August 28, 2009Client Alert

Health Care Law Report

Legal Compliance

  • HIPAA Breach Notification: The Department of Health and Human Services (“HHS”) recently issued rules covering breach notification and health information security guidance under HIPAA. Covered entities will need to notify individuals if protected health information has been breached. For breaches that affect more than 500 individuals HHS and the media must be promptly informed. Breaches under 500 individuals will be reported to HHS on an annual basis. The rules also provide guidance for the encryption and destruction of protected health information, including specifics on the types of technologies that HHS considers adequate to protect health information. For more information, please see our recent client alert titled, “New HIPAA Breach Notification Regulations Require Immediate Attention.”
  • Durable Medical Equipment (“DME”) Vendors: As of September 8, 2009, only one DME vendor will be allowed to sell items at a health care provider’s office. This will limit so-called “stock and bill” or consignment arrangements where the provider allows a DME vendor to keep items at the provider’s practice location. These arrangements have long been considered suspect by the Centers for Medicare and Medicaid Services (“CMS”). This new restriction will require title of the items to be transferred to the provider, rather than allowing for a consignment arrangement. Further, fitting and use services must be provided by individuals paid by the provider and not by the DME vendor.
  • HIPAA Enforcement: HIPAA enforcement authority has been consolidated in the Office for Civil Rights. The security rule was previously enforced by CMS, with the Office for Civil Rights only enforcing the privacy rules. Many commentators think this change will result in more enforcement actions.

OIG Advisory Opinions

OIG has been busy over the past few weeks, issuing several advisory opinions relating to prescription assistance programs, one operated by a pharmaceutical company and another by a state board, a hospital/physician group joint venture, a Medigap preferred provider network, a health screening program and an ambulance subsidy program. For more detail on these programs, please see our August Health Care Update, “Recent OIG Advisory Opinions.”


CMS is undertaking a demonstration project to evaluate the use of gainsharing programs to improve quality of care and efficiency by more closely aligning hospital and physician incentives. Twelve hospitals in New Jersey will take part in the project. Gainsharing, which is normally restricted under Medicare, creates financial incentives to encourage physicians to save costs.

Wisconsin: Domestic Partnership Registry

Earlier this month same-sex couples began signing up for the Domestic Partnership Registry in Wisconsin. While domestic partners do not have the same rights as married couples, the Wisconsin Domestic Partnership Law guarantees certain rights including rights in medical settings. Domestic partners can admit an incapacitated partner to a health care facility (including nursing homes, community based residential facilities and hospices), share a nursing home room, access health care, mental health and alcohol and drug treatment records, consent to organ donation or an autopsy and serve as a health care power of attorney.

For further questions or assistance on these or other health law issues, please contact one of the authors of this alert or your Michael Best Attorney.

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