Firm News

Hooper, Lundy & Bookman Negotiates $700 Million Settlement for Hospitals

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HLB Announces New Senior Counsel Appointments: HLB is pleased to announce that Karl Schmitz in Los Angeles and Matthew Clark in San Francisco have been named Senior Counsel of the firm.

2012 Southern California Super Lawyers: HLB is pleased to announce that Robert Lundy, Lloyd Bookman, Patrick Hooper, Charles Oppenheim and Bradley Tully have been selected as 2012 Southern California Super Lawyers

Court Halts Hospital Medi-Cal Rate

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Court Order — Medi-Cal Rate Litigation 12-11

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‘U.S. Supreme Court — Medicaid Intervenors’ Brief

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HLB Sues California on Behalf of Hospitals

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Chambers USA

Chambers USA has once again ranked HLB in the top tier of California Health Law Firms. The directory is published by the prestigious Chambers & Partners, which produces law firm directories of top-rated law firms throughout the United States and Europe, ranking law firms primarily based on outside interviews with general counsel, high-profile entrepreneurs and other significant purchasers of legal services.

This year HLB is one of only three firms to receive top-tier recognition by Chambers. In addition, a number of HLB attorneys were recognized by Chambers as top health law attorneys in California, Washington, D.C. and nationally.

Robert Lundy, Lloyd Bookman, Patric Hooper, Bradley Tully, John Hellow, Charles Oppenheim, Steven Lipton, Clark Stanton and Paul Smith were all ranked as top California health law attorneys. Robert Roth was recognized as a top Washington, D.C. health law attorney. Additionally, Lloyd Bookman, Steven Lipton and Patric Hooper were recognized as top health law attorneys nationwide.

To view the full Chambers USA profile of the firm, go to: http://www.chambersandpartners.com/USA/Editorial/42795

Legal 500 Awards

HLB was also recently named as one of the top 500 law firms in the country by the Legal 500 United States Directory. In developing the directory, researchers interview CEOs, CFOs and general counsel with a focus on the national capabilities of law firms.

Super Lawyers

Super Lawyers has recognized the following attorneys as “2011 Super Lawyers,” based on peer recognition and professional achievement:

Southern California:  Patric Hooper, Robert Lundy, Lloyd Bookman, Bradley Tully, John Hellow, Laurence Getzoff, David Henninger, Charles Oppenheim, Daron Tooch, Linda Kollar and Mark Hardiman.

San Diego:  Cary Miller

Rising Stars

HLB Attorneys David Hatch, Hope Levy-Biehl, John Mills, Karl Schmitz and Devin Senelick have been recognized in the official Super Lawyers Rising Stars Edition for 2011, recognizing Southern California Rising Stars.

HOOPER, LUNDY & BOOKMAN EXPANDS SAN FRANCISCO OFFICE

LOCAL HEALTH LAW EXPERTS JOIN FIRM AT CRITICAL TIME FOR PROVIDERS

Hooper, Lundy & Bookman, P.C., is pleased to announce that four veteran health law attorneys have joined the firm as partners in the firm’s San Francisco Office.

The four attorneys – M. Steven Lipton, Harry Shulman, Paul T. Smith and W. Clark Stanton – were most recently partners in the San Francisco health care practice of Davis Wright Tremaine (DWT) and officially joined HLB effective January 1, 2011.

“We are pleased to have these four exceptional lawyers join our team of health law experts serving Northern California hospitals, health systems and medical groups,” said Mark Reagan, Managing Partner of HLB’s San Francisco Office.

Added firm Managing Partner Robert Lundy: “The addition of Steve, Harry, Paul and Clark to the firm ensures that we will have the ability to maintain our dedication to excellence as we meet the growing needs of providers in the face of new and ongoing health care reform measures.”

Following is a brief overview of each of the attorneys joining HLB:

M. Steven Lipton has been practicing health law for more than 33 years. The focus of his practice is general hospital representation, including hospital operations, physician contracting, regulatory and compliance matters and health care transactions. His practice includes corporate governance, licensing, fraud and abuse, and representing PACE organizations. He also provides compliance training and counseling on patient anti-dumping laws. He regularly writes and speaks on issues related to his practice. Mr. Lipton has been recognized as a leading lawyer nationally by Chambers USA, a “Best Lawyer in America” in Health Care Law by Woodward/White and a “Northern California Super Lawyer” in Health Care Law by Law & Politics. Mr. Lipton may be reached at 415.875.8490 or slipton@health-law.com. 

Harry Shulman has been practicing health law for more than 35 years. He represents multi-institutional health systems, hospitals, medical staffs, independent practice associations and other types of physician organizations on a wide variety of issues including those related to peer review investigations and hearings, self-governance, clinical research, bioethics and consent. Mr. Shulman has authored numerous articles and consulted on published manuals and guidebooks on professional credentialing and peer review. He has been a speaker on medical staff issues for a variety or organizations. He has also been recognized as a “Best Health Care Lawyer in America” by Woodward/White, as well as a “Northern California Super Lawyer” by Law & Politics. Mr. Shulman may be reached at 415.875.8480 or hshulman@health-law.com.

Paul T. Smith has been practicing health law for more than 25 years. He advises health care providers on corporate formation and governance, joint ventures, financing, regulatory compliance, and information privacy security. In addition, he represents technology companies in transactional, financing and licensing matters, and data privacy and security. He was co-chair of DWT’s Health Information Technology and HIPAA Practice. He is author of the chapter on health information privacy in the book Privacy Compliance and Litigation in California, published by the State Bar of California. He regularly writes and speaks on issues related to his practice. Mr. Smith has been recognized as a leading California Health Care Lawyer by Chambers USA, a “Best Health Care Lawyer in America” by Woodward/White, as well as a “Northern California Super Lawyer” by Law & Politics. Mr. Smith may be reached at 415.875.8488, or psmith@health-law.com.

W. Clark Stanton has been practicing health law for more than 27 years. He represents hospitals and other health care providers, as well as medical staffs. He advises clients on operational and regulatory matters, including patient treatment matters and medical privacy and HIPAA. In addition, he has served as a hearing officer in medical staff hearings. Mr. Stanton writes regularly and has made numerous presentations on issues related to his practice. Mr. Stanton has been recognized as a leading California Health Care Lawyer by Chambers USA, and a “Northern California Super Lawyer” by Law & Politics. Mr. Stanton may be reached at 415.875.8489, or cstanton@health-law.com.

Kitty Juniper Joins Hooper, Lundy & Bookman

Health Law Expert Expands Firm Expertise in Retail Healthcare

Hooper Lundy & Bookman, PC, (HLB) is pleased to announce that Kathleen “Kitty” Juniper has joined the firm as a partner in the firm’s San Diego Office.

Most recently a partner at Juniper Sanderson Wiggins, LLP, Ms. Juniper brings with her more than 25 years of experience representing health-related businesses.

In her national health law practice, Ms. Juniper assists clients with business transactions and operations, new products and services, regulatory matters and government approvals. She specializes in issues related to managed care, retail health, licensing, advertising, privacy, contracts, compliance and business structures.

Ms. Juniper may be contacted at kjuniper@health-law.com or 619.744.7314.

RECENTLY PUBLISHED: 

“Welcoming Accountable Care Organizations to the Healthcare Landscape:  What Healthcare Lawyers Need to Know” by Robert W. Lundy, Jr. and David A. Hatch.  California Health Law News, Summer 2010 Edition

“Hospital Compliance Manual for California Hospitals” written by Hooper, Lundy & Bookman attorneys and published by the California Hospital Association.  For more information or to order, go to: http://calhospital.org/compliance

RECOGNITION AND AWARDS: 

Lloyd Bookman has been recognized as one of the Top 100 Lawyers in California by the Daily Journal Corp.

Daron Tooch has joined the Editorial Advisory Board of BNA’s Health Insurance Report

Physicians Providing In-Office Ancillary Services Must Meet New Disclosure Obligations That Are Likely To Be Effective January 1, 2011

The recently passed Affordable Care Act of 2010 (“ACA”) mandates that referring physicians or medical groups that provide MRI, CT, PET (or any other designated health services specified by CMS) under the Stark law’s In-Office Ancillary Services (“IOAS”) exception inform patients in writing at the time of their referral that the same services may be obtained from other “suppliers,” and identify a list of such suppliers who are located in the area in which the patient resides.  ACA, however, left open a number of issues regarding these new disclosure requirements, which CMS proposed to clarify in its 2011 Medicare Physician Fee Schedule Proposed Rule (the “Proposed Rule”), published on July 13, 2010.  The clarifications proposed by CMS are largely beneficial to physicians and physician groups (compared to the statutory wording in ACA), and are discussed in greater detail below.

Likely January 1, 2011 Effective Date

While ACA was passed on March 23, 2010, it provides that the new IOAS disclosure requirements will apply to “services furnished on or after January 1, 2010.”  This creates the odd potential for retroactive application of new disclosure requirements to services provided by physicians before March 23, 2010.  Fortunately, CMS is proposing that the new disclosure requirements apply only to specified imaging services furnished by physicians on or after the effective date of the final regulations, which CMS has proposed to be January 1, 2011.

Disclosure Requirements

As noted above, ACA requires physicians who provide specified imaging services (or other specified designated services) to provide an appropriate written disclosure to patients “at the time of the referral,” and list alternative “suppliers” (as that term is defined in the Medicare law) who furnish the same services and who are located in the area in which the patient resides.  However, ACA leaves unanswered a number of questions, such as the scope of applicable services, form of written disclosure, nature and number of suppliers to be listed and the definition of the patient’s area of residence.  CMS has proposed to clarify these issues under the Proposed Rule.

Scope of Services and Form of Disclosure

With respect to the scope of applicable services, CMS proposes to limit the new disclosure requirements to the imaging services identified in ACA, as well as such other radiology or imaging services included in the designated health services category specified by CMS (e.g. x-ray).  With respect to the form of the disclosure, CMS proposes that the disclosure be written in a manner sufficient to be reasonably understood by all patients, and indicate to the patient that the applicable services may be obtained from a person other than the referring physician (or his or her group practice).  CMS further proposes to prohibit including anything in the written disclosure which may indicate to the patient that he or she must receive the services from an alternative supplier listed in the disclosure if the patient chooses not to receive such service from the referring physician (or his or her group practice).

The Nature and Number of Suppliers and The Patient’s Area of Residence

Under the Proposed Rule, CMS proposes to limit the list of alternative suppliers to “suppliers” as defined in the Medicare law, which would exclude hospitals from being listed as an alternative supplier.  However, CMS has requested comments from the public regarding whether the inclusion of other types of providers, such as hospitals, would benefit patients choosing an alternative entity for services.

ACA is also silent regarding the number of alternative suppliers which must be listed by physicians in the disclosure statement, and does not define the patient’s “area” of residence.  On a hopeful note, CMS has indicated that it believes that requiring an original written notice of alternative suppliers based upon the patient’s residence is impractical and will present a significant administrative burden on physicians practicing in a solo or group practice.  Accordingly, CMS proposes limiting the disclosure statement’s alternative list of suppliers to at least 10 alternative suppliers that are located within a 25-mile radius of the referring physician’s office (not the patient’s residence).

For those physicians or group practices with fewer than 10 alternative suppliers within a 25-mile radius, CMS proposes that the written disclosure list all of the alternative suppliers located within such 25-mile radius.  In those cases in which there are no alternative suppliers located within the 25-mile radius, CMS proposes that the referring physician not be required to provide the patient with a list of alternative suppliers, although the physician must still disclose to the patient that he or she may receive the services from another supplier.

Additional Supplier Information and Documentation

Under the Proposed Rule, CMS also proposes that the disclosure statement include the name, address and telephone number of each alternative supplier, as well as the distance between each alternative supplier and the referring physician’s office at the time of the referral.  In order to document compliance, CMS proposes to require a record of the patient’s signature on the written disclosure statement be maintained in the patient’s medical record.

Existing State Disclosure Requirements

Referring physicians who provide services under the IOAS exception should also be mindful that, in addition to the new disclosure requirements imposed by ACA, they may already be subject to existing written disclosure requirements under state law.  For example, under Sections 650.01(f) and 654.2 of the California Business and Professions Code (“Sections 650.01(f) and 654.2”), California physicians who refer patients to organizations in which they have a financial interest must disclose their financial interest to the patient in writing at the time of referral.

Section 654.2’s disclosure obligation, can be satisfied either through posting a conspicuous disclosure statement at a common or registration area or by providing the patient with an individual written disclosure statement.  If the final rule under ACA is similar to the Proposed Rule, posting a conspicuous sign will not satisfy a referring physician’s disclosure obligations, since a copy of a written disclosure statement with the patient’s signature would be required to be maintained in the patient’s medical record.

Those wishing to provide CMS with comment on the Proposed Rule must do so no later than August 24, 2010.

If you have any questions regarding ACA’s new disclosure requirements or how they may affect your business arrangements, please feel free to contact David Henninger, Charles Oppenheim, David Hatch or Karl Schmitz at (310) 551-8111 in the Los Angeles office; Mark Johnson at (619) 744-7301 in the San Diego office; Stephen Phillips at (415) 875-8508 in the San Francisco office; or Robert Roth at (202) 587-2590 in the Washington, D.C. office.

Facility Claims Not Included in United Healthcare Class Action Settlement for Underpaying Professional Provider Claims, Court Rules

(Los Angeles) – A federal court in New York, overseeing a proposed class action settlement against United Healthcare for underpaying professional provider claims, has confirmed that the settlement does not cover claims for services and supplies rendered by facilities.

The order came in response to a request of the court from Hooper, Lundy & Bookman, P.C. (HLB), following United’s attempt to assert that some of the claims in a lawsuit pending in Los Angeles federal court on behalf of all ambulatory surgery centers (ASCs) in the country were covered by the proposed settlement in New York.

Ultimately, the New York court confirmed that, not only does the New York settlement exclude ASCs, it excludes hospitals and other types of facilities.  The result is that facilities throughout the country still have the right to pursue United for underpaying their claims for their services and supplies.

The issue arose when United sent class action notices to several ASCs, creating  confusion about whether the settlement in the New York released claims for services provided by ASCs and other facilities. United initially refused to stipulate that the New York lawsuit only applied to claims by professional providers, and not to facility providers. United argued that certain types of facility claims were covered by the New York settlement, including  bills on certain forms, bills using certain codes, and bills for drugs submitted in certain ways.

What began as a request on behalf of ASCs, expanded to include similar requests by the California Hospital Association (CHA), which represents the largest number of hospitals in any state, and other providers.

“United made this order necessary by sending out unclear class action notices to providers about the scope of what was being released and then refusing requests to clarify that facilities were outside the scope of the New York settlement. Only after a formal request and hearing by the federal court in New York on the issue, was United willing,” explained Glenn E. Solomon, co-lead counsel for the ASCs and CHA.  ”It became apparent before and during the court hearing that United was hoping to obtain releases for facility services and supplies through the class action, even though no facilities were parties to that class action.”

AMA Case

The New York case involves professional claims paid using United’s flawed Ingenix system, and certain other pricing systems used by United.  The case was pursued by the American Medical Association (AMA), along with several professionals, for compensation.

“The AMA did a good job representing professional provider members,” said Daron Tooch, co-lead counsel for the ASCs. ”But the AMA never claimed to represent the interests of facilities as to their separate underpaid claims for their services and supplies.”  Although both the New York and the Los Angeles lawsuits involve underpayments by United, the Los Angeles case relates only to services and supplies provided by ASCs.

ASC Case

When the Los Angeles action began, it was alleged that United paid ASCs based on the same flawed Ingenix system, based in part on United having represented to ASCs that it had used Ingenix for this purpose. Through discovery, however, HLB discovered that United actually paid most ASC claims based on other methods,  which appear to be even more flawed than the Ingenix system.

The amended complaint filed in Los Angeles details how United represented in its Evidences of Coverage (EOCs) that it would pay ASC claims based on what is known as the “usual, customary and reasonable” (UCR) charges; represented in its Explanations of Benefits (EOBs) that it paid ASC claims based on “reasonable charges” — i.e, a shorthand for UCR; and represented during appeals that ASC claims had been priced using the Ingenix system.  But United now admits that it really paid most ASC claims based on a multiple of either contracted rates or Medicare rates, which are not systems that even consider the provider’s charges, whether reasonable or otherwise.  “At least the Ingenix system purported to be based on UCR data, whereas the methods actually used to pay ASC claims appear to be entirely detached from charges,” explains Solomon.

As a result of the order, ASCs, hospitals and other facilities that may have received class action settlement notices from United need not write-off their underpaid claims for their services and supplies. The rights of facilities to pursue underpayments for their own facility services and supplies are retained.

For further information, please contact:

About Hooper, Lundy & Bookman, P.C.: HLB has obtained over $1 billion on behalf of its provider clients, which include hospitals, surgery centers, dialysis companies, medical groups, doctors, laboratories, nursing homes and other providers in the health care industry. HLB also routinely assists providers with a variety of complex health care issues, against managed care payors, government entities, and others.  The firm’s litigation, business, and regulatory departments provide a full range of legal services to the provider community.  With clients in all 50 states, and offices in Los Angeles, San Francisco, San Diego, and Washington, D.C., HLB is the largest law firm in the country dedicated solely to the representation of health care providers and suppliers. For more information, visit the firm’s website at www.health-law.com.

2010 Commonwealth Fund Report Ranking

HLB Ranks in Top Tier of Latest Chambers Review of Leading Health Law Firms

Hooper, Lundy & Bookman, Inc., has once again been named one of the top four health care law firms in California and one of the leading health care law firms in the country, according to the latest edition of Chambers USA. The directory is published by the prestigious Chambers & Partners, which produces law firm directories of top-rated law firms throughout the United States and Europe, ranking law firms primarily based on outside interviews with General Counsel, high-profile entrepreneurs and other significant purchasers of legal services. In addition to the firm ranking, six HLB attorneys were recognized as top performers in California, two California attorneys — Lloyd Bookman and Patric Hooper -¬were recognized as top performers in the country and one attorney was recognized as a top performer in Washington, D.C.

Following is the text of the firm’s profile, reprinted with permission of Chambers & Partners, USA. We thank all of our clients and friends who contributed to the Chambers review.

THE FIRM: This California-based healthcare boutique is renowned for its excellent Medicare and Medicaid reimbursement work. The firm provides a comprehensive array of services ranging from compliance and regulatory advice to transactional support for healthcare providers. Clients include hospitals and health centers, government entities, long-term care providers and trade associations.

Sources Say: “This top-end practice is especially good in reimbursement work.”

KEY INDIVIDUALS: Lloyd Bookman is hailed as “one of the top national experts on medical reimbursement.” Patric Hooper stands out for his regulatory work, and is praised for his experience and “invaluable perspective on regulations.” Robert Lundy is “focused, responsive and creative” in his handling of business transactions, including joint ventures and the structuring of physician organizations. Bradley Tully”really knows the regulatory landscape.” He specializes in Medicare/Medicaid, fraud and abuse, anti-kickback and physician self-referral issues. John Hellow is highly praised for his excellent defense of providers in Medicare disputes and government reimbursement matters. Charles Oppenheim is well regarded for his work on anti-kickback and Stark Law issues for a variety of healthcare provider clients. Editor’s Note: Robert Roth, who joined the firm as managing partner of the firm’s Washington, D.C. office in May, is noted by Chambers as a top health law attorney in Washington, D.C.

Robert Lundy and Lloyd Bookman Receive Mathies Award

Partners in Care Foundation (PIC) has honored HLB founding partners, Robert Lundy and Lloyd Bookman “for their significant contributions to advance the field of health law and to changing the shape of health care in California.’

Mr. Lundy & Mr. Bookman received PIC’s Mathies Award at the foundation’s Vision & Excellence in Health Care Leadership Tribute Dinner held May 3 at the Beverly Hills Hotel.

According to PIC, the Mathies award is given each year in recognition of innovation and creative leadership in the professional health care community for dedication and accomplishments that have significant impact on improving health care. The award was initiated and named in honor of PIC’s first award winners, founding Board Chair, Dr. Allen Mathies and Weta Mathies.

Practical Effects of Sect. 111 on Medical Malpractice

Presentation

Hooper, Lundy & Bookman Opens Washington, D.C. Office at Critical Time for Health Care — Veteran Health Law Expert Robert Roth Joins Firm

(Los Angeles) — Veteran health law attorney Robert L. Roth has joined Hooper, Lundy & Bookman (HLB) as managing partner of the firm’s newly-opened Washington, D.C. office.

“We are very pleased that Bob Roth has joined us with the opening of our Washington, D.C. operation,” said HLB Managing Partner Robert W. Lundy. “His unique expertise and successful representation of health care providers complement the breadth and depth of experience among our firm-wide health law specialists. With the recent enactment of health care reform and the expanding role of the federal government, we believe it is essential to have a Washington, D.C. presence. Bob’s established practice and contacts at the Washington, D.C. level will serve our clients firm-wide.”

Formerly a partner with Crowell & Moring’s Washington, D.C. Health Care Group, Mr. Roth brings with him more than 24 years of health law experience in a 27-year legal career that includes 11 years of public service at both the state and federal levels. Before entering private practice in 1993, Mr. Roth served as an attorney for the Health Care Financing Administration (subsequently renamed the Centers for Medicare and Medicaid Services) in the United States Department of Health and Human Services and, previously, as an Assistant Attorney General for Maryland’s Department of Health and Mental Hygiene and Counsel to the Constitutional and Administrative Law Committee of the Maryland General Assembly and the Commission to Revise the Annotated Code of Maryland.

In private practice, Mr. Roth represents a broad range of providers, including hospitals, medical groups, DME suppliers, long-term care facilities, psychiatric hospitals and imaging centers. Mr. Roth provides litigation representation and counsels his clients on Medicare and Medicaid payment, compliance and enforcement matters; licensing; coordination of benefits; and other health care regulatory issues.

In the Medicare reimbursement arena, Mr. Roth is best known for successfully arguing Monmouth Medical Center/Staten Island University Hospital v. Thompson, 257 F.3d 807 (D.C. Cir. 2001), which led to 253 lawsuits involving more than 600 hospitals consolidated under the case entitled In Re: Medicare Reimbursement Litigation. Mr. Roth was one of four members of the Plaintiffs’ Coordinating Counsel, which helped negotiate a settlement of more than $665 million to resolve these lawsuits.

In addition to his practice, Mr. Roth is widely respected in his peer community, holding leadership positions with the American Bar Association and American Health Lawyers Association. A frequent writer and speaker, he also serves on the Advisory Board of BNA’s Health Law Reporter and Medicare Report and the CCH Medicare & Medicaid Guide. Since 1984, he has also been teaching “Legislation” as an Adjunct Professor of Law at the University of Baltimore School of Law.

Mr. Roth is ranked by Chambers USA in the area of health law and has been recognized by Nightingale’s Healthcare News as both an outstanding health care litigator and fraud and compliance lawyer.

“I am thrilled to join a law firm that specializes completely in health care law as my clients grapple with the opportunities, risks, and complexity of the new health reform law,” Mr. Roth said. “Joining HLB will afford my clients access to the vast knowledge and experience of HLB’s highly-respected and nationally-known attorneys. Indeed, to be at the helm at the inception of the firm’s Washington, D.C. office is truly exciting.”

HLB’s Washington, D.C. address is 2000 K Street, NW, Suite 200, Washington, D.C., 20006. Mr. Roth may be reached at 202.587.2590 or rroth@health-law.com.

About Hooper, Lundy & Bookman: Founded in 1987, Hooper, Lundy & Bookman is the largest full service law practice in the country dedicated solely to the representation of health care providers and suppliers. With offices in Los Angeles, San Francisco, San Diego and Washington, D.C., and clients in all 50 states, we meet the business, litigation and regulatory needs of a broad array of healthcare providers–ranging from the largest national health care organizations to community hospitals and individual physician practices. For more information, please visit our website at www.health-law.com.

Amended Class Action Complaint on Behalf of ASCs – May 7, 2010

Downey Amended Class Action

HLB Health Care Reform Summary — March 2010

Presentation

Providing Subsidized EHR to Physicians Under Stark and Anti-Kickback Statute (Presentation by C. Oppenheim)

Presentation

HITECH Payment Models for Hospitals and Physicians (PDF)

The start of the new year brings closer the quickly approaching deadline for enhanced privacy and security protections resulting from the passage of the Health Information Technology for Economic and Clinical Health Act (HITECH Act) in February 2009.   As a result of HITECH, business associates who have access to protected health information (PHI) in the course of the services they provide to entities covered directly by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) will, for the first time, as of February 17, 2010, be directly subject to many of the requirements of HIPAA.  
 
Under HIPAA, a covered entity may disclose PHI to a business associate without a patient’s authorization if the business associate provides the covered entity with satisfactory assurances that it will appropriately safeguard the information.  These assurances must be documented in a written contract often referred to as a business associate agreement (BAA) that meets certain regulatory requirements.  Prior to HITECH, although a covered entity was required to impose certain requirements on its business associates via contract, business associates were not regulated directly by the Department of Health and Human Services (HHS) or its Office of Civil Rights (OCR).

• implement reasonable and appropriate written policies and procedures;
• develop a system for identifying breaches and notifying covered entities following discovery of a breach of unsecured PHI;
• mitigate any harms from the inappropriate use or disclosure of PHI;
• train its workforce;
• develop a sanctions policy;
• establish safeguards; and
• develop and implement a complaint system. 

Please contact Hope Levy-Biehl in our Los Angeles office at (310) 551-8140 or hlevybiehl@health-law.com or Stephen Phillips in our San Francisco office at (415) 875-8505 or sphillips@health-law.com if you are seeking guidance or counsel on how to ensure your organization or the organizations with which you contract are ready for the February 17, 2010 deadline, or if you would like to discuss these matters further.

HLB Attorneys Recognized for Outstanding Service

January 1, 2010
Hooper, Lundy & Bookman is proud to announce recognition for the following firm attorneys:
• Linda Randlett Kollar has become a Fellow in the prestigious Litigation Counsel of America (LCA). LCA is a highly selective, invitation-only trial lawyer honorary society composed of less than one-half of one percent of American Lawyers. According to LCA, fellows are selected based upon effectiveness and accomplishment in litigation, both at the trial and appellate levels, and superior ethical reputation.
• Patric Hooper has been named Los Angeles Health Care Lawyer of the Year by Los Angeles Times. His selection was made through a polling process conducted by Law & Politics
• Patric Hooper, Robert Lundy, Lloyd Bookman and Bradley Tully have been named in the Best Healthcare Lawyers, Southern California by the Los Angeles Times. Attorneys are selected through a polling process conducted by Law & Politics.
• Stephen Phillips has been named an Outstanding Health IT Attorney by Nightingale’s Healthcare News.

Hospital Transition Plan Filings Triggered by Contract Termination/Non-Renewal

Dear Clients and Friends:

In the process of assisting our hospital clients, we are seeing a growing trend in problems with the transition plans filed by health plans in advance of upcoming contract termination/non-renewal dates, and want to alert you to a number of the key issues.

Under California law, Knox-Keene licensed health plans are required to file transition plans with the Department of Managed Health Care (“DMHC”) when a contract termination/non-renewal will affect more than 2,000 health plan members. The deadline for these filings is at least 75 days prior to the contract’s termination/non-renewal date, so that the DMHC will have time to evaluate its impact on the health plan’s network. These transition plans must be filed even if the health plan believes that the parties will ultimately reach a new agreement with the hospital. Furthermore, these filings typically require approval from the DMHC, since the transition is considered a material modification to the health plan’s license. The health plan is not allowed to tell members that the hospital is out-of-network absent DMHC approval of the transition filing, and the DMHC can elect to approve some, all or none of the filing.

Since the DMHC’s decision on these filings can have a significant effect on contract negotiations and member volumes, we strongly recommend that hospitals obtain these filings from the DMHC, and be prepared to provide comments to the DMHC about any inaccuracies or other concerns for patient access. In helping many hospitals on these matters, some of the more common issues that we have seen regarding the proposed alternative facilities include:

• Inaccurate lists of the services available at the alternative facilities in the area
• Erroneous times/distances, both on the map and in real world driving conditions
• Unreliable census levels/beds available, especially at different times of the year
• Overstated medical staff privileges, and understated difficulty to obtain privileges
• Identifying alternative hospitals that also have pending terminations/non-renewal

The DMHC has expressed to us its strong interest in getting input from hospitals about these transition plans, as far in advance of the anticipated termination date as possible. We have learned from DMHC staff that they have to review approximately 400 transition filings per year, that comments from hospitals provide insight which often is difficult for the DMHC to gather otherwise, and that such comments impact the DMHC’s decisions on whether to approve or disapprove part or all of these transition plans. For example, the DMHC may disapprove transition of particular services, and require the health plan to continue to permit members to access the terminated/non-renewed hospital for those services, whether or not the hospital reaches a new contract with the health plan. We are told that this is part of the DMHC’s mission to ensure appropriate patient network access.

While the DMHC does not automatically forward copies of transition filings to the hospitals facing termination/non-renewal, it has informed us that the DMHC gladly will provide copies upon request, and it encourages hospitals who are the targets of these filings to pursue and comment on them early in the process.

For any questions or assistance with these matters, please contact Glenn Solomon at 310.551.8179 (gsolomon@health-law.com) or Daron Tooch at 310.551.8192 (dtooch@health-law.com).

 Very truly yours,

Hooper, Lundy & Bookman, Inc.

Return to Health Law Advisories

Blue Cross Demand for Reimbursement of Medi-Cal Payments to Non-Contracted Hospitals
We want to alert you to a recent development regarding what we believe to be inappropriate refund requests from Blue Cross to a number of non-contracted hospitals for Medi-Cal services rendered in 2007 and 2008. A number of hospitals have received letters from Blue Cross this month alleging that the plan supposedly overpaid for services during this time period and requesting reimbursement. The alleged source of the overpayment were funds that Blue Cross paid in or after November 2008, retroactively, for services rendered by the hospital during the prior two years. The letter states that Blue Cross only made these payments based on explicit directions from the California Department of Health Care Services (“DHCS”), and that Blue Cross now considers those directions based on a flawed interpretation of the Rogers Amendment. The letter also demands that any contest to this reimbursement request be made by the hospital within 30 working days of receipt of the letter.

For multiple reasons, our view is that these are not properly characterized as overpayments, that Blue Cross is not entitled to demand repayment of these funds or to offset them, that the hospitals who received this notice should object to the request, that Blue Cross’ refund request is non-compliant with applicable regulations, and that hospitals are entitled to retain this money. Any hospital who was not contracted with Blue Cross for Medi-Cal services for any period between 2007 and 2008 should check to see whether it received such a letter from Blue Cross, and if so, carefully consider its legal rights before accepting Blue Cross’ demand for repayment.

If you would like our legal assistance on this matter, please feel free to contact Glenn Solomon, Daron Tooch, or Lloyd Bookman in Los Angeles at 310-551-8111; or Craig Cannizzo in San Francisco at 415-875-8500. We currently are advising a number of hospitals regarding their legal rights on the issue. We also are representing the California Hospital Association in ongoing litigation against DHCS related to other issues raised by the Rogers Amendment.

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©2009 Hooper, Lundy & Bookman, Inc. Los Angeles | San Diego | San Francisco

Hooper, Lundy & Bookman Challenges Blue Cross’ Payments for Hospital Non-Contracted Claims

(Los Angeles)—Health law firm Hooper, Lundy & Bookman, Inc. (HLB) today filed complaints in state and federal court charging that Blue Cross of California and Anthem Blue Cross Life & Health Insurance used faulty data and systems to calculate inadequate reimbursement rates to Methodist Hospital of Southern California for out-of-network emergency care, authorized post-stabilization care and other medical services provided to Blue Cross’ HMO, PPO, and Blue Card members, and to beneficiaries of self-insured plans. (Case # CV09-5612-JSC (U.S. District Court); BC418873 (Los Angeles Superior Court).

“Blue Cross has repeatedly underpaid Methodist Hospital for emergency and post-stabilization claims submitted after Methodist’s contract terminated in December 2007,” said Methodist Co-Counsel Daron Tooch. “We believe these underpayments are in great part the result of flawed internal data and payment systems Blue Cross uses to determine out-of-network reimbursement rates.”

Because of the low payment rates and onerous terms in proposed hospital contracts, hospitals are increasingly deciding that they cannot afford to renew their contracts with health plans. Hospitals are nevertheless required to provide emergency care to patients, regardless of the patients’ ability to pay. After patients’ emergency condition was stabilized, Blue Cross often chose not to transfer the patients to in-network facilities, yet paid Methodist Hospital’s claims as though the patients chose to have their care at a non-contracted facility.

“If Blue Cross wanted to pay lower contracted rates for health care services provided to its stabilized members, then it should have transferred them to in-network facilities for their post-stabilization care,” said Methodist Co-counsel Glenn Solomon. “Having voluntarily opted to have its members receive their post-stabilization care at Methodist Hospital, Blue Cross has an obligation to pay the bills rather than leaving that burden with its members.”

The California suit filed today charges Blue Cross with failure to adequately compensate Methodist Hospital for non-contracted emergency, post-stabilization, and continuity of care services, by using flawed data and/or improperly manipulating the data.

The federal complaint makes similar allegations with respect to Blue Card and self-insured plans, and includes charges that the defendants have violated ERISA and the Racketeer Influenced and Corrupt Organizations Act (RICO).

“Blue Cross’ failure to adequately reimburse California hospitals for vital services has resulted in great financial stress for California hospitals and the patients they serve,” said Mr. Tooch. “Blue Cross should not be permitted to manipulate reimbursement rates that result in inadequate payment to providers.”

About Hooper, Lundy & Bookman: Founded in 1987, Hooper, Lundy & Bookman is the largest full service law practice in the country dedicated solely to the representation of healthcare providers. With offices in Los Angeles, San Francisco, San Diego and Washington, D.C., and clients in 50 states, we meet the business, litigation and regulatory needs of a broad array of healthcare providers–ranging from the largest national healthcare organizations to community hospitals and individual physician practices.

Relevant Documents

Complaint #1
Complaint #2

Hooper, Lundy & Bookman Files Nationwide Class Action Against Ingenix: Challenges Database Used to Pay ASC Non-Contracted Claims

(Los Angeles)—On behalf of Ambulatory Surgery Centers (ASCs) across the country, Hooper, Lundy and Bookman, Inc. (HLB) today filed a national class action complaint, challenging UnitedHealth Group, Inc. and other health plans’ misuse of the Ingenix, Inc. database, to knowingly underpay ASCs by millions of dollars over the years (Case No. CV09-0547-GW (PLA)).

“For many years, United and other payors have systematically underpaid ASCs. We believe that the flawed data in the Ingenix database, and the payors’ improper manipulations of that data, are major causes of the unreasonably low amounts of reimbursement to ASCs,” said Plaintiff Co-counsel Daron Tooch.

ASCs are health care facilities that provide outpatient surgical procedures such as orthopedic, podiatry, endoscopy, ophthalmology and oral surgery. Insurers and health plans throughout the country use the Ingenix database to determine the usual and customary rate (UCR) to pay ASCs that are not part of their network. This case specifically targets Ingenix’s flawed reimbursement calculations for ASCs that do not have contracts with health plans.

“The misuse of the Ingenix database to pay physician claims has been the subject of investigations by Congress. We believe that the conflict of interest issues and problems with the database identified in those investigations apply equally to the calculation and payment of ASC claims,” said Plaintiff Co-counsel Glenn Solomon.

The class action complaint specifically charges that Ingenix and UnitedHealth have:

• Violated the Employee Retirement Income Security Act (ERISA) through their failure and refusal to fairly and appropriately compensate ASCs for their services.
• Violated the Racketeer Influenced and Corrupt Organizations Act (RICO) in that they have committed mail fraud and wire fraud by sending false and misleading information in connection with their scheme to underpay ASCs.
• Violated the Sherman Act by price-fixing with regard to the reasonable and customary rates of nonparticipating ASCs.
• Violated California’s Business and Professions Code by engaging in unfair, unlawful and fraudulent business acts and practices.

The class action complaint outlines numerous flaws in the Ingenix Database. A sample of the errors in database calculations include:

• Using data that is not representative of ASC charges within a geographic area;
• Improperly “scrubbing” of data so that the true rates charged by ASCs are reduced;
• Reporting of charges that are systematically skewed downward;
• Using incorrect and inaccurate methodologies to calculate UCRs;
• Lack of quality control to ensure the validity and authenticity of data submitted.

For more information about this case, or if you are aware of any information that might be relevant to this case, please contact Mr. Tooch or Mr. Solomon by phone or e-mail, as noted above.

About Hooper, Lundy & Bookman: Founded in 1987, Hooper, Lundy & Bookman is the largest full service law practice in the country dedicated solely to the representation of healthcare providers. With offices in Los Angeles, San Francisco, San Diego and Washington, D.C., and clients in 50 states, we meet the business, litigation and regulatory needs of a broad array of healthcare providers–ranging from the largest national healthcare organizations to community hospitals and individual physician practices.

Relevant Documents

Complaint

HLB Ranks in Top Tier of Leading Law Firms in Latest Chambers Review

Hooper, Lundy & Bookman, Inc., has once again been named one of the top three
health care law firms in California and one of the leading health care law firms in
the country, according to the latest edition of Chambers USA. The directory is published by the prestigious Chambers & Partners, which produces law firm directories of top-rated law firms throughout the United States and Europe, ranking law firms primarily based on outside interviews with General Counsel, high-profile entrepreneurs and other significant purchasers of legal services. In addition to the firm ranking, five HLB attorneys were recognized as top performers in the state for the third year in a row.

Following is the text of the firm’s profile, reprinted with permission of Chambers & Partners, USA. We thank all of our clients and friends who contributed to the Chambers review.

“A gold standard, and certainly a leading practice in the state,” this California healthcare boutique has a notable profile in local counsel work for hospitals and associated corporate, regulatory and reimbursement matters. It worked on the Hoag Orthopedic project to create a regional orthopedic program in the western USA. Other clients include Sharp Healthcare. Name partner Lloyd Bookman is one of the first-class lawyers at the firm. Although his skills are wide, he has built a particularly good name in government reimbursement and regulatory work. Patric Hooper “forms the backbone” of the top healthcare litigation practice, particularly in Medicare reimbursement fraud and abuse and False Claims Act matters, up to the Ninth Circuit. Robert Lundy is a founding partner, whom sources praise as “a great business and transactional lawyer with a good head for structuring deals.” Compliance expert Bradley Tully has “considerable skill and know-how” in the regulatory and Stark aspects of healthcare. John Hellow has developed a solid reputation in government reimbursement and Medicaid matters.