Category: Health Care Law

Photocopiers – A Recurring Data Security Risk

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In a case that illustrates the data privacy risks associated with modern copiers, the United States Department of Health and Human Resources (HHS) has announced a $1,215,780 settlement with Affinity Health Plan, Inc. (Affinity), arising from an investigation of potential violations of the HIPAA Privacy and Security Rules.

This matter started when Affinity was advised by CBS Evening News that CBS had purchased a photocopier previously leased by Affinity.  CBS explained that the copier’s hard drive contained confidential medical information relating to Affinity patients.  As a result, on August 15, 2010, Affinity self-reported a breach with the HHS’ Office for Civil Rights (OCR).  Affinity estimated that the medical records of approximately 344,000 persons may have been affected by this breach.  Moreover, Affinity apparently had returned multiple photocopiers to office equipment vendors in the past without erasing the data contained upon the internal hard drives of those returned copiers.

After investigating this matter, OCR determined that Affinity had failed to incorporate photocopier hard drives into its definition of electronic protected health information (ePHI) in its risk assessments as required by the Security Rule.  Affinity also failed to implement appropriate policies and procedures to scrub internal hard drives when returning photocopiers to its office equipment vendors.  As a result, OCR determined that Affinity also violated the Privacy Rule.

In discussing this issue, Leon Rodriguez, Director of OCR, stated that, “This settlement illustrates an important reminder about equipment designed to retain electronic information: Make sure that all personal information is wiped from hardware before it is recycled, thrown away or sent back to a leasing agent…HIPAA covered entities are required to undertake a careful risk analysis to understand the threats and vulnerabilities to individuals’ data, and have appropriate safeguards in place to protect this information.”

In addition to the agreed upon settlement payment of $1,215,780, the settlement also requires the implementation of a Corrective Action Plan (CAP).  The CAP requires Affinity to use its best efforts to retrieve all hard drives that were contained on photocopiers previously leased by the plan that remain in the possession of the leasing agent, and take protective measures to safeguard all ePHI going forward.

Points to Consider

Affinity’s case demonstrates the risks presented by the modern copier – they are specialized computers that will store data and retain itindefinitely.  Thus, they pose a security risk for any company that processes and/or possesses personally identifiable information or proprietary information, such as trade secrets, research and development records, marketing plans and financial information.  Clearly, this risk applies to businesses regardless of specific business sector.

Therefore, when acquiring a copier, consider all options available to protect the data processed on that machine, typically through encryption or overwriting.  Encryption will scramble the data that remains stored on the copier’s hard drive.  Overwriting (or wiping) will make reconstructing the data initially on the drive very difficult.

Finally, anticipate the copier’s return to the vendor or other disposition.  Make sure that arrangements are made prior to the copier’s departure to effect the hard drive’s removal and secure disposition so as to make any data on it unusable to third parties.  Often vendors will provide such a service as will IT consultants.

Note that protecting sensitive information is a company’s ongoing responsibility.  Make sure that copiers are considered as part of any comprehensive data security or privacy policy (as are PCs, laptops, smart phones, flash drives and other electronic devices) to avoid an avoidable, but costly and embarrassing, data breach.

For additional information from the FTC on safeguarding sensitive data stored on the hard drives of digital copiers, click here.

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Health Care on the Hill: Week of September 9, 2013

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This week Congress returns to Washington, DC following their August recess and are jumping right back into legislative matters. Listed below are a few health-related hearings scheduled for this week.

Each Monday Capitol Health Record will be providing health-related highlights for the coming week.

Tuesday, September 10, 2013

10:15 a.m.
“PPACA Pulse Check: Part Two”
House Energy and Commerce Subcommittee on Health Hearing
2322 Rayburn House Office Building

Wednesday, September 11, 2013

2:00 p.m.
“The Threat to Americans’ Personal Information: A Look into the Security and Reliability of the Health Exchange Data Hub”
House Homeland Security Subcommittee on Cybersecurity, Infrastructure Protection, and Security Technologies Hearing
311 Cannon House Office Building

Thursday, September 12, 2013

10:00 a.m.
“Dental Crisis in America: The Need to Address Cost”
Senate Health, Education, Labor, and Pensions Subcommittee on Primary Health and Aging Hearing
430 Dirksen Senate Office Building

Thursday, September 12, 2013 and Friday, September 13, 2013

In addition to the above Congressional hearings, the Medicare Payment Advisory Commission (MedPAC) will be meeting in Washington, DC on Thursday and Friday to discuss recommendations regarding Medicare payment policies. MedPAC will meet at the Ronald Reagan Building and International Trade Center (1300 Pennsylvania Avenue, NW) from 9:30 a.m. to 5:15 p.m. on Thursday and 9:00 a.m. to 12:00 p.m. on Friday (agenda).

Amy Walker contributed to this article.

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A Continued Examination of Charitable Patient Assistance Programs Part Seven in a Series: Charitable PAPs: Donations and Transparency 2013-09-03

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In today’s challenging health care environment, Charitable Patient Assistance Programs (Charitable PAPs) have emerged to meet the needs of the nearly 30 million Americans that are underinsured and have difficulty paying out-of-pocket medical costs. As potential donors make strategic decisions to invest in Charitable PAPs, there are many elements that must be considered to ensure compliance with all applicable laws and regulations. For the previous alerts in the series, please refer here.

As Charitable PAPs are entrusted with donations to help patients, it is important that the organization is accountable to its donors and is in compliance with all relevant audit requirements. When considering a donation to a Charitable PAP, it is important to evaluate the organization’s commitment to regular and thorough independent, third-party reviews to verify program and financial transparency and to validate operations:

  • Does the organization undergo regular, independent financial audits? In most cases, non-profit 990s are prepared by an accredited and industry-recognized financial auditing firm typically named on the 990. Researching the firms can provide insight into the thoroughness of the audit.
  • Does the Charitable PAP agree to operate in a certain manner with its donors? Is compliance audited? It is possible to request copies of compliance audits to make sure the organization is adhering to applicable requirements and restrictions as outlined to donors.
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Top Whistleblower Settlements of 2013 – To Date

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The theme of the top whistleblower settlements to date in 2013 is, once again, health care fraud. Eight of the largest settlements involve fraud in the health care industry. This is indicative of the number of health care fraud cases being filed in recent years. According to the Department of Justice, since January 2009, over $10.3 billion has been recovered from health care fraud cases. This year, the focus seems to have particularly shifted to cases involving violations of the Anti-Kickback Statute and Stark law, which prohibit the giving of financial incentives for referrals or the use of particular pharmaceuticals or devices. Without further ado, here are the top whistleblower settlements of 2013 to date:

1. Ranbaxy USA Inc. ($500 Million)

Ranbaxy USA Inc., a subsidiary of Indian generic pharmaceutical manufacturer Ranbaxy Laboratories Limited, agreed to pay a total of $500 million to settle criminal and civil allegations filed against the company. Ranbaxy pleaded guilty and agreed to pay a criminal fine and forfeiture of $150 million. The civil settlement, which resolves False Claims Act violations, was for $350 million. Ranbaxy was accused of poor oversight and inadequate testing and maintenance of drugs manufactured at its facilities in Paonta Sahib and Dewas, India. This lead to false claims being submitted to numerous government agencies including the FDA, Medicaid, Medicare, TRICARE, the Federal Employees Health Benefits Program, the Department of Veterans Affairs, and USAID. The whistleblower in this case, former Ranbaxy executive Dinesh Thakur, will receive $48.6 million from the federal share of the civil settlement.

For more information about this settlement, read the DOJ press release.

2. C.R. Bard Inc. ($48.26 Million)

C.R. Bard Inc., a New Jersey-based corporation that develops, manufactures, and markets medical products, agreed to pay $48.26 million to resolve kickback allegations filed against the company. Bard was accused of submitting false claims to Medicare for brachytherapy seeds used to treat prostate cancer. According to the complaint filed in 2006, Bard paid illegal kickbacks in numerous forms to both physicians and customers who used the seeds to perform treatment for prostate cancer. The whistleblower in this case, Julie Darity, was a former Bard manager for brachytherapy contracts administration. She will receive $10,134,600 as her portion of the settlement.

For more information about this settlement, read the DOJ press release

3. Par Pharmaceutical Companies Inc. ($45 million)

Par Pharmaceutical Companies, Inc., one of the top five U.S. generic pharmaceutical companies, pleaded guilty to federal criminal charges and agreed to settle civil allegations involving the company’s promotion of the drug Megace ES. Par was fined $18 million and ordered to pay an additional $4.5 million in criminal forfeiture. The company will also pay $22.5 million to resolve the civil allegations. The civil suit accused Par of promoting Megace ES for non-FDA approved uses that were not covered by federal healthcare programs and of actively ignoring some of the negative side effects the drug has on various patient groups when promoting Megace ES. The settlement resolves three separate whistleblower lawsuits that were filed against the company. Two of the five whistleblowers in the cases, Mr. Michael McKeen and Ms. Courtney Combs will receive $4.4 million as their portion of the settlement. Any payments to the other whistleblowers, Ms. Christine Thomas, Mr. James Lundstrom, and Mr. Elliott, are unknown at this time.

For more information about this settlement, read our blog post.

4. Dr. Steven J. Wasserman ($26.1 Million)

This year, the Department of Justice announced one of the largest ever settlements with an individual under the False Claims Act. Florida dermatologist, Dr. Steven J. Wasserman agreed to settle allegations filed against him for $26.1 million. Dr. Wasserman was accused of performing medically unnecessary services and engaging in an illegal kickback scheme. Dr. Alan Freedman, the whistleblower in this case, was a pathologist at a company involved in the kickback operation. He filed his qui tam lawsuit in 2004 and will receive slightly over $4 million as his share in the settlement.  

For more information about this settlement, read our blog post. 

5. CH2M Hill Hanford Group Inc. ($18.5 Million)

CH2M Hill Hanford Group Inc. and its parent company CH2M Hill Companies Ltd. agreed to settle civil and criminal allegations relating to time card fraud for a total of $18.5 million. CH2M had a contract with the Department of Energy to manage and clean 177 large underground storage tanks that contained radioactive and hazardous waste at a nuclear site in Washington. CH2M employees allegedly regularly overstated the number of hours they worked on time cards submitted to the Department of Energy. As a result, CH2M was overpaid for more hours of work than were actually performed. The civil settlement was for $16.55 million. CH2M will also pay $1.95 million to resolve the criminal liabilities. To date, eight CH2M employees have pleaded guilty to engaging in the time card fraud. The whistleblower in this case, Carl Schroeder, was a former CH2M employee and one of the individuals who pleaded guilty to the scheme. The qui tam provisions of the False Claims Act bar whistleblowers from receiving a portion of the settlements if they are convicted for their role in the fraud scheme. Therefore, Mr. Schroeder will not receive a portion of this settlement.

For more information about this settlement, read the DOJ press release. 

6. American Sleep Medicine LLC ($15.3 Million)

The Department of Justice announced a $15.3 million False Claims Act settlement it reached with American Sleep Medicine LLC. American Sleep is a Florida-based company that owns and operates 19 diagnostic sleep testing centers across the country. Its primary business is to provide testing for patients who suffer from sleep disorders. American Sleep allegedly submitted false claims to Medicare, TRICARE, and the Railroad Retirement Medicare Program for tests that were performed by technicians who lacked the proper certification required by these agencies for reimbursement. The whistleblower in this case, Daniel Purnell, will receive about $2.6 million as his portion of the settlement.

For more information about this settlement, read the DOJ press release.  

7. Adventist Health System & White Memorial Medical Center
   ($14.1 Million)

This month, Adventist Health System and its affiliated hospital White Memorial Medical Center agreed to a $14.1 million settlement. The settlement was the result of a qui tam lawsuit filed against the companies accusing them of violating the Anti-Kickback Act and the Stark Statute. Of the $14.1 million, $11.5 million will go to the federal government and $2.6 million will go to California’s Department of Health Care Services. Adventist Health was allegedly improperly compensating physicians for patient referrals to White Memorial by transferring medical and non-medical supplies and other inventory to the physicians at less than fair market value. White Memorial was also accused of paying referring physicians at a rate above fair market value for teaching services at the family practice residency program. The whistleblowers in this case were Dr. Hector Luque and Dr. Alejandro Gonzalez, who were members and partners of White Memorial. They will collectively receive $2,389,219 as their portion of the settlement.

For more information about this settlement, read our blog post.

8. Cooper Health System ($12.6 Million)

Cooper Health System and Cooper University Hospital, a hospital and health care system in South New Jersey, agreed to a $12.6 million settlement that resolved allegations that Cooper engaged in an elaborate illegal kickback scheme. According to the complaint, Cooper created a sham advisory board to pay high-volume medical practices upwards of $18,500 each to attend four meetings over the course of a year with the true goal of encouraging medical practices to refer patients to Cooper. The whistleblower in this case, Dr. Nicholas L. DePace, is a prominent Delaware Valley cardiologist. Dr. DePace was invited to join the sham advisory board and, after attending one of the meetings, figured out Cooper’s true intentions. Dr. DePace’s whistleblower reward has not yet been determined.

For more information about this settlement, read our blog post.

9. Hospice of Arizona ($12 Million)

Three Arizona hospice companies, Hospice of Arizona LC, American Hospice Management LLC and American Hospice Management Holdings LLC, agreed to settle a False Claims Act lawsuit with the government for $12 million. In order for hospice care to be reimbursed by Medicare, patients are required to have a life expectancy of, at most, six months.The qui tam lawsuit, filed against the companies in 2010, accused the defendants of submitting false claims to Medicare for patients who did not need to be admitted to the Hospice of Arizona. Additionally, they were accused of submitting false claims by overbilling Medicare for some of the hospice’s services. Ellen Momeyer, the whistleblower in this action, was a former Hospice of Arizona employee. Momeyer will receive $1.8 million (approximately 15%) as her share of the settlement.

For more information about this settlement, read our blog post.

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Michigan Cardiology Settlement of Medicare and Medicaid Fraud Allegations

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On July 10, 2013, United States Attorney Barbara L. McQuade announced a $4 million settlement between Allegiance Health d/b/a W.A. Foote Memorial Hospital, Jackson Cardiology Associates, P.C., Jashu R. Patel, M.D. and the U.S. Government.  The U.S. Department of Justice collaborated with the Birmingham, Michigan law firm, Vezina Law, PLC, in pursuing this action against the Jackson, Michigan based defendants.

According to allegations brought against the defendants in 2008, Foote Memorial Hospital, Jackson Cardiology Associates, and Dr. Patel knowingly billed Medicare, Medicaid, and other federal health care programs for medically unnecessary cardiovascular procedures and tests, including, but not limited to, stress tests, cardiac catheterizations, cardiac stents, and peripheral angiography procedures.

The lawsuit was filed in the United States District Court for the Eastern District of Michigan under the qui tam provisions of the Federal and State False Claims Acts.  Both False Claims Acts allow private individuals with knowledge of fraud against a government program to file lawsuits on the Government’s behalf.  If the case is successful, the private plaintiffs, known as relators or whistleblowers, are entitled to a percentage of the Government’s recovery.  The state and federal False Claims Acts both provide for recovery of three times the single damages incurred by the government as a result of the fraud, as well as civil monetary penalties of between $5,500 and $11,000 per false claim submitted and statutory attorney fees.

The relator in this case is Dr. Julie Movach, an independent contractor with Medical Practice and a physician board certified in internal medicine, cardiology, and echocardiography.  Dr. Movach released a statement explaining how important it is for her to deliver the best care to her patients and ensure that they do not undergo any unnecessary procedures.  When she realized that certain health care providers were more concerned with their personal financial well-being rather than the welfare of their patients, to the point that they would commit fraud against federal health care programs, Dr. Movach knew she must expose this corruption.  She took it upon herself to file a lawsuit against the defendants on behalf of the U.S. government.  Dr. Movach deserves our thanks and applause for her willingness to risk her livelihood in order to ensure people with genuine need can continue to receive assistance from Medicare and Medicaid.

In this case, the combined settlement was $4,150,988.31. The Foote Memorial Hospital settled the allegations with the federal government for $1,824.927.98 and with the State of Michigan for $126,060.33.  At the same time, Dr. Patel and Jackson Cardiology settled the allegations with the federal government for $2,200,000.00.  As the whistleblower, Dr. Movach will receive a 19% share of the overall settlement, which amounts to approximately $760,000 of the proceeds.

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Countdown to HITECH Compliance: How to Redistribute Your Notice of Privacy Practices

Poyner SpruillSeptember 23, 2013 is the fast-approaching compliance deadline for the final omnibus HIPAA/HITECH rules.  Many provisions required revisions to Notices of Privacy Practices (NPPs) maintained and distributed by covered entities.  The U.S. Department of Health and Human Services (HHS) has made clear that these changes are material.  As a result, covered entities must redistribute their NPPs shortly in order to meet HITECH’s requirements.  This alert describes the manner of redistribution dictated by HIPAA.

General Requirements

When revising NPPs, keep in mind that whether paper or web-based, HHS requires them to be accessible to all individuals, including those with disabilities.  Covered providers required to comply with Section 504 of the Rehabilitation Act or the Americans with Disabilities Act must also take steps to ensure effective communication with individuals with disabilities, including making the revised NPP available in Braille, large print, or audio.  HIPAA also requires NPPs to be written in plain language.

Changes to the NPP may not be implemented prior to the NPP’s new effective date, unless otherwise required by law.  Typically, any change to the practices described within the revised NPP may only be applied to PHI created or received after the effective date of the change.  All previous versions of the NPP and any acknowledgments of its receipt must be maintained for six years from the last effective date.

If You Are a Health Care Provider

For existing patients, you must make the revised NPP available upon request on or after the effective date of the changes (for most, this date will be September 23, 2013).  If you have a physical service delivery site (such as a clinic or hospital), you must have copies of the NPP available at the site for individuals to take with them upon request.  You also must post a copy of the NPP or summary of the revisions in a clear and prominent location, where it is reasonable to expect individuals to be able to read the posting.  You must ensure all new patients receive the revised NPP at the time of first service after the effective date of the changes.  The revised NPP must be made available on your website if you have one.  If patients have agreed to receive electronic notice of the NPP, you may e-mail the revised NPP to those patients.  You do not need to obtain acknowledgment of receipt from individuals, except for the initial distribution of the NPP provided at the first time of service.

If You Are a Health Plan

You must distribute the revised NPP to current plan participants.  If you post your NPP on a website, then you must post the revised NPP, or a description of the material changes, prominently on that website by the effective date of the changes.  You also must provide in your next annual mailing to participants either the revised NPP or information regarding material changes and how to obtain a copy of the NPP.  If you do not post your NPP on a website, then you must provide participants with the revised NPP or information about the material changes and how to obtain the revised NPP within 60 days of the material changes.  Note that all health plans also must continue to notify participants of the availability of the NPP and how to obtain a copy at least once every three years.

HHS has stated that if covered entities or health plans amended and redistributed NPPs prior to issuance of the final omnibus rule then they are not required to repeat the process, so long as the current NPP that was redistributed meets all the requirements in the final rule.  For all other covered entities, the NPP must be revised and effective by September 23, 2013, and redistributed as appropriate.

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Healthcare Fraud Case Results in $491 Million Settlement

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On July 30, 2013, Pfizer Inc., one of the world’s largest pharmaceutical companies, announced its finalized agreement to pay $491 million to the U.S. government in order to resolve accusations that the company and one of its subsidiaries defrauded the U.S. healthcare system.  Under the settlement, Pfizer will pay $257 million in order to resolve civil allegations that Wyeth Pharmaceuticals Inc., owned by Pfizer, engaged in illegal marketing that led to false claims being brought to Medicare and similar healthcare programs.  Pfizer will pay the other $234 million of the settlement in order to cover criminal fines and penalties.

According to allegations in the lawsuit, Wyeth Pharmaceuticals had illegally marketed a transplant drug named Rapamune for uses that had not been approved by the U.S. Food & Drug Administration (FDA).  Patients use Rapamune in combination with other drugs following kidney transplants.  However, Wyeth’s advertising campaigns advocated the drug for unapproved applications, such as use after liver, lung, heart, pancreas, and islet transplants.  According to a U.S. attorney, this type of off-label marketing endangers patients and erodes the population’s confidence in the FDA.  In 2002, the FDA required Wyeth to place a “black box warning,” the most stringent type of warning required by the agency, on the Rapamune product label.  This warning would advise people of the risks inherent in using Rapamune after liver transplants.  One year later, the FDA required a similar type of warning with regard to the use of Rapamune after lung transplants.  Nevertheless, claims up to 90% of Wyeth’s Rapamune sales were allegedly for “off-label” uses.

The $491 million settlement resulted from two qui tam lawsuits filed against Wyeth Pharmaceuticals Inc.  Under provisions of the False Claims Act, private citizens with knowledge of fraud committed against the government can file a qui tam lawsuit on behalf of the United States.  The individual filing the lawsuit is known as the relator or whistleblower.  Healthcare whistleblowers, such as the persons who brought the lawsuits against Wyeth, serve an important role in exposing and eradicating healthcare fraud.  Many whistleblowers have personal knowledge of deceptive practices because they work for the companies that submit false claims to the Government.  By relating their knowledge to the appropriate authorities, these individuals can assure that healthcare programs can achieve their intended benefits to Americans with the greatest need of federal assistance.

In the first case, the False Claims Act whistleblowers were Marlene Sandler and Scott Paris.  They jointly filed a lawsuit in Pennsylvania that alleged aspects of off-label marketing.  At the time, the Government declined to intervene and the relators commenced to litigate the case on their own.  Two years later, a second qui tam whistleblower, Mark Campbell, came forward.  Mr. Campbell is a former Wyeth sales representative who worked for the company for twenty years.  Throughout the tenure of his employment, he became aware of Wyeth’s off-label marketing practices.  After he filed his lawsuit against Wyeth in the U.S. District Court for the Western District of Oklahoma, the Department of Justice intervened in the Sandler and Paris action.  The Government then transferred the matter to the Oklahoma court and consolidated the two cases.  The three Medicare fraud whistleblowers have aligned their interests and cooperated to help the investigation into Wyeth’s actions.

Because the whistleblowers took on a personal risk in bringing allegations against their employer and they devoted their time in relaying information vital to the case, they will obtain a significant proportion of the settlement.  False Claims Act whistleblowers typically receive 15% to 25% of settlements.  That means that Ms. Sandler, Mr. Paris, and Mr. Campbell will all potentially receive millions of dollars from Pfizer Inc.

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Health Care Reform Update – Week of August 26th , 2013

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CMS Announces Matching Agreements for Data Hubs

On August 21st, the Centers for Medicare and Medicaid Services (CMS) announced its most recent agreement with state entities for exchange data hubs. States are now required to report any suspected or confirmed loss of personally identifiable information within an hour of discovery to their designated Center for Consumer Information and Insurance Oversight (CCIIO) State Officer, who will then notify the relevant Federal agency. CMS has posted a draft of the reporting form and has asked for public comments to be submitted by September 20th.

Lawmakers Defend Critical Access Hospitals

On August 22nd, a bipartisan group of 20 Senators, led by Senator Tammy Baldwin (D-WI), sent a letter to Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) of the Senate Finance Committee defending critical access hospitals and challenging a report released last week by the Department of Health and Human Services (HHS) Inspector General which criticized hospitals participating in the Medicare Critical Access Hospital program.

Implementation of the Affordable Care Act

On August 16th, the Small Business Administration (SBA) and the Small Business Majority announced a new series of weekly webinars to help small business owners learn how the ACA will affect their businesses and their employees.

On August 19th, HHS announced that it will be partnering with the Young Invincibles for the Healthy Young America video contest.

On August 21st, seventy nine Republicans in the House of Representatives signed a letter to Speaker John Boehner (R-OH) and Majority Leader Eric Cantor (R-VA) urging them to de-fund the implementation and enforcement of the ACA in any relevant appropriations bill.

On August 21st, Republican members of the House Energy and Commerce Committee sent a letter to Treasury Secretary Jack Lew stating that they have not yet received a response to questions submitted for the record to Mark Iwry on August 2nd regarding the delay of the employer mandate.

On August 23rd, the IRS released proposed rules on the ACA’s small business tax credit, which will be available to employers with no more than 25 full time employees purchasing health insurance through the Small Business Health Options Program (SHOP) exchange.

Other HHS and Federal Regulatory Initiatives

On August 19th, an Oklahoma judge granted a temporary injunction against a state law that placed additional restrictions on access to Plan B One-Step pending the outcome of a lawsuit challenging the law. The new restrictions contradict FDA approval for unrestricted, over the counter sale of Plan B One-Step.

On August 19th, the Agency for Healthcare Research and Quality (AHRQ) announced Richard Kronick will replace Carolyn Clancy as the director of the agency. He is currently the Deputy Assistant Secretary for Planning and Evaluation in the Office of Health Policy.

On August 20th, the Centers for Disease Control (CDC) announced an award of approximately $75.8 million to all 50 states through the Epidemiology and Laboratory Capacity for Infectious Diseases Cooperative Agreement.

On August 22nd, the HHS Office of the Assistant Secretary for Planning and Evaluation released an issue brief which found that the percentage of office-based physicians who are accepting new Medicare patients has not changed significantly between 2005 and 2012, and is slightly higher than the percentage accepting new privately insured patients.

On August 23rd, Iowa Governor Terry Branstad (D) submitted a Medicaid expansion waiver to CMS, which will formally replace the previous Medicaid waiver for the Iowa Care program with the Iowa Health and Wellness Plan.

Other Congressional and State Initiatives

On August 19th, Congressman Charles Rangel (D-NY) and Senator Kirsten Gillibrand (D-NY) announced they will be introducing the Communities United with Religious Leaders for the Elimination of HIV/AIDS (CURE) Act of 2013.

Other Health Care News

On August 19th, the RAND Corporation released a report stating that the one year delay of the employer mandate will not substantially impact the ACA.

On August 20th, the Kaiser Family Foundation released its annual Employer Health Benefits survey, which found that premiums increased at modest levels, consistent with the last several years.

On August 21st, the Commonwealth Fund released their findings from their Health Insurance Tracking Survey, conducted from 2011 to 2013, which indicated that only 27% of 19 to 29 year olds are aware of the new health insurance marketplaces instituted by the ACA.

On August 22nd, Gallup released a poll which showed that while the number of Americans who approved or disapproved of the ACA remained steady, the number of people who had no opinion of the law increased from 4% in June to 11%.

Hearings and Mark-Ups Scheduled

The Senate and the House of Representatives are in recess until the week of September 9th.

Alyssa Franke also contributed to this article.

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Family and Medical Leave Act (FMLA) Protected Leave Now Available To Same-Sex Spouses

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United States Secretary of Labor, Thomas Perez, recently issued an internal memorandum to department staff outlining the Department of Labor’s plan to issue guidance documents which will, among other things,  make protected leave available to same-sex couples under Family and Medical Leave Act (“FMLA”).  This action comes as the Department prepares to implement the Supreme Court’s recent decision in U.S. v. Windsor, which struck down the provisions of the Defense of Marriage Act (“DOMA”) that denied federal benefits to legally married same-sex spouses.  Calling it a “historic step toward equality for all American families,” Secretary Perez noted that the Department of Labor will coordinate with other federal agencies to make these changes “as swiftly and smoothly as possible.”

Secretary Perez stated that guidance documents would be updated to remove references to DOMA and to “affirm the availability of spousal leave based on same-sex marriages under the FMLA.  This change is of great consequence to same-sex spouses who previously were unable to access the job-protected leave provided under the FMLA.  Now, eligible same-sex spouses will be able to take FMLA leave for certain specified family and medical reasons, including caring for a spouse with a serious health condition, and generally will be returned to their original position or another position with equivalent pay, benefits and status.  The new interpretation reflected in the Department’s updated guidance documents will be effective immediately.

In the Department’s official blog, Modern Families and Worker Protections, Laura Fortman, the principal deputy administrator of the Wage and Hour Division, announced on August 13, 2013 that revisions had already been made to various FMLA guidance documents to reflect the changes necessitated by U.S. v. Windsor.  Fortman clarified that the “changes are not regulatory, and they do not fundamentally change the FMLA.”  They merely expand the universe of employees who are eligible for FMLA benefits by including legally married same- sex couples.  The updated documents can be viewed at these links:

Although Secretary Perez did not specifically address the question, the updated guidance documents indicate that the Department only intends to expand FMLA benefits to same-sex spouses in the 13 states and the District of Columbia that have recognized same-sex marriage.  As an example, Fact Sheet#28F,Qualifying Reasons for Leave Under the Family and Medical Leave Act, defines “spouse” for purposes of FMLA leave as  “a husband or wife as defined or recognized under state law for purposes of marriage in the state where the employee resides, including “common law” marriage and same-sex marriage.”   In contrast, the Office of Personnel Management announced on its website that benefits will be extended to Federal employees and annuitants who have “legally married a spouse of the same sex, regardless of the employee’s or annuitant’s state of residency.”

As initial steps to implementing these changes, employers should inform or train human resources personnel regarding the availability of FMLA leave to eligible employees under the specified definition of spouse; review internal procedures and leave documentation to ensure compliance, and finally, review employee handbooks and policies to include provisions for same-sex couples where appropriate.

Is Obesity A Disease? The American Medical Association Says “Yes”; The Americans with Disabilities Act Says . . .

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In June 2013, the American Medical Association (AMA) declared obesity a disease. The president of the AMA gave several reasons for this declaration[1] “[R]ecognizing obesity as a disease will help change the way the medical community tackles this complex health issue.” The AMA president emphasized that classifying obesity as a disease could encourage people to pay attention to the seriousness of obesity, increase the dialogue between patients and physicians, and result in greater investments in research.

The Americans with Disabilities Act (ADA) was amended, effective January 1, 2009, to greatly expand the coverage of the act. Employers and individuals continue to observe how the Equal Employment Opportunity Commission (EEOC) and courts interpret and implement the amendments. Obesity is one condition that continues to be affected by the amendments.

In the original regulations implementing the ADA, the EEOC stated that “except in rare circumstances, obesity is not considered a disabling impairment.” 29 C.F.R. § 1630.16 App. (§ 1630.2(j)). Similarly, in its pre-amendment Compliance Manual, the EEOC stated that normal deviations in height, weight or strength are not impairments. However, “severe obesity,” which the Compliance Manual defined as “100% over the norm,” is “clearly an impairment,” although whether obesity rises to the level of “disability” is, like all impairments, determined by the substantial limitations test. The EEOC also noted that persons who are severely obese may have underlying or related disorders such as hypertension or thyroid disorder which do qualify as impairments.

The EEOC’s March 2011 regulations, which reflect changes made by the ADA Amendments, retain the statement that “[t]he definition of the term ‘impairment’ does not include physical characteristics such as . . . height, weight, or muscle tone that are within ‘normal’ range and are not the result of a physiological disorder.” This statement, however, does not prevent obesity from being considered a disability under the amended ADA. The ADA requires an individual assessment of the individual to determine whether he or she is disabled.

There are two principal ways in which the amendments increase the likelihood that obesity will be considered a disability under the ADA: (i) broader standards under the “substantial limitations” test and (ii) individuals no longer need to show that they are actually disabled to prevail under the “regarded as” disabled prong.

The substantial limitation test and major life activities

To qualify for protection under the ADA, an individual must show that he or she is disabled—substantially limited in a major life activity. The amendments were, in large part, a legislative response to courts’ narrow interpretation of what constituted a substantial limitation.[2] Significantly, “‘[s]ubstantially limits’ is not meant to be a demanding standard.”[3]

In combination with an expanded interpretation of major life activities, which include walking, standing, sitting, reaching, lifting, bending, breathing and working as well as major bodily functions including digestive, respiratory, circulatory functions, it is likely that many individuals whose weight restricts them from performing these activities or is a result of the dysfunction of a bodily system will be disabled within the meaning of the amendments.[4]

“Regarded as” disabled

An individual may be illegally discriminated against under the ADA if he or she suffers an adverse employment action because his employer considers him to be disabled. Under the ADA amendments, the individual does not need to show that she is actually disabled, or that she is substantially limited in a major life activity—simply that her employer thought that she was and took adverse action based on that perception.

For example, in 2010 a Mississippi district court allowed Ms. Lowe, an obese receptionist, to proceed with her ADA “regarded as” claim because her former employer harassed her based on her use of disabled parking.[5] The court stated that under the amendments “an individual is now not required to demonstrate that the disability she is regarded as having is an actual qualified disability under the ADA or that it substantially limits a major life activity.” Instead, the plaintiff was only required to show that “she has been subjected to an action prohibited under [the ADA] because of an actual or perceived physical or mental impairment whether or not the impairment limits or is perceived to limit a major life activity.”

Significantly, “a plaintiff now might be considered disabled due to obesity under the ADA if her employer perceived her weight as an impairment.” Therefore, employers should take care not to assume that employees are unable to complete tasks simply because of their weight. The ADA also prohibits discrimination in hiring, so employers should not decline to hire an individual simply because he or she is obese.

The ADA does not apply to individuals who cannot perform the essential functions of their job because of a medical condition, including obesity. As with all medical conditions, employers must identify the job responsibilities that employees are not able to complete and engage in a dialogue with the employee about accommodations that will allow the employee to perform these functions. If employees cannot perform their essential job functions with accommodation, employers may take adverse employment actions based on the performance failures.

[1] Ardis D. Hoven, Obesity As a Disease?, Huffington Post, June 28, 2013, www.huffingtonpost.com/ardis-d-hoven-md/obesity-as-a-disease_b_3518956.html.

[2] See Regulations to Implement the Equal Employment Provisions of the American With Disabilities Act, as Amended, 76 Fed. Reg. 16981 (March 25, 2011) (stating that, in the ADA Amendments Act Congress “simply indicates that ‘substantially limits’ is a lower threshold than ‘prevents’ or ‘severely or significantly restricts,’ as prior Supreme Court decisions and the EEOC regulations had defined the term”.

[3] 29 C.F.R. § 1630.2(j)(1)(i).

[4] Although some courts impose a requirement that the individual be “severely obese” or have a weight “outside the normal range” to be disabled, the amendments likely supersede any such requirement for individuals who can show that their weight substantially limits a major life activity or is the result of the dysfunction of a major bodily function. Compare BNSF Ry. Co. v Feit, 2013 WL 1855832 (D. Mont. May 1, 2013) (relying on the repealed EEOC compliance manual for the definition of “severely obese”); with EEOC, Section 902 Definition of the Term Disability, available at: http://www.eeoc.gov/policy/docs/902cm.html (stating that the definition has been removed from the website because “the analysis in it has been superseded by the ADA Amendments Act.”).

[5] Lowe v. American Eurocopter LLC, No. 1:10CV24-A-D, 2010 U.S. Dist. LEXIS 133343 (N.D. Miss. Dec. 16, 2010).

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