1. LEGAL ISSUES IN MEDICAL HOME DEVELOPMENT Presented by: Gerry Hinkley Davis Wright Tremaine LLP gerryhinkley@dwt.com

2. 2 Session goals  Understand the translation of Medical Home goals into a legally enforceable structure  Address some contracting issues – provider to provider; payor to provider  Consider antitrust risk  Weigh privacy and security concerns  Look at implications for the standard of care in negligence actions

3. 3 Transforming the model into a system  The Model’s general goals  Personal physician  Physician directed medical practice  Whole person orientation  Quality and safety  Enhanced access  Supportive payment

4. 4 Components of a system  Home provider – a professional or group of professionals  Elements of care and care coordination -- detailed description of the program:  patient and provider selection and participation  care paths and protocols  reporting and improvement  grievance resolution  Determination of costs to provide this level of care  Documentation  Employment, home provider contracts  Program plan and protocols  Payor contracts  Referral provider contracts  HIT procurement and maintenance

5. 5 Payor contracts  Payor business and financial support is key  In exchange for support, home providers commit to  Quality measures: third party (NCQA), payor-specific  Programmatic measures  Staffing  Care protocols  Reporting outcomes and patient/provider satisfaction  Payor participation takes the form of payment and care management

6. 6 Payor contracts – specific terms  Payment  PMPM  Patient attribution methodology  Evaluation  Utilization expectations  Quality measures  Patient and provider satisfaction  Termination  Dispute resolution  Consequences for provider status

7. 7 Antitrust compliance  Sherman Act – prohibiting unreasonable restraints on trade  Is setting a range of reimbursement horizontal price- fixing?  Is it a permissible restraint ancillary to a legitimate joint arrangement  Do procompetitive benefits outweight potential bad consequences?  Eliminates “free riders”  Benefits consumers  Reduces costs  Improves quality  Implications of “State Action” to avoid antitrust violation

8. 8 Privacy and security  More sharing of information than in typical model  Most communications between providers should be for “treatment” or “payment” and not require HIPAA authorization  HIPAA compliant authorization required to transmit out of the system – e.g. PHRs  State law may require specific consents  Consider appropriateness of enhanced or coordinated privacy policies for “trust”

9. 9 Standard of care  The professional must render care with the same degree of care as a reasonable member of that profession in similar circumstances would render in the community  Some courts have considered “resource restraints” to lower the standard  Will “resource expansion” push the standard to higher levels?

10. 10 Is this concierge medicine?  Prohibition on additional charges to patients for covered services (Medicare and perhaps HMO contracts) – can’t charge an “access fee” for Medicare covered services (and maybe for commercial services)  Do payors have a right to offset payments received from secondary paryors (COB)

11. 11 Thank You for Participating Gerry Hinkley Partner Davis Wright Tremaine LLP gerryhinkley@dwt.com 415.276.6530 www.dwt.com

12. 12 The purpose of this presentation is to inform and comment upon transactions in the health care industry. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations. (c) Davis Wright Tremaine LLP 2009