chapter 10

This type of law's purpose is to protect the competition to ensure consumer choice in health care.

Earlier cases were based on this concept that states that this occurs when a physician touches an individual without their permission.

As the judiciary system interprets previous legal decisions regarding a case, they are creating this.

Providers order more tests and provide more services than necessary to protect themselves from lawsuits.

This is merely a mutual agreement between a patient and provider.

This Act was passed in 1863 to protect the federal government against fraudulent defense contractors during the Civil War.

Patients' right to make an informed and educational decision regarding their medical treatment

This occurs when employees are afraid to change employment because they are afraid of losing their medical coverage.

This occurs when one or more organizations decide which services will be offered at each organization.

Improper or negligent treatment of a patient by a provider which results in injury, damage, or loss.

Organizations that are so large that they control a market, which does not allow consumers to choose.

Also called the Patient Self-Determination Act of 1990

These laws prohibit physicians, including dentists and chiropractors, from referring patients for services where they have a financial interest.

A group of healthcare organizations decide amongst each other to collaborate with price raising, lowering, etc.

These are created by administrative agencies to interpret law.

The simplest method of establishing a business.

• The minimal standard for action is federal law although state law may be stricter.
• -Legislature creates laws which are called statutes.
• -Both common law and statutes are then interpreted by administrative agencies by developing rules and regulationsthat interpret the law.

• 1) nonprofit and for profit corporations,
• 2) partnerships,
• 3) limited liability companies,
• 4 )sole proprietorships,
• 5) joint ventures .

• -Corporations are usually formed to protect the stockholders or owners from unlimited liability. Their liability is limited to their investment in the corporation.
• - Stockholders are normally not required to use their personal assets to protect the corporation

• -Although state definitions vary, the term applies that the owner requires a license to practice.
• - Although this corporation does not protect the owner from malpractice or liability, the corporation protects the owners from each others’ liabilities.

• -They have limited obligation to provide care for the needy.
• -Nonprofit corporations may also use the term “charity” for their organization. Their profits cannot be given to individuals

• -Government-owned are often hospitals that are tax exempt and often have federal or state funding. They often serve the uninsured and have a research and training component.
• - Public health clinics are also legally structured as a non-forprofit organization.

-The sole proprietorship of a business would have unlimited liability which means the liability extends beyond the scope of their business. Their personal assets can be attacked as well. It would be unusual for a health care provider to establish his or her practice as a sole provider because of the unlimited liability issue .

• -There may also be issues with the partnership which could include personality conflicts, opposing views on how to manage the business, and differing views on the mission of the business.
• - Although partnerships can be very successful, there is the issue of unlimited liability which means the owners, like the sole proprietorship, would be responsible for all debt and problems of other partners.

There can be an unlimited number of owners or a single owner. Owners are taxed on the percentage of income received from the company. • The LLC designation is included after the name of the company. This type of organization would be a possibility for providers to establish their practice. It does protect the providers more from liability issues

The original entities share the revenues, costs and control of the joint venture

• 1) establishing a contractual relationship to care for a designated population,
• 2) establishing an express contract with a patient under mutual agreement,
• 3) establishing a relationship under an implied contract .

- An implied contract can be implied from a physician’s actions. If a physician gives advice regarding medical treatment, there is an implied contract.

-A second example of this type of contractual right to admission is if governmental hospitals such as county hospitals are required to provide care for patients regardless of ability to pay

• -However, a physician could withdraw from a relationship by giving sufficient notice of their withdrawal or providing their patient with a referral.
• -However, if a physician withdraws from a relationship without sufficient reason, the provider may be liable for breach of contract

• -Criminal law is concerned with actions that are illegal based on court decisions.
• - Examples of criminal law infractions would be Medicare fraud, illegal abortions,

• 1) negligence which involves the unintentional act or omission of an act that would contribute to the positive health of a patient and
• 2) intentional torts such as assault and battery or invasion of privacy

-Invasion of privacy would be the violation of patients’ health records. Privacy issues relating to patient information is a major issue in the health care industry

• -Patients have sued physicians because they feel their provider has not provided them the level of care compared to the standard of care in the industry.
• -Studies have indicated that patients on average wait five years to receive payment from malpractice cases…most patients are not compensated as a result of a medical error.

“Improper or negligent treatment of a patient by a provider which results in injury, damage or loss” (p. 1060). According to the Institute of Medicine’s landmark report To Err is Human, medical malpractice results in approximately 80,000-100,000 deaths per year. Disputes over improper care of a patient have hurt both the providers and patients. Patients have sued physicians because they feel their provider has not provided them the level of care compared to the standard of care in the industry. Studies have indicated that patients on average wait five years to receive payment from malpractice cases…most patients are not compensated as a result of a medical error

• -As a result of the recent malpractice insurance crises over the past decades, more and more states have adopted statutory caps on monetary damages that a plaintiff can recover in malpractice claims.
• -According to the National Conference of State Legislatures, in 2005, there were 48 states which considered malpractice reform legislation with 30 states adopting law

• 1) alternative dispute resolution (ADR) methods,
• 2) neo no fault insurance and
• 3) Model Medical Accident Compensation System

• 1) Conciliation consists of bringing the two parties together to discuss their situation,
• 2) mediation is bringing the two parties together and suggest possible solutions, and arbitration which is the most formal, consists of holding a hearing where the cases are presented and an award is made.
• 3) Arbitration can be a binding decision which means they have to legally abide by the decision.

- This process would occur on an individual basis applying the standards of care and are examining the medical errors associated with the case. Funds are provided by a state fund

-Inability to pay cannot be a basis for denial when the person needs emergency services that the hospital can provide.

Approximately 10 million children who were uninsured and ineligible for public assistance will be positively impacted by this program.

-From a health care consumer aspect, it protects Medicare beneficiaries by granting them the ability to appeal provider termination of services.

• -This act regulates pension and benefits plan for employees including medical and disability benefits. It protects employees because it forbids employers from firing an employee so they cannot collect under their medical coverage.
• - An employee may change the benefits provided under their plan, but cannot force an employee to leave so they would not have to pay their medical coverage

• -The Equal Employment Opportunity Commission is responsible for monitoring and enforcing any violations of this law.
• -This law applies to employers with 15 employers or more, employment agencies and labor organizations and the federal government.

Although it does provide an opportunity to keep their coverage while they were changing jobs, there may be individuals who cannot afford the premiums so they may end up uninsured anyway

-This component was very important because many individuals were refused treatment because they could not pay for the services or were uninsured.

• It also guaranteed that individuals could purchase health insurance for a preexisting condition if they
• 1) have been covered by a previous employer program for a minimum of 18 months and
• 2) have exhausted any coverage through COBRA,
• 3) are ineligible for other health insurance programs, and
• 4) were uninsured for no longer than two months.
• -HIPAA also prohibited employers from stating pregnancy as a preexisting condition. Employers cannot charge higher premiums to employees according to health status

It gives patients new rights to access of their records, restricts the amount of patient information released, establishes new restrictions to researchers’ access, and increased criminal and civil sanctions for improper use

• Alcohol and other drug abuses are not covered under ADA.
• If an employer could make reasonable accommodations to a disabled individual without suffering financial hardship were requested to hire a disabled individual.
• - From a health care standpoint, a nursing home cannot refuse to admit a person with AIDS that requires a nursing service and that has that type of service available

• -This benefit does not cover the organization’s 10% highest paid.
• -The employer is also supposed to provide the same job or a comparable position upon the return of the employee

• -However it did highlight the issue of parity coverage between mental health issues and traditional medical care.
• -This federal legislation spurred several states to implement their own parity legislation

-It also prohibits employers form making adverse employment decisions based on a person’s genetic code nor can employers or insurance companies demand a genetic test

• -There are two federal agencies that enforce antitrust violations: the Federal Trade Commission and the Department of Justice.
• -The Sherman Act of 1890 focuses on eliminating monopolies which are health care organizations that control a market so the consumer has a no choice in their health care .
• -It also targets price fixing among competitors which eliminates the consumer from paying a fair price because the competitors establish a certain price by either increasing or lowering prices amongst themselves to stabilize the market.
• - Health care facilities may also have an agreement on market division. This illegal action occurs when one or more health organizations decide which type of services will be offered at each organization.

• - Price information exchange of services between providers can also be illegal.
• -Health care providers are protected under the Act if it has been determined that hospitals have exclusive contracts with certain providers which excludes other providers from use of the hospital.

• -The Act also prohibits other business practices that under certain circumstances may harm competition.
• - The Act also allows individuals to sue for three times their actual damages plus legal costs

• - This is a requirement for any hospitals with greater than $100 million in assets acquiring a hospital with more than $10 7) million in assets.
• -The DOJ and FTC will make the final decision on these proposals. This ensures there will not be any type of monopoly within a certain geographic area.

The concept of informed consent is based on the patient’s right to make an informed decision regarding medical treatment. It is a legal requirement in all 50 states. It is more than a patient signing an informed consent form—it is the communication between the provider and patient regarding a specific medical treatment.

• - The reasonable patient standard focuses on the patient’s information needs including the risks and benefits that allow the patient to make a decision
• -The reasonable physician standard focuses on the standard information that would be given by any physician to a patient contemplating the same procedure or treatment. Most states utilize the reasonable patient standard.

-Based on the concept of informed consent, in 1972, the Board of Trustees of the American Hospital Association developed a Patient Bill of Rights. The Patient Bill of Rights states that the patient has the right to all information from this provider regarding any testing, diagnoses, and treatments

• -Nearly 94% of the patients requested lethal medications because they were afraid of losing their autonomy or ability to make decisions and act for them, 76% were afraid they would no longer enjoy life as they were dying, and 53% were afraid of losing control of their bodily functions..
• -The state of Washington passed a similar December 2008 to legalize physician-assisted suicide in their state.

• -A living will lists which types of medical treatments you will and will not accept such as life-sustaining measures.
• -A medical power of attorney or durable power of attorney for health care is a person that will represent the consumer in case that person is unable to make a medical decision.
• -A do not resuscitate order (DNR) is a written directive that does not allow any life saving measures if you suffer cardiac arrest.
• -An advance directive is not needed for a DNR order. A doctor may place a DNR in your medical chart.

-The False Claims Act of 1995 imposes criminal penalties on anyone who tries to present fictitious claims for payment to the federal government. It is one of the most powerful government tools to combat civil fraud in health care

• -What is controversial about this Act is that whistleblowers may receive between 15 to 25% of proceeds in the case. As a result of the financial incentive program, the federal government has received $12 billion in returned funds.
• -According to one report, in 2006, nearly 500 hospitals across the United States were the subject of Medicare fraud. The civil fines for each violation can be $5,500 -$11,000. Many health care organizations may have hundreds of fines so their penalties can be huge

-Designated health services include clinical laboratory services, outpatient prescription drug services and physical and occupational therapy and imaging services such as MRIs.