California Occupational Therapist Pleads Guilty to Medicare Fraud Conspiracy. Case Lesson: Danger of Medical Providers Working With Management Companies

On October 24, 2016, a licensed occupational therapist Keith Canlapan pleaded guilty in Los Angeles for his role in a $2.6 million Medicare fraud scheme that involved billing for occupational therapy services that were not provided. The plea was to one count of conspiracy to commit health care fraud before U.S. District Judge George H. Wu of the Central District of California.  Sentencing is scheduled for Feb. 16, 2017, before Judge Wu. 

As part of his guilty plea, Mr. Canlapan admitted that he was a licensed occupational therapist employed with JH Physical Therapy, an occupational therapy clinic located in Walnut, California.  Mr. Canlapan further admitted that through JH Physical Therapy, he billed Medicare for occupational therapy services when no such services were provided to the Medicare beneficiaries.  Instead, the Medicare beneficiaries received massage and acupuncture services, which are not reimbursable under Medicare rules, he admitted.  In fact, on dates that Mr. Canlapan purportedly provided occupational services to Medicare beneficiaries at JH Physical Therapy, Canlapan was admittedly not present at JH Physical and instead was either out of the country or at his other places of employment on some of those dates. 

Between approximately October 2009 and approximately December 2012, Mr. Canlapan, through JH Physical Therapy, admitted in his plea that he billed Medicare $2,669,618 in false and fraudulent claims, of which Medicare paid $1,860,786.

Mr. Canlapan was charged in an indictment returned on June 16, 2016, along with co-defendants Simon Hong, 54, and Grace Hong, 50, husband and wife, both of Brea, California.  Simon Hong is the owner and Grace Hong is the co-operator of JH Physical Therapy, and they are charged with one count of conspiracy to commit health care fraud and three counts of health care fraud.  Both are pending trial, which is scheduled for Jan. 17, 2017.  An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Attorney Commentary on Management Companies and Patients' Requests for Therapy:

This case is a lesson on what happens when a licensed health care worker goes to work for a management company which helps the occupational therapist (in this case) obtain a Medicare provider number and then does the billing and essentially runs the practice.

Medical & Dental Management Companies - United Dental Group Ordered to Pay $867,000 Settlement and Cease Business Operations in California for Unlicensed Practice Due to Management of Dental Practices

Management companies operating medical and dental practices in California have long struggled with the State's strong laws against the corporate practice of medicine, dentistry, optometry or any of the healing arts. 

A recent case against a dental management company (and related Accusations by the California Dental Board against at least two of the dentists that worked there) reveal that if the State wants to be aggressive with these arrangements, companies should be careful with the structure, the written agreements, the "unwritten" arrangements, and ensure that practice and financial arrangements comply with the law. 

In this case, the Board asked United Dental for responses and received detailed written responses from it's in-house attorney and United Dental entered into a new management contract with the dentist that was not fully compliant with the law. United Dental managed 5 practices in California. Two years later, United Dental got hit with civil lawsuit and at least one dentist got an Accusation in March 2015 for aiding and abetting the unicensed practice of medicine.

Brief Summary of Settlement of Civil Lawsuit Filed by Orange County

On December 11, 2015, the Orange County District Attorney’s Office (OCDA) obtained a settlement in a civil suit it had filed against United Dental Corporation and its California affiliates (dba “United Dental Group”), as well as its owner Jeong Hoon Kim, for engaging in the unlicensed practice of dentistry and false and misleading advertising. The Dental Board has at least one Accusation pending against a dentist who worked at United which has not settled.

The settlement requires the shut-down of United Dental Group in California on or before March 3, 2016, and an $867,000 payment in civil penalties and costs ($8,791.20 to reimburse the Dental Board for its costs of investigation and $858,208.80 in civil penalties). During the shut-down period, all operations will be solely managed and controlled by a licensed California dentist. The final judgment was entered Dec. 9, 2015, in the Orange County Superior Court presided by Judge Geoffrey T. Glass. 

A Complaint to Dental Board Triggered The Civil Lawsuit by Orange County

Most investigations in our experience are from anonymous complaints from competitors. This case seems to be no different.

San Jose Psychiatrist Arrested For and Charged With Prescribing Controlled Substances Without A Legitimate Purpose and Prescribing to an Addict

The Medical Board of California has a Prescription Drug Strike Force. Recently, they conducted an investigation into a San Jose physician after receiving a complaint alleging that this doctor, Duke D. Fisher, a psychiatrist, would prescribe any medication the patient wanted in exchange for cash. The Board conducted multiple undercover operations at his office.

In our experience, these undercover operations are usually videotaped. If the undercover operation is not successful for prescription sought (such as Oxycontin), they will send undercover investigators back in and request other controlled substance prescriptions (such as Vicodin, Adderall, Xanax, etc.).

Based on the results of the undercover operation, the investigators determined that they had probable cause to believe that Dr. Fisher prescribed controlled substances without a legitimate medical purpose and prescribed controlled substances to an undercover customer who admitted to using heroin and methamphetamines.

On August 29, 2013, an arrest warrant was issued by the Santa Clara District Attorney's Office, bail was set at $64,000, and Dr. Fisher was charged with the following counts:
(1) prescribing without a legitimate medical purpose in violation of California Health and Safety Code Section 11153;
(2) prescribing to an addict  in violation of California Health and Safety Code Section 11156; and
(3) prescribing to an addict in violation of California Business and Professions Code Section 725.

Attorney Commentary

Physicians who prescribe controlled substances need to assume that everything is being recorded and that their records will be reviewed to determine if there is "legitimate medical purpose." If your personality is to trust patients -- and for physicians trained years ago who were not in the habit of cross-examining patients -- it must be remembered that when "red flags" appear, such as disclosing prior illegal drug use, conservative action must be taken.

Physicians remember that you cannot help any patients if you put your license in jeopardy. You need to set boundaries and remember that the only way in which you will not be accused of overprescribing or distributing controlled substances is if your records prove there is legitimate medical purpose and that you are not prescribing to an addict. For patients who have medical issues that require scheduled substances, they have to understand that they need to agree to the terms of your medication management agreement or they cannot be prescribed scheduled substances.

At a minimum, physicians who prescribe controlled substances need to do the following:

(1) register for the CURES database and run reports on all new patients and regularly on existing patients (some psychiatrists who treat patients with medications are not as careful on these points as are pain management physicians);
(2) remember that the CURES system is not perfect and do not rely solely on it;
(3) record all drugs dispensed and prescribed in the patient chart and keep copies of the prescriptions in the patient's chart;
(4) conduct the appropriate physical exam and obtain records from prior physicians and speak to those physicians;
(5) have pain management or medication agreements with patients that are followed and document when the agreement is breached;
(6) have a system in place that addresses the patients' medical issues and refer to specialists as needed; and
(7) remember that spending a weekend to address your practice and compliance is well worth the effort.

Once your practice has been open for some time, it is critical to revisit policies and procedures once a year just to protect yourself and your practice.


Posted by Tracy Green
Green and Associates, Attorneys at Law
tgreen@greenassoc.com
213-233-2260

New Rules Require Revocation Of Physician Assistant License If Registration As Sex Offender Required - Critical To Have Chaperones And Be Careful Of Plea Agreements Involving Sexual Issues

Over the years I have represented physicians, physician assistants, nurses and other health care professionals who have been accused of unlawful "touching" by a patient. In a number of these cases, the allegations were false. For example, one high profile gynecologist was accused of sexual touching when he conducted a breast exam of a 55 year old woman with fibroid breasts both with her laying down and sitting up. Since she had never had a breast exam where she was sitting up, she made a complaint. The complaint was dismissed but it was an unpleasant interview for the physician to go through simply because he was being thorough.

A few years ago, a physician assistant was accused of sexual touching because he placed the stethoscope just under the area near the breast while he listened to the heart -- very standard routine exam. The complaint was dismissed but only after an interview and investigation.

Recently, I was asked to consult on a case where a physician was charged criminally with a violation of Business & Profession Code 726 which prohibits sexual contact with patients since the physician had consensual oral sex with a patient.

Currently, I am representing a health care professional who is accused of touching a woman's breasts over the clothes during an exam. The case has been filed criminally since the same complaint was made by two different women and the present plea offer is a misdemeanor but with a requirement that he register as a sex offender. The sex offender registration is part of the regular plea offer. In his case, it would not be a bar to practice but if he were a physician assistant it would be a bar.

The Physician Assistant Committee in California has decided to increase the level of discipline for any physician assistant who has had sexual contact with a patient or who has been convicted of  a sex offense as defined in Section 44010 of the Education Code. Under the revised California Code of Regulation 1399.523 there is a finding that any proposed decision "shall contain an order revoking the license" and that "[t]he proposed decision shall not contain an order staying the revocation of the license."

What does this mean? First, if a physician assistant has sexual contact with a patient in violation of Section 726 or is convicted of any sex offense defined in Education Code Section 44010 which includes any registration as a sex offender -- the physician assistant's license will be revoked and is not eligible for probation.

For those unfortunate enough to be charged with any offenses related to sexual touching or gratification, any defense or plea of such charges needs to consider this important change.

For those that are practicing, it is critical that the use of chaperones -- especially for male PAs -- be considered as a routine policy. It should be essential during physical exams especially during breast and pelvic exams. However, all the patient needs to allege are things like touching a breast over clothes, rubbing a penis against a leg during a physical exam -- and there can be a critical issue. I have seen such allegations and they seem to be increasing for a variety of reasons and most of the cases I have handled have been false or exaggerated claims.


Posted by Tracy Green, Esq. Please email Ms. Green at tgreen@greenassoc.com or call her at 213-233-2260 to schedule a complimentary 30-minute consultation.
Any questions or comments  should be directed to Tracy Green, a very experienced California physician assistant attorney, health care attorney, and California Board attorney at tgreen@greenassoc.com.

The firm focuses its practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers in California and throughout the country. Their website is: http://www.greenassoc.com/

What Should Health Care Providers Do To Prepare For Or Help Avoid An Audit By Medi-Cal, Medicare Or Private Insurance Companies?

If you are a health care provider with a Medicare or Medi-Cal provider number -- especially in Southern California --chances are you WILL be audited or have an on-site visit at some point over the years. The audits and on-site visits (sometimes unannounced) have increased dramatically over the past years and will continue to increase as the state and federal governments face budget problems. In addition, the private insurers who administer Medicare are required by their contracts with the government to audit whether they suspect improprieties or not.

Your practice may also be subject to audits from insurance companies and health maintenance organizations (HMOs). The audit must be taken seriously since it can result in an overpayment being assessed and/or adverse administrative history. However, do not panic. Although it can seem like an intimidating event, you can increase your chances of prevailing and not having an unfair overpayment amount assessed if you prepare for any potential audit in advance and handle it properly once the request is made.

Here are some strategies and tips for helping you not only survive your audit but being prepared and prevailing to the greatest extent possible:

1. Prepare Your Staff In Advance For Understanding That Audits Are Part Of The Healthcare Business. Providers and the staff often erroneously assume that if they are being paid for claims that everything is correct and they are doing everything right. Not so. Medicare and Medi-Cal pay the provider on a "good faith" basis and reserve the right to audit. Private insurers, on the other hand, often require pre-approval before payment. Thus, it is critical that your entire staff understand that the best defense against audits is good charting, documentation, proper coding, and avoiding any upcoding, billing for services not provided or documented or anything else that may be characterized as fraud or abuse.

Once everyone understands that audits are part of the process it also helps them take control of the audit process and not let fear prevent them from handling it professionally. Most Medicare and Medi-Cal audits fall into one of three broad categories:
(1) an audit during the application or updating of application process where there is an on-site visit and review of business records and typically only a limited number of claims;
(2) prepayment audits (most common in Medicare), in which a review of claims is conducted before Medicare pays the physician, where carriers typically want to look at only one or two claims from each physician; and
(3) post-payment audits.

In a comprehensive post-payment audit or review, the carrier reviews a small statistical sample of claims and uses the results to calculate a projected overpayment for a period of months or years.

2. Identify In Advance Who Is Authorized To Speak To Auditors And Any Other Person Or Investigator Who Visits The Office In An Announced Or Unannounced Visit. First impressions count and this applies to audits and other visits by regulators or investigators. You will be better prepared if you determine in advance who is permitted to speak to government auditors or regulators. For example, you do not want the receptionist interviewed about your office's policies and procedures since anything he or she says may be used in your audit.

Establish a procedure that only an office manager, the provider or the health care lawyer are allowed to meet and discuss anything with the auditor or regulator. The other staff should be limited to contacts about establishing times and dates available for meeting unless and until they are instructed to do so by the designated persons in charge of the audit. There are many horror stories about staff meeting with auditors or regulators while the provider is out of the office and giving misinformation which was later used against the provider.

3. In Order To Anticipate An Audit Or Prevent An Adverse Audit, Understand Fully How The Medicare Or Medi-Cal Program Operates. Providers often assume that billers and office staff know how the Medicare and Medi-Cal programs operate when this is often not the case. Billers are used to working from superbills and entering codes without analyzing whether all the program rules are being followed. It should be understood by all that these programs will only reimburse "reasonable and necessary" services where there is the required documentation -- even if the services were provided. If the documentation is not present in the file -- it will be presumed that the service was not provided or that it was not medically reasonable and necessary.

We suggest that the providers have the billers and office managers create a thorough notebook regarding each of the procedure codes billed that contains the printed portions of any relevant manuals about what constitutes 'reasonable and necessary services' as defined by Medicare or Medi-Cal and what documentation is required for these services. It is then necessary to have the providers and anyone who sees patients or provides services read and understand these requirements. In addition, the provider needs to be aware of what your local carrier wants claims forms and patient records to contain because the requirements vary.

The provider may have worked in a hospital or private setting where the documentation requirements are different from private Medicare or Medi-Cal and not realize they are failing to properly document the file. For example, state law and private insurers may allow a physical therapist assistant or physical therapy aide to perform certain tasks in physical therapy while Medicare's billing and reimbursement policies and procedures may not pay for the same treatment by these assistants or aides for Medicare treated patients. Such information typically is contained in the Medicare manual and the local carrier's local medical review policy which are all available online.

Above all else, maintain complete documentation in patient records to substantiate the services billed. Record symptoms and diagnoses, details of the services and level of care provided, and complete progress notes. Medicare considers lack of corresponding documentation as evidence that billed services were not reasonable and necessary. The auditor will consider any related reimbursement as an overpayment and require the provider to refund the applicable amount.

There should be periodic internal reviews of files and education to ensure that the documentation is being done properly. Even if this billing and procedure code notebook and research was not done before the audit, prepare it at the beginning of the audit so everyone at the provider's office is prepared and knows the billing and reimbursement policies. Often during the audit, auditors will be mistaken about documentation or medical necessity requirements.

4. Have A Health Care Attorney To Whom You Can Send Any Audit Letters Or Whom You Can Contact Anytime There Is A Visit And Request For An Interview. If you receive a letter or visit from your Medicare or Medi-Cal carrier requesting a number of charts or records, contact your attorney immediately and fax him or her the letter or business cards of the visitors. Even if the attorney only needs to be minimally involved in most of the audit and file preparation, you need an objective person to ensure that the audit is handled in the best manner possible.

It is often easier for the health care attorney to speak with the auditors and set up a timetable for any interviews or to ensure that there is sufficient time to respond to the request for documentation. In most cases, thirty or sixty minutes of a qualified health care attorney's time at the beginning of the audit is well worth it since it will reduce the risk of overpayment, help reduce the provider's time and help ensure that the audit goes smoothly and that a good impression is made.

Resist the temptation to think that if a health care attorney is involved that an auditor or regulator will think that something is "wrong." In fact, the opposite impression is given: the provider is sophisticated, professional and has an established method for responding to audits. This is especially important in "unannounced" visits where it is easier for a health care attorney to be objective and take control of the situation where an auditor simply shows up and demands records and interviews at that moment. The health care attorney can also address regulatory issues that may be beyond the provider's expertise.

5. Read Any Letters Or Lists Carefully And Make Sure You Understand What Is Requested And See If There Are Any Patterns. This is another reason to send an audit or similar letter to your health care attorney so you understand what is requested. For example, assume that records for specific dates of service are requested as to a certain number of patients. Make sure that you also send in any other documentation that would support the services rendered on that day. This could include laboratory results, X-ray reports, photographs, consultations from other physicians, etc.

When reviewing the audit letter, especially if the letter requests multiple charts, see if there seems to be some type of underlying pattern or theme in the chart notes. Were the requested patient charts all billed for one particular code, all referred by a certain physician, or is there some other pattern? This will assist you in better addressing the concerns of the audit -- which may not be told to you directly by the auditors.

6. Determine With Your Health Care Attorney Whether You Need An Expert Witness Or Coding Expert During The Audit Process. Your attorney and you should consider hiring a coding expert to review the charts, preferably before you submit them to the auditor or carrier. If the expert cannot complete the review before the deadline for producing the records, the attorney will ask for an extension or simply have the expert conduct his review at the same time that the carrier does. Your attorney should have the review done under the attorney work product privilege so that the results will be confidential. One excellent preventative measure is to have a coding expert review charts periodically so that you know that your practice is in compliance with billing and record requirements. This can also be part of a compliance plan.

7. Take Control Of The Audit. Make Sure Records Are Complete. Review Charts And Records Carefully Before Copying Them Or Providing Them To Auditors. The auditors or regulators do their best to put the burden on the provider to prove that the services were properly documented and coded. Remember that the auditors are often not medical personnel even if they have some medical training. The auditors will often ask for the charts right away in unannounced visits.

Take your time and ensure that all reports, notes and other information are in the chart before you produce or copy it. Look for other records such as sign in sheets that will also be relevant to the audit. One of the most important things to do in preparing to respond to an audit is to ensure that the records are complete. One of the best ways to do this is to meticulously compare each medical record with its corresponding billing record. Remember, the billings are where the government’s investigation began. You can ensure that there are records for each of the dates billed, identify coding issues and have a better idea how to proceed in the audit.

Another important step is to make sure you produce the complete records. It is not enough to have them but you need to produce them and have records of the production. If you fail to produce records requested, you can be penalized financially or with adverse action against your provider number. If the auditor or regulator agrees you do not need to produce certain records or documentation, you or your health care attorney should document this agreement. It is important to document what is produced since you will be creating an administrative record. All records and documentation produced should be accompanied by a memorandum or letter itemizing the records produced and either delivered in person or with a return receipt or overnight service as proof of delivery.

8. Do NOT Alter The Records. If you need to supplement the records, make sure you do not back date or alter the records. Altering records can cause problems much worse than overpayments -- Medical Board complaints and discipline. Seek the advice of counsel when it comes to supplementing records or there is any issue about missing records.

9. Understand What Circumstances Might Can Trigger An Audit. Audits can provide an education. They can be stressful, especially if the outcome is unfavorable. However, they can offer tremendous amounts of information and educational opportunities for your office. Try to remain positive while you go through this process. What are some common triggers of audits?

■ High or excessive use of specific CPT codes. Sometimes excessive use of certain ICD-9 codes may also trigger audits. Generally, doctors who are outside the bell curve with regard to billing practices may get flagged on internal carrier audit screens.

If your practice tends to be more specialized (perhaps you specialize more in geriatric patients), you will, by the nature of your practice, be billing certain codes more frequently than the other doctors in the community who have a more broader-based practice pattern. You will want to explain these issues to the auditors. Do not be afraid to bill for specialized services or think that you will avoid an audit by underbilling or billing at the lower code. Just be extra careful in the documentation. Do not alter proper billing protocols just to try to stay under the radar. Bill for what you did and let the chart defend you.

Importantly, don't stress to the auditors how you provide services for "free" and underbill. That does not help your audit in most circumstances. Are you billing for codes where you are using new technology? Did you change your practice patterns to become more specialized so that your billing patterns changed? Did you add new diagnostic or therapeutic machines to the practice? Did you purchase a practice? If so, you may flag out on a statistical basis. Explain your billing and practice changes to the auditors and the best defense is a well-documented file. Use the research notebook described above to ensure you are complying with all the documentation and medical necessity requirements.

■ Do you have an unhappy patient or patient's family? If you have an unhappy patient, review the bill if the patient had a bad outcome or received an unexpectedly large bill. Sometimes collection practices or a bad outcome can prompt a patient to launch a complaint that generated the audit. To avoid such problems in the future, make sure the patient knows upfront about the costs. Speak with the biller or collection service to alter methods of collections. Consider formulating a payment plan with the patient or allow patients to pay with a credit card. If one of the patients was unhappy, raise this with the auditors.

■ Do you have disgruntled current or former employees? All it takes is a complaint from a current or former employee to trigger a fraud audit or other review. The employee may try to get revenge and the best way to prevent this from occurring is to do the following:

--have a compliance plan that requires the employee to report suspected fraud and abuse during employment;

--conduct exit interviews where employees are asked about any suspected fraud or abuse;

--have written employee policies and maintain personnel files;

--have regular office meetings to review policies;

--address small issues before they escalate to large ones;

--make everyone in the office feel like part of the team; and

--educate the employees regarding billing and documentation requirements so that they do not mistakenly think that something is being done improperly.

If you suspect that a current or former employee triggered the audit, bring the disgruntled employee up in the audit and explain why he or she is not credible if he or she is the source. The auditor may not identify the complainant but this may help defuse the employee's allegations.

■ Are You Overusing Pre-Printed Forms Or Template Shortcuts? Be careful with the use of templates especially in electronic records. Although templates are acceptable charting methods, they can look very repetitive, especially when it comes to routine care and services. Each chart note should clearly reflect the chief complaint, history, examination and treatment you rendered on that date for that patient.

Cutting and pasting templates/macros from previous dates of service and simply using that language again in subsequent chart notes does not necessarily indicate what happened on that specific date of service. It makes for a bigger charts but once it looks repetitive or like filler, it can cause an issue with the audit where your office might be characterized as a "mill" or you are questioned about the amount of time spent with the patient.

Look for these triggers and others as they will help you defend the audit. Do not be afraid of negative facts or problems that you have found. If there are weaknesses or mistakes, discuss with your health care attorney whether you should concede certain issues at the audit level for credibility reasons. Do not assume that if you admit certain problems that the auditors will be fair to you or not seek overpayment. You need to have a strategy and having an outside objective person such as a health care attorney can be useful so you do not make a tactical mistake that could cause later problems or result in an overpayment.

10. Be Professional. Treat the auditors with respect even when you disagree with them or their position. This is another reason to have an objective health care attorney for you to rely upon. It is easy to get emotional and defensive when your medical services seem like they are under attack and you already feel underpaid by the carriers.

11. Maintain A Notebook Of Administrative And Professional Records. In advance of the audit, have a notebook or file with all the key documents you need for an audit. You will be prepared and then update these on an annual basis at the beginning of the year. These records include but are not limited to the following:

--All Medicare and Medi-Cal applications and supplemental applications (see if there is an issue with failure to update these applications);

--Malpractice insurance, workers' compensation insurance; liability insurance and any other insurance required by the programs; --Copies of all licenses held by providers and staff;

--Other business documentation required by the programs such as office leases, contracts with laboratories, contracts with suppliers, etc. (this will depend upon the type of provider);

--Equipment lists where the equipment is diagnostic or used for billing; and

--Any other documentation required by the program and its manuals.

12. Request An Exit Conference Or Meeting Upon The Conclusion Of The Audit. Depending on the type of audit or visit, you want to have an exit conference or meeting where you can address any outstanding issues in the audit. You also may want to or submit a letter that is reviewed or drafted by your health care attorney showing that you have fully complied with all record requests and documenting any positions regarding coding, billing, medical necessity or other issues that have arisen. Having an excellent record of your submissions will be important to obtaining a favorable result and creating a good record if there is a subsequent hearing.

13. Conclusion. Audits happen to all providers. It does not necessarily mean you are a bad provider or that you should immediately leave the Medicare or Medi-Cal programs. With increasing financial pressures on health programs and practices, it is important to be forward thinking and create compliance plans and self-audit so your practice does not get assessed an overpayment.

During the audit, do your best to turn a potentially negative situation into a positive learning experience to correct any legitimate problems that the audit may uncover as well as to minimize the chance of future audits. Being stubborn and continuing to bill improperly will not help your practice. The carrier may still monitor your subsequent claims to see if your billing practices have actually changed and comply with the program's rules and regulations. Be proactive, anticipate audits in advance and handle audits intelligently and you will prevail to the greatest extent possible.

Posted by Tracy Green, Esq. Please email Ms. Green at tgreen@greenassoc.com or call her at 213-233-2260 to schedule a complimentary 30-minute consultation.  

Any questions or comments  should be directed to Tracy Green, a very experienced California administrative law attorney, Los Angeles Medicare audit attorney, and Los Angeles Med-Cal attorney.The firm focuses its practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed providers and in audits, administrative board and discipline matters in California and throughout the country. Our website is: http://www.greenassoc.com/

Health Care Practice Risk Management And FAQ - Treating Patients In A Difficult Economy

Health care practices are facing problems when patients become unable or don’t pay their co-pays or when they refuse to pay their physician charges. Just sending matters out to collections without finding out more can lead to Board complaints and lawsuits. Here are some frequently asked questions:

Question: When a patient is dissatisfied with care, can he or she dispute the charge with the credit card company?

Answer: A credit card customer can always request that a charge be questioned. Normally, when this situation occurs, the credit card issuer will open an investigation into the disputed charge. In the meantime, the card issuer may also withhold paying the credit charge amount to the physician.

Q: What is the appropriate response when an established patient comes in but is unable to pay?

A: Talk to the patient first. Investigate why the patient isn’t paying the bill; e.g., is he or she unhappy with the care? After that, you can consider alternative financing options, including bill collection. It is helpful to have a written policy summarizing the practice’s policy on financial matters that you give to each patient at the initial visit. A health care provider has the right to expect payment for services rendered. The practice should have a policy and apply it consistently in a nondiscriminatory fashion. When you can, “remind” a patient that he or she received a copy of your policy at the time of the first visit. It makes handling this type of difficult situation easier. If you decide to terminate the patient relationship for nonpayment, you must follow a formal process that includes giving the patient proper notice and treating emergencies in the interim.

Q: Can the health care provider refuse to establish a patient-physician relationship based on the patient’s inability to pay?

A: Yes, as long as the patient is not seeing you based on a referral from an Emergency Department where you were on call when the patient was seen. If the patient did not come to you as a result of an ED call and you have an established policy of not accepting patients who cannot pay, you can refuse to establish the relationship. Potential patients should be given some indication of your practice’s financial requirements when they make an initial appointment for treatment. If the potential patient is not aware of your financial requirements, he or she may delay making other arrangements for care while waiting for an appointment with you. If the patient then arrives for an appointment and you decide not to accept him or her for financial reasons, your decision can appear questionable in retrospect if the patient is injured by the subsequent delay in receiving medical care. A process in which the biller checks the status of coverage before the patient comes in can expedite your decision on whether to accept him or her as your patient.

If the patient was a referral from an ED call, determine the requirements of the particular hospital as established in the hospital’s medical staff bylaws and rules and regulations. You must follow those requirements. At a minimum, you will likely be required to see the patient at least one time to determine the patient’s status and whether he or she has an emergency medical condition under EMTALA. If the patient is in need of emergent treatment, you will likely be required to provide the care regardless of his or her ability to pay, although you can ask for payment or payment arrangements.

Q: When a patient is dissatisfied with the result of an elective procedure and demands a concession (a free revision, a refund, a discount, or refuses to pay credit card charges), what recourse does the physician have?

A: Selecting the correct patient, providing very thorough informed consent, and keeping the lines of communication open are your best defenses against patient dissatisfaction. However, once a patient who is dissatisfied asks for compensation, contact your attorney or your risk manager, who will help you evaluate the situation from professional liability and compliance standpoints. In some situations, making a concession may be viewed as a “courtesy” gesture and may be a positive factor in the defense of a claim. Other situations may warrant the use of a Release of Claims form.

One preventative measure is to put a time limit on any adjustments or revisions to the original procedure (such as 60 or 90 days from the procedure date). Otherwise, a patient could come in years later and request a revision that was discussed when the procedure was first done.

Q: What factors should I consider in choosing a commercial credit company to provide a line of credit to my patients? Where can I find a reputable company?

A: Some commercial credit companies hold the physician responsible if the patient defaults on a payment. Before using a commercial credit company, read the contract carefully to make sure you won’t be liable for a patient’s outstanding balance. You should also be aware of your state’s consumer protection laws regarding lending and disclosure and make sure that your patients understand the terms and conditions of the financing. Your bank, local medical society, or professional society can help you locate a commercial credit company.

Q: How should my office handle credit card challenges?

A: A credit card company will notify the physician in writing about an inquiry into a charge that is being challenged. It is very important that you respond to the letter. If you don’t clarify the dispute, the charge will be disallowed. Educate your office staff so that they recognize these letters and they bring them to your attention. Be sure to respond to any letter related to charges that are in question.

One preventative measure is that if you accept a credit card for payment, you may want to consider a limit on allowable credit card charges. The limit can be a percentage of the total treatment charge or a dollar limit, e.g., $3,500, $5,000, or not more than 50 percent of the procedure cost.

Other preventative measures are (1) payment plans should be in writing and signed by the patient and (2) be sure to obtain a reference for credit applications. This will ultimately assist you in locating the patient if the account needs to be sent to a collection agency.

Q: Can I use a collection agency?

A: Yes, but sure you select a reputable collection agency. There are very specific state laws dealing with fair debt collection. A physician who selects an agency that violates state laws could face liability for negligent selection. We have had health care providers sued for what their collection agency did during the collection process.

As a preventative measure, identify poor payers early on and deal with the problem. Do not wait until the situation reaches a crisis point and puts your health care provider-patient relationship at risk.

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of individuals, businesses and licensed professionals, particularly health care professionals including individual physicians, corporate providers and group practices. Their website is: http://www.greenassoc.com/

Transportation Services: Attorney Comments On OIG Opinion Approving Free Transportation For Family And Friends

If your clinic or facility offers free transportation to Medi-Cal, Medicare or other beneficiaries, a recent Advisory Opinion analyzing a free local transportation program for friends and family of the residents of a skilled nursing facility ("SNF") will be helpful to your facility, compliance officer and health care attorney in structuring a free transportation plan that will be compliant with federal and state rules and regulations.

On March 13, 2009, the HHS Office of Inspector General (OIG) issued Advisory Opinion No. 09-01 analyzing the propriety of a free local transportation program, which the OIG had previously addressed in Advisory Opinion 00-07 (November 17, 2000) and in a December 10, 2002 letter, in which the OIG offered protection from administrative sanctions to those free transportation programs that were in existence prior to August 30, 2002 and met certain requirements.
For this Opinion, see:http://www.oig.hhs.gov/fraud/docs/advisoryopinions/2009/AdvOpn09-01.pdf
This Opinion is the first guidance the OIG has provided regarding free transportation exceeding "nominal value" ($10 per item or $50 annual aggregate amount), and the first applicable to family and friends of a patient (rather than the patient). It provides useful guidance regarding how to structure a compliant transportation program, and is helpful for health care providers looking for ways to remedy transportation difficulties for patients and patients' families and friends. It can also assist providers in how to structure their transportation programs for patients.

Governing Law
Section 1128A(a)(5) of the Act (the "CMP") provides for the imposition of civil monetary penalties against any person who gives something of value to a Medicare or state health care program (including Medicaid) beneficiary that the benefactor knows or should know is likely to influence the beneficiary's selection of a particular provider, practitioner, or supplier of any item or service for which payment may be made, in whole or in part, by Medicare or a state health care program, including Medicaid.

The OIG may also initiate administrative proceedings to exclude such party from the Federal health care programs. Section 1128A(i)(6) of the Act defines "remuneration" for purposes of section 1128A(a)(5) as including "transfers of items or services for free or for other than fair market value." The OIG has previously taken the position that "incentives that are only nominal in value are not prohibited by the statute," and has interpreted "nominal value to be no more than $10 per item, or $50 in the aggregate on an annual basis."

In addition, in the Conference Committee report accompanying the enactment of section 1128A(a)(5), Congress expressed its intent that, with respect to allowable remuneration, the statute should not preclude the provision of items and services of nominal value, including free local transportation services.

Case Specific Facts
The facts underlying the Opinion are specific. The SNF proposed offering free local transportation for family and friends of its residents to the facility. The facility, which was not readily accessible by public transportation, also was separated from part of its primary service area by a $9.00 toll bridge. The proposed free transportation service generally would pick up and drop off friends and family at designated public locations within the facility's service area and only provide transport to and from the facility.
OIG's Analysis
The OIG acknowledged that free transportation programs can have a beneficial effect on patient care if they are narrowly tailored to address issues of (a) financial need, (b) limited transportation resources, (c) treatment compliance or safety, and (d) do not exhibit any of the characteristics of fraudulent schemes.
However, the OIG explained that free transportation services are also sometimes an integral part of fraudulent or abusive schemes that lead to inappropriate steering of patients, overutilization, and the provision of medically unnecessary services, and therefore such arrangements should be evaluated on a case-by-case basis.
Factors To Be EvaluatedThe OIG indicated that factors to be evaluated in analyzing arrangements where providers or suppliers offer free transportation to potential sources of Federal health care program business, including beneficiaries should include, but not be limited to, the following:

■ Transportation offered in a manner related to referrals. How is the transportation being offerred?

■ Selective criteria related to the volume or value of Federal health care program business are suspect. Examples of suspect criteria include: the selection of passengers based upon a diagnosis, condition, or treatment that might result in lucrative revenues to the offeror or selection based on a patient's insurance coverage.

■ Luxury or specialized transportation. Luxury or specialized transportation, such as limousines, airline tickets, or ambulance transports, raise greater concerns because such transports are more valuable to the recipient and therefore more likely to be an improper inducement

■ Geographic area for transportation. Local transportation services are typically less valuable to the recipient than longer-distance transports.

■ Free transportation services offered to beneficiaries residing outside an offeror's primary service area are subject to abuse, particularly if the free transportation is used to expand the provider's historical service area. For example, "leap-frog" arrangements that provide free or subsidized transportation to beneficiaries traveling from outside the provider's local area, potentially bypassing other providers that could provide services for the beneficiary, are problematic.
■ Availability of other means of transportation. When examining free transportation services, we consider whether services are offered in areas lacking public transportation or areas without affordable alternatives. Free local transportation arrangements in areas lacking affordable alternative transportation are less likely to be vehicles for generating referrals.

■ Marketing or advertising. When a free transportation arrangement is marketed or advertised, there is greater risk that the arrangement is being offered as an inducement for referrals.

■ Transportation destination. Free transportation provided to or from the offeror's premises may be appropriate based on the totality of the facts and circumstances. However, free transportation of beneficiaries to a different provider raises concerns. The transportation could be an inducement for referrals from the provider to the offeror of the transportation.

■ Treatment of the costs of the free transportation. Costs of free transportation should be borne by the provider of the transportation. Arrangements that shift costs to Federal health care programs are suspect. There are some programs, such as Adult Day Health Care programs, where transportation is to be borne by the programs.

■ Other characteristics that raise concerns. Where the offeror of the free transportation is also a provider that will provide Federally payable items and services to passengers, there is increased risk that the provider could be using free transportation services to gain access to beneficiaries, potentially to provide services that are unnecessary or inappropriate. For example, the OIG has indicated that it has a long-standing concern about Medicare and Medicaid mills that provide free transportation to attract patients.
OIG's Conclusion
After analyzing the proposed SNF arrangement, the OIG concluded that, although the arrangement potentially implicates the anti-kickback statute, it would will not impose civil monetary penalties or administrative sanctions because sufficient safeguards had been built into the transportation program, and the program did not include any of the following potentially abusive arrangements:

■ Providers offering out-of-state patients free transportation to receive services at their facilities

■ Van drivers soliciting, and offering free transportation services to, Medicaid patients for health care providers who compensate the drivers on a per patient or per service basis

■ Providers offering residents of nursing facilities and other congregate care facilities free transportation services to and from their offices for services of questionable necessity

■ Providers offering patients free limousine services

■ Hospitals or other providers offering patients free ambulance services without making individual determinations of financial need

■ Hospitals or other providers inducing referrals from physicians by offering the physicians' patients free transportation to the physicians' offices or to a facility where the physician furnishes services

■ The SNF arrangement was open to the friends and families of all SNF residents and was not limited to targeted populations of federal health care program beneficiaries.

■ The transportation provided under the arrangement was reasonable and did not include luxury services.

■ The arrangement was offered and advertised only locally.

■ Moreover, the proposed arrangement was narrowly tailored to meet the needs of a community where the availability of public transportation was limited and the SNF was separated from its primary service area by a costly toll bridge.

■ The cost of the transportation would not be claimed by any federal health care program cost report or otherwise shifted to the federal government. The OIG noted that the proposed arrangement would align with the SNF's mission to provide residents with quality care in a residential setting through increased companionship resulting from access to friends and family.

Conclusion. The factors are extensive and need to be analyzed on a case-by-case basis. This Opinion is limited to its facts but it is clear where the OIG has concerns. Free transportation can be a valuable and important service but if not done properly can subject a provider to sanctions, suspension, qui tam claims and potential criminal charges. This Opinion is merely a starting point in the analysis.

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals and businesses in civil, business, administrative and criminal proceedings, with a specialty in health care providers.

Criminal Investigations, Charges And Convictions Have Consequences For Licensed Professionals

Licensed professionals and those with jobs in law enforcement or the types of job that require security clearances suffer more – almost a type of double jeopardy – when they are charged with or convicted of a crime. In some cases, professionals can suffer collateral consequences when they are charged but have yet to be convicted. For example, if a licensed physician is charged with Medi-Cal fraud, he or she will probably be subjected to a temporary suspension and temporary withhold by the Department of Health Care Services even when there is no conviction.

In California, if you have a professional license and plead guilty to a misdemeanor or felony (even one that can be reduced to a misdemeanor and be expunged), it is virtually certain that at some point you will face disciplinary action or investigation against your license arising from the conviction. This does not mean necessarily that your license will be revoked but there is a range of discipline. The level of that discipline may depend on how you handle your criminal case and disciplinary investigation from the beginning.

A recent review of recent Accusations filed by the California Board of Chiropractic Examiners and discipline imposed by the California Department of Real Estate -- just two of many professional boards -- reveal what we have known well from our practical experience: the most common ground for revocation of a license, probation or for even filing an Accusation against a license is a criminal conviction.

For example, out of 33 Accusations filed by the Chiropractic Board from July 1, 2008 to March 30, 2009 - 22 involved criminal convictions. For the Department of Real Estate, over a 3 month period, out of 101 licenses that were revoked, 72 were revoked on the ground that there was a substantially related criminal conviction in violation of Business & Profession Code Section 490 and/or there was a mere conviction of a crime in violation of Business & Profession Code Section 10177(b). For the 31 real estate licenses that were revoked with a right to a restricted license, 23 of those cases involved a criminal conviction. Most other professional boards and bureaus follow this same pattern.

One reason this occurs is that criminal convictions are easy targets for the Board investigators. There's no need to prove gross negligence or engage in a debate among the experts. It is simple to prove up a conviction -- even those that are not related to the professional practice. Most criminal acts involve "moral turpitude" and allow the Boards to look tough on discipline especially when they are not especially devoted to consumer or patient protection or simply do not have the budget to do so.

What are 8 things a licensed professional can learn from these statistics and do if they are facing the potential criminal charges?

First, it goes without saying, avoid criminal charges at all costs! Do not put your license at risk. If you are entering into a business or professional transaction that could expose you to some risk, seek legal advice to ensure compliance with the law. This could serve as a defense later in the event there are charges filed. If you are facing criminal charges or think they are a possibility, do everything in your power with the help of experienced counsel to get the charges dismissed if possible. Civil compromises, deferred prosecution agreements and other mechanisms should be considered if available.

Second, if you are facing a criminal investigation, be proactive at that time. If there is obvious true exposure, obtain experienced counsel and work on reaching the best result possible. Consider the collateral consequences to your professional license in every way possible. In some cases, reach an agreement pre-filing or early in the stages where you can influence the charge. Seek charges if possible that will have the least impact on the license. In cases that will proceed to trial, realize that the consequence of a criminal felony conviction could well be revocation of the license.

Third, do not falsely believe that only prosecutions related to the practice of your profession will result in professional discipline. The reality is that any criminal conviction for any criminal act can constitute professional misconduct. The various boards and licensed discipline professionals will discipline for anything from petty theft (shoplifting) to driving under the influence to domestic violence to tax fraud and business crimes. Disciplinary sanctions will depend on the nature of the crime committed and many additional factors.

Fourth, remember that even if you win your criminal case at trial, the burden of proof is lower at an administrative hearing. You can win the criminal trial battle but lose the war on your license. Winning your criminal case may not make the administrative matter go away. Be prepared for and aware of this fact.

Fifth, while fighting the criminal case, have counsel that will act in a manner that will not jeopardize your license. You also need to act in a manner that does not further harm your chances of holding onto your license or seeking reinstatement at an early time. Do not make any false statements or misrepresentations during proffer sessions, interviews or during testimony.

Sixth, with the help of experienced counsel, create a strategy to help bolster your professional defense while you defend your criminal case. This may include continuing education, volunteer work and other ways of showing that you are a professional who is valued in the community. Each case is different and there is no cookie cutter approach that works effectively. We like to tell clients that we help them earn the right to say they are sorry to the professional licensing boards and show them that they have learned from this experience. This needs to be done through hard work and not simply promises or letters. Action speaks louder than words.

Seventh, do not submit to interview with any government officials -- law enforcement or board investigators -- without having experienced counsel present and without being fully prepared. This is probably one of the most important points. More cases are damaged by ill-prepared interviews, confessions and misstatements which do more harm than good.

Eighth, a client who represents himself has a fool for a lawyer. Even if you think it is outside of your budget, think about the earning potential of your license over the course of your career and the value. In addition, see if you can at least hire an experienced attorney for objective guidance and advice on the key points and strategies.

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals and businesses in civil, business, administrative and criminal proceedings.

Embezzlement And Theft: Attorney Comment Re: Increased Prosecutions

In the past, we have written about how during these economic times, small to medium size businesses are especially vulnerable to fraud by trusted employees or business partners. In addition, we have represented licensed professionals and business people who have committed financial crimes such as embezzlement. We have seen an increase in the prosecution of these cases and increased sentences.

The lessons to be learned are that businesses need to be vigilant about having checks on those with access to money. Individuals need to recognize that during economic crises they will have access to money but if they take funds (even with the intent to repay), they will face prosecution more often than they would have in the past. Financial crimes are being prosecuted with a greater vigilance. Felony theft charges can ruin a career and are not worth the risk. Sentences have increased significantly for state and federal white collar crimes.

Where the case is prosecuted has a significant impact on the sentence. For the most part, prosecutions in Orange and Ventura Counties result in more jail time than those cases in Los Angeles. Embezzlement of public institutions on non-profits will stand a greater risk of prosecution than embezzlement from private companies or individuals.

We have represented a number of individuals where repaying immediately and reaching a civil settlement has avoided criminal prosecutions. Each case is different and often the victims simply want repayment. The tougher cases are where there are no funds for restitution or repayment.

Here are a summary of four recent California prosecutions. Remember that complaints and arrest warrant affidavits contain only allegations against an individual and all defendants must be presumed innocent unless and until proven guilty:

Embezzlement From State Bar Of California

On April 7, 2009, the California Attorney General’s Office filed seven criminal charges in Alameda County against its former Director of Real Property, Sharon Elyce Pearl, who allegedly embezzled $675,000 from the State Bar of California over an 8-year period.

The charges include: (1) One criminal count of embezzlement for violating section 504 of the state Penal Code and (2) Six counts of filing false tax returns for violating section 19706 of the state Revenue and Taxation Code.

The facts underlying the felony complaint are alleged to be as follows. In 1999, the State Bar purchased an office building at 180 Howard Street, San Francisco, for use as its headquarters. The State Bar inherited tenants who leased retail space within the building. As the Director of Real Property, Ms. Pearl handled building management and was responsible for collecting tenant's rent. The complaint alleges that as early as 2002, Ms. Pearl began to embezzle a portion of the rental funds she collected.

The means of embezzlement was allegedly as follows: Ms. Pearl directed some tenants to make their rent checks payable to "PLOT-The State Bar of California." Unknown to the renters, "PLOT" stood for the Piedmont Light Opera Theatre. Ms. Pearl deposited some of the checks into accounts held by the Piedmont Light Opera Theatre (PLOT). Ms. Pearl, who was a signatory on the theater's accounts, would then transfer funds from the theater accounts to her personal bank account. She would then use the embezzled funds to pay for her personal expenses.

The State Bar contends that Ms. Pearl was able to continue doing this for years because the State Bar did not keep track of the rent payments it was owed. It had no reconciliation mechanism and did not track any gaps in payments. It simply deposited the payments it received from Ms. Peal. The State Bar contended it did not uncover Ms. Pearl's involvement until 2008 when she requested a check that she claimed was for a tenant's security deposit refund. Because there were no records that the tenant in question had ever paid a security deposit, the State Bar launched an internal investigation into the financial discrepancies.

The State Bar also claims it discovered that Ms. Pearl was maintaining two sets of books, and the investigation was referred to the Attorney General's Special Crimes Unit for prosecution. These allegations regarding “date of discovery” are set forth in order to allege why the statute of limitations should not begin to run until the date the State Bar discovered the alleged embezzlement. Ms. Pearl could face up to nine years in state prison if convicted on all charges.

Copies of the complaint and arrest warrant declaration can be found at:
http://ag.ca.gov/cms_attachments/press/pdfs/n1712_pearl_complaint_-_filed.pdf
http://ag.ca.gov/cms_attachments/press/pdfs/n1712_pearl_arrest_declaration_-_filed.pdf

Trustee of 401(k) Account Convicted For Taking 401(k) Funds

On March 19, 2009, after a 6 day trial, a jury in Ventura County found Michael Joseph Pearns guilty of grand theft of more than $50,000 for stealing $97,186 from his former employees and business partners. Pearns and two business partners ran MJP Financial, a.k.a Mountain View Financial, a real estate loan firm in Westlake Village from 1995 to 2000. In 2000 the loan firm closed. While the firm was in business, 12 employees made 401(k) contributions from their personal paychecks. The company's 401(k) had a total value of $97,186. Pearns was one of the trustees of the 401(k) account.

In April 2003 Pearns was having financial difficulties. Based on Pearns' status as a “trustee,” he submitted paperwork to Morgan Stanley, the investment company where the 401(k) money was held, that allowed him to transfer all the employees' 401(k) contributions into his own personal IRA. When a former business partner of the loan firm and co-trustee of the 401(k) learned what Pearns had done, she pressured him to return the $97,186. Pearns returned approximately $72,000. The remaining money was never paid back. Thus, repayment of the majority of funds in this case did not cause the case to go away.

It is not clear why this case proceeded to trial. It may have been due to a breakdown in plea negotiations regarding jail or prison time. After the jury's verdict, Judge Kevin DeNoce revoked Pearns' bail and remanded him into the Ventura County jail pending sentencing. Pearns faces a maximum sentence of four years in state prison.

Ventura College Athletic Director and Basketball Coach Diverted Public Funds

On February 25, 2009, Greg Winslow was arrested for grand theft and misappropriation of public funds. The six-count felony complaint alleges Winslow, the former men's head basketball coach and athletic director at Ventura College, misappropriated public funds when he received and diverted money directed to the Ventura College men's basketball program into his personal bank account.

It is also alleged that Winslow assisted in and/or provided fraudulent information on admission applications for certain student athletes. This false information caused the school to classify some student athletes as California residents rather than out-of-state residents. This false information allegedly resulted in a loss of approximately $40,000 in tuition money to Ventura College.

Soccer Club Treasurer Sentenced To 28 Months For Embezzling Funds

On February 25, 2009, Alan Olin was sentenced in Ventura County Superior Court to 28 months in state prison and ordered to pay $120,735 in restitution to the Conejo Valley United Soccer Club. Olin had plead guilty to one count of felony grand theft and admitted a special allegation that he stole more than $65,000.

According to the prosecuting agency, from December 2002 through November 2007, Olin embezzled $120,735 while acting as treasurer for the Conejo Valley United Soccer Club. The fraud was discovered in 2008 after a review of the soccer club's bank records.

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of individuals, licensed professionals and businesses in civil, business, administrative and criminal proceedings.

Practice Management: Texting Patients Can Cut Costs And Increase Efficiency

Health care providers are looking for ways to cut the amount of time their practice spends in calling patients to confirm and remind them of appointments, lab calls and follow-ups. Text messages can also be used for "outreach" messages reminding patients of needed mammograms, Pap smears and cardiovascular disease lab tests. They can also be used for other reminders such as: "You have a physical at 9 a.m. tomorrow. Please do not eat or drink anything after 12 p.m. midnight."

They can also be used for billing reminders: "You have a balance of $55. Please remit." Daily reminders can also be set up for patients in reminding them to put on sunscreen or other reminders to help patients be compliant. They can also be used to develop patient relationships such as "happy birthday" greetings. Many providers report that patients like it and do not find it overly intrusive.

Although we have written this to address health care providers, many other professional practices can use the ideas in this article and adapt for their business. For example, in our own practice we are sending text messages to confirm the time and place of appointments and court or hearing appearances. This helps confirm that the person will receive and see the message without checking home answering machines, cellphone voicemails or emails. All professional practices that rely on appointments could benefit from the idea although it is usually medical practices that have the volume of patients to justify using a web-based text messaging program.

There are many Web-based text messaging options. Most are free to set up, with users billed a set fee for the month, generally in the $200 range. Also available are physician-specific systems that can mine data from a practice management or electronic medical records system, which means the messaging is all done automatically. For other systems, cell phone numbers would need to be entered manually each day. Some of the text messages can also be sent to a phone as a voicemail.

Since many people have cell phones with text-messaging capabilities, some health care providers (including test programs by Kaiser Permanente) have decided that texting is the way to go. These providers are saving numerous staff time hours per week by using a text-messaging system that automatically sends the reminders. Some practices are reducing staff time from one hour, per doctor, per day to less than 10 minutes by using text messaging systems for appointment reminders, lab calls and follow-ups. They are also able to better predict the number of "no shows" so that revenue can be increased by filling that time with additional patient visits. This can boost the bottom line of practices significantly.

Many providers have enthusiastically adopted texting. However, to make sure texting is effective for your practice, it takes some groundwork and preparation. to make sure texting is effective for your practice.

First, determine what the texting system will be used for which will help make it easier to decide which system to buy.

Second, the practice should draft the outgoing messages that will be sent and have them cleared by the practice's attorney for possible HIPAA security rule violations. Our opinion is that in general, the use of text messaging is permissible on the same basis that telephone messages have been permissible under current law. However, there should be guidelines to ensure HIPAA compliance.

Third, patients need to be given the option of whether to use the communication mode. The patients should also be given instructions on how to opt out of receiving text messages. Senior patients may need instruction on how to check their text messages. Some text messages allow you to opt out. For example, in Kaiser's case, each message ended with, "Txt STOP to end msgs."

Fourth, your practice should start collecting cell phone numbers if they have not already been collected. For physicians just getting started it might be a slow process before the system reaches its fullest potential, as it might take several months for the databases to be populated with cell numbers.

Fifth, practices need to be vigilant about making sure data fields are updated regularly to avoid invalid numbers or bounced-back messages.

Sixth, if your practice sets up a two-way system, the staff must be equipped to deal with the return messages. Some providers' systems allow patients to respond to the text message to confirm appointments, for example. The messages are sent back as an e-mail that the staff must receive. Then, the staff manually enters any schedule changes or confirmations into the practice management system.

Finally, determine in advance the format and content of the messages so the staff has little discretion in what they write. To further protect yourself, it may be that the less specific the messages, the better. Messages about test results, for example, could say something like, "Everything looks normal," or in the case of a positive result, "UR lab results are in. Call 2 discuss."

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals and businesses in civil, business, administrative and criminal proceedings, with a specialty in health care providers.

HIPAA Privacy Rule: What Does The Average Provider Have To Do?

Although HIPAA has been around for years, there are still questions and fears regarding HIPAA. Just this past week, nearly two dozen employees at Kaiser Permanante Medical Center in Bellflower, California were fired or disciplined for peering into the medical records of octuplet mom Nadya Suleman.

Fifteen employees were fired and eight were disciplined for snooping into Suleman’s records without authorization. Hospital officials discovered Suleman’s medical records had been inappropriately accessed on two different occasions beginning three weeks ago, while security personnel were monitoring Kaiser’s computer network. Kaiser officials notified Suleman about the matter on both occasions, shortly after the employees had either been fired or disciplined.

For the average health care provider , the HIPAA Privacy Rule requires activities, such as:

■ Notifying patients about their privacy rights and how their information can be used.

■ Adopting and implementing privacy procedures for its practice.

■ Training employees so that they understand the privacy procedures.

■ Designating an individual to be responsible for seeing that the privacy procedures are adopted and followed.

■ Securing patient records containing individually identifiable health information so that they are not readily available to those who do not need them.

Responsible health care providers and businesses already take many of the kinds of steps required by HIPAA to protect patients’ privacy. To ease the burden of complying with the new requirements, HIPAA's Privacy Rule gives needed flexibility for providers and plans to create their own privacy procedures, tailored to fit their size and needs. The scalability of the Privacy Rule provides a more efficient and appropriate means of safeguarding protected health information than would any single standard.

For example, the privacy official at a small physician practice may be the office manager, who will have other non-privacy related duties. However, even a small practice needs a designated privacy official. The privacy official at a large practice or health plan, in contrast, may be a full-time position, and may have the regular support and advice of a privacy staff or board.

The training requirement may be satisfied by a small physician practice’s providing each new member of the workforce with a copy of its privacy policies and documenting that new members have reviewed the policies. In addition, a small or large practice may provide training through live instruction, video presentations, or interactive software programs.

The policies and procedures of small providers can be more limited under the HIPAA Privacy Rule than those of a large hospital or health plan. This limitation is justified based on the volume of health information maintained and the number of interactions with those within and outside of the health care system. Nevertheless, there should be policies and procedures as part of a basic compliance plan. HIPAA training and compliance need not be expensive or time consuming but it must be set up. Once it is set up and implemented there is little left to do except ensure that new employees receive the training and sign documentation indicating that they have received the training.

As part of compliance plans, we encourage health care providers to have all employees attend a training overview of HIPAA (which can be conducted in-house), which will prepare them to:

(1) describe what HIPAA is and how it came to be;
(2) identify major components and implementation timeframes of HIPAA (privacy, security, code sets, due diligence, and transactions);
(3) be cognizant of the HIPAA privacy rules, current practice policies and California’s privacy laws regarding medical records;
(4) determine what is considered private vs public information;
(5) identify penalties associated with violations of HIPAA rules;
(6) report suspected violations of HIPAA rules;
(7) identify how to obtain additional assistance or information regarding HIPAA within the practice; and
(8) describe generally how HIPAA could affect them and their work unit.

Upon completion of HIPAA training, employees will sign a form acknowledging receipt of this training. One copy of the acknowledgement form will be given to the employee and another will be placed in their personnel file.

If your practice is not compliant with HIPAA training and having each employee sign a HIPAA form as part of their personnel file, it's not too late to become compliant. Most health care attorneys or other compliance providers can conduct in-office seminars or draft a training manual that can be reviewed at a reasonable cost. Don't wait for a patient to file a complaint or until an employee improperly discloses protected health information (PHI).

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, Califonria. The firm focuses its practice on the representation of licensed professionals and businesses in civil, business, administrative and criminal proceedings, with a specialty in health care providers and HIPAA compliance.

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