HEALTH LAW SUPPLEMENT Winter 2009

Notice to patients of breaches of their health information now required under HIPAA. A new HIPAA regulation took effect September 23, 2009 under the Health Information Technology for Economic and Clinical Health Act (HITECH). It requires notice of breaches of security by practitioners to the affected patients, the HHS Secretary, and if more than 500 individuals are involved then also to the media. A breach is defined as unauthorized acquisition, access, use or disclosure of protected health information (PHI). There is a “harm threshold” provision that removes the requirement of notice if the breach does not pose a threat of harm. For example, a fax containing PHI sent to the wrong number but quickly returned or destroyed might not be expected to cause harm so would not be reportable. In my experience, for small practices, the most common reportable breach would be the loss or theft of records.
New York State also has a breach notification law, GBL §899-aa that requires notification to customers of any breach of “private information,” defined as social security, driver’s license or other identifying numbers, account or credit or debit card numbers, or security codes or passwords.

The Red Flag Rule is further delayed. The “Red Flag Rule,” a set of regulations issued by the Federal Trade Commission, was first scheduled to take effect August 1, 2009 and then November 1, 2009. Now the effective date has been pushed back to June 1, 2010. The purpose of the Rule is to reduce identity theft. The FTC has so far insisted that it will be applicable to health care practitioners because they are “creditors” who bill patients and insurers for services. The Rule would require practitioners to establish policies and procedures to identify and prevent identity theft. The FTC has issued a “Do it yourself” kit for small businesses to comply with the Rule, at www.ftc.gov/bcp/edu/microsites/redflagsrule/RedFlags_forLowRiskBusinesses.pdf Among other health care associations, the AMA continues to lobby against the application of the Rule to health care providers, so there is still a chance that the Rule may not be applied to them in June.

An unintended corporate practice problem. There has been an unintended consequence of the new laws enacted over the past few years, one of whose purposes was to limit the practice of psychotherapy exclusively to licensed professionals and State licensed entities. Prior to the passage of those laws requiring licensure, many educational corporations and not-for-profit corporations had provided non-medical mental health services to the public even though they were without an operating license from one of the State agencies that issues them, the DOH, OMH, OASAS or OMRDD. Now the ability of such organizations to legally provide such services is in question. Organizations such as these, for example, some “clinics” affiliated with social service organizations or psychotherapy training institutes, serve a large segment of the public. Also in question is whether social workers and mental health practitioners who work in such settings under supervision may use that supervised experience as qualifying experience for licensure or advanced credentialing. Regulators and lawmakers have devised a proposed solution, which is to institute a sort of quasi-licensing procedure by which the educational and not-for-profit organizations would register with and meet certain requirements of the State Education Department. The registration would apparently have retroactive effect to resolve the issue of licensure qualifying experience. The legislature has not yet acted on the bills, A 8897 and S 5921.

Hiring a student extern. Some practitioners and practices hire student externs to assist in providing mental health services to patients. Professional regulations generally permit the practice if the student is in a licensure qualifying graduate program and the site has been approved by the program as providing an approved supervised practicum experience and such experience is required for completion of the program. Some clients engage in this practice to save money as well as to provide training. If there really is a financial benefit to the employer however, then the student should probably be paid as an employee.
The NYS Department of Labor has guidelines that distinguish between externs (or “trainees” as the Department calls them) who need not be paid, and those who must be employees and as such be paid at least minimum wage. To qualify as a trainee who need not be paid, one must be provided training similar to that received in school, not displace a regular employee, be closely supervised, be the primary recipient of any benefit from his or her labor, and not provide any immediate advantage to the employer by his or her labor. The last two qualifications are the most significant in differentiating those externs who must be paid. If the practice bills for the labor of the extern, then the practice is the recipient of benefit and is deriving an advantage from the labor of the extern.
Bottom line: if you bill clients or insurers for the services performed by an extern, then the extern should probably be a W-2 employee with all that this entails, i.e., withholding of federal, State and City income taxes, FICA and UEI, and provision of NYS DBL and worker’s comp insurance. N.B. Students may not be retained as independent contractors because of the requirement of close supervision imposed by their lack of licensure and academic programs.

Sex with a patient you plan to marry is still not OK. Ethics codes for mental health practitioners are clear in prohibiting sex with patients and former patients, with the latter either forever or for a considerable period of time. It’s been unclear however whether there was some type of implicit exception, at least in terms of enforcement by a licensing board, if a practitioner began an intimate relationship with a patient or recent ex-patient that developed into a marital one. An appellate court in New York opined that there was no such exception. The physician had argued that his constitutionally guaranteed right to marry was implicated. The court disagreed and held that a physician can be disciplined for moral unfitness even if the patient with whom he engaged in a sexual relationship eventually becomes his fiancé. Angelo v State Board for Professional Medical Conduct, Appellate Division, Third Department, October 22, 2009, NYLJ No. 505410.

For LMHC’s and LMFT’s, a change in status under the National Health Care Reform Bill. The House version of the health care reform bill (H.R. 3962) contains, among many other provisions, one that authorizes licensed mental health counselors and licensed marriage and family therapists to bill Medicare. We’ll see whether the change stays in any bill that may eventually be passed.

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.

𝄞 HAPPY HANUKKAH, CHRISTMAS AND NEW YEAR TO ALL! 𝄞

WE WISH YOU PEACE AND PROSPERITY AND THANK
YOU FOR YOUR TRUST AND BUSINESS DURING THE PAST YEAR!

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