Legal Brief Pennsylvania Employers Have a Duty to Protect and Secure Employee Data PA EMPLOYERS HAVE A DUTY 2 4 Brandon S. Williams, Esquire - [email protected]1 equipped with security measures to guard against data breaches and should do so by: (1) Reviewing and tightening internal policies and procedures related to data protection in the area of both data collection and storage. (2) Engaging information technology professionals to develop and regularly update effective ways to protect employee data. (3) Training employees regarding data security. (4) Maintaining documentation of data protection efforts. (5) Developing a protocol to be followed in case of a data breach. Contact Brandon Williams, Esq. at [email protected] or 717-233-4101 for more information. In a recent decision, the Pennsylvania Supreme Court found the University of Pittsburgh Medical Center liable to employees for not taking reasonable care to protect employee data. UPMC, which had gathered the personal data from employees as a condition of employment, was hacked and the personal information of 62,000 employees and former employees was compromised. Although the hackers acted illegally in obtaining the information from UPMC computer systems, the Court ruled that UPMC should have anticipated the possibility of hackers attempting to access the information and should not have stored the information on its internet-accessible computer system which lacked adequate security measures, including proper encryption, adequate firewalls, and adequate authentication protocol. e Court held that employers are expected to exercise “reasonable care” – including taking measures to prevent hacking – in securing employee data. Employers are now on notice that they have a duty to ensure their systems are In is Issue Your State Budget and New Home Care & Home Health PCQPAC Introduction 6 Affordable Care Act Ruled Unconstitutional
Transcript
LegalBrief
Pennsylvania Employers Have a Duty to Protect and Secure Employee Data
equipped with security measures to guard against data breaches and should do so by:
(1) Reviewing and tightening internal policies and procedures related to data protection in the area of both data collection and storage.
(2) Engaging information technology professionals to develop and regularly update e�ective ways to protect employee data.
(3) Training employees regarding data security.
(4) Maintaining documentation of data protection e�orts.
(5) Developing a protocol to be followed in case of a data breach.
Contact Brandon Williams, Esq. at [email protected] or 717-233-4101 for more information.
In a recent decision, the Pennsylvania Supreme Court found the University of Pittsburgh Medical Center liable to employees for not taking reasonable care to protect employee data. UPMC, which had gathered the personal data from employees as a condition of employment, was hacked and the personal information of 62,000 employees and former employees was compromised. Although the hackers acted illegally in obtaining the information from UPMC computer systems, the Court ruled that UPMC should have anticipated the possibility of hackers attempting to access the information and should not have stored the information on its internet-accessible computer system which lacked adequate security measures, including proper encryption, adequate �rewalls, and adequate authentication protocol. �e Court held that employers are expected to exercise “reasonable care” – including taking measures to prevent hacking – in securing employee data. Employers are now on notice that they have a duty to ensure their systems are
In �is Issue
Your
State Budget andNew Home Care& Home Health
PCQPACIntroduction
6
Affordable CareAct RuledUnconstitutional
2
Pennsylvania has been working to rebalance its Medicaid Program expenditures for long-term care and support services to get more recipients into lower cost home- and community-based programs instead of higher cost nursing home care, including through the current roll out of the new Community Health Choices Medicaid managed care program and expansion of LIFE Programs. However, the State Budget has not allocated funds for the Department of Health to hire more sta� for processing licenses for new home- and community-based providers. �e result is longer processing time frames for license applications, beyond the 60-days prior notice required by Department regulations (28 Pa. Code
Section 51.3), for new Home Care and Home Health Care providers seeking to meet the increasing demand for home- and community based services. New companies seeking to provide these services will need to factor in the new licensing time frames. For new Home Health licenses (28 Pa. Code Chapter 601), the Department of Health current projected processing time frame is 6 months to a year (including the related Medicare certi�cation). �ere are currently 580 licensed home health agencies in Pennsylvania. For new Home Care licenses (28 Pa. Code Chapter 611), the Department of Health current projected processing time frame is 5-6 months. �ere are currently 2,264 licensed
home care agencies or registries in Pennsylvania. �e Pennsylvania Department of Human Services has not reported any network shortages of licensed home- and community-based providers during the roll out of Community Health Choices in the Southwest (14 counties) and Southeast (5 counties) Regions. Implementation of Community Health Choices in the 48 remaining counties (Phase 3) is scheduled for January 1, 2020; and, will test whether the current license delays are a�ecting network su�ciency there. A current and growing shortage of both Home Care Workers and Home Health Aides nationwide has been reported. Forbes stated in their April 18, 2018 article “�e Shortage of Home Care Workers: Worse �an You �ink” that “Government statisticians rank home care as one of the nation’s fastest growing occupations, with an additional million workers needed by 2026; that’s an increase of 50% from 2014.” Home Health Care News reported in their May 6, 2018 article “Where the Home Health Aide Shortage Will Hit Hardest by 2025” that “�e number of new job openings for home health aides by 2025 is expected to reach 423,200, a growth rate of 32%....the expected workforce gap will also hit negative -446,300 workers by 2025….with all states needing more home health aides.” For more information about licensing for health care services facilities by the Pennsylvania Department of Health and the Pennsylvania Department of Human Services, you may contact Bruce G. Baron, Esq. at [email protected] or 717-233-4101.
Long-term care providers in the Commonwealth are facing new challenges in the transition to Community Health Choices Managed Care. Community Health Choices has already been implemented in the Southwest region of Pennsylvania (e�ective January 2018) and Southeast region of Pennsylvania (e�ective January 2019). It will be implemented in the rest of the state in January of 2020. During the continuity of the care period, which is a period of 18 months from implementation, DHS mandates that the CHC MCOs contract with all existing Medicaid certi�ed nursing facility providers if those nursing facility providers are willing to do so and are willing to accept the Community Health Choices rates for payment. During this transition period, the CHC-MCOs have agreed to pay providers a “rate �oor” for the �rst three years after implementation of CHC in the region, which consists of an average of the four quarterly Medicaid rates e�ective prior to the date of implementation in the region. Providers should appeal any and all audit reports issued by DHS that impact this “rate �oor,” as they will be living with these rates for a three year period unless an alternative rate schedule is negotiated. After the continui-ty of care period, providers will essentially be on their own as to whether they will be able to contract with one or all three of the CHC-MCOs. Moreover, after the end of the rate �oor, providers will again be completely on their own with respect to negotiating their rates for Medicaid recipients, with essentially private entities that are the CHC-MCOs. Providers who have a current CMS rating between 3 –5 stars, or a 3 –5 star CMS rating during the last 2 quarterly reporting periods may want to consider joining Pennsylvania Coalition for Quality Post-Acute Care (PCQPAC). More information on this new organization is detailed below. Questions on CHC Managed Care in Pennsylvania? Contact Daniel Natirbo�, Esq. at [email protected] or 717-233-4101.
MEDICAID MANAGED CARE UPDATE
We are excited to announce that our �rm is serving as legal counsel for Pennsylvania Coalition for Quality Post-Acute Care (PCQPAC), a 501(c)(6) non-pro�t corporation with the mission of assisting long-term care Provider Members in the transition to Community Health Choices (“CHC”) Medicaid Managed Care and in the process of contracting with Community Health Choices Managed Care Organizations (“MCOs”). PCQPAC represents its high quality post-acute care providers/members in contracting with Managed Care Organizations (CHC-MCOs), ensuring that providers are receiving sustainable future reimbursement rates. PCQPAC provides members with ongoing support and representation, both from a lobbying and legal perspective, in managing all ongoing operational issues with DHS and CHC-MCOs as they arise.
PCQPAC’s Quality Care Parameters:A current CMS rating between 3 –5 stars or a 3 –5 star CMS rating during the last 2 quarterly reporting periods. �e PCQPAC Board may vote to amend or supplement these parameters in the future. PCQPAC’s Membership Fee:Members will be charged a $30 per bed yearly fee. �ere is a $30,000.00 cap for multi-facility organizations with common ownership. Membership will run through December 31 of a given year and will be auto-renewed on January 1st of the subsequent year, unless communicated otherwise with PCQPAC. �e PCQPAC Board has the jurisdiction to vote on modifying the membership fee, if deemed necessary. PCQPAC’s Current Board Members:• President: Alicia Silliman, NHA, Nursing Home Administrator at St. Luke’s University Health Network • Treasurer: Paul Lieber, NHA, Director of Health Care Operations at JDK Management Company, LP• Secretary: Ben Kurland, LNHA, CDP, RAC-CT, CEO at Allaire Healthcare Services
Capozzi Adler, P.C. serves as legal counsel for PCQPAC. Triad Strategies provides lobbying support for PCQPAC.
PENNSYLVANIA COALITION FOR QUALITY POST-ACUTE CARE (PCQPAC) INTRODUCTION
WHY SHOULD YOUR FACILITY(S) JOIN PCQPAC?
PCQPAC provides strength in numbers: We are at a critical moment in the history of the long-term care health system in the Commonwealth and history has taught us that there is strength in numbers in meeting all of the challenges that are on the horizon. Other states, including New Jersey, have successfully formed similar coalitions and provider networks, as a response to the implementation of Managed Care. Even with the implementation of rate �oors and the continuity of care period, there remains several serious open questions with respect to supplemental payments to providers including, but not limited to:• Disproportionate Share Payments• Appendix 4, Access to Care Payments, including: o Nursing facility assessment tax related allowable costs for non-public nursing facilities o Nursing facility assessment tax quarterly supplemental payments for non-public nursing facilities o Supplemental ventilator care o Tracheostomy care and equipment o Vent equipment and supplies o Exceptional DME payments. To be clear, DHS has announced that the timing and form of these payments, even though they are included in the capitated payments paid to the MCOs, must be negotiated between the providers and the MCOs. �is is an area where there is strength in negotiating in numbers. PCQPAC will provide members with assistance in regards to these issues.
PCQPAC assists with operational issues arising with CHC-MCOs:• Members facilities are encouraged to report operational
problems arising with CHC-MCOs to PCQPAC. A PCQPAC representative will work with CHC-MCO representatives to remedy the issue for all PCQPAC member facilities. �is may include intervention via a lobbyist or attorney. • PCQPAC will assist and represent members in handling CHC-MCO transportation issues that may arise. • Members will be regularly surveyed in order to identify areas where PCQPAC support is needed. Survey results will be distributed to membership. • Members will receive frequent updates on Community Health Choices implementation. A PCQPAC representative will attend various CHC-MCO meetings and distribute notes to membership after each meeting. �is will ensure that PCQPAC member facilities are immediately aware of updates and changes, without sending their own representative to meetings. PCQPAC provides members with one voice in negotiating sustainable rates:• PCQPAC negotiates contracts with MCOs on behalf of members entering CHC in January 2020. • PCQPAC educates and assists contracted members with negotiating yearly renewal contracts with CHC-MCOs. • PCQPAC negotiates Quality Parameters for MCO contracting.• PCQPAC negotiates sustainable rates after expiration of the rate �oor. If you are interested in becoming a member of PCQPAC, please contact Cassandra Reed at [email protected] or 717-233-4101 for a full membership packet. For questions about CHC Managed Care and CHC-MCO contracting, please contact Daniel Natirbo�, Esq. at [email protected] or 717-233-4101.
4
We are excited to announce that our �rm is serving as legal counsel for Pennsylvania Coalition for Quality Post-Acute Care (PCQPAC), a 501(c)(6) non-pro�t corporation with the mission of assisting long-term care Provider Members in the transition to Community Health Choices (“CHC”) Medicaid Managed Care and in the process of contracting with Community Health Choices Managed Care Organizations (“MCOs”). PCQPAC represents its high quality post-acute care providers/members in contracting with Managed Care Organizations (CHC-MCOs), ensuring that providers are receiving sustainable future reimbursement rates. PCQPAC provides members with ongoing support and representation, both from a lobbying and legal perspective, in managing all ongoing operational issues with DHS and CHC-MCOs as they arise.
PCQPAC’s Quality Care Parameters:A current CMS rating between 3 –5 stars or a 3 –5 star CMS rating during the last 2 quarterly reporting periods. �e PCQPAC Board may vote to amend or supplement these parameters in the future. PCQPAC’s Membership Fee:Members will be charged a $30 per bed yearly fee. �ere is a $30,000.00 cap for multi-facility organizations with common ownership. Membership will run through December 31 of a given year and will be auto-renewed on January 1st of the subsequent year, unless communicated otherwise with PCQPAC. �e PCQPAC Board has the jurisdiction to vote on modifying the membership fee, if deemed necessary. PCQPAC’s Current Board Members:• President: Alicia Silliman, NHA, Nursing Home Administrator at St. Luke’s University Health Network • Treasurer: Paul Lieber, NHA, Director of Health Care Operations at JDK Management Company, LP• Secretary: Ben Kurland, LNHA, CDP, RAC-CT, CEO at Allaire Healthcare Services
Capozzi Adler, P.C. serves as legal counsel for PCQPAC. Triad Strategies provides lobbying support for PCQPAC.
WHY SHOULD YOUR FACILITY(S) JOIN PCQPAC?
PCQPAC provides strength in numbers: We are at a critical moment in the history of the long-term care health system in the Commonwealth and history has taught us that there is strength in numbers in meeting all of the challenges that are on the horizon. Other states, including New Jersey, have successfully formed similar coalitions and provider networks, as a response to the implementation of Managed Care. Even with the implementation of rate �oors and the continuity of care period, there remains several serious open questions with respect to supplemental payments to providers including, but not limited to:• Disproportionate Share Payments• Appendix 4, Access to Care Payments, including: o Nursing facility assessment tax related allowable costs for non-public nursing facilities o Nursing facility assessment tax quarterly supplemental payments for non-public nursing facilities o Supplemental ventilator care o Tracheostomy care and equipment o Vent equipment and supplies o Exceptional DME payments. To be clear, DHS has announced that the timing and form of these payments, even though they are included in the capitated payments paid to the MCOs, must be negotiated between the providers and the MCOs. �is is an area where there is strength in negotiating in numbers. PCQPAC will provide members with assistance in regards to these issues.
PCQPAC assists with operational issues arising with CHC-MCOs:• Members facilities are encouraged to report operational
problems arising with CHC-MCOs to PCQPAC. A PCQPAC representative will work with CHC-MCO representatives to remedy the issue for all PCQPAC member facilities. �is may include intervention via a lobbyist or attorney. • PCQPAC will assist and represent members in handling CHC-MCO transportation issues that may arise. • Members will be regularly surveyed in order to identify areas where PCQPAC support is needed. Survey results will be distributed to membership. • Members will receive frequent updates on Community Health Choices implementation. A PCQPAC representative will attend various CHC-MCO meetings and distribute notes to membership after each meeting. �is will ensure that PCQPAC member facilities are immediately aware of updates and changes, without sending their own representative to meetings. PCQPAC provides members with one voice in negotiating sustainable rates:• PCQPAC negotiates contracts with MCOs on behalf of members entering CHC in January 2020. • PCQPAC educates and assists contracted members with negotiating yearly renewal contracts with CHC-MCOs. • PCQPAC negotiates Quality Parameters for MCO contracting.• PCQPAC negotiates sustainable rates after expiration of the rate �oor. If you are interested in becoming a member of PCQPAC, please contact Cassandra Reed at [email protected] or 717-233-4101 for a full membership packet. For questions about CHC Managed Care and CHC-MCO contracting, please contact Daniel Natirbo�, Esq. at [email protected] or 717-233-4101.
I want to focus this installment of our series known as “Take Control of your Accounts Receivable” on a critical player in your e�orts to watch your bottom line: the resident’s “Resident Representative”, or, as some nursing facilities in Pennsylvania refer to this person, the “Responsible Party” or
“Designated Representative”. Our installments in this series share with you tips, legal updates, personal observations, and “lessons learned” to help you improve the e�ectiveness of your Accounts Receivable Management Program. Why do I want to devote this
space to a discussion of the Resident Representative? �e weakest link in the admissions and account management process that negatively impacts a nursing facility’s bottom line is frequently the identi�cation and preparation of a resident’s Resident Representative.
TAKE CONTROL OF YOUR RESIDENT ACCOUNTS RECEIVABLE: YOUR RESIDENT’S RESIDENT REPRESENTATIVE
�e reasons for this weak link include one or more of the following:
(1) �e Admission Agreement lacks a clear de�nition, or any de�nition whatsoever, of a Resident Representative, or it lacks a description of the duties and responsibilities of the Resident Representative; (2) �e Admission Agreement properly explains that a Resident Representative will not be held personally liable for the debt, but, it fails to disclose that a Resident Representative can potentially be held �nancially liable in the amount that he or she fails to transfer from the resident’s income or assets despite having access to the resident’s resources;
(3) �e Admission Director identi�es the resident on the �rst page of the Admission Agreement as the Resident Representative, although a member of the resident’s family or a friend signs the signature line on the last page of the Admission Agreement;
(4) �e signature line of the Admission Agreement for the Resident Representative does not identify the signatory as the resident’s Resident Representative; (5) �e Admission Director fails to identify a Resident Representative or neglects to name the person on the �rst page of the Admissions Agreement;
(6) �e Admission Director neglects to have the Resident Representative
sign the last page of the Admission Agreement, which is a legally enforceable contract;
(7) �e Admission Director fails to adequately explain to the Resident Representative his or her duties or responsibilities, including assistance in the MA application process. Or, worse, the Admission Director directs the Resident Representative to not make any payments or escrow the resident’s income while Medicaid is pending;
(8) �e Admission Director fails to adequately explain to the Resident Representative that the Admission Agreement is a legally enforceable and binding contract;
(9) �e Admission Director or Business O�ce fails to explain to the Resident Representative the bene�ts of arranging direct deposit of the resident’s Social Security income either as Representative Payee or through the Resident Fund Management System. �e same issue applies to the resident’s pension income;
(10) �e Business O�ce fails to mail a monthly bill to the Resident Representative during the �rst several months after the facility admits the resident as a matter of policy while MA is pending; and,
(11) Finally, the Business O�ce simply allows the Resident Representative to avoid payment or not cooperate for too
long. In other words, the Resident Representative is taking advantage of a disorganized Business O�ce or its passive attempts at collection. When the weak link breaks . . . I am certain that you have experienced one or more of the following situations as a result of the weaknesses above: (1) �e family spends the resident’s money on non-allowable expenses although the relative or resident truly believes that these expenditures were justi�ed;
(2) A relative intentionally or fraudulently diverts the resident’s funds for personal consumption or investments; (3) �e Resident Representative fails to fully cooperate in the Medicaid application process, including the transfer of �nancial documents or information; or,
(4) Although the CAO directs the Resident Representative to “spend down” the resident’s funds to qualify for Medicaid, he or she refuses, even if the amount is nominal. As a result of this last scenario, you’re attempting to collect against a private pay resident with insigni�cant �nancial resources. What law allows you to contract with a resident’s family member or friend to act as the Resident Representative? �e term, “Resident
Representative,” is generally accepted under the law. �e Nursing Home Reform Act of 1987 permits the nursing facility to contract with a person who has access to the resident’s income and resources to transfer payments from the resident’s income and resources. 42 U.S.C. §1396r(c)(5)(B)(ii). Furthermore, the Pennsylvania Administrative Code permits a resident to name a Resident Representative. 28 Pa. Code §201.24(a). �is section of the Code de�nes the Resident Representative as someone who can make decisions on behalf of the resident, but it does not obligate a Resident Representative to make payments. In addition, this section prevents a nursing facility from naming an employee as a resident’s Resident Representative, unless a court appoints the employee as the resident’s guardian. Accordingly, an Admission Agreement must be clear as to the de�nition, duties, and responsibilities of a Resident Representative to be legally enforceable. If the Admission Agreement is clear, the Resident Representative can be held legally liable for his or her failure to perform his duty to remit payment form the resident’s funds. Of course, the Resident Representative may also be held liable personally if he diverts the resident’s funds for non-allowable purposes, which requires a court order. Is a Resident Representative a Guarantor? No. As most of you are aware, Medicaid law expressly restricts a nursing facility that is eligible for Medicaid or Medicare reimbursement from requiring a third party guarantee of payment to the facility as a condition of admission or continued stay. A Guarantor is someone who is personally liable for a debt from his or her own assets. An example of a Guarantor is the father who co-signs a car loan for his daughter. �e law does not prohibit
a third person voluntarily guarantee payment to the nursing facility. I continue to see, however, the term Guarantor in admission agreements, admission fact sheets, or account invoices even though the admission agreement does not clearly obligate a third party as a guarantor. Why do you need to take a look at the Resident Representative clauses of your Admission Agreement? Although Pennsylvania court case law regarding the legal �nancial liability of a Resident Representative is scarce, the Allegheny County Court of Common Pleas recently addressed this issue in Five Star Quality Care, Inc d/b/a Overlook Green v. Joyce and Charles Yablonski. �e opinion of this Court will have a strong persuasive e�ect on other county courts throughout Pennsylvania. In summary, the Court disallowed the nursing facility’s claim against a resident’s “Responsible Party” because the Admission Agreement did not “clearly and unambiguously” de�ne the term “Responsible Party” or obligate the Responsible Party to guarantee payment. In fact, the Court expressly preferred the term “Resident Representative”, rather than “Responsible Party”, because the usage of “Resident Representative” is more widely accepted and de�ned in state statutes. Because it is the nursing facility or its management company that drafts the Admission Agreement, the burden is on the nursing facility to ensure the requirements and obligations of a Resident Representative are “clear and unambiguous.” Otherwise, the nursing facility’s attempts to collect a debt against a Resident Representative in a court may be weakened or unsuccessful. If you would like more information on how your Admission Agreement can be used or modi�ed to protect your facility’s bottom line, including an analysis and revision of the contract terms related to the Resident Representative, you may contact Andrew R. Eisemann, Esq. at our Firm at [email protected] or 717-233-4101.
5
I want to focus this installment of our series known as “Take Control of your Accounts Receivable” on a critical player in your e�orts to watch your bottom line: the resident’s “Resident Representative”, or, as some nursing facilities in Pennsylvania refer to this person, the “Responsible Party” or
“Designated Representative”. Our installments in this series share with you tips, legal updates, personal observations, and “lessons learned” to help you improve the e�ectiveness of your Accounts Receivable Management Program. Why do I want to devote this
space to a discussion of the Resident Representative? �e weakest link in the admissions and account management process that negatively impacts a nursing facility’s bottom line is frequently the identi�cation and preparation of a resident’s Resident Representative.
�e reasons for this weak link include one or more of the following:
(1) �e Admission Agreement lacks a clear de�nition, or any de�nition whatsoever, of a Resident Representative, or it lacks a description of the duties and responsibilities of the Resident Representative; (2) �e Admission Agreement properly explains that a Resident Representative will not be held personally liable for the debt, but, it fails to disclose that a Resident Representative can potentially be held �nancially liable in the amount that he or she fails to transfer from the resident’s income or assets despite having access to the resident’s resources;
(3) �e Admission Director identi�es the resident on the �rst page of the Admission Agreement as the Resident Representative, although a member of the resident’s family or a friend signs the signature line on the last page of the Admission Agreement;
(4) �e signature line of the Admission Agreement for the Resident Representative does not identify the signatory as the resident’s Resident Representative; (5) �e Admission Director fails to identify a Resident Representative or neglects to name the person on the �rst page of the Admissions Agreement;
(6) �e Admission Director neglects to have the Resident Representative
sign the last page of the Admission Agreement, which is a legally enforceable contract;
(7) �e Admission Director fails to adequately explain to the Resident Representative his or her duties or responsibilities, including assistance in the MA application process. Or, worse, the Admission Director directs the Resident Representative to not make any payments or escrow the resident’s income while Medicaid is pending;
(8) �e Admission Director fails to adequately explain to the Resident Representative that the Admission Agreement is a legally enforceable and binding contract;
(9) �e Admission Director or Business O�ce fails to explain to the Resident Representative the bene�ts of arranging direct deposit of the resident’s Social Security income either as Representative Payee or through the Resident Fund Management System. �e same issue applies to the resident’s pension income;
(10) �e Business O�ce fails to mail a monthly bill to the Resident Representative during the �rst several months after the facility admits the resident as a matter of policy while MA is pending; and,
(11) Finally, the Business O�ce simply allows the Resident Representative to avoid payment or not cooperate for too
long. In other words, the Resident Representative is taking advantage of a disorganized Business O�ce or its passive attempts at collection. When the weak link breaks . . . I am certain that you have experienced one or more of the following situations as a result of the weaknesses above: (1) �e family spends the resident’s money on non-allowable expenses although the relative or resident truly believes that these expenditures were justi�ed;
(2) A relative intentionally or fraudulently diverts the resident’s funds for personal consumption or investments; (3) �e Resident Representative fails to fully cooperate in the Medicaid application process, including the transfer of �nancial documents or information; or,
(4) Although the CAO directs the Resident Representative to “spend down” the resident’s funds to qualify for Medicaid, he or she refuses, even if the amount is nominal. As a result of this last scenario, you’re attempting to collect against a private pay resident with insigni�cant �nancial resources. What law allows you to contract with a resident’s family member or friend to act as the Resident Representative? �e term, “Resident
Representative,” is generally accepted under the law. �e Nursing Home Reform Act of 1987 permits the nursing facility to contract with a person who has access to the resident’s income and resources to transfer payments from the resident’s income and resources. 42 U.S.C. §1396r(c)(5)(B)(ii). Furthermore, the Pennsylvania Administrative Code permits a resident to name a Resident Representative. 28 Pa. Code §201.24(a). �is section of the Code de�nes the Resident Representative as someone who can make decisions on behalf of the resident, but it does not obligate a Resident Representative to make payments. In addition, this section prevents a nursing facility from naming an employee as a resident’s Resident Representative, unless a court appoints the employee as the resident’s guardian. Accordingly, an Admission Agreement must be clear as to the de�nition, duties, and responsibilities of a Resident Representative to be legally enforceable. If the Admission Agreement is clear, the Resident Representative can be held legally liable for his or her failure to perform his duty to remit payment form the resident’s funds. Of course, the Resident Representative may also be held liable personally if he diverts the resident’s funds for non-allowable purposes, which requires a court order. Is a Resident Representative a Guarantor? No. As most of you are aware, Medicaid law expressly restricts a nursing facility that is eligible for Medicaid or Medicare reimbursement from requiring a third party guarantee of payment to the facility as a condition of admission or continued stay. A Guarantor is someone who is personally liable for a debt from his or her own assets. An example of a Guarantor is the father who co-signs a car loan for his daughter. �e law does not prohibit
a third person voluntarily guarantee payment to the nursing facility. I continue to see, however, the term Guarantor in admission agreements, admission fact sheets, or account invoices even though the admission agreement does not clearly obligate a third party as a guarantor. Why do you need to take a look at the Resident Representative clauses of your Admission Agreement? Although Pennsylvania court case law regarding the legal �nancial liability of a Resident Representative is scarce, the Allegheny County Court of Common Pleas recently addressed this issue in Five Star Quality Care, Inc d/b/a Overlook Green v. Joyce and Charles Yablonski. �e opinion of this Court will have a strong persuasive e�ect on other county courts throughout Pennsylvania. In summary, the Court disallowed the nursing facility’s claim against a resident’s “Responsible Party” because the Admission Agreement did not “clearly and unambiguously” de�ne the term “Responsible Party” or obligate the Responsible Party to guarantee payment. In fact, the Court expressly preferred the term “Resident Representative”, rather than “Responsible Party”, because the usage of “Resident Representative” is more widely accepted and de�ned in state statutes. Because it is the nursing facility or its management company that drafts the Admission Agreement, the burden is on the nursing facility to ensure the requirements and obligations of a Resident Representative are “clear and unambiguous.” Otherwise, the nursing facility’s attempts to collect a debt against a Resident Representative in a court may be weakened or unsuccessful. If you would like more information on how your Admission Agreement can be used or modi�ed to protect your facility’s bottom line, including an analysis and revision of the contract terms related to the Resident Representative, you may contact Andrew R. Eisemann, Esq. at our Firm at [email protected] or 717-233-4101.
KEEPING COMPLIANT WHERE FEDERAL OVERPAYMENT RULE SET ASIDE, AFFORDABLE CARE ACT RULED UNCONSTITUTIONAL, APPEALS PENDING
In 2016, CMS published its Overpayment Rule, 81 F.R. 7652 (2/12/2016), e�ective March 14, 2016, 42 CFR Part 401, Subpart D, to clarify when and how Medicare and Medicaid providers were to identify and return “overpayments” in order to avoid False Claims Act liability added by the A�ordable Care Act (ACA). �e new Compliance and Ethics Program Condition of Participation for Nursing Facility Providers, 42 CFR § 483.85, with its e�ective date of November 28, 2019 coming soon, also implements a requirement added by the ACA. While e�orts to pass laws that “repeal and replace” the ACA have not succeeded to date, there have been two recent court victories on this front. First, in September 2018, the U.S. District Court for the District of Columbia, in a challenge to the Overpayment Rule under the Federal Administrative Procedures Act (APA), ruled that the entire Rule must be set aside. UnitedHealthcare Ins. Co. v. Azar, 330 F.Supp.3d 173 (D.D.C. 2018), currently on appeal to the U.S. Court of Appeals for the D.C. Circuit (No. 18-5326).
I want to focus this installment of our series known as “Take Control of your Accounts Receivable” on a critical player in your e�orts to watch your bottom line: the resident’s “Resident Representative”, or, as some nursing facilities in Pennsylvania refer to this person, the “Responsible Party” or
“Designated Representative”. Our installments in this series share with you tips, legal updates, personal observations, and “lessons learned” to help you improve the e�ectiveness of your Accounts Receivable Management Program. Why do I want to devote this
space to a discussion of the Resident Representative? �e weakest link in the admissions and account management process that negatively impacts a nursing facility’s bottom line is frequently the identi�cation and preparation of a resident’s Resident Representative.
�e reasons for this weak link include one or more of the following:
(1) �e Admission Agreement lacks a clear de�nition, or any de�nition whatsoever, of a Resident Representative, or it lacks a description of the duties and responsibilities of the Resident Representative; (2) �e Admission Agreement properly explains that a Resident Representative will not be held personally liable for the debt, but, it fails to disclose that a Resident Representative can potentially be held �nancially liable in the amount that he or she fails to transfer from the resident’s income or assets despite having access to the resident’s resources;
(3) �e Admission Director identi�es the resident on the �rst page of the Admission Agreement as the Resident Representative, although a member of the resident’s family or a friend signs the signature line on the last page of the Admission Agreement;
(4) �e signature line of the Admission Agreement for the Resident Representative does not identify the signatory as the resident’s Resident Representative; (5) �e Admission Director fails to identify a Resident Representative or neglects to name the person on the �rst page of the Admissions Agreement;
(6) �e Admission Director neglects to have the Resident Representative
sign the last page of the Admission Agreement, which is a legally enforceable contract;
(7) �e Admission Director fails to adequately explain to the Resident Representative his or her duties or responsibilities, including assistance in the MA application process. Or, worse, the Admission Director directs the Resident Representative to not make any payments or escrow the resident’s income while Medicaid is pending;
(8) �e Admission Director fails to adequately explain to the Resident Representative that the Admission Agreement is a legally enforceable and binding contract;
(9) �e Admission Director or Business O�ce fails to explain to the Resident Representative the bene�ts of arranging direct deposit of the resident’s Social Security income either as Representative Payee or through the Resident Fund Management System. �e same issue applies to the resident’s pension income;
(10) �e Business O�ce fails to mail a monthly bill to the Resident Representative during the �rst several months after the facility admits the resident as a matter of policy while MA is pending; and,
(11) Finally, the Business O�ce simply allows the Resident Representative to avoid payment or not cooperate for too
long. In other words, the Resident Representative is taking advantage of a disorganized Business O�ce or its passive attempts at collection. When the weak link breaks . . . I am certain that you have experienced one or more of the following situations as a result of the weaknesses above: (1) �e family spends the resident’s money on non-allowable expenses although the relative or resident truly believes that these expenditures were justi�ed;
(2) A relative intentionally or fraudulently diverts the resident’s funds for personal consumption or investments; (3) �e Resident Representative fails to fully cooperate in the Medicaid application process, including the transfer of �nancial documents or information; or,
(4) Although the CAO directs the Resident Representative to “spend down” the resident’s funds to qualify for Medicaid, he or she refuses, even if the amount is nominal. As a result of this last scenario, you’re attempting to collect against a private pay resident with insigni�cant �nancial resources. What law allows you to contract with a resident’s family member or friend to act as the Resident Representative? �e term, “Resident
Representative,” is generally accepted under the law. �e Nursing Home Reform Act of 1987 permits the nursing facility to contract with a person who has access to the resident’s income and resources to transfer payments from the resident’s income and resources. 42 U.S.C. §1396r(c)(5)(B)(ii). Furthermore, the Pennsylvania Administrative Code permits a resident to name a Resident Representative. 28 Pa. Code §201.24(a). �is section of the Code de�nes the Resident Representative as someone who can make decisions on behalf of the resident, but it does not obligate a Resident Representative to make payments. In addition, this section prevents a nursing facility from naming an employee as a resident’s Resident Representative, unless a court appoints the employee as the resident’s guardian. Accordingly, an Admission Agreement must be clear as to the de�nition, duties, and responsibilities of a Resident Representative to be legally enforceable. If the Admission Agreement is clear, the Resident Representative can be held legally liable for his or her failure to perform his duty to remit payment form the resident’s funds. Of course, the Resident Representative may also be held liable personally if he diverts the resident’s funds for non-allowable purposes, which requires a court order. Is a Resident Representative a Guarantor? No. As most of you are aware, Medicaid law expressly restricts a nursing facility that is eligible for Medicaid or Medicare reimbursement from requiring a third party guarantee of payment to the facility as a condition of admission or continued stay. A Guarantor is someone who is personally liable for a debt from his or her own assets. An example of a Guarantor is the father who co-signs a car loan for his daughter. �e law does not prohibit
a third person voluntarily guarantee payment to the nursing facility. I continue to see, however, the term Guarantor in admission agreements, admission fact sheets, or account invoices even though the admission agreement does not clearly obligate a third party as a guarantor. Why do you need to take a look at the Resident Representative clauses of your Admission Agreement? Although Pennsylvania court case law regarding the legal �nancial liability of a Resident Representative is scarce, the Allegheny County Court of Common Pleas recently addressed this issue in Five Star Quality Care, Inc d/b/a Overlook Green v. Joyce and Charles Yablonski. �e opinion of this Court will have a strong persuasive e�ect on other county courts throughout Pennsylvania. In summary, the Court disallowed the nursing facility’s claim against a resident’s “Responsible Party” because the Admission Agreement did not “clearly and unambiguously” de�ne the term “Responsible Party” or obligate the Responsible Party to guarantee payment. In fact, the Court expressly preferred the term “Resident Representative”, rather than “Responsible Party”, because the usage of “Resident Representative” is more widely accepted and de�ned in state statutes. Because it is the nursing facility or its management company that drafts the Admission Agreement, the burden is on the nursing facility to ensure the requirements and obligations of a Resident Representative are “clear and unambiguous.” Otherwise, the nursing facility’s attempts to collect a debt against a Resident Representative in a court may be weakened or unsuccessful. If you would like more information on how your Admission Agreement can be used or modi�ed to protect your facility’s bottom line, including an analysis and revision of the contract terms related to the Resident Representative, you may contact Andrew R. Eisemann, Esq. at our Firm at [email protected] or 717-233-4101.
Enclosed is an Invitation to Our Fre
e, S
emi-A
nnua
l Sem
inar
7
Second, in December 2018, the U.S. District Court for the Northern District of Texas ruled, in a challenge by several States to the entire ACA as amended by the Tax Cuts and Jobs Act of 2017, reducing the ACA’s shared responsibility payment to -0-, that the entire ACA, including the overpayment provision, must be stricken as unconstitutional. Texas v. U.S., 340 F.Supp.3d 579 (N.D. Tex. 2018). Since the District Court granted a stay of its decision pending review by the U.S. Court of Appeals for the Fifth Circuit, 352 F.Supp.3d 665 (N.D. Tex. 2018), appeal pending at No. 19-10011, the ACA remains “in e�ect.” Even if these two e�orts are successful in further reducing providers’ False Claims Act liability, these lower court victories should not change provider compliance program behavior. Longstanding OIG Compliance Guidance, issued before the enactment of the ACA, advised that providers must take decisive steps to correct identi�ed noncompliance, including the return of any overpayments. Both the OIG and the Pennsylvania Medicaid Program have established self-disclosure protocols for providers “to voluntarily come forward and disclose overpayments or improper payments.” Participation in these programs and continuing current compliance program e�orts can reduce provider risks, including avoidance of compulsory Corporate Integrity Agreements, reduction in potential damages, and deferral of actual repayment pending settlement. State and Federal audits for potential overpayments are also not letting up. If you have concerns about how to deal with possible overpayments identi�ed through your compliance program or related to recent audit results, you may contact Glenn A. Parno, Esq. ([email protected]) or Bruce G. Baron, Esq. ([email protected]) at our Firm.
�e Stylistics Perform at our Annual Holiday Party.
Lou Capozzi presents “NLRB & Union Activity Update” at our Semi-Annual Seminar in Grantville, PA.
RECENT AND UPCOMING EVENTS
Capozzi Adler, P.C.Attorneys at Law2933 N. Front StreetHarrisburg, PA 17110
Your Legal BriefCapozzi Adler, P.C. Attorneys at Law
Your LegalBriefJune
13Andrew Eisemann, Esq., Bruce Baron, Esq., and Joseph Gentile, Esq. will hold a “Take Control of Your Accounts Receivable: Maximize Your Reimbursement” workshop at Mohegan Sun Pocono in Wilkes Barre, PA. Admission is free along with 4 hours of continuing education credits for NHAs and CPAs. NHAs, CFOs, Business O�ce Managers, and Billing Supervisors are encouraged to attend! For more information or to register, email Cassandra at [email protected]. Program information is enclosed in the middle of this newsletter.
Dec.
8Capozzi Adler, P.C. held its annual Holiday Party & Fundraiser, featuring musical performances by local band “Unum” and R&B group “�e Stylistics.” Over $15,000 was raised for UnitedLeukodystrophy Foundation, Speranza Animal Rescue and the Harrisburg Symphony Youth Orchestra.
Nov.
9Our popular semi-annual seminar “Current Legal Issues for Pennsylvania Nursing Facilities” returned to Hollywood Casino in Grantville.
Enclosed is an Invitation to Our Free, Semi-Annual Seminar
Jan.
1Capozzi Adler, P.C. proudly became a 2019 Premier Partner of LeadingAge PA.
Enclosed is an Invitation to Our Fre
e, S
emi-A
nnua
l Sem
inar
May
17Capozzi Adler, P.C.’s popular semi-annual seminar “Current Issues for Pennsylvania Nursing Facilities” is returning to Rivers Casino in Pittsburgh, PA. Admission is free along with 7 hours of continuing education credits for NHAs, CPAs, and attorneys. For more information or to register, email Cassandra at [email protected]. Program information is enclosed in the middle of this newsletter.
June
11Our 21th Anniversary of serving the legal needs of health care providers.
June
13Daniel Natirbo�, Esq., Bruce Baron, Esq., and Tim Zeigler will hold a “Maximize your Reimbursement under CHC Medicaid Managed Care” workshop at Mohegan Sun Pocono in Wilkes Barre, PA. Admission is free along with 2 hours of continuing education credits for NHAs and CPAs. For more information or to register, email Cassandra at [email protected]. Program information is enclosed inside this newsletter.
June
19Daniel Natirbo�, Esq., Glenn Parno, Esq., and Brandon Williams, Esq. will present “Medical Marijuana and the Federally Licensed/Certi�ed Health Care Provider from 2:30pm – 4:00pm at LeadingAge PA’s Annual Conference.
July
12Capozzi Adler, P.C. will hold its 10th Annual File Burning Fundraiser, with musical entertainment, a �reworks show by Fireworks Extravaganza, and a fundraiser for Maranatha Carlisle and Safe Harbour.
June
19-21Visit us at exhibitor table 201 at the LeadingAge PA Annual Conference & Exposition at the Hershey Lodge in Hershey, PA.
