The U.S. Department of Health & Human Services Office of Inspector General (OIG) issued a special fraud alert on June 9, 2015, stating that physician compensation arrangements may result in significant liability. Hopefully this is not a surprise to any physician or entity that treats federal health plan beneficiaries. However, given that, historically, OIG regulatory actions largely (although not exclusively) focused on the entity from which a physician received compensation, such as hospitals, laboratories, durable medical equipment suppliers, pharmacies, etc., the June 9, 2015, fraud alert highlights the potential for physician liability in these arrangements.

New Texas Medical Board (TMB) rules effective June 3, 2015, limit the ability to prescribe drugs based only on telephonic consults. The rules also raise questions about the viability of some call-coverage arrangements. Specifically, for a physician prescribing medication, Tex. Admin. Code tit. 22 §190.8 now requires, among other things, a “defined physician-patient relationship” that must include a physical examination performed by the provider face-to-face or in accordance with Tex. Admin. Code tit. 22 ch. 170 rules for telemedicine. Significantly, the limitations do not apply to mental health services, except in cases of behavioral emergencies.

On May 7, 2015, Governor Jay Nixon signed Senate Bill 239 into law and reinstated damage caps for Missouri medical malpractice cases. While Missouri law previously limited damages in wrongful death actions, healthcare providers faced limitless verdicts in all other medical malpractice lawsuits. Not anymore.

Under the new law, plaintiffs cannot recover more than $400,000 for non-economic damages in medical malpractice actions. If the case involves claims of catastrophic personal injury or wrongful death, the cap is increased to $700,000. The term “catastrophic personal injury” is defined by statute to include cases of quadriplegia, paraplegia, loss of 2 or more limbs, brain injuries involving permanent cognitive impairment, irreversible major organ failure, or severe vision loss.

The Anthem breach sent alarm waves through the health care industry and the employer health plan community. With 78.8 million affected individuals for Anthem and 11 million for the companion breach of Premera Blue Cross, the combined size ranks among the largest data breaches in history.

The Anthem and Premera breaches signal a sea change in the threat environment for health plans, a new reality that requires a fresh look at data security. Prudent employers with group health plans should take that fresh look now, by strengthening the data security provisions in their business associate agreements (BAAs) with third-party plan administrators, and also by updating their HIPAA-required security risk assessments.

The state of Georgia reached a civil settlement agreement on April 23, 2015, with Grady Health System based on allegations that Grady incorrectly coded claims for neonatal intensive care unit (NICU) patients, resulting in overpayments by Georgia Medicaid. For more details, read the Georgia Attorney General’s press release announcing the settlement.

Husch Blackwell Partner Winn Halverhout authored a briefing on the emerging use of medical marijuana in pediatric healthcare for the American Health Lawyers Association. The briefing, titled “Legal Aspects of Marijuana Applications in Pediatric Health Care,” addresses the development of state laws and cultural acceptance of marijuana.

The LA Times reported on March 18, 2015, that one of California’s biggest health insurers, Blue Shield of California, had lost its tax-exempt status. The report came after California’s Franchise Tax Board quietly revoked Blue Shield’s state tax-exempt status back in August 2014. One of the biggest reasons for doing so was because of Blue Shield’s huge financial reserves.

Husch Blackwell welcomes two attorneys to its Denver office: Senior Counsel Julie A. Sullivan and Associate Lawson S. Parker II. Sullivan and Parker both join the firm’s Healthcare, Life Sciences & Education industry team.

Sullivan has served as both in-house and external counsel to members of the healthcare industry. She counsels clients on a variety of regulatory and compliance issues, and transactional matters, and has also assisted clients with mergers and acquisitions. Parker assists hospitals, physicians, single and multi-specialty group practices, dentists and other healthcare professionals with respect to their operational, transactional and regulatory compliance matters. He also advises on mergers and acquisitions, joint ventures, the sale of healthcare-related entities and employment matters.

Because the healthcare industry is heavily regulated and complex, most healthcare deals involve a sign-then-close structure; that is, they have a period of time between signing the agreement and the closing date. This built-in period after signing the purchase agreement gives the parties time to obtain necessary approvals or perform necessary pre-closing covenants.