Source: https://healthlawmonitor.jacksonkelly.com/
Timestamp: 2019-04-25 20:17:28+00:00

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Ransomware is a type of malware that encrypts data making it inaccessible to authorized users until a ransom payment is made. Ransomware can infect devices and systems through spam, phishing messages, websites, and email attachments when users click on a malicious link or open an attachment.
Health care organizations should focus on its risk assessment processes to address ransomware risks. This should include developing and implementing security incident procedures and response reporting processes to respond to malware and other security incidents. The guidance can be accessed through the following link: HHS Guidance.
Late last week, the Department of Homeland Security also released guidance on cyber incident reporting. The guidance addresses when, what, and how to report a cyber incident to the Federal Government. The fact sheet can be accessed through the following link: DHS Fact Sheet.
This article was authored by Lindsay D. Petrosky, Jackson Kelly PLLC.
On February 9, 2016, the West Virginia Supreme Court (“Supreme Court”) decided State ex rel. Wheeling Hospital, Inc. v. Wilson, No. 15-0558 (W. Va. February 9, 2016), which took up the issue of the Peer Review Privilege codified at W. Va. Code § 30-3C-1 et seq. In clarifying the meaning of the language contained in West Virginia’s Peer Review Statute, the Supreme Court recognized “an urgent need for more precise guidelines as to which documents are subject to disclosure.” Wheeling Hospital, No. 15-0558 at 14.
This matter arrived at the Supreme Court on a Petition for a Writ of Prohibition filed by the Defendant, because it had been ordered by the Circuit Court to produce several documents that it claimed were protected by the Peer Review Privilege. Id. at 3. The Plaintiff, however, argued that these documents were not necessarily created specifically to be used for peer review purposes and were documents that fell under the original source exception to the Peer Review Privilege. Id. at 4, 8. In its argument to the Supreme Court, the Defendant argued that if the documents ordered to be disclosed by the Circuit Court were, in fact, disclosed, “such disclosure [would] have a ‘chilling effect’ on the peer review process, itself.” Id. at 7 (citing Young v. Saldanha, 431 S.E.2d 669, 673 (W. Va. 1993)).
With Justice Davis writing the opinion, the Supreme Court performed a lengthy discussion of West Virginia’s Peer Review Statute and the case law interpreting the same while citing case law from other jurisdictions to aid in further interpreting the meaning of the statute. In so doing, the Supreme Court stated “that documents using data that is generated exclusively for o by a peer review organization for its sole use are protected by the peer review privilege.” Id. at 15. Further, the Supreme Court stated that “documents that contain mental impressions, analyses, and/or work product of the review organization are exempt from disclosure.” Id. Specifically, the Supreme Court found that “credentialing files are “clearly privileged.” Id. (citing Syl. Pt. 8, State ex rel. Charles Town Gen. Hosp. v. Sanders, 556 S.E.2d 85 (W. Va. 2001)).
However, according to the Supreme Court the more difficult question arises when determining “[w]hich category contains documents that are considered by a peer review organization but that have not necessarily been created specifically for or by that entity” or whether “compilations of existing data that are used by a peer review organization” fall under Peer Review protection. Id. at 16. The Supreme Court stated that “[t]he answer…is simple: ‘the origin of the document determines if it is privileged.’” Id. at 16-17 (quoting State ex rel. Shroades v. Henry, 421 S.E.2d 264, 269 (W. Va. 1992)).
To determine the origin of the document, one must “look to the way in which a document was created and the purpose for which it was used, not…its content.” Id. at 17 (quoting Bd. of Registration in Med. v. Hallmark Health Corp., 910 N.E.2d 898, 907 (Mass. 2009)). “The proper inquiry as to whether a document qualifies for protection…is whether it was created by, for, or otherwise as a result of a medical peer review committee.” Id. (quoting Hallmark, 910 N.E.2d at 907). Thus, according to the Supreme Court, “the test to apply to determine whether the peer review privilege shields a particular document from disclosure is whether the document was created exclusively by or solely for a review organization.” Id.
With regard to original source documents, the Supreme Court found that “[d]ocuments that may be provided to a peer review committee, but were not originally prepared exclusively for the committee and are also accessible to staff of the facility in their capacities as employees or managers of the facility, separate and apart from any role on a review committee, are not in any way protected by the privilege. The privilege attaches only to the files maintained by and for the committee, not to all files in a facility.” Id. at 19 (quoting Large v. Heartland-Lansing of Bridgeport Ohio, LLC, 995 N.E.2d 872, 884-85 (Ohio Ct. App. 2013)). Simply put, “documents that are otherwise discoverable do not become privileged merely because they have been dipped in the waters of a peer review committee file.” Id. at 20 (quoting Large, 995 N.E.2d at 886). Importantly though, the Supreme Court held that “[w]here documents sought to be discovered are used in the peer review process but either the document, itself, or the information contained therein, is available from an original source extraneous to the peer review process, such material is discoverable from the original source, itself, but not from the review organization that has used it in its deliberations.” Id. at Syl. Pt. 2.
Applying these principles to the facts of this case, the Supreme Court held “that the party seeking the protections of the peer review privilege bears the burden of establishing its applicability by more than a mere assertion of privilege.” Id. at 22-23. The Supreme Court further found that many of the documents that the Circuit Court ordered to be produced were, in fact, privileged by the Peer Review Privilege. Id. at 23-24. However, the Supreme Court was unable to tell whether the remaining documents were entitled to Peer Review protection, because it lacked “the crucial information determinative of the applicability of the privilege.” Id. at 24. As such, the Supreme Court held that a party seeking peer review protection of certain documents must produce a privilege log that “identifies each document…by name, date, and custodian” as well as providing information regarding “(1) the origin of each document, and whether it was created solely for or by a review committee, and (2) the use of each document, with disclosures as to whether or not the document was used exclusively by such committee.” Id. at 26. The privilege log should also contain “a recitation of the law supporting the claim of privilege.” Id.
To determine whether a particular document is protected by the peer review privilege codified at W. Va. Code § 30-3C-3 (1980) (Repl. Vol. 2015), a reviewing court must ascertain both the exact origin and the specific use of the document in question. Documents that have been created exclusively by or for a review organization, or that originate therein, and that are used solely by that entity in the peer review process are privileged. However, documents that either (1) are not created exclusively by or for a review organization, (2) originate outside the peer review process, or (3) are used outside the peer review process are not privileged.
Where documents sought to be discovered are used in the peer review process but either the document, itself, or the information contained therein, is available from an original source extraneous to the peer review process, such material is discoverable from the original source, itself, but not from the review organization that has used it in its deliberations.
The party seeking the protections of the peer review privilege bears the burden of establishing its applicability by more than a mere assertion of privilege.
A party wishing to establish the applicability of the peer review privilege, set forth at W. Va. Code § 30-3C-3 (1980) (Repl. Vol. 2015), should submit a privilege log which identifies each document for which the privilege is claimed by name, date, and custodian. The privilege log also should contain specific information regarding (1) the origin of each document, and whether it was created solely for or by a review committee, and (2) the use of each document, with disclosures as to whether or not the document was used exclusively by such committee. Finally, the privilege log should provide a description of each document and a recitation of the law supporting the claim of privilege.
This article was authored by John M. Huff, Jackson Kelly PLLC. For more information on the author, see here.
Struggling insurance cooperative Kentucky Health Cooperative was placed into rehabilitation by the Department of Insurance late last week. KYHC had already announced that it was ceasing operations and would not be writing any new business after end of year. Now, the Department of Insurance will take over the company and oversee the winding up of KYHC’s affairs.
Rehabilitation is a legal step the Department of Insurance can take for insolvent insurers under KRS Chapter 304.33. The Department of Insurance will take over the day-to-day operations of KHC and will establish a formal process for submitting claims. Typically, the insurance company will eventually transition from rehabilitation into liquidation. Given KYHC’s troubled past and stated intentions for the future, a transition to liquidation is almost a certainty.
The Department of Insurance has been authorized to retain Jeff Gaither and David Hurt as the Special Deputy Rehabilitators. Once retained, they will oversee the operations on a day-to-day basis, but that transition could take a little time.
While that transition takes place, providers will need to continue to provide care to KYHC members under their current provider contracts. Paragraph 6 of the Rehabilitation Order entered by the Franklin Circuit Court specifically states that all provider contracts shall remain in force and cannot be canceled, even if there was prior notice of cancelation or attempt at cancelation.
Providers who serve KYHC members or who have provider contracts with KYHC will need to monitor the KYHC rehabilitation closely. In order to qualify to potentially receive payment on outstanding claims, providers will need to meet the requirements and deadlines established by the Special Deputy Rehabilitators once a plan for the orderly liquidation of the company is approved.
For more information, please contact Jay Ingle in the Firm’s Lexington, Kentucky, office.
Interested parties will have until November 24, 2015 to comment on the proposed rule. If you would like to evaluate the proposed rule’s impact on your healthcare facility or are interested in submitting rulemaking comments, please contact James W. Thomas and Aaron S. Heishman, Jackson Kelly PLLC.
The Resource Conservation and Recovery Act (“RCRA”) governs the generation, storage, transportation, and disposal of solid waste and hazardous waste. All healthcare facilities generate pharmaceutical waste, including expired medicines and residue in used syringes and IV bags. While most pharmaceutical waste is not hazardous waste, healthcare facilities generate approximately 36,200 tons of hazardous waste pharmaceuticals annually. Common hazardous waste pharmaceuticals includes used smoking cessation patches containing nicotine and drugs containing warfarin such as the blood-thinning medication Coumadin®.
Properly managing and disposing of hazardous waste pharmaceuticals presents a challenge to healthcare facilities. RCRA was designed for large manufacturing facilities with employees dedicated to handling predictable waste streams. Healthcare facilities, on the other hand, generate small quantities of waste throughout a facility and require waste determinations to be made by employees whose first priority is to care for patients. Environmental agencies in many states have taken notice of the struggle of healthcare facilities to properly dispose of hazardous waste pharmaceuticals, and have brought enforcement actions against healthcare facilities for RCRA violations in recent years.
Currently, healthcare facilities that generate hazardous waste are divided into three categories—Large Quantity Generators (“LQGs”), Small Quantity Generators (“SQGs”), and Conditionally Exempt Small Quantity Generators (“CESQGs”) based on the quantity of hazardous waste generated per month. CESQGs are subject to fewer regulations, and may send hazardous waste to solid waste landfills rather than regulated hazardous waste treatment, storage, and disposal (“TSD”) facilities.
Hazardous waste pharmaceuticals managed in compliance with EPA’s proposed rule will no longer count toward a generator’s status. For example, a hospital that currently generates 110 kg of hazardous waste per month, of which 20 kg is hazardous waste pharmaceuticals, would only be deemed to be generating 90 kg of hazardous waste per month under the proposed rule. Therefore, the hospital could change from a SQG to a CESQG and be subject to fewer regulations. EPA predicts the proposed rule will allow many healthcare facilities to downwardly adjust their hazardous waste generator status.
Often, healthcare facilities return unused pharmaceuticals to manufacturers for credit that can be used to offset the cost of future purchases. Under EPA’s proposed rule, a healthcare facility’s generator status will not be affected by quantities of pharmaceuticals that are returned to manufacturers or reverse distributors for credit.
Some pharmaceuticals, such as phenol, are simultaneously listed as a hazardous substance by EPA and as a Controlled Substance by the Drug Enforcement Agency (“DEA”). Healthcare facilities that generate this dual waste face the expensive task of complying with both RCRA and DEA regulations. EPA proposes to conditionally exempt from RCRA regulation any hazardous waste pharmaceutical that is also a DEA controlled substance, as long as the healthcare facility complies with all DEA regulations.
EPA is proposing to ban all healthcare facilities, including CESQGs, from disposing hazardous waste pharmaceuticals into sewers through sinks, toilets, and drains. EPA claims sewer disposal of pharmaceuticals affects human health and the environment.
Hazardous substances that are generated in residential households are largely exempted from hazardous waste disposal regulations due to the “Household Waste Exclusion.” Currently, all hazardous waste—including hazardous waste pharmaceuticals—generated by patients at long-term care facilities is treated as exempted household waste. In its proposed rulemaking, EPA expresses its intent to abolish this household waste exemption for many long-term care facilities.
It must be stressed that EPA seeks to remove this household waste exemption for all hazardous waste generated at long-term care facilities, not just for hazardous waste pharmaceuticals. EPA believes long-term care facilities should be treated like hospitals rather than households. If adopted, this proposal could cause many long-term care facilities to become SQGs or LQGs for the first time due to the amount of non-pharmaceutical hazardous waste they generate. Importantly, the proposed rule clarifies that the household waste exclusion would continue to apply to group homes and independent living communities.
Unit-Dose Containers – Packets, pill cups, blister packs, bottles, and vials holding up to 1 liter of liquid or 1,000 pills will be considered RCRA empty if the pharmaceuticals have been fully dispensed.
Dispensed Syringes – Used syringes that held hazardous waste pharmaceuticals are also medical waste. Currently, these dual wastes must be managed, at considerable cost, in compliance with both RCRA and medical waste regulations. EPA proposes to exclude from RCRA regulation syringes that contain residue of hazardous waste pharmaceuticals. Instead, dispensed syringes can be disposed of as medical waste.
Other Containers – EPA proposes to regulate containers with residue of hazardous waste pharmaceuticals (e.g., IV bags and tubing, inhalers, aerosols, medicine tubes) as hazardous waste if the residues contain listed hazardous wastes or exhibit a hazardous waste characteristic for ignitability, reactivity, corrosivity, or toxicity.
Personnel Training - Healthcare facilities must inform employees that handle hazardous waste pharmaceuticals regarding the proper handling and disposal of these wastes. Training can be administered verbally or through written materials.
Longer Accumulation Time – LWQs and SQGs are currently only allowed to accumulate hazardous wastes for limited periods of time. The need for frequent shipments is not cost effective for healthcare facilities that generate large quantities of waste. EPA proposes to allow healthcare facilities to accumulate hazardous waste pharmaceuticals for up to 1 year before they must be shipped to a disposal facility.
This article was authored by Aaron S. Heishman, Jackson Kelly PLLC.
 See 40 C.F.R. § 261.4(b)(1).
 See 40 C.F.R. §261.7(b)(1) and (b)(3).
This month, the IRS released Notice 2015-46, which provides further guidance for charitable hospitals to comply with Treasury Regulation (“Treas. Reg.”) § 1.501(r)-4(b)(1)(iii)(F), which requires that a hospital facility include a provider list in its financial assistance policy (“FAP”) in order to maintain its tax-exempt status. Section 501(r)(1) of the Internal Revenue Code provides that a hospital organization described in § 501(r)(2) will not be treated as a non-profit entity described in § 501(c)(3) unless the organization meets the requirements of § 501(r)(3) through (r)(6). A failure to meet the requirements of § 501(r) that is neither willful nor egregious is excused if the hospital facility corrects and discloses the failure in accordance with IRS Revenue Procedure 2015-21. See Treas. Reg. § 1.501(r)-2(c). A hospital facility's omission or error relating to the § 501(r) requirements that is minor and either inadvertent or due to reasonable cause will not be considered a failure to meet a requirement of § 501(r) and subsequently stripped of its tax-exempt status if the hospital facility corrects such omission or error as soon as possible after discovery. See Treas. Reg. § 1.501(r)-2(b).
Section 501(r)(4) requires charitable hospital organizations to establish written FAPs, which must include eligibility criteria for financial assistance to patients and whether such assistance includes free or discounted care. FAPs must also include the basis for calculating amounts charged to patients and the method for applying for financial assistance. Finally, FAPs must set forth the hospital’s collection protocols that it may take against a patient in the event of non-payment.
In response to proposed regulations in 2012, a number of commenters noted that emergency department patients are commonly seen by private physician groups or other third-party health care providers while in a charitable hospital facility. These commenters asked for clarification regarding the extent to which a hospital facility’s FAP must cover these private physician groups and other third-party health care providers that can aptly be described as “non-employee providers.” Under the final regulations, a hospital facility’s FAP must apply to all emergency and medically necessary care provided in the hospital facility only to the extent the care is provided by the hospital facility itself or a substantially-related entity. See Treas. Reg. § 1.501(r)-4(b)(1)(i). The final regulations also require a hospital facility’s FAP to include a list of non-employee providers, other than the hospital facility itself, delivering emergency or other medically necessary care in the hospital facility and specify which providers are covered by the hospital facility’s FAP and which are not. See Treas. Reg. § 1.501(r)-4(b)(1)(iii)(F).
(1) If a provider is covered by a hospital facility’s FAP in some circumstances but not in others, the hospital facility must describe the circumstances in which the emergency or other medically necessary care delivered by the provider will and will not be covered by the FAP.
(2) A hospital facility’s provider list must indicate whether the services of a particular provider are or are not covered by the hospital facility’s FAP but is not required to indicate whether that provider’s services are (or may be) covered by another entity’s financial aid policy or program.
(3) Minor omissions and errors that are either inadvertent or due to reasonable cause are not considered failures to meet a requirement of § 501(r) if they are promptly corrected, and hospital organizations are not required to disclose such omissions or errors. See § 1.501(r)-2(b)(1). Omissions or errors in a hospital facility’s provider list, including a failure to include a provider in that list or to identify a service covered by the FAP, will be considered minor and either inadvertent or due to reasonable cause if the hospital facility takes reasonable steps to ensure that its list of providers is accurate. A hospital facility that updates its list of providers by adding new or missing information, correcting erroneous information, and deleting obsolete information at least quarterly will be considered to have taken reasonable steps to ensure that its list is accurate and will be considered to have corrected any minor omissions or errors in the list for purposes of § 1.501(r)-2(b).
This article was authored by Ryan Pulver, Jackson Kelly PLLC. For more information on the author, click here.
In the landmark case of King v. Burwell, the United States Supreme Court has upheld the ability of federally-run insurance exchanges to offer federal subsidy monies to Americans seeking health coverage under the Affordable Care Act. The vote was 6-3, with Justices Alito, Scalia, and Thomas dissenting. Justice Kennedy joined Chief Justice Roberts and the majority from the National Federation of Independent Business v. Sebelius case in upholding the law as currently implemented. This means that qualified individuals in the 34 states with federal exchanges (including West Virginia, Pennsylvania, Ohio, and Indiana) may continue to receive the subsidies. Further analysis of the Supreme Court’s decision will be provided in a later alert.
This article was authored by James Thomas, Jackson Kelly PLLC. For more information on the author, see here.
The Kentucky Supreme Court rendered an opinion on June 11, 2015, establishing the law in Kentucky on ex parte communications with a party’s non-expert treating physician, i.e. interviewing the Plaintiff’s treating physicians in advance of a deposition. In Caldwell v. Hon. A.C. McKay Chauvin, the plaintiff in an underlying medical negligence action sought a writ from the Kentucky Court of Appeals preventing the trial court from enforcing its order permitting the defendants to make ex partecontacts with plaintiff’s treating physician. The basis for the plaintiff’s position was that she claimed that a privilege existed under Kentucky law protecting communications between the patient and the physician, and thus prevented disclosure of those communications. She also argued that HIPAA did not allow for ex parte interviews under any circumstances.
The Court held that there is no law (Kentucky or federal) prohibiting a party from making an ex parte contact with the opposing party’s non-expert treating physician; the physician is a fact witness and the information he or she possesses is not subject to an evidentiary privilege. Included in this portion of the Opinion was the Court’s holding that there is no physician-patient privilege under the Rules of Evidence. The Court, however, went on to hold that the treating physician’s disclosure of information is still subject to HIPAA. Accordingly, for an ex parte interview to proceed, the Court held there must be a valid court order in place authorizing the disclosure of PHI in a voluntary ex parte interview pursuant to 45 CFR §164.512(e)(1)(i). In Caldwell, the trial court’s order permitted the voluntary ex parte interviews, but did not expressly authorize disclosure of the patient’s information, leaving it to the discretion of the treating physician. Thus, the Court held that any disclosure of PHI under that order would likely violate HIPAA. While the Court held that physician ethics rules did not hold the weight of law to create a privilege, they may cause a physician to refuse to engage in an ex parte interview even if a court order authorized disclosure.
The Kentucky Supreme Court’s opinion is not final. However, it will become final on July 2, 2015 unless a party files a petition for rehearing or modification of the opinion. There are several takeaways from the Court’s opinion, whether one is a party to the case or employs or is the treating physician to be interviewed. First, ex parte communications are permitted. Counsel for a party opposing the patient may reach out to the physician with or without a court order, as long as the communications do not involve HIPAA-protected disclosures (e.g., scheduling a deposition). Second, if the party making the ex parte communication seeks PHI during the interview, he/she must ensure that an order complying with 45 CFR §164.512(e)(1)(i) is in place and expressly authorizes the disclosure of the information sought. Finally, if the person involved is the treating physician, he or she should also ensure that such an order is in place prior to making any disclosures or risk sanctions. The treating physician should also make sure that a HIPAA-compliant ex parte disclosure would not subject him or her to any ethical violations or disciplinary proceedings. And as always, the ex parte interviews are informal discovery, and therefore voluntary. Thus, the treating physician can always decline the interview, which will likely be followed by a formal request for a non-ex parte examination, such as a deposition subpoena.
This article was authored by Jay Ingle and Chacey Ford, Jackson Kelly PLLC.
On April 20, 2015, the U.S. Department of Health and Human Services Office of Inspector General (“OIG”), in collaboration with the American Health Lawyers Association (“AHLA”), the Association of Healthcare Internal Auditors (“AHIA”) and the Health Care Compliance Association (“HCCA”) released new compliance guidance for health care boards entitled “Practical Guidance for Health Care Governing Boards on Compliance Oversight.” The new resource provides practical tips for boards as they oversee their organization’s efforts to comply with state and federal laws that regulate the health care industry. The new guidance will also assist internal auditors, lawyers, and compliance officers that report to health care boards.
The document, which builds upon guidance published by the OIG and AHLA in 2003, 2004, and 2007, addresses: 1) the roles of and relationships between the organization’s compliance, audit, and legal departments; 2) regular reporting to the board about the organization’s risk mitigation and compliance efforts by various members of management in key leadership roles; 3) appropriate identification and auditing of potential risk areas in a rapidly evolving health care environment; and 4) methods to encourage accountability and foster a culture of compliance throughout the entire organization. The document also includes assorted tools and tips that boards overseeing health care organizations of varying size and resources should consider implementing. These specifically identified tools and tips may serve as a new standard that the OIG will rely on to hold board members accountable in the event of a compliance problem at the organization. Boards should carefully review the new guidance and consider what changes, if any, are necessary, with the understanding that the OIG clearly expects boards to undertake an active role in overseeing the organization’s compliance program functions.
This article was authored by Rachel D. Ludwig, Jackson Kelly PLLC. For more information on the author, see here.

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