The document summarizes changes to health care law and policies resulting from the Affordable Care Act and other regulations. Key points include: - The employer mandate was delayed until 2015 to allow employers more time to comply. Other ACA provisions like the individual mandate and health insurance exchanges remain on schedule. - Reporting requirements for employers were also delayed until 2015 but employers are still encouraged to report health coverage information in 2014. Requirements like providing a summary of benefits to employees remain in effect. - Small business tax credits of up to 50% of premium costs were introduced to encourage small businesses to offer health insurance to employees. - Payment reforms aim to increase Medicaid rates for primary care physicians and provide bonuses for

1. Health Law Seminar
November 7, 2013
Presented by
Stephen D. Barham * James L. Catanzaro, Jr. * Justin L. Furrow
Douglas S. Griswold * Rosemarie L. Hill * Calvin B. Marshall, Jr.
© 2013 Chambliss, Bahner &
Stophel, P.C. All Rights Reserved.
Chambliss, Bahner & Stophel, P.C.
Liberty Tower • 605 Chestnut Street, Suite 1700 • Chattanooga, TN 37450
chamblisslaw.com

2. Stephen D. Barham and Douglas S. Griswold
Legal Update
ACA, Health Care Liability and
State Statutory Update
2

3. Douglas S. Griswold
Affordable Care Act
2014 Update
3

4. Employer Mandate
• On July 2, 2013, Treasury Department delayed
the Employer Shared Responsibility provision
until 2015.
4

5. Impact to Other ACA Provisions
• Delay of employer mandate does not impact:
– Individual mandate
• However, open enrollment through Exchanges
pushed back to March 31
– Implementation of Exchanges
• SHOP Exchange delays(?)
– Tax subsidies for individuals
– Other fees and taxes, including PCORI fees and
transitional reinsurance fees
5

6. Other Delays
• Department of Labor has delayed until 2015
certain reporting obligations on large employers
about the health care coverage offered to
employees
– Employers still "encouraged" to report in 2014
6

7. Reporting Requirements for
2013 and 2014
7

8. W-2 Reporting
• Employers must report aggregate cost of health
insurance on each employee's W-2
– Effective for 2012 tax year
• Applicable to employers that file 250 or more W2s
8

9. Summary of Benefits and
Coverage
• Uniform, concise, easy to read 4 page summary
of benefits and coverage
• Provided to all employees
• Provided at initial enrollment, open enrollment
and upon request
• Effective on all plans renewing after October 1,
2012
9

10. Notice of Exchange
• Employers required to notify all employees
regarding availability of subsidized health
insurance exchange coverage
– Model notice available at www.dol.gov
• Required as of October 1, 2013
10

11. Small Business Tax Credits
11

12. Who Qualifies?
• Applies to small businesses with fewer than 25
full-time equivalent employees making an
average of $50,000 a year or less and who pay at
least 50% of full-time employees' premium costs
– Don't need to offer coverage to part-time
employees or dependents
12

13. Tax Credit
• Starting in 2014, tax credit worth up to 50% of
employer contribution towards employees'
premium costs
– 35% for tax-exempt employers
• Credit is highest for employers with 10 or less
employees who are paid an average of $25,000
or less
13

14. Example
• Number of employees: 10
• Wages: $250,000
• Employer contribution to premiums: $70,000
• Tax credit amount: $35,000 (50% of employer's
contribution)
14

15. Hospitals & Physicians
Payment Reforms
15

16. Primary Care Physicians' Bonus
• 10% bonus payment to primary care physicians
and to general surgeons practicing in health
professional shortage areas
• Ends December 31, 2015
16

17. Medicaid Incentives
• Medicaid payments increased to 100% of
Medicare rates for primary care services
furnished by primary care physicians
• Applies for 2013 and 2014
17

18. Physician Quality Data Reporting
• Physicians who fail to submit quality data to
Physician Quality Reporting System (PQRS) will
have Medicare payments reduced starting in
2015
18

19. Hospital Readmission Reductions
• Payments reduced for hospitals experiencing
hospital-acquired infections or excessive readmissions.
– Maximum payment reduction is 2% in 2014 and
will be capped at 3% in 2015 and beyond.
19

20. DSH Payment Reductions
• Effective on or after FY 2014, hospitals will
receive 25% of the amount they previously would
have received under the current formula for
Medicare DSH.
20

21. Questions?
21

22. Stephen D. Barham
Health Care Liability
22

23. Medical Malpractice Lawsuits
Year
State
Hamilton County
2006 – 2007
583
20
2007 – 2008
537
17
23

24. Health Care Liability Lawsuits
Year
State
Hamilton County
2006 – 2007
583
20
2007 – 2008
537
17
2011 – 2012
374
32
24

25. Griffith v. Goryl
• Bladder cancer diagnosis and treatment case
• Appeal focused on expert's knowledge of the
local community
• Expert must know the community and explain
his/her opinion with more than just what the
majority of the community does
25

26. Watkins v. Affiliated Internists
• 27 year old died from acute drug intoxication
from prescription drugs
• Doctor allegedly failed to properly oversee the
physician assistant prescribing drugs
• Family attempted to establish case by negligence
per se – meaning so obvious as to not even
require an expert
• Medical malpractice must have a qualified expert
to testify as to the breach and causation in
almost every case
26

27. Barnett v. Tennessee Orthopaedic
Alliance
• Plaintiff fired counsel and acted on her own
• Dispute was over course of care for neck injury
• Plaintiff was granted multiple extensions to
obtain expert
• Plaintiff's expert admitted not having knowledge
of the key standard of care at issue
• Defendant received Summary Judgment based
on plaintiff's failure to obtain an expert
• Defendant was also awarded discretionary costs
and costs of defending the appeal
27

28. Williams-Ali v. Mountain States
Health Alliance
• Plaintiff fell from the table during a nuclear stress
test
• Plaintiff alleged ordinary negligence and did not
comply with the medical malpractice statutes
• Plaintiff was 68 years old, over 300 lbs. and had
suffered prior stroke leading to some paralysis
• Dispute turned on whether proper restraint of
patient for test was within Medical Malpractice
Act coverage
28

29. Williams-Ali v. Mountain States
Health Alliance
• Are the alleged negligent acts "basic" or "routine
non-medical?"
• Was the injury unrelated to the performance of
an actual medical service that required
specialized skill or training?
• Here the technicians made decisions based on
their assessment of the patient using their
training expertise and experience
• The Medical Malpractice Act applies and Plaintiff
should give the presuit notice and provide an
expert to testify regarding the standard of care
29

30. New State Laws
• Mammography records must be retained for 10
years following patient discharge from a hospital
or death
30

31. New State Laws
• Breast Cancer Prevention Act
– Sets out warning to patients with dense breast
tissue regarding the tissue making it harder to
evaluate test results and potential association with
an increased risk of breast cancer
– Expressly states there is no legal obligation for
failure to comply
31

32. Pharmacy
• Prohibits nurse practitioners and physician
assistants from prescribing schedule II, III, and IV
controlled substances unless certain limited
conditions are met
32

33. Pharmacy
• Limits the schedule II or III opioid that nurse
practitioners and physician assistants can
prescribe to an opioid listed on the formulary and
only for a maximum of a non-refillable, 30-day
course of treatment, unless prescription in
question is specifically authorized by the
formulary or expressly approved after
consultation with the supervising physician
before the prescription or before dispensing the
medication
33

34. Pharmacy
• Chasing over prescribers
– The Department of Health instructed to:
• Identify the top 50 prescribers of controlled
substances from the previous calendar year
• Send a notice letter to each nurse practitioner,
physician assistant, and physician on the list
34

35. Pharmacy
• Within 15 business days of receiving the letter,
the supervising physician or physician shall
submit to the Department an explanation
justifying the amounts of controlled substances
prescribed by the nurse practitioner or physician
assistant in the relevant period of times,
demonstrating that these amounts were
medically necessary and that the supervising
physician had reviewed and approved the
amounts and that the amounts prescribed by the
physician are justifiable
35

36. Pharmacy
• The State may hire an expert reviewer to
determine if the explanation is acceptable
• The Board which has licensed the prescriber may
have the matter referred to it
• Relevant records may be used to build a case
against a nurse, physician assistant, physician, or
supervising physician by the licensing board
• Sets the roadmap for suspending licenses for
over prescribing controlled substances
36

37. Pain Clinics
• New statute places restrictions on pain clinic
prescriptions, oversight, and operations
37

38. Questions?
38

39. James L. Catanzaro, Jr. and Calvin B. Marshall, Jr.
Think You Know HIPAA'S
Impact? Understanding the
"Omnibus Rule" Changes
39

40. The "HITECH Act"
• In 2009, Congress enacted the Health
Information Technology or Economic and Clinical
Health Act (HITECH) to strengthen the privacy
and security protections for health information
under HIPAA
40

41. • As a result of HITECH, DHHS implemented the
"Omnibus Rule," which radically changed
privacy/security obligations and breach reporting
effective 9/23/13
41

42. • As a result, covered entities (CEs) must realize
the new world in which they operate and
restructure business associate agreements
(BAAs) and policies to catch up to these changes
42

43. • The changes for BAAs and policies go beyond
merely copying over technical phrases and
require a new evaluation of added
risks/obligations and how a CE protects itself
43

44. • New Risk:
• Under the Omnibus Rule, the CE may now be
liable for the acts of its business associate (BA).
Issue is one of control
• Old Rule:
• No such liability, if can demonstrate good
procedures
44

45. • NEW RISK EXAMPLE
• Assume that a BA employee performing billing
functions for the CE takes home a laptop with
unsecured health information involving over 500
patients. The employee leaves the laptop on the
bus
45

46. • When a breach like this occurs, compliant
notifications must be sent, a proper risk
assessment or investigation completed and
breach effects mitigated. Costs can run into six
figures
46

47. • Relevant Questions for Your BAA
• Is the BA your agent? Too much control?
• How soon must the BA report?
• Who pays for all of this and is subject to resulting
CMPs (if any?)
47

48. • Is there an indemnity clause?
• Beware: If you simply signed a BAA provided by
the BA, it may include limitation of liability
and/or other limitations
48

49. • New Risk Example #2
• Same set of facts as above but assume CE
terminates contract and goes with new billing
company. Old company does not destroy or
return PHI to CE and its databases are no longer
secured. PHI is disclosed when hackers gain
access and sell info.
49

50. • Relevant Questions for Your BAA:
• Does your BAA require the BA to return, destroy
or protect PHI here?
• Do you have indemnity or other protections?
• Is the BA required to mitigate under limitations
acceptable?
50

51. • Beware:
• BAAs proposed by BAs may limit its liability or
remove responsibility for such action. The BAA
may not address what happens when the service
agreement terminates.
51

52. • Ultimately, a CE that does not understand
potential risks and how its BAAs addresses such
risks is sticking its head in the sand.
• NOTE: HIPAA liability insurance might be
something to look into as well.
52

53. • New Risk:
• When a CE discovers a potential breach, it must
report the breach unless it can by 4 part risk
assessment show a low probability of
compromise for the PHI.
• Old Rule:
• No reportable breach unless significant risk of
financial, reputational or other harm.
53

54. • NEW RISK EXAMPLE
• A CE employee leaves a laptop with unsecured
PHI in an open area where others congregate.
No evidence of tampering or that anyone viewed
PHI. Unless can show a low probability, this must
be treated as a breach!
54

55. • Relevant Questions for Your Policies
• Are you prepared to perform a 4 part risk
assessment?
– Factors are: Nature and extent of PHI involved; to
whom PHI was disclosed; was PHI actually
accessed; and to what extent risk to PHI mitigated
• Who makes the difficult call on reporting (or
not)?
55

56. • NEW RISK - TECHNOLOGY
• Mobile devices used to communicate about
patient information store such data in memory or
on a SIM card and therefore must comply with
HIPAA security rules
56

57. • NEW RISK EXAMPLE – TECHNOLOGY
• Example: CE employees are allowed to use their
own smart phones to receive patient data or
images.
57

58. • Relevant Questions for Your Policies
• What protections have been established?
•
Passwords
•
Secure Wi-Fi
•
Encryption
58

59. • By the way, do your BAs have similar policies?
• Does your BAA require it?
59

60. QUESTIONS

61. Rosemarie L. Hill and Justin L. Furrow
Understanding and
Preventing Retaliation Claims
and Whistleblowers
61

62. What is Retaliation?
• Taking an "adverse employment action" against
an employee who has engaged in "protected
activity" under a number of state and federal
statutes regulating the employment relationship
62

63. Retaliation is Forbidden
By a Number of Laws That
Affect Your Workplace
• Discrimination/harassment (Title VII and the
Tennessee Human Rights Act, Age Discrimination in
Employment Act, Americans with Disabilities Act)
• Compensation (wage claims – Fair Labor Standards
Act)
• Medical and family leave (FMLA)
• Unfair labor practices
• Health and Safety
• Military Service
• Workers' Compensation Injuries
63

64. Protected Activity
• Protected activity includes:
– Internal complaints about
discrimination/harassment
– Complaints to government agencies (Equal
Employment Opportunity Commission; Department
of Labor, Occupational Safety and Health
Administration, and so on)
– Lawsuits – filing them or participating in them
– Opposition to allegedly unlawful activity (more to
follow in Whistleblowing portion of seminar)
64

65. Adverse Employment Action
• Adverse employment action can include:
– Termination of employment
– Demotion
– Hour reduction
– Wage reduction
– Reassignment
– Relocation
– Threats
– Harassment
65

66. Adverse Employment Action
• Adverse employment action can also include
retaliation beyond the job:
– Conduct that occurs outside the workplace can be
prohibited under the anti-retaliation provision of
all of these employment laws
– If it is determined to be a "materially adverse
action" – it is not limited to actions that occur in
the workplace or that directly affect the
employee's terms and conditions of employment
66

67. Adverse Employment Action
• Some activities are not considered adverse
employment actions:
– Getting the "cold shoulder" from co-workers (if
employer has forbidden retaliation)
– Disciplinary actions that have no effect on pay or
advancement, if accurate
– Poor performance reviews that have no effect on
pay or advancement, if accurate
67

68. Illegal Retaliation
• Examples of Illegal Retaliation Outside of the
Workplace
– "They stopped asking me to go to lunch"
– "They invited me to lunch, but then went somewhere else"
– "They stopped inviting me to Happy Hour"
– "He spread rumors about my sexual conduct around the
community"
– "She threatened to ruin my marriage"
– "I don't get to go to trade shows any longer"
68

69. Illegal Retaliation
• U.S. Supreme Court says illegal retaliation is:
– Any action against an employee (regardless of
where it takes place) that would discourage a
reasonable employee from making, supporting, or
participating in the investigation of a
(discrimination/harassment) claim
69

70. Illegal Retaliation
• Is everything an employer might do after
someone makes a complaint illegal retaliation?
– NO – An Employer should not be "held hostage" to
an employee who has engaged in protected activity
even if it might be accused of retaliatory behavior:
• Employee conduct can be so disruptive or
unreasonable that it falls outside the protection of
anti-retaliation provisions
70

71. Illegal Retaliation
• For instance, courts have held that the following
activities are not protected:
– Violating legitimate workplace rules or employer
orders or instructions
– Stealing confidential documents (even if
documents are ones the employee wants to use in
her lawsuit or complaint)
– Illegal or violent activities
71

72. Illegal Retaliation
– Refusing to perform your job, or neglecting it
(particularly to work on your lawsuit)
– Harassing co-workers to get them to support your
or their discrimination complaint
72

73. Illegal Retaliation
• So - how does one prove a retaliation claim?
– Employee engaged in protected activity (made a
complaint)
– Employee was subjected to adverse action
– There is a CAUSAL LINK between the activity and
the adverse action
73

74. Illegal Retaliation
• What proves a CAUSAL LINK time-wise?
– Courts generally look at time passed between the
protected activity and the adverse employment
action – the shorter the window, the more it will
look to a jury/trier of fact as if the employer is
retaliating
– There is no safe period, and some courts say
temporal proximity is ALWAYS important; and
some say it is not sufficient to prove a causal link
74

75. Illegal Retaliation
• Why do we worry so much about retaliation
claims?
– BECAUSE AN EMPLOYER CAN WIN THE
UNDERLYING CLAIM/LAWSUIT BROUGHT BY THE
EMPLOYEE BUT LOSE THE RETALIATION CLAIM AND
PAY JUST AS MUCH IN DAMAGES
– BECAUSE RETALIATION CLAIMS ARE ON THE RISE –
for instance, 22% of 1997 EEOC charges included
retaliation claims and 34% in 2008 – 36.3% by
2010
75

76. Illegal Retaliation
• Self-help against retaliation claims starts
immediately
– There are ways to protect yourself from retaliation
claims
• Forbid it and publicize that it's forbidden (policies)
• Emphasize at every step of an investigation that it's
forbidden
• Deal with it immediately if it occurs
76

77. And Now for Our
Paid Political Announcement
• A little bit of time and money spent with and on
your lawyers on the front end can prevent a lot
of time and money spent with and on your
lawyers on the back end – when you are sued for
retaliation
77

78. Retaliation Only an
Employment Law Concern?
• Retaliation is not limited to complaints about
employment-related issues
• Federal and state laws prohibit retaliation against
"whistleblowers"
78

79. What is a "Whistleblower?"
• Generally speaking, someone who exposes
alleged misconduct, or dishonest or illegal
activity occurring in an organization
• Definition of whistleblower depends on statutory
definition of "protected activity"
79

80. Whistleblowers are Protected
from…
• Termination
• Discrimination
• Demotion
• Suspension
• Harassment
• Threats
Generally—Adverse Employment Actions
80

81. Examples of Whistleblower Laws
• Tennessee Public Protection Act
– Protects persons who refuse to "participate in" or
"remain silent about" illegal activities
• Violation of state or federal criminal or civil law
designed to protect public health, safety, or welfare
• Tennessee common law
– Protects person attempting to exercise a
constitutional or statutory right
– Prohibits termination in violation of "public policy"
81

82. Examples of Whistleblower Laws
• Affordable Care Act
– Protects persons who "object to" or "refuse to
participate in" any activity the person believes
violates the Act (or any rule, regulation, standard,
or ban under the Act)
82

83. Examples of Whistleblower Laws
• Federal False Claims Act
– Protects persons who "act in furtherance of a qui
tam action"
• Bringing a qui tam action
• Investigating a qui tam action
• Supplying information that could prompt an
investigation
• Generally taking steps to expose fraud
• Also a Tennessee False Claims Act offering similar
protections
83

84. But We've Done Nothing Wrong!
• Whistleblower retaliation claims do not depend
on whether company actually committed a
violation
• Whistleblower must simply have "reasonable
belief" that violation has occurred
• Company's "innocence" is largely immaterial in
whistleblower retaliation lawsuit
84

85. Questions?
85

86. Stephen D. Barham
Qui Tam Actions
86

87. State Qui Tam Action
• May be brought by the State or an individual
• Case involves knowingly defrauding the State or a
political subdivision
87

88. Action Brought by 3rd Party
• Case is sealed and not served for 60 days (or
longer if extended)
• Initial service only on Attorney General – along
with supporting evidence
• AG investigates and decides whether to take over
the case
• After AG decision defendant is served with
Complaint
• The individual bringing the action case receive 25
– 33% of the proceeds or settlement
88

89. Federal False Claims
• False claims include claims for service simply not
rendered, essentially theft by deception, they
also include an assortment of other attempts to
manipulate the Medicare and Medicaid payment
systems
89

90. Federal False Claims
• Cost report fraud
• Upcoding
• Unbundling, or
• Billing for unnecessary services
90

91. Federal False Claims
• False claims are punishable as:
– Crimes
– Civil violations
• Exclusion from federal program payment
opportunities
• Civil money penalties
91

92. Federal False Claims
• Private individuals can also bring qui tam actions
to enforce the FCA
92

93. Federal False Claims
• Administrative sanctions to providers who
submit false claims
• Impose civil penalties of up to $11,000 per false
claim plus three times the amount claimed
93

94. Federal False Claims
• Common problems resulting in sanctions
– Billing for unnecessary services
– Upcoding
– Unbundling
– Billing Medicaid for name-brand drugs when
generics were supplied
– Double billing
– Filing of inflated cost reports or cost reports that
include non-allowable costs
94

95. Federal False Claims
• Any private person can bring a qui tam action on
behalf of the government to enforce the Civil FCA
95

96. Federal False Claims
• Award of bounties of up to 25 - 30% of the false
claim recovery creates a significant incentive for
private litigants to bring such cases
• Potential for statutory attorney's fees
• Makes these cases very attractive to attorneys as
well
96

97. Federal False Claims
• Qui Tam actions are filed under seal, and often
remain sealed for a considerable period of time
while the government is investigating the claim
97

98. Federal False Claims
• Qui tam filings are increasing exponentially in
the health care area, and every health care
provider should be attentive to this threat
98

99. Federal False Claims
• Tendency toward civil enforcement
– Only meet the civil, preponderance of the
evidence, standard of proof
– Recoveries without proof of specific intent to
defraud
– Standard of knowledge is whether he or she
"should know"
99

100. Federal False Claims
• The government only intervenes in less than one
quarter of qui tam cases
• Beginning in 2010, the recoveries and relators'
shares where the government has declined to
intervene have increased substantially
100

101. Federal False Claims
• Statute of limitations for FCA actions is:
– 6 years from the date on which the violation of the
FCA was committed
– Up to 10 years after the date of the violation of the
act
• The statute of limitations is tolled when the
defendant conceals its violation of the FCA
101

102. Questions?
102

103. 103

104. Health Care Section
William P. Aiken
E. Stephen Jett
Stephen D. Barham
Calvin B. Marshall, Jr.
James L. Catanzaro, Jr.
Jason R. Mirmelstein
Mark A. Cunningham
Rosemarie L. Hill
Douglas S. Griswold
Justin L. Furrow
Frederick L. Hitchcock
104

105. 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.
105