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Archive for December, 2013

Burden of ACA Medical Device Tax Clearly on Manufacturers

Posted on: December 19th, 2013

By: Taryn Kadar

With the Affordable Care Act (“ACA”) imposing new taxes on the sale of medical devices, the Northern District of Georgia addressed an important question regarding who bears the responsibility of a new 2.3 percent tax on all medical devices, the manufacturer or the distributor. In Chemence Medical Products, Inc. v. Medline Industries, Inc., the district court found that the language of the ACA clearly imposes the tax on manufacturers, producers or importers, but not on a distributers, retailers or consumers. The court found that Chemence, a medical manufacturer, could not pass along the charge of the tax to its distributer, Medline Industries.

The court made note that this situation regarding who bears the burden to pay the medical device tax, could easily be avoided through contractual language. In this case, the contract between the two parties was made in 2010, before it was clear what the ramifications and burdens of the ACA would be. While parties can agree by contract to shift the cost of the tax to the distributer, the contract here did not contain such an agreement.

For those medical device manufacturers who are still operating under contracts entered into before the ACA medical device tax took place, this case should be a wake-up call in that the manufacturer will ultimately bear the primarily responsibility for the tax absent a contractual agreement otherwise.

Medical Director Liability: GA Supreme Court Clarifies Limited Exceptions to Physician-Provider Requirement of Medical Malpractice Cases

Posted on: December 3rd, 2013

By: Michael Eshman

On November 25, 2013, the Georgia Supreme Court issued a unanimous decision regarding the issue of medical directors’ liability when that director had no involvement with the patient.  This was an important decision for not only medical directors, but also for any individual with a supervisory position.  The case involved an allegation of liability against an ER medical director who was not involved with the patient’s treatment.  Plaintiff alleged the medical director was liable for negligently failing to ensure that the emergency room physicians and nurses were adequately trained.

The Court of Appeals initially held that the medical director owed a duty to the patient, and that “the failure to adequately supervise emergency room staff can result in liability for any damages resulting from such failure by one whose responsibility it is to provide such supervision.”  The Georgia Supreme Court disagreed, finding that the medical director was entitled to summary judgment for the following two reasons:

(1) A medical director cannot be liable for merely undertaking to supervise medical staff, but may be liable if he or she undertakes to direct the method and manner of care rendered by the medical staff.  Because the medical director in the case above did not treat the patient and had no responsibility or authority to control or direct the method or manner of care rendered, he owed no duty to the patient and could not be liable for medical malpractice for the injuries claimed.

(2) The medical director did not escalate the risk of harm to the patient by the alleged failure to adequately supervise the ER physicians and staff.  The Court determined that at most, the medical director failed to resolve a misunderstanding amongst the medical staff about the specific requirements of a certain treatment protocol.

The possibility of medical director liability is not ruled-out by the Court’s decision, but the circumstances of any such liability are clearly limited.  In light of this decision, it would be in the interest of any providers who act as medical directors (or any supervisor) to review their agreements with the facilities where they provide these services and make certain there is a clear understanding of whether the medical provider has the responsibility or authority to control or direct the method or manner of care provided by the medical staff he or she supervises.  If the responsibility or authority exists, then there is potential liability for the medical director for the actions of the medical staff.  If the responsibility or authority does not exist, then the medical director is likely insulated from liability for injuries to patients he or she did not treat, unless the medical director did something to escalate a risk to the patient.

USCIS Announces E-Verify Updates for 2014

Posted on: December 3rd, 2013

By: Kelly Eisenlohr-Moul

Recently, United States Customs and Immigration Enforcement Services (USCIS) announced several updates to its E-Verify system.  USCIS has indicated that the upcoming changes are an attempt to address criticism regarding security loopholes and lack of user friendliness.

Initially, E-Verify now has the ability to automatically lock social security numbers (SSNs) which are flagged as “misused.”  This feature targets the long-running criticism that E-Verify fails to address identity fraud involving borrowed, stolen, or purchased SSNs.  The technology is similar to that used by credit card companies and banks in identifying fraudulent account activity.  If a “locked” SSN is entered into the E-Verify system, the user will receive a Tentative Non-Confirmation (TNC) and will be referred to the local Social Security Administration office for follow-up.

USCIS also is attempting to improve user friendliness by simplifying the contract terms governing E-Verify use.  Specifically, the Memorandum of Agreement signed by all employers upon enrolling in E-Verify has been revamped to include plainer language, a clearer organizational structure, and instructions for reporting any privacy or security breaches.

Although the MOU has been in effect since E-Verify was launched in 1997, it has been treated much like a form credit card or iTunes user agreement, which few employers bother to read or understand before beginning to use E-Verify.  This can have serious consequences if the employer is later accused of document fraud or abuse, and is presumed to have knowledge of the terms agreed upon in the MOU.  The simplified version, due to be implemented on December 8, aims to foster a better understanding of the terms governing the relationship.

USCIS also has announced new, simplified E-Verify posters for the workplace.  It is mandatory that employers using E-Verify display these posters, although USCIS has stated that either the old or new version is acceptable.

Given the dramatic uptick in E-Verify usage due to state regulation, employers should expect E-Verify to continue evolving throughout the coming year.