Breaking Down the Supreme Court’s Landmark Decision on FERC Order 745: A Win for Consumers and the Future of Clean Energy

After the New England Patriots’ crushing loss to the Broncos on Sunday, January 25, 2016, there was at least a ray of sunshine the next day for consumers and clean energy enthusiasts when the Supreme Court issued its decision upholding the Federal Energy Regulatory Commission’s (FERC) authority to regulate demand response programs in wholesale markets. The crux of the Supreme Court’s decision in Federal Energy Regulatory Commission v. Electric Power Supply Association, is that demand response programs can participate in wholesale electricity markets based on rules structured by FERC. So, what exactly does that mean?

Simply put, demand response is a way of coordinating consumers to not use energy at certain peak times. Demand response programs pay consumers for a commitment to curtail their use of power at peak times so as to curb wholesale rates and prevent grid breakdowns. This sale of not-power – or “negawatts” – in turn, helps reduce carbon emissions and the price of electricity.

At the center of this landmark case is Order 745 issued in 2011 by FERC, the agency that regulates the country’s high voltage electric transmission grid. Order 745 set compensation for demand response in wholesale energy markets, making the value of demand response equal to that of electricity in the market. In other words, Order 745 makes the value of a negawatt equal to that of a megawatt.

The Electric Power Supply Association (EPSA) took issue with Order 745 because EPSA represents power producers who were threatened by demand response’s cheaper alternative to power generation. EPSA sued FERC alleging that FERC only has jurisdiction over federal power markets. By setting the compensation rate for demand response customers, EPSA alleged that FERC was interfering with retail electricity, which falls under state control. In 2013, the D.C. Circuit Court of Appeals sided with EPSA and vacated Order 745. However, Monday’s Supreme Court decision overturned the Circuit Court’s ruling and definitively sided with FERC.

The Supreme Court’s decision, delivered by Justice Elena Kagen, concluded that FERC is within its powers to regulate the wholesale market even when it results in indirect impacts on state-controlled retail market conditions. Because the purpose of the Federal Power Act is to protect against excessive prices and ensure smooth grid operation, the Supreme Court found that demand response is necessarily within the federal domain.

This decision is a big win for the future of clean energy because it paves the way for regional energy markets to maximize grid efficiency through demand response resources that can help achieve a clean, affordable, and reliable electric grid. According to Jon Wellinghoff, the former FERC chief who headed the commission when it issued Order 745, this decision will help drive down wholesale energy prices by billions of dollars each year. And the ruling will be a boon for consumer side energy technology, expanding opportunities for digital controls, solar PV, and battery storage. The bottom line is that this decision is a coup in the fight against climate change: it will enhance efforts to keep down energy costs and reduce carbon and greenhouse gas emissions. Now that’s a winning goal for everyone!

This blog was prepared by Julie Barry and Cailin Burke. For more information, contact Julie, a partner in the firm’s Renewable Energy Practice Group, at 617-456-8090.

 

Federal Law Would Bar “Gag Clauses” Aimed at Consumer Reviews

“Avoid insane clients and their bad online reviews,” screams a headline on a website advising that wedding photographers include non-disparagement clauses in their contracts with brides-to-be.  “Bridezillas,” the site warns, “can ruin your business if you’re not careful.”

The site is Exhibit A to an op-ed piece in the Huffington Post by two federal lawmakers urging passage of the “Consumer Review Freedom Act of 2015,” legislation passed unanimously by the U.S. Senate and now awaiting House approval.  The bill, according to co-sponsors Sen. John Thune (R-S.D.) and Rep. Darrell Issa (R-Calif.), would “protect the spirit of our Constitution’s First Amendment right to free speech by prohibiting these gag clauses,” while “preserving the right of a business to defend itself against false claims.”

The CRFA is a reaction to a practice, said to be particularly common in the health care, hospitality, and retail sectors, of including gag clauses in form contracts and online terms of service.  The clauses operate by imposing a monetary penalty on consumers who badmouth the site’s product or service—or, more cunningly, by automatically assigning the copyright in any online review to the business reviewed, which can then exercise a copyright holder’s right to have the review taken down from the web.

In one well-publicized case, an online retailer lashed out at a consumer who had complained about the business on RipoffReport.com, insisting that the consumer take down the review or else pay the $3,500 penalty specified in online terms of service.  When the consumer refused to pay, the retailer allegedly referred the debt to a collection agency.   Dentists, too, have been known to present patients with a “mutual privacy agreement” by which the dentist obtains copyright over any online review the patient writes about the dentist’s services.  Such take-it-or-leave-it clauses, if challenged in court, might well be struck as “unconscionable,” but their presence in contracts can nevertheless have a chilling effect on consumer speech.

The CRFA would combat the practice by making gag clauses in form contracts “void from the inception.”  It would apply to any provision that purports to restrict written or oral reviews, to impose a penalty for such reviews, or to require a transfer of intellectual property rights in the review.  One exception is that the business may demand a non-exclusive license to the review so that, for example, it may use a review on its website for marketing purposes.

The bill would also make it unlawful for a business to “offer” a form contract containing one of the prohibited gag clauses.  Enforcement would be vested in the Federal Trade Commission and state attorneys general.

Businesses that believe they have been harmed by unfair negative reviews are not left entirely without a remedy; if the review contains provably false facts, the business may be able to succeed in an action for libel.  Such cases are notoriously hard to win, because statements of opinion are generally protected under the First Amendment.  As a result, a business seeking to counter the complaints of disappointed brides or aching dental patients may do best by responding to the criticism with a forthright explanation or apology – in other words, by fighting speech with speech.

If you would like any assistance or need more information, please contact the author of this alert, Robert A. Bertsche,  at 617 456 8018 or rbertsche@PrinceLobel.com.

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FTC Publishes Policy Statement and Business Guide on Native Advertising

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The biggest news from the Federal Trade Commission’s newly issued guidelines on native advertising may be the line buried in a “final note” at the end of a long, detailed document:  “Everyone who participates directly or indirectly in creating or presenting native ads should make sure that ads don’t mislead consumers about their commercial nature.”  With those words, the FTC suggested that marketers aren’t the only ones who have to worry about native ads; the FTC could be planning to take enforcement actions against publishers, as well.

The guidelines demonstrate the FTC’s recognition that the context of the advertising, and the target audience of the advertising, and not just the platform on which the advertising appears, influence the analysis of when publishers should disclose to readers that particular content has been sponsored by advertisers.

The FTC is charged with protecting consumers from “unfair or deceptive acts or practices in or affecting commerce,” which are proscribed by the Federal Trade Commission Act. From time to time, the FTC issues guidance on what advertisers can do to avoid deceptive and unfair practices in certain advertising contexts. Two years after hosting a workshop entitled “Blurred Lines: Advertising or Content? An FTC Workshop on Native Advertising” for the purpose of exploring the legal issues involved in native advertising, the Federal Trade Commission has at last published its much-anticipated guidelines on consumer protection in the native advertising context. In late December 2015, the FTC published its Enforcement Policy Statement on Deceptively Formatted Advertisements (the “Policy Statement”), and its companion document, the more practical Native Advertising: A Guide for Businesses (the “Business Guide”).

The guidelines have received a mixed reception.  In a recent Advertising Age article, many publishers said they feel they are already in compliance with the measures the guidelines suggest.  But the Interactive Advertising Bureau, a trade association, expressed reservations that some of the guidelines about labeling native ads may be “overly prescriptive,” and cautioned that it is important that the FTC guidelines “not stifle innovation.”

Many predict that 2016 will see the FTC seeking to take enforcement actions in the native advertising realm.  To ensure that your publication is not a test case, it is important to understand what native advertising is and under what circumstances it can be deemed deceptive or misleading.

What is a native advertisement?

While native advertising is the commonly-used, catch-all term for advertising content that looks like editorial content, it is actually only one type of advertising utilizing branded, or sponsored, content.  The FTC defines native advertising as “content that bears a similarity to the news, feature articles, product reviews, entertainment, and other material that surrounds it online.” Two common types of native ads are in-feed ads such as Facebook’s “sponsored post” or Twitter’s “promoted post” (which appear in your “feed” on those platforms), and recommendation widgets which appear at the bottom or on the side of a web page, providing image-plus-text links to sponsored content with words such as “you may also like,” or “recommended for you.”  Other examples include paid search units such as the top or most prominent results from a Google or Bing search, and in-game or in-app product placements.

What’s special about native advertising?

An advertising act or practice that misleads a “significant minority” of “reasonable consumers” and which act is “material” to consumers’ purchasing decisions is a violation of the FTC Act.   If the act or practice affects a consumer’s purchasing decision, then it is material.  The consumer is likely harmed by the act or practice because she would not have made that decision but for the deception.  The use of native advertising raises concerns about consumer deception because if the reader assumes that certain content is editorial, she may view that content as unbiased, not understanding that the content has a commercial message.  Because a successful native ad unit blends in with the editorial content on the webpage, consumers may be deceived by viewing an advertisement where they would expect to see editorial content.  In the words of the FTC, the native format “masks the signals” that typically alert consumers that what they are viewing is advertising.

The Policy Statement itself provides little new information about the FTC’s position on avoiding deceptive practices in native advertising.  Much of the Policy Statement is devoted to a discussion of the various deceptive advertising formats that the FTC has addressed throughout the evolution of the media. As we have learned through several policy statements from the FTC over the years, while the advertising formats change, the law stays the same. Essentially, the requirements for avoiding deceptive advertisement are the same for native advertising as they are for any other type of advertising: consumers must be notified that the content they are viewing has a commercial message, and that message must be truthful.  Like with any new media advertising formats, it is only the way in which such disclosures are made that differs with native ads.

Is all native advertising potentially deceptive?

While the title of the Policy Statement might lead you to believe the FTC considers all native advertising “deceptively formatted,” the Business Guide offers several examples of situations in which no disclosure is needed because no deception is likely. If no objective statement about the product is made, then no disclosure is required.  For example, a race car videogame places billboards along a virtual road, and those billboards contain advertisements for real world products.  The advertisers of those real world products pay the videogame developers to place their ads on those billboards.  But because video game players know from real life experience that billboards are advertisements, no disclosure is necessary.

Let’s say that in that same game, players have the option of filling up at a Mobil gas station.  Mobil paid the game developers to make that gas station look like a Mobil station.  Perhaps on another level the driver can stop at a Gulf station.  The game makes no statement about whether Gulf or Mobil is better quality gas.  Therefore, no disclosure is necessary because the existence of the Gulf or Mobil brands in the game is not likely to be material to the purchasing decision of the players in the real world.

Another example: A women’s magazine publishes a video on YouTube of a makeup tutorial for creating the perfect “cat eye” look. The person giving the tutorial does not mention any specific products she is using, nor are any names or logos visible on said products.  The video is accompanied by the phrase “Presented by CoverGirl” along with the CoverGirl logo.  Even though CoverGirl’s sponsorship of the video is advertising, the video is not because it doesn’t promote CoverGirl’s products. Therefore no disclosure language is required on the video itself.

Let’s say instead that the makeup tutorial is performed by a popular vlogger using CoverGirl products.  The vlogger tells her audience why she chooses CoverGirl products over others in achieving the perfect cat eye.  The labels on the products are clear to the viewers.  That video is promoted in feed on Facebook, and because of the nature of the Facebook platform, it is specified that the video comes from the CoverGirl Facebook page.  Because of her experience with using Facebook, it would be clear to the reasonable consumer that the video is an ad for CoverGirl.  However, once the Facebook user clicks through to the video, the viewer should hear a disclosure by the vlogger that the video is an advertisement for CoverGirl products. Deception is likely because the viewer could reasonably believe that the content of the video reflects the impartial opinion of the beauty expert vlogger, and would not likely attribute it to the advertiser.

What’s new from the FTC?

The above examples demonstrate some nuances of the analysis of whether any ad format is deceptive, not previously addressed by the FTC: (1) that the Commission will evaluate “the particular circumstances in which the native ads are presented to consumers,” including “consumers’ ordinary expectations based on their prior experience with the media in which the ads appear” (Guide); and (2) that the Commission will “consider the ad’s format on reasonable or ordinary members of [the] targeted group [of consumers]” (Statement). However, the Business Guide, and past guidelines from the FTC, also make the potentially conflicting statement that if “a significant minority of reasonable consumers do not notice, process, or comprehend” the disclosure, then the disclosure is insufficient.

Assuming most advertising is targeted to some group, it remains unclear, then, how broad or narrow an audience the advertiser must consider.  In the context of an ad for a cruise ship, is it less than half of all “reasonable consumers” generally, or is it, for example, ordinary members of Generation X who like to travel? The Commission’s statement that it will give some weight to consumers’ prior experience when evaluating whether an ad is deceptive similarly clouds instead of clarifies. An advertiser could not know how many consumers, out of all the consumers who see its ad in their Twitter feed, have enough prior experience with Twitter to understand its content is an ad.  Does this mean that if an advertiser is targeting millennials on Twitter no disclosure is necessary, but if it’s targeting baby boomers it is?  Regardless, by factoring the presumed experiences of a certain consumer group, the FTC grants itself the ability to subjectively determine whether disclosure was necessary or effective. In an attempt to provide guidance on how to make effective disclosures in native advertising, the FTC may have made the analysis for advertisers more difficult.

What should disclosures look like?

In 2013, the FTC published a comprehensive guide on how to make effective disclosures in digital advertising — the “Dot Com Disclosure” guide. The Policy Statement addresses the main categories of those guidelines in the context of native advertising:

  • Proximity and placement
    • The disclosure must come before the advertising message, such as in front of or above the headline of the content.
    • If graphics are dominant, or thumbnails are presented to the consumer, the disclosure should be placed within the graphic or on the thumbnail itself, rather than merely in the written description of the content.
    • The disclosure must remain with the content when it is shared by consumers, for example, through social media or email.
    • Another disclosure should be made on the page which the consumer clicks to or taps through.
  • Prominence
    • Disclosures should stand out, such as by using contrasting colors, shading, and borders.
    • Audio/visual advertisements require audio/visual disclosures.
    • Disclosures in videos must appear long enough for the consumer to read and them.
  • Clarity of meaning of language
    • Don’t use words that have different meanings to consumers in different contexts.
    • Be consistent across ads.
    • Don’t use logos or brand names alone without text disclosures.
    • Best practices = use “Ad,” “Advertisement,” “Paid Advertisement,” or “Sponsored Advertising Content.”
    • In the recommendation widget and other similar contexts, avoid “Promoted” or “Promoted Stories” (because those phrases are ambiguous as to whether the site is endorsing the content)
    • “Presented by X,” ” Brought To You By X,” “Promoted by X,” “Sponsored by X” may be used when the advertiser funded or underwrote the creation of the content, but did not create or influence the content.

The bottom line

It is apparent from the Policy Statement and the Business Guide that the type of consumer comprising a target audience for a commercial message is a key factor in analyzing whether and how to disclose the advertising message. The FTC also recognizes that not all native advertising is deceptive.  Consumers’ experience with the platform on which the ad is placed can negate any potential confusion as to whether the content there is advertising or not.

Like spam email and banner ads before it, digital native advertising is merely the newest way for advertisers to convey a commercial message, but the consumer protection principles and rules remain the same. The Policy Statement and Business Guide help advertisers apply those principles and rules in the native advertising context.  Publishers should take heed.

If you have any questions about complying with FTC guidelines on native advertising, or any other marketing and advertising law matters, please contact Amanda Schreyer, a member of Prince Lobel Tye’s Media Law Practice Group and the author of this alert, at aschreyer@princelobel.com.  You can follow her on Twitter @SchreyerEsquire, and you can follow the Prince Lobel Media Law Group at @PLT_Media

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[i] The two preceding paragraphs were published previously in substantially similar form in this author’s article Beyond the Buzzwords: Sponsored Content, Native Advertising, and Consumer Protection, published in the American Bar Association’s Landslide magazine.

Top 10 Predictions for Health Care Providers in 2016

Based on proposals in 2015 and the OIG’s Work Plan for 2016 it is likely that there will be:

Federal Regulatory Changes Affecting:

  1. The discharge planning process for hospitals, including long-term hospitals, inpatient rehabilitation facilities, critical access hospitals, and home health agencies.
  2. The implementation of Section 603 of the Bipartisan Budget Act of 2015, which concerns payment for hospital off-campus outpatient provider-based sites that are not emergency departments.
  3. The Medicare-Medicaid Conditions of Participation governing long-term care facilities.
  4. Reimbursement for therapy services provided in skilled nursing facilities.

Increased Focus on the Privacy and Security of Protected Health Information:

  1. Phase 2 HIPAA Audits of health care providers and their business associates, with increased scrutiny of policies and procedures regarding electronic protected health information.
  2. A continued increase in medical identity theft, with increased scrutiny of health care providers’ privacy and security measures to protect medical records.
  3. A proposal for further regulatory oversight of hospitals’ networked medical devices, such as dialysis machines, radiology systems, and medication dispensing systems that are integrated with electronic medical records, to protect associated electronic protected health information and to ensure patient safety.

Compliance Concerns Resulting In:

  1. Recoupment of Medicare payments for items and services furnished to alien beneficiaries who are not lawfully present in the United States.
  2. New safe harbors and the modification of existing safe harbors under the Federal Anti-Kickback Statute.
  3. RAC and/or QIO reviews of hospitals’ compliance with the 2-midnight rule and the Notice of Observation Treatment and Implication for Care Eligibility Act of 2015 (“The NOTICE Act”).

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If you have questions about the Top 10 Predictions for Health Care Providers in 2016, or any concerns regarding your organization’s compliance with the items listed, please contact Rochelle H. Zapol, a partner in Prince Lobel’s Health Care Practice Group and the author of this blog. You can reach Rochelle at 617 456 8036 or rzapol@PrinceLobel.com

 

The Case of the Vanishing Exhibit:

A Defeat for Public Access or a Victory for Public Safety?

video

“Now you see it.  Now, you don’t.”  It’s a phrase associated with magic tricks—not typically applied to exhibits introduced in public court proceedings.  But it describes exactly what happened recently to an 8-minute video of a self-proclaimed ISIL supporter that was played in federal court in Springfield.

After Alexander Ciccolo was charged with being a felon in possession of a firearm, he was held without bail largely on the strength of a video of his interrogation by an FBI agent, during which Ciccolo defended the actions of the Islamic State terror organization.  “They’re doing a good thing,” he said in the video.  “They’re implementing the sharia, they’re freeing people from oppression.  Wherever they go, they’re changing things.”

After playing the video in open court, the government had second thoughts.  Saying that it had “improperly offered” the unredacted video in evidence at the hearing, it asked the judge for the right to substitute a version of the video in which Ciccolo’s face was entirely obscured.

“The government believes that ISIL recruited the defendant in part through videos posted on social media sites, and that it could effectively use an unredacted version of the defendant’s post-arrest statement … to recruit others,” the U.S. Attorney’s Office told the court in a written motion.  “A redacted version of the video, in contrast, would have significantly less recruiting value.”  (The video with Ciccolo’s face obscured appears here.)

The magistrate allowed the motion in July, and last week she reaffirmed her ruling in the face of a challenge from the Boston Globe.  The Globe had relied on a well-established body of case law holding that a common law presumption of access applies to relevant documents that are submitted to, and accepted by, a court.  “[F]ederal courts routinely have granted public access to recordings presented as evidence in criminal trials,” the Globe argued.  “The government’s submission, unsupported by affidavit, falls far short of justifying an order that effectively denies public access to evidence after it has been entered in a case and relied upon in a judicial ruling.”

Magistrate Judge Katherine Robertson’s December 21 Order essentially describes this case as a close call.  Describing terrorism as an “existential threat,” she said the public “has a strong interest in watching Defendant speak his thoughts.”  Why a U.S. citizen would become “‘obsessed with Islam’ and plan to engage in violence in support of ISIL are questions of substantial public concern.”  She concluded that access to the unredacted video would likely “promote public understanding of a historically significant event.”

Nonetheless, though she conceded that the government bears the burden of proof and must identify important countervailing interests in order to overcome the presumption of access, the judge sided with the prosecutors.  She relied heavily on an FBI agent’s affidavit stating that a terrorism expert had concluded that the unredacted video would be “especially attractive as a propaganda asset” for ISIL, whereas the redacted video would be “practically worthless from the point of view of effective terrorist propaganda.”  She also noted that the redacted video, while obscuring the defendant’s face, nonetheless revealed his “words and the inflections of his voice, as well as his gestures and posture during the interview,” and called the obscuring of his face (otherwise visible in photographs and courtroom sketches) a “narrow remedy.”

Ultimately, the magistrate judge concluded, there was a “compelling interest in preventing the public broadcasting of a recording that, in unredacted form, might contribute to the on-line recruitment of individuals interested in the goals of ISIL, thereby impairing the goals of law enforcement and increasing genuine risks to public safety.”

If you would like any assistance or need more information, please contact the author of this alert, Robert A. Bertsche,  at 617 456 8018 or rbertsche@PrinceLobel.com.

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What Health Care Providers Need to Know to Comply with the OIG’s Fiscal Year 2016 Work Plan

On November 2, 2015, the Office of the Inspector General (OIG) released its Fiscal Year 2016 Work Plan.  Set forth below is a summary of certain new and revised items on the OIG’s list that may be of interest to our health care clients.

Hospitals

Oversight of Provider-Based Status (Revised)The OIG will continue to determine the number of provider-based facilities owned by hospitals and whether these facilities meet the regulatory requirements in 42 C.F.R. § 413.65.  In addition, the OIG will review whether there were any challenges associated with the provider-based attestation review process.  The OIG is concerned about provider-based facilities that bill as hospital outpatient departments.  The OIG is likely to focus on hospital outpatient departments established prior to November 2, 2015 since payment changes will take effect for “new” hospital outpatient departments established after that date.  Under Section 603 of the Bipartisan Budget Act of 2015, any “new” off-campus hospital outpatient department established after November 2, 2015 (other than a dedicated emergency department) will be paid under either the Medicare payment system applicable to ambulatory surgical centers or the Medicare physician fee schedule.Medical Device Credits for Replaced Medical Devices (New)

When a medical device implanted during an inpatient or outpatient procedure requires replacement due to defects, recalls, mechanical complications, etc., Medicare pays for the replacement at a reduced rate.  See 42 C.F.R. §§ 412.89 and 419.45.  The OIG will review whether Medicare payments for inpatient and outpatient claims for replaced medical devices were appropriate.  Prior OIG reviews revealed that Medicare Administrative Contractors made payments to hospitals for replaced medical devices at non-reduced rates.

Medicare Payments to Acute Care Hospitals during MS-DRG Payment Window (New)

The OIG will review billing of outpatient claims under Medicare Part B for services provided during inpatient stays at acute care hospitals.  Medicare billing regulations provide that certain items, supplies, and services furnished to inpatients are covered under the Medicare Part A payment.  Therefore, they should not be billed separately to Medicare Part B.  See 42 C.F.R. §§ 409.10 and 410.3.  Prior OIG audits have identified that acute care hospitals are at risk for noncompliance with this requirement.

CMS Validation of Hospital-Submitted Quality Reporting Data (New)

Hospitals need to be sure that the quality data they report to the Centers for Medicare & Medicaid Services (CMS) under the hospital quality reporting program is accurate and complete.  The OIG will examine the extent to which CMS validates the accuracy and completeness of the quality data reported by hospitals under the hospital quality reporting program.  Hospitals are at risk of a 2 per cent reduction in their Medicare payments if their quality reporting data is not accurate and complete.

Controls over Networked Medical Devices at Hospitals (New)

The OIG intends to examine the Food and Drug Administration’s (FDA’s) oversight of hospitals’ networked medical devices to determine whether oversight is adequate to protect electronic protected health information (ePHI) and ensure patient safety. The OIG notes that computerized medical devices, such as dialysis machines, radiology systems, and medication dispensing systems that are integrated with electronic medical records and a hospital’s larger health network, present an increasing threat to the privacy and security of PHI.  Networked medical devices are also subject to oversight by the Office for Civil Rights (OCR), and the privacy and security of ePHI will also be a focus of HIPAA audits by the OCR in the upcoming calendar year.

Nursing Homes

Skilled Nursing Facility PPS Payments (New)

The OIG will assess compliance with the skilled nursing facility prospective payment system (SNF PPS), including whether SNF claims were paid in accordance with federal laws and regulations and documentation requirements.  The OIG is particularly concerned about SNF claims for therapy services since previous audits indicated that SNF payments for therapy services “greatly exceeded” SNF costs.

State Agency Verification of Deficiency Surveys (New)

The OIG will review whether State survey agencies conduct appropriate follow-ups to verify that nursing homes have corrected deficiencies identified during surveys.  The State survey agency is expected to verify the correction of deficiencies through onsite review or by obtaining other evidence that demonstrates the deficiencies have been corrected.

Hospices

General Inpatient Hospice Care

Hospices will continue to be under scrutiny by the OIG.  The OIG intends to review the general inpatient hospice care benefit, including:

The appropriateness of general inpatient care claims;

The content of election statements of hospice beneficiaries who receive general inpatient care;

Hospice beneficiaries’ plans of care;

The medical records of hospices that billed for general inpatient hospice care to determine whether that level of care was medically necessary;

Whether payments for hospice benefits were made in accordance with governing regulations.

Ambulatory Surgical Centers

The OIG plans to examine Medicare’s oversight of the quality of care provided at Ambulatory Surgical Centers (ASCs).  Prior review by the OIG found issues with Medicare’s oversight, including five or more years between certification surveys for some ASCs, poor CMS oversight of ASCs by State survey agencies and ASC private accreditation organizations, and limited public information on the quality of ASCs.

Physicians

Physicians-Referring/Ordering Medicare Services and Supplies

Physicians and non-physician practitioners are required to be enrolled in the Medicare program to refer/order certain services, supplies, and durable medical equipment.  If these requirements are not met, then payment of Medicare claims for these services should not be made.  The OIG will review certain Medicare services, supplies, and durable medical equipment referred/ordered by physicians and non-physician practitioners to determine whether orders met these requirements and whether payments were appropriate.

Anesthesia Services-Non-Covered Services

Medicare will only pay for anesthesia services under Medicare Part B if the services are “reasonable and necessary” and the beneficiary had a related Medicare service.  The OIG intends to review Medicare Part B claims for anesthesia services to determine whether they comply with these requirements.

Physician Home Visits – Reasonableness of Services

The OIG will determine whether Medicare payments to physicians for evaluation and management home visits were reasonable, including whether physicians documented the medical necessity of a home visit instead of an office visit or an outpatient visit.

Prolonged Evaluation and Management Services – Reasonableness of Services

The need for prolonged evaluation and management services (additional time beyond the time spent with a beneficiary for a usual companion evaluation and management service) is considered to be “rare and unusual.”  The OIG intends to evaluate whether Medicare payments to physicians for prolonged evaluation and management services were reasonable and made in accordance with Medicare requirements.

Zapol

If you have questions about the OIG’s Fiscal Year 2016 Work Plan, or any concerns regarding your organization’s compliance with the items in the Plan, please contact Rochelle H. Zapol, a partner in Prince Lobel’s Health Care Practice Group and the author of this alert. You can reach Rochelle at 617 456 8036 or rzapol@PrinceLobel.com

Bill Cosby and the Right of Access

Television watchers all over America once looked up to Bill Cosby as Dr. Huxtable on The Cosby Show.  Those days are long gone.  Today, Cosby is the subject of widespread contempt, not to mention numerous lawsuits and withdrawn honorary degrees.  He is, to put it mildly, in a state of disgrace and a ton of legal trouble.

One aspect of Cosby’s ongoing legal problems is that the Constitution does more than protect the right to speak and publish.  It also assures that the press and public will be able to find out what is going on in the courts, what lawyers call “Access.”  This is not the same as the right of an accused to a public trial.  It is, rather, a right that all of us have to keep an eye on the judicial system, with only rare exceptions.

New Hampshire is especially strong when it comes to the right of access.  Like the federal constitution, the state constitution protects free speech and liberty of the press, which are to be “inviolably preserved.”  But New Hampshire goes further and says that “Government … should be open, accessible, accountable and responsive.”  A 1992 case called Petition of Keene Sentinel demonstrates just how seriously the right of access is taken in this state.

In 1990, Charles G. Douglas III was running for re-election to Congress when the newspaper went to the courthouse to look at the records of his two divorces, one in 1979 and the other in 1983.  The court clerk told the reporter that most of the papers in one case, and all of the papers in the other, were impounded.  In other words, the public could not see them.

The Sentinel filed a petition seeking access, but the superior court judge denied the newspaper’s request, citing among other reasons that the paper hadn’t met its burden of proof and, further, that its “motive” was suspect.  Douglas lost the election, but the case continued.  In 1992, the Supreme Court (of which Douglas had previously been a member) reversed the lower court’s decision.  First, the burden should have been placed on Douglas to prove why the papers should remain under seal, not the other way around.  Second, “motive” is beside the point.  As the court put it, why the newspaper, or any member of the public for that matter, wants to see court records is “irrelevant” because “we cannot dictate what should and should not interest the public.”

Last July, the Associated Press went to federal court in Pennsylvania and obtained an order granting access to documents from the first sexual assault case brought against Bill Cosby.  The public then learned that the man who played Dr. Huxtable wasn’t the person we thought he was.  Indeed, the judge cited Cosby’s “mantle of public moralist” as one reason for ordering disclosure.  It turned out that in 2005 Cosby had admitted, under oath, that he gave prescription drugs (Quaaludes) to women for purposes of sex.

Things were bad for Cosby last summer, and they have only gotten worse.  At latest count, more than 50 women have claimed they were his victims.  There are lawsuits against him in Massachusetts, California, and elsewhere.  Even his lawyers are getting sued!

Recently Cosby’s lawyers returned to court in Philadelphia, trying to reseal the documents that the Associated Press obtained earlier this year.  That sounds like trying to put the toothpaste back in the tube, but the lawyers claim that public access to Cosby’s admissions in his 2005 deposition testimony has damaged his reputation.  As examples, they cite Drexel University’s revocation of Cosby’s honorary degree and Disney World’s removal of Cosby’s statue.

These arguments qualify as lawyer’s chutzpah (gall).  Putting the records back under seal wouldn’t do any good anyway.  You can find them all over the Internet.  I doubt that the motion will succeed in Pennsylvania, and I’m sure it wouldn’t if the case were in New Hampshire.

Joseph D. Steinfield is a partner in the Boston law firm of Prince Lobel Tye LLP.  He resides in Boston and in Keene. If you have any questions about the information presented here, please email: jsteinfield@princelobel.com. Copyright 2015.

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First published in the Keene (NH) Sentinel, December 13, 2015.