Legal Issues

KEY TERMS

Term	Definition
Abuse	Unknowingly defrauding the Medicare program by obtaining payment for items or services when there is not legal entitlement to the payment.
Arbitration	Legal method where the patient and physician may agree to resolve any controversy that may occur before an impartial panel.
Civil Law	Law that enforces private rights and liabilities, as distinguished from criminal law.
Defamation	Slander or libel or injury to reputation.
Defendant	Person defending a case. In a malpractice case this is usually the physician.
Deposition	Taking of testimony from a witness made under oath although not in an open court. Information is written down or taped to be used in the case of a trial.
Embezzlement	Willful act of illegally taking an employer’s money by an employee.
Ethics	Moral principles and standards in the ideal relationship between a physician and patient or between physicians.
Fraud	An intentional misrepresentation of facts to deceive or mislead another.
Judgment	The official decision of the court in regard to an action or suit.
Litigation	A lawsuit.
Locum Tenens	A physician who substitutes for another physician who is out of the office for an extended period of time.
Malfeasance	Wrongful treatment of a patient.
Misfeasance	Lawful treatment performed or provided in the wrong way.
Negligence	Omission to do something that should be done under ordinary circumstances. Negligence can involve a wrongful action or an omission of care.
Nonfeasance	Failure by a physician to anything in regard to a patient’s medical condition when the physician has an obligation to act.
Open Contract	An account where charges are made from time to time with a 5-year limitation for collection from the date the charge incurred.
PHI	Protected Health Information. Data that could be used to learn a person’s health information.
Qui Tam	Recovery of a penalty brought by an informer in a situation. Generally, a percentage of the recovery is given to the informer for payment.
Statute of Limitations	The time limit in which a lawsuit may be filed.
Written Contract	An agreement signed by a patient in which specific payment amounts are made on the account on a monthly basis. These accounts usually have high amounts that will take over 4 months to repay and generally have a 6-year limitation for collection.

Introduction

The purpose of this chapter is to describe some of the problems encountered in the performance of practice duties and to provide guidance on ways to avoid legal issues in medical records, billing, and collection activities.

The best policy for any practice is to practice within the guidelines of the law and to have an attorney who is skilled in laws concerning medical practices and policies. When in doubt concerning practice policy or guidelines, one should contact an attorney to determine the various rules and regulations for the particular state and circumstances.

It is not the author’s intent to replace legal counsel or to offer advice on legal matters. The intent is to direct the reader in identifying problems and situations that may require assistance from those who are versed in the rules and regulations governing your state policies and laws.

Medical Ethics

According to Mosby’s Medical, Nursing, & Allied Health Dictionary, ethics is defined as the science or study of moral values or principles, including ideals of autonomy, beneficence, and justice. Ethics are standards in which a medical practice determines the propriety of conduct in relationship to patients, physicians, and coworkers. Our modern code of medical ethics was adopted by the American Medical Association and is known as the “Principles of Medical Ethics.” Often in medicine, medical ethics and medical professional liability sometimes overlap.

Medical ethics and patient privacy have several factors in common. In forming the privacy rules discussed later in this chapter, you can see the parallel between ethics and HIPAA rulings. The following represent some of the standard guidelines of medical ethics used by medical practices.

Everything you see, hear, or read about a patient remains confidential and does not leave the office.

Never make critical remarks about the physician to a patient.

Do not discuss a patient’s condition within hearing distance of other patients.

Do not discuss patient information with acquaintances (yours or the patient’s).

Do not leave patient records or appointment books exposed on your desk.

Do not make critical statements about treatment given to a patient by another physician.

To obtain an in-depth understanding of the Code of Ethics for professional associations, visit the following web sites:

American Association of Medical Assistants	http://www.aama-ntl.org
American Health Information Management Association	http://www.ahima.org

Medical Records

A medical record is a written account of the reason a patient sought medical care and the treatment rendered by the physician. Records include:

Notes written in an office chart (progress notes)

Operative reports

Hospital summaries

Consultation notes

Laboratory/diagnostic studies

Radiology reports

Patients’ medical records and financial records contain health information. Health information includes any facts that relate to the past, present, or future physical or mental health or condition of an individual, the health care they received, or the payment for that health care.

The data that could be used to learn a person’s health information is called protected health information, or PHI. Under federal regulations, medical offices, insurance carriers, and any other company that processes patients’ health information electronically must protect the privacy and security of this PHI.

Protected Health Information: The HIPAA Privacy Rule

Congress passed the Health Insurance Portability and Accountability Act (HIPAA) in 1996 because of concerns regarding fraud (e.g., coding irregularities, medical necessity issues, and waiving co-pays and deductibles). Although the authority granted under the Federal False Claims Act provided CMS with regulatory authority to enforce fraud and abuse statutes, HIPAA extends that authority to all federal and state health care programs.

HIPAA provisions were designed to improve the portability and continuity of heath care coverage by:

Limiting exclusions for preexisting medical conditions.

Providing credit for prior health coverage and a process for transmitting certificates and other information concerning prior coverage to a new group health plan.

Providing new rights that allow individuals to enroll for health coverage when they lose other coverage, change from a group to individual plan, or have a new dependent.

Prohibiting discrimination in enrollment and premiums against employees and their dependents based on health status.

Guaranteeing availability of insurance coverage for small employers and renewability of coverage in both the small and large group markets.

Preserving the states’ traditional role through narrow preemption provisions in regulating health insurance.

Privacy Rule

The final HIPAA Privacy Rule was published by the Department of Health and Human Services (HHS) on December 28, 2000. The final rule took effect on April 14, 2003. The Privacy Rule creates national standards to protect individuals’ medical records and other PHI. The rule also gives patients greater access to their own medical records and more control over how their personal health information is used. The rule addresses the obligations of health care providers and health plans to protect health information.

The Privacy Rule requires the implementation of activities that include:

Providing information to patients about their privacy rights and how their information can be used.

Adopting clear privacy procedures for the practice, hospital, or plan.

Training employees so they understand the privacy procedures.

Designating an individual to be responsible for seeing that the privacy procedures are adopted and followed.

Securing patient records containing individually identifiable health information so they are not readily accessible to those who do not need them.

The HIPAA Privacy Rule covers patients’ protected health information. Under the Privacy Rule, medical practices may not use or disclose protected health information, except as the individual who is the subject of the information (or the individual’s personal representative) authorizes in writing or as needed for treatment, payment, and health care operations.

These terms refer to:

Treatment	Providing, coordinating, and managing health care for the patient, such as asking the patient’s insurance carrier for an authorization, a consultation between doctors on the patient’s case, or the referral of a patient from one physician to another.
Payment	All the activities the medical office does to be reimbursed by insurance companies and government health plans, including billing and collection activities.
Health Care Operations	Administrative, financial, and legal activities necessary to run the business of the medical office.

If a practice thinks it best, it may obtain patient consent for uses and disclosures of protected health information for treatment, payment, and health care operations. This consent is not required by the Privacy Rule, however. An authorization from the patient is required by the Privacy rule for the practice, hospital, or plan to use and disclose protected health information not otherwise allowed by the rule. Where the Privacy Rule requires patient authorization, voluntary consent is not sufficient to permit use or disclosure of protected health information unless it also satisfies the requirements of a valid authorization. A valid authorization is a detailed document that gives covered entities permission to use protected health information for specified purposes, which are generally other than treatment, payment, or health care operations.

An authorization must have: