Bring the New Australian Living Donor Compensation Scheme to the United States

August 29, 2013 by · Leave a Comment
Filed under: Bioethics, Health Law 

Jared SteppThe Australian government has announced a new scheme that will compensate living organ donors with cash payments during their recovery period. This is said to be intended not as a payment for the organ, but as a way to minimize the financial burden of donation. The plan should be seen as a step in the right direction for those who favor legalizing payment for organ donation in the United States, and Congress should seriously consider authorizing a similar pilot program.

Australia’s new program has several features, designed to mitigate fears and concerns about paying organ donors. First, the plan reduces the fear that individuals will look to donate their organs out of desperation and economic necessity. This is accomplished by limiting the payments to the currently employed, including self-employed and part-time workers. Additionally the compensation is not extravagant, topping out at $606 a week for up to six weeks. This limited compensation is unlikely to attract financially distressed donors who would otherwise choose not to donate, though it may make it easier for those who are not well-off to commit to a process that will entail significant time off from work. That being the case, most donors would find themselves afterwards in relatively the same financial situation as before they donated.

Second, the money comes from the Australian government, rather than from the recipients themselves.  This reduces the appearance of a cash-for-organs system that might be unpopular and ethically problematic. A third party payment system for bone marrow is already developing in the US. The group has led the effort for such after the 2012 decision of Flynn v. Holder held that payment for donating bone marrow by apheresis is allowed under the current law. If third parties, be they charitable organizations or the US government, make payments to donors a gap is created between the donor and the recipient. This gap will, presumably,  allow donors to still feel that they have actually donated and not sold their organ. And, if the altruistic component of donation can be preserved while reducing the financial burden to the donor then it is unlikely that this new scheme will drive away potential donors who do not like the idea of selling their organs.

If this scheme were adopted by the United States it has the potential to drastically increase the supply of kidneys, especially in minority communities. There is currently a huge gap between the supply and demand for kidneys. For racial minorities this gap is even wider. Modest payment for missed work time, coupled with an awareness campaign, would allow low-income individuals to donate their organs without placing themselves in financial jeopardy from missed work. If the amount of money paid to the donor was kept modest, like the Australian scheme, claims of exploitation would be less persuasive.

The US government should closely monitor the Australian pilot program to see if it is effective. If so, it should be rapidly adopted by the US. If not, then consideration should be given to other means of increasing organ donation, including larger cash payments to donors. A US program similar to the new Australian scheme would go a long way to closing the gap between the need for kidneys and the supply of living donors.


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Healthcare Compliance Certification Program at Seton Hall Law School

June 3, 2013 by · Leave a Comment
Filed under: Health Law 

HCCP-learnmore3June 10-13, 2013, Newark, New Jersey

NY/NJ CLE credits available

Program Overview

This four-day educational program, held twice a year, immerses attendees in the statutes, regulations, and other guidance that comprise the body of law known as “fraud and abuse law,” as well as other healthcare-related laws and regulations, to help them understand the legal underpinnings of the compliance programs they develop and enforce.

Who Should Attend

Pharmaceutical and medical device professionals in compliance, legal, regulatory and medical affairs, sales, marketing, grants and related areas, as well as outside counsel who represent healthcare companies.

Cost & Registration

Tuition for the Program: $2,400. To register, go to

Program Details

  1. Program faculty include high-level government and private lawyers who are experts in pharmaceutical and medical device fraud and abuse issues.
  2. Session topics include Federal and State False Claims Acts, Federal Anti-Kickback Statute, the Food, Drug & Cosmetic Act (FDCA), Data Privacy (HIPAA, HITECH, and others), Food & Drug Administration Amendment Act of 2007 (FDAAA), Foreign Corrupt Practices Act (FCPA), Prescription Drug Marketing Act of 1987 (PDMA), PhRMA Code and AdvaMed Code, The Federal Sunshine Law, federal and state marketing and disclosure laws, OIG compliance guidance, and much more.
  3. Attendees receive extensive resource materials which will aid them in their ongoing compliance efforts.
  4. Attendees will receive a certificate issued by Seton Hall Law School upon completion of the Program, and may apply for approximately 26 CEUs for HCCA and SCCE certification and/or NY and NJ CLE credit.

More Information

For more information regarding the Program, please contact Sara Simon at or call 973-642-8190.


Sterilization Matters

May 31, 2013 by · 4 Comments
Filed under: Quality Improvement 

Nina K. ShumanWhen patients undergo surgical or other medical procedures, they hope to receive optimal care provided by experienced physicians. They are rarely concerned about proper sterilization of surgical instruments and other medical equipment as it is likely assumed that the health care facility has applied this standard precaution. Unfortunately, however, not every medical center is adequately sterilizing its equipment, yet this is a crucial element of successful medical care.

According to a report by The Center for Public Integrity, a patient who underwent a routine rotator cuff repair surgery at a Texas hospital in 2009 was readmitted weeks later due to an infection from the deadly bacteria known as P. aeruginosa.[1] An investigation conducted by the Centers for Disease Control and Prevention (CDC) and the hospital revealed that the arthroscopic shaver utilized for the surgery contained the deadly bacteria even after the sterilization process. [2] A more recent incident occurred in March of this year where a routine inspection at an oral surgeon’s office in Tulsa, Oklahoma exposed sterilization issues, including cross-contamination problems.[3] The Department of Health stated, “more than 60 former patients [of the oral surgeon] tested positive for hepatitis and HIV.”[4]

Medical device manufacturers originally sold “single-use” devices because of the demand for disposable equipment.[5] In the late 1970s, hospitals began reusing medical devices intended for or labeled as “single-use” as a cost control measure.[6] The FDA explains that “single-use” devices are to be used once or on one patient during a single procedure whereas reusable medical devices are those that can be reused to treat several patients.[7]

Contaminated reusable medical devises can lead to infections but a method known as “reprocessing” involves meticulous sterilization intended to prevent infections.[8] Reprocessing generally includes the following steps: 1) preliminary decontamination and cleaning in the area of use such as the operating room to inhibit drying of blood and other contaminants on the devises; 2) transfer of the devise to the reprocessing area where careful cleaning occurs and 3) final disinfection or sterilization to allow the devise to be reused.[9] The FDA further explains that problems arise for reprocessing when sterilization instructions by the manufacturer are “unclear, incomplete, difficult to obtain from the manufacturer, or impractical for the clinical environment.” [10] Manufacturer designs that render proper cleaning difficult in addition to scantily paid sterilization technicians are other sources of concern.[11]

There are some diseases that preclude the reuse of medical devices, specifically Creutzfeldt-Jakob Disease (CJD).[12] CJD is a neurodegenerative disorder that causes rapidly advancing dementia, deteriorating memory, drastic changes in behavior, and coordination and visual issues.[13] It is 100% fatal; patients with CJD usually die within one year of disease symptom onset.[14] CJD results when normal brain proteins are transformed into abnormal and infectious forms known as prions.[15] Infected pituitary hormones, dura mater transplants, cornea grafts, and neurosurgical instruments are some examples of materials that can transmit the disease to patients.[16] Most disinfectant and sterilization procedures do not eliminate the infected prions.[17] Importantly, although fatality normally occurs within one year of symptom onset, the disease has an incubation period of up to 50 years, it is not readily detectable until symptoms occur, and is seemingly capable of transmission to others during the incubation period.[18]

The World Health Organization (WHO) released infection control guidelines for health facilities handling patients with CJD.[19] Essentially, any reusable surgical instruments that come into contact with “high infectivity areas” including the brain, spinal cord, and eye should be disposed of and incinerated.[20] But the difficulty, of course, is knowing who is infected with this infectious fatal disease with the disturbingly long incubation period.

Ensuring that hospitals follow proper sterilization is integral, but technician certification is also an important aspect of the overall sterilization scheme.[21] As the director of sterilization at a healthcare facility in New York so accurately stated, “The people who do your nails, they have to take an infection control course before they can apply for a license …Yet the people who deal with lifesaving equipment, they are required to have zero education.”[22] Currently, New Jersey is the only state that makes certification mandatory for sterilization technicians.[23]

As the provision of health care becomes more transparent, patients not only have the ability to choose where to obtain services based on price and reputation of a facility, but they are also, presumably, able to learn about various quality measures. By filtering a search based on location or hospital name, the Centers for Medicare & Medicaid Services’ (CMS) Hospital Compare Website enables patients to view quality measures such as readmission, complication, and mortality rates.[24] There, patients are able to examine the facility’s rates in comparison to the national average.[25] Therefore, improper sterilization leading to increased infection rates will likely be exposed to the public, however attenuated, which could cause patients to seek care elsewhere—at least in time, among consumers able to bring choice to the equation (non-emergency, non-insurance dictated) and who have the ability to comprehend the data. But seemingly, more direct measures can be taken to ensure patient safety.

[2] Id.

[6] Id.

[8] Id.

[9] Id.

[10] Id.

[14] Id.

[20] Id.

[22] Id.

[23] Id.

[25] Id.


Managing Whistleblower Risk and Liability

May 28, 2013 by · Leave a Comment
Filed under: Health Law 

glynn_timothyLast week, the Jersey Journal reported that a jury recently awarded a former employee of Bayonne Medical Center over $2.1 million in his whistleblower suit against the hospital.  The employee, Ceferino Doculan, alleged that the hospital violated New Jersey’s whistleblower statute, the Conscientious Employee Protection Act (CEPA), by terminating his employment as a technician in the hospital’s blood bank because he had complained to hospital personnel that his new supervisor was not qualified to hold that position under New Jersey law.

Although the hospital argued it had terminated Doculan for other reasons, the jury apparently accepted Doculan’s view of the predominant reason for his firing.  According to the article, the jury awarded him about $120,000 in compensatory damages (lost wages and pain and suffering) and $2 million in punitive damages.  The hospital intends to appeal.

The case offers several lessons regarding whistleblower liability risks for hospitals and other healthcare providers.   One broad takeaway is that management of whistleblower risks cannot be disentangled from other compliance matters.   So, in addition to the concerns about how to respond to a whistleblower appropriately, Bayonne Hospital had an actual legal problem – the supervisor was not qualified under New Jersey law.   CEPA and most other whistleblower laws do not limit protection to complaining employees who are correct about the law; typically, the employee’s report must merely be made in good faith.    Yet, intuitively, if the employer has in fact broken the law,  the employee may have an easier time establishing her wrongful termination claim, in part because the existence of the legal violation will potentially make the whistleblower more credible in her lawsuit.  Thus, vigilance about compliance with the law in the employer’s operations in general – in this case, on a human resources-related matter – is a key component in reducing whistleblower liability risks.

Second, keep in mind that, with rare exception, whistleblower laws protect only reports of illegal conduct or conduct that poses some kind of direct and serious risk to the public.  Whistleblower laws do not protect employee reports of violations of employer policies, nonlegal disputes with the employer, or other purely internal matters.   But, in highly regulated industries like healthcare, actions that might not otherwise implicate the law often do.  For example, in most industries, the law does not require a license, special training, or other credentials to serve as a supervisor; in healthcare, things are different.   Compliance personnel in the healthcare context therefore should know that whistleblower liability risks linger in the background of many human resources and other kinds of decisions.  Employee complaints and reports regarding such decisions – even those that might seem standard or run-of-the-mill – therefore should be taken seriously and treated like those that obviously involve legal mandates.

Finally, hospitals and other healthcare providers potentially confront multiple whistleblower regimes.  High-profile whistleblower litigation in this area often involves federal law, most notably, the False Claims Act (including “qui tam” actions for alleged overbilling of the government).  See examples here and here.   And the new whistleblower provisions found in the Affordable Care Act are garnering much attention.  But, as the CEPA claim in this case suggests, many states provide statutory and common-law whistleblower protections that sweep more broadly, potentially protecting employees who report a wide variety of alleged legal violations.   Each of these federal and state regimes has its own set of legal requirements, limitations, and remedies.  A working familiarity with these various regimes can enhance compliance and risk management.

For those interested in learning more about federal and state whistleblower regimes, Seton Hall Law School now offers an eight week online course on managing whistleblower risks.  The course is designed to introduce human resources and compliance personnel to the laws protecting employees who report alleged misconduct of their employers.  If you would like more information, please visit the course website  or call 973-642-8482.


Memorial Day, Remembering our Veterans With Treatment

May 27, 2013 by · 1 Comment
Filed under: Health Law 

It is Memorial Day, and like in past years I will ask that we take a moment here to consider the sacrifices at the heart  of this holiday—we remember our fallen, we memorialize our dead. At present, the Veterans Administration is having great difficulty in treating and compensating our war wounded.

Number of Veterans Affected, Multiple Deployments

Since the U.S. went to war in Afghanistan in 2001 and Iraq in 2003, about 2.5 million service members have been deployed in the Afghanistan and Iraq wars, according to Department of Defense data. Of those, more than 800,000 were deployed more than once; 400,000 have done three or more deployments, and nearly 37,000 were deployed more than five times.[1] Obviously, multiple deployments increase the likelihood of service related injuries.

Wounded & Injured

It is worth noting that although considered the longest wars in U.S. history, Iraq and Afghanistan have produced relatively few U.S. service member deaths: 6,648 (as of March, 2013), but have produced a large number of wounded in action (roughly 50,000). According to reports such as Modern Warfare, by Alec C. Beekley, MD, FACS, LTC, MC, US Army, Harold Bohman, MD, CAPT, MC, US Navy, and Danielle Schindler, MD,[2] compared to Vietnam, the mortality rate of combat wounded in Afghanistan and Iraq has decreased by nearly half. New medical procedures, protective gear such as body armor and faster medical evacuation are saving more than 90 percent of all those who fall in battle, many of whom would have died on the battlefield just a generation ago. They live, but they are compromised substantially.

Type of Injuries

Notably, according to Modern Warfare, prior wars “had a higher proportion of thoracic injuries and fewer head and neck injuries. There has been a decreased incidence of wounds to the abdomen since the Persian Gulf War. The percentage of blast-related injuries is now higher.”

The number of injured are estimated by many to be ten and twenty times the number wounded in action.[3]

As would be expected with the dominance of “blast related injuries,” hearing loss, traumatic brain injury (TBI), PTSD and clinical depression, are leading injuries, with hearing loss first.[4] A 2005 Department of Veterans Affairs research paper found that one third of returning soldiers were referred to audiologists due to exposure to blasts, and 72% of them were identified as having hearing loss;[5] a 2013 report by the U.S. Congressional Research Service estimates that 255,330 members of the military suffer from TBI;[6] a 2008 study by the Rand Corp found that 14% of Iraq and Afghanistan Veterans screened positive for PTSD, 14% for major depression, and 19% had a probable traumatic brain injury.[7]

And notably, the VA reports that 37% of the claims it has backlogged at present are from Vietnam Veterans, a great influx of which (260,000) occurred after the VA finally expanded the number of illnesses presumed to be associated with Agent Orange.[8]

VA Backlog

The Center for Investigative Reporting recently released a report[9] (featured on NPR)[10] which found:

  • Despite assurances from the Obama Administration that the VA would be streamlined, “the internal documents show the VA expects the number of veterans waiting – currently about 900,000 – to continue to increase throughout 2013 and top a million by the end of this month [March, 2013].
  • The VA’s internal documents “show that the average wait time for veterans filing disability claims fell by more than a third under President George W. Bush, even as more than 320,000 Iraq and Afghanistan veterans filed disability claims.
  • The documents show delays escalated only after Obama took office and have more than doubled since, as 455,000 more returning veterans filed their claims.”
  • Pointedly, under President Obama “the ranks of veterans waiting more than a year for their benefits grew from 11,000 in 2009, the first year of Obama’s presidency, to 245,000 in December – an increase of more than 2,000 percent.”
  • Although the VA tracks and widely publishes the avg. number of days it takes to process a claim (273 days), that number pointedly does not refer to new claims. The average number of days to process a new claim in Newark is 371.6 days[11]

That amounts to roughly a year and a week for an initial claim in Newark, New Jersey– a very long time to live for a disabled veteran without much needed payments.

And importantly, if a veteran fails to characterize the claim correctly, the appeals process can literally take 2 and 3 years.


[1] Chris Adams, Millions went to war in Iraq, Afghanistan, leaving many with lifelong scars, McClatchy News (March 14, 2013),

[2] Alec. C. Beckley, et al., Modern Warfare, in Lessons Learned from OEF and OIF: Combat Casualty Care (Office of the Surgeon General Department of the Army, 2012), available at .

[3]See Linda J. Bilmes, The Financial Legacy of Iraq and Afghanistan: How Wartime Spending Decisions will Cancel Out the Peace Dividend (2013) citing VBA Office of Performance, VA Benefits Activity, Veterans Deployed to the Global War on Terror (through September 2012) (noting that 56% of veterans deployed have received VA medical facility service and that one in two have filed disability claims— and that 2.5 million have served),;  Dan Froomkin, How many U.S. soldiers were wounded in Iraq? We have no idea, Nieman Foundation for Journalism at Harvard University (Dec. 30, 2011), at

[4] Froomkin, supra at note 5.

[5] Stephen A. Fausti, et al., Hearing health and care: The need for improved hearing loss prevention and hearing conservation practices, 42-4 J. of Rehab. Res. & Dev. 45 (July/Aug. 2005) at

[6] U.S. Congressional Research Service, U.S. Military Casualty Statistics: Operation New Dawn, Operation Iraqi Freedom, and Operation Enduring Freedom, Feb.5, 2013; See also Spencer Ackerman, The Cost of War Includes at Least 253,330 Brain Injuries and 1,700 Amputations, Wired, Feb. 8, 2013,

[7] Rand Corp., Invisible Wounds of War, (2008), available at

[8] Allison Hickey, Balancing the Record on the Claims Backlog, Vantage Point: Dispatches from the U.S. Department of Veterans Affairs (Mar . 19, 2013),

[9] Aaron Glantz, VA’s ability to quickly provide benefits plummets under Obama, Center for Investigative Reporting (March 11, 2013),

[10] Fresh Air, Veterans Face Red Tape Accessing Disability, Other Benefits, Phila. Public Radio (March 18, 2014),


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