive in a men's locker room with syringes
and needles.
- He was treated at the hospital, and tests showed
he had cocaine and marijuana in his system.
7

8. - Testing has been recommended for about
4,700 people in New Hampshire alone.
- In addition to Arizona, he also worked in
Georgia, Kansas, Maryland, Michigan,
New York and Pennsylvania before being
hired in New Hampshire in April 2011.
Read more: http://www.seattlepi.com/news/article/Suspect-in-hepatitis-C-outbreak-was-fired-in-Ariz-
3737922.php#ixzz22DXkxz7G
8

9. 9

10. 10

11. MDH Finds Drug Thefts
Have Doubled
• The Coalition's report, said to be the first of its kind, found
250 cases of prescription drugs that were stolen or
reported missing at Minnesota health care facilities from
2005 to 2011.
• A string of cases made headlines last year, including that
of a nurse at Abbott Northwestern Hospital who allegedly
let a patient writhe in pain after she siphoned off his
painkillers.
• In March 2011, St. Cloud Hospital suspended a nurse who
allegedly used a contaminated needle to steal
medications from IV bags, spreading bacterial infections
to 23 patients.
11

12. Prescription Painkiller
Overdoses Are a Public
Health Epidemic
• Prescription painkiller overdoses killed nearly 15,000
people in the US in 2008. This is more than 3 times the
4,000 people killed by these drugs in 1999.
• In 2010, about 12 million Americans (age 12 or older)
reported nonmedical use of prescription painkillers in the
past year.
• Nearly half a million emergency department visits in 2009
were due to the misuse or abuse of prescription
painkillers.
• Nonmedical use of prescription painkillers costs health
insurers up to $72.5 billion annually in direct health care
costs.
12

13. No One Is Immune
13

14. 14

18. Prescription Pill
Epidemic Fuels Pharmacy
Robberies Across the
Country
• "Last year, pharmacy robberies were up
18,000 in the entire country," (Knoxville
P.D. spokesman D. DeBusk, 7/8/11).
• Robbers come in 24/7 to demand
prescription pills, especially OxyContin,
and make a quick getaway.
• Innocent employees and customers at
risk.
18

19. Painkillers Claim More Lives in 4 Years
Than Throughout the Entire Vietnam War

21. Most Frequently Abused
Drugs
• To relieve pain: opioids like OxyContin® and
Vicodin®
• To relieve anxiety: sedatives like Valium® and
Xanax®
• To boost attention and energy: medicines that
speed up physical and mental processes like
Ritalin®, Adderall® and Dexedrine®
• To improve athletic performance: steroids like
Anadrol® and Equipoise®
• Painkiller Opana, new scourge of rural America
(Reuters 3/27/12)
21

22. Rise of Oxycontin
• Oxycodone developed in 1916
• Oxycontin approved by FDA in 1995
• Oxycontin introduced in U.S. in 1996
• Best selling non-generic pain reliever in
U.S. by 2001
See contra: Anatomy of an Epidemic: The Opioid
Movie
22

24. Newborn Addicts
24

25. Figure 1. Weighted National Estimates of the Rates of NAS per 1000 Hospital Births per Year
Patrick, S. W. et al. JAMA doi:10.1001/jama.2012.3951
Copyright restrictions may apply.

26. Response by law Enforcement

29. Whack A Mole

30. Pain Meds Prescribed Based on
What???

31. Methods of Drug Diversion –
Engaged in Illegal Trafficking
Activities
• Chicago doctor given four life sentences
• Convicted of causing the deaths of four patients who overdosed on
pain pills
February 14, 2012

32. Methods of Drug Diversion –
California "Doctor Feelgood" Charged
with Three Murders
• Wrote more than 27,000 prescriptions in a three year period
• "If my patient decides to take a month supply in a day, then there's
nothing I can do about that."

34. Responses to Prescription
Drug Abuse
• National
• State
• Local
• Employer's
34

35. National Response
http://www.whitehouse.gov/sites/default/files/ondcp/issues-content/prescription-
drugs/rx_abuse_plan_0.pdf

36. Epidemic Responding to
America's Prescription Drug
Abuse Crisis
• Education
• Tracking and Monitoring
• Proper Medication Disposal
• Enforcement
36

37. U.S. Senate Panel Launches
Investigation of Painkillers,
Drug Companies
37

39. Prescriber Education
• In April 2011, FDA announced the elements of a Risk
Evaluation and Mitigation Strategy (REMS) to ensure that
the benefits of extended-release and long-acting (ER/LA)
opioid analgesics outweigh the risks. The REMS supports
national efforts to address the prescription drug abuse
epidemic.
• As part of the REMS, all ER/LA opioid analgesic companies
must provide:
• Education for prescribers of these medications, which will be
provided through accredited continuing education (CE)
activities supported by independent educational grants from
ER/LA opioid analgesic companies.
• Information that prescribers can use when counseling
patients about the risks and benefits of ER/LA opioid analgesic
use.
39

40. • Make Better Use of PMPs
• Enhance Enforcement By Creating Task Forces Locally
• Ensure Proper Disposal of Drugs
• Leverage the State's Role as Regulator & Purchaser
• Build Partnerships Among Key Stakeholders
• Use the Bully Pulpit to promote Public Education

43. 43

44. As of: July 31, 2008
Drug Product: METHADONE
Prescriber State: TN
Rank Prescriber Name Office Zip Scripts Filled Cash Scripts Filled
1 XXXXXX Nashville-372 33 16
2 XXXXXX Nashville-372 32 32
3 XXXXXX Nashville-372 29 11
4 XXXXXX Nashville-372 29 27
5 XXXXXX Nashville-381 18 5
16 XXXXXX Nashville-374 10 10
Source: Tennessee Prescription Drug Monitoring Database

46. Tennessee's New Law
Prescription Safety Act
• Establishes requirement that physician
check database….
• Requires pharmacists to update the
database every 7 days rather than 30
• Effective 4/13
• Similar laws passed by Kentucky,
Oklahoma & New York and by
Massachusetts
46

47. Don't Turn A Blind Eye
47

48. DEA Activates "Pill Mill“
Tip Line
• 24-hour, toll free "pill mill" tip line and email
address
• 888-954-4662
• Callers should leave their contact
information and the names of any doctors or
clinics you are calling about
• TN Drug Diversion Task Force: 877-FOR-
RXTN
• TennCare patient – OIG: 800-433-3982
48

49. RAC & ZPIC
IS THE ALPHABET SOUP
COMING FOR YOU?
Stephen D. Barham

50. ZPIC
• Zone Program Integrity Contractor
("ZPIC") replaces the Program
Safeguard Contractors ("PSC")
50

51. ZPIC
• Given various tools to watch for
"abuse" authorized to do:
– Post-payment audits
– Pre-payment audits
51

52. Regional Audit Contractors
("RAC") Program Mission
"To reduce Medicare improper payments
through efficient detection and
collection of overpayments, the
identification or underpayments, and the
implementation of actions that will
prevent future improper payments."
52

53. RAC Regions
53

54. Region C Contractor
Connolly Healthcare
RAC Toll Free Number
866.360.2507

55. • RAC audits areas CMS has approved for it
55

56. Key Audit Approved Issue

57. Medicare by the Numbers
• In 2010 the U.S. spent 2.59 trillion in
health expenditures accounting for
17.9% of the U.S Gross Domestic
Product
• $524.6 billion was through Medicare
• $401 billion was through Medicaid
57

58. Medicare by the Numbers
• CMS estimates that 50.2 million
Americans are enrolled in Medicare
Parts A/B
• U.S. population is around 314.5 million,
so nearly 1/6 of the population
receives Medicare benefits
58

59. PRACTICAL
IMPLICATIONS

60. Bookmark Connolly
Healthcare and Visit
Regularly
www.connollyhealthcare.com/RAC

61. • Know the areas of billing concern for
your practice
• Find out what your billing company is
doing to prepare and its plan to stay on
top of where the Auditors are focused
• Keep your billing staff trained
• Keep your doctors trained
– Documents must support the billing
61

62. • Consider a self-audit
• Know in advance what your billing
company will and will not do or help
you with if you receive an audit
• Understand the importance of
providing a complete response to an
initial request for records
62

63. Pay Attention
• Do not just assume your billing company or
staff will take care of this matter
• Could your practice survive having to repay a
quarter to half of your Medicare money
collected over a year or longer?
• Focus on deadlines in the letters
• Send all correspondence, documents or
other materials in a manner that is traceable
and requires a signature
63

64. Pay Attention
• Know how to document the care
provided and make sure that your filing
system is accurate
• Understand available resources and
assistance for appeal
– Billing company or self auditor
– Insurance coverage
• Know the potential impact to your
practice and be prepared
64

65. Medicare Applications
• Triple check that the right forms are
correctly and completely prepared
• Send in a traceable manner
• Know the enrollment rules and what
happens if there is a problem or delay
65

66. AUDIT APPEALS
PROCESS

67. Audit Appeals Process
• Follows normal Medicare appeals process
– 5 stages of administrative review
– All stages of review by the agency or its
contractors
– First couple of stages ~ rubber stamp
– Must complete first 4 stages before the agency
prior to appealing in traditional "Article 3" court
• CMS correspondence includes appeal
instructions
67

68. Initial Determination
• When?
– Varies: several months to a year after initial request
for documentation
• What?
– Multi-page document
– Standard excerpts of legal authority for reference
– Citations to other legal authority including CMS
Manuals
– Spreadsheet of each initial determination
68

69. Initial Determination
• The Spreadsheet
– Beneficiary
– HIC#
– DOS
– Original code billed and corresponding $
amount
– Decision: downcode and corresponding $
amount allowed OR denial
– "Rationale"
• usually not very specific or helpful
• e.g. "insufficient documentation"
• sometimes even illegible! 69

70. 1st Stage: Redetermination
• When?
– 120 calendar days after receipt of notice
of overpayment
• 30 days in order to avoid recoupment
– Contractor has 60 days to send
redetermination decision
• Contractor can extend for 14 days if provider
submits additional materials
70

71. 2nd Stage: Reconsideration
• When?
– 180 calendar days of receiving
Redetermination decision
• Or within 60 days to avoid recoupment
– The QIC (Qualified Independent Contractor)
has 60 days to issue Reconsideration
decision
• Last chance to add records to justify billings
• If Reconsideration decision not rendered within
timeframe, provider can proceed to request ALJ
hearing
71

72. 3rd Stage: ALJ Hearing
• When?
– 90 days after receipt of Reconsideration
decision from QIC
• Reconsideration decision will include a new
spreadsheet showing rationale and new decisions
• If any decision is overturned, the QIC must remand
overpayment decision to be recalculated
• QIC decides whether statistical sampling justified
– Will receive a notice of either telephone
or video conference hearing date
72

73. 4th Stage: MAC Hearing
• Medicare Appeals Council
– Part of the Department of Health and
Human Services' Departmental Appeals
Board
• When?
– 60 days after ALJ decision
– MAC has 90 days to act
– Recoupment is ongoing during this time
73

74. 5th Stage: Federal
District Court
• When?
– 60 days after receipt of MAC decision
• What?
– $1,220 amount in controversy
requirement
– Follow federal rules of procedure
74

75. ENACTED LEGISLATION
Douglas S. Griswold & Calvin B. Marshall, Jr.

76. SB 1935/HB 1896
• Nurses Engaged in Interventional Pain Management
– Establishes requirements for direct physician supervision of
advanced practice nurses and physician assistants engaged
in invasive procedures involving:
• Spine
• Spinal cord
• Sympathetic nerves
• Block of the peripheral nerves
– Covers office settings but not settings licensed as health
facilities.
– Physicians providing supervision must be certified in an
applicable specialty.
– Effective July 1, 2013.
76

77. SB 2253/HB 2569
• Tennessee Prescription Safety Act of 2012
– Requires prescribers and certain dispensers of
controlled substances to be registered in Tennessee’s
controlled substances database.
– Requires that the database monitoring committee
check the database and report violations.
– Requires that prescribers check the database before
prescribing controlled substances – for every new
episode of treatment and at least annually during
episodes of treatment.
– Also requires that dispensers check before prescribing
certain controlled substances.
– Effective May 9, 2012.
77

78. SB 2407/HB 2569
• Doctor Shopping
– Expands the responsibility to report under "doctor
shopping" law to include hospitals, hospital administrators
and dispensers of controlled substances.
– Expands access to Tennessee’s controlled substances
database so that hospitals can determine if certain
employees are prescribing controlled substances for
personal use.
– Provides state and federal law enforcement with
warrantless access.
– Requires that pharmacies and pharmacists check customer
identification before filling prescriptions.
– Requires that pain management clinics be owned by
hospitals or physicians authorized to prescribe.
– Effective May 10, 2012.
78

79. SB 2416/HB 268
• Drug Overdose Reporting
– Requires the Commissioner to submit to the Governor,
the House and the Senate an annual report covering
aggregate hospital claims involving drug poisonings
(covering the calendar year two years prior).
– Each report must be published on DOH’s website.
– Requires the Commissioner to establish a reporting
protocol for medical examiners in drug overdose death
cases.
– Effective May 10, 2012.
79

80. SB 2587/HB 2724
• Pain Management Clinics Prescribing
Medication
– Maintains the exclusion of suboxone from the list of
prescribed substances for patients at pain management
clinics.
– Requires pain management clinics operating on or before
January 1, 2012 to file an application for certification by
October 1, 2012.
– Allows applicants who are denied pain management clinic
certificates to appeal.
– Provides for voluntary inactivation of pain management
clinic certificates.
– Effective May 1, 2012.
80

81. SB 3263/HB 3514
• Nursing Home Employment of Physicians
– Amends Tennessee corporate practice of
medicine statutes to allow nursing homes
and their affiliates to employ physicians.
– Certain requirements apply—most
importantly, a nursing home employer must
not restrict a physician’s independent
medical judgment.
– Effective July 1, 2012.
81

82. SB 3627/HB 2801
• Hormone Replacement Therapy
– Requires that in hormone replacement
therapy clinics, all hormone replacement
therapy must be performed or supervised
by licensed physicians.
– Establishes certain protocols covering
physician delegation and supervision.
– Effective July 1, 2012.
82

83. SB 2245/HB 2383
• Adjusting TennCare reductions
– Restored 1.75% of a 4.25% TennCare
reimbursement rate reduction.
• Covers certain providers, including x-ray providers,
nursing homes, transportation providers, dentists
and home health providers.
– Eliminated a $2 copayment on
nonemergency transportation that had
previously gone into effect.
– Effective May 15, 2012.
83

84. SB 2222/HB 2360
• Licensure Renewal Date for Health Care
Facilities
– Covers health care facilities licensed under Title 68,
Chapter 11 of the Tennessee Code, including hospices
and ambulatory surgical centers.
– Licensure renewal is due on the anniversary date of
the facility license instead of June 30 of each year.
– During the transition period, licenses may be
renewed for terms of 5-18 months (pro-rated
renewal fees).
– Currently in effect.
84

85. REVIEW FROM LAST
YEAR

86. SB 611
• Physician Restrictive Covenants
– Removed the former 6-year limitation on
duration of physician covenants.
– Expanded application of the law to
osteopathic physicians.
– Effective January 1, 2012.
86

87. SB 1145/HB 1591 and SB
2910/HB 2909
• Amended Tennessee practice of medicine
statutes in order to extend the post-termination
restrictions of physician non-compete law
(T.C.A. § 63-1-148) to hospital-based physicians
employed independent of a bona fide practice
purchase.
• Does not cover situations involving a bona fide
practice purchase or a breach of contract by the
physician.
• Both bills are currently in effect.
87

88. PENDING LEGISLATION

89. SB 2414/HB 2574
• Emergency license suspension
– Would permit the Commissioner or certain
licensing boards to suspend, on an
emergency basis, the license of a
practitioner who is under state or federal
indictment involving the sale or dispensing
of controlled substances.
– Includes physicians, osteopathic physicians,
optometrists, podiatrists, dentists, nurses
and physician assistants.
89

90. SB 2275/HB 2558
• Physician supervision of aesthetic procedures
– Requires that all "cosmetic treatments or procedures"
be performed by physicians or under the supervision
of physicians.
– "Cosmetic treatments and procedures" is defined very
broadly and includes using chemical, mechanical,
physical or energy agents or the injection of foreign or
natural substances in order to alter physical
appearance.
– Physicians supervising non-physicians in this context
would be subject to professional discipline if they
contract with any entity that is not owned or
controlled by physicians licensed in Tennessee.
90

91. How to Limit Risks
When Physicians Exit
James L. Catanzaro, Jr.

92. What Are the Risks?
• Employment based claims
• Compliance risks
• Handling of confidential and trade secret
information
• Patient information and competition
• Maintaining integrity of system and practice
items
• Subsequent malpractice or other claims
• Disassociation of a "Partner"
• Compensation issues
92

93. What Are the Risks?
• These risks are heightened because most
physicians have employment contracts
that require a notice period before
termination occurs. Also, if one is a
"partner," consideration of termination
rights under operating or stockholder
agreements must occur.
93

94. Steps to Limit Risks
1. Effective Employment Agreement addressing:
– Ownership of accounts receivable and patient
information.
– Establishing non-competition and non-solicitation
obligations.
– Defining and limiting use of confidential information.
– Setting post-termination compensation process and
rights.
– Tail coverage rights.
94

95. Steps to Limit Risks
2. Use of Separation and Severance Agreements
– Use of "adequate" consideration to support ("tail
coverage", severance pay, etc.).
– Includes release of claims (employment, operating
or shareholder agreement based, compensation
and other claims).
– Structures handling of notifications to patients,
malpractice carriers and managed care plans,
insurance networks, and licensing boards and
hospitals.
95

96. Steps to Limit Risks
3. Purchase of "Tail" Coverage
– Provides additional carrier at the settlement
table.
– Can structure practice's purchase based on
numerous factors including: duration of
service, whether termination is for or
without cause, etc.
96

97. Steps to Limit Risks
4. Settling the procedure by which patients
are notified and how patient records are
maintained
– Managing the patient abandonment risk.
– Protecting the ownership and control of
patient lists and ensuring the solicitations do
not occur.
– Providing custodial rights for records.
97

98. Steps to Limit Risks
5. Exit Interviews
– Reduces risk of unknown qui tam claims and
other complaints.
– Includes use of documentation with
statement to the effect that employees
provide full and complete information about
any issues with which he/she is concerned.
– Allows Practice to disclose and manage, if
needed.
98

99. Steps to Limit Risks
6. Use of procedures and guidelines to
limit access to a computer network and
documents.
99

100. QUESTIONS?
100

101. Disclaimer
This presentation is provided with the understanding that
the presenters are not rendering legal advice or services.
Laws are constantly changing, and each federal law, state
law, and regulation should be checked by legal counsel
for the most current version. We make no claims,
promises, or guarantees about the accuracy,
completeness, or adequacy of the information contained
in this presentation. Do not act upon this information
without seeking the advice of an attorney.
This outline is intended to be informational. It does not
provide legal advice. Neither your attendance nor the
presenters answering a specific audience member
question creates an attorney-client relationship.
101