Tag Archives: U.S. Department of Health and Human Services (HHS)

Data Breach at Colorado Hospital Highlights IT Security Risks

Lance Leider headshotBy Lance O. Leider, J.D., The Health Law Firm

A small rural hospital in Glenwood Springs, Colorado, has identified a virus on its computer network that had captured and stored screen shots of protected health information in a hidden file system. The hidden folder was created on Sept. 23, 2013, but was not discovered until Jan. 23, 2014. The breach identified at least 5,400 individual patients whose information was compromised.

According to Healthcare IT News, among the stolen data was patient names, addresses, dates of birth, telephone numbers, Social Security numbers, credit card information, and admission and discharge dates.

Hospital officials have been unable to determine how the virus was loaded onto the hospital network, according to Healthcare IT News. Consequently, officials believe that there is “very high” probability that the data had been accessed by an outside entity.

To read the entire article from Healthcare IT News, click here.

Take Steps to Secure Your Network.

Breaches of this kind are not solely confined to hospitals and large providers. In fact, it may be that this hospital was targeted because it was a smaller provider in a rural area with easier access to its systems.

Viruses like the one in question could be loaded onto systems as a result of an outside attack (think hackers) or through inside means like a flash drive or deliberately opening an infected e-mail.

It is imperative that a Health Insurance Portability and Accountability Act (HIPAA) covered entity have an effective cyber security plan. Make sure that you have up-to-date anti-virus software and that your computers are secure from access by unauthorized personnel like cleaning crews or patients and their families. Also, meet with your IT professional to discuss security measures you can put in place such as restricting access and accessibility to certain files or the ability to download programs and applications to essential staff only.

Hacked data represents a growing share of HIPAA breaches. It is imperative that covered entities ensure their compliance with HIPAA to avoid any sanctions by the Office for Civil Rights (OCR). To date, the OCR has collected in excess of $18 million in fines and penalties for failures to secure patient information.

Get a Risk Assessment.

A HIPAA Risk Assessment is a thorough review and analysis of areas where you may have risk of violating the HIPAA laws. Federal regulations require that covered entities have this assessment done. When the OCR auditor comes to visit your office to check for HIPAA compliance, they will ask for your Risk Assessment. Do you have one? Does your staff know who your HIPAA compliance officer is? To learn more on HIPAA risk assessments, click here.

Contact a Health Law Attorney Experienced in Defending HIPAA Complaints and Violations.

The attorneys of The Health Law Firm represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other health care providers and institutions in investigating and defending alleged HIPAA complaints and violations and in preparing Corrective Action Plans (CAPs).

For more information about HIPAA violations, electronic health records or corrective action plans (CAPs), please visit our website at www.TheHealthLawFirm.com or call (407) 331-6620 or (850) 439-1001.

Comments?

Do you think it is likely that this hospital was targeted because it was a smaller provider in a rural area? Do you think a HIPAA risk assessment could have helped this practice avoid a breach? Please leave any thoughtful comments below.

Sources:

Harvey, Nelson. “Hospital Database Hacked, Patient Info Vulnerable.” Aspen Daily News. (March 15, 2014). From: http://www.aspendailynews.com/section/home/161578

McCann, Erin. “Small-Town Hospital Gets Hacked.” Healthcare IT News. (March 17, 2014). From: http://www.healthcareitnews.com/news/small-town-hospital-gets-hacked

About the Author: Lance O. Leider is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, Florida 32714, Phone: (407) 331-6620.

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2014 The Health Law Firm. All rights reserved.

Dermatology Practice Settles with Government After Stolen USB Drive Results in HIPAA Breach

10 Indest-2008-7By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

The U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR), and Adult & Pediatric Dermatology (APDerm), reached a $150,000 settlement for privacy and security violations of the Health Insurance Portability and Accountability Act (HIPAA). The alleged violations related to an unencrypted USB drive that was stolen. The thumb drive contained the protected health information (PHI) of around 2,200 patients, according to a press release posted December 26, 2013, on the HHS website.

According to the HHS, this is the first settlement with a covered entity for not having policies and procedures in place to address the breach notification provisions of the Health Information Technology for Economic and Clinical Health (HITECH) Act.

To read the entire press release from the HHS, click here.

APDerm delivers dermatology services to patients in Massachusetts and New Hampshire.

Alleged Violations Stemmed from Stolen, Unencrypted USB Drive.

According to the HHS, the OCR initiated its investigation after being tipped off that an unencrypted thumb drive containing the PHI of about 2,200 patients was stolen from a vehicle of an APDerm staff member. According to Healthcare IT News the thumb drive was never recovered.

The investigation allegedly revealed that APDerm had not conducted an accurate and thorough analysis of the potential risks and vulnerabilities to the confidentiality of PHI as part of it security management process. It’s also alleged that APDerm failed to fully comply with the HITECH Breach Notification Rule, which requires organizations to have written policies and procedures in place and to train staff members.

According to Healthcare IT News, the settlement also includes a corrective action plan (CAP). The CAP requires the dermatology company to develop a risk analysis and risk management plan to address and mitigate any security risks and vulnerabilities. Click here to read the entire article on Healthcare IT News.

Warning to HIPAA Covered Entities Regarding Risk Assessments.

This settlement is an important reminder about equipment designed to retain electronic information. HIPAA covered entities are responsible for making sure all personal information is protected. Entities are also required to undertake a careful risk analysis to understand the threats and vulnerabilities to individuals’ data, and have safeguards in place to protect this information.

HIPAA laws have most likely changed since you last edited your privacy forms and procedures. Many health providers simply do not have the time to re-review their policies and revise documents. In a perfect practice, this would be done every six months.

To learn more on HIPAA risk assessments, click here.

Be Sensitive to Technical Equipment Containing Internal Memory.

In today’s technological society everyone must be continually vigilant about the machines and equipment used. Many different types of devices now contain internal memory chips and hard drives that may store data that is difficult to erase. These may include photocopiers, scanners and fax machines, in addition to computers and servers. Security videos and communications monitoring systems may also maintain such information. Backup tapes and modern cell phones are other possible examples. These should be professionally cleaned of all data or destroyed before discarding them, selling them or trading them in on newer models.

To read a previous blog on Affinity Health Plan settling with government in photocopier HIPAA breach incident, click here.

Practical Tips.

The following are some lessons learned from this case. Share them with others in your organization:

1. Ensure that all types of electronic media by which you transfer patient health information of any kind are encrypted. This includes thumb drives, CD ROMs, DVDs, backup tapes, mini hard drives and anything else.
2. Try not to remove any patient information from your work cite. If you need to work on it remotely, use a secure, encrypted internet connection to access your work data base. Avoid saving the work or data onto your laptop hard drive or other removable media.
3. Never leave your laptop or other media in a car you are having worked on by a mechanic, having an oil change, having the car washed, or while you run into a store. Thieves stake out such locations and are waiting for careless individuals to do this.
4. Never leave your laptop, thumb drive or other electronic media from work in your car. What can be worse than having your car stolen? Having your car stolen with your laptop in it with patient information on it.

Contact a Health Law Attorney Experienced in Defending HIPAA Complaints and Violations.

The attorneys of The Health Law Firm represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other health care providers and institutions in investigating and defending alleged HIPAA complaints and violations and in preparing Corrective Action Plans (CAPs).

For more information about HIPAA violations, electronic health records or corrective action plans (CAPs) please visit our website at http://www.TheHealthLawFirm.com or call (407) 331-6620 or (850) 439-1001.

Comments?

What do you think of this settlement? Does your office and/or practice have an annual security risk assessment? Do you think risk analyses are important? Please leave any thoughtful comments below.

Sources:

Millard, Mike. “Lost Thumb Drive Leads to $150K Fine.” Healthcare IT News. (December 30, 2013). From: http://www.healthcareitnews.com/news/lost-thumb-drive-leads-150k-fine

U.S. Department of Health and Human Services “Dermatology Practice Settles Potential HIPAA Violations.” HHS.gov. (December 26, 2013). From: http://www.hhs.gov/news/press/2013pres/12/20131226a.html

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. http://www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2014 The Health Law Firm. All rights reserved.

Two Laptops Containing Information of 729,000 Patients Stolen from California Hospital Group

6 Indest-2008-3By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

The personal health information of around 729,000 patients has been compromised following the theft of two laptops. The password-protected computers were taken from an administration building of AHMC Healthcare Inc., a hospital group in Alhambra, California. According to the Los Angeles Times, the laptops contain data from patients treated at six different AHMC Healthcare hospitals. Surveillance video shows that the theft occurred on October 12, 2013, but hospital officials did not discover the laptops were missing until two days later.

To read the article from the Los Angeles Times, click here.

Laptops Contain Patient Information, But No Evidence Information Has Been Hacked.

According to the hospital group, the laptops contain data including patients’ names, Medicare/insurance identification numbers, diagnosis/procedure codes, and insurance/patient payment records. Some of the files allegedly contain the Social Security numbers of Medicare patients.

So far, there is no evidence the information has been accessed or used, according to the CBS affiliate in Los Angeles. Click here to read the article from the CBS affiliate.

However, given that this just occurred a few days ago, it is probably too early to tell, anyway.

Breach Must Be Reported to the Department of Health and Human Services.

Hospitals are required, under federal law, to report potential medical data breaches involving more than 500 people to the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR). The OCR is responsible for investigating all allegation of violations of HIPAA Privacy and Security Regulations.

According to the Los Angeles Times, AHMC Healthcare has already asked for an auditing firm to perform a security risk assessment. Hospital administrators are also expediting a policy to encrypt all laptops.

HIPAA Omnibus Final Rule Effective September 23, 2013–Get a Risk Assessment.

The HIPAA Omnibus Final Rule went into effect on September 23, 2013. By now, hospitals, physicians and all covered entities must comply with the HIPAA Omnibus Final Rule. The amendments to the rule are available on the HHS OCR website. I previously wrote a blog series about the HIPAA Omnibus Final Rule. Click here for part one, click here for part two and here for part three.

Covered entities should be performing HIPAA risk assessments to identify their security risks and implement protections before a data breach occurs. HIPAA has always required covered entities to perform HIPAA risk assessments. Very often, the first question the OCR asks when investigating a possible HIPAA violation is what risk assessment the health care provider has performed.

The objectives of an adequate HIPAA risk analysis are:

1. Identify the scope of the analysis – the analysis should include all the risks and vulnerabilities to the confidentiality, availability and integrity of all electronic health information regardless of its location.
2. Gather data – the covered entity must identify every location where electronic data is stored.
3. Identify and document potential threats and vulnerabilities – the covered entity should consider natural threats, human threats and environmental threats.
4. Assess current security measures – the covered entity must examine and assess the effectiveness of its current measures.
5. Determine the likelihood of threat occurrence – the covered entity should evaluate each potential threat and prioritize its plan to address each threat.
6. Determine the potential impact of threat occurrence – the covered entity should assess the possible outcomes of each identified threat such as unauthorized disclosure of confidential information.
7. Determine the level of risk – the covered entity should categorize each risk and plan its procedures to mitigate any damage cause by each risk.
8. Identify security measures and finalize documentation – the covered entity should thoroughly document all the steps it used in its risk assessment process.

Contact a Health Law Attorney Experienced in Defending HIPAA Complaints and Violations.

The attorneys of The Health Law Firm represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other healthcare providers and institutions in investigating and defending alleged HIPAA complaints and violations and in preparing Corrective Action Plans (CAPs).

For more information about HIPAA violations, electronic health records or corrective action plans (CAPs) please visit our website at www.TheHealthLawFirm.com or call (407) 331-6620 or (850) 439-1001.

Comments?

What do you think if this alleged HIPAA violation? Do you have policies and procedures in place to protect your patients’ right to privacy? Have you received a HIPAA risk assessment lately? Please leave any thoughtful comments below.

Sources:

Winton, Richard. “Laptop Thefts Compromise 729,000 Hospital Patient Files.” Los Angeles Times. (October 21, 2013). From: http://www.latimes.com/local/la-me-hospital-theft-20131022,0,1936078.story#axzz2iRg6Rh3Y

Los Angeles CBS. “Laptops Containing Patient Information Stolen from Alhambra Hospital.” Los Angeles CBS. (October 22, 2013). From: http://losangeles.cbslocal.com/2013/10/22/laptops-containing-patient-information-stolen-from-alhambra-hospital/

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2012 The Health Law Firm. All rights reserved.

Affinity Health Plan Settles with Government in Photocopier HIPAA Breach Incident Involving Patient Medical Information

8 Indest-2008-5By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

The U.S. Department of Health and Humans Services (HHS) Office of Civil Rights (OCR), and Affinity Health Plan, Inc. (Affinity), reached a settlement for more than $1.2 million for potential violations of the Health Insurance Portability and Accountability Act (HIPAA). The alleged violations related to a photocopier previously leased by Affinity. The photocopier had an internal hard drive which stored copies of documents, including medical records, which had been photocopied by Afinity. The photocopier was returned to the leasing company and then later purchased from that same company by CBS Evening News. Apparently CBS Evening News then discovered the medical records on the photocopier hard drive.

According to the HHS, Affinity filed a breach report with the HHS OCR on April 15, 2010. This is required under the Health Information Technology for Economic and Clinical Health (HITECH) Act.

To read the entire press release from the HHS, click here.

Affinity is a not-for-profit managed care plan serving the New York metropolitan area.

Alleged Violations Stemmed from Failing to Clear Photocopier Hard Drive.

Affinity was allegedly informed by a representative of CBS Evening News, that as part of an investigation, CBS purchased a photocopier previously leased by Affinity. CBS allegedly informed Affinity that the photocopier still contained medical information on its hard drive. The OCR estimated that up to 344,579 individuals may have been affected by the breach. The OCR’s investigation found that Affinity impermissibly disclosed the protected health information of these individuals when it returned multiple photocopiers to leasing agents without deleting the data stored on the hard drives.

Affinity Must Try to Retrieve All Hard Drives in Previously Used Photocopiers.

According to HealthIT Security, on top of the $1,215,780 payment, Affinity must also try to recover all its previously used photocopiers that are still in the custody of the leasing company. Affinity must also conduct a risk analysis of its electronic protected health information for security risks and vulnerabilities.

Click here to read the article from HealthIT Security.

Warning to HIPAA Covered Entities Regarding Risk Assessments.

This settlement is an important reminder about equipment designed to retain electronic information. HIPAA covered entities are responsible for making sure all personal information is wiped from the hardware before it is recycled, thrown away or sent back to a leasing agent. Entities are also required to undertake a careful risk analysis to understand the threats and vulnerabilities to individuals’ data, and have safeguards in place to protect this information.

HIPAA laws have most likely changed since you last edited your privacy forms and procedures. Many health providers simply do not have the time to re-review their policies and revise documents. In a perfect practice, this would be done every six months.

To learn more on HIPAA risk assessments, click here.

Be Sensitive to Technical Equipment Containing Internal Memory.

In today’s technological society everyone must be continually vigilant about the machines and equipment used. Many different types of devices now contain internal memory chips and hard drives that may store data that is difficult to erase. These may include, for example, photocopiers, scanners and fax machines, in addition to computers and servers. Security videos and communications monitoring systems may also maintain such information. Backup tapes and modern cell phones are other possible examples. These should be professionally cleaned of all data or destroyed before discarding them.

Contact a Health Law Attorney Experienced in Defending HIPAA Complaints and Violations.

The attorneys of The Health Law Firm represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other healthcare providers and institutions in investigating and defending alleged HIPAA complaints and violations and in preparing Corrective Action Plans (CAPs).

For more information about HIPAA violations, electronic health records or corrective action plans (CAPs) please visit our website at www.TheHealthLawFirm.com or call (407) 331-6620 or (850) 439-1001.

Comments?

What do you think of this settlement? Does your office and/or practice have an annual security risk assessment? Do you think risk analyses are important? Please leave any thoughtful comments below.

Sources:

Office of Civil Rights. “HHS Settles with Health Plan in Photocopier Breach Case.” U.S. Department of Health and Human Services. (August 14, 2013). From: http://www.hhs.gov/news/press/2013pres/08/20130814a.html

Ouellette, Patrick. “OCR, Affinity Health Plan Reach HIPAA Violation Agreement.” HealthIT Security. (August 14, 2013). From: http://healthitsecurity.com/2013/08/14/ocr-affinity-health-plan-reach-hipaa-violation-agreement

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2012 The Health Law Firm. All rights reserved.

Health Care Professionals Take Note of the New HIPAA Rules

Patricia's Photos 013By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law, and Lance O. Leider, J.D., The Health Law Firm

With the popularity of electronic health records (EHRs), social media and everything in between, the U.S. Department of Health and Human Services (HHS) has released stronger rules and protections governing patient privacy. On January 17, 2013, the HHS announced the omnibus rule to strengthen the privacy and security protection established under the Health Insurance Portability and Accountability Act (HIPAA) of 1996.

Click here to read the entire 563-page rule.

Now, I can’t say that I’ve read the entire document yet, but I can tell you about the major parts of the omnibus rule, and what it means to you.

It is Your Responsibility to Keep Patient Information Safe.

HHS is expanding the government’s jurisdiction over healthcare providers, health plans and other entities that process health insurance claims to include their contractors and subcontractors with whom providers share protected health information. As the industry embraces new care delivery models, including accountable care organizations (ACOs) and integrated delivery systems, data is exchanged between physicians, hospitals and additional providers to improve care and reduce costs. This all has to be done while keeping patient data safe. According to the HHS, some of the largest breaches involve business associates and not the covered entities themselves.

The government is committed to doing more HIPAA compliance audits and collecting more fines.  The fines the government collects will help to fund the audit process. Because of this rule, we will see audits of business associates and their subcontractors, not just covered entities.

Under the new rule, penalties have been increased for noncompliance based on the level of negligence with a maximum penalty of $1.5 million per violation.

The “Wall of Shame” is a Public Display of Breaches.

The changes also improve the Health Information Technology for Economic and Clinical Health (HITECH) breach notification requirements by making it clear when breaches must be reported to the Office for Civil Rights (OCR), according to the HHS.

Once reported to the OCR, the breaches are then placed on what is commonly known in the healthcare industry as the “Wall of Shame.” It’s a comprehensive list of privacy breaches each affecting more than 500 people. We’re currently working on a “Wall of Shame” blog, so more on that later.

Patient Demographics and Marketing.

One part of the final rule also sets new regulations for how patient information can be used for marketing and fundraising. It ensures that such information cannot be sold without a patient’s permission. According to an article in Fierce Healthcare, this provision is a huge win for patient advocates and privacy groups who blast hospitals for mining patient data to target affluent or privately insured patients. Hospitals using health and demographic data from patients’ records to target advertising could be in hot water.

Click here to read the entire Fierce Healthcare article.

If Your are Unsure, Get a HIPAA Risk Assessment.

Since the HIPAA laws have changed, you need to edit your privacy forms and procedures. Many health providers simply don’t have the time to re-review their policies and revise documents. A HIPAA risk assessment is a thorough review and analysis of areas where you may have risk of violating the HIPAA laws.  Federal regulations require that covered entities have this assessment done. A HIPAA risk assessment can significantly reduce, if not entirely eliminate, your exposure to regulatory and litigation sanctions.

When the OCR auditor comes to visit your office to check for HIPAA compliance, they will ask for your risk assessment. Do you have one? Does your staff know who your HIPAA compliance officer is? Call an experienced health law attorney to complete a risk assessment of your practice today. To learn more on HIPAA risk assessments, click here to read a blog we wrote.

Take a Closer Look at Your Privacy Practices.

Healthcare providers, now is the time to revise your Notice of Privacy. The final rule will be effective on March 26, 2013. Covered entities and their business associates will have until September 21, 2013, to comply.

Contact a Health Law Attorney Experienced in Defending HIPAA Complaints and Violations.

The attorneys of The Health Law Firm represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other healthcare providers and institutions in investigating and defending alleged HIPAA complaints and violations and in preparing Corrective Action Plans (CAPs).

For more information about HIPAA violations, electronic health records or corrective action plans (CAPs) please visit our website at www.TheHealthLawFirm.com or call (407) 331-6620 or (850) 439-1001.

Sound Off.

What do you think about the new HIPAA rules? Do you think these updates were necessary? Do you think it will be difficult for health professionals to comply? Please leave any thoughtful comments below.

Sources:

HHS Press Office. “New Rule Protects Patient Privacy, Secures Health Information.” U.S. Department of Health and Human Services. (January 17, 2013). From: http://www.hhs.gov/news/press/2013pres/01/20130117b.html

Struck, Kathleen. “HIPAA Rules Fortify Patient Privacy.” MedPage Today. (January 21, 2013). From: http://www.medpagetoday.com/PracticeManagement/InformationTechnology/36940

Conn, Joseph. “New Rule: Hospital, Physician Partners Face Penalties for Privacy Leaks.” Modern Healthcare. (January 17, 2013). From: http://www.modernhealthcare.com/article/20130117/NEWS/301179957/new-rule-hospital-physician-partners-face-penalties-for-privacy&utm_source=home&utm_medium=web&utm_campaign=most-popular-box

Caramenico, Alicia. “New HIPAA Rule a Delicate Balance Between Privacy, Sharing.” Fierce Healthcare. (January 18, 2013). From: http://www.fiercehealthcare.com/story/new-hipaa-rule-delicate-balance-between-privacy-sharing/2013-01-18

Authors: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

Lance O. Leider is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, Florida 32714, Phone:  (407) 331-6620.

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.

Copyright © 1996-2012 The Health Law Firm. All rights reserved.

Florida Pharmacy Owner Accused of Medicare Fraud

00011_RT8By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

A family that owns a number of South Florida pharmacies is allegedly under investigation for Medicare fraud, according to a number of sources. On January 17, 2013, federal authorities raided one pharmacy location in Naples, Florida. Drug Enforcement Administration (DEA) agents removed boxes of documents and computers from the pharmacy, according to Naples News. The pharmacy owner and his mother are allegedly being investigated by the U.S. Office of Inspector General (OIG) of the Department of Health and Human Services (HHS).

Click here to read the entire Naples News article.

Pharmacy Owner and Mother Allegedly Submitted False Claims to Medicare, Medicaid and Tricare.

According to NBC2, a South Florida television station, the pharmacy owner and his mother were both allegedly part of a scheme that defrauded Medicare. The family allegedly submitted claims to Medicare Part D after beneficiaries had died. This information came from a letter sent to Medicare Part D providers from the Centers for Medicare and Medicaid Services (CMS) on October 17, 2012. The letter was obtained by NBC2. The scheme allegedly also involved submitting false claims to Medicaid and Tricare.

Click here to watch the NBC2 news story.

Investigation is Ongoing.

The pharmacy that was raided is part of a chain of stores owned by the same family. So far, only the pharmacy located on Rattlesnake-Hammock Road in Naples is being investigated. That location is reportedly still closed, but the other pharmacy locations are open.

Neither the DEA nor the OIG of the HHS has released a press release on this investigation.

As in all media reports, please remember that all persons are presumed to be innocent until proven guilty in a court of law.

Pharmacies Are Being Raided and Shutdown  All Over the State.

If  you have watched the news at all lately or have been reading our blog, you can tell there have been an increased number of raids on pharmacies, arrests of pharmacists and emergency suspension orders issued from the Department of Health (DOH).

Recently, the DEA served a Walgreens distribution center in Florida with an immediate suspension order (click here to read more on this story), and pulled the controlled substance licenses from two Central Florida CVS Pharmacies (to learn more, click here).

In my personal opinion, the recent raids and investigations at pharmacies are especially hard on the independent operators. If the large retail giants can’t survive, the small independent pharmacies stand little chance.

Talk with an Experienced Health Law Attorney About Medicare, Medicaid and Tricare Issues Now.

The attorneys of The Health Law Firm represent healthcare providers in Medicare audits, ZPIC audits and RAC audits throughout Florida and across the U.S. They also represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other healthcare providers and institutions in Medicare and Medicaid investigations, audits, recovery actions and termination from the Medicare or Medicaid Program.

For more information please visit our website at www.TheHealthLawFirm.com or call (407) 331-6620 or (850) 439-1001.

What Do You Think?

As a pharmacy owner, pharmacy employee or health care facility owner, what do you think of the increased effort to find fraud? Do you think all facilities, not just pharmacies, are under the microscope? Please leave any thoughtful comments below.

Sources:

Freeman, Liz. “Sunshine Pharmacy in East Naples Remains Close, Day After Federal Raid.” Naples News. (January 19, 2013). From: http://www.naplesnews.com/news/2013/jan/19/sunshine-pharmacy-east-remains-closed-raid-federal/

Ritter, Rick. “Naples Pharmacy Busted for Medicare Fraud.” NBC2. (January 20, 2013). From: http://www.nbc-2.com/story/20627104/detectives-investigating-medicare-fraud-at-naples-pharmacy

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.

Copyright © 1996-2012 The Health Law Firm. All rights reserved.

American Hospital Association (AHA) Sues U.S. Government for Denied Medicare Payments by RACs, ZPICs and Other Auditors

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On November 1, 2012, the American Hospital Association (AHA) filed a lawsuit against the U.S. Department of Health and Human Services (HHS) claiming that private auditors hired to crack down on improper Medicare payments are denying hospitals millions of dollars in medically necessary care, this is according to a number of sources. The AHA is seeking a court order declaring the practice invalid, saying it violates the Medicare Act.

Four hospital systems in Michigan, Missouri and Pennsylvania have joined the AHA as plaintiffs in the suit. The suit has been filed in federal court in Washington, D.C.

To read the AHA complaint against the HHS, click here.

AHA Wants Doctors to Be Able to Focus on Patient Care.

The lawsuit alleges Recovery Audit Contractors (RACs), private auditors used by the HHS, forced hospitals to repay Medicare for the costs of in-patient services by determining that Medicare beneficiaries should have been treated as out-patients instead of being admitted into hospitals as in-patients. The services provided to out-patients are much less, of course, and the bills for out-patient services are usually much lower.

In the official press release AHA argues when patients need treatment, the first step for a doctor is to decide whether to admit the patient to the hospital or to provide care in an out-patient facility. AHA believes doctors’ decisions are often more complicated for Medicare beneficiaries because the doctor is routinely second-guessed by RACs months or even years later. The president and CEO of AHA said this practice is “indefensible.”

Click here to read the entire press release from the AHA.

Neither the Centers for Medicare and Medicaid (CMS) nor the Department of HHS has commented on the pending litigation.

AHA Fed Up with Redundant Audits that Drain Time, Funding and Patient Care.

In October 2012, prior to the lawsuit, the executive vice president of the AHA wrote a letter to the Office of Inspector General (OIG) in response to the Work Plan for Fiscal Year 2013. In the work plan the OIG reviewed the effectiveness of various Medicare contractors, including RACs, Medicare Administrative Contractors (MACs) and Zone Program Integrity Contractors (ZPICs).

The letter states that these programs auditing payment accuracy are well intentioned, but hospitals are fed up with the RACs’ inaccuracy in determining whether the hospital received any overpayments. The letter also claims that hospitals are overwhelmed by the significant overlap and duplication of efforts between the RACs, MACs and ZPICs. These redundant audits drain time, funding and attention to patient care, according to the AHA.

According to the OIG review, hospitals reported appealing more than forty percent (40%) of all RAC denials, with a seventy-five percent (75%) success rate in the appeals process.

Click here to read the letter from the AHA to the OIG.

How to Take Action Once a Notice of a Medicare Audit Has Been Received.
When a physician, medical group or other healthcare provider receives a notice of an audit and site visit from a RAC, MAC or ZPIC, things happen fast with little opportunity to prepare. To help, read our checklist of what to do when notified of a Medicare or ZPIC audit. Click here for part one and click here for part two.

Don’t Wait Until It’s Too Late; Consult with a Health Law Attorney Experienced in Medicare and Medicaid Issues Now.

The attorneys of The Health Law Firm represent healthcare providers in Medicare audits, ZPIC audits and RAC audits throughout Florida and across the U.S. They also represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other healthcare providers and institutions in Medicare and Medicaid investigations, audits, recovery actions and termination from the Medicare or Medicaid Program.

For more information please visit our website at www.TheHealthLawFirm.com or call (407) 331-6620 or (850) 439-1001.

Comments?

What you think about the lawsuit again the HHS? Do you support AHA’s decision to question the RACs’ auditing system? Please leave any thoughtful comments below.

Sources:

Mitchell, Alicia. “Hospitals Sue Federal Government for Unfair Medicare Practices.” American Hospital Association. (November 1, 2012). Press Release from: http://www.thehealthlawfirm.com/uploads/AHA%20Sues%20Govnt%20PR.pdf

Pollack, Richard. “Letter: AHA Supports OIG Review of Effectiveness of Medicare Contractors, Including RACs, In 2013 Work Plan.” American Hospital Association. (October 24, 2012). Letter from: http://www.thehealthlawfirm.com/uploads/AHA%20letter%20to%20OIG%20on%20RACs.pdf

Morgan, David. “Hospitals Sue Government Over Private Medicare Audits.” Reuters. (November 1, 2012). From: http://uk.reuters.com/article/2012/11/01/us-usa-healthcare-medicare-idUKBRE8A01BZ20121101

Harris, Andrew. “American Hospital Association Sues U.S. Over Medicare.” Bloomberg. (November 1, 2012). From: http://www.bloomberg.com/news/print/2012-11-01/american-hospital-association-sues-u-s-over-unpaid-medicare.html

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.


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