Kaufman and Canoles

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Archive for August, 2011

Tuesday, August 30, 2011

Physician Group Practice Demonstration Results

Earlier this month, the Centers for Medicare & Medicaid Services (“CMS”) announced the fifth year results of the Physician Group Practice (PGP) Demonstration, which was a precursor to and assisted in shaping and forming the Accountable Care Organization (ACO) model that was developed and rolled out to the public for consumption in the Patient Protection and Affordable Care Act (PPACA).  Under the PGP Demonstration, the participating physician group practices were afforded an opportunity to earn incentive payments based on meeting certain criteria for the quality of care delivered to the recipients of their professional services in addition to savings generated for the Medicare program. 

CMS reported that, of the ten total physician group practices participating in the PGP Demonstration, four such groups will share $29.4 million of the $36.2 million in total program savings generated in the fifth year of the five-year PGP Demonstration.  In addition, CMS reported that with respect to the 32 quality measures used to determine a physician group practice’s quality of care, seven of the ten participating physician group practices achieved the benchmarks set forth by CMS for all 32 measures, while the remaining three participating physician group practices achieved the quality benchmarks in at least 30 of the 32 quality measures.  This is in contrast to the first year of the PGP Demonstration in which only two of the ten participating physician group practices achieved the quality benchmarks set by CMS in all of the quality measures.  Over the course of the five-year PGP Demonstration, seven of the ten participating physician group practices have shared in $110 million in savings generated for the Medicare program.  Further, each of the physician group practices realized increases in quality scores for quality measures pertaining to heart failure, coronary artery disease, diabetes, cancer screening, hypertension and preventative care. 

Additionally, CMS announced that all ten of the participating physician group practices are participating in CMS’ PGP Transition Demonstration which is a follow up two year demonstration that began on January 1, 2011.  While the ACO regulations issued by CMS were inordinately complex and difficult for entities to comply with, one thing that seems fairly clear from the results of the five-year PGP Demonstration is that quality outcomes and reductions in costs to the Medicare program are achievable when physicians and physician groups are incentivized to achieve certain quality benchmarks.  It will be interesting to track the progress and results with respect to the PGP Transition Demonstration over the next couple of years. –Aaron J. Ambrose

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Monday, August 29, 2011

Building Defenses Against Threat of Retaliation Claims

This past fiscal year, more charges of illegal retaliation were filed with the Equal Employment Opportunity Commission (“EEOC”) than any other type of charge.  This marked the first time in EEOC charge-handling history that race discrimination charges were not the most frequently filed claim.  Also, given recent federal cases expanding retaliation rights, employees and their attorneys appear to have recognized that retaliation claims are more likely to be successful at trial than many standard discrimination claims.

With the current legal environment, employers are well-advised to make sure they have updated anti-retaliation policies in place.  Such policies are often included in employee handbooks as part of policies outlining complaint procedures wherein employees are assured that they will not suffer any retaliation or discrimination for filing an internal complaint or for complaining to governmental authorities about some potential violation of the law.  Other steps employers should consider include:  providing training to supervisors who may not understand the scope of retaliation legal protection; maintaining confidentiality and otherwise conducting thorough investigations whenever an employee makes a protected complaint; and carefully considering the timing of any discipline of employees who have recently filed protected complaints.
David J. Sullivan

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Thursday, August 25, 2011

How Successful is the Current Uniform Dispute Resolution Policy?

The Internet Corporation for Assigned Names and Numbers (“ICANN”) recently sought comment on the current state of the Uniform Dispute Resolution Policy (“UDRP”).  The UDRP dictates how domain name disputes are resolved, and all domain name registrars and anyone who registers a domain name must agree to follow the UDRP for disputes.

In response to the request for comment, the National Arbitration Forum (“Forum”) submitted a five page letter commenting on the current state of the UDRP.  The Forum is one of the entities which resolves disputes under the UDRP, and it has handled over 16,000 domain name disputes.  The Forum’s response to ICANN’s request for comment provides interesting insight into its administration of disputes under the UDRP. 

Kristan B. Burch is Co-Chair of the firm’s Intellectual Property Law and Franchising Practice Group.  She regularly serves as counsel in intellectual property matters in the United States District Court for the Eastern District of Virginia.  –Kristan B. Burch

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Wednesday, August 24, 2011

Heightened Sanctions for Syria

On August 18, 2011, President Obama signed an executive order imposing additional sanctions on Syria.  These sanctions block all assets of the Syrian Government subject to the jurisdiction of the U.S.  In addition, all U.S. persons are prohibited from exporting or reexporting services to Syria and operating or investing in Syria.  All imports of Syrian-origin petroleum or petroleum products are banned, and U.S. persons are prohibited from having any dealings in or related to Syrian-origin petroleum or petroleum products.  These sanctions will immediately supplement the strict sanctions already imposed on Syrian exports/imports.  Along with these additional sanctions, the Treasury Department’s Office of Foreign Assets Control (OFAC) also added several Syrian energy companies to the List of Specially Designated Nationals.  U.S. persons must refrain from engaging in any transactions with such parties or risk the imposition of a hefty penalty.

Companies are still welcome to apply for a license if they wish to engage in a prohibited transaction.  In fact, OFAC has just promulgated a series of general licenses to authorize certain transactions with Syria that are now otherwise prohibited due to the new sanctions.  These general licenses are for diplomatic services, legal services, bank service charges, services incidental to authorized exportation, internet based services, and personal remittances.  If you would like more information on how to apply for one of these licenses, please feel free to contact me at recoley@kaufcan.com. –R. Ellen Coley

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Monday, August 22, 2011

Senate Finance Committee Report Inquires into Physician-Owned Distributors

Senator Orrin Hatch recently released a report by the Senate Finance Committee offering an overview of key issues and potential areas for Congressional oversight concerning Physician-Owned Distributors (“PODs”).  After the issuance of this report, the Chairman and Ranking Members of the Senate Finance Committee sent letters to the Centers for Medicare & Medicaid Services (“CMS”) and the United States Department of Health and Human Services (“HHS”) requesting they address the concerns voiced in this report. 

PODs normally consist of a small group of physicians who form these companies to distribute and sometimes manufacture medical implantation devices used in surgery. The report emphasized that because these very physicians usually work at the hospitals to which these PODs sell their products, they believed there is a significant risk of fraud and abuse.  The Committee asserted that the very nature of PODs creates financial incentives for physicians to use the devices distributed by their PODs as much as possible, whether or not this is the most efficient use of hospital funds, in their patients’ best interests, or the highest quality products.

The report asserted instances where the number of certain surgeries spiked with the advent of a new POD device that was integral to such operations. Further, it offered anecdotal stories where physicians redid surgeries so as to use their own POD devices, or engaged in several surgeries that all required POD devices on elderly patients, despite the high risk that numerous surgeries pose to this demographic.

As a result of this report, the Senate is calling for more regulation to clarify the environment in which PODs operate. Although the HHS has issued written guidance concerning PODs expressing the need to carefully review and scrutinize these entities under fraud and abuse laws, it declined to specifically regulate PODs under the Stark Law.  In its report, the Senate Finance Committee has called for HHS and CMS to take several measures to increase scrutiny of PODs.  The Committee would like to see HHS and CMSinquire into existing PODs and their current ownership structures in order to develop additional regulatory guidance and recommendations for further regulation of PODs. Further, the Committee believes that PODs should be included within the final definition of “applicable manufacturers” under the Sunshine Act so that these POD entities’ activities will be more transparent and subject to the Sunshine law’s reporting requirements. 

For more information please refer to the Senate Finance Committee’s Report.
Christopher L. McLean

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Wednesday, August 17, 2011

FMLA Scenario 1.0

Some of the most common questions from human resource professionals involve employees taking leave under the Family and Medical Leave Act (“FMLA”).  Therefore, this blog will routinely address some of the trickier situations that can arise under the FMLA. 

Today’s situation: A husband and wife work for the same employer.  The employer is covered by the FMLA and both the husband and wife satisfy the requirements for taking covered leave.  Yesterday, the wife gave birth to a baby.  Both the husband and the wife request leave under the FMLA to care for their newborn child.  How much leave are they entitled to?

The FMLA regulations explain that a husband and wife who are eligible for FMLA leave and are employed by the same covered employer may be limited to a combined total of 12 weeks of leave during any 12-month period if the leave is taken for birth of the employees’ son or daughter or to care for the child after birth, for placement of a son or daughter with the employees for adoption or foster care or to care for the child after placement, or to care for the employees’ parent with a serious health condition.

The regulations also explain that if the husband and wife both use a portion of the total 12-week FMLA leave entitlement for either the birth of a child, for placement for adoption or foster care, or to care for a parent, the husband and wife would each be entitled to the difference between the amount he or she has taken individually and 12 weeks for FMLA leave for other purposes. For example, if each spouse took 6 weeks of leave to care for a healthy, newborn child, each could use an additional 6 weeks due to his or her own serious health condition or to care for a child with a serious health condition. The regulations also note that many state pregnancy disability laws specify a period of disability either before or after the birth of a child; such periods would also be considered FMLA leave for a serious health condition of the mother, and would not be subject to the combined limit.
David J. Sullivan

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Tuesday, August 16, 2011

Technology Transfer Lessons from Stanford v. Roche

In its June, 2011 decision in Stanford v. Roche, the U.S. Supreme Court ruled that the Bayh-Dole Act, governing federal funding of university research, does not override the rule that invention rights belong to the inventor, not to his or her employer.  The facts of the case are interesting, in that they involve work by the inventor, a Stanford University employee, for a private company that was actually arranged by the University, and competing assignments of patent rights stemming from the work to both Stanford and the private company.  The outcome of the case – that the assignment to the private company by the inventor gave it the right to exploit his invention without infringing any rights of Stanford – turned on the language in the competing assignment documents, and the court’s holding with regard to the effect of the Bayh-Dole Act on inventors’ rights. 

While many technology transfer professionals have relied on assumed ownership by universities of inventions conceived or reduced to practice with federal funding, the Stanford v. Roche decision makes clear that this is not the case.  In doing so, it underscores the need for clear and redundant reduction to writing of university researchers’ assignments of patent rights in inventions made in the course of their work for or at the direction of the university.  It also gives important guidance on exactly how such assignments of intellectual property rights in employment agreements, confidentiality/nondisclosure agreements, intellectual property policy documents, invention disclosure forms and other documentation of the university’s rights in patentable inventions by its researchers and faculty should be written.  The Supreme Court’s decision should be mandatory reading for all university technology transfer professionals. –Robert E. Smartschan

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Friday, August 12, 2011

Update on Challenges to Obamacare

On August 12, 2011, the Eleventh U.S. Circuit Court of Appeals issued a ruling holding the individual mandate provision of the Patient Protection and Affordable Care Act, passed in 2010 (“Obamacare”), to be unconstitutional.  The divided three-judge panel struck down the requirement that Americans must carry health insurance or face penalties.  The ruling did not go so far as to invalidate Obamacare entirely.

The Eleventh Circuit ruling follows the June 29, 2011 Sixth Circuit ruling which upheld the constitutionality of Obamacare, which was the first appeals court decision to rule on a challenge to the law.  Appeals still remain pending in Richmond (4th Circuit), and Washington, D.C. (D.C. Circuit). 

The Eleventh Circuit ruling opens the door to the Supreme Court granting certiorari to resolve the conflicting decisions in different circuits regarding the constitutionality of the individual mandate provisions of Obamacare.  The Thomas More Law Center has already filed a petition for certiorari with the United States Supreme Court on July 26, 2011.  However, the Supreme Court is unlikely to grant certiorari until the remaining circuits rule, which most likely will not occur until 2012.  –Christopher L. McLean

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Friday, August 12, 2011

CMS Proposes Payment Policy and Rate Changes Under the Medicare Physician Fee Schedule for 2012

Centers for Medicare & Medicaid Services (“CMS”) proposed its update to the Medicare Physician Fee Schedule (“MPFS”) for the calendar year of 2012. Under this plan, more than one million providers of vital health services receive compensation for the care they provide Medicare’s beneficiaries. It proposes several things, but most importantly calls for a 29.5% percent reduction in payment rates to physicians and nonphysicians under this plan according to the statutory sustainable growth rate formula (“SGR”).  CMS has voiced its displeasure with such a cut in reimbursement to such providers and asserts that it is not a correct valuation of their services. Its hands are tied however, because this formula can only be changed through legislation. Congress has confronted this problem every year since 2003, and has each year enacted legislation to chip away at these large reductions, saving providers from a large reduction in reimbursement for services provided to Medicare beneficiaries.  Fortunately for Medicare beneficiaries and the providers treating such beneficiaries, Congress is again expected to implement legislation as a temporary fix to decrease this severe cut in reimbursement.

The proposed rule sets out other notable changes that all purport to ensure that Medicare reimburses physicians accurately for the services provided.

In what could be the most significant change in reimbursement methodology, the proposed rule aims to expand Medicare’s multiple procedure payment reduction (“MPPR”) policy for advanced diagnostic imaging services. Currently, the MPPR policy applies only to the technical component of diagnostic imaging services and not to the professional component.  Upon implementation of the proposed rule, CMS will, in the event of multiple diagnostic imaging procedures performed on the same date of service, reimburse at 100% of the fee schedule amount for technical and professional components of the highest paid procedure, but will only reimburse at 50% of the fee schedule amount for both technical and professional components of any other diagnostic imaging procedure performed on the same date of service.

CMS is accepting comments on the proposed rule until August 30, 2011 and will review and respond to all comments by November 1, 2011. For more information, please click here to see the entire proposed rule. –Christopher L. McLean

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Friday, August 12, 2011

A New Approach to Internet and Social Media Searches

A recent article in the New York Times examined a start-up company’s plan to help employers use internet searches to uncover information about applicants, ostensibly avoiding the legal risk associated with such activities.

Social Intelligence is a California company that scours the internet for its employer clients, digging up information on its clients’ job applicants, then scrubs the data and completes a background report on the applicant that does not include any protected class information.  According to the article, the Federal Trade Commission has determined that Social Intelligence complies with the Fair Credit Reporting Act.  Most importantly, Social Intelligence claims to insulate employers from discrimination claims by removing any references to a person’s religion, race, marital status, disability, and other information protected under federal employment laws.

While not every employer will retain the services of a third party to perform internet searches, it is important to be aware of the risks of conducting such searches.  It is also important to weigh the risks against the potential rewards, as much of the information found on the internet may not be job related at all.  For these reasons, employers should evaluate their options and implement a company policy that avoids unnecessary risks. 
David J. Sullivan

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