Singularity Health Law Blog

IRS SPOILS PHYSICIAN RECRUITMENT CONTRACTS

One of the hallmarks of physician recruitment contracts offered by hospitals and physician groups is the incentive of "foregiveness" of "loans" offered t phy;sicians who are financially underwritten as an inducement to relocate and entier profesioal practice ina particular location. Typically, there is a subidiy of the practice for a few years followdd by a three year or so period of continuing practice ofbligaiton in the community, during which the origional subsidy "loan" is written of over time and the physician is given Form 1099C (cancellation of dept) in the later years of the guarantee arrangement.

Last April, a United States District Court judge in the State of Washington, agreed with the Internal Revenue Service that those kinds of "loans" were in fact compensation and not loans at all. It held that the physician group was liable for failure to withhold from the payments to its physicians. The case was The Vancouver Clinic, Inc. v. The United States of America, 111 AFTR 2d paragraph 2031-632 (2013 DC Wash.).

The Hon. Rondal B. Leighton entered summary judgment in favor of the IRS,holding that because both the group and the physician at the inception had no expectatoin that the incentives would be repaid and that there would never be a repayment of the "loan", it was not in fact a loan.

These kind of incentive arrangments will in the future likely to be designed to have the look and feel of actual loans with effective promissory notes and periodic payments over the term of the loan agreements, including the early years. This is just aother level of complexity in the three dimensional chess game of the multiagency oversight regulation of health care systems.

INDIAN CARDIOLOGISTS CAN PURSUE DISCRIMINATION CLAIM

 On November 30, 2012, Judge Greg Costa of the U.S. District Court for the Southern District of Texas, on remand from the 5th Circuit Court of Appeals, allowed three Indian cardiologists to move forward with their discrimination claim against David P. Brown, the administrator of Citizen’s Medical Center, finding that under the McDonnell Douglas shifting burden framework, the plaintiff’s had met their burden of showing a prima facie case of discrimination through circumstantial evidence  on 4 out of 8 adverse employment actions alleged by the plaintiffs and that the justifications offered by the defendant were pre-textual.

 

OIG APPROVES PLAN FOR CALL-PAY

More and more physicians who used to accept on call duty at a hospital as part of their obligations of being part of the medical staff are insisting on receiving some form of remuneration for the inconvenience. On October 30, 2012 the Office of Inspector General of HHS posted an advisory opinion No. 12-15 approving a hospital’s plan to pay for on-call services of physicians on its medical staff.  These are for consulting physicians, not those physicians called on a regular basis to assist the ER, like intensivists, hospitalists, interventional cardiologists, etc. The concern of the OIG was the likely implication of the federal antikickback statute.  The personal services and management contracts safe harbor at 42 CFR Section 1001.952(d) doesn’t apply because it requires the aggregate amount of compensation to be identified in advance.

SHAM PEER REVIEW BOOK INTERVIEW: Greg Piche´

Those that are interested can find an interview of the author of Sham Peer Review by the Denver Press Club at the following link.

http://denver.granicus.com/MediaPlayer.php?view_id=96&clip_id=5585

SHAM PEER REVIEW OF AFRICAN AMERICAN DOCTOR?

 

Dr. Vincent L. Guinn, an African American Cardiologist, brought a sham peer review suit against Mount Carmel Health and a number of physicians in the U.S. District Court in the Southern District of Ohio.  He alleged two principal federal claims: antitrust conspiracy and monopolization and a violation of his civil rights.  Mt. Carmel summarily suspended Dr. Guinn’s privileges after a colleague alleged that he had placed an intracardial device in a patient “pocket” that had broken down and was infected.  The defendants sought to have the two claims dismissed for lack of standing under a number of different theories. The Court in Guinn v. Mount Carmel Health, et al., S.D. Ohio, No. 2:09-cv-226, 2/27/12, dismissed the antitrust case on the pleadings, but chose to allow Dr. Guinn to move forward with his discrimination case.

 

TEXAS SONAGRAM ABORTION CASE

 

The Texas Sonogram abortion case returned to Judge Sam Sparks in the U.S. District Court last week after his finding that the Texas law requiring physicians performing abortions to show pre-abortion patients copies of sonogram images and to listen to fetal heartbeats 24 hours before performing the procedure was unconstitutional.  The Fifth Circuit U.S. Court of Appeals overturned Judge Sparks in January.  The case, Texas Physicians Providing Abortion Services v. David Lackey, M.D., built upon the U.S. Supreme Court decision in Planned Parenthood of Southeast Pennsylvania v. Casey,which upheld the right to abortion, but affirmed the state’s “informed consent” requirement that certain information be provided to the woman first.

Comment on "Eight Reforms To Medical Peer Review Post."

Until my retirement three years ago I was Associate Director for Research and Disputes for HRSA's National Practitioner Data Bank.  For over 10 years I read every Secretarial Review request, assigned every case to staff reviewers, and approved every decision before forwarding it for final approval and signature by the Director.  In other words, I have great familiarity with this matter. 

Before turning to the eight suggestions, I must take issue with the implication that a report to the NPDB can destroy a career.  It is the underlying actions that hurt careers, not reports to the Data Bank.  Applications for licensure, privileges, etc., require physicians to disclose more than is required to be reported to the Data Bank.  For example, the Data Bank does not require reporting of pending cases; applications do.  Honest physicians have nothing to fear from Data Bank reports; they have to disclose the same information regardless of the Data Bank.

It also should be noted that there are thousands of physicians with multiple reports in the Data Bank who continue to practice and, often, to have even more actions taken against them and reported.  If the Data Bank ended careers, physicians would not continue to have action after action taken against them.

EIGHT REFORMS TO MEDICAL PEER REVIEW

The fundamental problem with medical peer review today is that there are large segments of medical practice that are more art than science and that all professionals are human beings and occasionally make mistakes. The system of peer review provided under the Health Care Quality Improvement Act of 1986 (“HCQIA”) sets up an intensely adversarial system in which those privileged to review their peers are not accountable for bias, bad faith or malice if there is any colorable justification for complaint about the judgment or quality of care provided by the reviewed physician. Further, the results can destroy a peer reviewed physician who may up with a “record” in the National Practitioner Data Bank.

 

10 CRITICAL PRO IMMUNITY PEER REVIEW CASES: No 1.

This is a series describing the ten important pro-immunity peer review cases where court have granted immunity to peer reviewers under the Health Care Quality Improvement Act of 1986, 42 U.S.C. Sec. 11112 (“HCQIA”). 

No. 1: Poliner v. Texas Health Systems, 537 F 3d 368 (5th Cir., 2008)

The Fifth Circuit Court of Appeals reversed the $33 Million Dollar Judgment awarded the plaintiff in Poliner. The Poliner case raised a lot of eyebrows both because of the amount of the original damages award of $360 Million Dollars and its success in overcoming immunity claims under the Health Care Quality Improvement Act of 1986 ("HCQIA"). The trial court reduced the award to $33 Million Dollars prior to the appeal.   Dr. Poliner, an interventional cardiologist, claimed that he was forced to agree to an abeyance of his privileges in lieu of a summary suspension and was prevented from performing procedures in the the defendant's catherization laboratory while an investigation was pending, only posted about $10,000 dollars in actual damages. His case went to a jury solely on defamation grounds.

10 CRITICAL PRO IMMUNITY PEER REVIEW CASES: Number 3.

This is a series describing the ten important pro-immunity peer review cases where court have granted immunity to peer reviewers under the Health Care Quality Improvement Act of 1986, 42 U.S.C. Sec. 11112 (“HCQIA”). 

No. 3: Mathews v. Lancaster General Hospital, 87 F.3d 624 (3rd Cir. 1996)

Dr. Mathews was an orthopedic surgeon with privileges at Lancaster General Hospital in Pennsylvania.  He was scheduled as the assistant surgeon on a case that turned out poorly, but he was not present at the operation.  The surgeon in charge, Dr. Kent punctured the patient’s esophagus with a high speed drill.  He repaired the would but there were later unfortunate sequelae. The hospital peer review investigation of tDr. Kent  led to a review of Dr. Mathews cases as well as there was an arrangement for the two surgeons to participate in each others surgeries.  There followed an exhaustive review of Dr. Mathews cases by his colleagues at the hospital and by an independent outside reviewer, who found substantial deficiencies in many of Dr. Mathews’ cases.