Healthcare Law Blog

Proposed Payment Changes for Medicare Home Health Agencies

The Centers for Medicare and Medicaid (“CMS”) recently released a proposed rule involving 2014 payment changes for the Home Health Prospective Payment System. The rule projects that the changes could reduce Medicare payments to home health agencies by 1.5 percent. CMS estimates that 3.5 million beneficiaries currently receive home health services, costing Medicare approximately $18.2 billion in 2012, so a 1.5 percent reduction would be significant ($290 million, to be exact). More >

Sound Inpatient’s Unsound Practices Lead to $14.5 Million Settlement

On July 3, 2013, the United States Department of Justice announced Sound Inpatient Physicians, Inc. (“Sound Inpatient”) will pay $14.5 million dollars to settle allegations that it over-billed Medicare and other federal health care programs. The Washington-based company employs more than 700 hospitalists and post-acute physicians to facilities in twenty-two states. More >

Oxford Health Plans, LLC v. Sutter: Don’t Forget to Read the Arbitration Provision

On June 10, 2013, the U.S. Supreme Court issued a decision confirming that payment disputes between a payor and its network providers may be resolved through group arbitration if allowed by the arbitrator, even if the use of class procedures is not expressly provided for in the agreement. More >

Addressing the Physician Shortage: Recruit Early and Recruit Often

In my last blog post, I discussed the serious physician shortage in Kentucky which will only continue to get worse as more persons become insured and the population ages and needs more health care services.  To address the physician shortage, many hospitals and health systems are stepping up their physician recruitment efforts and are recruiting physicians while they are still in residency programs rather than waiting until the physician has completed residency or fellowships training.  Early recruitment benefits both the hospital or health system and the medical resident.  The hospital or health system obtains a firm commitment from the resident to establish a practice at a definite future date to address the future health care needs of the community, while the resident essentially has a guaranteed position and income upon successful completion of residency or fellowship training.

The recruitment transaction between the hospital or health system is fairly straightforward but generally requires three written agreements between the hospital or health system and the medical resident.  The first is a resident stipend agreement in which the hospital or health system pays the resident a stipend to cover educational and living expenses during the residency conditioned upon the resident's continued satisfactory performance in the residency program and timely completion of the residency program.  In exchange, the resident commits to becoming employed by the hospital or health system upon successful completion of the residency program and agrees to remain employed by the hospital or health system for a fixed period of time, usually 3-5 years.  A draft employment agreement between the parties is also prepared and referenced in the residency stipend agreement.

The sums advanced to the resident as stipend payments are secured by a promissory note executed by the resident, essentially making the stipend payments a type of forgivable loan.  Once the resident completes the residency program and becomes employed by the hospital or health system, the stipend payments are forgiven over the period of the physician’s employment by the hospital or health system.

Recruiting physicians while they are still in residency is particularly useful to address future community health care needs due to physicians planning to retire from medical practice at a future date.  More importantly, however, a hospital or health system must address both the current and future shortage of physicians in order to fulfill its mission in the community it serves, and early physician recruitment is a useful tool to address community needs for health care providers.

Christopher J. Shaughnessy is a member at McBrayer law.  Mr. Shaughnessy concentrates his practice area in healthcare law and is located in the firm’s Lexington office.  He can be reached at cshaughnessy@mcbrayerfirm.com or at (859) 231-8780, ext. 1251. 

Services may be performed by others.

This article does not constitute legal advice.

Squeezing Blood from a Turnip: Health Care Reform & Kentucky’s Physician Shortage

Deloitte Consulting, a technology firm helping to establish the new Kentucky Health Benefit Exchange mandated by the Affordable Care Act (“ACA”), recently completed a review that paints quite a grim outlook for the future state of health care in the Commonwealth. According to the review, Kentucky needs 3,790 additional physicians (including primary care doctors and specialists), 612 more dentists, 5,635 more registered nurses, 296 more physician assistants, and 269 more optometrists to meet current demand. The numbers are stunning on their own, but in light of health care reform and Medicaid expansion, they are downright staggering. More >

Employer Mandate Enforcement Delayed Until 2015

On Tuesday, the Obama Administration announced that enforcement of the employer mandate provision of the Affordable Care Act (“ACA”) would be delayed until 2015, a year from its intended January 2014 start. The mandate requires that businesses with 50 or more full-time equivalent employees provide affordable health insurance for those employees or pay penalties. The administration has been under substantial pressure to delay the mandate, in large part because employers are still struggling with understanding and implementing the provisions. Some small businesses had even considered reducing their workforces below the 50-employee threshold or cutting employee hours to escape penalties for not providing coverage. More >

Two Peas in a Pod: Licensing Health Care Facilities & Daycare Centers

Health care businesses are subject to complex rules and regulations, most of which are constantly changing. Providers of all types and sizes continually face licensure issues and compliance requirements. There are few industries as regulated as health care, but that is not to say that providers stand alone in the issues they face. In fact, one type of industry has a markedly similar oversight process: daycare centers. More >

Hot Topics in Healthcare

On June 26, 2013, McBrayer attorney Lisa English Hinkle presented "Hot Topics in Healthcare" at the Fayette County Bar Association's  Bench & Bar Conference. If you were unable to attend, but would like to know what's hot in the healthcare industry, you can access a PDF copy of the seminar presentation here.  More >