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Archive for the ‘Medical & Health Care’ Category

Some Potential Certainty in an Outcome in an Uncertain Medical Malpractice World

Posted on: July 12th, 2019

By: Shaun Daugherty

Medical malpractice claims can be dangerous in front of a jury and some recent Georgia verdicts are proof of that.  In Georgia, as many other states, medical doctors typically have consent clauses in their professional liability policies that require their consent before any payment may be offered by the insurance company.  In part, this is because any payment by the insurance company on behalf of the provider to settle a malpractice claim is reportable to the National Practitioner’s Databank(“NPDB”) and, for physicians, the Georgia Composite Medical Board (“the Board”).  The Board has the power over the providers’ licenses and a report could start an investigation that could lead to sanctions against the providers’ license, up to and including revocation, and the sanctions are public record.

Because of the uncertainty in the medical malpractice trials, may times the parties seek some parameters in the form of high/low agreements where the plaintiff is guaranteed some minimal amount even if the jury returns a verdict in favor of the provider, but caps the top dollar payout even if the jury awards more.  However, the consent clause in the providers’ insurance contracts usually require that this agreement also be consented to because the payment of the “low,” even in light of a defense verdict, would require a reporting to the Board, but not the NPDB.  Georgia HB 128 changes this state reporting requirement now that it has been signed into law.

The NPDB does not require reporting of the payment of a “low” in light of a defense verdict in a medical malpractice trial and HB 128 seems to mirror the intent of the federal reporting requirements.  Now, if a physician receives a defense verdict at trial, any payment of a “low” is no longer reportable to the Board by the insurance carrier and, thus, no potential investigation or sanctions.  This removal of the reporting requirement may result in incentivizing physicians to consent to these types of agreements in the future to allow for more certainty on the potential outcomes of the cases, regardless of what a jury may do.

If you have questions or would like more information, please contact Shaun Daugherty at [email protected].

Amendments make the difference for opioid prescription writers in the recently passed House Bill 551

Posted on: April 25th, 2019

By: Shaun Daugherty

Several years ago in Georgia, the Legislature passed a law requiring anyone with a DEA registration number to enroll and become a user of the Prescription Drug Monitoring Program (“PDMP”) no later than January 2018. For those that did not register, the law read that the prescriber will “be held administratively accountable to the state regulatory board governing such prescriber…” Recently, many of our state regulatory boards started looking to see who had not registered and starting to hold providers “administratively liable.” Generally speaking, this meant getting a disciplinary letter from the board or the Attorney General’s Office citing the violation and the sanctions that were desired. In many cases, this meant a public reprimand in the form of a consent order.

House Bill 551 was introduced in the 2019 legislative session. Originally, the Bill was related to kratom, its prohibition to anyone under 18, and the labeling requirements of packaging. Kratom is an herb that is being studied for its effects on pain relief, depression and anxiety. However, the substance has been used recreationally, can be abused, and is under great scrutiny on the federal and state levels.

Through the process of how a bill becomes a law (thank you Schoolhouse Rock!), House Bill 551 received an amendment which had nothing to do with kratom. The amendment related to the powers of the state regulatory boards when holding a prescriber “administratively liable” for failure to register with the PDMP. For any prior disciplinary actions that had been levied, the Bill indicates that until December 31, 2019, the issuing board shall have the discretion to rescind the same if the prescriber subsequently registered for the database, complied with any other imposed requirements, and has not had other administrative violations in the past. Some would argue that the regulatory boards always had this discretion and the fact that there is now a date where such discretion is withdrawn may create future issues.

In addition, the Bill further restricted the board’s power moving forward by defining “administratively liable” as the ability to provide a warning to the prescriber and/or to impose a fine. The fine is considered administrative in nature and not a form of discipline. Essentially, the Bill appears to take away the power of the boards to publicly sanction or discipline any provider that has failed to register for the PDMP as they were required to do.

The Bill was sent to the Governor for signature on April 11, 2019. If the Bill becomes law, and you have been publicly sanctioned for failure to register for the PDMP, you can petition to have the discipline rescinded. If you received a letter about the desire to sanction your license, but no action has yet been taken, hold tight, you may just get a warning and a fine.

For any questions, please contact Shaun Daugherty at [email protected].

Office of Inspector General Approves Warranty Program for Medical Device Manufacturer

Posted on: November 5th, 2018

By: Ali Sabzevari

The Department of Health and Human Services Office of Inspector General recently approved a medical device manufacturer’s proposed warranty program, which provides a refund to the hospital at which a patient underwent joint replacement surgery using the manufacturer’s knee or hip implant and related products, if the patient was readmitted within 90 days because of a surgical site infection or need for implant replacement surgery. The proposed model could serve as a road map for these kinds of risk sharing arrangements.

Advisory Opinion No. 18-10, which can be accessed here, set forth that although the suggested warranty implicates the safe harbor regulations to the anti-kickback statute, 42 C.F.R. § 1001.952, the “Proposed Arrangement poses a sufficiently low risk of fraud and abuse under the anti-kickback statute.”

The anti-kickback statute makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program. See section 1128B(b) of the Act. Where remuneration is paid purposefully to induce or reward referrals of items or services payable by a Federal health care program, the anti-kickback statute is violated. By its terms, the statute ascribes criminal liability to parties on both sides of an impermissible “kickback” transaction. For purposes of the anti-kickback statute, “remuneration” includes the transfer of anything of value, directly or indirectly, overtly or covertly, in cash or in kind. The statute has been interpreted by several federal courts to cover any arrangement where one purpose of the remuneration was to obtain money for the referral of services or to induce further referrals.

The U.S. Department of Health and Human Services has promulgated safe harbor regulations that define practices that are not subject to the anti-kickback statute because such practices would be unlikely to result in fraud or abuse. See 42 C.F.R. § 1001.952. The safe harbors set forth specific conditions that, if met, assure entities involved of not being prosecuted or sanctioned for the arrangement qualifying for the safe harbor. However, safe harbor protection is afforded only to those arrangements that precisely meet all of the conditions set forth in the safe harbor.

The Advisory Opinion concludes that the Proposed Arrangement would not generate prohibited remuneration under the anti-kickback statute. Value-based care and risk sharing models continue to gain appeal, and the Office’s approval of this warranty program shows that the era of value-based care is here to stay.

If you have any questions or would like more information, please contact Ali Sabzevari at [email protected].

PUNITIVE DAMAGES: How Much Is Too Much?

Posted on: November 1st, 2018

By: Rebecca Smith

On August 10, 2018, in the first Roundup cancer lawsuit to proceed to trial, a jury awarded Dewayne Johnson a total of $289 million dollars. On Monday, October 22, 2018, a San Francisco Superior Court Judge refused to overturn the jury verdict, however, ruled that if plaintiff would accept a reduction in the punitive damages from $250 million to $39 million she would deny Monsanto’s Motion for New Trial. On Friday, October 26, 2018, attorneys for Plaintiff Johnson accepted the trial court’s reduction of the punitive damage, reducing the total verdict to Mr. Johnson from $289 million to $78 million.

This case involved the trial of design defect and failure to warn claims asserted by Dewayne Johnson alleging that his exposure to glyphosate and glyphosate-based herbicides (Roundup) developed by Monsanto caused him to develop non-Hodgkin’s Lymphoma. At trial, the jury was asked to resolve the complex question of whether plaintiff’s exposure to Roundup caused his Lymphoma, to which the jury responded affirmatively. Monsanto challenged that determination in post-trial motions, however, Judge Suzanne Bolanos denied such contest, finding there was no legal basis to disturb the jury’s determination that plaintiff’s exposure to Roundup was a substantial factor in causing his Lymphoma. Judge Bolanos, however, did “disturb” the punitive damage award.

Monsanto had argued that there was no clear and convincing evidence of a specific managing agent authorizing or ratifying malicious conduct and accordingly that punitive damages should not be awarded. Judge Bolanos, however, indicated that when the entire organization is involved in acts that constitute malice, there is no danger a blameless corporation will be punished for bad acts of which it had no control. Further, she held that the jury could have concluded that Monsanto acted with malice by consciously disregarding a probable safety risk of Roundup and continuing to market and sell its products without a warning.

In addressing the amount of the punitive damages, Judge Bolanos began her disagreement with the jury. The award, she indicated, was extremely high for a single plaintiff and consisted largely of non-economic damages which the due process case law recognizes as a punitive element. Pointing to the prior U.S. Supreme Court decision of State Farm Mut. Auto Ins. Co. v. Campbell that “[p]unitive damages found to exceed the ceiling of what due process allows must be reduced,” Judge Bolanos ordered the ratio of compensatory damages to punitive damages be reduced to one to one.  Accordingly, the court held that regardless of the reprehensibility of Monsanto’s conduct, the constitutionally required punitive award could be no more than the compensatory damages award of $39 million.

It is unlikely that this case will end here. While the plaintiff has accepted the reduction in the punitive damages and accordingly, the reduced amount will be entered as a judgment, this does not preclude Monsanto from appealing the judgment. Further, should Monsanto appeal the judgment, plaintiff has reserved its right to appeal the reduction of punitive damages. This is a case well worth watching.

If you have any questions or would like more information, please contact Rebecca Smith at [email protected].

Is Wellness Activity Participation Compensable?

Posted on: September 25th, 2018

By: Joyce Mocek

The Department of Labor (DOL) recently issued an opinion letter on whether employees must be compensated under the Fair Labor Standards Act (FLSA) for the time they spend participating in wellness activities.   In this inquiry, the employer advised the DOL that it allowed its employees to participate in wellness programs including “biometric screening,” (ie cholesterol levels, blood pressure and nicotine usage screening), during and outside of regular work hours.  The screening information could result in a decrease in the employee’s health insurance deductible.  The screening was not related to the employee’s job, there were no restrictions on the time an employee could participate in the events, and participation was not required by the employer.

In its opinion letter, the DOL noted the employer received no financial benefit as a result of the employee participation in the activities, and the employee’s voluntary participation predominantly benefited the employee.  The employer did not require the employee to perform any job related duties while they were participating in the activities.  Thus, since the activities predominantly benefited the employee, the DOL opined that the time the employees spent participating in the wellness program did not constitute worktime under the FLSA.  Further, since the employee was relieved of all duties, and not restricted in the amount of time they could participate in the activities, the time spent was considered non-compensable “off  duty” time.

Employers with wellness programs should review their policies concerning such programs, to ensure they follow the guidance recently outlined by the DOL in this opinion letter to avoid potential FLSA issues.

If you have any questions or would like more information, please contact Joyce Mocek at [email protected].