Healthcare Empowered

The Corporate Practice of Medicine (CPOM) is deeply rooted in Texas law. But the Corporate Practice of Dentistry similarly provides that “a person may not practice dentistry without a valid license issued by the Texas State Board of Dental Examiners. The Texas Dental Practices Act sets forth several categories of activities that constitute the practice of dentistry. For example, a person who owns, maintains, or operates a business which engages another person to practice dentistry – under any type of contract or arrangement – may be considered as engaging in the practice of dentistry.”

Like in the medical context, DSOs are often to allow unlicensed persons to share in the revenue of the dental practice.

As Keith Lefkowitz, Hendershot Cowart, P.C. points out:

In 2015, the Texas legislature passed a law requiring Dental Support Organizations to register with the state annually and provide “the name and business address of each dentist in this state with which the dental support organization has entered into an agreement.” 

The Secretary of State shares this information with the State Board of Dental Examiners, allowing them to monitor which practices are receiving services from a DSO. 

As a result, it is imperative for licensed dentists to ensure that contracts and arrangements for business support services comply with state law and TBSDE rules and regulations, especially the Corporate Practice of Dentistry doctrine.

This type of registration system is not required for MSOs, Management (or Medical) Services Organizations. MSOs are very common in the medical industry, but, in some contexts, have been abused.

Steven G. Pine, gina L. Bertolini, with K&L Gates:

Shortly after the Dobbs decision, HHS laid out its position in a 11 July 2022 memorandum issued to state survey directors (the EMTALA memo) that asserted, among other things, that state laws purporting to limit abortion services more narrowly than provided under EMTALA are preempted.

Three days after HHS issued the EMTALA memo, the Texas Attorney General (AG) filed a federal complaint in the Texas District Court seeking a declaratory judgment that HHS had acted beyond its authority in issuing the EMTALA memo, as well as an injunction seeking to prevent enforcement of the EMTALA memo. … [T]he Texas District Court granted Texas’ request for an injunction, in part, in a preliminary order issued 23 August 2022. …

The outcome of this appeal could significantly impact how hospitals, health systems, and other providers deliver emergency abortion care across the country. HHS continues to stand behind the EMTALA memo, which has only been enjoined in the state of Texas to date, stating that it would investigate reports or complaints regarding an EMTALA violation and “will not hesitate” to refer states attempting to prohibit providers from offering emergency care consistent with EMTALA to the DOJ “to take appropriate legal action.”

I anticipate the Fifth Circuit will affirm the District Court, but other appellate courts will reach different conclusions. Ultimately it will be up to the U.S. Supreme Court to settle the scope of EMTALA preemption. Again, I think they will find there is no direct conflict between EMTALA and state law, and thus, no preemption.

Will Maddox for D Magazine:

Consolidation is on the rise as well. According to research from Deloitte, the largest 10 healthcare systems in the U.S. control nearly a quarter percent of all hospitals. Between 2013 and 2018, the ten largest health systems saw revenue increase 82 percent from $505 billion to $918 billion, five times faster than the rest of the market.

Consolidation has been occurring since the 1990’s, and will likely continue as more hospitals struggle to stay profitable. Torch, an organization of rural and community hospitals, has some troubling statistics:

• Texas leads the nation in rural hospital closures.
• 26 Texas rural hospital closures (permanently or temporarily) have occurred in 22 communities since the beginning of 2010. Nationally, more than 120 rural hospitals have closed in the same time frame.
• A Centers for Healthcare Quality and Payment Reform study estimates 76 rural Texas hospitals are at risk of closure and 12 rural Texas hospitals are at immediate risk of closing.
• The closures are taking an economic toll on Texas as a rural hospital closure – on average – costs 170 jobs and an annual payroll of $22 million.
• Closures have a ripple effect in the community reducing sales tax revenue to local government, reducing school student numbers driving down state payments to the local school, and hurting local businesses across the community.

More scary statistics related to ransomware attacks on healthcare providers. Nearly half (47%) of healthcare IT professionals said their organizations experienced a ransomware attack in the past two years, up from 43% in 2021, according to a survey released by the Ponemon Institute. 

Ill-prepared providers must make the hard choice to pay or not to pay. The consequences can be devastating.

Ron Southwick, writing for Chief Healthcare Executive:

The Lehigh Valley Health Network in eastern Pennsylvania disclosed a ransomware attack last month, and said it would not pay. Lehigh Valley said a gang known as BlackCat, which has ties to Russia, launched the attack. The health network said this month that the ransomware group posted photos of cancer patients on the dark web, according to WPVI-TV in Philadelphia and other media outlets.

From the Eastern District of Texas:

Ophthalmology provider group, Arlington Ophthalmology Association, P.L.L.C. d/b/a Kleiman Evangelista Eye Centers (“K&E”), with offices located in Arlington, Dallas, Plano, Southlake, Mount Pleasant, and Gun Barrel City, Texas, has agreed to pay $2,902,505 to resolve False Claims Act allegations that it offered and paid kickbacks to optometrists to induce referrals of patients who were candidates for cataract surgery in in violation of the False Claims Act and Anti-Kickback Statute, announced Eastern District of Texas U.S. Attorney Brit Featherston.

This is a great example of how business practices common in other industries do not work in healthcare. Even if Medicare was not involved, Texas’ Patient Solicitation Act prohibits “offering to pay or agreeing to accept anything of value to secure or solicit a patient or patronage for or from a licensed professional.” It is called an “All-Payor” statute, meaning a violation is not limited to referrals for services paid by government health programs

Jonathan Porter, writing for Healthcare Law Insights, highlights several types of fraud associated with medical research and clinical trials: Clinical trial fraud, grant fraud, and failure to disclose ties to foreign governments, are all types of fraud associated with medical research and clinical trials. The Department of Justice, through it’s consumer protection branch, has become more interested in this type of fraud, which will necessarily impact researchers, including universities and research hospitals:

What is clear from these cases is that universities and hospitals must be aware that they have liability if their employees commit fraud or make false statements. Investing in a robust compliance program to root out fraud is critical, in order to both reduce False Claims Act risk and to save institutional reputation. Contact your Husch Blackwell attorney today with questions.

The root problem is our society is mentally sick. Violence is the symptom. All the security in the world won’t stop someone who is intent on hurting others. Any solution must address the problem.

Will Mattox, writing for D Magazine:

But the issue seems to be getting worse. The American Hospital Association says that 44 percent of nurses experienced physical violence, and 68 percent experienced verbal abuse during the pandemic. Given the rise of violence in the workplace in healthcare settings, one might expect these facilities to be as secure as a sporting event or airport, with metal detectors at every entrance, guests and staff asked to empty their pockets while being searched, and visible security forces throughout the facility.

But herein lies the growing tension in healthcare, especially around hospital operations and design. Healthcare leaders don’t want their facilities to feel like locked-down institutions. Walking into a new hospital these days is more likely to feel like entering the lobby of a luxury hotel with engaging art, attractive light fixtures, natural light, and multiple seating areas. A metal detector, security guard with a wand, or other deterrents might ruin the ambiance medical centers want to exude.

From Merrill Matthews, writing for The Hill:

The point is that if the federal government were better at preventing Medicare and Medicaid fraud, the programs could save perhaps $100 billion a year or more. While that wouldn’t solve Medicare’s long-term financial challenges, it would certainly help delay the day of reckoning.

While no one defends the fraud, many politicians and bureaucrats don’t seem that interested in trying to fix it. Indeed, when Republican state legislators propose verifying state Medicaid rolls to ensure recipients are qualified, Democrats usually push back.

What’s clear is that there is a way to cut Medicare without hurting Medicare patients, and that’s to cut the fraud. But it’s much less work, and perhaps more politically rewarding, to just attack political opponents.

Most people would agree that Medicare fraud should be stopped, but that’s easier said than done. Medicare’s Prospective Payment System (PPS) is part of the problem. They pay first and ask questions later. By that time, the money is long gone.

The federal waste, fraud, and abuse laws are also complicated. Many well-meaning providers do not understand them. There is growing support for revamping the Anti-Kickback Statute.