HEALTH LAW SUPPLEMENT Fall 2011

Deadline for waivers of corporate practice prohibition extended. Governor Cuomo signed a law that extends to February 1, 2012 the deadline established by the recently enacted Education Law §6503-a by which not-for-profit corporations formed for charitable, educational or religious purposes might be granted a waiver by the Department of Education of the prohibition on corporate practice of the mental health professions. The law established an exception that allowed not-for-profits that are unlicensed by the Departments of Health or Mental Hygiene to nevertheless offer psychotherapy to their clients as conducted by social workers, psychologists, mental health practitioners and other licensed professionals. Unlicensed corporations, including non-profits, generally are prohibited from offering healthcare and mental healthcare services to the public under New York State’s relatively strict prohibition on corporate practice of professions. Recent changes in New York State law restrict the practice of psychotherapy to licensed individuals and entities; the practice of psychotherapy had not previously required a license. This exception to the corporate practice prohibition implicitly recognizes the significant demand for mental health services that has been and will continue to be met by social service agencies and educational institutions.

PPACA may finally change billing company compensation arrangements. It was in April 1997 that the New York State Department of Health first issued an opinion that healthcare practitioners who compensated their billing companies based on a percentage of the amount billed or collected were violating New York State’s prohibition against “fee splitting.” Nevertheless the practice has continued and in my experience remains the compensation arrangement used by most billing services. That may change soon. The recently enacted Federal Patient Protection Affordability Care Act (PPACA) requires billing services who bill Medicaid to register and as part of the enrollment process disclose their fee schedules, which must be in compliance with Federal and pertinent state laws. To avoid violation of New York State’s prohibition on fee splitting, billers should be paid based on the cost of processing bills, and not based on any formula that depends on the amount billed or collected.

Conflicting views on malpractice liability and reform. Public Citizen reports that the number of malpractice payments to plaintiffs declined for the seventh consecutive year in 2010 based on reports to the National Practitioner Data Bank. Between 2000 and 2010, malpractice awards and settlements have declined about 12%, while healthcare costs in general rose over 90%. Public Citizen argues that malpractice litigation doesn’t inflate healthcare costs and that limits on damages now imposed by some states are unfair to those who suffer devastating injuries as a result of medical malpractice.
But the federal HEALTH Act (Help Efficient Accessible Low-Cost Timely Healthcare) of 2011, supported by the AMA and other healthcare associations but not as yet passed, would impose a $250,000 cap on non-economic damages (“pain and suffering”) and preempt less strict existing state laws, like New York’s which has no such limit. The rationale for the HEALTH Act is that malpractice payments are under-reported, that reform is needed to reduce the number of frivolous claims made, and that apprehension about large malpractice awards drives medical decision-making and increases costs. In one survey of emergency physicians, 53% said that the number of tests they conducted was directly related to a fear of being sued.

Elder Abuse Reporting in New York State. A common but mistaken belief among healthcare professionals is that reporting of in-home elder abuse is mandatory in New York State, just like child abuse is. In fact it is not. Forty-two states in the US have mandatory reporting of in-home adult or elder abuse, but not New York. That is not to say that New York ignores the problem. New York laws define adult abuse as including physical abuse, financial exploitation, active and passive neglect and sexual abuse of a person over 18 years of age, create Adult Protective Services agencies in each county to investigate and intervene, and provide immunity for reporters. See New York Social Services Law, Article 9-B, Adult Protective Services. Statistics indicate that neglect is the most common type of abuse and adult children are the most frequent perpetrators.
Adult Protective Services do not have the same power to intervene as Child Protective Services. Adults have a right to remain in an abusive situation if they have capacity and so choose. Lack of capacity can only be determined by a medical evaluation and ruling by a court. Abused adults have the option of obtaining an Order of Protection to prevent further abuse, which may include expulsion of the perpetrator, or in some cases, of having the perpetrator arrested under the State’s Domestic Violence Law. In cases of financial exploitation and a lack of capacity of the victim, a guardian may be appointed.
For healthcare professionals, because reporting is not mandatory, it is first necessary to assess the capacity of the patient. If the patient has legal capacity, which is generally assumed in the absence of a legal adjudication or clear clinical evidence otherwise, and declines to authorize reporting to Adult Protective Services, then a report against the patient’s wishes may result in a professional complaint of breach of confidentiality. It is unclear whether the immunity granted by Social Service Law §473-b would apply to a healthcare professional in such a situation. If the patient is incapacitated, then ethical considerations would seem to require reporting despite the legal uncertainty.
There is an exception to the general rule that reporting elder abuse is not mandatory. New York Public Health Law §2803-d mandates reporting of adult and elder abuse to the Department of Health when the adult is “receiving care or services in a residential health care facility.” In such situations, regardless of capacity of the patient, healthcare professionals must report the abuse or neglect and are provided immunity for doing so.

Bruce is named a New York Super Lawyer ™ 2011. Bruce was selected for inclusion in the New York Super Lawyers – Metro Edition within the primary area of practice of health law. Only 5% of lawyers in the State are selected. The selection process is based on peer nominations, blue ribbon panel review and independent research by Thomson Reuters. Recipients will be featured in a special supplement to the New York Times Magazine on October 2, 2011.

New divorce law seems to increase use of mediation. Last year New York State enacted a law for the first time permitting spouses to divorce for “irreconcilable differences.” It was the last State in the US to offer its citizens this type of no-fault divorce. Property division, maintenance, parenting and child support arrangements need to be resolved and one party must swear that the marriage has been irretrievably broken for 6 months. Bruce, a trained mediator who has been conducting divorce mediation since 1986, has noticed an increased use of mediation since the change in the law.

INFORMATION IN THIS NEWSLETTER IS NOT LEGAL ADVICE FOR ANY PARTICULAR CLIENT OR SITUATION. CONSULT WITH AN ATTORNEY INDIVIDUALLY FOR LEGAL ADVICE REGARDING THE SPECIFICS OF YOUR SITUATION.

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