From the President
From the Statehouse
From the Legal Counsel
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FROM THE PRESIDENT...Hakan M.
Kutlu, MD
Dear Friends & Colleagues:
The nation’s financial health continues to decline with daily
reports of continued losses in the stock market and downturns
amongst former blue chip industries. The new administration is
desperately struggling to pump life back into the economy with
emergency “transfusions” of taxpayer dollars into these ailing
giants. On the positive side, the administration appears to be
serious about addressing major healthcare issues and amongst
other things has proposed the creation of a large “healthcare
reserve fund” which would help not only expand coverage for the
uninsured but would also eliminate the yearly Medicare cuts in
physicians reimbursements dictated by the current flawed SGR
formula… we’ll see if this will fly… President Obama’s plate is
quite full at the moment.
On the state front, the ASC bill has made it out of the
legislature and awaits Corzine’s signature, while a patient
safety bill has been sent back to committee for modifications.
We are currently discussing the formation of a NJ Society of
Plastic Surgeons political action committee so that we may more
actively be involved with the political process.
Final arrangements are also being made for our annual spring
conference at Forsgate on April 4th and we are quite excited
about the new two track format. We encourage you to bring your
staffers and to invite other colleagues who are not necessarily
members of the NJSPS. They can earn CME credits as well
experiencing what membership has to offer. Our next executive
committee meeting is on March 11th and I encourage you to
contact me if there are any issues which you would like
addressed on our agenda.
From the Statehouse...Beverly
J. Lynch
Election Time
We’re just one year into our two-year legislative session, and
looking forward to the November ballot – when all 80 members of
the Assembly, and the Governor (and new this year, a Lieutenant
Governor) will be considered.
We are joining with other physician groups in hosting several
fundraisers for key legislative leadership. The first one – for
Assemblyman Joe Cryan – will be held on Tuesday, March 24, 6 pm,
at Forsgate Country Club, right off exit 8A. Join your physician
colleagues for a “meet and greet” with Assemblyman Cryan.
Tickets are just $250/physician. For information, please contact
me at
blynch@blynchassociates.com or 609-392-7553.
Medical Marijuana
On February 23, 2009, the New Jersey Senate narrowly voted to
approve S-119, legislation that would establish the “New Jersey
Compassionate Use Medical Marijuana Act.” According to the
proponents of the measure, medical research suggests that
marijuana may alleviate pain or other symptoms associated with
certain debilitating medical conditions. Federal law, however,
prohibits the use of marijuana. Ninety-nine percent of
marijuana-related arrests in the country are made under state
law rather than under federal law. Changing state law would
therefore provide legal protection to the vast majority of
seriously ill people who use marijuana medically. Thirteen
other states permit the use of marijuana for medical purposes,
and with this bill, New Jersey would join the effort to protect
patients using marijuana to alleviate suffering from arrest,
prosecution, and other legal sanctions, as well as provide
protection to their physicians, caregivers, alternative
treatment centers authorized to produce marijuana for medical
purposes, and persons who simply are in the vicinity of
permitted medical use of marijuana.
Several New Jersey physician organizations have come out in
opposition to the bill. The bill now moves to the Assembly for
consideration.
Legal Report...Kern
Augustine Conroy & Schoppmann, P.C.
NJ Legislature Passes Surgical Facilities Self-Referral Bill
The NJ Assembly has passed, without amendment, the Senate
substitute for S787 which passed the Senate in December 2008.
The legislation, which now awaits the Governor’s signature,
addresses the referral of patients to a surgical facility in
which the referring physician has a financial interest and the
regulation of those surgical facilities. Practices with a one-OR
surgical suite meeting the bill’s definition of “surgical
practice,” must register with the Department of Health & Senior
Services. This process includes obtaining Medicare certification
or accreditation from an accrediting agency recognized by CMS.
ASCs must be licensed and must also obtain accreditation. There
would be only a one-year window for registrations and new
licenses to be obtained; after that time, with few exceptions,
no surgical practice registrations or ASC licenses will be
issued. Referrals from physician owners of these entities would
be exempted under the state’s law prohibiting self-referrals if
several criteria are met, including that the referring physician
personally performs the procedure, remuneration to the physician
is based only on ownership interest, and the financial interest
is disclosed to the referred patient. Important in light of
recent challenges by insurers, the legislation still provides
that referrals made prior to or within one year following the
law’s effective date would be deemed to comply with the state’s
self-referral law, if the referrer personally performed the
procedure and the entity was a licensed ASC or the entity met
the definition of a surgical practice. Once the law is enacted,
issues of facility fee billing and Medical Board oversight of
surgical practices will remain. The legislation also ends the
self-referral exemption for lithotripsy and radiation therapy
after one year from the law’s effective date.
Infighting Threatens Resolution of Lawsuit Against United
Healthcare and Ingenix
A fight between lawyers representing the AMA and certain state
medical societies, and other lawyers representing a group of
private physicians, is jeopardizing efforts to resolve class
action litigation against United Healthcare Group (UHG).
According to published reports, after NY Attorney General Andrew
Cuomo resolved a case against UHG related to its ownership and
manipulation of the Ingenix database, efforts reportedly
accelerated to resolve the long-standing case against UHG.
Lawyers representing the AMA and state medical societies are
reportedly pushing for a quick settlement, reportedly valued at
$350 million, of which up to $87.5 million would be paid to the
lawyers. Lawyers representing the private physician groups argue
that the amount the AMA and state societies is willing to accept
is woefully inadequate and are demanding $900 million to settle
the case, claiming that UHG paid physicians $3.3 billion less
than the amounts doctors billed for out-of-network services.
Apparently seeking to gain a tactical advantage in the UHG
litigation, lawyers for the AMA recently generated headlines
around the country by filing a lawsuit in Newark against Aetna
and Cigna based upon their use of the Ingenix databases.
However, the same claims have been pending against Aetna and
Cigna for two years in a lawsuit brought by the same lawyers who
represent the individual physician groups in the UHG litigation.
To read more, go to:
www.drlaw.com/classaction.
Third Circuit Rejects Exclusive Services Agreement with
Hospital
In a rare judicial analysis of the Stark law, the Third Circuit
Court of Appeals overturned a lower court decision in a case
brought by a physician whistleblower against a hospital. In
U.S. ex rel. Kosenske v. Carlisle HMA, Inc., the Court
upheld the application of the False Claims Act in a qui tam
suit where the defendant hospital had filed claims certifying
compliance with Stark and the Anti-Kickback Statute. The Court
found that the hospital’s grant of an exclusive services
contract to an anesthesiology group and the hospital’s provision
of free space, equipment and personnel to the group constituted
remuneration but that the written agreement between the two
parties failed to meet the “personal services exception” under
Stark or the Anti-Kickback law’s personal services safe harbor.
The agreement failed in part because it had not been updated to
address the group’s provision of pain management services at the
hospital’s outpatient ASC and pain clinic, services that were
added to the arrangement years after the written agreement was
executed. The Court was mindful that anesthesiologists
performing pain management become referrers to the hospital and
its facilities. The agreement also failed the fair market value
requirement, the Court stating that a written agreement stating
“negotiated” compensation between interested parties “does not
reflect fair market value.” The case applies beyond exclusive
services agreements and should alert those with “stale” or
loosely structured personal services agreements of the need to
update them to reflect the true arrangement and to comply with
an applicable exception. To read more, go to
www.drlaw.com/exclusive.
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