by Mark Bauman | May 20, 2023 | Health Care Law, Legal News
In Tristani v. Richman, the United States Court of Appeals for the Third Circuit held that Medicaid liens on judgments or settlements limited to medical costs are not prohibited by the anti-lien and anti-recovery provisions of the Social Security Act, 42 U.S.C. § 1396p(a)-(b).
In Tristani, the Pennsylvania Department of Public Welfare (the DPW) paid medical benefits on behalf of three individuals who suffered injuries allegedly caused by the negligence of others. The three individuals filed separate lawsuits against the ostensibly negligent parties, seeking compensatory damages for the injuries they sustained. After the plaintiffs settled their lawsuits with the parties allegedly responsible for their injuries, the DPW asserted liens against each of the plaintiffs’ settlements for the amount of medical expenses paid on each respective plaintiffs’ behalf, less a proportionate share of the plaintiffs’ costs and attorneys fees. The plaintiffs then commenced a putative class action lawsuit against the DPW and the agency’s current and former secretaries in the United States District Court for the Western District of Pennsylvania seeking a determination of whether the DPW had authority to assert such liens against Medicaid beneficiaries.
Two years after initiating their lawsuit against the DPW, the plaintiffs filed a motion for summary judgment in which they asked the district court to declare that: (1) the Commonwealth’s practice of asserting Medicare liens is invalid; (2) the DPW’s ability to recover medical payments made by managed care organizations is limited to capitation payments made by the State; and (3) Pennsylvania’s current method of determining what portion of a settlement constitutes medical costs violates Supreme Court precedent. The district court denied the DPW’s motion after determining that federal law prohibited the DPW from asserting liens against third-party recoveries obtained by Medicaid beneficiaries. However, the district court further held that Pennsylvania’s method of apportioning settlements between medical costs and other portions of the recovery did not violate federal law. The parties then filed cross-appeals to the United States Court of Appeals for the Third Circuit.
On appeal, the Third Circuit began by noting that the Social Security Act (the Act) requires states, as a condition to receiving Medicaid assistance, to oblige Medicaid recipients to assign to the State any rights they may possess to recover medical costs from a third party. The Third Circuit further observed that the Act requires states to seek reimbursement for medical assistance payments made to Medicaid recipients whenever a state determines that a third party is legally liable to pay for a recipient’s medical care. The Third Circuit noted that the Act does not set forth a method by which states must seek reimbursement of medical assistance payments they have made.
The Third Circuit then remarked that the foregoing provisions of the Act conflict with other sections of the Act which prohibit states from imposing liens against the property of Medicaid beneficiaries or recovering any medical assistance properly paid on an individual’s behalf. The Court concluded that the plain language of these conflicting provisions could not be reconciled.
Nevertheless, the Third Circuit determined that the conflicting language in the Act was not fatal to the DPW’s position. Rather, the court followed the well-settled tenet that, when interpreting a statute, a court should not look only at a particular clause in which general words are used, but rather, should examine provisions in the context of the entire statute, and the objects and policy of the law, and construe the statute in a manner that will execute the legislature’s will. The Third Circuit then concluded that, upon consideration of the Act as a whole, including its text, structure, purpose and legislative history, the DPW’s practice of asserting liens against the portion of a Medicaid recipient’s recovery that relates to medical costs must be viewed as an exception to the anti-lien and anti recovery provisions of the Act.
In reaching this conclusion, the Third Circuit stressed that the anti-lien and anti-recovery provisions of the Act significantly predate the reimbursement and forced assignment provisions. The court further noted that the two sets of provisions were enacted to achieve different goals. Specifically, the anti-lien and anti-recovery provisions were created to ensure that Medicaid beneficiaries were not required to directly bear the costs of their medical care. The reimbursement and forced assignment provisions, on the other hand, were enacted to allow states to recoup their medical assistance payments in circumstances where a third party is responsible for a Medicaid recipient’s injuries. According to the court, the only way to effectuate both goals underlying these conflicting provisions is to view the reimbursement and forced assignment provisions of the Act as exceptions to the anti-lien and anti-recovery provisions.
Moreover, the Third Circuit determined that the legislative history of the Act supports the notion that Medicaid beneficiaries are not entitled to retain money paid to them by liable third parties to compensate the beneficiaries for their medical costs. The court reached this conclusion after observing that the anti-lien and anti-recovery provisions were inserted into the Act to protect Medicaid recipients and their spouses from the loss of their property, usually their home, during their lifetime. The court then declared that “Congress’s concern for protecting a Medicaid beneficiary’s personal assets – not her interest in recovering medical costs paid on her behalf – clearly animated the enactment of the anti-lien and anti-recovery provisions.”
The legislative history of the Act’s reimbursement and forced assignment provisions, on the other hand, demonstrates that Congress intended to ensure that states recovered medical assistance payments made to Medicaid recipients whenever third parties are found liable for the recipient’s medical expenses despite the apparent proscription against seeking recovery of such payments. According to the court, “{i} defies common sense to conclude that Congress intended to protect the rights of Medicaid beneficiaries to recover medical costs that they never paid in the first place.” Rather, the court maintained that the reimbursement and forced assignment provisions were meant to limit the financial burden of Medicaid on the states and to ensure that Medicaid beneficiaries did not receive a windfall by recovering medical costs they never paid. Thus, the court concluded that “the forced assignment and reimbursement provisions are best viewed as creating an implied exception to the anti-lien and anti-recovery provisions of the Social Security Act.” The court then held that liens on settlements or judgments that are limited to medical costs are not prohibited by the anti-lien and anti-recovery provisions of the Act.
Finally, the court determined that Pennsylvania’s current statutory scheme, which permits Medicaid recipients to appeal from the statutory default rule of allocation for tort recoveries, is a permissible default apportionment method under federal law.
by Mark Bauman | May 19, 2023 | Legal News, Medical Malpractice
On the morning of October 23, 2013, Senate Bill 379, also known as the “Benevolent Gesture” Bill, was signed into law by Pennsylvania Governor Tom Corbett, after unanimous approval in both the State Senate and House of Representatives.
The Benevolent Gesture Law prevents physicians’ empathetic gestures from being used as evidence in medical malpractice lawsuits. Notably, it does not prevent the use of any statements by physicians indicating negligence or fault.
In addition to gestures directed toward patients, the Benevolent Gesture Law excludes from evidence any gestures made to a patient’s representative (such as a legal guardian, attorney, or power of attorney), as well as those directed toward the relative of a patient. According to the Law, a patient’s “relative” includes his or her spouse, parent, stepparent, grandparent, child, stepchild, grandchild, brother, sister, half-brother or half-sister, spouse’s parent, or any other person with a “family-type” relationship with a patient.
by Mark Bauman | May 19, 2023 | Health Care Law, Legal News
Act 169 of 2006, which provides a framework for making healthcare decisions on behalf of incompetent adult patients through advance health directives, went into effect on January 29, 2007. The Act allows physicians to initiate, continue, withdraw or withhold medical care based upon instructions contained in a patient’s living will, out-of-hospital do-not-resuscitate order, or by following the directions from a health care agent or health care representative.
Although the living will and out-of-hospital do-not-resuscitate order provisions largely follow existing statutory law, the Act attempts to clearly define the applicable standards and procedures that should be implemented when healthcare decisions for an incompetent adult patient are made by agents appointed through a health care power of attorney or by a health care representative.
An advance healthcare directive is a living will, a health care power of attorney, or a document that combines the features of both a living will and a health care power of attorney. A health care agent is appointed by the patient through a health care power of attorney. A health care representative can be designated by the patient or is authorized to act by default under the law. If a health care representative must be designated through default, the Act prioritizes the list of individuals to be considered. However, a patient of sound mind may modify the default designations or disqualify certain individuals. Additionally, upon petition, a judge may disqualify eligible individuals from being appointed a patient’s health care representative.
For an advance healthcare directive to be valid, it must be made by an adult patient who is of sound mind. It must also be in the form of a written document signed by the patient and two witnesses over 18-years-old. If the patient is unable to sign, the advance directive can be signed by another individual at the patient’s direction; however, neither health care providers nor their agents, including office staff, may sign on behalf of a patient whom they are treating. An exception to the requirement that the advance healthcare directive be in writing applies to the designation of a health care representative. In addition to appointment through a written document, a patient may also appoint a health care representative by personally informing the healthcare provider of the designation. Although a written advance healthcare directive need not be notarized to be valid in Pennsylvania, other states may require notarization. Additionally, advance directives executed under the prior law remain valid and advance directives executed in other states are recognized in Pennsylvania as long as the directions from the health care agent or representative are consistent with Pennsylvania law.
A patient can also change or revoke an advance directive. Changes can only be made if the patient is of sound mind and the changes are executed as stated above. A patient can also revoke an advance directive, but the requirements are different depending on whether the advance directive is a living will or a health care power of attorney. A patient may revoke a living will at any time and in any manner and does not need to be of sound mind to do so. The revocation of a living will is effective immediately upon communication to the health care provider by the patient or by a witness to the revocation. However, for a patient to revoke a health care power of attorney, he or she must be of sound mind and the revocation must be in writing or through personal communication by the patient to the health care provider.
When presented with an advance health directive, the health care provider is required to place a copy of the advance health care directive in the patient’s medical record and to also document any amendments or revocations that take place. If the individual claiming authority to make health care decisions on behalf of the incompetent adult patient is a health care representative, the healthcare provider can require the healthcare representative to produce a written declaration establishing the individual’s authority.
The authority granted to an health care agent or representative under an advance directive depends on the type of directive at issue. A living will is only operative if the patient becomes incompetent and is permanently unconscious or is diagnosed with an end-stage medical condition. However, the authority of a health care agent can be more broad and is defined by the language of the health care power of attorney, which may include all care and not just end of life decisions. Some limited restrictions to the health care agents authority apply in situations involving pregnant women and disabled patients. A health care representative holds authority similar to that of a health care agent except that the direction to withhold or withdraw life-sustaining treatment can only be made if the patient is permanently unconscious or has an end-stage medical condition. Furthermore, a patient of sound mind can countermand or reverse any decision made by a health care agent or representative by informing the health care provider. And a patient, regardless of mental capacity, may countermand the decision to withhold or withdraw life-sustaining treatment by personally informing the health care provider.
Under the Act, a physician must determine whether a patient is incompetent. If the patient is found to be incompetent, or conversely regained competence, it must be documented in the patient’s medical records and, to the extent possible, the patient and patient’s health care agent or representative must be notified. Additionally, a physician must also determine whether a patient is permanently unconscious or have an end-stage medical condition. Again, such a finding must be documented in the patient’s medical records and, to the extent possible, the patient and patient’s health care agent or representative must be notified. Although the Act does not require that the above determination be confirmed through a second opinion, a patient’s advance directive may require such confirmation before becoming effective.
In the event a patient’s advance health care directive becomes effective, the Act defines the obligations a health care agent or representative. The agent or representative’s first duty is to collect information regarding diagnosis and treatment options. Health care decisions for the incompetent adult patient are then made following a prescribed criteria. First, the oral or verbal instructions made by the patient while competent are to be followed. If no such instructions were made or apply, the agent or representative should make any health care decisions based on the patient’s preferences and values, which include religious and moral beliefs. Lastly, the health care decisions made on behalf of the incompetent adult patient should take into account the best interests of the patient.
Although the Act provides that a health care provider must generally comply with the decisions of a health care agent or representative, it also addresses situations where the health care provider has religious or moral objections to the health care decision made by the health care agent or representative or has concerns regarding providing medically inappropriate care. The Act also provides guidance regarding various other issues that may arise when a health care agent or representative must make health care decision on behalf of an incompetent patient such as privacy issues, rules regarding documentation of discussions, disclosures and consents between the health care agent or representative and the health care provider, and special rules regarding artificial nutrition and hydration.
by Mark Bauman | May 18, 2023 | Legal News, Medical Malpractice
An opinion from the Allegheny County Court of Common Pleas helped further shape the Peer Review Protection Act (“the Act”) analysis by focusing on hospitals’ efforts to improve the care they provide in ways that may not involve a traditional committee.
In the underlying matter, the plaintiffs alleged that the patient sustained a deep tissue injury during a hospital admission. After receiving a copy of the incident report, a registered nurse created a chronology of the patient’s treatment based on his medical records and the discussions she had with the physicians involved. Then, with the help of another nurse, she created a re-education plan. The plaintiffs sought both the chronology and the reeducation plan. The defendants, however, contended they were protected because they were created in order to improve care. Judge R. Stanton Wettick, Jr. agreed.
Judge Wettick began with addressing the Act’s purpose of protecting candid evaluations of health care providers, which requires confidentiality to allow for a comprehensive, honest assessment. Documents that contain information that can be found from original sources, such as medical records, are not given the same protections. Original sources are documents prepared solely in connection with the recording events of a patient’s treatment.
Here, however, the original source exception did not apply because the registered nurse testified that it was assumed that she would review any event on her unit, regardless of whether a supervisor directed her to do so. Judge Wettick noted that each document, “was generated for the purpose of evaluating the conduct of the medical staff and, if necessary, re-educating the staff regarding future procedures.” The fact the documents contained some information from original sources did not mean they were discoverable. Moreover, although the Act does not define the term “review organization,” Judge Wettick pointed to the Superior Court’s interchangeable use of the terms “committee” and “individual.” Accordingly, an individual may constitute a review committee on her own. Therefore, Judge Wettick found that both documents fell within the Act’s confidentiality provision based on the nurses’ desire to self-assess and re-educate.
by Mark Bauman | May 18, 2023 | Health Care Law, Legal News
The standards by which the IRS determines whether a worker is classified as an “employee” or an “independent contractor” have been modified. Prior to the modification which was made early in 2006, the IRS used a complex “20 factor” test, which proved difficult to use. In an attempt to simplify the test, the IRS created three primary categories, which encompass 11 factors for consideration.
The three main categories that the IRS now considers are: (1) behavioral control, (2) financial control, and (3) the type of relationship between the health care entity and worker. The behavioral control factor analyzes facts that show whether the business has a right to direct and control. For example, if the business instructs the worker when, where, and how to work, or if they dictate what tools or equipment to use, and what other workers to hire, this tends to show control and indicates that the worker is an employee.
The financial control factor looks for facts that show whether a business has a right to control the business aspects of that worker’s job. For example, an independent contractor is more likely to have expenses that are not reimbursed, and is more likely to have a significant investment in what is needed to get the job done. The third and final category looks to the type of relationship. For this category, the IRS looks for facts that show the parties’ relationship. For example, the IRS will look for a written contract describing the relationship and benefits offered.
The determination of whether a worker is an “employee” or an “independent contractor” is important because the employer-entity is responsible for the withholding and/or paying of several employment taxes, such as federal income taxes, social security and Medicare taxes, and federal unemployment taxes. However, this determination is of even greater significance to those in the health care field because several other agencies (i.e. Office of Inspector General and the Centers for Medicare and Medicaid Services) have adopted the IRS’s definition of “employee.”
Generally speaking, if the status of the worker is questionable, the IRS takes the position that the worker is treated as an employee, as opposed to an independent contractor. However, if an entity would like to receive a determination on the status of the worker, the employer-entity may complete a FORM SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, which can be found HERE.
