Fourth Annual Student Health Law Conference To Be Held at Seton Hall Law on October 22nd
Filed under: Health Care Employment, Health Law, Seton Hall Law
The American Society of Law, Medicine & Ethics (ASLME) and Seton Hall University School of Law will co-sponsor the Fourth Annual Student Health Law Conference: Taking the Health Law Career Path on Friday, October 22, 2010, in Newark, New Jersey.
This conference, which is attended by law students from law schools throughout the country, seeks to expose law students to the myriad career paths for attorneys in health and life sciences. The conference provides an introductory session on health law, panels on a variety of employment opportunities in health law, and a networking reception with the conference speakers. Career paths that will be represented include academia, compliance, private firms, government agencies, nonprofit organizations, drug and device companies, health insurers, and hospitals. Speakers for this year’s conference have been chosen for their health law expertise and background.
The format of the conference is a series of panels focused around a particular kind of health law career. Each panel is approximately one hour long and comprised of two to four panelists. Students will have the opportunity to explore nontraditional employment opportunities across the health law spectrum, receive support and guidance from professionals familiar with the experience needed for various careers as well as recruitment and hiring processes, and network with health law attorneys.
Interested in learning more about career paths for attorneys in health and life sciences? Click here for information on attending the conference.
Finding an Understanding Between Doctors and Patients
Filed under: Health Law, Medical Malpractice, Transparency
Photo by baslow via Flickr
A general perception has been that doctors choose their profession over their patients. The perception takes shape as medical professionals sometimes choose to protect their profession over the chance to improve the quality of medical care– whether doctors refusing to report a colleague’s mistake or perhaps even hindering the efforts of a doctor rating system.
So when medical mistakes occur and possible lawsuits are on the horizon, it’s no shock that medical professionals sometimes fail to own up to their mistakes–implementing instead a code of silence about the case to avoid or limit liability. In a critical time when patients or family members are looking for answers, doctors can be unavailable to provide it for them. It would also not be a shock if, after any such information could be helpful to the patient, doctors did so under the advice of counsel.
However, a study has been recently reported by the NY Times which suggests that perhaps silence may not be the most prudent approach. According the NY Times,
Since 2001, the University of Michigan Health System has handled patient injuries by initiating discussions with patients and families, conducting internal investigations and offering apologies with offers of compensation should those investigations reveal medical errors. To examine the repercussions of such an open disclosure with compensation policy, researchers analyzed the number of claims and lawsuits filed against the hospital system between 1995 and 2007, comparing data from before and after the policy took effect.
Contrary to fears that such transparency might worsen litigation, the researchers found that there were actually fewer lawsuits and claims after the hospital began its disclosure with compensation program. Moreover, the hospital system’s liability costs for lawsuits, patient compensation and legal fees dropped, and claims in general were resolved faster than ever before.
While it may seem counter-intuitive to admit fault from a litigation standpoint, these efforts at transparency and an acknowledgment have actually decreased the number of lawsuits. Richard C. Boothman, who devised and carried out the disclosure program, says, “[w]hen you break that paradigm of litigation and give patients the chance to understand the human element of the other side — of the doctor and what they are struggling with — you find that people are far more forgiving and understanding than has been typically assumed.”
It’s an interesting proposition, disclosure and accountability as both a means to litigation loss reduction and changing negative perceptions of the profession. In revealing the doctor’s ordeal– in disclosing the fault, one may move forward towards greater understanding between patients and doctors.
It’s also worth noting that additional disclosure methods are being studied. The Wall Street Journal reports a study about a project, known as OpenNotes, where doctors share their notes with their patients electronically. While doctors do complain that the OpenNotes may be burdensome, there are those who think it it may be worth the additional burden because it shows– perhaps whether or not the handwriting is decipherable–that doctors are willing to take the extra time to attempt to keep them informed.
But of course, it would better if patients actually understood their doctors. But this would be in stark contrast to a recent study we wrote about here on HRW last week. The study showed a woeful lack of communication (and a wide gap in perception) between hospital staff physicians and “their” patients:
- Only 18% of patients knew their main doctor by name.
- Sixty-seven per cent of doctors believed their patients knew them by name.
- Fifty-seven per cent of patients knew their diagnosis.
- Seventy-seven per cent of doctors believed their patients knew their diagnosis.
- Fifty-eight per cent of patients thought that physicians always explained things in a comprehensible way.
- Twenty-one per cent of doctors stated they always provided explanations of some kind.
- Sixty-six per cent of patients reported receiving a new medication in the hospital, 90% noted never being told of any adverse effects of these medications.
- Ninety-eight per cent of doctors stated that they at least sometimes discussed their patients’ fears and anxieties.
- Fifty-four per cent of patients said their doctors never did this.
Missouri Votes Against Individual Mandate, May Impact Standing Argument in Federal Court
Recently, Missouri voters overwhelmingly approved a ballot initiative which, according to the AMA’s amednews.com, “ask[ed] voters in part if they want to ‘deny the [federal] government authority to penalize citizens for refusing to purchase private health insurance or infringe upon the right to offer or accept direct payment for lawful health care services.’”
More than 71% of voters approved the initiative which seeks to negate the individual mandate, 29% voted against.
As recent events in California regarding Proposition 8 have shown, a referendum deemed unconstitutional is without force of law.
In the AMA’s article, it is noted that
Few legal experts consider the state proposals more than symbolic, as federal law generally trumps state law. But lawsuits filed or joined by officials in 21 states challenging the federal government’s authority to require health insurance have the potential to overturn the federal law.
Generalities aside, as is best in this regard, it strikes me that the Missouri initiative may have more than just symbolic value. Importantly, in the recent federal court decision regarding Virginia’s suit against the individual mandate, the judge in that case found standing for the state of Virginia–an exceedingly important, though procedural, ruling. It is exceedingly important because without standing the case could simply not go forward. The judge in the case found standing for Virginia’s 10th Amendment claim largely based upon a law passed subsequent by the state of Virginia. Regarding that matter I wrote:
In deciding the standing issue, Judge Hudson, according to Professor Jack Balkin, made much of the “Virginia Health Care Freedom Act– which asserts that no Virgina citizen may be forced to purchase health care insurance; that this law conflicts with the federal Affordable Care Act, and therefore Virginia has standing to challenge the act under the 10th amendment.”
Virginia’s Act was passed subsequent to the federal law in question; other states challenging the individual mandate do not, at present, have such a law to rely on. As Professor Balkin points out, however, the Virginia Act being deemed sufficient to buttress standing in a States’ rights Tenth Amendment claim is interesting– to say the least. It begs the question.
In more than just symbolic terms, Missouri may have just answered that question–at least in terms of 10th Amendment standing–if, of course, its federal district court sees the matter in the same way as did Judge Hudson. Certainly not guaranteed– the Missouri Federal Court is not bound by the Federal Court of Virginia– but nonetheless, Missourian’s just laid claim to an argument that has won elsewhere.
Trouble Brewing for Pharmaceutical Companies
Bribery and recalls. Federal agencies are turning up the heat on pharmaceutical companies. Were you surprised by the eight recalls of Johnson & Johnson products this year? Maybe you shouldn’t be. As HealthReformWatch.com reported in We May Need More Than a Spoonful of Sugar to Help Our Medicine Go Down, drug recalls reached a record high 1,742 in 2009 — more than four times the amount in 2008. Bowman Cox, managing editor of the Gold Sheet (which first broke the story) told CNN Money that in light of the 296 recalls issued in the first six months of 2010, there could be 600 or more recalls this year.
Why So Many Recalls?
Analysts and legislators are examining the recall statistics to find sources and solutions to the pharmaceutical safety issue.
1. Drug repackaging
Advantage Dose, a now-defunct Shreveport, LA based drug repackager, was responsible for more than 1,000 of the 2009 recalls. Companies like Advantage Dose repackage and relabel drugs into smaller units for resale or distribution to health care facilities. After excluding Advantage Dose from the count, there still remains a 50% jump in recalls from 2008 to 2009.
2. The generic rush
Gold Sheet’s Cox suggests that generic manufacturers cut drug design costs in their rush to be first to market after a branded-drug’s patent protection expires, decreasing quality. “The first applicant typically gets the lion’s share of the business for the new drug… So they get the application. They make and market the drug, but they could still have problems down the road if they haven’t really understood the optimum way to make that drug.” One example of a design failure is Caraco Pharmaceutical Laboratories’ “tablet thickness” recalls in March 2009.
3. Manufacturing lapses
Some experts say the biggest culprits include the quality of raw materials and contamination. Approximately one month ago, HealthReformWatch.com reported in Pharmaceutical Outsourcing: Trading Quality for Lower Costs? that India’s largest pharmaceutical manufacturer had been cited several times in recent years for manufacturing violations. Additional recalls include vaccines produced by Shantha Biotechnics for Sanofi-Aventis and injectible drugs made by Claris Lifesciences for Pfizer. The FDA stated its intent on May 5, 2010 to “propose stronger regulation for pharmaceutical companies that outsource manufacturing, putting more responsibility on the companies to ensure the purity and safety of the products…”
4. Increased FDA scrutiny of manufacturing facilities
Which came first, the chicken or the egg? Increased FDA oversight may or may not have led to the increased number of recalls; however, the recalls will probably lead to increased FDA regulatory power.
As Jennifer Jascoll reported, Senator Michael F. Bennet (D-CO) proposed the Drug Safety and Accountability Act of 2010 on August 3, 2010. According to Bennet’s press release, “[t]he bill would strengthen manufacturer quality standards, enhance the FDA’s ability to protect Americans through improved tracking of foreign manufacturing sites, and give the FDA much-needed authority to recall potentially dangerous drugs.” Currently, the FDA is empowered to issue warnings and recommend that a manufacturer issue a recall.
Two prior bills would also increase FDA powers to mandate a recall:
- The Protect Consumers Act of 2009 (sponsored by Rep. Betty Sutton, D-OH) would require the Secretary of HHS implement a recall if it is determined to be necessary.
- H.R. 6740 (sponsored by Rep. Edolphus Towns, D-NY) would provide the Secretary of HHS with the ability to mandate a recall “if the Secretary has reason to believe that the use or consumption of, or exposure to, a drug (or an ingredient or component used in any such drug) may cause serious adverse health consequences or death to humans or animals.”
According to CNN Money, the FDA has not identified any alarming pattern. FDA spokeswoman Elaine Gansz Bobo stated, “[s]ince every recall situation is unique, it would be difficult to assess whether there are any trends or increases in recalls this year… At this time, however, we have not identified any trends.” Despite the FDA’s lack of concern, other federal agencies are interested in the practices of pharmaceutical companies.
Further Federal Investigations
According to the N.Y.Times, federal prosecutors and securities regulators are investigating pharmaceutical companies for potential violations of the Foreign Corrupt Practices Act (FCPA). The FCPA is an anti-bribery law which bars companies from offering foreign government officials items of value for profit. For instance, Pfizer disclosed in April “that it paid $35m over six months to 4,500 doctors in private practice for education and the development and marketing of new drugs.” Although this practice is legal in the U.S., such payments are illegal in many foreign countries where physicians are employed by the government.
On November 17, 2009, Assistant Attorney General Lanny A. Breuer stated that the Department of Justice intended to focus its attention on the pharmaceutical industry:
In some foreign countries and under certain circumstances, nearly every aspect of the approval, manufacture, import, export, pricing, sale and marketing of a drug product may involve a “foreign official” within the meaning of the FCPA. The depth of government involvement in foreign health systems, combined with fierce industry competition and the closed nature of many public formularies, creates, in our view, a significant risk that corrupt payments will infect the process. Our remarkable FCPA unit and our terrific health care fraud unit will be working together to investigate FCPA violations in the pharmaceutical industry in an effort to maximize our ability to effectively enforce the law in this high-risk area.
“Corrupt practices” under the FCPA are not limited to cash in envelopes. Inappropriate payments for lavish hospitality, consulting, licensing agreements, and even charitable donations may raise red flags for government investigators.
Could bribery be contributing to decreased quality and the sudden rise in recalls? According to the Financial Times, the DoJ is focusing its efforts elsewhere:
[T]he DoJ is particularly interested in corrupt payments that may have influenced the reliability or integrity of data in clinical trials performed outside the US. A recent report by the Department of Health and Human Services found 80 percent of marketing applications for drugs approved by the Food and Drug Administration in the US had relied on at least one foreign trial.
It appears that the DoJ’s scrutiny of clinical trials is not without merit. The N.Y.Times reports that “[l]ast month, a federal drug official reported that he found repeated instances in a landmark clinical trial of Avandia, a controversial diabetes medicine, in which patients taking Avandia appeared to suffer serious heart problems that were not counted in the study’s crucial tally of adverse events.” The clinical trials for Avandia included many foreign trial sites, which were submitted in support of the drugs’ application to enter and remain on the U.S. market. GlaxoSmithKline, the trial’s sponsor, has not been accused of fraud.
According to recent regulatory filings, the following companies are under investigation for possible violations of the FCPA:
- Merck is cooperating with a federal investigation of company activities in multiple foreign nations.
- Medtronic is cooperating with investigations of company activities in Greece, Poland, Germany, Turkey, Italy, and Malaysia.
- Eli Lilly is cooperating with the investigations of subsidiaries in several countries, including Poland.
- Federal investigators are looking into improper payments related to the sale of Zimmer products abroad.
- Johnson & Johnson voluntary disclosed the possibility that company subsidiaries abroad had made improper payments to government officials in two countries relating to the sale of medical devices.
- Pfizer and Bristol-Myers Squibb have also disclosed that they are subject to federal investigations. AstraZeneca, GlaxoSmithKline, and Baxter SciClone have also received inquiries from federal enforcement agencies.
Professor Gaia Bernstein on ‘Intensive Parenting’ and the Law
According to Health Law Prof Blog, Seton Hall Law’s own Professor Gaia Bernstein and co-author Zvi Triger led in SSRN Health Law Paper downloads last month for their paper, “Over Parenting,” forthcoming in U.C. Davis Law Review. In addition to taking the number one spot at SSRN, Professor Bernstein appeared in the New York Times, Forbes Magazine and Canada’s leading newspaper, The Globe and Mail, concerning her recent scholarship on “Intensive Parenting” and the Law. These articles follow on the heels of another recent article in the ABA Journal. (See all below).
Regarding the general perception that “Intensive Parenting” or “Helicopter Parenting” is a norm appropriate for unmitigated aspiration, The Times writes:
Bernstein and Triger are not so sure. They cite studies that suggest what we have discussed on Motherlode before, that what they call intensive parenting (which others dub helicopter parenting or smothering mothering) can cause more harm than good. It is creating an anxious, dependent generation, they write, and it can “seriously undermine one of the most important roles of parents, namely, nurturing a sense of independence and separation from the parent.”
They fear that the trend is already being codified into law. In custody cases, lawyers advise parents, particularly the one who might have had less day-to-day participation in the children’s lives, to enter what Bernstein calls “the race for involvement.”
“It becomes a strategy, to know all the teachers, coach little league, text your children 20, 30 times a day,” she said in an interview.
Professor Bernstein and her co-author have also cautioned that “the law repeatedly incorporates child-rearing practices into mandatory legal standards and that we should expect to see pressure on legislatures and courts to turn sophisticated child rearing practices used by Intensive Parenting adherents into legal standards. ‘Some child rearing practices are desirable social norms but not desirable legal standards,’ Professor Bernstein explained. “For example, some states now place women who consume alcohol during pregnancy under civil confinement. Would we want to see pregnant women who do not to take folic acid vitamins–which reduce the probability of birth defects– similarly placed under civil confinement?”
“The authors warn against use of the law to enforce Intensive Parenting. Although research has shown that Intensive Parenting has important advantages, a rising body of research has shown that Intensive Parenting can seriously undermine one of the most important roles of parents, namely, nurturing a sense of independence and separation from the parent. Disconcertingly, this research also shows that deficiencies correlated with Intensive Parenting place this generation at a higher risk for anxiety disorders and making poor choices regarding alcohol and drug abuse and sexual relationships.”
“Intensive Parenting is largely a socio-economic construct. It is class, race, ethnicity and culturally dependent and tends to place its weight squarely upon the shoulders of women-who are still overwhelmingly responsible for the raising of children. A hasty and uncritical incorporation of such standards in a multicultural society would increase existing biases and force Intensive Parenting on those who may be financially unable or ideologically unwilling to adopt it.”
Read the New York Times article, Defining a Successful Parent.
Read the Forbes article, Custody Goes To The Craziest Parent.
Read the Globe and Mail article, Give Helicopter Parents a Break
Read the ABA Journal article, Courts Reward Helicopter Parents, Two Law Profs Say
Recommended Reading: Recent Scholarship on Medical Decisionmaking for Children
Alicia Ouellette’s Shaping Parental Authority over Children’s Bodies (published in the Summer 2010 issue of the Indiana Law Journal and available on SSRN) highlights four “shaping cases,” including “a case involving a white father who used surgery to reshape the eyes of his adopted Asian child; another in which parents used human growth hormone to add a few inches onto the adult height of their young son; a third in which a mother consented to liposuction for her twelve-year old daughter; and the case of Ashley X, a young girl with profound disabilities whose parents elected to stunt her growth and remove her breasts and uterus in order to continue caring for her at home.” Professor Ouellette argues that these cases reveal that the “traditional hierarchical model of the family at play in the health-care setting, which starts from an assumption of parental power” and “take[s] as a given that, absent grievous harm or death, parents have a right to modify a child’s body,” fails to adequately protect or respect children. She advocates instead the adoption of a “trust-based construct,” under which parents would be conceived of as trustees of their children’s welfare (e.g., their need for food, safety, and nurturing) and developing autonomy rights (e.g., the right to self-determination that will be theirs once they reach adulthood). Under Professor Ouellette’s trust-based construct, the four shaping cases she identifies would trigger third-party review, because of the potential for conflict between the parents’ trustee-like duties to their children and the parents’ personal interests. This is not to say that the parents’ decision to “shape” their children would be overruled in all four cases; Professor Ouellette argues that the outcomes of the third-party reviews would likely vary. Overall, this is a fascinating (and very readable) article in which facts that might seem sensationalistic at first blush are used as a launching pad for a thoughtful theoretical analysis with broad potential applicability.
Rachel Camp’s A Mistreated Epidemic: State and Federal Failure to Adequately Regulate Psychotropic Medications Prescribed to Children in Foster Care (forthcoming in the Temple Law Review and available on SSRN) also takes on the issue of medical decisionmaking for children, focusing on children in foster care for whom psychotropic medication has been recommended. Professor Camp persuasively argues that parents whose children have been removed and placed in foster care have a right to consent before their children begin taking such medications, because they fall outside the bounds of “ordinary” medical care. “[W]hen a parent is unwilling or unable to consent,” Professor Camp advocates for “[c]ourt review with an evidentiary burden on the party seeking the medication, not agency acquiescence[.]“ A meaningful and enforced consent requirement would “force[] a check on a system that has become complacent about how psychotropic medications are administered to children in care;” it could also “empower parents to parent — to assess risks, benefits, and make decisions for their children.” Professor Camp’s article provides an excellent summary of the (startling) facts about the extremely high rates of use of psychotropic medication by children in foster care, a nuanced and thorough accounting of the possible explanations for these high rates, a helpful overview of the applicable law, and concrete recommendations for state-level legal and policy change.
An “Unknowable” Number of Bureaucrats
Filed under: Health Law, Health Reform, Obama Administration
Franz Kafka (1883-1924)
Perhaps I’ve just read too much Kafka for this to be a comfortable paragraph, but I’ll let you decide. From Politico, in “Health reform’s bureaucratic spawn“:
Don’t bother trying to count up the number of agencies, boards and commissions created under the new health care law. Estimating the number is “impossible,” a recent Congressional Research Service report says, and a true count “unknowable.”
The modern course of the law is administrative. In the end, the appropriate scope of the Congressional delegation of power falls to the Supreme Court’s “intelligible principle” doctrine and the acknowledged need for technical expertise in complex areas that require rules–such as Health Law and Health Law Finance. But that doesn’t make it all that much less scary.
The rest of the Politico article is worth a quick read. And if you’re an aspiring attorney, you might want to consider taking Administrative Law. And, of course, Health Law.
Judge Rules, Virginia Moves Forward Against Individual Mandate
James Earle Fraser's statue The Contemplation of Justice, which sits on the west side of the United States Supreme Court building, on the north side of the main entrance stairs. Photo by UpstateNYer.
Federal District Court Judge Henry E. Hudson has ruled that Virginia’s suit against the federal government for imposing an individual mandate to purchase health insurance can go forward. Which is to say that the suit survived the motion to dismiss for failure to state a claim. A primary consideration therein being whether or not Virginia had standing to bring such a claim.The judge ruled that it did.
Which means that the judge has ruled that the case can go forward and the issues be heard and then decided on their merits. No small thing, sine qua non in fact, but largely a procedural hurdle in what most believe will be a long and arduous trek through the legal system, subject to myriad appeals culminating, ultimately, before the Supreme Court.
In deciding the standing issue, Judge Hudson, according to Professor Jack Balkin, made much of the “Virginia Health Care Freedom Act– which asserts that no Virgina citizen may be forced to purchase health care insurance; that this law conflicts with the federal Affordable Care Act, and therefore Virginia has standing to challenge the act under the 10th amendment.”
Virginia’s Act was passed subsequent to the federal law in question; other states challenging the individual mandate do not, at present, have such a law to rely on. As Professor Balkin points out, however, the Virginia Act being deemed sufficient to buttress standing in a States’ rights Tenth Amendment claim is interesting– to say the least. It begs the question.
Balkin:
Indeed, the logic of the opinion seems to suggest that if Virginia had objections to any other part of the federal tax laws, it could pass a Virgina Tax Freedom Act related to that provision, claiming that the tax provision was beyond the reserved powers of the states under the Tenth Amendment. This new act would give it standing to challenge any other part of the Internal Revenue Code, and it would also get around the tax anti-injunction act. Moreover, under the logic of the opinion, every other state in the Union could also create its own tax freedom act, and each of them would also be entitled to begin a series of tax protest challenges to provisions of the Internal Revenue Code. This cannot be consistent with the purposes of the tax anti-injunction act.
If you have a minute, it would actually be well spent on reading Professor Balkins post. Even if you are not a lawyer, I think you’ll find his writing accessible– and rewarding. He frames the difficulties of the opinion well.
Having said that, in a recent post we recounted the NY Times recap of the government’s argument regarding “inactivity” and the Commerce Clause:
Ian H. Gershengorn, a deputy assistant United States attorney general, countered that the insurance requirement fitted well within the Supreme Court’s parameters for Congressional regulation of interstate commerce. A choice not to obtain coverage, he said, is not inactivity, as Virginia and the other state plaintiffs claim, but an active decision to pay for future medical care out of pocket. Because many Americans cannot afford the cost of surgeries and hospitalization, their choice to go uninsured shifts the uncompensated cost of their care to hospitals, taxpayers and commercial policyholders.
The argument seems to have not persuaded Judge Hudson. Quoting from the opinion, Daily Finance writes: “From a legal standpoint, the judge defined the issue as:
‘whether or not Congress has the power to regulate — and tax — a citizen’s decision not to participate in interstate commerce [by choosing not to buy health insurance.]‘”
For those of you with more interest in the subject, I would suggest these two posts:
1) “Is it Unconstitutional to Mandate Health Insurance? ,” which was originally published here on HRW by Professor Mark Hall and then later cited by the New York Times, Washington Post, etc.
And
2) “The Original Individual Mandate, Circa 1792,” which was originally published here on HRW by Bradley Latino, a Seton Hall Law student, and then by The Health Care Blog and on Maggie Mahar’s Health Beat Blog.
New Rules for Insurance Appeals Under PPACA
Filed under: Health Law, Obama Administration, Private Insurance
On July 22, the Obama Administration released interim final rules that allow patient appeals of health insurance coverage decisions as required under the Patient Protection and Affordable Care Act (”PPACA”) and Health Care and Education Reconciliation Act (”Reconciliation Act”). Published by the departments of Health and Human Services, Treasury, and Labor, these rules create standards for the internal and external processes by which patients can appeal adverse benefits decisions.
Prior to these rules, coverage appeals were governed by contract and State law. Forty-four States have created some form of external appeal process for insurance coverage decisions; however, their coverage is limited and the processes vary greatly. Effective January 1, 2003, changes to the Employee Retirement Income Security Act of 1976 (”ERISA”) regulations provided standards for internal appeals processes. However, these standards only apply to employer-sponsored group health insurance.
As stated in the Obama Administration fact sheet entitled, “Appealing Health Plan Decisions,”
Today, if your health plan tells you it won’t cover a treatment your doctor recommends, or it refuses to pay the bill for your child’s last trip to the emergency room, you may not know where to turn. Most health plans have a process that lets you appeal the decision within the plan through an “internal appeal” — but depending on your State’s laws and your type of coverage, there’s no guarantee that the process will be swift and objective. Moreover, if you lose your internal appeal, you may not be able to ask for an “external appeal” to an independent reviewer.
Internal Appeals Process
Under the rules, new health plans beginning on or after Sept. 23, 2010, must have an internal appeals process for beneficiaries to challenge “adverse benefits decisions” — a “denial, reduction, or termination of, or a failure to provide or make a payment (in whole or in part) for a benefit.” Such adverse benefits decisions may be based on individual eligibility, benefit coverage, limitations on otherwise covered benefits (such as preexisting condition exclusions, source-of-injury exclusions, and network exclusions), and a determination that a benefit is experimental or not medically necessary.
In addition, health plans must do the following:
- Notify a claimant of a benefit determination as soon as possible;
- Provide claimants, free of charge, with the evidence relied upon and the rationale for the decision;
- Avoid conflicts of interest by making decisions regarding hiring, compensation, termination, and promotion independent of a claims adjustor or medical experts record of denial of benefits; and
- Meet additional requirements for notice, including information on internal appeals and external review processes.
However, these requirements do not pertain to so-called “grandfathered health plans” — those health plans that were in existence before March 23, 2010 when PPACA was enacted. In the individual market, health insurance providers must meet the foregoing requirements as well as the following three:
- Applicants for individual insurance must be allowed to appeal initial eligibility determinations;
- Internal review must be limited to a single level, allowing claimants to appeal to external or judicial review immediately; and
- Insurers must maintain all claims and notices for a minimum of six years, which is already required of employer-sponsored health plans under ERISA.
External Appeals Process
If the internal appeal is denied, patients may choose to have the claim reviewed by an independent reviewer. According to Appealing Health Plan Decisions, States are encouraged to adopt the National Association of Insurance Commissioners (NAIC) standards in “their external appeals laws to adopt these standards before July 1, 2011.”
The NAIC standards call for:
- External review of plan decisions to deny coverage for care based on medical necessity, appropriateness, health care setting, level of care, or effectiveness of a covered benefit.
- Clear information for consumers about their right to both internal and external appeals — both in the standard plan materials, and at the time the company denies a claim.
- Expedited access to external review in some cases — including emergency situations, or cases where their health plan did not follow the rules in the internal appeal.
- Health plans must pay the cost of the external appeal under State law, and States may not require consumers to pay more than a nominal fee.
- Review by an independent body assigned by the State. The State must also ensure that the reviewers meet certain standards, keep written records, and are not affected by conflicts of interest.
- Emergency processes for urgent claims, and a process for experimental or investigational treatment.
- Final decisions must be binding so, if the consumer wins, the health plan is expected to pay for the benefit that was previously denied.
If State laws don’t meet these standards, consumers in those States will be protected by comparable Federal external appeals standards.
As Kaiser Health News reported, “This is a regulation that benefits everyone — consumers get protections, business and providers get more certainty in the rules and the need for litigation to settle these issues should be dramatically minimized,” Phyllis Borzi, assistant secretary of the Department of Labor, said at a briefing for reporters Thursday.
Consumer Assistance Grants
However, procedural rights for consumers are not sufficient to ensure proper appeals. “Not enough consumers know this is an option that they have,” said Angel Robinson, the consumer advocate in the Iowa Insurance Division, according to Kaiser Health News.
In addition to the new requirements for internal and external appeals processes under the interim final rules, the federal government is offering nearly $30 million in resources to States and Territories to strengthen and establish consumer assistance programs. Specifically, these programs are charged with:
- Helping consumers enroll in health coverage;
- Helping consumers file complaints and appeals against health plans;
- Educating consumers about their rights and empowering them to take action; and
- Tracking consumer complaints to help identify problems and strengthen enforcement.
Image Credit: Appeal to the Great Spirit, Cyrus Edwin Dallin (1909) Photo by Toni To via Flickr
The Original Individual Mandate, Circa 1792
Regardless of one’s opinion on the Patient Protection and Affordable Care Act’s constitutionality, most commentators–and no less an authority than the Congressional Budget Office–agree (or concede, as the case may be) that Congress has never required Americans to purchase a good or service from a private entity as a condition of citizenship. But, importantly, they are wrong. The ongoing debate over the mandate’s constitutionality has uncovered an unlikely precedent to the PPACA’s individual mandate to possess health coverage. I recently wrote about this overlooked original individual mandate in an article, “The First Individual Mandate: What the Uniform Militia Act of 1792 Tells Us about Fifth Amendment Challenges to Healthcare Reform.”
The Militia Acts of 1792, passed by the Second Congress and signed into law by President Washington, required every able-bodied white male citizen to enroll in his state’s militia and mandated that he “provide himself” with various goods for the common weal:
[E]ach and every free able-bodied white male citizen of the respective States . . . shall severally and respectively be enrolled in the militia . . . .provid[ing] himself with a good musket or firelock, a sufficient bayonet and belt, two spare flints, and a knapsack, a pouch, with a box therein . . . and shall appear so armed, accoutred and provided, when called out to exercise or into service
This was the law of the land until the establishment of the National Guard in 1903. For many American families, compliance meant purchasing-and eventually re-purchasing-multiple muskets from a private party.
This was no small thing. Although anywhere from 40 to 79% of American households owned a firearm of some kind, the Militia Act specifically required a military-grade musket. That particular kind of gun was useful for traditional, line-up-and-shoot 18th century warfare, but clumsy and inaccurate compared to the single-barrel shotguns and rifles Americans were using to hunt game. A new musket, alone, could cost anywhere from $250 to $500 in today’s money. Some congressmen estimated it would cost £20 to completely outfit a man for militia service-about $2,000 today.
Perhaps the most surprising aspect of the militia mandate is how uncontroversial it was. For instance, although the recently-ratified Bill of Rights was certainly fresh on Congress’ mind, not one of militia reform’s many opponents thought to argue the mandate was a government taking of property for public use. Nor did anyone argue it to be contrary to States’ rights under the Tenth Amendment. Rather, the mandate was criticized as an unfair burden upon the poor, who were asked to pay the same amount to arm themselves as the rich. Indeed, the Militia Acts did nothing to defray costs, although a few years later Congress did appropriate funds to pay militia members for the use of their time and goods-in effect subsidizing the purchases.
All this history is potentially important to the health insurance mandate’s upcoming legal challenges, such as those recently filed by the Thomas More Law Center and the citizens of Mississippi. Both lawsuits assert Fifth Amendment-based rights the Supreme Court has, up to this point, never recognized. The Court could change its position on these issues, but only if context permits. These are the situations where historical precedent, or the lack thereof, can make or break a constitutional argument.
For example, one interesting complaint in the Mississippi class action asserts that the plaintiffs “have the constitutional right to be free from entering a private contract or an involuntary association.” The complaint considers such a right as an element of “substantive due process,” a set of constitutionally-protected “fundamental rights” that may not be expressly mentioned in the the Constitution itself, but are read as expressed through the word “Liberty” and are held to be ”deeply rooted in the history and traditions of the United States.” Many healthcare issues fall under the substantive banner. Through this doctrine, for example, the Fifth and Fourteenth Amendment due process guarantees have been read to protect privacy and reproductive choices.
The 1792 mandate directly contradicts the notion that longstanding American values somehow establish a freedom from government-mandated purchases. If such rights truly are deeply rooted in our history and traditions, Americans throughout the several states saw little need for legal recourse: in fact, many states updated their militia laws in the early 19th century specifically to conform with the federal statutory requirements. The Militia Acts’ roots reach back to colonial New England, where it seems Massachusetts lead the way again in 1632 with its own firearm mandate.
The Militia Acts may be less applicable to other constitutional issues. Both of the aforementioned class actions, as well as Florida Attorney General Bill McCollum’s suit, also argue that Congress simply cannot regulate interstate commerce by requiring Americans to participate in it. Of course, the procurement of supplies under the Militia Acts did require Americans to engage in commerce, and, perhaps, Interstate Commerce. But it is not particularly tenable to cite the Commerce Clause as the power under which Congress and President Washington moved. More apt would be the Militia Clause, wherein Congress may “call forth the Militia” coupled with the Necessary and Proper Clause: ”Let the end be legitimate, let it be within the scope of the constitution,” as Justice Marshall famously wrote in McCulloch v. Maryland “and all means which are appropriate, which are plainly adapted to that end . . . are constitutional.” Importantly, McCulloch is still good law (for some idea of the breadth of the Necessary and Proper Clause power, See U.S. v. Comstock, recently decided by the Supreme Court). And yes, the Necessary and Proper Clause may work in tandem with the Commerce Clause.
What is “Necessary and Proper” to the execution of one power (Militia Clause), however, may not be ultimately determined by the Court to be constitutionally so for another (Commerce Clause). But as Constitutional Law Professor Edward Hartnett of Seton Hall Law has pointedly queried, “At least so long as McCulloch v. Maryland is good law, why would the necessary and proper clause in aid of the militia power allow for an individual mandate, while the necessary and proper clause in aid of the commerce power would not?”
Either way, however, it is simply wrong to say that Congress has never required Americans to purchase a good or service from a private entity as a condition of citizenship. In fact, in light of the Militia Acts, the individual mandate to purchase goods or services to protect oneself and one’s neighbors can readily be described as “deeply rooted in the history and traditions of the United States.” The debate needs to be altered to accommodate this history.
As I continue researching the Militia Acts and the militia system, what surprises me most, and what seems most relevant to the current populist arguments against healthcare reform in general, is how invested Americans once were in the idea of personal sacrifice. My favorite quotation comes from James “Left Eye” Jackson, an antifederalist-leaning congressmen who was no friend of the Washington Administration:
“Though it may prove burthensome to some individuals to be obliged to arm themselves, yet it would not be so considered when the advantages were justly estimated . . . . [A]s this nation is rising fast in manufactures, the arts and sciences, and from her fertile soil may expect great affluence, she ought to protect that and her liberties from within herself.”
[Bradley Latino is a third-year student at Seton Hall Law School and a guest blogger at Health Reform Watch. He graduated cum laude from Butler University in 2005, where he majored in literature. He is currently working with the New Jersey Appleseed Public Interest Law Center on an overview of potential conflicts between New Jersey private health insurance regulation and the newly-passed federal law.]
Virginia, the First State to Challenge the Health Care Law in Court
Effective 2014, as part of the new health care law, most U.S. citizens will be required to obtain some type of health care insurance or be hit with a tax penalty. This federal mandate is part of an effort by the Obama administration to use the penalty (or tax) to prevent uninsured Americans from shifting their $43 billion in healthcare costs to others.
However, this mandate did not sit well with some states, as many have filed suits seeking to invalidate the law. Virginia was the first to butt heads with the federal government in court. In a two-hour hearing, the federal government and Virginia both made their arguments before U.S. District Judge Henry E. Hudson.
The NY Times reports that Judge Hudson, “who was appointed by the first President George Bush, questioned both sides aggressively and said he would rule within 30 days. The judge predicted that the challenges to the health care law ‘will at some point in time define the outer boundaries’ of federal regulatory power.”
Although the hearing primarily concerned the issue of whether Virginia had legal standing to bring this claim, part of that analysis requires the court to look at the likliehood of the party seeking standing to have the injury alleged redressed. The requirements for standing are nicely stated in “The ‘Lectric Law Library“:
Standing. The legal right to initiate a lawsuit. To do so, a person must be sufficiently affected by the matter at hand, and there must be a case or controversy that can be resolved by legal action.There are three requirements for Article III standing: (1) injury in fact, which means an invasion of a legally protected interest that is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical; (2) a causal relationship between the injury and the challenged conduct, which means that the injury fairly can be traced to the challenged action of the defendant, and has not resulted from the independent action of some third party not before the court; and (3) a likelihood that the injury will be redressed by a favorable decision, which means that the prospect of obtaining relief from the injury as a result of a favorable ruling is not too speculative. Lujan v. Defenders of Wildlife, 112 S. Ct. 2130, 2136 (1992) (Lujan). The party invoking federal jurisdiction bears the burden of establishing each of these elements. Id.
The state here would seem to bear the burden of showing, among other things, that any harm that may or may not be experienced by its individual citizens is a concrete and particularized harm to the state itself. As for the crux of the issues beyond standing, The NY Times reports:
[States'] central argument is that the Commerce Clause of the Constitution cannot be interpreted to allow government penalties on Americans for refusing to buy a product, or as Virginia’s lawsuit puts it for “an absence of commerce.”
“We’re saying you can’t draft someone into activity so you can regulate him,” Virginia’s solicitor general, E. Duncan Getchell Jr., told Judge Hudson.
Mr. Getchell said the Justice Department’s defense of the law “evinces hostility to federalism.” He called the law “a radical, radical claim of power” that, if upheld, would allow the federal government to require citizens to buy most any commercial product in the name of advancing the national interest.
Ian H. Gershengorn, a deputy assistant United States attorney general, countered that the insurance requirement fitted well within the Supreme Court’s parameters for Congressional regulation of interstate commerce. A choice not to obtain coverage, he said, is not inactivity, as Virginia and the other state plaintiffs claim, but an active decision to pay for future medical care out of pocket. Because many Americans cannot afford the cost of surgeries and hospitalization, their choice to go uninsured shifts the uncompensated cost of their care to hospitals, taxpayers and commercial policyholders.
Despite Virginia’s efforts to protect the interest of the state and its citizens, not everyone in Virginia is pleased with the state’s action to nullify the new health care law. Some citizens of Virginia seemed more concerned about affordable health care than state’s rights. As one small business owner puts it, “…seems to me that our attorney general and our current administration are putting politics first and are not taking care of the citizens of the commonwealth of Virginia.”
The Attorney General of Virginia, Ken Cucinelli “said at a news conference after the hearing that the state has “a better than even chance of prevailing” at each step along the way to the lawsuit’s ultimate destination: the U.S. Supreme Court.”
Judge Hudson’s comment, that “the health care law ‘will at some point in time define the outer boundaries’ of federal regulatory power,” is interesting in this context. It seems to denote a question, even if not answered at this time, as to where the line lay.
Professor Mark Hall, in posts here at HRW and later picked up by the Washington Post and New York Times, would beg to differ with Mr. Cucinelli (and perhaps Judge Hudson). Professor Hall’s posts appear below:
Is it Unconstitutional to Mandate Health Insurance?
Are The Attorneys General’s Constitutional Claims Bogus?
CVS & HHS: Partners in Compromising Your Privacy
Filed under: Health Law, Prescription Drugs, Privacy
On January 16, 2009, the Department of Health and Human Services (HHS) and CVS entered into a resolution agreement requiring CVS to pay a $2.25 million fine and implement a corrective action plan for “potential violations of the HIPAA [The Health Insurance Portability and Accountability Act of 1996] privacy rule.” Why? CVS had allegedly been placing prescription bottles and labels into dumpsters that were accessible to the public. The bottles/labels contained protected health information (PHI), which CVS was required to safeguard under federal law.
Although HHS appears to regard the settlement as a success, given its prominence on the HIPAA enforcement section of HHS’s website, it is nothing of the sort. The agreement provides that CVS “expressly den[ies] any violation of HIPAA or the Privacy Rule, and further den[ies] any wrongdoing,” while HHS does not concede that CVS is “in compliance with the Privacy Rule.” HHS did agree with itself, however, releasing an FAQ (accompanying the press release) stating that under its Privacy and Security Rules: “covered entities are not permitted to simply abandon PHI or dispose of it in dumpsters or other containers that are accessible by the public or other unauthorized persons.”
Why is this old news important? This week I had a prescription filled at my local CVS pharmacy in Livingston, New Jersey. While standing at the pharmacy I noticed that all of the filled prescriptions were stored directly behind the counter in plain view of any customer. Each prescription was inside a small bag to which a customer receipt was attached. The receipts in the front row of the storage bins were readable from the counter. The receipts contain protected health information (PHI) that is subject to the Privacy and Security Rules of HIPAA including:
1) Full name,
2) Address,
3) Telephone number,
4) Day and month of birth,
5) Drug name and dosage, and
6) Prescriber.
HHS maintains the authority for civil enforcement of violations of the Privacy and Security Rules promulgated pursuant to HIPAA. So, why is it that CVS allows the public to view its customers’ PHI in violation of HIPAA even while still subject to the corrective action plan for its prior alleged violations? Well, I asked the pharmacist on duty. The pharmacist acknowledged that it was a problem that the PHI could be viewed from the counter. However, CVS was expecting to remodel and “hopefully” the shelf would be placed farther away to render the PHI unreadable. Upon requesting the contact information for CVS’s privacy officer, the pharmacist readily provided such information and stated that she would “appreciate” someone actually reporting the apparent violation.
HHS was recently provided with additional enforcement tools under the HITECH provisions of the American Recovery and Reinvestment Act of 2009. Unfortunately, it does not appear that HHS is serious about enforcing its own regulations or resolution agreements; nor, if the flagrantly violative placement of prescriptions is indicative of mindset, is CVS serious about HIPAA compliance.
Health Care Jobs Up– Again
Filed under: BLS, Health Care Employment, Health Law
Photo by bjmccray via Flickr
“Health Care Jobs Up,” a tried and true headline that has been capable of use every month in the last decade, and one I’ve used a time or two in one form or another here at HRW. Although the Bureau of Labor Statistics’ latest employment report showed a slowdown in private sector hiring, ambulatory care settings added 8,700 jobs while health care as a whole added 13,100 jobs.
In an article entitled “The Health Care Economy: Where the Jobs Are,” Merril Goozner over at the Fiscal Times writes:
The health care industry is bulletproof when it comes to increasing spending or creating jobs. Growth rates that are often double the rest of the economy have allowed the nation’s hospitals and physician offices to add nearly 1.5 million jobs over the past decade, a period when other private sector employers were shedding 2.8 million jobs, largely the result of the banking and financial crisis. In fact, there hasn’t been a single month in the past decade when health care providers as a group didn’t increase employment opportunities for job-hungry Americans.
The employment gains experienced in the health care sector are prodigious, in January of 2009 The Wall Street Journal reported that in an otherwise bleak economy
“Health care saw a net gain of 419,000 jobs in 2008 and its growth outlook continues to be strong through 2016, according to the Bureau of Labor Statistics.”
And for health law practitioners? What I wrote back in March of this year seems no less true now:
What might one expect to be the effect of this relatively sanguine state of affairs for Health Care employment on Health Law practitioners?
In the well written and informative words of Professor Jennifer Bard, J.D., M.P.H (I highly recommend the article, “I’m Interested in Health Law- Now Where Can I Get a Job?” to anyone who may be considering a career in Health Law),
Health care is a trillion-dollar industry[1]that has grown exponentially over the past 10 years with very little sign of slowing. The demand for legal services has tracked the growth of the industry,[2] and, as a result, attorneys calling themselves “health lawyers” have grown from a small core of specialists to a large and diverse group of individuals who are as likely to specialize in bond issuance and tax planning as in torts or food and drug law. Moreover, the increasing regulation of health care has created substantial need for lawyers specializing in compliance with a vast array of federal, state and local regulations. Where 15 years ago most health law was done by small, specialized law firms, today many of the nation’s biggest law firms have thriving health law practices.
Significantly, although officially published in the Winter of 2009 (14 New York State Bar Association Health Law Journal 73 (2009)), Professor Bard first published those words to SSRN in February of 2008-prior to the onset of the Obama Administration and the rising priority of Health Care Reform and regulatory enforcement. Because of these rising priorities, her words are no less true than when they were written, and have arguably gained an even greater currency since.
In an article this month in The American Lawyer, “Drug Supplement. New federal regs demand more health care lawyers,” Rachel Breitman points out the following:
Ever since President Barack Obama gave health care reform a prime spot on his agenda, hospital, pharmaceutical, medical device, and insurance interest groups have been digging in, with the expectation of a battle to come-the kind that requires lawyers.
Changes have already begun. New federal regulations like a genetic discrimination shield law and new digital privacy security standards have been enacted. The U.S. Department of Justice and Health and Human Services launched a healthcare task force in May. “There’s going to be more oversight about how companies spend government grant funds for research and clinical trials,” says Frederick Robinson, the head of Fullbright & Jaworski’s Washington, D.C., health law practice, which advises clients like Zimmer, Inc., and Walgreen Company. “Also, as health care providers apply for stimulus funds, there will be new compliance challenges to get the money.”
As a result, law firms have a new appetite for health care lawyers.
Seton Hall University School of Law Launches European Healthcare Compliance Certification Programme in Paris
Filed under: Compliance, Health Law, Seton Hall Law
Press Release: Seton Hall University School of Law Launches European Healthcare Compliance Certification Programme in Paris
Co-presented by:
Seton Hall School of Law and Sciences Po
June 21 - 25, 2010- Sciences Po, Paris, France
- www.sciences-po.fr/spf/healthcare
PRESS RELEASE
Phone: 973.642-8863
E-mail: simone.handler-hutchinson@shu.edu
Website: law.shu.edu/Paris OR www.sciences-po.fr/spf/healthcare
The Healthcare Compliance Certification Programme, co-organized by Sciences Po Executive Education (Paris, France) and Seton Hall University School of Law (Newark, N.J) to be held from June 21-25, 2010 on the Paris campus of Sciences Po today announced its 2010 topics and faculty.
FEATURED FACULTY:
CURRENT & FORMER REGULATORY & ENFORCEMENT OFFICIALS:
Paul McNulty, Partner, Baker & McKenzie, LLP (DC) Former U.S. Deputy Attorney General
Kirk Ogrosky, Partner, Arnold & Porter LLP (DC), Former Deputy Chief, Health Care Fraud, Criminal Division, U.S. Dept. of Justice
INTERNATIONAL ORGANIZATIONS
Alex Conte, Senior Legal Analyst, Anti-Corruption Division, OECD
Dr. Guitelle Baghdadi-Sabeti, Team Leader, Good Governance for Medicines, World Health Organization
Marie-Claire Pickaert, Deputy Director General, European Federation of Pharmaceutical Industries and Associations (EFPIA)
COMPANY COMPLIANCE PROFESSIONALS:
Dirk Brinckman, Assistant General Counsel, Johnson & Johnson (Brussels)
Roeland Van Aelst, Vice President, EMEA & Canada, Office of Health Care Compliance & Privacy, Johnson & Johnson
KEYNOTE & ACADEMIC SPEAKERS:
Paul Benkimoun, Healthcare Journalist, Le Monde
Claude Le Pen, Professor, Université Paris-Dauphine
Kathleen Boozang, Professor of Law, Seton Hall Law School (Newark, NJ)
LEADING LEGAL AND COMPLIANCE COUNSEL AND ADVISORS:
Peter W.L. Bogaert, Managing Partner, Covington & Burling (Brussels)
John Rupp, Partner, Covington & Burling LLP (London)
Karolos Seeger, Partner, Debevoise & Plimpton LLP (London)
Susie Smith, Bevan Brittan LLP (UK)
Ted Acosta, Leader, Life Sciences & Corporate Compliance Fraud Investigation & Dispute Services, Ernst & Young LLP
Jill Deal, Partner, Venable LLP (DC)
Kristof Van Quathem, Data Protection Advisor, Covington & Burling LLP (Brussels)
Carolyn Lindsey, Director of Member Services, TRACE International
Owen Bevan, Director, Legal & Compliance Practice, Corporate Executive Board
PROGRAMME CURRICULUM:
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HIPAA Administrative Simplification: Enforcement
By Laura Sunyak
In February of 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (ARRA), and with it enacted the Health Information Technology for Economic and Clinical Health Act (HITECH Act). The HITECH Act contains regulations that significantly increase the penalty amounts the Secretary of the Department of Health and Human Services (HHS) may impose for violations of rules promulgated under the Health Information Portability and Accountability Act (HIPAA), and encourages corrective action. In order to incorporate the increased penalty structure into HIPAA, HHS has recently issued an interim final rule designed to strengthen its enforcement power and incorporate the new penalty structure of the HITECH Act into HIPAA.
Prior to the HITECH Act, the Secretary could not impose a penalty of more than $100 for each violation, or $25,000 for all identical violations of the same provision. A covered entity could also bar the imposition of a civil monetary penalty by simply showing that it did not know that it violated a HIPAA rule. As a result, enforcement of HIPAA rules has been weak, bordering on nonexistent. The number of covered entities that were in full compliance with the law was always very low, simply because HHS did not have a sufficient enforcement mechanism in place to deter violations. If covered entities did change their behavior to become compliant, it was out of a desire to follow the law, not due to fear of prosecution or administrative action.
Before ARRA was signed into law, although there were HIPAA audits that took place, they were few and far between. Covered entities complained that the requirements were not clear, and so hesitated to attempt to comply. With the enactment of ARRA and the HITECT Act, and the adoption of the interim rule, HIPAA covered entities will have no choice but to take notice and comply, or face much harsher penalties. The implementation of these acts also transfers authority for enforcement of HIPAA’s security rules from the Centers for Medicare and Medicaid to the Office of Civil Rights which, with 275 investigators and an annual budget of $40 million, is in a better position to bring enforcement actions and recover penalties. The penalties collected for violations will in turn be used to fund greater enforcement efforts. The interim rule amends 45 CFR part 160, subpart D, which establishes rules relating to the imposition of civil money penalties, to conform several provisions to section 13410(d) of the HITECH Act’s amendments to section 1176 of the Social Security Act, which became effective February 18, 2009. This interim final rule’s amendments distinguish between violations occurring before February 18, 2009, and violations occurring on or after that date, with respect to the potential amount of the civil money penalty and the affirmative defenses available to covered entities.
The interim final rule, effective as of November 30, 2009, modifies the penalties for HIPAA violations occurring after February 18, 2009. (For an explanation of the meaning of “interim final rule,” click here. According to this rule, the penalty for unknown violations, where the covered entity did not know of the violation, and would not have known by exercising reasonable diligence, is now between $100 and $50,000. For violations involving reasonable cause, such as circumstances that would make it unreasonable to comply with HIPAA despite extraordinary care, the penalty is now between $1,000 and $50,000. For violations involving willful neglect, or a conscious, intentional failure or reckless indifference to the obligation to comply with HIPAA, the penalties are further broken down into whether or not the covered entity corrects the violation. If the violation is corrected within 30 days, the penalty is now between $10,000 and $50,000. If the penalty is not timely corrected, each violation will be fined $50,000. The rule also puts into place an annual cap of $1.5 million on all violations of an identical provision.
According to Georgina Verdugo, the director of OCR, the implementation of these tougher enforcement provisions strengthens HIPAA protections and rights related to protected health information, and should encourage covered entities, including health care providers and health plans, to “ensure that their compliance programs are designed to prevent, detect, and quickly correct violations of the HIPAA rules.… such heightened vigilance will give consumers greater confidence in the privacy and security of their health information and in the industry’s use of health information technology.”
The enactment of these tougher enforcement penalties create additional incentives to make sure that covered entities have HIPAA compliance programs in place, which should include training employees to be compliant and ensuring that they are aware of how important it is to report potential violations so that they can be corrected in a timely manner.
When taking into account the lack of enforcement that had occurred prior to the recent HIPAA amendments, the new provisions seem to be a necessary step in enforcing the law and preventing the misuse of protected health information. With more resources available to track down HIPAA violations, and steeper penalties exacted against entities that violate HIPPA, the new rule is a step in the right direction toward greater protection of protected information. With the rampant rise of identity theft in this electronic age, consumers can never be too careful in ensuring that information stays in the right hands.
As HHS, acknowledges, this Interim Final Rule is only the first of several steps being taken to implement the HITECH Act’s tougher enforcement provisions. The remaining provisions, which are not yet effective, will be addressed in the near future.
Posts from Health Reform Watch have been cited by media sources throughout the country, including Kaiser Health News, The Health Care Blog, NPR's Planet Money Blog, Duke Univ. Med. Center News, American Health Line Alerts, BusinessWeek.com, Concurring Opinions, Balkinization, The New England Journal of Medicine, Harvard's Nieman Foundation for Journalism, The New York Times, Washington Post, L.A. Times, Las Vegas Sun, Maggie Mahar, Ezra Klein, Tom Geoghegan, and the official homepage of the Office of the Democratic Majority Leader of the House of Representatives, Steny Hoyer.
