LANSING LINES: State Seeks To Dump Dental Contract Suit

The state is asking a judge to dismiss a lawsuit claiming the Department of Technology, Management and Budget showed “blatant favoritism” in awarding a $657 million contract for the Healthy Kids Dental Program.

The state says MCNA Insurance Company’s suit filed in Ingham County should be dismissed “because disappointed bidders lack standing to challenge a public bid process,” according to court documents.

The state further alleges the court doesn’t have jurisdiction over MCNA’s appeal because DTMB’s award recommendation was not a final decision by a judicial agency.

“The state’s attempt to dismiss the case, on a technicality, sends a clear message: It believes DTMB’s procurement decisions are immune from judicial review and it can act with impunity no matter how flawed the process or how blatant a violation of the law has occurred,” said MCNA attorney Scott Eldridge, of Miller Canfield Paddock and Stone.

“Transparency and fiscal responsibility require judicial review of this flawed decision,” he added. “These tactics contradict Michigan’s stated commitment to fiscal responsibility and competitive bidding.”

MCNA Insurance Company asked an Ingham County judge to reverse the DTMB’s decision to award the Healthy Kids contract to Blue Cross Blue Shield. It filed a related suit in the Court of Claims in January regarding DTMB’s response to its Freedom of Information Act request for documents related to the bid process.

According to the Ingham County court filing, DTMB admitted the process “involved multiple improprieties, secret negotiations and special exceptions granted in favor” of BCBS.

Lyon’s Notes Show Knowledge Of Legionella In July 2015
(FLINT)—Notes about Flint’s lead and Legionnaires’ disease outbreak were on the phone of Michigan Department of Health and Human Services Director Nick Lyon in July 2015—six months before the governor’s public announcement.
That testimony from Jeff Seipenko, a special agent for the state’s Attorney General’s Office, came during day 14 of Lyon’s preliminary exam in Flint and it arguably provides confirmation that the DHHS director was aware of suspicions that the city’s drinking water source was tainted with legionella bacteria.

Public health officials have said at least a dozen people died of Legionnaires’ disease in Genesee County in 2014 and 2015, and the prosecution has charged Lyon with involuntary manslaughter connected to the December 2015 death of Robert C. Skidmore, 85, of Mount Morris. The prosecution expects to seek a second charge in connection with the death of John Snyder, 83, in June 2015.

Skidmore’s son, Robert J. Skidmore, also testified, saying his father liked to laugh, sing, hunt and spend time at his cabin. But, after his legionella diagnosis in June 2015, his father was lethargic, only sitting.

“He never seemed like he got better,” said the son, who grieved the loss of his mother in June 2015 and his father the following December.

The younger Skidmore said neither he nor his father had warning of a Legionnaires’ disease outbreak in Flint. He said he learned about it when it was made public in January 2016.

The outbreak is generally believed to be tied to the city’s switch from the Lake Huron water to Flint River in April 2014.

Lyon also is charged with misconduct in office. The preliminary exam was continued to Feb. 7 before Judge David Goggins.

The July 22, 2015, note, which was displayed in court, noted “lead is probably a result of the pipes from street to house” and “increased anemia and other health issues (update on legionnaires.” It also references “DM,” “Wyant” and “Dan,” whom Seipenko believed was former Chief of Staff for the governor, Dennis Muchmore and Michigan Department of Environmental Quality Director Dan Wyant.

“Talk to Dan about potential increase lead testing . . . we care,” one part of the note reads. “Higher levels of chlorine. Gam won’t use. Pipes replaced for GM,” a reference to General Motors.

Seipenko said the date on the note also was of importance because it was the same day of a meeting between Muchmore, another aide to the governor, pastors and Flint residents about the city’s water problems.

The date also conflicts with Lyon’s previous comments about when he learned of legionella in Flint. He told media he learned of the outbreak in January 2015 and email shown in court labeled “FW: Legionella” is dated January 2015. However, according to video of his testimony before a joint committee meeting of the Michigan House and Senate in April 2016, he learned about it in July 2015.

Also testifying Friday was Jim Henry, the Genesee County Health Department’s environmental health director, who said his office was “significantly” understaffed in 2014 and 2015. He said he learned of legionella in Flint in October 2014 and started working with DHHS, whom he said was not present in Flint when needed.

“Why didn’t you publish something in the paper to tell people in Flint about the outbreak?” Special Prosecutor Todd Flood asked.

“I wish we had; I do,” Henry replied. “At the time, I can tell you, our office was overwhelmed…there was a lot of things going on that inundated our office; this (legionella) was, at the time, something else and we should have. I wish we would have.”

State To Provide Hepatitis C Medication Under Medicaid
The state of Michigan is expected to begin providing Hepatitis C direct-acting antiviral medications to more Medicaid patients, according to a federal lawsuit settlement.

Lansing attorney Aaron Burrell, who represents the plaintiffs in a class-action complaint filed in U.S. District Court in Detroit, confirmed that the settlement calls for the state to begin providing the antiviral medications to Medicaid patients with a metavir fibrosis score (MFS) of F1 and above beginning Oct. 1. That expands to patients with an F0 score beginning Oct. 1, 2019.

Currently, the state allows coverage to Medicaid patients with an F2 score or above.

“It’s a good settlement for everybody,” Burrell said about the settlement, which also calls for the plaintiff, identified only as J.V., to receive $5,000 plus attorney fees under her federal civil rights violation claim.

“I think the state of Michigan did a great job and the attorney general staff working on the case did a good job,” he added. “It’s good for all parties.”

Lynn Sutfin, public information officer for the Michigan Department of Health and Human Services (MDHHS), declined to comment, saying “technically the court order is not final, yet.” She also declined to say how many patients were affected.

Burrell said both sides are working on the final agreement, which will be submitted with in the next 90 days to Judge R. Steven Whalen for final approval.

Burrell said the state would send out notices to patients previously denied the Hepatitis C medication once the judge approves the final settlement. The notices will have instructions on how patients can re-apply for the medication.

The plaintiff was diagnosed as chronically infected by the Hepatitis C virus and her MFS was F0, which made her ineligible for the direct-acting antiviral medications that could cure her, according to the April complaint.

The MFS measures the severity of liver damage from mild fibrosis (F0-F1), which is no liver damage to very mild liver damage, to decompensated cirrhosis where the liver can no longer maintain its function.

The complaint alleged MDHHS’ denial of J.V.’s application to receive the medications violated her constitutional rights and failed to provide necessary medical assistance.

Couple Claims MDHHS Didn’t Destroy Newborn’s Blood As Requested
A Saginaw County couple is suing the Michigan Department of Health and Human Services for not returning or destroying blood samples taken from their son at birth without their permission.

According to the Jan. 19 Court of Claims filings, Hemlock attorney Philip Ellison and his wife, Katherine Ellison, allege individuals working as agents of DHHS extracted and seized six blood samples or blood spots from their son, who was born in September, without a warrant and without their permission.

The couple does “not wish the state government or any entity” to have their son’s blood, the court filing states.

According to MDHHS’ Michigan BioTrust for Health website, five to six blood spots are collected from almost every newborn shortly after birth for newborn screening and any unused blood spots are stored indefinitely unless a parent or grown child—age 18 and older—opts-out.

Philip Ellison claims he completed the department’s Directive to Destroy Residual Newborn Screening Blood Specimen’s form in October, but the state failed to confirm it destroyed the extra blood samples.

The court filing also alleges MDHHS did not properly respond to the couple’s Freedom of Information Act request.

The Ellison couple seeks an order compelling MDHHS to return their son’s blood samples and original medical records containing test results. The couple seeks reasonable attorney fees and punitive damages, which it did not define in the court filing.

Lansing Lines is a cooperative feature presented by MIRS, a Lansing-based news and information service and Healthcare Michigan.

Medical Community Town Hall in Flint

The Genesee County Medical Society presents a Dinner Business Meeting and Medical Community Town Hall

Mindfulness: its Importance to the Medical Community and Patients
February 1, 2018
Flint Golf Club
3100 Lakewood Drive
Flint, MI 48507

Physicians, Practice Managers, and Health Care Professionals Welcome!
$40.00 – GCMS Members, Spouses, Practice Managers, & Staff
$40.00 – Genesee County Osteopathic Association Physician Members & Spouses
$25.00 – Residents & Students
$75.00 – All Non-Member Guests

Evening Schedule:
6 pm, Registration & Social Hour
6:30 pm, Dinner
7 pm, Meeting
7:15 pm, Presentations

Space is limited!
Please register by January 25, 2018
Please mail your reservation payment to:
Genesee County Medical Society
4438 Oak Bridge Drive, Suite B
Flint, MI 48532
Email Sherry at to register your attendance or call 810-733-9923 for more information.

Legionnaires’ Researcher Says Wells Repeatedly Blamed Hospitals

(FLINT) – A Wayne State University professor testified that Michigan’s chief medical executive consistently tried to blame Genesee County hospitals for the 2014 and 2015 Legionnaires’ disease outbreaks in Flint.

Shawn McElmurry, who led a team of researchers trying to identify the source of the outbreak that is attributed to 12 deaths, also testified Dec. 20 at the preliminary exam for Dr. Eden Wells that he told Gov. Rick Snyder that the team’s study “wasn’t going well” and he could use his help to carry out much-needed testing.

“It was made clear to me I don’t (report) directly to the governor,” McElmurry testified. ” . . . It was made clear to me I was to work with (Michigan Department of Health and Human Services Director) Nick Lyon.”

When Lyon wasn’t available, McElmurry said, he was to reach out to Rich Baird, a Snyder senior advisor.

Wells is charged with obstruction of justice and with lying to a peace officer by knowingly giving false statements to a water investigator.

The prosecution is expected to seek an involuntary manslaughter and misconduct charges at the conclusion of the preliminary exam, which continues Jan. 28 before Judge William Crawford III in downtown Flint. The manslaughter charge is in connection with the death of John Snyder, 83, of Genesee County, in June 2015.

McElmurry first took the stand for the Wells’ prelim on Dec. 11, testifying that the research team, Flint Water Interagency Coordinating Committee (FWICC), wanted to test water samples from the filters the state distributed, but Wells claimed in an August 2016 meeting that doing so was a “red line.” He interpreted that to mean the team would not be allowed to move forward unless it left the water filters alone.

Wednesday’s testimony began with defense attorney Steve Tramontin cross examining the witness about problems within the research team.

Tramontin also questioned McElmurry about his distrust of the state during the FWICC research and about outside influences on his team’s conclusions due to McElmurry’s discussions with other groups or individual people about the crisis.

Special Prosecutor Paul Stablein asked point blank if the state tried to influence the group’s results.

“The state has strongly pushed us to recognize the Legionnaires’ outbreak as a hospital-associated outbreak,” McElmurry said, noting that while researchers “continue to analyze the data,” it is “fairly safe to say we cannot explain all the Legionnaires cases based on hospital association.”

That prompted Stablein to ask what, if anything, Wells did to try to influence FWICC’s study.

Wells consistently reiterated “it’s the largest hospital known . . . outbreak of Legionnaires,” McElmurry said, emphasizing the word “hospital.”

“She always tried to qualify the outbreak as hospital related,” he added. “It certainly made it difficult to approach McLaren (Hospital).”

On cross examination, McElmurry said McLaren officials “didn’t consent to participate” in the group’s study.

It was during the “red line” meeting, McElmurry said, that Snyder asked about the study’s progress.

“I told him it wasn’t going at all,” he said. “We needed a push.”

McElmurry said he didn’t attempt to follow up with the Governor nor did the Governor contact him after the meeting.

Wells and Lyon, who also faces charges of involuntary manslaughter and misconduct in office for his response to the Flint water crisis, are two of 15 current and former state and city officials charged in connection with the water crisis and Legionnaires’ disease outbreak.

Four other defendants have accepted plea deals and agreed to cooperate with the prosecution, which could lead to dismissed charges.

This story presented in cooperation with MIRS, a Lansing-based news and information service.

Treat Pain And Opioid Addiction At The Same Time

Colorado Public Radio

Seven years ago, Robert Kerley, who makes his living as a truck driver, was loading drywall when a gust of wind knocked him off the trailer. Kerley fell 14 feet and hurt his back.

For pain, a series of doctors prescribed him a variety of opioids: Vicodin, Percocet and OxyContin.

In less than a year, the 45-year-old from Federal Heights, Colo., said he was hooked. “I spent most of my time high, laying on the couch, not doing nothing, falling asleep everywhere,” he said.

Kerley lost weight. He lost his job. His relationships with his wife and kids suffered. He remembers when he hit rock bottom: One night hanging out in a friend’s basement, he drank three beers, and the alcohol reacted with an opioid.

“I was taking so much morphine that I [experienced] respiratory arrest,” Kerley said. “I stopped breathing.”

An ambulance arrived, and EMTs administered the overdose reversal drug naloxone. Kerley was later hospitalized. As the father of a 12-year-old boy, he knew he needed to turn things around. That’s when he signed up for Kaiser Permanente‘s integrated pain service. (Kaiser Health News is not affiliated with Kaiser Permanente.)

“After seven years of being on narcotics and in a spiral downhill, the only thing that pulled me out of it was going to this class,” he said. “The only thing that pulled me out of it was doing and working the program that they ask you to work.”

The program he refers to is an eight-week course, available to Kaiser Permanente members in Colorado for $100. It’s designed to educate high-risk opioid patients about pain management. A recent class met at Kaiser’s Rock Creek medical offices in Lafayette, Colo., a town east of Boulder. Will Gersch, a clinical pharmacy specialist, taught several patients learning to battle addiction the science behind prescription drugs.

“So, basically the overarching message here is the higher the dose of the opioids, the higher the risk,” he told the group, as he jotted numbers on a whiteboard. “If you’re over these two doses, that’s a risk factor.”

Upstairs, Gersch’s colleague Amanda Bye, a clinical psychologist, highlighted a key element of the program: It’s integrated. For patient care, there’s a doctor, a clinical pharmacist, two mental health therapists, a physical therapist and a nurse — all on one floor. Patients can meet with this team, either all at once or in groups, but they do not have to deal with a series of referrals and appointments in different facilities. A spokesperson for Kaiser Permanente said researchers tracked more than 80 patients over the course of a year and found the group’s emergency room visits decreased 25 percent. Inpatient admissions dropped 40 percent, and patients’ opioid use went way down.

“We brought in all these specialists. We all know the up-to-date research of what’s most effective in helping to manage pain,” Bye said. “And that’s how the program got started.”

Bye said the team helps patients use alternatives like exercise, meditation, acupuncture and mindfulness. Some patients, though, do need to go to the chemical dependency unit for medication-assisted treatment for their opioid addiction. Benjamin Miller is an expert on integrated care with the national foundation Well Being Trust. Kaiser is on the right track, he said.

“The future of health care is integrated and, unfortunately, our history is very fragmented, and we’re just now catching up to developing a system of care that meets the needs of people,” he said.
Similar projects in California showed a reduction in the number of prescriptions and pills per patient, said Dr. Kelly Pfeifer, director of high-value care at the California Health Care Foundation. Her group released case studies of three programs similar to Kaiser’s Colorado program. (Kaiser Health News produces California Healthline, an editorially independent publication of the California Health Care Foundation.)

“We’ve seen great success with these models that are integrating complementary therapy, physical therapy, behavioral health and medical care,” Pfeifer said. A key strategy is to gradually decrease the amount of opioids a patient takes, rather than cut them off before they’re ready. “It works so much better when the patients have access to these complementary therapies,” she said. “And it works even better when those complementary therapies are part of an integrated team.”

But it can be difficult to implement universally. One challenge is scale: Big systems like Kaiser Permanente have ample resources and enough patients to make the effort work. Another issue is payment. Some insurers won’t pay for some alternative treatments; others have separate payment streams for different kinds of care.

“Frequently, behavioral health and medical health are paid for by entirely different systems,” Pfeifer said.

The need for programs like Kaiser’s is urgent. In 2016, a record 912 people died from an overdose in Colorado, according to data recently released by the state health department. Of those, 300 people died from an opioid overdose. Opioid use often leads to an addiction to heroin, which claimed another 228 lives last year in the state. Those two causes together now rival the number of deaths from car accidents in the state.

Colorado faces a severe shortage of treatment options. Making matters worse, the state’s largest substance abuse treatment provider, Arapahoe House, decided to close as of Jan. 2.
Kaiser’s integrated pain service has given some patients a second chance.

Robert Kerley, now a veteran of the program, recently shared his story with other patients. “I got my life back. I can sleep. I can eat. I can enjoy things,” Kerley told them.

To cope with pain, Kerley starts his morning with stretching and a version of tai chi that he calls “my chi.” He practices deep breathing. His advice to others suffering from pain or addiction?

“Do whatever it takes to walk away from it, like no matter what,” Kerley said. “Trust me, it gets better. It gets 100 percent better than where you’re at right now.”

Better for Kerley means his relationships with his family have improved. And he’s back at work, once again able to make a living as a truck driver.

This story is part of a reporting partnership with NPR, Colorado Public Radio and Kaiser Health News.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

Are EDs Inadvertently Taking Money From Primary Care?

CEO MedNetOne Health Solutions

For years, there’s been a concerted effort by insurance companies to halt the number of unnecessary visits to the Emergency Department. (Note – it is no longer a room.) This was a wise move designed to contain overall health care costs and excessive—and often unmerited—testing. While numbers are still too high, there’s been a decrease in the number of visits over the past several years.

That’s good news, the education on not using the ED like a physician’s office is working! Yet the shift from the ED to urgent care clinics or primary care physicians, where patients’ nonemergent needs are best met, resulted in reduced fees to hospitals and health systems. Darn those unintended consequences! Coupled with the trends of decreasing hospital admissions and shortened hospital stays, something needed to be done, right? In response, the Agency for Healthcare Research and Quality (AHRQ) released a five-level emergency department triage algorithm that stratifies patients into five groups, from least to most urgent, based on patient acuity and resource needs; but left out of the reimbursement bonanza are PCPS rightfully doing the same work in their own office – which they pay for.

PCPs can’t charge an exorbitant facility fee, while hospitals and emergency departments can. An ambulatory sensitive condition such as a strep throat isn’t generally a level 5 case, even though it can escalate into a very serious health risk if not treated, but do you want to bet that it’s been coded as such in the ED?

Interestingly, I stumbled across this article on how Emergency Departments are monopolies, with patients paying the cost, around the same time I was reviewing data for our own organization’s patient population ED use. It’s the 80/20 rule all over again, with a small number of patients incurring the majority of ED costs. And unlike the article’s thesis, I felt like we were paying the costs.

Staying on the ED theme, I recently participated in a Detroit area community health forum looking at reducing emergency department costs. I found myself wondering if Detroit-area hospitals (and likely those in other large metropolitan areas throughout the country) continue to increase unnecessary ED use by advertising ED wait times? If the doctor will see me in 20 minutes and I live close by, why should I see my PCP and risk having to wait in the office for an hour to be “worked-in” while pre-scheduled patients are seen? I also discovered that emergency department professional services have not gone through any auditing process to determine whether the level of acuity warrants the reimbursement received. Yet, office-based services are being reviewed by a national vendor and repriced. Repricing is occurring more frequently. Those pesky unintended consequences again! ED overuse is not a new issue – but it appears that options to curb abuse are causing the healthcare balloon to bulge elsewhere, with PCPs paying the price.

Segueing into an ED alternative leads me to a new favorite topic – house calls. Some physician members of our organization are now making house calls again, perhaps prompted by the CDC’s new push for an old practice. House calls peaked mid-century and were almost completely out of favor by the 1970s. Now, they may be slowly regaining steam, as PCPs hit the streets for true community based care. Will their visits help limit ED use? How could they not? Will PCPs be reimbursed accordingly for their efforts? Stay tuned.

The Importance Of Maintaining Accurate Mailing Information

Wachler & Associates, P.C.

In today’s mobile society, it is important that physicians are reminded of the requirement to maintain current, accurate mailing information with the appropriate state and federal agencies for licensing and Medicare and/or Medicaid billing purposes. There are significant potential consequences if a physician has an inaccurate address on file, fails to regularly check the mailbox connected to the address on file, or does not timely report a change in mailing address or practice location.

For state licensing, under the Michigan Public Health Code, Act 368 of 1978, physicians have a duty to notify the Michigan Department of Licensing and Regulatory Affairs (“LARA”) of a change in mailing address within 30 days after the change occurs(1). Failure to report a change of mailing address is, by itself, a sanctionable offense under the Public Health Code. The disciplinary subcommittee may impose a fine or reprimand a physician who fails to timely report a change of address(2).

In addition, if LARA files an administrative complaint against a physician alleging any sanctionable offense, it may notify the physician by sending a copy of the administrative complaint through regular mail and certified mail, return receipt requested, to the provider’s last known mailing address(3). A physician has 30 days from receipt of the complaint to respond to the allegations in writing or LARA will treat the allegations as admitted(4). If the time to respond to the administrative complaint expires and the physician has not submitted a written response, a copy of the complaint will be forwarded to the disciplinary subcommittee, which may then impose sanctions against the provider(5).

This means that a physician who does not receive notice of an administrative complaint and therefore fails to timely respond may be defaulted by the disciplinary subcommittee and subject to the penalties authorized under the Public Health Code. The penalties, which may be as severe as suspension or revocation of the physician’s medical license, will be imposed based on allegations that the physician does not have the opportunity to defend against on the merits.

Once a final order is entered by the disciplinary subcommittee, there is no administrative mechanism for overturning it. Under current law, the only avenue for relief that is available to a physician who has been defaulted is to challenge entry of the disciplinary subcommittee’s order in the Michigan Court of Appeals, which is a costly and time-consuming process.

It is therefore critical that physicians maintain a current, reliable address on file with LARA, and regularly check the mailbox for that address. Physicians should be cautious of maintaining a Post Office (P.O.) Box address on file with LARA, instead of a business or residential address, because there is a greater risk of delayed notice of an administrative complaint. With a P.O. Box, the recipient of certified mail is not present to accept delivery, thus, it may take longer to receive important documents such as an administrative complaint. Physicians that use a P.O. Box, or any other mailing address, should have a system in place to ensure that their mailbox is regularly checked in the event they are unavailable or unable to do so.

Similarly, physicians that bill Medicare or Medicaid are required to timely report a change in practice location. For Medicare, physicians are required to report a change in practice location within 30 days(6). CMS may take adverse action against a physician who fails to comply with this requirement, including deactivation of the physician’s Medicare billing privileges, an assessment of an overpayment back to the date of the change in practice location and, most significantly, revocation of the physician’s Medicare billing privileges(7).

For Medicaid, the Michigan Medicaid Provider Manual requires that physicians notify the Michigan Department of Health and Human Services (“DHHS”) via the online CHAMPS system of any changes to their enrollment information within 35 days, including “moving to a new office,” “adding another office or location,” and “changing the address to which [remittance advices] and/or correspondence are sent.(8)” DHHS may terminate a physician’s enrollment in the Michigan Medicaid Program, which means revocation of billing privileges, if he or she fails to submit timely and accurate information.

Accordingly, to comply with Medicare and Medicaid billing rules, physicians should promptly notify the appropriate state and federal agencies if there is any change in practice location. Failure to do so may result in severe penalties including, but not limited to, revocation of billing privileges. If you need additional information or assistance, contact a Wachler & Associates attorney at (248) 544-0888.

Sarah Hillegonds is an associate attorney at Wachler & Associates, P.C. Ms. Hillegonds practices in all areas of health care law and devotes a substantial portion of her practice to representing health care entities in the defense of RAC, Medicare, Medicaid, and third party payor audits. Ms. Hillegonds also represents health care providers in licensing matters.

(1)MCL 333.16192
(2)MCL 333.16221(g) and MCL 333.16626.
(3)MCL 333.16192(2).
(4)MCL 333.16231(8), (9)
(6)42 CFR § 424.516
(7)42 CFR § 424.516; 42 CFR § 424.540; 42 CFR § 424.565
(8)DHHS Medicaid Provider Manual, General Information for Providers, Section 3, Maintenance of Provider Information

IN MY OPINION: The World Turned Upside Down


Recently, it was reported on CNN that a county in Great Britain has announced a controversial policy to “support patients whose health is at risk from smoking or being very overweight.” The plan for the local clinical commissioning group is to “delay access to routine or non-urgent surgery under the National Health Service until patients improve their health.” Criteria have been established for the time limits and percentage of weight loss required for those with a BMI of over 30 and over 40. For smokers to have elective surgeries would require a patient to go eight weeks or more without a cigarette. They would have to take a breath test to prove their claim of abstinence. The Royal College of Surgeons in the UK opposes this policy. These patients will eventually get surgery, even if they are unable to lose weight or stop smoking, but they will have to wait.

The CCG states that financial savings are not expected. These proposals were developed “with the best interest of the whole patient population of our area in mind!” Interestingly enough, surveys are reporting 85 percent public agreement with these policies. A 2016 report by the Royal College of Surgeons shows that one in three of the clinical commissioning groups that develop policies on a county by county basis are denying or delaying routine surgery to smokers and obese patients in some way. What makes the recent Hertfordshire County decision unusual is that it makes the delay indefinite.

The arguments on both sides of this issue are quite compelling. There is a need for communities to decide how they want their health care resources expended. In the United States, the length and breadth of services that insurance policies promise to cover are more than the system can provide without inflation. On the other hand, restricting access to, or delaying, non-emergency surgery can lead to all sorts of complications, ultimately costing more. The morality is an open question. Ultimately, these types of discussions are going to have to be held, not just in England and Canada, but here in the United States as well.

On a completely separate topic, while I was cleaning out a corner of my office, I found posters from the defunct bi-annual Post-Election Catharsis Party. These parties were held every other year when all levels of government held elections in Lansing. It was sponsored each time by political junkies. The idea was that, after national, state, and local elections, folks from both parties should get together and have a party so the relationships could be maintained, healed, or formed. Political parties that went out of power would have hundreds of government staffers, and sometimes legislators, looking for a job. These parties were held every two years in Lansing at Beggar’s Banquet. I was always thrilled to be one of the sponsors because the purpose of these get-togethers was so important. Sadly, these events are no longer held. In truth, politics have become so contentious in Lansing, that I’m not surprised. The folks from disparate parties do not wish to socialize together. There’s very little working across the aisle, and there certainly is almost no hiring across party lines. Decision-making takes place via rote party affiliation, without input from the other party. Sadly, term limits have made this worse than ever, but that is a whole other discussion. It is just a shame that collegiality has disappeared almost completely from politics. It means that very little is successfully accomplished on behalf of the state. Almost everything is done based on parochial interests. It makes it hard to work out of a mess like this state is experiencing.

As this year ends, we sincerely hope everyone has a peaceful wonderful family-based holiday season full of joy and good health!

Peter Levine is executive director of the Genesee County Medical Society. His column comes to us courtesy of GCMS.

VOICES: Medicine And Politics


The practice of medicine was not a political exercise for centuries. Now it seems more political and proscribed than thoughtful, deliberative or even analytical. The educated experienced physician exercising judgment and guidance for a unique individual, his or her patient, has been increasingly replaced by rules, regulations, mandates, laws, schemes and perverse incentives. These have been mostly at the hands of non-professional administrators and bureaucrats. That medical professionals have been cajoled into participating in this evolution acknowledges physicians acceptance of such questionable transitions in rendering care.

Politics, laws, and the burgeoning onerous administrative state are not intrinsic to the medical profession. How this occurred, has been allowed to occur and continues to occur are questions one would think a profession populated by educated, talented individuals exercising critical insights and analysis might ponder.

At its very basis, it is hard to escape the evolution of a fundamental “misconception” that has become the accepted fallacy permitting government’s intrusion into the sanctity of the relationship between a physician and her patient: the political fallacy that medical care is a right. If medical care, which must include physicians’ services, is considered the “right” of the patient, the “right” should be properly protected by law. Here then is the entrée opportunity for government, and it has progressed with rapidity. With this circumstance now dominant, what is bedrock for an economically free society has been interrupted.

Physicians produce economic value via the services they render. It is what a doctor depends upon for his livelihood as a means of supporting his own life. The result for free men, whose natural right to private property has been intrinsic to Western civilization since 17th century England, should be the freedom to exchange with other men, also free, in trade or not. Government cannot enforce laws that protect the patients’ “right” to medical care other than by coercion, force. This is in contrast to medical care being a service that is provided by doctors and others to those who wish to purchase it. If the “right” to health care belongs to the patient, he in essence owns the services of a doctor without the need of either earning them or receiving them as a gift from the doctor.

Since this is the principle, government coercion is the vehicle. Coercion can take many forms. At the extreme was Bill 41 in Quebec, Canada. Doctors objecting to a Medicare law were forced to continue working under penalty of jail sentence and fines of up to $500 per day. Those speaking out publically against the bill were subject to one-year jail sentences and fines of up to $50,000. Here in America we have 4,000 pages of ACA rules and regulations for physicians, CMA mandates, payment schemes, EMTALA laws, Medicare and Medicaid rules of participation, EMR mandates, and MIPA demands just to name a few.

A single example (which I am sure every physician and elected legislator is familiar with) is a modification to a regulation resulting in a multitude of new regulations. These new regulations were produced carrying the authority of “administrative law” and crafted by a group of bureaucrats at the Department of Health and Human Services, Office of the Secretary. “2015 Edition Health Information Technology (Health IT) Certification Criteria, 2015 Edition Base Electronic Health Record (EHR) Definition, and ONC (The Office of the National Coordinator of Health Information Technology) Health IT Certification Program Modifications.” As an aside, the implementation cost for just this is estimated at $331.8 million.

So what we have are likely immoral and unconstitutional (my judgments), coercive laws based on a fallacy and the spewing out of mandates and regulations at an exponential rate. This regulatory onslaught is being created largely by unaccountable and certainly unelected bureaucrats. These regulations have the force of law (but without due process since it does not exist for so called “administrative law”) with fines and punishments that are nearly uncontestable. Almost as tragic, at least from my perspective, is many in the medical profession participating in this “Mad Hatters Tea Party.”

Moving forward a step or two, doctors are pandered to by politicians who seek money and laudatory sentiments from physicians as they seek election or reelection. Platitudes and sophistry somehow seem eagerly consumed by doctors participating in this charade. Hopefully and alternatively, perhaps all participants really know it is nothing but a façade, a silly game they choose to engage. For physicians the rate of coercion might be somewhat mitigated, doubtful. Really, can physicians in their wildest dreams expect politicians to bring an end to the barriers erected by the regulatory state? Are the barriers to innovation, to differentiated physician excellence, to physicians’ economic opportunities and to a competitive health care environment that have been created politically through statuettes and regulations up for real or even any debate? Or are the statutes and regulations now permanent stumbling blocks for a diverse physician community? But, for the politicians, the luxury of picking winners and losers based on influence, lobbying, money and cronyism can continue unimpeded.

Is this really the best way to evolve a dynamic, innovative, facile, enthusiastic group of medical professionals and to create access to medical care that is unquestionably the best in the world? I leave it to you to ponder this question.

Is there a way out? Absolutely, but doctors must have the fortitude to change the paradigm before it becomes too late. An entitlement mentality is an almost impossible habit to break even if the future promises to health care are a financial impossibility and therefor a cruel delusion. Accepting government provided financial compensation cannot persist if change is to occur. Coercion as a mechanism to force political change away from the traditional, historical and “equitable” doctor-patient relationship is not likely to succeed in the real sense of producing value through excellence. As David Hume has stated, “all plans of government, which suppose great reformation in the manners of mankind, are plainly imaginary.” Is this really the way a great republic should function. Is what is happening to the medical profession a harbinger, a warning signal to society as a whole?

The author’s opinions are his own, and not necessarily those of Healthcare Michigan.

2017 Tax Reform And Its Effects On Health Care

Dickinson Wright

Over the past decade, the health care industry has been accustomed to being center stage in political debates, but while medical providers and facilities did not have a prominent role in the latest political drama, the far-reaching effects of the Tax Cuts and Jobs Act of 2017, will impact almost everyone delivering health care goods and services. In addition to the reduction of personal tax rates, the following provisions will likely be most applicable to health care providers:

1. Reduced Business Tax Rates

The tax rate for businesses taxed as corporations was reduced from 35 percent to 21 percent, and entities taxed as a partnership, S corporation, or sole proprietorship may now be entitled to a Pass-Through Entities Deduction of 20 percent of domestic “qualified business income.” The Pass-Through Entity Deduction, however, is complicated and has significant limitations. For example, select services entities, such as physician practices, have low upper limits for the availability of the deduction ($415,000 for married taxpayers and $207,500 for single taxpayers). As a result, this deduction may benefit only a limited number of health care providers.

Action Steps

There has been significant speculation as to whether there will be (or should be) a rush for S-Corps to revoke their designation, or for LLCs (PLCs) to elect a C-Corp tax status to take advantage of the reduced corporate tax rate. While some for businesses (such as capital-intensive high growth entities) this strategy may have merit, in many others there may be little, or negative, benefit in such a change. The decision to change the tax structure of your entity should not be taken lightly, and owners should review their structure with a qualified attorney, or accountant tax advisor, before making any changes.

2. No Deduction For Government Investigation Expenses

The Act provides that payments to any government “in relation to the violation of any law or the investigation or inquiry by such government or entity into the potential violation of any law” are non-deductible. Health care entities will still be able to deduct amounts that are made for restitution or to “come into compliance with any law.” Previously payments made to the state and federal governments, such as the False Claims Act settlements or court orders, were treated as deductible to the extent that they are compensatory or remedial in nature. In addition, going forward, government agencies will be required to report on an informational return payments under a settlement agreement or court order.

Action Steps

In the event an organization is obligated to make such a payment, it will be important that any agreement or order specify the nature of the payment and the portion of the payment identified as restitution or to come into compliance.

3. Limitation of Operating Loss Deductions

The Act also limits the net operating loss (“NOL”) deduction to 80% of taxable income, and eliminates the “carry-back” provisions that allowed losses to be applied to prior year’s income. NOL’s can now only be carried forward indefinitely and offset up to 80 perent of a future year’s taxable earnings.

Action Steps

This provision results in businesses that were previously profitable, and have experienced a recent economic downturn, to be forced to wait until future years of profitability to receive a tax benefit from a current year’s loss. Since entities will no longer be eligible to receive a tax refund for taxes paid in prior years, entities should develop additional contingency plans to assist with cash flow in the event of an unexpected decline in profitability.

4. Reduced Deduction on Certain Entertainment Expenses

No deduction will be allowed for expenses relating to entertainment, amusement, recreation, or clubs organized for business, pleasure or other social purpose. The deduction of 50 percent of food and beverage expenses will remain.

Action Steps

Organizations should review expenses to determine which will no longer be eligible for deductions, and ensure that such expenses are properly categorized to prevent inaccurate deductions of such expenses on future returns.

5. New Excise Tax on “Highly Compensated” Non Profit Executives

The Act imposes a new 21 percent excise tax on compensation that exceeds $1 million paid to a tax-exempt employer’s five highest paid employees (including any former employees). The tax applies to both direct and indirect compensation, and any “parachute payment,” where the aggregate payment is three times (or more) the average compensation in the preceding five years. For purposes of determining whether an individual is a covered employee, remuneration paid to a licensed medical professional (including doctors and nurses) that is directly related to the performance of medical services by such professional, is not included.

Action Steps

The new excise tax is effective for tax years after December 31, 2017. There is no transition rule for applying the excise tax on compensation paid to the employees. Exempt organizations will need to identify their highest five-paid employees based on the 2017 tax year, who will be considered covered employees for 2018, and plan accordingly.

Given the breath of the changes under the Act, it is important for organizations meet with their tax advisor now, and assess the impact of the many changes before being stuck with an unexpected tax bill next year.

Please contact Peter Domas at 248-433-7595 or any member of Dickinson Wright’s Healthcare or Taxation team to assist your business with the changes under the Tax Cuts and Jobs Act of 2017.

Peter Domas is an attorney in Dickinson Wright’s Healthcare Practice group. His practice is devoted to representing clients in the health care industry, and assisting them in navigating the complex statutory and regulatory environment unique to health care corporate, transactional, and litigation matters. Peter also counsels clients on the development and maintenance of effective internal compliance programs with a special focus on federal and state fraud and abuse laws, reimbursement regulations, and HIPAA.

New Settlement Options Soon To Be Available To Medicare Audit Appellants

Wachler & Associates, P.C.

The Department of Health and Human Services recently unveiled the next two steps in its ongoing efforts to reduce the significant volume of claims pending at the Administrative Law Judge (ALJ) level of the Medicare appeals process, each of which involve additional settlement options for providers to resolve their pending claim appeals.

The first new settlement option was announced by the Centers for Medicare & Medicaid Services (CMS), which CMS refers to as the “low volume appeals settlement option (LVA).” As the name suggests, the LVA will be limited to provider appellants with a low volume of claims pending at the ALJ and Medicare Appeals Council (MAC) levels of appeal. While CMS has only released limited details with respect to the LVA’s eligibility requirements at this time, CMS defined “low volume” as fewer than 500 Medicare Part A or Part B claim appeals pending at the ALJ and the MAC, combined, as of Nov. 3, 2017. Additionally, the billed value of each appeal must be $9,000 or less. According to CMS, for those eligible providers whose pending appeals meet these thresholds, and who also meet “certain other conditions,” CMS will offer to settle eligible appeals at 62 percent of the net allowed amount.

While CMS currently instructs interested appellants to continue to monitor its website in the coming weeks for further details on the LVA settlement, it is expected that the LVA will be similar to the previous Part A appeals settlements offered by CMS, which included at 68 percent settlement offered in October 2014 and a 66 percent settlement offered in September 2016. These prior settlements were offered to hospitals with eligible inpatient status claims pending in the Medicare appeals process. Meanwhile, the upcoming LVA will be the first global settlement offered by CMS outside of the inpatient status appeal arena, and the first to be available to Part B provider types. However, it is unclear at this time whether the LVA will be directed at specifically identified Part A and Part B services, or will be available to all Part A and Part B claims that meet the volume-related thresholds cited in the LVA announcement by CMS.

In addition to the LVA, a second settlement option was recently announced by the Office of Medicare Hearings and Appeals (OMHA). While technically not considered a “new” settlement option, OMHA announced it will be expanding its current Settlement Conference Facilitation (SCF) program. Phase I of the SCF program was originally launched in July 2014 to provide an alternative dispute resolution process for eligible Medicare providers to enter into open and non-binding settlement discussions with CMS with the goal of reaching a mutually agreeable resolution for claims pending at the ALJ appeal level. Under Phase I, participation in the SCF program was limited to claims meeting narrow eligibility requirements, including only Part B claims in which the request for ALJ hearing was submitted in 2013. Phase II of the SCF program, which opened in October 2015, expanded the eligibility requirements for Part B claim appeals to include claims in which the request for ALJ hearing was filed by September 30, 2015, among other expanded eligibility criteria. Finally, Phase III was introduced in February 2016, which opened up the SCF program to eligible Part A claim appeals. The SCF program has provided an attractive option for providers who are currently in the midst of the three-year ALJ waiting period. By participating in the SCF program, providers can both achieve timely resolution of their appeals and eliminate the risks associated with the inherent uncertainties of prevailing at the ALJ hearing. Furthermore, by participating in the SCF program, appellants forfeit neither their hearing rights nor the time already invested in awaiting an ALJ hearing. In the event a provider and CMS do not mutually agree on a settlement amount at the SCF, the provider’s claim appeals would simply return to the ALJ level of appeal in the order the hearing request was originally received by OMHA.

At this time, OMHA has not released any further details surrounding the upcoming SCF expansion, but it is reasonable to speculate the eligibility requirements will be expanded to include those providers who have filed their ALJ appeals more recently given that the SCF is currently only available to ALJ appeals filed prior to October 1, 2015. Much like the LVA, OMHA instructs interested appellants to continue to monitor the OMHA website for additional details about the SCF expansion in the coming weeks.

Although additional details of each program are forthcoming, the LVA and expansions to the SCF program are welcomed additions to the current alternative dispute resolution programs offered by CMS and OMHA in recent years. While additional resolutions will likely need to be offered in the future to eliminate the current ALJ appeals backlog, the LVA and expanded SCF are certainly a step in the right direction. Perhaps most importantly, because CMS is authorized to recoup any alleged overpayment amounts while an ALJ appeal is pending, many providers are not financially positioned to withstand payment withholds by CMS for such an extended period of time. Thus, the recently announced settlement options may enable certain providers to efficiently resolve their appealed claims, receive timely payment, and remain in business.