Wake Forest Law Review

 

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By Mikhail Petrov

On March 7, 2016, in the published civil case of Cumberland County Hospital v. Burwell, the Fourth Circuit reviewed the decision of the district court to deny Cumberland County Hospital System’s (“the Hospital”) request for a writ of mandamus to compel the Secretary of the Department of Health and Human Service (“HHS”) to adjudicate immediately the Hospital’s administrative appeals on claims for Medicare reimbursement. The Forth Circuit agreed with the district court, finding that (1) the Hospital  did not have a clear and indisputable right to a hearing within a ninety-day time frame, and (2) that the political branches are best suited to address the backlog in the administrative process.

Facts

Both the Hospital and the Secretary agree that, as of February 2014, HHS had 480,000 appeals awaiting assignment to an Administrative Law Judge (“ALJ”), and the Secretary conceded in her brief that the number had already climbed to more than 800,000 appeals, creating a ten-year backlog. While acknowledging the unacceptability of the backlog, the Secretary attributes it to an increased number of appeals within the Medicare system and inadequate funding by Congress to hire additional personnel.

The Hospital operates a number of facilities in eastern North Carolina, delivering medical services to beneficiaries of Medicare. In 2012 and 2013, the Secretary denied payment to the Hospital on over 900 claims for reimbursement for Medicare services that she had initially authorized. By September 2014, the Hospital had over 750 appeals on these claims that had been pending for more than ninety days before the Office of Medicare Hearings and Appeals (“OMHA”) within HHS. Those appeals related to claims for some $12.3 million in reimbursement. Because reimbursement of such a large sum is essential to the Hospital’s operations, the Hospital commenced this action for a writ of mandamus.

Rule of the Case

The Hospital asked the district court for a writ of mandamus to require the Secretary to docket, assign to an ALJ, and decide an appeal within ninety days, as required by the Medicare Act. See 42 U.S.C. § 1395ff(d)(1)(A). A writ of mandamus is a “drastic” remedy that must be reserved for “extraordinary situations” involving the performance of official acts or duties. Kerr v. U.S. Dist. Court for the N. Dist. of Cal., 426 U.S. 394, 402 (1976). Accordingly, to show that it is entitled to mandamus relief, a plaintiff must show, among other things, that it has a “clear and indisputable right to the relief sought” and that the responding party has a “clear duty to do the specific act requested.” United States ex rel. Rahman v. Oncology Assocs., P.C., 198 F.3d 502, 511 (4th Cir. 1999).

Reasoning of the Fourth Circuit

As bleak as the circumstances appeared to be, the Fourth Circuit was unpersuaded that Article III treatment of the ailing Article II issue in the manner the Hospital urged was the answer or, indeed, even possible or desirable.

The Hospital asserts that the Secretary’s delay violates the congressional mandate that its appeals be heard and decided by an ALJ within ninety days as per 42 U.S.C. § 1395ff(d)(1)(A). The Fourth Circuit agreed with the district court and dismissed the Hospital’s complaint, relying on two independent grounds. It held (1) that the Hospital does not have a clear and indisputable right to an ALJ hearing within a 90-day time frame, as required for issuance of a mandamus order, and (2) that the political branches, rather than the courts, are best suited to address the backlog in the administrative process.

First, the Hospital contends that the Medicare Act gives it a clear and indisputable right to have its appeals decided within ninety days and that it imposes on the Secretary a clear duty to accomplish that. In support of this contention, the Hospital emphasizes the mandatory language of the Act, which provides that an ALJ “shall conduct and conclude a hearing . . . and render a decision on such hearing by not later than the end of the 90-day period beginning on the date a request for hearing has been timely filed.” 42 U.S.C. § 1395ff(d)(1)(A). The Secretary, by contrast, maintains that the Medicare statute does not confer on the Hospital a right to a hearing within ninety days that is enforceable through mandamus, emphasizing that the statute provides that the consequence of failing to adjudicate an appeal within ninety days is that the provider (the Hospital) may escalate that appeal to the Departmental Appeals Board.

The Fourth Circuit agreed with the Secretary in that, instead of creating a right to go to court to enforce the ninety day deadline, Congress specifically gave the healthcare provider a choice of either waiting for the ALJ hearing beyond the ninety day deadline or continuing within the administrative process by escalation to the next level of review at the Departmental Appeals Board. The Hospital’s argument focuses on only the provision creating the ninety day time frame and fails to account for its context in the comprehensive administrative process. Thus, while the Act gives the Hospital the clear and indisputable right to this administrative process, it does not give it a clear and indisputable right to adjudication of its appeals before an ALJ within ninety days.

Second, the Fourth Circuit agreed with the district court’s conclusion that to grant mandamus relief would inappropriately “inter-meddle” with the agency’s problem-solving efforts and would fail to recognize HHS’s comparative institutional advantage in crafting a solution to the delays in the adjudication of appeals.

The Fourth Circuit concluded that if it were to interfere in the administrative process, it would be undermining important separation-of-powers principles. In the Medicare Act, Congress required healthcare providers to engage in an Executive Branch administrative process in making claims for Medicare reimbursement, thus precluding court suits in the first instance that would bypass the process. But, in doing so, it did not deny healthcare providers judicial review; indeed, it guaranteed such review, but only after the Secretary is given the opportunity to grant or deny the claims in accordance with the specified process. A writ of mandamus would have courts interrupt the specified administrative process and cross the lines of authority created by statute. Additionally, even if the backlog was fully attributable to the Secretary’s mismanagement, a court must “respect the autonomy and comparative institutional advantage of the executive branch” and must be “slow to assume command over an agency’s choice of priorities.” In re Barr Labs., Inc., 930 F.2d 72, 74 (D.C. Cir. 1991). Moreover, it is unlikely that any judicial intervention into HHS’s administrative process, as urged by the Hospital, would improve anything. Thus, the political branches are best-suited to alleviate OMHA’s crippling delays.

Holding

The Fourth Circuit agreed that the delay in the administrative process for Medicare reimbursement is incontrovertibly grotesque. Still, the Fourth Circuit held that the Medicare Act does not guarantee a healthcare provider a hearing before an ALJ within ninety days, and affirmed the decision of the district court to dismiss the case.

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By Kayleigh Butterfield

On January 21, 2016, in the published civil case Colon Health Centers v. Hazel, the Fourth Circuit affirmed the Eastern District of Virginia’s decision upholding the constitutionality of the state’s certificate of need (“CON”) program. Colon Health Centers of America and Progressive Radiology (“Appellants”) argued that Virginia’s CON law violates the dormant Commerce Clause of the United States Constitution. However, the Fourth Circuit held that the CON program does not discriminate against out-of-state companies and does not create excessive burdens on interstate commerce in relation to its local benefits.

A Contested Approach to Health Care

Similar to 35 other states, Virginia has adopted a “certificate of public need” requirement for medical service providers who seek to establish or expand operations within the state. The CON program requires, for various public policy and health reasons, that applicants show a sufficient public need for its establishment in any given area. The application process involves a “batching” system whereby health-planning agencies conduct initial investigations into a batch of various company applications before making a recommendation to the Department of Health (“Department”). The Department is then responsible for determining whether a public need for the given program has been demonstrated and, if it has, issuing a certificate to the applicant.

Appellants are out-of-state medical providers who initially brought suit against the Commonwealth under the dormant Commerce Clause and the Fourteenth Amendment’s Equal Protection, Due Process, and Privileges and Immunities Clauses. The district court dismissed the entire suit for failure to state a claim. The Fourth Circuit reversed the dismissal of the dormant Commerce Clause claim and remanded the case for discovery. After extensive discovery, the district court granted summary judgment for the Commonwealth.

No Interstate Discrimination

The Fourth Circuit noted that a state law could discriminate against interstate commerce facially, in effect, or in purpose. Here, Appellants did not allege facial discrimination. Similarly, the Fourth Circuit quickly disposed of any discriminatory purpose, noting that the CON program is primarily designed to improve the overall function of Virginia’s health care system.

Appellants also alleged that the effect of the CON program systematically advantages in-state companies as opposed to those out-of-state. Pointing to the State’s expert testimony at trial, the Fourth Circuit noted that statistics do not show any unfair advantage against out-of-state providers. The Fourth Circuit further distinguished Appellant’s expert testimony by observing that this evidence only established that the program favored incumbents over new providers. The Fourth Circuit explained that advantages for or against incumbents are not relevant to the dormant Commerce Clause analysis involving in-state and out-of-state entities.

Burdens on Interstate Commerce Not Excessive

The Fourth Circuit went on to examine whether Virginia’s CON program might still excessively burden interstate commerce in relation to its proposed benefits. To carry out this analysis, the Fourth Circuit employed the balancing test from Pike v. Bruce Church, Inc. under a rational basis standard of review. While the Fourth Circuit acknowledged that Appellants made fair arguments regarding potential burdens, the court ultimately held that the burdens did not outweigh the program’s significant interests in bettering the state health care system. The Fourth Circuit also noted that this balancing of interests is better handled by the legislative branch, which is representative of the Commonwealth itself.

Affirmed

The Fourth Circuit determined that Virginia’s CON law neither discriminated against out-of-state health care providers, nor created excessive burdens on interstate commerce that would warrant judicial intervention. The district court’s grant of summary judgment for the Commonwealth was therefore affirmed.

By Dan Menken

Today in United States v. Garnes, the Fourth Circuit affirmed the conviction of Charlotte Elizabeth Garnes for conspiracy to commit health care fraud, obstruction of an official proceeding, and ten counts of making a false statement relating to a health care benefit program.

Defendant Raises Three Claims Challenging the Conviction and Sentence

First, Defendant claims that the district court abused its discretion by permitting the government to cross-examine her regarding an extramarital affair with her former boss.

Second, Defendant claims that the district court erred by denying her motion for a judgment of acquittal because the evidence presented was insufficient to establish that her convictions for conspiracy to commit health care fraud and for making false statements relating to a health care benefit program were “knowing and willful.”

Finally, Defendant claims that the district court improperly held her responsible for losses caused by her co-conspirator when calculating her sentencing guidelines range.

 Defendant Involved in a Conspiracy to Commit Health Care Fraud

Defendant, along with two unlicensed counselors, entered into an agreement to defraud the North Carolina Medicaid agency. Defendant submitted numerous reimbursement claims in which she falsely represented that she had provided therapeutic services. Many of the claims were facially invalid because claimed therapy sessions exceeded 24 hours in a single day. Additionally, Defendant submitted claims for services rendered in North Carolina when she was in a different state, and she claimed services were provided to patients who testified that they never received services from Defendant.

During cross-examination, the government sought to show that Defendant had been fired from her previous employment for failure to maintain proper records. Defendant responded to this line of questioning by stating that the owner’s significant other had fraudulently used Defendant’s Medicaid number. In response, the government sought to impeach Defendant’s alternative explanation by questioning Defendant regarding her extramarital affair with the owner.

 Claim One: Evidence Impeaching Witness Testimony Allowed on Cross-Examination

Reviewing for an abuse of discretion, the Fourth Circuit held that the district court correctly overruled the objection of Defendant’s counsel because Rule 404(b) does not control evidence offered for impeachment on cross-examination. The evidence in question was probative of Defendant’s character for truthfulness.

 Claim Two: Knowledge and Intent May Be Inferred From Circumstantial Evidence

Reviewing de novo, the Court noted that in order to convict Defendant of conspiracy to commit health care fraud, the government has to show that Defendant “knowingly and willfully executed” a fraudulent health care scheme. The Court further noted that the jury may infer knowledge and intent from circumstantial evidence in conspiracy cases. In this case, there was sufficient evidence regarding Defendant’s reimbursement claims to establish that Defendant had “knowingly and willingly” agreed to participate in a fraudulent health care scheme with her co-conspirators.

Furthermore, in order to convict Defendant of making a false statement relating to a health care benefit program, the government must show that Defendant knowingly and willfully made materially false or fraudulent statements in connection with the delivery of or payment for health care benefits, items, or services. Similarly, on this charge, the Fourth Circuit ruled that there was sufficient evidence from which a jury could find that the false statements made by Defendant were made knowingly and willfully.

Claim Three: Conspirator Responsible for Foreseeable Acts of Co-Conspirators

The Fourth Circuit held that the district court was entitled to include the amount of losses caused by co-conspirators in calculating the sentencing guidelines range. Defendant’s relevant conduct includes all reasonably foreseeable acts in furtherance of the jointly undertaken criminal activity.

 Conviction and Sentence Affirmed

Holding that there was no reversible error committed by the district court regarding the three claims of the Defendant, the Fourth Circuit affirmed Defendant’s conviction and sentence.

Friday, October 24th

Z. Smith Reynolds Library Auditorium

CLE Credits:

5.5 hours General

View the Brochure

Please REGISTER today to help us accommodate all of our guests for parking and CLE credit.

Directions to the Z. Smith Reynolds Library Auditorium can be found here.  For the most convenient parking, please use Lot S and Lot E, as designated on the parking map.

Please direct any questions to Kenny Cushing at cushka12@wfu.edu.

Description

The Wake Forest Law Review will host its Fall 2014 symposium, “Relationship-Centered Health Care: Implications for Law and Ethics,” on Friday, October 24th at the Z. Smith Reynolds Library Auditorium.  The symposium is co-sponsored by the Wake Forest Center for Bioethics, Health and Society.

Viewing health care delivery as fundamentally relational—rather than as a series of discrete transactions between provider and patient—provides a psychological and sociological lens to evaluate its contemporary legal and ethical dimensions. Larry Churchill, the co-author of two acclaimed books on this emerging topic—Healers: Extraordinary Clinicians at Work (2011) and What Patients Teach: The Everyday Ethics of Health Care (2013)—will be the featured keynote speaker, along with co-authors David Schenck and Joseph Fanning.

In their first book, Healers, the authors use empirical observation, as well as philosophical, anthropological and psychological perspectives, to analyze the ritual structure and spiritual meaning of healing skills. In What Patients Teach, the authors examine the dynamic of “doubled-agency” between doctors and patients, which is based in patients’ vulnerabilities and gives rise to a set of special responsibilities.

A distinguished group of legal, medical, and ethics scholars will respond to the ideas raised by these authors and explore their own work as it relates to the web of critical relationships within health care delivery.

Schedule

 8:30 Continental Breakfast
 9:00 Patient-Centered Health Care (Keynote Speaker)
Larry Churchill, Ph.D. Professor of Medicine, Ann Geddes Stahlman Chair in Medical Ethics, Vanderbilt University Toward an Ethic of Patient-Centered Health Care
Joseph Fanning Assistant Professor of Medicine, Vanderbilt University
David Schenck Assistant Professor of Medicine, Vanderbilt University
 10:30 The Phenomenology of Being a Patient, Physician, or Research Subject
Mary Catherine Beach, M.D., MPH Associate Professor, Department of Medicine, John Hopkins University Clinician Emotions and Values: Risks and Benefits of Relationship-Centered,Care
Lois Shepherd, J.D. Peter A. Wallenborn, Jr. and Dolly F. Wallenborn Professor of Biomedical Ethics, Professor Public Health Sciences, Professor of Law, University of Virginia Welcome, Responsibility and Healing Skills
Mark Hall, J.D. Fred D. & Elizabeth L. Turnage Professor of Law, Wake Forest University Physicians as Placebos: The Law and Ethics of Healing Relationships
Rebecca Dresser, M.S., J.D. Daniel Noyes Kirby Professor of Law, Professor of Ethics in Medicine, Washington University What Subjects Teach: The Everyday Ethics of Human Research
 12:00 Lunch (click here to see on-campus dining options)
 1:30 Computers and Physical Space: The Architecture of Clinical Encounters
Pat Ober, M.D. Professor, Wake Forest University The Electronic Medical Record: Treating Our
Fellow Creature as Corn and Coal
Christine Coughlin, J.D. Director, Legal Analysis, Research & Writing, Professor of Legal Writing, Wake Forest University iConsent: The Doctrine of Informed Consent in the Electronic Age
Elizabeth Pendo, J.D. Vice Dean, Professor of Law, St. Louis University Caring for Patients with Disabilities
 2:45 How Doctors and Patients Communicate
Arthur R. Derse, M.D., J.D. Julia and David Uihlein Professor of Medical Humanities and Professor of Bioethics and Emergency Medicine, Medical College of Wisconsin Three Generations of the Objective Patient
Standard is Enough!: The Evolution of Informed
Consent in Wisconsin and its Implications for the Physician-Patient Relationship
Nancy King, J.D. Professor, Wake Forest University The Reasonable Patient and the Healer
Chris Robertson, J.D., Ph.D., M.A. Associate Professor of Law, University of Arizona Should Patient Responsibility for Costs Change the Doctor-Patient Relationship?
 3:45 Adjourn

Abstracts

Churchill

Despite the profound changes in medical ethics over the past 50 years, medicine’s codes, oaths, and principles remain steadfastly centered on the professional. This Article explores how pervasive this professional orientation is and the shortcoming and distortions that result. By adopting and incorporating many of the bioethical formulations for good doctoring, medicine has largely substituted norms inspired by political ideals and an economic model of consumer rights to replace the defunct paternalistic norms. A genuinely patient-centered ethic begins with patients, with patients’ understanding of the moral features of clinical encounters, and a reworking of the moral tools essential to practice effectively.   Read PDF of article online.

Coughlin

The recent introduction of electronics within the doctor-patient relationship—specifically the use of computers and tablets—will affect the quality of that relationship, as well as the patient’s understanding of the clinical encounter. This presentation and Article looks at that effect by examining the use of computers and tablets in the informed consent process.

Many physicians and health care entities use general informed consent forms to document a patient’s consent. Indeed, various state laws provide physicians some protections from litigation if an informed consent form is used. In reality, many of these informed consent forms, while arguably consistent with the law, are inconsistent with the goals of informed consent because they are not focused on the patient as an individual and they are written above the recommended grade level reading target. Recent research, moreover, regarding reading comprehension on computers and tablets versus hard copies suggests that reading on tablets and other types of computers promotes “skimming” and likely decreases reading comprehension overall.

The advent of electronics used to obtain informed consent and other information, while efficient, may decrease the understanding and comprehension of the risks and benefits of the proposed treatment. Appropriate precautions must be instilled not only to obtain meaningful informed consent but also to preserve trust in the doctor-patient relationship. As electronics become an integral part of patients’ clinical experience, best practices should be implemented so the focus is not only avoiding possible litigation. Rather, best practices should be implemented in a manner consistent with Dr. Churchill’s and his colleagues’ focus on the patients’ understanding of the various dimensions of clinical encounters.  Read PDF of article online.

Derse

The Wisconsin Supreme Court in 1975 adopted the objective patient standard for material information that must be disclosed to a patient by a physician for adequate informed consent. The court significantly expanded the standard’s reach by including these elements as material to an objective patient 1) information about the health care facility’s level of expertise, 2) the experience of the physician, if substantially different from an average practitioner, 3) all viable alternative options for treatment including means of diagnostic measures and followup and 4) a duty to disclose all viable alternative diagnoses considered before arriving at a final diagnosis, as well as the diagnostic tests that would rule out those alternate diagnoses. In response to claims of judicial overreach, the Wisconsin legislature amended the state’s informed consent statute to return the state to a professional standard of material information and excluded the requirement to disclose alternative modes of treatment for other diagnoses considered. The saga of the establishment and expansion of the standard, as well as the recent legislation, will be reviewed, and implications for physician-patient communication will be discussed.

Dresser

In What Patients Teach: The Everyday Ethics of Health Care, Dr. Larry Churchill, Joseph Fanning, and David Schenck offer a critique of conventional medical ethics. They contend that ethical codes and principles neglect patients’ experiences and rely too heavily on what professionals, rather than patients, see as ethical care. I believe that many of the points Churchill and his colleagues make about medical ethics apply equally to research ethics.

For the most part, research ethics has developed without serious attention to the views of people who know what it is like to be a research subject. Rather than relying on speculation about the research participant experience, research ethics and oversight ought to rely on what actual participants say about their experiences. Research ethics, as well as regulations intended to promote ethical conduct, should be based on evidence. Ethical and regulatory decisions should take into account participants’ knowledge, as well as their positions on ethical issues in research.  Read PDF of article online.

Hall

Placebos are often denigrated as spurious effects in research, or psychosomatic clinical aberrations, but generations of careful study and reflection reveal that “nonspecific healing” effects are pervasive in medical encounters.  In part, this is because good clinicians, knowingly or subliminally, are able to activate or enhance the body’s own self-healing powers.  Viewed this way, physicians do not so much administer placebos as they themselves are (or can be) a placebo agent—by dealing with patients in ways that make bioactive treatment modalities more effective than if they were administered, say, by a machine.  This is a large part of what we mean when we refer to health care workers as healers and when we emphasize the importance of healing relationships.

            This Article will explain and develop these ideas, drawing on both empirical and conceptual literature.  The Article will then explore whether or not various elements of health care law and ethics are compatible with optimizing the healing aspects of treatment relationships.  Key points of focus will include informed consent doctrine, the ethics of administering placebos, the malpractice standard of care, and managed care patient rights.  Read PDF of article online.

King

This Article’s focus is (1) an examination of the “reasonable person” concept as it applies to disclosure and causation in informed consent, and (2) the application of the reasonable person to the physician-patient relationship, using Alice Trillin’s New Yorker essay “Betting Your Life.” The Article then uses these concepts to discuss healing relationships as described by Dr. Churchill and his colleagues.  Read PDF of article online.

Ober

“The practice of medicine is not a business and can never be one …Our fellow creatures cannot be dealt with as a man deals in corn and coal; the human heart by which we live must control our professional relations.”

[Sir William Osler]

             The introduction of the electronic medical record [EMR] in recent years brought a promise of great potential advantages, especially in the realms of communication, health monitoring, and patient safety. This great potential has fallen by the wayside as the EMR has been subverted for the purpose of business-oriented goals such as more efficient [and, possibly, inflated] billing. Recognition of the ideals of patient individuality and patient-centered healthcare is discouraged by the EMR in its current format. The patient’s unique story is devalued. Patients have become commodities, clinics have become cheerless assembly lines, and the advice of Sir William Osler has been disregarded as the EMR is replacing the traditional patient-oriented focus of medical practice with a business-oriented model.

Pendo

People with disabilities face multiple barriers to adequate health care and report poorer health status than people without disabilities.  The Institute of Medicine and others suggest that lack of physician education and professional training on disability competency issues is one of the most significant barriers to appropriate and effective care.  A related but less-studied barrier is the physical environment of health care, including facilities, examination rooms, and medical and diagnostic equipment.  This presentation will explore the model of relational ethics as illustrated by Dr. Larry Churchill, Joseph Fanning and David Schenck in Healers: Extraordinary Clinicians at Work and What Patients Teach: The Everyday Ethics of Health Care as a framework to acknowledge and address these barriers, and to improve the health and health care experiences of patients with disabilities.  Read PDF of article online.

Robertson

Decades of health policy reforms have caused patients to pay-out-of-pocket greater portions of the cost of their own healthcare.  We know from prior research that some patients are left “underinsured,” which means that the costs of care can undermine adherence, can cause stress, and can cause other risks such as bankruptcy and foreclosure—all of which may worsen the patient’s health. Only recently have scholars begun to ask whether and how physicians should respond.  Do they have a duty to tell their patients about costs of each treatment alternative?  Should they sometimes recommend cheaper healthcare, even if it is inferior?  Do physicians have a more fundamental duty to investigate the real costs of healthcare that will be imposed on patients?  Or, alternatively, are these financial duties better handled by other professionals—such as social workers?   One might cogently argue that treating the whole person includes attention to her pocketbook as well.  These questions are many and difficult, but analysis suggests some paths forward.  Read PDF of article online.

Shepherd

To be successful, all methods of bioethical analysis—whether Principlism or approaches that emphasize care, community, solidarity, or professionalism—rely on the presence of individuals who are radically open to the presence of all others and who are ready, willing, and able to take responsibility for what is going on.  This presentation will explore ideas of welcome and responsibility in the clinical encounter.  In their book Healers, Extraordinary Clinicians at Work, David Schenck and Larry Churchill write that “healing…always has to do with the quality of relationships.”  We often judge clinicians by how responsibly they care for vulnerable patients.  But if relationships are what we seek, then patients must also have responsibilities and physicians must also be vulnerable.  Read PDF of article online.

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