wheel of mis fortune: challenges for healthcare executives
DESCRIPTION
Wheel of Mis fortune: Challenges for Healthcare Executives. Wheel of Mis fortune: Challenges for Healthcare Executives. Moderator: Stacy M. Kniffen Paquet, JD, Assistant Vice President, Management Liability Product Manager, OneBeacon Professional Insurance Panelists: - PowerPoint PPT PresentationTRANSCRIPT
2010 Medical Professional 2010 Medical Professional Liability SymposiumLiability Symposium
Chicago, IL ~ March 18 & 19, 2010
Wheel of Wheel of MisMisfortune: Challenges fortune: Challenges for Healthcare Executivesfor Healthcare Executives
Wheel of Wheel of MisMisfortune: fortune: Challenges for Challenges for
Healthcare ExecutivesHealthcare ExecutivesModerator:
Stacy M. Kniffen Paquet, JD, Assistant Vice President, Management Liability Product Manager, OneBeacon Professional Insurance
Panelists:
R. Dale Grimes, Esq., Member, Leader, Antitrust and Trade Practices Group, Bass, Berry & Sims PLC
Kimberly B. Holmes, Esq., RPLU, AVP, Deputy Worldwide Product Manager, Health Care Practice, Chubb Specialty Insurance
Paul J. Siegel, Esq., Partner, Jackson Lewis, LLP
Session Overview
• The Current Healthcare Landscape: From the Underwriting Prospective Regulatory, HIPAA and Antitrust Issues
• Antitrust Exposures & Enforcement Update – Including Compliance Tips
• Key Issues in Wage and Hour and Class Action Litigation Update
The Health Care Landscape – Key Exposures Facing
Executives
• Regulatory Exposures Recent amendments to federal False Claims Act RAC (Recovery Audit Contractor) Audits
• HIPAA/HITECH - Compliance & What’s Next?
• Antitrust Exposures Physician Antitrust Exposure Market/Competitor Antitrust Exposure
Health Care Regulatory Exposure
• Recent amendments to federal False Claims Act (FCA) Overpayments from the government now trigger
the recipient’s duty to return the overpayment to avoid violating the FCA
• Increased state & federal recovery and enforcement efforts regarding Medicare/Medicaid fraud & abuse Federal RAC (Recovery Audit Contractor) Audits
• Current progress nationwide • Presently a large number of successful appeals
New HIPAA Reporting obligations under the
HITECH Act
• Now there is a reporting requirement under HIPAA – what does that mean? Breaches of unsecured, protected health
information (PHI) affecting > 500 individuals must be reported to HHS
• www.hhs.gov/ocr/privacy/hipaa/administrative/breachnotificationrule/postedbreaches.html
Not every breach is a reportable event Why it’s so important to access the correct
guidance immediately on this issue (hint: to save $$$$$$)
Physician Antitrust Exposure
• Specialty Hospital or Physician Specialty Practice• Organization’s due process protocols with respect
to peer review process• Venue matters• Local competitors – the more the better• Significant defense dollars to reach MSJ (Motion
for summary judgment) stage• Battle of the Experts
Market / Competitor Antitrust Exposure
• What is your policy’s definition of “Antitrust Violation?”
• Significant defense dollars to reach MSJ (Motion for summary judgment) stage
• Competitor Collaborations• Hospital/Physician Joint Ventures• Carrier/Insured partnership is key to best
resolution• Class action claim trends
Antitrust Overview
• There is a heightened enforcement environment
• There are numerous antitrust issues facing healthcare providers & entities
• There are severe consequences and compliance is important
Age of Heightened Enforcement
New Environment“As president, I will direct my administration to reinvigorate antitrust enforcement. It will step up review of merger activity and take effective action to stop or restructure those mergers that are likely to harm consumer welfare . . .”
- President Obama, September 27, 2007
“I come to this job not timid about using antitrust authority to ensure markets are open and competitive”
-Christine Varney, DOJ Antitrust Div. HeadBloomberg, February 27, 2010
“The FTC, which has already taken significant action, needs to be more aggressive with doctors, hospitals, pharmaceutical manufacturers and medical suppliers who manipulate the market… The Justice Department, which has been far too lax over the last eight years, must re-engage in policing anticompetitive practices by insurance companies...”
- Chairman Rockefeller's opening remarks in a committee hearing on competition in the health care marketplace, Official Press Release, July 16, 2009
Antitrust Issues Faced By the Healthcare Industry
Heightened Antitrust
Enforcement
Merger Clearance –
More Scrutiny?
Full-service vs.Single Specialty
Hospitals
Information Sharin
g
Excl
usio
n fr
om
Acce
ssProviders versus
Payers
Joint Negotiations
with Payers
Bundled Discounts
Interlocking
Directo
rates
Hart
-Sco
tt-Ro
dino
Ac
t Com
plia
nce
ConsequencesCivil Liability
• Often “bet the company” litigation
• Litigation is complex, fact driven, and expensive
• Liability may include:
Consent Decrees
Treble Damages
Disgorgement of Profits
Injunction
Attorney’s fees
• Insurance coverage is an issue
Joint Contracting Situations
• Provider Network / IPA
• Partially owned / related special facilities
• Virtual mergers ofprovider practices
Joint Contracting Exposure
• Price fixing
• Illegal per se means no excuses
• “Best case” is consent decree
• Worst case is civil / criminal liability
Joint Contracting Caution Required
• Agency Healthcare Enforcement Statements 8 & 9
• Control / Full Merger
• Don’t try to circumvent consent order
Information SharingSituations
• Competitor communications about price, cost, other sensitive information
• Trade association activities
• Due diligence review
Information SharingExposure
• Potential liability for price fixing
• Exchange can be illegal by itself
• Class action litigation
• Avoid in most cases
• Safe harbors: Agency Healthcare Enforcement Statements 4, 5, 6
• Carefully structure due diligence
Information SharingCaution Required
• Deals subject to HSR
• Non-reportable deals
• Post-closing review
Acquisition ReviewSituations
• Gun-jumping
• Review kills deal
• “Look back”
Acquisition ReviewExposure
• Reduction in competition (3 2; 2 1)
• Significant price increases
• Pre-closing planning
Acquisition ReviewCaution Required
Conclusion
• The likelihood of antitrust enforcement is greater now than in the past
• Antitrust risks in healthcare are real
• Antitrust compliance throughout the entire healthcare organization is critical
Why Wage And Hour Issues Matter
• Attractive cases for plaintiffs’ attorneys Relatively easy to get a class or collective
action certified Employer bears many of the burdens of proof Intent is not at issue Many employers have not focused sufficiently
on compliance Claims Spread: Pay practices are often
relatively similar throughout an industry
Wage And Hour Basics
• The FLSA imposes individual liability on corporate officers or agents for wage violations where they exercised control over the company’s wage practices
• A corporate officer with operational control can be an “employer” and this is jointly and severally liable under the FLSA for unpaid wages
• Decisions interpreting the breadth of the definition of “employer” under the FLSA have held that a plaintiff is not required to pierce the corporate veil to hold an officer personally liable
Class And Collective Action Litigation
• “[T]he Court finds it appropriate to conditionally certify an FLSA collective action for all present and former hourly registered nurses, staff nurses, licensed practical nurses, nurses aides, and respiratory therapists employed at Kaleida hospitals and skilled nursing /long-term care facilities . . .”
Gordon v. Kaleida Health, et al., Case No. 08-CV-378S (W.D.N.Y. Oct. 13, 2009)
Class And Collective Action Litigation
• “[C]ertification of this matter as a collective action is GRANTED with respect to the following putative plaintiff class: All present and former hourly employees of Faxton-
St. Luke’s Healthcare and St. Luke’s Home, including but not limited to registered nurses, licensed practical nurses, and certified nurses’ assistants . . . who have been subject to automatic meal break deductions . . .”
Hamelin v. Faxton-St. Luke’s Healthcare, et al., Case No. 6:08-CV-1219 (N.D.N.Y. Jan. 26, 2009)
Compensable Working Time
• Compensable working time includes: Time spent in primary work activities; Idle or stand-by time controlled or requested
by employer; Time spent by an employee outside normal
hours that is suffered or permitted by employer
• An employer must compensate employees for unauthorized work whenever it “suffers or permits” an employee to work.
• An employer suffers or permits an employee to work where the employer knew or had reason to believe the employee was performing work and permitted him or her to do so.
• Subject to past practice and collective bargaining agreement rules, employers are free to discipline employees for unauthorized work.
Unauthorized Working Time
Claims: Unpaid Off-The-Clock Work
• Preparatory activities generally are not compensable unless they are an integral and indispensable part of an employee’s principal duties or required by the employer’s rules, collective bargaining agreements, industry custom, or laws.
• Donning and doffing gear or uniforms is compensable only if it is “specialized protective gear.”
Claims: On Call Time
• Employees “on call” must be compensated if the employer’s control over the employee is such that the employee cannot use the time effectively for his or her own purposes.
• Relevant Factors: Excessive restrictions (is the employee free to
pursue personal agenda?); Frequency of interrupting calls is unduly
restrictive; Short response time is unduly restrictive; and, Does employee have the ability to trade on-call
responsibilities with another employee
Claims: Unpaid Training Time
• Lectures, meetings, and training programs are compensable work time unless four conditions are met: Attendance is outside employee’s regular work
hours; Attendance is voluntary; The event is not directly related to employee’s
job; and, The employee performs no productive work.
Calculating Overtime
• The Regular Rate of Pay Includes: Shift differential payments Commissions Nondiscretionary bonuses Awards or prizes won for quality, quantity or
efficiency Most profit sharing payments On-call pay “Combat” pay (extra pay for undesirable
assignments)
Questions?
Stacy Kniffen Paquet [email protected]
Kimberly Holmes [email protected]
Dale Grimes [email protected]
Paul Siegel [email protected]