On June 5, 2017, the U.S. Supreme Court held that the employee benefit plans of church-affiliated hospitals and healthcare facilities may be exempt from the federal Employee Retirement Income Security Act of 1974 (ERISA), in Advocate Health Care Network et al. v. Stapleton et al. More background information can be found in our December legal alert on this case.
On May 23, 2017, Texas Governor Greg Abbott signed Senate Bill (SB) 507, expanding the current law dealing with “balance billing.”
Balance billing occurs when an insured patient receives care from a physician, hospital or other healthcare provider, who is not part of a patient’s health plan provider network. The out-of-network provider then bills the patient directly for the portion of medical expenses not covered by insurance, typically at a much higher rate.
In 2009, Texas passed legislation establishing a Texas Department of Insurance (TDI) mediation system aimed at resolving balance billing issues. The 2009 legislation made mediation available to patients who were balanced billed by six types of facility-based providers: radiologists, anesthesiologists, pathologists, ER physicians, neonatologists and assistant surgeons. Effective September 1, 2017, SB 507 expands access to balance billing mediation eligibility to all types of out-of-network providers treating patients at in-network hospitals and other facilities, including freestanding ERs. SB 507 also allows mediation for emergent care balance bills over $500 at any healthcare facility, whether in or out of network. The legislation will cover Texans with PPO plans receiving care from an out-of-network provider at an in-network facility. It will also cover the Teachers Retirement System, in addition to the Employee Retirement System covered by the original legislation.
SB 507 also expands disclosure requirements on network status by health plans, facilities, and other healthcare providers. These new requirements include, among other things, that a bill sent to a patient contain an explanation of the mediation process, and a statement that is substantially similar to the following:
“You may be able to reduce some of your out-of-pocket costs for an out-of-network medical or health care claim that is eligible for mediation by contacting the Texas Department of Insurance at (website) and (phone number, including requiring that the following statement be added to balance bills.”
Providers should become familiar with the new balance billing requirements to determine how they will impact current billing practices. A full copy of SB 507 is available at Texas Legislature Online.
Beginning on June 1, 2017, health care providers of services and suppliers must submit all information necessary for the Centers for Medicare and Medicaid Services (“CMS”) to analyze actual or potential violations of the federal physician self-referral law (the “Stark Law”) using approved forms designed to streamline the CMS Voluntary Self-Referral Disclosure Protocol (the “SRDP”). If you are currently working on a self-disclosure filing for CMS, you must convert that disclosure to this new format or risk CMS rejecting the disclosure in its entirety. The new forms, contained within Form CMS-10328 available here, must be used for all voluntary Stark Law self-disclosures submitted on or after June 1, 2017, except disclosures by physician-owned hospitals and rural providers regarding a failure to disclose physician ownership on the provider’s website or in any public advertisement. Continue Reading Revised SRDP Process Begins June 1
The United States Supreme Court has long upheld the validity and enforceability of arbitration agreements. Thus, it was no surprise when the Court reversed a decision from the Kentucky Supreme Court that declined to recognize arbitration agreements executed by individuals pursuant to powers of attorney. In Kindred Nursing Centers LP. v. Clark, the Court held that family members with powers of attorney may enter into arbitration agreements on behalf of nursing home residents.
In Kindred Nursing Centers, two separate families admitted their elderly family members, (hereafter “the residents”) to a Nursing Home. In both cases, the family members completed admission paperwork on behalf of the residents, pursuant to powers of attorneys. The admission paperwork included an arbitration agreement, which provided that “any and all claims or controversies arising out of or in any way relating to…the Resident’s stay at the Facility” would be resolved through binding arbitration. When the residents subsequently died, their estates brought lawsuits against the Nursing Home. The Nursing Home moved to compel arbitration.
The Kentucky Supreme Court held that the arbitration agreements were invalid. In so holding, the Kentucky Supreme Court purported to create a “clear statement rule.” Under the “clear statement rule,” the Kentucky Supreme Court held that the family members could only enter into arbitration agreements on behalf of the residents, if the powers of attorney expressly gave them the right to enter into arbitration agreements. Because neither power of attorney expressly addressed arbitration agreements, the Kentucky Supreme Court found them insufficient to authorize the family member to waive the residents’ right to a jury. The United States Supreme Court reversed.
On appeal, the United States Supreme Court explained that the Federal Arbitration Act (FAA) makes arbitration agreements valid, irrevocable, and enforceable. While arbitration agreements are subject to generally applicable contract defenses, they cannot be invalidated pursuant to rules that apply only to arbitration agreements. The Supreme Court then held that Kentucky’s “clear statement rule” ran afoul of the FAA because it required arbitration agreements to be expressly authorized by powers of attorney when other contracts did not require such express authorization. This violates the FAA because the FAA requires that arbitration agreements be on equal footing as all other contracts.
The United States Supreme Court then analyzed the specific powers of attorney at issue. The first power of attorney authorized the family member to (among other things) “institute legal proceedings” and “make contracts of every nature in relation to both real and personal property.” On remand, the United States Supreme Court instructed the Kentucky Supreme Court to evaluate whether the forgoing language encompassed the ability to execute arbitration agreements. The second power of attorney authorized the family member to “transact, handle, and dispose of all matters affecting [the resident] and/or [the resident’s] estate in any possible way” including the power to “draw, make, and sign in [the resident’s] name any and all … contracts, deeds or agreements.” The Supreme Court held that this second power of attorney was broad enough to encompass the execution of an arbitration agreement. Thus, the second resident’s arbitration agreement must be enforced.
Kindred Nursing Centers removes any doubt that nursing homes may enforce arbitration agreements executed on a resident’s behalf by their attorney-in-fact, provided that the underlying power-of-attorney provides sufficient contracting authority.
According to an article published by USA Today, nearly $1 trillion in federal cuts to the Medicaid program approved by House Republicans threaten getting low income and special needs children covered by insurance. Concerns are magnified by the Sept. 30 deadline for CHIP reauthorization, which some worry will be used as a bargaining tool to get the House-passed American Health Care Act (AHCA) through the Senate. AHCA would cut $880 billion from Medicaid over a 10-year period, leaving the most vulnerable without coverage. To read the full article, please visit USA Today.
After a month of spirited efforts to accommodate the disparate interests of the Freedom Caucus and the Tuesday Group, Amendments offered by Representatives Tom MacArthur (R-NJ) and Fred Upton (R-MI) facilitated the hurried House passage of H.R. 1628 – – the American Health Care Act of 2017. Passed as a “reconciliation bill” (more on that later), the House voted 217-213 on May 4, 2017, to dismantle the Affordable Care Act (ACA) and make sweeping changes to the nation’s health care system.
Insurers providing health care benefits to federal employees can obtain reimbursement when their insured obtains a tort recovery, despite a state law prohibiting such reimbursement, based on the preemption provision of the Federal Employees Health Benefits Act (FEHBA), pursuant to the U.S. Supreme Court’s decision in Coventry Health Care of Missouri, Inc., fka Group Health Plan, Inc. v. Nevils, issued April 18, 2017.
The decision by the House Leadership to choose not to bring the American Health Care Act (AHCA) to a vote left industry analysts speculating both about the fate of “Obamacare,” and the prospects for narrower reforms. With bipartisan support to reduce prescription drug prices, it appears as though Democrats and Republicans are working on plans to fix drug prices. This tenth article in our series on the effect of a “slow repeal” of the ACA updates our January 12, 2017, article on the pharmaceutical industry and addresses current efforts aimed at reducing drug prices in the U.S.
On March 20th, House Republicans rolled out a number of changes to their bill, the American HealthCare Act (AHCA), seeking to repeal and replace the Affordable Care Act, the healthcare law better known as Obamacare. Although the House Leadership ultimately chose not to bring the AHCA to a vote, this ninth article in our series on the effect of a “slow repeal” of the ACA unpacks the Manager’s Amendment, and offers insights on what may still form the basis for health care legislation.
The U.S. Court of Appeals for the Third Circuit held recently that Title IX of the Education Amendments of 1972 (“Title IX”)—which prohibits sex discrimination in the “education programs or activit[ies]” of entities receiving federal financial assistance—can apply to residency programs at hospitals. The ruling may profoundly impact how hospitals respond to complaints of sex discrimination (including sexual harassment) by resident physicians and necessitate that hospitals comply with federal Title IX regulations and guidance. The ruling also opens the door for residents who experience sex discrimination to sue under Title IX, thereby avoiding the complex administrative exhaustion process required to file a similar claim under Title VII of the Civil Rights Act of 1964, which generally governs sex discrimination in the workplace. For more information on this new development, visit the legal alert authored by Derek Teeter and Lorinda Holloway.