More and more physicians are opting to leave private practice (or to skip it altogether) for the perceived job security and hopefully steady paycheck of hospital employment.  According to a study conducted by the American Medical Association (AMA) , the number of physicians practicing in private practice is now less than 50%.  According to the AMA, this is the first time the private practice percentage has dropped this low since 2012 when the AMA began formally conducting the study.

To be sure, managing a private medical practice, like any closely-held private business, has its share of challenges.  However, as the recent shake up at one Pennsylvania health system demonstrates, being someone else’s employee can be a risky proposition when you have no control over the decisions that can make or break your practice.

Many physicians thinking about hospital employment as opposed to private practice should consider that they are likely to receive only a short term employment agreement – often 3 or fewer years in length with the possibility of earlier termination.  Typically there is no guarantee of contract renewal and if times are tough, many physicians can see their proposed renewal-term compensation reduced or put at further risk based on often unachievable performance metrics.

Moreover, employed physicians could wake up one day to learn that their employer is in financial trouble and they are being “restructured” out of their job.  When asked, many physicians who have elected to remain in private practice will say they are willing to put in the work required to manage and grow their practices in exchange for the knowledge that they retain control over their own professional destiny.

While hospital employment might be right for some physicians, all physicians considering employment should carefully weigh the long term risks and rewards of building a private practice over which they maintain control versus those of employed practice where they may find their professional life dangling by a relatively short-term contract over which they have little control.

If you need legal assistance with your private practice or if you are looking to establish or re-establish your private practice, please contact Todd Rodriguez at 610-458-4978 or by email at trodriguez@foxrothschild.com.

This post is a courtesy of Fox Rothschild attorney, Marcus C. Hewitt, Esq., and was first published as an Alert on Fox’s website.  It is most relevant for health care providers that are based in North Carolina.  If you would like more information as to how this issue might affect your facility, please contact Mr. Hewitt at mhewitt@foxrothschild.com. 

North Carolina legislators filed another bill to amend the state’s Certificate of Need Act on April 1, 2021.

As filed, Senate Bill 462 would modify several longstanding cost thresholds that trigger CON review:

  • tripling the cost threshold for diagnostic centers from $500,000 to $1.5 million, to be adjusted annually based on changes in the consumer price index
  • raising the cost threshold for major medical equipment from $750,000 to $2 million; to be adjusted annually based on changes in the consumer price index
  • doubling the $2 million general cost threshold for a new institutional health service under N.C. Gen. Stat. § 131E-176(16)b to $4 million, to be adjusted annually based on changes in the consumer price index

The bill also inserts a provision that any CON will expire if construction does not commence within the following time frames:

  • Four years for projects with a capital expenditures over $50 million
  • Two years for projects with a capital expenditures of $50 million or less

Raising the cost thresholds would allow smaller, less expensive projects to proceed without CON review, while still requiring examination of larger, more expensive proposals.

Under current law, a CON does not expire, but the North Carolina Department of Health and Human Services has the authority to revoke a CON if the holder is not making good faith efforts to develop the project. However, delays in the development of CON-approved projects are common and such a revocation is rare.

Legislators have also filed bills to fully repeal the CON Law. Bills filed in the North Carolina Senate and House (S309 and H410) remain pending and are currently in committee.

On March 5, 2021, the Pennsylvania Department of Health (the “Department”) proposed permanent regulations relating to medical marijuana, replacing the current temporary regulations at 28 Pa. Code Part IX. The proposed regulations can be accessed here, and the notice regarding the same can be accessed here.

The Proposed Regulations are in substantially the same form as the temporary regulations that have been in effect since April of 2017.  [See our prior post on the Temporary Regulations and how they are applicable to physicians here].  However, there are a couple of notable proposed revisions for practitioners to be aware of:

  • The Department intends to add ”anxiety disorders” and ”Tourette’s Syndrome” to the definition of ”serious medical condition”, as well as “any other condition recommended by the Medical Marijuana Advisory Board and approved by the Secretary.” These additions would widen the scope of conditions that can be treated with medical marijuana and pave the way for future conditions to be added through a Board recommendation process.
  • “Continuing care” would be updated for consistency with the statutory definition by adding ”including an in-person consultation with the patient.” This change would eliminate any question of whether a practitioner can certify the use of medical marijuana for a patient without consulting with them in−person.
  • Practitioners would now be prohibited from charging patients “excessive fees.” The Department is proposing the change “due to patient complaints of practitioners taking advantage of the certification process by charging excessive lab testing, follow-up, or other fees not initially disclosed.” Practitioners should reconsider their fees in light of this proposed regulation.

As a reminder, failure to comply with any provision of the Act applicable to practitioners can result in sanctions by the Pennsylvania State Board of Medicine or Osteopathic Medicine and removal from the practitioner registry.

The Proposed Regulations also address, among various topics, the following:

  • Requirements for permits and applications for the same (and fees associated therewith).
  • Requirements for the operation of a medical marijuana
  • Visitor access to a medical marijuana facility and protocol pertaining to the same.
  • Requirements for growing and processing medical marijuana.
  • Acceptable forms of medical marijuana that a grower/processor may process.
  • Limits on medical marijuana processing (e.g., THC and CBD).
  • Inventory data, storage requirements, and equipment, operation and maintenance (including sanitation and safety).
  • Packaging and labeling of medical marijuana products.
  • Transportation of medical marijuana.
  • Dispensaries and the general dispensing of medical marijuana products.
  • Licensed medical professionals at a facility –
    • Of particular interest, the Proposed Regulations provide that a physician or pharmacist must be present at the facility during operating hours and, if a permittee operates more than one facility under the same permit, a physician assistant or certified nurse practitioner may cover the other sites.
  • Medical marijuana laboratories, including suspension, approval and/or revocation.
  • Medical marijuana cardholder responsibilities and revocation or suspension of an identification card.

Should you have any questions regarding the proposed permanent regulations or anything else discussed herein, please contact us.

Culture Swab

In response to the COVID−19 pandemic, clinical laboratories have increased their diagnostic testing capabilities and expanded their business by testing COVID−19 specimens from different states and entering into arrangements to conduct COVID−19 screening for employers. Despite waivers designed to make COVID-19 testing available and accessible on a widespread basis, labs must be careful in expanding their business to ensure that they maintain compliance with federal and state laws.  Similarly, companies looking to partner with labs for specimen collection should familiarize themselves with applicable federal and state laws.

For an overview of the state and federal regulatory landscape in this context,  please read our client alert. For guidance on your company’s situation, please contact us.

Fox Rothschild LLP partner, William Maruca, was recently interviewed for an article in Cosmos regarding the regulatory risks to hospitals and DME suppliers who enter into arrangements to ensure that COVID-19 patients receive free home oxygen equipment.  Some hospitals have decided to take on the inherent risks in such an arrangement to address a lack of home oxygen equipment in the pandemic, so that COVID-19 patients can be discharged earlier and beds can be turned over for new patients.

Please see the full article here: Cosmos Compliance: Some Hospitals Give COVID-19 Patients Free Oxygen to Speed Up Discharge

Should you have any questions regarding these or similar arrangements from the perspective of the hospital or the DME supplier, please do not hesitate to contact William Maruca.

 

On January 15, 2021, the U.S. Department of Health and Human Services opened the reporting portal for individuals who had received Provider Relief Funds (PRF) from the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The portal is currently open for “registration” only. HHS has not yet set up the reporting portion of the portal and the date by which the first reports will be due is currently unknown.

Who Needs to Register?

Entities that received one or more payments which totaled more than $10,000 from the General and Targeted Distributions will need to register on the portal.

Registration is NOT required at this time for providers who received less than $10,000 total in PRF or have received PRF based on:

  • The Nursing Home Infection Control Distribution
  • The Rural Health Clinic Testing Distribution
  • Reimbursement for Testing, Treatment and Vaccine Administration
  • The Vaccine Administration Assistance Fund

What is the Deadline for Registration?

At this time there is no deadline for registration.

The previous due date for submitting documentation regarding the use of PRF was February 15, 2021. HHS is now stating that they will provide information regarding when documentation must be submitted at a “later” date.

How Do Providers Register?

Providers should go to the HHS website and register.

Some things to know about registration:

You must complete the registration process in ONE session. You cannot stop, and return to your submission. HHS is estimating that the registration process will take approximately 20 minutes.

You should have the following information available when you start the registration process:

  • Tax ID Number (TIN) (or other identifying number submitted during the application process)
  • Business name (as it appears on a W-9) of the reporting entity
  • Contact information (name, phone number, email) of the person responsible for submitting the report
  • Address of the reporting entity as it appears on a W-9
  • TIN(s) of subsidiaries (if a provider is reporting on behalf of subsidiary(ies)
  • Payment information for any of the payments received, including:
    • TIN of entity that received the payment
    • Payment amount
    • Mode of payment (check or direct deposit ACH)
    • Check number or ACH settlement date

You will also need to create a username (in the form of an email address) and create a password during the registration process.

What Happens Next?

HHS will contact providers using the email provided as part of the registration process to notify providers as to when they can begin reporting actual information related to the use of PRF funds.

Notice of Reporting Requirements

HHS has issued another Post-Payment Notice of Reporting Requirements document. For the most part, the 1/15/21 Requirements track the previously published November 2, 2020 guidance, reiterating that PRF can be used for health care related expenses, including general and administrative expenses and lost revenue.

Some items of interest include:

Lost Revenue

The 1/15/21 Requirements outline the numerous ways that providers can quantify lost revenue. The requirements are consistent with language in the recently passed Consolidated Appropriations Act, 2021.

Lost revenue can be calculated as follows:

(a) the difference between 2019 and 2020 actual patient care revenue;

(b) the difference between 2020 budgeted and 2020 actual patient care revenue as long as providers can demonstrate that the 2020 budget was established and approved by March 27, 2020.

(c) by “any reasonable method of estimating revenue.”

This catch-all provision will require a provider to describe the methodology used, explain why it is reasonable, and demonstrate how the revenue loss was attributable to COVID-19.

The 1/15/21 Requirements also state that ALL providers will need to include information regarding their actual patient care revenue in 2019 vs 2020. Even providers who can demonstrate that they used all of their PRF for health care related expenses will need to provide information regarding 2019 actual patient care revenue and 2020 actual patient care revenue.

The 1/15/21 Requirements also contemplate that providers who did not expend all their PRF by December 31, 2020 can use the PRF for covering lost revenue in 2021. Providers can calculate lost revenue for 2021 by comparing actual revenue from Quarter 1 to Quarter 2 of 2019 with actual revenue from Quarter 1 to Quarter 2 of 2021. Alternatively, providers can compare budgeted revenue from Quarter 1 to Quarter 2 of 2020 to Quarter 1 to Quarter 2 of 2021.

Parent Use of Subsidiary Funds

Also consistent with the Consolidated Appropriations Act, 2021, HHS recognizes that parents can take Targeted Distribution funds received by one subsidiary and provide those funds to another subsidiary. However, providers who transfer targeted distribution funds will have an increased likelihood of an audit.

HHS plans to offer Question & Answer Sessions via webinars in advance of the reporting deadline and additional information will be provided in the HHS Provider Relief Fund FAQ document.

This post is a courtesy of Fox Rothschild attorney Mark Tabakman, Esq., and was first published on Fox’s Wage & Hour – Developments and Highlights Blog.  It is particularly relevant for health care providers that automatically deduct lunch breaks from their employees’ wages:

The health care industry seems to be ground zero for a particular kind of class action lawsuit.  Many of these health care institutions have policies where a thirty-minute lunch period is automatically deducted from the daily scroll of hours.  This is quite understandable, from an operational perspective, as it usually is difficult for employees to go to their time clock, punch out and then back in for lunch.  Although this facilitates operational efficiency, it also leads to allegations that employees supposedly worked through lunch and were not paid.  Then, a class action ensues.

The latest example of this is a group of nurses who have received conditional certification for a class in a FLSA collective action based on the theory that they took their lunch breaks when they really worked.  The case is entitled Hamid et al. v. The Chester County Hospital and was filed in federal court in the Eastern District of Pennsylvania.

Securing conditional certification in a class action suit is often not that hard, as only a modest showing of commonality has to be made.  In approving the request for conditional certification, the Judge agreed that the named plaintiff showed sufficient commonality with other workers, concluding she had the same job duties and same kind of claims as the other hourly nurses at the Hospital.  He concluded that “Hamid has provided some evidence, beyond mere speculation, of a ‘factual nexus’ between defendants’ pay and break structure policy for Hamid and defendant’s pay and break structure policy for other nurses.”

The lawsuit charged that the hospital automatically deducted break times from employee wages notwithstanding that the employees duties’ prevented them from taking their breaks.   A second theory of the lawsuit is the employer’s alleged failure to include weekend premium pay, e.g. shift differentials, when computing overtime pay.   Under the FLSA regulations, these kinds of extra payments must be included when the employer calculates overtime.

The Judge noted that the plaintiff had presented sufficient evidence to meet the “lenient” standard for conditional certification.  This low standard necessitates that the named plaintiff must demonstrate a “factual nexus” between the application of the employer’s policy to not only the named plaintiff but to the co-workers allegedly affected in the same manner.  The Judge concluded that the employer’s pay and break policies applied to all workers, causing them to not receive all of the wages to which they were entitled .  The Judge also found that the named plaintiff had made “a modest showing” that she worked under the same terms and conditions of employment as the other employees.  Thus, a class, at this time, was appropriate.

The Takeaway

The concept of a fail-safe mechanism is critical.  Any employer who utilizes an automatic deduction system for lunches, which is quite legal, must ensure that there is some way for employees who ostensibly work through lunch to report that missed lunch.  Then, the employer can pay for the time if it deems it was properly worked.  That way, if the employee does not use the reporting system and then files a suit for wages, he is put on the defensive as to why he did not use the reporting mechanism.

And, there is no (good) answer to that for an employee…

This post is a courtesy of Fox Rothschild attorney Mark Tabakman, Esq., and was first published on Fox’s Wage & Hour – Developments and Highlights Blog.  It is particularly relevant for health care providers that enter into staffing services arrangements with vendors:

In FLSA cases, plaintiff lawyers are always looking for a deep pocket and one of the avenues they use towards this “goal” is the joint employer doctrine.  That doctrine allows more than one employer to be liable for employee damages (e.g. overtime, back wages) if the employers are found to co-determine employee terms and conditions of employment.  In a recent Third Circuit case involving the health care industry, a panel has reversed a lower court ruling that found two entities were not a joint employer meaning that this company now has to defend the collective action allegations of unpaid overtime.  The case is entitled Talarico v. Public Partnerships LLC and issued from the Court of Appeals for the Third Circuit.

The Court found that Public Partnerships, LLC (PPL) set rules for a group of Direct Care Workers (DCWs), established their working conditions

Copyright: rmarmion / 123RF Stock Photo

and maintained their employment records, all indicators of a joint employer relationship.  In the end, it was a factual question for a jury.  The Court observed that “whether PPL is Talarico’s employer is a genuine dispute as to a material fact because the evidence — viewed in the light most favorable to the nonmoving party, Talarico — does not so favor PPL that no reasonable juror could render a verdict against it.”  PPL provided “financial management services” to entities who participated in Medicaid’s Home and Community-Based Services waiver program.  It must be noted that the joint employer “problem” is prevalent in the health care industry, where many different agencies and entities work together to provide care.

The suit alleged that overtime was only paid to these direct care workers when they worked in excess of forty hours for a single client.  When they worked for more than one client, and their hours added up to more than forty, they were only paid straight time.  The lower court Judge applied the four-factor test adopted by the Third Circuit in 2012 decision and noted that the documents “all state that the [participant-employer] is the employer of the DCW, not PPL.”  On appeal, the appellate panel that two of these factors militated a conclusion that the entities were a joint employer.

The Third Circuit identified those “bad” factors as “the alleged employer’s authority to promulgate work rules and assignments and to set the employees’ conditions of employment: compensation, benefits, and work schedules, including the rate and method of payment,” and “the alleged employer’s actual control of employee records, such as payroll, insurance, or taxes.”  The Court also noted that “although the participants select the specific wage rate for their DCWs, PPL caps the maximum rate DCWs may receive based on the commonwealth’s reimbursement rate.  In addition to this cap, PPL requires DCWs and the participants to submit time sheets, which PPL then reviews before paying the DCWs.”  The Court also found that PPL had the “authority to hire and fire the relevant employees” and PPL played a role in “day-to-day employee supervision, including employee discipline.”

The Takeaway

Health care employers are, I believe, particularly at risk in these joint employer cases.  Health care entities often utilize many staffing or other agencies for personnel and the lines of supervision can grow blurry, which may impel a joint employer finding.  The strategy here is to engraft into any vendor or other commercial agreement specifically demarcated lines of independence that seal off, to as large an extent as possible, the putative joint employer from making any decisions into the terms and conditions of employment of the workers at issue.  In other words, the employer can draft its way out of a problem.

Maybe…

This post is authored by Catherine Wadhwani, Partner and Co-Chair of the firm’s Immigration Practice Group.  The post first appeared on Fox’s Immigration View Blog:

We hear the reports daily.  COVID-19 cases are spiking nationwide.  Hospitals and health care facilities are at maximum capacity.  Even with progress toward the availability of a vaccine, it’s not clear exactly when things will return to a state of normalcy.  Health care employers in many areas of our country continue to have difficulty recruiting physicians to meet patient needs. With the ongoing pandemic, this is more urgent than ever.

One option that may help health care employers when a US physician cannot be recruited is J-1 Waiver sponsorship of an international medical graduate.  Barring unusual circumstances, J-1 waiver sponsorship should result in a full-time employment contract with a highly qualified international medical graduate for a period of 3 years.

For eligible employers, sponsoring a J-1 Exchange Visitor physician who is completing graduate medical education and training in the US is done by filing an application with an appropriate government agency, often a state health department.  Most employer-sponsored J-1 Waiver applications are filed by healthcare providers that are located in Health Professional Shortage Areas (HPSAs) or Medically Underserved Areas (MUAs) or that treat underserved patient populations.  This includes the Conrad 30 J-1 waiver program in which all 50 states participate.  There are also a few region-specific waiver programs such as that of ARC (Appalachian Regional Commission) and the DRA (Delta Regional Authority), and waiver applications can be filed with HHS (Health and Human Services), among other agencies.

“J-1 Waiver Season” generally begins on October 1st with the start of the federal government’s fiscal year.  A few states have already received the currently permissible 30 waiver applications per fiscal year to close out their Conrad 30 programs until next October.  Many other Conrad programs and agencies continue to accept J-1 waiver applications so if you are a health-care employer in need, it may not be too late.

Sponsorship of a foreign national physician through the J-1 Waiver process can help meet patient demand and provide consistency of care over the 3-year commitment period.  Further, during the 3-year period, the physician may become well established in an area and agree to stay beyond the 3-year commitment.  This can greatly benefit an underserved patient population and bring much-needed relief to over-burdened providers.

To learn more about sponsoring a J-1 Exchange Visitor physician for a waiver, please contact me directly with inquiries at cwadhwani@foxrothschild.com or 412-394-5540.

Catherine Wadhwani is a Partner and Co-Chair of the Immigration Practice Group at Fox Rothschild LLP.  For more than 25 years, her practice has focused on business immigration law and compliance, primarily in the health care, general corporate and academic sectors.  Ms. Wadhwani’s practice covers the United States and Consulates worldwide.  She is based in our Pittsburgh, Pennsylvania office.  

Please contact Ms. Wadhwani at cwadhwani@foxrothschild.com  or 412-394-5540.

Earlier this week, the Office of Inspector General OIG issued a Special Fraud Alert (Alert) on speaker programs by pharmaceutical and medical device companies in connection with the Federal Anti-Kickback Statute. In the Alert, the “speaker programs” are defined as company-sponsored events at which a health care professional makes a speech or presentation to other health care professionals about a drug or device product or a disease state on behalf of the company. In these scenarios, the company generally pays the health care professional speaker and provides remuneration (such as free meals) to the attendees. In the last three years, drug and device companies have reported paying nearly $2 billion to health care providers for speaker-related services.

In the Alert, the OIG highlighted it is skeptical of the educational value and intent of these speaker programs when there are numerous other ways for health care professionals to obtain information about products and disease states that do not involve remuneration, such as online resources, package inserts, third party educational conferences and journals.

The Alert also provided a number of factors that could evidence improper intent, including, but not limited to:

  1. The company sponsors speaker programs where little or no substantive information is actually presented;
  2. Alcohol is available or a meal exceeding modest value is provided to the attendees of the program (the concern is heightened when the alcohol is free);
  3. The program is held at a location that is not conducive to the exchange of educational information (e.g., restaurants or entertainment or sports venues);
  4. The company sponsors a large number of programs on the same or substantially the same topic or product, especially in situations involving no recent substantive change in relevant information;
  5. There has been a significant period of time with no new medical or scientific information nor a new FDA-approved or cleared indication for the product;
  6. Health care professionals attend programs on the same or substantially the same topics more than once (as either a repeat attendee or as an attendee after being a speaker on the same or substantially the same topic);
  7. Attendees include individuals who don’t have a legitimate business reason to attend the program, including, for example, friends, significant others, or family members of the speaker or health care professional attendee; employees or medical professionals who are members of the speaker’s own medical practice; staff of facilities for which the speaker is a medical director; and other individuals with no use for the information;
  8. The company’s sales or marketing business units influence the selection of speakers or the company selects health care professional speakers or attendees based on past or expected revenue that the speakers or attendees have or will generate by prescribing or ordering the company’s product(s) (e.g., a return on investment analysis is considered in identifying participants);
  9. The company pays health care professional speakers more than fair market value for the speaking service or pays compensation that takes into account the volume or value of past business generated or potential future business generated by the health care professionals.

In the conclusion of the Alert, the OIG reasoned the Alert is not intended to discourage meaningful health care provider education, but rather to highlight certain inherent risks.

As a result of this Alert, drug and device companies and health care providers should consider the risks when assessing whether to offer, pay, solicit, or receive remuneration related to speaker programs.

Should you have any questions regarding the Alert, any member of Fox Rothschild LLP’s Health Law Group would be happy to assist you.