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    Professor David Marcinko was a board certified surgical fellow, hospital medical staff President, public and population health advocate, and Chief Executive & Education Officer with more than 425 published papers; 5,150 op-ed pieces and over 135+ domestic / international presentations to his credit; including the top ten [10] biggest drug, DME and pharmaceutical companies and financial services firms in the nation. He is also a best-selling Amazon author with 30 published academic text books in four languages [National Institute of Health, Library of Congress and Library of Medicine].

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Celebrating Our One/Third Millionth ME-P Reader

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By Hope Hetico RN MHA

[ME-P Management and Staff]

Oh – good morning doctors, financial advisors, nurse-executives, HIT experts, healthcare CXOs and all medical management consultants, readers, subscribers, visitors and devotees of the Medical Executive-Post professional ecosystem.

We are reporting this “breaking-news” ME-P event live from an Institute of Medical Business Advisors, Inc. corporate retreat in seclusion up North.

The Breaking News!

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Hospital Acquired Conditions

Clarifying “Never-Events” Terminology

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief]

dr-david-marcinko1Did you know that “never-events” are also being called “hospital acquired conditions”; in some cases? 

Of Terms and Definitions 

Below is the list of conditions that the Centers for Medicare and Medicaid Services (CMS) selected in its FY 2008 final rule: 

  • Serious Preventable Event — Object Left in Surgery
  • Serious Preventable Event — Air Embolism
  • Serious Preventable Event — Blood Incompatibility
  • Catherther-associated Urinary Tract Infections
  • Pressure Ulcers (Decubitus Ulcers)
  • Vascular Catheter-Associated Infection
  • Surgical Site Infection — Mediastinitis After Coronary Artery Bypass Graft (CABG) Surgery
  • Hospital-Acquired Injuries — Fractures, Dislocations, Intracranial Injury, Crushing Injury, Burn and Other Unspecified Effects of External Causes

Assessment 

IOW: You might say “nosocomial”; but I may say “hospital-acquired” when it comes to infections? 

And so, is this a linguistic technique to take some of the legal-liability and “sting” out of “never-events” terminology?

Does a term-of-art really matter to the affected patient? Suppose you were the patient? 

Conclusion 

Please comment and opine? 

Speaker: If you need a moderator or a speaker for an upcoming event, Dr. David Edward Marcinko; MBA – Editor and Publisher-in-Chief – is available for speaking engagements. Contact him at: MarcinkoAdvisors@msn.com 

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FDA Liability Immunity Ruling

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The US Supreme Court Rules

[By Staff Reporters]

Did you know that the US Supreme Court just ruled that makers of medical devices – like implantable defibrillators or breast implants – are immune from liability for personal injuries as long as the Food and Drug Administration [FDA] approved the device before it was marketed and it meets the agency’s specifications? 

Background

In 2004, the administration reversed longstanding federal policy and began arguing that “premarket approval” of a new medical device by the FDA overrides most claims for damages under state law, but because federal law makes no provision for damage suits against device makers, injured patients have turned to state law and have won substantial awards, according to the New York Times 

The Ruling

The decision does not foreclose lawsuits claiming that a device was made improperly, in violation of Food and Drug Administration [FDA] specifications, while cases may also be brought under state laws that mirror federal rules, as opposed to supplementing them. 

Devices subject to the premarket approval process, and thus affected by the court’s opinion, tend to be more technologically advanced and expensive, while examples of devices that have been the subjects of recent lawsuits include an implantable defibrillator, a heart pump, a spinal cord stimulator, a drug-coated stent, an artificial heart valve, and prosthetic hips and knees. 

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matrix pills

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Assessment

The Bush administration plans to continue its push for pre-emption from personal injury suits in another FDA case that the court has accepted for its next term, on whether the agency’s approval of a drug, as opposed to a device, pre-empts personal injury suits.

And so, is this ruling a boon for trial lawyers or patients; both or neither?

Conclusion

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About CLIA

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Clinical Laboratory Improvement Amendments

 By Patricia A. Trites; PhD, MPA, CHBC, CMP™ (Hon)

trites

The Clinical Laboratory Improvement Amendment (CLIA) was passed in 1988 and pertains to any healthcare provider or entity that performs any laboratory test.   

A Series of Acts 

This legislation is actually a series of acts that established quality standards for laboratory testing in order to ensure the accuracy, reliability and timeliness of patient test results regardless of where the test was performed.   

Certification Types 

Providers must register with the Centers for Medicare and Medicaid Services (CMS) by filling out an application and paying the required fees. These fees vary upon the type or complexity of certificate requested. After completing all of the requirements, the provider will receive a CLIA Certificate.   

The four types of CLIA certificates are:  

  1. Waived Complexity
  2. Provider Performed Microscopy [sub-group of moderate complexity]
  3. Moderate Complexity
  4. High Complexity 

Revised Regulations 

In 1997 CMS enacted a new regulation that requires providers to include their CLIA number on all claim forms (ex: HCFA/CMS 1500) that contain requests for payment for clinical laboratory services.  

This is to insure that: (1) the provider has a current CLIA certificate and, (2) that the provider is performing only the laboratory tests that are allowed for the particular level of certificate. There are specific regulations and documentation requirements for the different levels of service.

Compliance Issues 

A recent study in 2001 found that a large percentage of clinical laboratories were not in compliance.  It has been recommended that increased inspection, both announced and unannounced, be instituted to better insure the quality of laboratory services.  

The CLIA requirements can be found at: http://www.cms.gov/clia. 

Assessment 

What has been your experience with CLIA?

Conclusion

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Certificates of Need [CON] Questioned in Alabama

Good Health Policy or Competitive Anachronism?

By Staff Writers

Modern Healthcare just reported on a new study by an Alabama policy research group that questions whether the state needs to have a certificate of need process in place to limit the growth of healthcare facilities in the state. 

The API Study 

The study, by the Alabama Policy Institute [API], argued that the state’s CON regulations should be repealed. Its author, Roy Cordato, contended that if the state removes its CON restrictions, doctors, clinics and hospitals would be able to respond to competitive marketplace needs more quickly, which would actually improve the efficiency of healthcare delivery there. 

Methodology

To conduct the study, researchers looked at the experience of other states with CON programs.

Assessment

It found that 13 states have recently repealed CON regulations. Removing CON requirements has given consumers improved access to care in those states. Meanwhile, there’s almost no evidence that Alabama’s existing CON process has helped to reduce healthcare costs. 

Conclusion

And so, are CONs needed for competitive modernity, or are they relics of the misguided political past? 

Related info: www.HealthCareFinancials.com 

More info: The US Healthcare Certificate of Need Sourcebook

www.beardbooks.com/beardbooks/the_us_healthcare_certificate_of_need_sourcebook.html

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The Medical Expert [Trial Witness]

An Important Determinant of Success or Failure

By Dr. Jay S. Grife; JD, MAinsurance-book1 

In every civil medical malpractice trial, besides counsel for the respective parties, there is a Plaintiff (patient) and a Defendant (doctor).

In addition to the parties and their respective counsel, witnesses, both lay and expert, form the main body of testimony that will be elicited and heard by the Judge and jury.  

Overview of Witness Types 

Both lay and expert witnesses serve to tell the story of the parties to the court.  In a medical malpractice case, a lay witness generally explains the facts of specific events which they have witnessed, or more likely, how the Plaintiff has been affected by the alleged negligence. The parties may also call a special kind of witness, called a “medical expert”, to testify on their behalf.   

Definition of Medical Expert 

An expert witness is simply a witness with experience in a particular field, whose testimony will aide the lay jury in understanding the medical aspects of the case. In most medical malpractice cases, the Plaintiff must present expert testimony from a health care practitioner that the Defendant fell below the standard of care required and caused injury to the patient.  

These are the two essential prongs which when conjoined equate to negligence in legal terminology; (1) liability being a breach in the standard of care and (2) causation being that the negligence caused the Plaintiff damages. 

The “Two-Pronged” Test 

It is essential to understand that a Plaintiff cannot prevail in litigation if only one of these two prongs has been left unsatisfied.

For example, if a physician failed to diagnose cancer in a terminally ill patient, the fact that the diagnosis was not made can be deemed negligent, but the negligence in the failure to diagnose did not damage the patient, in that she was terminal when she initially presented. 

It is this two pronged test which delineates legal negligence from commonly expressed negligence or a bad result from the care and treatment provided.

Experts Not Always Required 

In rare instances, and in ever diminishing jurisdictions, expert testimony is not required in medical negligence matters.

In those instances, the legal doctrine of Res Ipsa Loquitur or “the thing speaks for itself” often will attach to obviate the expert’s place.

Normally, in a medical malpractice case, a Plaintiff is required to establish: (1) a breach in the standard of care or that an act or omission by the Defendant that was not in keeping with the degree of skill and learning ordinarily used under the same or similar circumstances by members of defendant’s profession; and (2) causation or that such negligence or omission caused the plaintiff’s injury.

The Res Ipsa Loquitur Doctrine 

However, the doctrine of Res Ipsa Loquitur exists to preclude the need for direct proof of negligence through medical testimony, and allows cases submitted under the doctrine to proceed to the jury even in the absence of testimony as to negligence because a jury is permitted to draw an inference of negligence from the specific act itself.

The classic example of such an incident would be the leaving of a surgical instrument inside a patient’s body, or operating upon the wrong body part [“Never-Event”]. 

Conclusion:

What has been your experience with medical expert witnesses – help or hindrance – hired gun or balanced interpreter?

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New MSA / HSA Patient Identification Programs

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Further Implications of the U.S. Patriot Act for Hospitals

By Dr. David E. Marcinko; MBA, CMP™

By Hope R. Hetico; RN, MHA, CMP™dave-and-hope4

With the recent popularity and growth of health savings accounts (HSAs) and / or medical savings accounts (MSAs), compliance with the USA Patriot Act of 2002 has become an important issue for these new, hybrid health insurance products.

Many of these insurance plans place patients and insurers into relationships with shared information institutions like hospitals, healthcare organizations, medical clinics and patient clients.

The “Online” Connection

This occurs because many, perhaps even the majority of HSAs, MSAs and high deductible healthcare plans [HD-HCPs] are opened online, as patients and insurance company clients use Internet search engines to find the “best” policy type to meet their needs. 

Ditto, for more traditional health insurance plans, as well? 

Example: 

For example, on October 1, 2003, Section 326 (Customer Identification Program) of the US Patriot Act went fully into effect, requiring the implementation of reasonable procedures to verify the identity of new customers and certain existing customers opening a new MSA or HSA account. 

And, Section 3261 of the Act also requires banks, savings associations, insurance companies, hospital and medical union credit unions, and certain non-federally regulated banks to have the CIP fully implemented. Broker-Dealers [BDs] in securities are subject to similar, but slightly different rules.   

Bank Secrecy Act [BSA] 

For additional compliance, The USA Patriot Act also amended the Bank Secrecy Act (BSA) to give the federal government enhanced authority to identify, deter and punish money laundering and terrorist financing activities.

Increased Hospital Vigilance

This, the passage of the USA Patriot Act – and these important derivatives – means that affected hospitals and healthcare organizations must be more vigilant about laws concerning money laundering; reporting of disease and quarantine; and cyber attacks.

Moreover, it means that healthcare organizations must adhere to the Act, regarding affected health insurance policies, by meeting its Customer Identification Program (CIP) and anti-money laundering requirements.  

Assessment

Whatever the financial outlays required for compliance – there be very large savings later if affected hospital assets and patient health insurance information is safeguarded against attacks of virtual or real assets. 

Conclusion

And so, what is your opinion on the above health law and policy? 

Related source:Marc B. Royo and David B. Nash.Sarbanes-Oxley and Not-for-Profit Hospitals: Current Issues and Future.”

Speaker: If you need a moderator or a speaker for an upcoming event, Dr. David Edward Marcinko; MBA is available for speaking engagements. Contact him at: MarcinkoAdvisors@msn.com

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Department of Labor Curtails Healthy Habits

New DOL Regulatory Guidelines Seem Paradoxical

Staff writers 

New regulatory guidelines from the Department of Labor [DOL] may curtail the ability of employers to motivate workers and employees to kick unhealthy habits.  

According to a report in the Wall Street Journal, the guidelines close a legal loophole that could have allowed employers to make health insurance more expensive for unhealthy workers than for their colleagues. 

High Deductible – HCPs 

Some employers have incorporated a form of supplemental insurance into their wellness programs under which workers enroll in an employer sponsored high-deductible health care plan [HD-HCP] and can offset the deductible by earning “wellness credits” for meeting certain health benchmarks – such as weight control or cholesterol levels – issued under a separate supplemental policy.  

Legal Opinions and Risk Management Concerns

But lawyers, benefits managers and risk management consultants have voiced concerns that such programs could hurt employees with health problems, as unhealthy employees could face insurance deductibles more than $1,000 higher than healthier co-workers. 

Conclusion 

And so, is this fair or not – and – does it promote the public good?

“Never-Events” Payment Trends

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Aetna and WellPoint Refuse to Pay for Medical Errors

By Staff WritersMedical Chart

According to The Wall Street Journal, some large private health insurers are following Medicare’s lead by refusing reimbursement for erroneous medical care. Aetna and WellPoint now have contract provisions stating their refusal to pay – or allow patient-balance-billing – for care related to the 28 “Never-Events” compiled by the National Quality Forum [NQF].  

These NEs include, death of a low-risk pregnancy mother, instruments left in-situ after surgery, and using contaminated instruments or medical devices. Of course, the very definition of some other NEs is hotly contested.

Significant Examples 

Nevertheless, Aetna is including contract provisions that bar payment for all 28 NEs. And, WellPoint is refusing payment for 4/28 NEs in the State of Virginia.

Other insurers, like UnitedHealth Group and Cigna are considering similar moves; as are all 39 members of the Blue Cross/Shield Association. Hospitals in Minnesota and Massachusetts have already agreed to not charge for all, or at least some, of the 28 never events identified by the NQF. 

Assessment

And so, is this a national economic trend whose time has come; or just an unfortunate quality-care issue gone wrong regarding the “law of unintended consequences?”  What are your thoughts? 

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Conclusion

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The US Supreme Court

Denies GA Hospital Peer-Review Case

Staff Writers

According to Gregg Blesch of Modern Healthcare, the US Supreme Court just declined to review a case that hospitals hoped would clarify whether federal courts must defer to state laws protecting the confidentiality of peer review. 

The 11th U.S. Circuit Court of Appeals ruled in June that peer-review records should be fair game for a urologist attempting to prove he was the target of racial discrimination at 186-bed Houston Medical Center [HMC] in Warner Robins, GA.

HMC appealed to the Supreme Court. No federal law provides a privilege for hospital peer-review, yet all states have laws that protect the confidentiality hospitals say they need in order to foster the participation and candor crucial to identifying and addressing mistakes. 

And so, have you ever been on a hospital peer-review panel, and what are your thoughts on this case regarding privilege and confidentiality?

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Sarbanes-Oxley and the Healthcare Industry

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Applicability to Hospitals and Medical Organizations

[By Prof. Gregory O. Ginn; PhD, CPA, MBA, CMP™]

[By Prof. Hope Rachel Hetico; RN, MHA, CMP™]

Professor Hope HeticoIn response to scandals involving Enron Corporation and its auditor, Arthur Andersen, the U.S. Congress passed Public Law 107-204, whose short title is “The Sarbanes-Oxley Act of 2002.”  

At first blush, the Sarbanes-Oxley Act seems to have very little to do with hospitals, healthcare organizations or the medical industrial complex; however, upon closer inspection, several sections appear to be relevant to the hospital industry. 

Governance

Title III, section 302 is entitled “Corporate Responsibility for Financial Reports.”

This section requires that the principal officers and financial officers sign the financial report, certify that the report contains no false statements, and certify that the report is materially correct or face stiff penalties.

Healthcare leadership activities must include formal statements that: 1. The signing officers have reviewed financial reports; 2. Reports do not contain material untrue statements or omissions considered misleading; 3. Statements fairly present financial condition and results in all material respects; 4. Signing officers are responsible for internal controls and must report findings; 5. All deficiencies are in internal controls reports and information on fraud is included; and 6. Internal control changes that could negatively impact them are included. 

Internal Controls 

The Sarbanes-Oxley Act, Title III, section 302(a)(4)(A)–(D) indicates that the officers signing the financial reports are responsible for:

· Establishing and maintaining internal controls;

· Designing internal controls so material information is known to officers;

· Evaluating effectiveness of internal controls within 90 days; and

· Presenting conclusions about the effectiveness of internal controls.

Ethics 

Title IV of the Sarbanes-Oxley Act is entitled “Enhanced Financial Disclosures” and section 406 is entitled “Code of Ethics for Senior Financial Officers.” Section 406 calls for ethical handling of actual or apparent conflicts of interest, full disclosure in the financial reports, and compliance with government rules and regulations. 

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Hospital cafeteria plans

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Disclosure 

Title IV, section 409 is entitled “Real Time Issuer Disclosures.” It requires disclosure to the public “on a rapid and current basis such additional information about material changes in the financial condition or operations of the issuer.

This may include trend and qualitative information and graphic presentations that are necessary or useful for the protection of investors and the public interest. Hospitals may be required to take stricter stances on disclosure by the attorney general of their respective states, if not directly by the Sarbanes-Oxley Act.

Accordingly, hospitals should do the following:

· Adopt a strict conflict of interest disclosure statement and policy;

· Develop an unambiguous definition of “conflict of interest”;

· Develop and use solid criteria for selecting new board members, and

· Treat prospective physician board members like all board members. 

Financial Implications of the Sarbanes-Oxley Act for Hospitals

On the one hand, the Sarbanes-Oxley Act creates a compliance burden for hospital executives.

On the other hand, there may be benefits that will accrue from the stricter burden of compliance. Stricter ethics may result in boards making decisions that are better for hospitals and worse for physicians. Better disclosure may ultimately cause less risk to investors and provide better access to capital. More astute boards may actually make better financial decisions.

And, stronger internal controls may well help to avoid embarrassing and costly financial failures in hospitals.

Penalties 

Sarbanes-Oxley imposes penalties of fines and/or up to 20 years imprisonment for altering, destroying, mutilating, concealing, falsifying records, documents or tangible objects with the intent to obstruct, impede or influence a legal investigation.

Healthcare organizations may not attempt to avoid these requirements by reincorporating their activities or transferring their activities outside of the United States.

Conclusion

The Sarbanes-Oxley Act is intended to safeguard the economy since the healthcare industry is such a large and integral part of it, and will invariably have an effect on all healthcare organizations.

And so, has your hospital or healthcare organization, analyzed its activities to comply with the Sarbanes-Oxley Act, and very possibly improve its financial performance?

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Healthcare Entities and the US PARIOT Act?

Applicability to Hospitals and Medical Organizations

By Gregory O. Ginn; PhD, CPA, MBA, CMP™ (Hon)

By Hope Rachel Hetico; RN, MHA, CMP™

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After the September 11, 2001 terrorist attacks against the United States, the US Congress passed Public Law 107-56 whose short title is “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of 2001.”

At first blush, the Act seems to have very little to do with hospitals, healthcare organizations or the medical industrial complex; however, upon closer inspection, several sections appear to be relevant to the industry. 

The Prevention and Detection of Money Laundering 

Title III of the USA PATRIOT Act is entitled the “International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001.” The purposes of the Act are “to prevent, detect, and prosecute money laundering and the financing of terrorism.” Healthcare responsibilities in a money laundering program may include:

· Developing internal policies, procedures, and controls;

· Designation a chief compliance officer;

· Ongoing employee training programs; and

· Executing an independent audit program to test compliance 

Preparedness for Biological and Chemical Attacks 

Title X of the USA PATRIOT Act contains several calls for strengthening the public health system. Section 1013(a)(4) calls for “enhanced resources for public health officials to respond to potential bioterrorism attacks.”

Hospitals can take several steps to mitigate even in the absence of significant funding: 

· First, hospitals can establish links with ‘first responders’ such as local law enforcement, fire departments, state and local government, other hospitals, emergency medical services, and local public health departments.

· Second, hospitals can establish training programs to educate hospital staff on how to deal with chemical and biological threats.

· Third, hospitals can make changes in their information technology to facilitate disease surveillance that might give warning that an attack has occurred. Information technology may be useful in identifying the occurrence syndromes such as headache or fevers that might not be noticed individually but in the aggregate would signal that a biological or chemical agent had been released.

· Fourth, hospitals may be able to acquire access to staff and equipment to respond to biological and chemical attack through resource sharing arrangements in lieu of outright purchases. 

Protection of Critical Infrastructures 

Title X of the USA PATRIOT Act also contains section 1016, entitled “The Critical Infrastructures Protection Act of 2001.” It acknowledges that the defense of the United States is based upon the functioning of many networks and that these networks must be defended against attacks of both a physical and virtual nature.

Section 1016 also specifies that actions necessary to carry out policies designed to protect the infrastructure will be based upon public and private partnerships between the government and corporate and non-governmental agencies. 

Toward this end, the Act establishes a National Infrastructure Simulation and Analysis Center (NISAC) to support counter-terrorism, threat assessment, and risk mitigation. NISAC will acquire data from governments and the private sector to model, simulate, and analyze critical infrastructures including cyber, telecommunications, and physical infrastructures.

Health Insurance Implications 

With the recent popularity and growth of High Deductible Health Care Plans [HDHCPs], compliance with the USA PATRIOT Act has becomes an important issue for these new, hybrid health insurance products that place financial services organizations into relationships with shared information institutions like hospitals, healthcare organizations, medical clinics and patient clients.

This happens because many HDHCPs are opened by mail or online, as patients use the internet to search for policies. Appropriately, banks, healthcare entities and hospitals are working with insurance companies, trust companies and broker-dealers to offer identity-compliant and integrated HDHCPs. Verifications that these clients are who they say they are, is as paramount as monitoring their activity?

Healthcare organizations may meet these requirements by implementing a Customer Identification Program [CIP] and/or Anti-Money laundering requirements. Section 314(b) of the Act permits financial institutions, upon providing notice to the United States Department of the Treasury, to share information with one another in order to identify and report to the federal government activities that may involve money laundering or terrorist activity. 

Assessment 

Almost five years after passage of the USA PATRIOT Act, little is known about how it is being used to track terrorists, healthcare organization activity, or innocent Americans.

Unfortunately, the Muslim doctor terrorist incident of July, 2007 in North Staffordshire Hospital near Glasgow, implicated eight medical-workers of a clandestine Al-Qaeda sleeper cell in an attempted attack in Great Britain.  

Although successfully thwarted, the fact that all were tied to the British National Healthcare System [NHS] indicates the international nature of such threats and growing domestic reliance on foreign-trained physicians which must be carefully screened. 

Conclusion

The USA PATRIOT Act provides little indication in its title to affect the management of hospitals. Nevertheless, it is intended to safeguard the nation and its economy.

Since the healthcare industry is such a large part of the economy, it follows that legislation designed to protect our nation and economy will invariably have an effect on hospitals. 

And so, has your hospital or healthcare organization analyzed its activities to comply, prevent and/or mitigate losses and very possibly improve its financial performance by adhering to the US PARIOT Act?

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Regulations that Impact Medical Practice Value

Understanding USPAP Standards

Dr. David E. Marcinko; MBA, CMP™

Hope R. Hetico; RN, MHA, CMP™  

 

When a medical practice changes ownership, both the buyer and seller need to understand how industry regulation impacts practice value, as well as have an appreciation for accepted appraisal definitions and methodologies used by qualified appraisers to estimate value.   

Uniform Standards of Professional Appraisal Practice [USPAP] 

USPAP standards are promulgated to provide the minimum requirements to which all professional appraisals must conform. USPAP requires the three recognized approaches to value (the income, market, and cost approaches) be considered to estimate value. 

History 

In the fall of 1994 and 1995, the IRS first issued training guidelines pertaining to the valuation of physician practices. These guidelines suggest that appraisers consider all three of the general approaches to valuation as required by the USPAP. 

Valuation Approaches

Specifically in transactions involving physician organizations, the IRS implied: 1. The discounted cash flow (DCF) analysis is the most relevant income approach. 2. The DCF must be done on an “after-tax” basis regardless of the tax status of the prospective buyer. 3. Practice collections must be projected for DCF based on reasonable and proper assumptions for the practice, market, and health industry. 4. Physician compensation must be based on market rates consistent with age, experience, and productivity. 

Conclusion

And so, what is your experience with the above USPAP regulations, or are they new to you? 

NOTE: For comprehensive institutional information on this topic, please subscribe to our premium, 1,200 pages, 2-volume quarterly print subscription guide: Healthcare Organizations [Financial Management Strategies]       http://www.stpub.com/pubs/ho.htm  OR  www.HealthcareFinancials.com  

Speaker: If you need a moderator or a speaker for an upcoming event, Dr. David Edward Marcinko; MBA is available for speaking engagements. Contact him at: MarcinkoAdvisors@msn.com

New Negligent Medical Care Policy Proposal

In with Contract Law – Out with Tort Law and Litigation

Staff Writers 

 

The National Center for Policy Analysis [NCPA} recently reported that more than 98 percent of people injured by negligent medical care never files a lawsuit. Moreover, among the lawsuits that are filed, one in three doesn’t involve medical errors and only 46 percent of the payouts in malpractice cases go to patients. 

Of course, the threat of malpractice litigation causes great distress for doctors. One in four is sued in any given year, while more than half are sued at least once during a career. 

Therefore, the NCPA proposed using voluntary medical care legal contracts to:

· Pre-determine economic damages in the event of unexpected death or disability.

· Allow the economic payouts to be risk-adjusted.

· Require doctors to disclose quality information.

· Mandate patient accountability with medical orders.  

The center said that a legal contract system might compensate patients harmed by medical errors, reduce the cost of determining fault and compensation, and encourage health care providers and patients to reduce the frequency of errors.  

What do you think about this new health law vision of medical negligence as contract law? 

An Emerging Never-Events Policy

Leapfrog Hospital Quality and Safety Survey

Staff WritersHospital Access Management

According to a September 2007 report, just over half of responding hospitals have adopted the new Leapfrog Group Never-Events Policy, which is a list of actions to take whenever a “never-event” – a rare medical error – occurs. By agreeing to this policy, hospitals pledge to:

  • Apologize to the patient and/or family affected by the never-event.
  • Report the event to at least one of the following agencies: The Joint Commission, a state reporting program for medical errors, a Patient Safety Organization.
  • Perform a root cause analysis, consistent with instructions from the chosen reporting agency.
  • Waive all costs directly related to the serious reportable adverse event.

The Leapfrog Group follows the National Quality Forum’s (NQF) definition of “never-events”; which includes errors such as surgery performed on the wrong body part or on the wrong patient, leaving a foreign object inside a patient after surgery, and discharging an infant to the wrong person, etc. 

Is this policy reasonable or unreasonable, in your estimation?

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Tax and Estate Planning Attorneys

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Legal Re-Tooling in the Era of Healthcare Reform

[By Staff Writers]

As a tax, estate planning or bankruptcy lawyer, you already know that almost every legal magazine around has articles or advertisements proposing that you become a financial planning professional or business consultant to your physician clients. 

Moreover, lawyers of all stripes are being pushed toward interdisciplinary alliances by encroachment on their turf by the Big Four accounting firms. With audits of publicly held companies now a commodity, the giant accounting firms are getting more of their revenues from consulting, and that puts them into direct competition with attorneys, MBAs, actuaries and other management and financial service professionals. 

Of all careers, you know how absolutely onerous it is to practice medicine today, and are finally thankful that you did not take that career route many years ago. So, like your neighbor the accountant, you begin to explore that potential of developing a service line extension to your legal practice, in order to assist your medical colleagues who have been hit on hard economic times.  

2010 Estate Tax Reform Letter

The Epiphany 

In fact, you soon realize that more than 90,000 trust, probate and estate planning attorneys like yourself are interested in pursuing financial planning in the next decade. And, you reckon, advising physicians has got to be easier than law, or less stressful than the corporate lifestyle of your MBA trained brother-in-law, right? 

So, you set out to stretch your legal horizons and explore the basic legal nuances of those topics not available in law school when you were a student. Things like medical fraud and abuse standards; managed care compliance audits and Medicare recoupments, CPT® codes, OSHA, EMTALA, HIPAA, capitation and EPA standards; anti-trust issues; and managed care contract dilemmas or de-selection appeals; etc. 

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The New World 

What a brave new world the legal profession has become! Even the American Bar Association’s commission on multi-disciplinary practice has recommended that lawyers be permitted to share fees and become partners with financial planners, money managers and other similar professionals. 

As a real life example, the venerated Baltimore brokerage firm of Legg Mason teamed up with the Boston law firm of Bingham Danna, LLC, to create one of the first marriages between a law and securities firm. 

Assessment 

If you want in on the challenge and bucks, you’d better acquire at least a working knowledge of healthcare administration, or perhaps help craft some new case law, or assist your doctor-clients in some fashion; otherwise, you will remain a legal document producer.

Conclusion

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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Kindred Hospital Liability Policy

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The Medical Waiver Issue

[By Staff Writers] 

Recently, Kindred Hospital of Wyoming Valley, PA has come under fire from two attorneys who fear patients may be signing away their rights to seek a jury trial if they are injured through malpractice.  

Introduction 

Kindred Hospital, a long term acute care facility, is asking patients to sign a waiver that would mandate any claim for injuries go through mediation or binding arbitration. These are alternative legal processes utilized in lieu of filing a lawsuit.

According to the hospital, such voluntary waivers benefit the patient by allowing for faster resolution of malpractice claims. 

Not so Fast! 

But, lawyers who reviewed the document say they are concerned that it is being presented to patients who, because they are under duress due to their illness, might not understand its implications. 

Enter the Guidance Counselors 

Upon investigation, Kindred said that admissions counselors review documents to ensure patients understand it, and do not attempt to pressure them in any way. Patients also have the right to revoke the document within five days of signing it, according to the Times Leader; in February 2007.  

Assessment

Kindred Healthcare operates various types of health care facilities nationwide where the form is used. Is anyone familiar with these folks who can make an informed opinion on this tactic?

Hospital with paper MRs

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Conclusion

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Restrictive Medical Practice Covenants

About Agreements Not to Compete

[By Staff Writers]

A covenant not to compete [restrictive covenant], is an agreement whereby one party commits himself to not practicing medicine for a period of time, within a geographical area, or with members of a defined population.  

Covenant Types 

According to healthcare law expert Frederick Wm. LaCava; Ph.D, JD, arguments can arise because of two sets of circumstances: (1) sale of a practice or (2) as a term of an employment agreement [personal communication]. 

Legal Theory 

The law treats the two types of restrictive covenants quite differently, favoring agreements as part of the sale of a practice, and entertaining challenges to covenants in employment contracts.

In the sale of a practice, restrictive covenants are almost universally enforced, and play a logical part of the transfer of goodwill. This is because the biggest value of a practice may be the propensity of existing patients to come to that location for medical services.  

On the other hand, a covenant not to compete which is part of a contract of employment is far more likely to result in litigation because these covenants are more likely to be used or avoided unfairly.

Generally, a covenant will be upheld by a court if it is reasonable in terms of time, location, or patients.  For example, covenants up to two years have been almost uniformly upheld. The covenant must also extend over no more than a reasonably necessary geographical area to protect the legitimate interest. 

Alternative Approach  

An alternative to a geographical covenant limitation is the time specification of certain patients whose business may not be solicited by the former employee, within the period of the associate’s employment although they may reside anywhere. 

Conclusion 

Legal remedies to compensate those who have been harmed by a restrictive covenant violation include actual damages, liquidated damages calculated in advance the covenant was drafted, and injunction. 

Do you have – or require – a restrictive covenant in your medical practice or financial advisory firm entity?

Conclusion

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