HEALTH LAW SEMINAR

Chambliss, Bahner & Stophel, P.C.1000 Tallan Building Two Union Square

Chattanooga, TN 37402(423) 756-3000cbslawfirm.com

October 17, 2012

© 2012 Chambliss, Bahner & Stophel, P.C.All Rights Reserved

LEGAL ASPECTS OF THE PRESCRIPTION DRUG ABUSE PROBLEM AND

DIVERSION

Alix C. Michel and David J. Ward

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Prescription Drug Abuse is an Epidemic

• The toll our nation's prescription drug abuse epidemic has taken in communities nationwide is devastating…we all share a responsibility to protect our communities from the damage done by prescription drug abuse.

Gil Kerlikowske

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Staff and Employee Vetting

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- Traveling medical technician who was charged in July with causing an outbreak of Hep C in New Hampshire.

- A dozen hospitals in seven states are scrambling to identify people who might have been infected.

- A hospital official in Arizona said he had been fired from her facility in April 2010, after he was found unresponsive in a men's locker room with syringes and needles.

- He was treated at the hospital, and tests showed he had cocaine and marijuana in his system.

Drug Diversion Hep C Outbreak

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- Testing has been recommended for about 4,700 people in New Hampshire alone.

- In addition to Arizona, he also worked in Georgia, Kansas, Maryland, Michigan, New York and Pennsylvania before being hired in New Hampshire in April 2011.

Read more: http://www.seattlepi.com/news/article/Suspect-in-hepatitis-C-outbreak-was-fired-in-Ariz-3737922.php#ixzz22DXkxz7G

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MDH Finds Drug TheftsHave Doubled

• The Coalition's report, said to be the first of its kind, found 250 cases of prescription drugs that were stolen or reported missing at Minnesota health care facilities from 2005 to 2011.

• A string of cases made headlines last year, including that of a nurse at Abbott Northwestern Hospital who allegedly let a patient writhe in pain after she siphoned off his painkillers.

• In March 2011, St. Cloud Hospital suspended a nurse who allegedly used a contaminated needle to steal medications from IV bags, spreading bacterial infections to 23 patients.

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Prescription Painkiller Overdoses Are a Public

Health Epidemic• Prescription painkiller overdoses killed nearly 15,000

people in the US in 2008. This is more than 3 times the 4,000 people killed by these drugs in 1999.

• In 2010, about 12 million Americans (age 12 or older) reported nonmedical use of prescription painkillers in the past year.

• Nearly half a million emergency department visits in 2009 were due to the misuse or abuse of prescription painkillers.

• Nonmedical use of prescription painkillers costs health insurers up to $72.5 billion annually in direct health care costs.

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No One Is Immune

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Prescription Pill Epidemic Fuels Pharmacy

Robberies Across the Country

• "Last year, pharmacy robberies were up 18,000 in the entire country," (Knoxville P.D. spokesman D. DeBusk, 7/8/11).

• Robbers come in 24/7 to demand prescription pills, especially OxyContin, and make a quick getaway.

• Innocent employees and customers at risk.

Painkillers Claim More Lives in 4 YearsThan Throughout the Entire Vietnam War

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Most Frequently Abused Drugs

• To relieve pain: opioids like OxyContin® and Vicodin®

• To relieve anxiety: sedatives like Valium® and Xanax®

• To boost attention and energy: medicines that speed up physical and mental processes like Ritalin®, Adderall® and Dexedrine®

• To improve athletic performance: steroids like Anadrol® and Equipoise®

• Painkiller Opana, new scourge of rural America (Reuters 3/27/12)

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Rise of Oxycontin

• Oxycodone developed in 1916• Oxycontin approved by FDA in 1995• Oxycontin introduced in U.S. in 1996• Best selling non-generic pain reliever in

U.S. by 2001

See contra: Anatomy of an Epidemic: The Opioid Movie

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Newborn Addicts

Figure 1. Weighted National Estimates of the Rates of NAS per 1000 Hospital Births per Year

Patrick, S. W. et al. JAMA doi:10.1001/jama.2012.3951

Copyright restrictions may apply.

Response by law Enforcement

Whack A Mole

Pain Meds Prescribed Based on What???

Methods of Drug Diversion – Engaged in Illegal Trafficking

Activities

• Chicago doctor given four life sentences• Convicted of causing the deaths of four patients who overdosed on

pain pills

February 14, 2012

Methods of Drug Diversion – California "Doctor Feelgood" Charged

with Three Murders

• Wrote more than 27,000 prescriptions in a three year period • "If my patient decides to take a month supply in a day, then there's

nothing I can do about that."

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Responses to Prescription Drug Abuse

• National

• State

• Local

• Employer's

National Response

http://www.whitehouse.gov/sites/default/files/ondcp/issues-content/prescription-drugs/rx_abuse_plan_0.pdf

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Epidemic Responding to America's Prescription Drug

Abuse Crisis

• Education

• Tracking and Monitoring

• Proper Medication Disposal

• Enforcement

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U.S. Senate Panel Launches Investigation of Painkillers,

Drug Companies

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Prescriber Education

• In April 2011, FDA announced the elements of a Risk Evaluation and Mitigation Strategy (REMS) to ensure that the benefits of extended-release and long-acting (ER/LA) opioid analgesics outweigh the risks. The REMS supports national efforts to address the prescription drug abuse epidemic.

• As part of the REMS, all ER/LA opioid analgesic companies must provide: • Education for prescribers of these medications, which will be

provided through accredited continuing education (CE) activities supported by independent educational grants from ER/LA opioid analgesic companies.

• Information that prescribers can use when counseling patients about the risks and benefits of ER/LA opioid analgesic use.

• Make Better Use of PMPs• Enhance Enforcement By Creating Task Forces Locally• Ensure Proper Disposal of Drugs• Leverage the State's Role as Regulator & Purchaser• Build Partnerships Among Key Stakeholders• Use the Bully Pulpit to promote Public Education

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As of: July 31, 2008

Drug Product: METHADONE

Prescriber State: TN

Rank Prescriber Name

Office Zip Scripts Filled Cash Scripts Filled

1 XXXXXX Nashville-372 33 16

2 XXXXXX Nashville-372 32 32

3 XXXXXX Nashville-372 29 11

4 XXXXXX Nashville-372 29 27

5 XXXXXX Nashville-381 18 5

16 XXXXXX Nashville-374 10 10

Source: Tennessee Prescription Drug Monitoring Database

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Tennessee's New LawPrescription Safety Act

• Establishes requirement that physician check database….

• Requires pharmacists to update the database every 7 days rather than 30

• Effective 4/13• Similar laws passed by Kentucky,

Oklahoma & New York and by Massachusetts

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Don't Turn A Blind Eye

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DEA Activates "Pill Mill“Tip Line

• 24-hour, toll free "pill mill" tip line and email address

• 888-954-4662• Callers should leave their contact

information and the names of any doctors or clinics you are calling about

• TN Drug Diversion Task Force: 877-FOR-RXTN

• TennCare patient – OIG: 800-433-3982

RAC & ZPICIS THE ALPHABET SOUP

COMING FOR YOU?

Stephen D. Barham

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ZPIC

• Zone Program Integrity Contractor ("ZPIC") replaces the Program Safeguard Contractors ("PSC")

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ZPIC

• Given various tools to watch for "abuse" authorized to do:

– Post-payment audits

– Pre-payment audits

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Regional Audit Contractors ("RAC") Program Mission

"To reduce Medicare improper payments through efficient detection and collection of overpayments, the identification or underpayments, and the implementation of actions that will prevent future improper payments."

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RAC Regions

Region C Contractor

Connolly Healthcare

RAC Toll Free Number

866.360.2507

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• RAC audits areas CMS has approved for it

Key Audit Approved Issue

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Medicare by the Numbers

• In 2010 the U.S. spent 2.59 trillion in health expenditures accounting for 17.9% of the U.S Gross Domestic Product

• $524.6 billion was through Medicare

• $401 billion was through Medicaid

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Medicare by the Numbers

• CMS estimates that 50.2 million Americans are enrolled in Medicare Parts A/B

• U.S. population is around 314.5 million, so nearly 1/6 of the population receives Medicare benefits

PRACTICAL IMPLICATIONS

Bookmark Connolly Healthcare and Visit

Regularlywww.connollyhealthcare.com/RAC

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• Know the areas of billing concern for your practice

• Find out what your billing company is doing to prepare and its plan to stay on top of where the Auditors are focused

• Keep your billing staff trained

• Keep your doctors trained

– Documents must support the billing

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• Consider a self-audit

• Know in advance what your billing company will and will not do or help you with if you receive an audit

• Understand the importance of providing a complete response to an initial request for records

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Pay Attention

• Do not just assume your billing company or staff will take care of this matter

• Could your practice survive having to repay a quarter to half of your Medicare money collected over a year or longer?

• Focus on deadlines in the letters

• Send all correspondence, documents or other materials in a manner that is traceable and requires a signature

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Pay Attention

• Know how to document the care provided and make sure that your filing system is accurate

• Understand available resources and assistance for appeal

– Billing company or self auditor

– Insurance coverage

• Know the potential impact to your practice and be prepared

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Medicare Applications

• Triple check that the right forms are correctly and completely prepared

• Send in a traceable manner

• Know the enrollment rules and what happens if there is a problem or delay

AUDIT APPEALS PROCESS

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Audit Appeals Process

• Follows normal Medicare appeals process

– 5 stages of administrative review

– All stages of review by the agency or its contractors

– First couple of stages ~ rubber stamp\

– Must complete first 4 stages before the agency prior to appealing in traditional "Article 3" court

• CMS correspondence includes appeal instructions

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Initial Determination

• When?

– Varies: several months to a year after initial request for documentation

• What?

– Multi-page document

– Standard excerpts of legal authority for reference

– Citations to other legal authority including CMS Manuals

– Spreadsheet of each initial determination

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Initial Determination

• The Spreadsheet

– Beneficiary

– HIC# – DOS – Original code billed and corresponding $ amount– Decision: downcode and corresponding $ amount

allowed OR denial – "Rationale"

• usually not very specific or helpful• e.g. "insufficient documentation"• sometimes even illegible!

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1st Stage: Redetermination

• When?

– 120 calendar days after receipt of notice of overpayment

• 30 days in order to avoid recoupment

– Contractor has 60 days to send redetermination decision

• Contractor can extend for 14 days if provider submits additional materials

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2nd Stage: Reconsideration

• When?

– 180 calendar days of receiving Redetermination decision

• Or within 60 days to avoid recoupment

– The QIC (Qualified Independent Contractor) has 60 days to issue Reconsideration decision

• Last chance to add records to justify billings

• If Reconsideration decision not rendered within timeframe, provider can proceed to request ALJ hearing

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3rd Stage: ALJ Hearing

• When?

– 90 days after receipt of Reconsideration decision from QIC

• Reconsideration decision will include a new spreadsheet showing rationale and new decisions

• If any decision is overturned, the QIC must remand overpayment decision to be recalculated

• QIC decides whether statistical sampling justified

– Will receive a notice of either telephone or video conference hearing date

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4th Stage: MAC Hearing

• Medicare Appeals Council

– Part of the Department of Health and Human Services' Departmental Appeals Board

• When?

– 60 days after ALJ decision– MAC has 90 days to act– Recoupment is ongoing during this time

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5th Stage: FederalDistrict Court

• When?

– 60 days after receipt of MAC decision

• What?

– $1,220 amount in controversy requirement

– Follow federal rules of procedure

ENACTED LEGISLATION

Douglas S. Griswold & Calvin B. Marshall, Jr.

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SB 1935/HB 1896

• Nurses Engaged in Interventional Pain Management– Establishes requirements for direct physician supervision of

advanced practice nurses and physician assistants engaged in invasive procedures involving:

• Spine

• Spinal cord

• Sympathetic nerves

• Block of the peripheral nerves

– Covers office settings but not settings licensed as health facilities.

– Physicians providing supervision must be certified in an applicable specialty.

– Effective July 1, 2013.

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SB 2253/HB 2569

• Tennessee Prescription Safety Act of 2012

– Requires prescribers and certain dispensers of controlled substances to be registered in Tennessee’s controlled substances database.

– Requires that the database monitoring committee check the database and report violations.

– Requires that prescribers check the database before prescribing controlled substances – for every new episode of treatment and at least annually during episodes of treatment.

– Also requires that dispensers check before prescribing certain controlled substances.

– Effective May 9, 2012.

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SB 2407/HB 2569

• Doctor Shopping– Expands the responsibility to report under "doctor shopping" law

to include hospitals, hospital administrators and dispensers of controlled substances.

– Expands access to Tennessee’s controlled substances database so that hospitals can determine if certain employees are prescribing controlled substances for personal use.

– Provides state and federal law enforcement with warrantless access.

– Requires that pharmacies and pharmacists check customer identification before filling prescriptions.

– Requires that pain management clinics be owned by hospitals or physicians authorized to prescribe.

– Effective May 10, 2012.

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SB 2416/HB 268

• Drug Overdose Reporting

– Requires the Commissioner to submit to the Governor, the House and the Senate an annual report covering aggregate hospital claims involving drug poisonings (covering the calendar year two years prior).

– Each report must be published on DOH’s website.

– Requires the Commissioner to establish a reporting protocol for medical examiners in drug overdose death cases.

– Effective May 10, 2012.

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SB 2587/HB 2724

• Pain Management Clinics Prescribing Medication

– Maintains the exclusion of suboxone from the list of prescribed substances for patients at pain management clinics.

– Requires pain management clinics operating on or before January 1, 2012 to file an application for certification by October 1, 2012.

– Allows applicants who are denied pain management clinic certificates to appeal.

– Provides for voluntary inactivation of pain management clinic certificates.

– Effective May 1, 2012.

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SB 3263/HB 3514

• Nursing Home Employment of Physicians

– Amends Tennessee corporate practice of medicine statutes to allow nursing homes and their affiliates to employ physicians.

– Certain requirements apply—most importantly, a nursing home employer must not restrict a physician’s independent medical judgment.

– Effective July 1, 2012.

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SB 3627/HB 2801

• Hormone Replacement Therapy– Requires that in hormone replacement

therapy clinics, all hormone replacement therapy must be performed or supervised by licensed physicians.

– Establishes certain protocols covering physician delegation and supervision.

– Effective July 1, 2012.

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SB 2245/HB 2383

• Adjusting TennCare reductions

– Restored 1.75% of a 4.25% TennCare reimbursement rate reduction.

• Covers certain providers, including x-ray providers, nursing homes, transportation providers, dentists and home health providers.

– Eliminated a $2 copayment on nonemergency transportation that had previously gone into effect.

– Effective May 15, 2012.

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SB 2222/HB 2360

• Licensure Renewal Date for Health Care Facilities– Covers health care facilities licensed under Title 68,

Chapter 11 of the Tennessee Code, including hospices and ambulatory surgical centers.

– Licensure renewal is due on the anniversary date of the facility license instead of June 30 of each year.

– During the transition period, licenses may be renewed for terms of 5-18 months (pro-rated renewal fees).

– Currently in effect.

REVIEW FROM LAST YEAR

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SB 611

• Physician Restrictive Covenants

– Removed the former 6-year limitation on duration of physician covenants.

– Expanded application of the law to osteopathic physicians.

– Effective January 1, 2012.

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SB 1145/HB 1591 and SB 2910/HB 2909

• Amended Tennessee practice of medicine statutes in order to extend the post-termination restrictions of physician non-compete law (T.C.A. § 63-1-148) to hospital-based physicians employed independent of a bona fide practice purchase.

• Does not cover situations involving a bona fide practice purchase or a breach of contract by the physician.

• Both bills are currently in effect.

PENDING LEGISLATION

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SB 2414/HB 2574

• Emergency license suspension– Would permit the Commissioner or certain

licensing boards to suspend, on an emergency basis, the license of a practitioner who is under state or federal indictment involving the sale or dispensing of controlled substances.

– Includes physicians, osteopathic physicians, optometrists, podiatrists, dentists, nurses and physician assistants.

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SB 2275/HB 2558

• Physician supervision of aesthetic procedures– Requires that all "cosmetic treatments or procedures"

be performed by physicians or under the supervision of physicians.

– "Cosmetic treatments and procedures" is defined very broadly and includes using chemical, mechanical, physical or energy agents or the injection of foreign or natural substances in order to alter physical appearance.

– Physicians supervising non-physicians in this context would be subject to professional discipline if they contract with any entity that is not owned or controlled by physicians licensed in Tennessee.

How to Limit RisksWhen Physicians Exit

James L. Catanzaro, Jr.

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What Are the Risks?

• Employment based claims• Compliance risks• Handling of confidential and trade secret

information• Patient information and competition• Maintaining integrity of system and practice

items• Subsequent malpractice or other claims• Disassociation of a "Partner" • Compensation issues

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What Are the Risks?

• These risks are heightened because most physicians have employment contracts that require a notice period before termination occurs. Also, if one is a "partner," consideration of termination rights under operating or stockholder agreements must occur.

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Steps to Limit Risks

1. Effective Employment Agreement addressing:

– Ownership of accounts receivable and patient information.

– Establishing non-competition and non-solicitation obligations.

– Defining and limiting use of confidential information.

– Setting post-termination compensation process and rights.

– Tail coverage rights.

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Steps to Limit Risks

2. Use of Separation and Severance Agreements

– Use of "adequate" consideration to support ("tail coverage", severance pay, etc.).

– Includes release of claims (employment, operating or shareholder agreement based, compensation and other claims).

– Structures handling of notifications to patients, malpractice carriers and managed care plans, insurance networks, and licensing boards and hospitals.

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Steps to Limit Risks

3. Purchase of "Tail" Coverage

– Provides additional carrier at the settlement table.

– Can structure practice's purchase based on numerous factors including: duration of service, whether termination is for or without cause, etc.

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Steps to Limit Risks

4. Settling the procedure by which patients are notified and how patient records are maintained– Managing the patient abandonment risk.

– Protecting the ownership and control of patient lists and ensuring the solicitations do not occur.

– Providing custodial rights for records.

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Steps to Limit Risks

5. Exit Interviews

– Reduces risk of unknown qui tam claims and other complaints.

– Includes use of documentation with statement to the effect that employees provide full and complete information about any issues with which he/she is concerned.

– Allows Practice to disclose and manage, if needed.

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Steps to Limit Risks

6. Use of procedures and guidelines to limit access to a computer network and documents.

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QUESTIONS?

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Disclaimer

This presentation is provided with the understanding that the presenters are not rendering legal advice or services. Laws are constantly changing, and each federal law, state law, and regulation should be checked by legal counsel for the most current version. We make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of the information contained in this presentation. Do not act upon this information without seeking the advice of an attorney.This outline is intended to be informational. It does not provide legal advice. Neither your attendance nor the presenters answering a specific audience member question creates an attorney-client relationship.