Juvan's Health Law Recap--February 25, 2007
Last week, I visited Orlando, Florida for the American Health Lawyers Association Long Term Care in the Law Conference. This week's Health Law Recap will focus on a few themes and trends identified at the Conference.
- Shift in Long Term Care Reimbursement. Leslie Norwalk, the Acting Administrator for the Centers for Medicare and Medicaid Services (CMS), focused on the increased pressure on the federal government resulting from the health financing crisis. In response, federal reimbursement for long term care will shift in favor of home health agencies and away from skilled nursing facility care.
- Employee Education About False Claims Act. Many attorneys expressed to representatives of CMS that there continues to be substantial and noteworthy ambiguities in connection with the Deficit Reduction Act employee education requirements. One attorney noted that the requirement applies to an entity that has less than 5 million dollars in Medicaid payments if the entity is affiliated with other entities that receive 5 million or more in such payments. Representatives for CMS have promised that further clarification will follow shortly.
- Plaintiffs' Lawyers Use Web Sites, E-Mail Addresses to Pierce the Corporate Veil. There has been a strong trend for parent companies who acquire nursing home facilities to form separate subsidiaries to act as holding companies and operating companies for each nursing facility acquired. One prominent defense attorney noted that plaintiffs' lawyers have begun to cite to web sites and e-mail addresses to build a case for veil piercing. The lawyer cautioned that employees in each separate company should have different e-mail addresses. For example, if the parent company is named "Health Care Solutions, Inc.," one subsidiary is named "Brecksville Health Care Solutions, Inc." and the other is "Madison Health Care Solutions, Inc.," the employees at the parent and both subs should not have their e-mail address as "employeename@healthcaresolutions.com." Instead, the following e-mail addresses would help to show that the three entities are separate legal entities:
- Parent Company: employeename@healthcaresolutions.com
- Brecksville Health Care Solutions, Inc: employeename@brecksvillehealthcare.com
- Madison Health Care Solutions, Inc: employeename@madisonhealthcare.com
In addition, the attorney noted that legal counsel should review a company's web site and that the web site should clearly state that each facility is owned by a separate legal entity.
- Medicaid Fraud Enforcement Is on the Rise. Many representatives of the federal government emphasized that, in the upcoming years, the government will have increased budgets to implement Medicaid fraud controls and pursue Medicaid fraud investigations. In the past, Medicaid has not received the same scrutiny as have other federal health care programs.
