Pierce & Mandell, P.C.

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Boston, Massachusetts 02108-3002

Phone: (617) 720-2444
Fax: (617) 720-3693

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Proposed Changes to Prescription Monitoring Program Would Affect Most Physicians

Monday, February 25, 2013
By Dean P. Nicastro

Massachusetts’ new Prescription Monitoring Program (PMP) Law (Chapter 244 of the Acts of 2012) provides that practitioners who prescribe controlled substances (Schedules II-V) will be automatically registered as participants in the state’s PMP when they obtain or renew their Massachusetts controlled substance registration.  This provision took effect January 1, 2013, and the Massachusetts Department of Public Health (DPH), acting under the PMP Law’s mandate, has issued proposed amendments to its existing PMP regulations to implement the automatic participation requirement and associated provisions.

Highlights of these proposed amendments:

  • Effective January 1, 2013, all practitioners (physicians, dentists, podiatrists) who hold a Massachusetts Controlled Substance Registration (MCSR) are automatically granted authority to “utilize” the PMP
  • “utilize” is defined as accessing or reviewing a patient’s prescription history within the PMP
  • Practitioners must accept the Terms and Conditions of use of the PMP to complete a MCSR
  • PMP participants must utilize the PMP prior to seeing a “new patient” – compliance is met by reviewing the most recent 12-month prescription history of the “new patient”
  • “new patient” means an individual person who has not received any professional services from the participant within the previous 12 months
  • Attending physicians in a hospital or other inpatient facility are subject to this utilization requirement, but not other participants who provide care in the hospital/facility
  • Exceptions are carved out for when acute care is required so as not to result in patient harm, and for instances when the PMP is not reasonably possible to be utilized (e.g., technological or electrical failure)
  • PMP primary account holders may routinely request to delegate up to 2 authorized support staff to utilize the PMP on their behalf – the primary account holder is responsible for all delegate use of the PMP

The proposed regulatory amendments will be up for public hearing before the Public Health Council (PHC) on March 22, 2013.  DPH has stated that the goals of the proposed amendments are to: “(1) increase utilization of the PMP in order to provide prescribers and dispensers with additional information that can inform clinical decision making, and (2) better address the morbidity and mortality resulting from prescription drug misuse and abuse by identifying individuals in need of intervention or treatment.”  Because the proposed amendments will require physicians and other prescribing practitioners to check the PMP database when seeing “new patients,” testimony from organized medicine and other interested parties can be expected.  A final version of the regulations could be adopted as early as the PHC’s April 2013 meeting.

Pierce & Mandell P.C.’s health care lawyers are uniquely qualified to assist medical professionals in understanding, interpreting and complying with the latest PMP regulations. Contact us.

Mandatory Compliance and Ethics Programs for Nursing Homes

Thursday, February 21, 2013
By: Rebecca J. Merrill, Esq.

Time is Running Out: March 23rd is the Deadline for Nursing Facilities to Implement Mandatory Compliance & Ethics Programs

On or before March 23, 2013, Medicare and/or Medicaid certified nursing facilities must have in operation a Compliance & Ethics Program that is effective in promoting quality of care and preventing and detecting criminal, civil and administrative violations under the Patient Protection and Affordable Care Act of 2010 (Pub. L. 111-148) (the “ACA”).  While the ACA clearly required the Secretary and Inspector General of the Department of Health and Human Services to issue regulations further defining the ACA Mandatory Compliance & Ethics program requirements by March, 23, 2012, no such regulations have been promulgated.  The lack of clarifying regulations, however, does not relieve nursing facilities of the statutory obligation to have in operation such a Compliance & Ethics Program. Fortunately, the Office of Inspector General has long been committed to guiding nursing facility providers in the development of voluntary compliance plans and such guidance is an excellent starting point for developing or reviewing and updating existing compliance programs and documents. See OIG Supplemental Compliance Program Guidance for Nursing Facilities, Sept. 2008; and OIG Original Compliance Program Guidance for Nursing Facilities, Mar. 2000.  

Section 6201 of the ACA also sets forth several critical elements that must be addressed in nursing facility compliance and ethics programs to meet the ACA mandate.  These elements include:

A. Established compliance standards and procedures to be followed by employees and other agents that are reasonably capable of reducing the prospect of criminal, civil, and administrative violations.

B. Assign overall responsibility for compliance oversight to specific individuals within high-level personnel of the organization to ensure adherence to compliance and ethics standards and procedures and provide such individuals with sufficient resources and authority to accomplish such compliance.

C. Use due care not to delegate substantial discretionary authority to individuals whom the organization knows, or should know, through the exercise of due diligence, had a propensity to engage in criminal, civil, and administrative violations.

D. Take steps to effectively communicate its compliance and ethics standards and procedures to all employees and organizational agents (e.g., require participation in training program; disseminate training materials that explain requirements in a practical manner).

E. Take reasonable steps to achieve compliance with its standards (e.g., utilize monitoring and auditing systems designed to detect criminal, civil, and administrative violations under the ACA by its employee and agents; employ and publicize a reporting system that enables employees and agents to report violations without fear of retribution).

F. Consistently enforce standards and procedures through appropriate disciplinary mechanisms, including, as appropriate, discipline of individuals responsible for the failure to detect an offense.

G. After an offense has been detected, take all reasonable steps to respond appropriately to the offense and prevent further offenses of a like nature (e.g., make necessary modifications to existing compliance and ethics program to better prevent and detect criminal, civil, and administrative violations).

H. Perform periodic reassessment of the existing compliance and ethics program to identify changes necessitated by organizational evolution and changes in public policy.  

All nursing facilities should undertake a comprehensive review of existing compliance and ethics policies, if any, and update or draft new policies to ensure that the facility meets the statutory requirements for the March 23, 2013, Mandatory Compliance & Ethics Programs for CMS Certified Nursing Facilities.  The Health Care Team at Pierce & Mandell, P.C. is equipped and prepared to assist your facility in developing or updating its compliance and ethics standards and procedures.  

Final Sunshine Act Rule on Disclosure of Gifts to Doctors and Hospitals

Monday, February 18, 2013
by William M. Mandell

The Centers for Medicare and Medicaid Services (“CMS”) released its final Sunshine Rule on February 1. This Rule implements the federal open transparency system, passed as part of Affordable Care Act that requires manufacturers of drugs, devices, biological, and medical supplies covered by Medicare, Medicaid, or the Children's Health Insurance Program to report payments or other transfers of value made to physicians, dentists, podiatrists, optometrists, chiropractors, and teaching hospitals. CMS will post the reported data on a new federal public website which will “go live” by September, 2014 implementing the mandatory national reporting system intended to expand the transparency of industry relations with medicine.

Some highlights of the final Sunshine Rules include:

New Deadlines

Data collection will start on August 1, 2013 CMS said, noting that manufacturers will report the data for August through December of 2013 to CMS by March 31, 2014 and CMS will release the data on a public website by September 30, 2014. CMS is developing an electronic system to facilitate the reporting process.

Companies required to Collect Data and Report
The term “applicable manufacturer” has been defined quite broadly to include not only a company that manufactures drugs, devices, or biological or medical supply, but also companies that license the technology and distribute items. CMS, however, excluded pharmacies, in-house labs and manufacturers of raw materials or components from the Sunshine data collection and reporting requirements.

Content of Reports

Each report must disclose the form and nature of each payment by category, such as “food and beverage”, “speaking” or “research”.

Opportunity to Correct

Reporting companies and reported physician, practitioner and teaching hospital recipients will be able to review and correct the data provided in any reporting period during a specified 45 day period before it is posted on-line.

Exemption for CME Sponsorship Reporting

Support payments made by companies for CME programs and speakers are not subject to Sunshine reporting if certain requirements are meet, including proper program accreditation and the absence of company influence on content and speaker selection.


The final rule simplified the scope of reporting of research payment over a broad range of pre-clinical and FDA phase research. As allowed under the ACA, publication of reported research payments related to new products are delayed for the sooner of four years or the FDA approval date. Payments for research on new applications of existing products may not be subject to delayed publication.

Preemption Of Existing State Laws

CMS is instructing drug and device companies subject to Sunshine reporting to continue to report under State or local disclosure laws “until the requirements under the Federal rule take effect.” This would appear to mean that companies can stop collecting data after July 31, 2013 that is now required to be collected and reported under the Massachusetts Pharmaceutical and Medical Device Manufacturer Code of Conduct. The Massachusetts Department of Public Health regulations governing the Massachusetts reporting requirements were amended last November to address federal preemption and state that no company is required to disclose information to Mass DPH that has already been disclosed to CMS pursuant to Sunshine reporting and that is then provided by CMS to DPH in annual reports. But, companies would presumably still need to file final Massachusetts reports to DPH for all pre-August 2013 data collected by the June 1, 2014 Massachusetts reporting deadline.  More guidance from Massachusetts DPH will hopefully be forth coming on this issue.

As expected, Sunshine preemption does not prohibit DPH, under the Massachusetts reporting law, from continuing to require reporting of information regarding payments or other transfers of value that are not required under the Sunshine Rule.

Violation and Compliance

Companies that fail to collect and report required data to CMS on payments to physicians and teaching hospitals can be fined up to $150,000 annually in civil penalties. Knowing failure to report can result in fines of up to $1 million annually, and the federal enforcement agencies (CMS and the HHS OIG) “reserve the right to audit, evaluate or inspect applicable manufacturers for their compliance with the reporting requirements.” Companies must maintain records for five years from the date of payment.

Future Trends for Massachusetts Physicians

Overall, the relaxation under Massachusetts law on meals in locations other than hospitals and medical offices, and the recent CMS implementation of broader Sunshine Act federal reporting on financial interactions with physicians and teaching hospitals, does bring the Massachusetts regulatory scheme on relationships with industry more in line with those applicable to physicians from other states. However, one thing is certain for all physicians across the U.S. –interactions with drug and device companies will become part of a comprehensive federal searchable on-line data base accessible by the public, including patients, journalists and enforcement agencies.

The health care legal team at Pierce & Mandell  is ready to assist doctors, hospitals, and drug and device companies to better understand and comply with the new requirements.

Apologizing for Medical Mistakes

Wednesday, February 06, 2013
By Dean P. Nicastro

Massachusetts health care providers (including hospitals, clinics, nursing homes, physicians, dentists, podiatrists, chiropractors, nurses, etc.) are now subject to the benefits and challenges of a new health care law impacting the arena of medical mistakes.  Section 79L of Massachusetts General Laws Chapter 233, which took effect November 4, 2012, the so-called “Disclosure and Apology Law,” protects a health care provider’s real-time statements expressing apology, sympathy, mistake or error (“apology,” for short) from being admissible as evidence against the provider in a medical malpractice case or in an administrative proceeding (for example, a medical board disciplinary proceeding).  Specifically, when the statement relates to an “unanticipated” medical outcome and when a provider communicates it to a patient or to the patient’s relative or representative, the law sets forth the general rule that the “apology” is not admissible.

However, the law makes exception for apology statements when the health care provider (or his/her defense expert witness) “makes a contradictory or inconsistent statement as to material facts or opinions,” when questioned under oath during the litigation.  In this case, the apology is admissible in evidence for all purposes.  Because this exception is not defined, plaintiffs and defendants may take to arguing over whether a particular subsequent statement made during testimony by the provider, or by the provider’s expert witness, is in fact inconsistent or contradictory to the original statement of apology.

The new apology law also imposes upon providers an obligation to “fully inform the patient and, when appropriate, the patient’s family,” about an unanticipated outcomewith significant medical complication resulting from the provider’s mistake.”  Because the term “significant medical complication” is not defined, questions of interpretation may arise, for purposes of determining just when the obligation to inform (disclose) applies in a given situation.    

The Massachusetts Medical Society sponsored the enactment of the Disclosure and Apology Law.  It is meant to be an innovative way to promote transparency, reduce litigation, and lower the costs of the health care system.  Future judicial interpretation will aid in understanding the full scope of its benefits.   Providers, in the meantime, will want to proceed carefully, and may wish to consult expert assistance, in proceeding under this statute.    

For more information on health care law, contact Pierce and Mandell, P.C.

Owning and Leasing Medical and Dental Office Space: The Basics

Thursday, January 31, 2013

• Owning a Medical Office or Building

When purchasing a commercial space or building for a medical or dental practice, it is always better to own the real estate through a separate legal entity both for tax and liability purposes.  When purchasing real estate, bank counsel may be helpful, but he/she does not represent the interests of either the buyer or seller.  Buying or seller a building or office condominium involves deed registration, title searches, zoning and permitting, thus it is important to hire a lawyer who specializes in real estate conveyancing.  

• Leasing a Medical Office

When leasing commercial medical space, you first must fully and accurately identify the premises. It is important to be clear on the dimensions and/or square footage of the leased premises and how it is calculated. It is helpful to determine if the square footage referenced is rentable (which includes portions of common areas) or useable (within the four walls of the premises).

• Price

When leasing a commercial dental space, there are several common lease rates, including triple net lease and gross lease.  In a triple net lease the tenant typically pays a lower base rent to the landlord and then the tenant pays all additional expenses separately.  These additional expenses may include: electricity, water, gas, janitorial services, maintenance, property taxes and property insurance.  In a gross lease rate all operating expenses are included in the monthly rental payments.  

• Lease Term

The lease term is the period during which the tenant has exclusive possession and the obligation to pay rent. A short-term lease may be beneficial for the practice owner looking for flexibility – perhaps to move to a larger space – while a long-term lease can guarantee that the tenant will be able to keep a certain space at a known rent for an extended period.

• Build-Out/Tenant Improvement

Leasing a new space that needs to be built out may require you to seek allowances to finish the space to your specifications. If leasing an existing space, there may be modifications needed, which can be paid for by both the landlord and tenant.  Some landlords will permit the tenant to engage its own architect and contractor, subject to the landlord's approval, other landlords will require the tenant to use providers selected by them.

• Maintenance

There are common area maintenance charges that may be passed on to the tenant for the landlord’s expenses for utilities, taxes and other costs related to the building or center where the premises are located.   The tenant may be required to pay a certain percentage share of the costs for maintaining, operating, repairing and replacing components of the building. Typically, the proportionate share is based on the tenant’s square footage divided by all leasable square footage for the building.

• Personal Guaranty

When entering into a commercial lease, a landlord may require a personal guarantee from the practice owners, even if they own and operate the practice through a corporation or LLC, and may refuse to rent the space without one.  The guarantors stand behind the tenant’s performance and would be personally liable for the lease and other payments if the tenant fails to do so for any reason.

• Assignment & Subletting

Having the right to assign the lease or sublet a portion or all of the office is very important when selling a practice or relocating an office.  Some leases define any change in ownership of the tenant, even a partial buy-in by another practioner, as an assignment or subletting. Therefore, the admission of new partners or shareholders, or sale of the practice could present problems if the tenant is not allowed to assign or sublet.

Right of First Refusal

A right of first refusal could allow a tenant to be notified and have the first opportunity to either purchase the space or lease additional space before the owner can sell or lease it to another person.

• Insurance

The amounts of insurance coverage are dependent on the financial strength of the parties and the nature of the tenant's business. Often the lease will require the tenant to have the landlord named as an additional insured on the tenant's liability insurance policy.

• Compliance with the Law

Most leases provide that the tenant will "comply with all laws.” There are three areas of the law are of particular concern: ADA compliance, local building code compliance, and environmental law compliance.

For information or assistance, contact Pierce and Mandell, P.C.

The above practice points should be considered by medical and dental professionals when buying or selling a practice. This list does not constitute legal advice and is not conclusive. We recommend that medical and dental practices and professionals obtain assistance from professionals (attorneys and CPAs) to ensure that agreements are complete and serve to adequately protect your interests.

HIPAA Laws And Dangerousness Disclosure

Tuesday, January 29, 2013
by William M. Mandell

In his January 15, 2013 letter to “our Nation’s Health Care Providers” United States Department of Health and Human Services Office of Civil Rights Director,  Leon Rodriquez, highlights that HIPAA does not prohibit the disclosure of health information consistent with applicable ethical standards and state law if a patient presents a serious danger to themselves or others in order to alert those persons whom the provider believes are reasonably able to prevent or lessen the threat.

Massachusetts HIPPA laws also allows for such warnings and reasonable precautions in such instances, and even imposes under Mass. Gen. L. c. 123, §36B a duty on licensed mental health professionals to warn or protect potential victims if a patient (i) has communicated an explicit threat to kill or inflict serious bodily injury upon a reasonably identified victim or victims and the patient has an apparent intent and ability to carry out the threat or (ii) has a history of physical violence which is known to the practitioner and the practitioner has a reasonable basis to believe that there is a clear and present danger that the patient will attempt to kill or inflict serious bodily injury against a reasonably identifiable victim or victims.

In such instances, licensed mental health professionals are authorized to disclose confidential communications when taking one or more of the following required reasonable precautions as defined in Mass. Gen. L. c. 123:

  • Communicate the threat to the reasonably identified victim or victims,
  • Notify the appropriate law enforcement agency in the vicinity where the patient or potential victim resides, or,
  • Arrange for voluntary hospitalization, or initiate proceedings for involuntary commitment.  
Given the focus of our national dialogue on safety from tragedy, this is a good teaching moment to make sure your clinical, social work and health information staffs understand these parameters.

Please do not hesitate to contact Pierce and Mandell, P.C. if you have any questions, or you may contact Bill Mandell directly at bill@piercemandell.com

Pierce & Mandell to Participate in Yankee Dental Congress 2013

Thursday, January 17, 2013

For the fourth consecutive year, Pierce & Mandell, P.C. is proud to be part of the Yankee Dental Congress, to be held January 30th through February 3rd at the Boston Convention & Exhibition Center.  

Yankee Dental Congress is a trade show and convention that draws thousands of dental professionals each year.  Pierce & Mandell attorneys William M. Mandell, Kate L. Auerbach and Rebecca Merrill will be available at Booth 818 to meet with dental professionals interested in legal advice on all dental law and ethics, including dental practice transitions and sales, associate buy-ins, leases, employment and service agreements, and staff employment issues.

Click here for more information on Yankee Dental Congress.

HIPAA “De-Identification Process” is Clarified by Department of Health and Human Services

Thursday, January 10, 2013
By: Rebecca Merrill

Guidance from the Office for Civil Rights (OCR) of the Department of Health and Human Services (HHS) provides clarity on the available methods of de-identification of protected health information (PHI) as well as the federal government’s scrutiny of such procedures.

The Privacy Rule of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) established two methods of de-identification: (1) Expert Determination Method and (2) Safe Harbor Method. 45 C.F.R. § 164.514(a).  These de-identification methods are applied to PHI to enable the use of health information for non-treatment purposes (e.g., research and policy development), while protecting the individual’s right to privacy by removing identifiers from the PHI prior to utilizing the data for secondary purposes.

Applying the expert determination method, a covered entity may determine that health information is not identifiable if a qualified expert, applying generally acceptable statistical and scientific principles and methods for rendering information not individually identifiable, (i) “determines that the risk is very small that the information could be used, alone or in combination with other reasonably available information, by an anticipated recipient to identify an individual who is a subject of the information; and (ii) documents the methods and results of the analysis that justify such determination.”  45 C.F.R. § 164.514(b).

The HHS guidance sets forth factors that the agency will apply when scrutinizing expert qualifications for the purpose of expert de-identification.  These factors will be helpful to health care providers, health plans and business associates in assessing the qualifications of an expert and understanding the de-identification process and risk assessment.  

The HHS guidance also details three primary principles that should guide expert risk assessment.  The first principle, replicability, involves the prioritization of “health information features into levels of risk according to the chance it will consistently occur in relation to the individual.”  For example, low risk replicability would occur when the “results of a patient’s blood glucose level test will vary”; whereas, high risk replicability would exists when the “[d]emographics of a patient (e.g., birth date) are relatively stable.” Id.  Second, the principle of data source availability examines “which external data sources contain the patients’ identifiers and the replicable features in health information, as well as who is permitted access to the data source.” Id.   In it Guidance, HHS indicates that lab reports with identifying information that are often limited to healthcare environments are low risk, while patient name and demographic information often in public sources (e.g., vital records) are high risk.  Third, the principle of distinguishability requires a determination of “the extent to which the subject’s data can be distinguished in the health information.”  Id.

Finally, the HHS guidance addresses the Safe Harbor Method, pursuant to which a covered entity can de-identify PHI by adhering to a de-identification framework that mandates removal of at least 18 identifiers from the health information and requires that the covered entity.  In addition, the Safe Harbor requires that the covered entity have no actual knowledge of potential for an individual to be identified by the de-identified information alone or in combination with other information. 45 C.F.R. § 164.514(b).  The HHS guidance offers clarification on several of these factors, enabling the covered entity to better navigate the de-identification process.  In addition, the guidance provides examples of what constitutes “actual knowledge.”   Finally, the guidance explains that once data is de-identified in accordance with the Safe Harbor, covered entities are not required to enter into data use agreements when sharing the information with third-parties.  

Pierce & Mandell’s health care lawyers can assist in all phases of HIPAA compliance for medical and dental professionals.  Contact us.

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