HEALTH LAW
GILCHRIST
FALL 2008
I.INTRODUCTION TO HEALTH CARE
A.Why Study Healthcare?
B.Outline of Our Healthcare System
●Gov’t is largest insurer in the country (ex. of publicly-funded healthcare: SChip, Medicare, Medicaid, Veterans Health Association)
●42 million are uninsured in U.S. Of this number, 1/3 belong in households that make $50,000 or more annually, and some around age 30 opt not to purchase health insurance
●Going through our healthcare system – how it works:
1.Person who is sick or injured
2.Primary care physician
3.Specialty physician
4.Hospital or Testing Facility (Diagnostic Imaging Centers – conduct MRIs, mammograms, etc.)
5.Pharmacy
6.Hopefully sick person gets well (if not, you loop back into the process)
●Players of our Health care system
1.Consumers
●Quality, cost, accessibility, ability to pay matter most to consumers
●Most likely everyone at some point (kids, sick, healthy, elderly)
●Issues that are important – quality, affordable, efficient, access/convenience of care
2.Providers
●Types of Healthcare Providers
○Hospitals (acute treatment hospital, long-term hospitals, pediatric, cardiac, etc.)
○ASC’s (Ambulatory Surgical Center – surgery center patient walks in and out, don’t stay overnight; 2 types: multi-specialty and single specialty)
○Public Health Clinics (publicly funded health centers)
○Mental Health Centers
○Physicians
○Diagnostic Imaging Providers (radiologists practice here – 2 types: diagnostic [diagnose patients] & interventional [interact w/patients via use of scopes, etc. – these may refer patients sometimes])
○ESRD (End stage Renal Disease – ex: dialysis) Facilities
○Nursing Homes
Physicians<primary care or specialists. Primary care: family practice physicians, pediatricians, OBGYN’s, mid-level provides. Specialists<referring or non-referring. Referring: neurosurgeons, cardiologists, orthopedists, oncologists, dermatologists. Non-referring: radiologists, anesthesiologists, pathologists.
●What is a referral? When one doctor sends you to another health care provider
○See Power Point charts on diff. types of primary care and specialty doctors
○All primary care physicians refer their patients (whether it’s to a hospital, testing center, or to specialty doctors)
○Some specialty physicians refer; others don’t
3.Payors
●U.S. Government (Medicare, Medicaid, etc.)
○How does gov’t get most for its money?
■Gov’t doesn’t bargain; they say this is what we’ll pay, period. In some states there are so many Medicaid patients, doctors/hospitals virtually have to take these patients (ex: MS – lots and lots of patients on Medicaid)
●State Gov’t (participate in Medicaid)
●Workers Compensation Programs [Employers (if self-insured)]
●Lawsuits (Damages)
●Charity Care (no payment)
●Insurance Companies
○How does an insurance company get the most from its providers?
■Insurance companies contract w/physicians & hospitals and say we will direct them to you, but in order to contract w/us and have access to these patients, you have to charge us less than your usual charge (so, basically, they bargain w/the health care providers b/c the providers want access to these patients)
●Consumers/Patients
●Most important issues to the people who are paying?
○Costs and effectiveness (want to get results from what they are paying for)
4.Regulators
●lots of regulators both federal and state. Biggest enforcer is Centers for Medicare and Medicaid Services (CMS) – they are huge, scary enforcer – send doctors to jail
●What issues are important here? Over-charging patients, unnecessary treatments, unnecessary or improper referrals, etc. – Gov’t has to put restrictions on these things, so doctors and hospitals don’t take advantage of the system
●Major Regulatory Schemes
○CON laws, EMTALA, HIPAA , ERISA, UHCDA (Uniform Healthcare Decisions Act – deals w/informed consent & who can consent for minors and incapacitated persons), STARK (anti-self-referral law), ANTIKICKBACK STATUTE (AKS) (prohibits doctors from getting paid for making referrals), FCA
●Interrelationships
1.Physician/Hospital Relationship
●What is the relationship b/t physicians and hospitals?
○Employment or Not? Generally, doctors are not employed by the hospital; rather, they are independent contractors. Some radiologists, etc. are employed.
○Medical Staff membership
■Documents
●Bylaws (hospitals have bylaws that tell doctors how they have to behave)
●Fair Hearing Plan (medical staff’s bylaws ; medical staff reviews doctors after they have unanticipated bad outcomes from treatments or surgeries, and Fair Hearing Plan outlines how to do this)
■Credentialing Process (how hospital reviews doctor’s credentials before allowing them on medical staff—they look at physician’s educational background, work history, if any complaints have been filed and upheld against the physician)
■Peer Review
●How do hospitals/doctors get patients?
●Doctors on medical staff send them there, or they come in through emergency room.
●How do hospitals/doctors get paid?
●Hospital<Board, Medical Staff. Board: Community leaders, Chairman of Medical Staff. Medical Staff: Medical Executive Committee.
2.Provider/Regulator Relationship
●What is the relationship b/t providers and regulators?
○Analogy? Good drivers and law enforcement – still get nervous when you pass them even if not doing anything wrong – this is how healthcare providers feel around regulators – like they’re on edge
○Governing documents
■Conditions of Participation (Medicare)
■Medicare Auditors (MACs, QICs)
■Statutes
●STARK
●ANTI-KICKBACK LAW
●False Claims act
C. “Better” reading for 8/27/09
●3 core requirements for success in medicine (applies to legal profession and others too)
1.Diligence
2.Doing right
3.Ingenuity
II.CERTIFICATE OF NEED LAW
A.What is the CON Law and Why is it here?
●1974 – National Health Planning and Resource Development Act
○Intent to have major healthcare services/equipment pre-approved
○All states were required to have CON laws by 1980
●Legislative intent:
○CON laws were originally enacted to insure quality health care by limiting supply
○Insure access to indigent population
○Control costs (one of primary motivating factors – state hoped to prevent expenditure of large amounts of money on health care services in areas where they weren’t really needed)
○Prevent unnecessary duplication of resources
●In 1982, after CON programs were in place, statistics showed there had been increases in health care costs per capita by 14%
●In 1987, there was a gov’t repeal of the federal act
●Followed end of cost-plus reimbursement
●15 states dropped CON programs
●35 (including MS) still have them [in the last 5 years, each year there has been a proposal in the MS State Legislature to do away with CON laws, and each year the proposals have failed]
●Who likes these CON laws? Hospitals and health service providers already in existence b/c it keeps out competition
●There has been only 1 hospital approved in MS since 1974 b/c of CON laws!!! (Gilchrist said that 2 have been built)
● Who benefits most from CON laws? Health lawyers b/c there is a lot of fighting over CON laws
●Proponents of CON laws say that CON laws
○promote “appropriate competition” (however they define this?);
○ maintain higher quality care as a result of the state’s monitoring; &
○insure availability of services to geographic areas who would otherwise not have those health services
B.Why Mississippi?
●Economic factors
○MS ranks 50th in median household and family income
○16% of MS families live below the poverty level
○22% of Mississippians have no health insurance
○22 counties w/double-unemployment rates in 2004
●Health Factors
○Highest percentage of births to “at risk” mothers
○Highest rate of adult overweight and obesity
○Exceed the national new case rate of TB each year
○3rd highest prevalence for diabetes (37% higher)
○1 of 11 states in “stroke belt”
C.CON process governed by:
●Mississippi State Department of Health
○State Health Plan
●Issued each year, effective July 1
●Currently under 2012 plan (supposedly effective through June 30, 2012)
●Each CON application is reviewed under State Health Plan in effect on the date Application was filed
○Certificate of Need Manual
○Case Law
●So, when you file a CON app., you have to satisfy 3 different tests (SHP, CON manual, case law)
D.Parameters for Obtaining CON
●CON granted only if Department determines:
○Need exists (most of them are volume based – based off numbers);
○Other specific/general criteria are satisfied (in CON manual) economically viable, need (not specific numbers) you have to show you give quality care;
○You have to show you will provide a reasonable amount of Indigent care; and
○Access to indigent patients.
○Most specific things are in the state plan, but if something isn’t specified in the state plan, use the Con Manuel.
●“Reasonable amount of indigent care” is defined by MDOH as:
○an amount comparable to the amount of such care offered by other providers of the same service in the same geographic area
E.MCA § 41-7-191
●Requires CON approval for any of the following 10 types of activity:
1.Any expenditure that exceeds the “capital expenditure threshold,” as defined by MDOH.
●$1,500,000 for major medical equipment
●$2,000,000 for clinical health services
●$5,000,000 for other (construction, repairs, renovations)
2.Construction, development, establishment of a new health care facility.
●Health care facility includes:
■Hospitals/ skilled nursing facilities
■Comprehensive medical rehab facilities
■ASC’s
■Home health agencies
●Does not include:
■Doctors’ offices/dentists’ office
■Diagnostic testing facilities
3.Relocation of a health care facility or portion thereof, or major medical equipment
●Unless within a mile; AND
●Costs less than capital expenditure threshold
●Applies to a wing, a service, unit, or beds
●Getting additional beds should be number 4!!!!
4.The following always require CON (unless already provided in last 12 months):
●Open heart surgery
●Cardiac catheterization
●Skilled nursing beds
●Home health services
●Comp. inpatient Rehab services
●Radiation therapy
●MRI/PET
●Ambulatory Surgery Center (ASC)
●LTAC (Long term acute care) Services
●Invasive Diagnostics
●Swing beds
●Licensed psychiatric/chemical dependency services
5.Relocation of one or more health services (unless within mile, under cap. Exp.)
6.Acquisition or control of “major medical equipment”
a.Mme – any equipment that costs more than a 1.5 million (capital expenditure)
7.Change in ownership
●If piece of equipment or facility changes ownership by 50%, you must get approval by the Dept. beforehand
8.Change in ownership of skilled nursing facility, intermediate care facility or intermediate care facility for mentally retarded
9.Any activity described in 1-9 above, if that same activity would require CON approval if undertaken by a health care facility
10.Any capital expenditure by or on behalf of a health care facility not covered in 1-10 above.
●Med. Office Bldg. (MOB) constructed on land adjacent to health care facility
●Land leased from health care facility for construction of MOB
●Health care facility has option to purchase MOB or other structure
●Health care facility maintains authority to approve tenants of MOB or other structure
●To obtain a CON:
○Satisfy the 4 general goals of the SHP
○Satisfy any applicable “specific standards and criteria”
○Substantially comply with General Review Criteria (set forth in CON Review Manual)
●4 general goals of the State Heath Plan
1.To prevent the unnecessary duplication of health resources
2.To provide cost containment
3.To improve the health of MS residents
4.To increase the acceptability, accessibility, continuity and quality of health services
●The State Health Plan: Specific Standards and Criteria
●Section B – Criteria and standards applicable to various health facilities and services
●Every CON application for any of the specified facilities or services must be found to be in substantial compliance w/these standards and criteria before a CON will be issued
●Examples of Specific Standards and criteria
○Open heart surgery – must show: top two the most important
●Minimum population base of 100,000 within the service area
●150 surgeries per year by end of year 3
●Other providers in area doing 150 surgeries per year for 2 yrs.
●Staffing levels (personnel and proper location)
●Data maintenance requirement
○MRI Services/equipment top two the most important
●2,700 procedures per year by end of year 2
●Existing units must be performing at least 1700 procs per year
●Full range of diagnostic imaging modalities available
●Staffing levels (personnel, location)
●Data maintenance
○Acute Care Beds (aka as hospital beds)
●Bed Need Formula:
○Counties w/no hospital
- state average occupancy of beds per 1,000
○Counties w/hospital : ADC (average daily census)+ K (confidence number given by state)(squre root of ADC)
- avg. daily census = ADC
- K – confidence factor
○New: underdeveloped counties w/rapidly growing populations [only county under formula here that qualifies for a hospital is DeSoto county]
○Occupancy > 70% for last 2 years
○Virtually impossible to build a hospital under this formula (b/c you can’t build a hospital w/less than 100 beds and under formula it’s nearly impossible to show that there is a need for 100 beds)
○ASC’s
●1,000 surgeries per room per year
●Population base of 60,000 w/in 30 min.
●Existing facilities in ASPA have done 800 surgeries per room per year in most recent year
●Economically viable in 2 years
●Physician support w/in 25 miles
●Other services available
- right now there is no area that meets these requirements for ASC
●Methods to Satisfy the SHP’s “Need Requirements”
○“The MSDH may use a variety of statistical methodologies including, but not limited to, market share analysis or patient origin data to determine substantial compliance with projected need and with applicable criteria and standards in this Plan.” (Source: SHP at 1-3)
○Some sets of standards prescribe formulas for projecting need
●Use prescribed formula
●Use another methodology [Recent MRI cases – no published decision]
○Where there is no prescribed formula, a variety of methodologies have been approved by the Department and on appeal:
●Population calculations based on patient origin data
●Sworn affidavits by supporting physicians
●Reference to historical utilization and documented growth of practices
○See these cases from slide:
Mississippi State Department of Health v. Natchez Community Hospital, 743 So. 2d 943(Miss. 1999)
●No “unsupported statements” by physicians
Biloxi HMA, Inc. v. Singing River Hospital, 743 So. 2d 979 (Miss. 1999)
●ASC rule – AVERAGE number of surgeries, not actual.
Delta Regional Medical Center v. Mississippi State Dept. of Health, 759 So. 2d 1174 (Miss.1999)
●Population calculations – in variety of ways.
●General Review Criteria (found in CON Review Manual)
○16 General Review Criteria apply to every project – those with specific criteria and those without
1.Economic viability (show it will be economically viable by end of year 2 of operation)
2.Need, generally, for project
3.No significant adverse impact to existing service providers
4.Quality of care (existing providers)
*1st 2 of these are argued about the most
●Procedure for Obtaining CON:
○Step 1: Notice of Intent to Apply for CON (30 days before filing Application)
○Step 2: File CON application with MDOH
●CON application considered on schedule of “review cycles”
●Filing dates December 1, March 1, June 1, September 1
●Filing fee:
○.5% of proposed capital expenditure, Not less than $1000 or more than $25,000
○additional fee: .25% of poroposed capital expendiure
○not less than $1250 or more than $75,000
○Step 3: Application must be “deemed complete” by Department’s Division of Health Planning and Resources
●30 days from filing
●Opportunity to submit additional information
○Step 4: Comment Period
●30 days – Letters accepted from Affected Parties
○Step 5: Department issues its “Staff Analysis”
●First indication of whether application will be approved or disapproved
●Made on the face of the application (they don’t look into the validity of the affadavits or numbers)
○Step 6: “Affected Parties” (anyone in the service area) may request a hearing on the application
●Called a Hearing During the Course of Review
●Must be requested within 20 days after issuance of the Staff Analysis
●The Applicant may request a Hearing IF the Application is recommended for disapproval
○Step 7: Hearing w/in 60 days of Hearing Request
●Presided over by Hearing Officer (employee of AG office)
●Parties submit Proposed Findings w/30 days of transcript
○Step 8: Hearing Officer’s Findings/Conclusions
○Step 9: State Health Officer (Dr. Ed Thompson) announces the Department’s decision at the next monthly CON announcement meeting
●Appeals from MDOH
○First Appeal: Chancery Court
●Appeal w/in 20 days of MDOH Final Order
●Applicant may appeal to Hinds Co. or home county
●Opponent may appeal only to Hinds Co.
●Chancellor must rule within 120 days from Final Order of MDOH, or MDOH deemed affirmed
○[EP1]Second Appeal: MS Supreme Court
●Appeal w/in 30 days from chancery decision
●Oral argument granted if requested
●Standard of Review
■Same at Chancery and Supreme Court levels
●Presumption that Hearing Officer and State Health Officer are correct in their decisions
●MCA § 41-7-201(2)(f) provides:
“[t]he order shall not be vacated or set aside, either in whole or in part, except for errors of law, unless the court finds that the order … is not supported by substantial evidence, is contrary to the manifest weight of the evidence, is in excess of the statutory authority or jurisdiction of the [Department], or violates any vested constitutional rights of any party involved in the appeal ….”
●Likely Timeline (with hearing)
○Day 0 – Notice of Intent
○Day 30 – Con Application filed
○Day 60 – Application Deemed Complete
○Day 90 – Comment Period Ends
○Day 105 – Staff Analysis Issued
○Day 125 – Hearing Requests Deadline
○Day 180 – Hearing Starts (??)
○Day 243 – Parties’ Proposed Findings Due
○Day 273 – Final Decision from MDOH
●Likely Timeline … (w/appeal)
○Day 293 – Appeal to Chancery Court
○Day 393 – Chancery Court decision
○Day 423 – Appeal to Supreme Court
●So, the CON law …
○Pros
●Prevents unnecessary duplication
●Curtails free market/competition
●Increases efficiency
●Decreases costs
●Maintains quality
[biggest pro – jobs for lawyers!!!]
○Cons
●Promotes monopolistic activity
●Curtails free market/competition
●Reduces efficiency
●Raises costs
●Reduces quality
I.Public Health Care Programs