1. LEGAL COMPLIANCE, PLANNING FOR PRIVATE PATIENT SUBSCRIPTION/PAYMENTS: REIMBURSEMENT MODELS AND METHODS FOR NON-PLAN REIMBURSED INTEGRATIVE HEALTH SERVICES James J. Eischen, Jr., Esq. October 2013 San Diego, California

2. Partner at Higgs, Fletcher & Mack, LLP 25+ years of experience as an attorney in California 4+ years of experience in the healthcare field: medical groups, EHR firms, health coaching enterprises and healthcare products. Studied at the University of California School of Law, emphasis in corporate/real estate. Professional Memberships: San Diego County Bar Association Law & Medicine Section, Attorney-Client Relations Committee, State Bar Of California Section Member JAMES J. EISCHEN, JR., ESQ.

3. Direct/Subscription Medicine Generally Defined History, Evolution, Various Models

4. History (c) 2013 James J. Eischen, Jr., Esq.

5. MEDICINAL REGULATION (Event Driven) 1848: Drug Importation Act requires U.S. Customs Service inspection to stop entry of tainted, low quality drugs from overseas. 1906: Food and Drug Act outlaws states from buying and selling food, drinks, and drugs that have been mislabeled and tainted. 1912: Sherley Amendment outlaws labeling medicines with fake medical claims meant to trick the buyer. 1939: Federal Food, Drug and Cosmetic Act requires new drugs show safety before selling and safe limits be set for unavoidable poisonous matter, and allows for factory inspections. Dangerous drugs must be given under the direction of a medical expert. 1951: Durham-Humphrey Amendment defines the kinds of drugs that cannot be used safely without supervision. 1962: Kefauver-Harris Drug Amendments require drug makers to prove drug works before FDA can approve for sale. http://www.fda.gov/downloads/D rugs/ResourcesForYou/Consumers /BuyingUsingMedicineSafely/Unde rstandingOver-the- CounterMedicines/ucm093550.pd f (c) 2013 James J. Eischen, Jr., Esq.

6. HEALTH INSURANCE CONNECTED TO EMPLOYMENT 1942: WWII wage + price controls = Employer-paid health insurance to increase compensation – IRS ruled health insurance a legitimate cost of doing business and not taxable income for employee. – Institutionalized employer-provided health care begins. Paul Starr, The Social Transformation of American Medicine, (New York: Basic Books, 1982), p. 311. (c) 2013 James J. Eischen, Jr., Esq.

7. HISTORY SUMMARIZED Negative health events and questionable health product sales drive US health regulations, AMA formation WWII connects US health insurance with employment, leaving gaps (disabled, retired, government employees) that lead to government plans (Medicare formed 1965) Fears about abusive government plan billing lead to stringent billing laws to prevent fraud (and frustrate physician business) Fee for service with restrictions on utilization: to keep underfunded government plans afloat (and private plans follow Medicare) Plan fee for service tilts toward intervention and away from prevention, and plans do not reimburse for patient connection Health outcomes drop while healthcare spending increases US healthcare market broken and badly needs reform Some physicians seek alternatives to plan dependence and plan-driven healthcare http://www.ama-assn.org/ama/pub/about-ama/our-history/timelines-ama- history.page http://www.ama-assn.org/ama/pub/about-ama/our-history/timelines-ama- history.page (c) 2013 James J. Eischen, Jr., Esq.

8. Evolution (c) 2013 James J. Eischen, Jr., Esq.

9. PRIVATE MEDICINE HAS COME A LONG WAY Washington Qliance Florida MDVIP Expansion with confirmed FFNCS model compliance Fee For Non-Covered Service (c) 2013 James J. Eischen, Jr., Esq.

10. FEE FOR SERVICE (FFS) Does FFS work? Consensus = NO (c) 2013 James J. Eischen, Jr., Esq.

11. The way we pay doctors is profoundly flawed. We need to move rapidly away from fee-for- service and embrace new ways of paying doctors to encourage cost-effective, high quality care. http://telemedicinenews.blogspot.com/ (c) 2013 James J. Eischen, Jr., Esq.

13. One problem is that the current fee-for-service system makes it difficult to coordinate after-hours care with a patient's regular doctor. This is problematic considering that providers that know a patient well, or at the very least have a patient's medical record, are able to give better quality of care. In 2010, 40.2 percent of people said their primary care clinics offered extended hours, such as at night and on weekends. One in five people found it very difficult or somewhat difficult to reach their clinician after hours. People that reported less difficulty reaching a physician after hours had fewer emergency department visits (30.4 percent compared to 37.7 percent). Furthermore, there were lower rates of unmet medical needs (6.1 percent compared to 13.7 percent). http://www.ncpa.org/sub/dpd/index.php?Article_ID=22692 (c) 2013 James J. Eischen, Jr., Esq.

14. Already, one in five physicians is restricting the number of Medicare patients in their practice and one in three primary care doctors – the providers on the front lines of keeping the cost of seniors care low – are restricting Medicare patients, according to a 2010 AMA survey of more than 9,000 physicians who care for Medicare patients. http://www.forbes.com/sites/brucejapsen/2013/01/30/1-in-10-doctor-practices-flee- medicare-to-concierge-medicine/ (c) 2013 James J. Eischen, Jr., Esq.

19. Average annual fee = approximately $1,800 > 4,000 physicians practice privately in the United States in 2012 Private physician averages about 350 patients Medicare changes = doctors reimbursed less for care provided Private patients get more face-time with doctors more thorough annual physicals focus on preventive medicine Private fee makes up for lost revenue from declining reimbursements EVOLVING AWAY FROM FEE FOR SERVICES: Private Subscription? http://www.ncpa.org/sub/dpd/index.php?Article_ID=22781 (c) 2013 James J. Eischen, Jr., Esq.

20. Concierge medicine delivers excellent care in a manner that is attractive to physicians. Question: Whether it has the potential to fix many of the more serious problems that exist in our system for delivering primary care. Affordability Reducing the number of patients that concierge-practice physicians see significantly reduces the number of patients served by each primary care physician. Retainer-based medicine remains attractive to doctors and patients in many regards. But significant questions remain about whether it should be promoted as a model that can meet the needs of most patients in society even with the advent of hybrid models. (c) 2013 James J. Eischen, Jr., Esq.

21. WHY MUST U.S. HEALTH CARE EVOLVE? (c) 2013 James J. Eischen, Jr., Esq.

22. WHY AMERICA PERFORMS POORLY ON HEALTH MEASURES (c) 2013 James J. Eischen, Jr., Esq.

23. WHY AMERICA PERFORMS POORLY ON HEALTH MEASURES (c) 2013 James J. Eischen, Jr., Esq.

24. U.S. has a large and widening "mortality gap" among adults over 50 compared with other high-income nations. Two-thirds of the difference in male life expectancy between the U.S. and other countries is due to deaths in that under-50 age category, and one-third of the gap is due to deaths among women under 50. U.S. fares worse in nine health domains: birth outcomes, injuries and homicides, teen pregnancies and sexually transmitted infections, HIV/AIDS, drug-related mortality, obesity and diabetes, heart disease, chronic lung disease, and disability. Areas in which the U.S. is not behind other wealthy countries are cancer screening and mortality, control of high blood pressure and cholesterol, smoking rates, and suicides. Part of the nation's poor ranking attributed to problems with its $2.6 trillion-a-year health care system (the world's most expensive by far). 50 million Americans without health insurance, fewer doctors per capita, less access to primary care and fragmented management of complex chronic diseases. http://www.npr.org/blogs/health/2013/01/09/168976602/u-s-ranks-below-16-other-rich-countries-in- health-report (c) 2013 James J. Eischen, Jr., Esq.

25. WHY SUBSCRIPTION? Patient Buy-in/Investment In Health Investing in health Owning health outcomes Realizing actual costs of poor health decisions (c) 2013 James J. Eischen, Jr., Esq.

26. REMOVING MENU DISTORTIONS FROM HEALTH CARE DELIVERY Subscription model as financially viable Subscription = payment for counseling and medical direction disconnected from plan-funded intervention Subscription = compensation for connection/tracking/coordination (c) 2013 James J. Eischen, Jr., Esq.

27. INCENTIVIZING CUSTOMER SERVICE/RETENTION Remaining connected vs. one-off consults Patient accountability only possible with persistent connection (c) 2013 James J. Eischen, Jr., Esq.

28. STABILIZED PRACTICE CASH FLOW FFS = financial disincentive to connect with medical practice Subscription = investment in connection, incentive to remain connected (c) 2013 James J. Eischen, Jr., Esq.

29. HOW TO STRUCTURE PRIVATE MEDICINE MODELS

30. Read The Rules (c) 2013 James J. Eischen, Jr., Esq.

31. A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse, U.S. Department of Health & Human Services and Office of Inspector General http://oig.hhs.gov/compliance/ physician-education/index.asp http://oig.hhs.gov/compliance/ physician-education/index.asp Private reimbursement compliance issues (c) 2013 James J. Eischen, Jr., Esq.

33. https://oig.hhs.gov/complia nce/physician- education/index.asp (c) 2013 James J. Eischen, Jr., Esq.

34. OIG: NO DOUBLE BILLING If you are a participating or non-participating physician, you may not ask Medicare patients to pay a second time for services for which Medicare has already paid Charging an access fee or administrative fee that allows patients to obtain Medicare-covered services from your practice constitutes double billing It is legal to charge patients for services that are not covered by Medicare If you have opted-out of Medicare May charge for access and care coordination Must comply with opt-out contract rules (c) 2013 James J. Eischen, Jr., Esq.

35. OIG ALERT – MARCH 31, 2004 Alert from Office of Inspector General, March 31, 2004 http://oig.hhs.gov/fraud/docs/alertsa ndbulletins/2004/FA033104AssignVio lationI.pdf http://oig.hhs.gov/fraud/docs/alertsa ndbulletins/2004/FA033104AssignVio lationI.pdf (c) 2013 James J. Eischen, Jr., Esq.

36. OIG ALERT 03-31-04 While the physician characterized the services to be provided under the contract as not covered by Medicare, the OIG alleged that at least some of these contracted services were already covered and reimbursable by Medicare. Among other services offered under this contract were the coordination of care with other providers, a comprehensive assessment and plan for optimum health, and extra time spent on patient care. OIG alleged some of these contracted services were already covered and reimbursable by Medicare. (c) 2013 James J. Eischen, Jr., Esq.

37. http://www.medicare.gov/pubs/pdf/10050.pdf CHECK FOR MEDICARE COVERAGE (c) 2013 James J. Eischen, Jr., Esq.

38. MEDICARE ASSIGNMENT COMPLIANCE Unless you have opted out of Medicare Avoiding billing for covered services Avoiding billing for buzz words Watch out for: Access Care coordination Membership (?) 24/7 communications (?) Electronic records access (c) 2013 James J. Eischen, Jr., Esq.

39. OPT-OUT COMPLIANCE The physician/practitioner has filed an affidavit in accordance with §40.9 and has signed private contracts in accordance with §40.8 but, the physician/practitioner knowingly and willfully submits a claim for Medicare payment (except as provided in §40.28) or the physician/practitioner receives Medicare payment directly or indirectly for Medicare-covered services furnished to a Medicare beneficiary (except as provided in §40.28); (For specific information about Chapter 15, sections 8 and 28, refer to http://www.cms.hhs.gov/Manuals/downloads/bp102 c15.pdf on the CMS website. The sections of Chapter 15 that are revised by CR6081 are attached to CR6081.) The physician/practitioner fails to enter into private contracts with Medicare beneficiaries for the purpose of furnishing items and services that would otherwise be covered by Medicare, or enters into private contracts that fail to meet the specifications of §40.8; or The physician/practitioner fails to comply with the provisions of §40.28 regarding billing for emergency care services or urgent care services; or The physician/practitioner fails to retain a copy of each private contract that the physician/practitioner has entered into for the duration of the opt-out period for which the contracts are applicable or fails to permit CMS to inspect them upon request. (c) 2013 James J. Eischen, Jr., Esq.

40. OPT-OUT NONCOMPLIANCE CONSEQUENCES All of the private contracts between the physician/practitioner and Medicare beneficiaries are deemed null and void. The physicians or practitioners opt-out of Medicare is nullified. The physician or practitioner must submit claims to Medicare for all Medicare covered items and services furnished to Medicare beneficiaries. The physician or practitioner or beneficiary will not receive Medicare payment on Medicare claims for the remainder of the opt-out period, except as stated above. The physician or practitioner is subject to the limiting charge provisions as stated in §40.10. The practitioner may not reassign any claim except as provided in the Medicare Claims Processing Manual, Chapter 1, General Billing Requirements, §30.2.13. (For more information about the General Billing Requirements refer to http://www.cms.hhs.gov/manuals/downloads/clm104 c01.pdf on the CMS website). The practitioner may neither bill nor collect any amount from the beneficiary except for applicable deductible and coinsurance amounts. The physician or practitioner may not attempt to once more meet the criteria for properly opting out until the 2-year opt-out period expires. (c) 2013 James J. Eischen, Jr., Esq.

41. STATE LAW INSURANCE ISSUES (REGARDLESS OF OPT-OUT STATUS) Avoiding appearance (or reality) of insurance Why? Lack of adequate capitalization Lack of registration State law violation of insurance regulations (c) 2013 James J. Eischen, Jr., Esq.

42. BOTTOM LINE Subscription for: – Non-covered services – All services (as opt-out) – Limits to avoid insurance issues Exclude mandated services – Electronic records Deal with HIPAA! (Or, you cant avoid the federal government) (c) 2013 James J. Eischen, Jr., Esq.

43. HIPAA/PRIVACY COMPLIANCE (PARTICULARLY WITH ELECTRONIC COMMUNICATIONS) Final/Omnibus Rule updated Electronic data storage of any kind = HIPAA Basic rules: Privacy Security Add: Accounting (for cash paid services) (c) 2013 James J. Eischen, Jr., Esq.

44. DISCOUNTING, REBATES, INSURANCE PLAN CO PAYS/DEDUCTIBLES: AVOIDING IMPROPER INCENTIVIZING UNDER STATE/FEDERAL LAWS May not incentivize No free toaster oven Co-pays and deductibles May not induce utilization (c) 2013 James J. Eischen, Jr., Esq.

45. Proper Private Practice Formation

46. PHYSICIAN-PATIENT CONTRACT DRAFTING RECOMMENDATIONS Easy to read contract – Simplify Clarity, particularly on key issues Use FAQs and brochures to express details, use the contract to craft the compliance posture Fee structure must avoid state insurance issues Amenities allocated to private fees to avoid Medicare compliance issues (Q: Does your staff know how to properly explain your retainer/subscription model?) – Or comply with opt-out requirements – http://www.cms.hhs.gov/Manuals/downloads/bp102c15.pdf Avoid inducements/discounting (i.e. no toaster ovens) AVOID PROMISES YOU CANT KEEP (c) 2013 James J. Eischen, Jr., Esq.

47. PHYSICIAN-PATIENT AGREEMENT DEALING WITH ELECTRONIC COMMUNICATIONS Need separate ePHI agreement for risk management/HIPAA compliance HIPAA Final Rule: Non-compound ePHI consent (c) 2013 James J. Eischen, Jr., Esq.

48. EPHI/ELECTRONIC RECORDS AND COMMUNICATIONS RISK MANAGEMENT Privacy Rule Security Rule Documented permissions (c) 2013 James J. Eischen, Jr., Esq.

49. CAN I CHARGE FOR PATIENTS ACCESS TO ELECTRONIC HEALTH RECORDS? www.hhs.gov/news/press/2013pres/01/ 20130117b.html Patients can ask for a copy of their electronic medical record in an electronic form. When individuals pay by cash they can instruct their provider not to share information about their treatment with their health plan. New limits on how information is used and disclosed for marketing and fundraising purposes. Prohibits the sale of an individuals health information without explicit permission. MUST ONLY CHARGE ACTUAL COSTS (c) 2013 James J. Eischen, Jr., Esq.

50. HIPAA COMPLIANCE: BASIC DOCUMENTATION Notice of Privacy Practices (NPP) Business Associate Agreement (BAA) Internal risk analysis Practices office procedures and processes must be examined thoroughly (c) 2013 James J. Eischen, Jr., Esq.

51. MUST CHECK MARKETING/PRACTICE COMMUNICATIONS FOR COMPLIANCE Website FAQs Patient letters Staff training!!! (c) 2013 James J. Eischen, Jr., Esq.

52. THANK YOU James J. Eischen, Jr., Esq. Office:(619) 819-9655 Email: Eischenj@higgslaw.comEischenj@higgslaw.com Skype: jeischenjr http://www.assessmentandplan.com http://www.higgslaw.com (c) 2013 James J. Eischen, Jr., Esq.