In The News

Protecting Patient Privacy in Discarded Medical Records

Over the past few years, physician practices have implemented many policies and procedures to protect their patients' privacy in an effort to comply with the Privacy and Security Rule under HIPAA.


 They have adopted compliance plans and procedures to protect their patients' privacy in the transmission and storage and use of their protected health information (“PHI”).  The need to protect the privacy and security of this information does not end when the medical record is no longer needed by the practice.  Failing to implement reasonable safeguards to protect PHI in connection with disposal of your medical records could result in impermissible disclosures of PHI with the same risks and penalties as the disclosure of information from active medical records. In addition to the policies that your office has in place to secure its active medical records, every medical office should have developed a HIPAA compliant policy to dispose of medical records that are no longer part of a patients active medical file. This is particularly important in the age of electronic records. Any procedures for the proper disposal of medical records should specifically address the disposition of electronic PHI and the hardware or electronic media, such as PCs, hard drives, and disks, on which it is stored.


A physician’s office may not simply abandon PHI or dispose of it in dumpsters or other containers that are accessible by the public or other unauthorized persons. However, the Privacy and Security Rules do not provide any particular disposal method for PHI that will guarantee compliance. Instead, a practice should determine what is reasonable for their office and consider a methods potential risks to patient privacy, keeping in mind the form, type, and amount of PHI to be disposed of. For instance, the disposal of certain types of PHI such as name, social security number, driver’s license number, debit or credit card number, diagnosis, treatment information, or other sensitive information may warrant more care due to the risk that inappropriate access to this information may result in identity theft, employment or other discrimination, or harm to an individual’s reputation.


The Office of Civil Rights provides some guidance for disposing of PHI.  Depending on the circumstances, proper disposal methods may include (but are not limited to):


• Shredding or otherwise destroying PHI in paper records so that the PHI is rendered essentially unreadable, indecipherable, and otherwise cannot be reconstructed prior to it being placed in a dumpster or other trash receptacle;


• Maintaining PHI for disposal in a secure area and using a disposal vendor as a business associate to pick up and shred or otherwise destroy the PHI;


• In justifiable cases, based on the size and the type of the covered entity, and the nature of the PHI, depositing PHI in locked dumpsters that are accessible only by authorized persons, such as appropriate refuse workers;


• For PHI on electronic media, clearing (using software or hardware products to overwrite media with non-sensitive data), purging (degaussing or exposing the media to a strong magnetic field in order to disrupt the recorded magnetic domains), or destroying the media (disintegration, pulverization, melting, incinerating, or shredding).


There are also outside vendors who can assist a medical practice to appropriately dispose of PHI on its behalf.


 

Stephen Zralek to Discuss Laws of Social Media

Bone McAllester Norton attorney Stephen Zralek will discuss the laws of social media for "Digital Citizenship and the First Amendment: The final segment of Leadership and Civility in the Digital Age," a series moderated by former FCC Commissioner Deborah Taylor Tate.


This event features Gene Policinski, senior vice president and executive director of the First Amendment Center as he joins Deborah Taylor Tate for a discussion of the tenets of the First Amendment – religion, speech, press, assembly and petition – and how all have been affected in a digital world. Stephen Zralek will also join the conversation to discuss the evolving laws of social media, including defamation, marketing to children and employment issues.


Tuesday, April 26, 2011, 6 p.m.
Mullican Television Studio, Ezell Center, Lipscomb University
RSVP to Leah Davis at This email address is being protected from spambots. You need JavaScript enabled to view it. or call (615) 966-6155


 

April 2011 Newsletter Features Human Rights Leaders, ATHENA, Top 40, Margaritaville, Real Estate, & Medical Records

Bone McAllester Norton attorneys continue to gain recognition in the Nashville community.  The firm also sponsored "Day on the Hill" Luncheon for the Tennessee Bankers Association Young Lawyers Division, and made sure to keep the theme fun.  To read the rest of our newsletter, click here.

What are the roles of a Trademark Administrator?

By Paul Kruse

Last week we talked about the importance of having a trademark administrator. Here is a detailed list of what you should expect from yours:

A trademark administrator will periodically audit a company’s records  to:

  • Identify all  active trademark registrations currently owned by or assigned to the company  broken down by issuing country or entity.

  • Identify all  pending trademark applications currently owned by or assigned to the company  broken down by issuing country or entity.

  •  Identify all  trademark registrations and applications abandoned, cancelled or expired in the  past twenty-four months broken down by issuing country or entity.

  • Specify whether  the trademarks appearing in such applications or registrations are either still  being used or for which there is an intention to use at any point during the  next twelve months.

  • Provide a copy  of all trademark clearance searches and/or opinions relating to the  availability of a trademark obtained in the past twenty-four months.

  • Identify which  of the searched trademarks are being used or for which there is an intention to  use at any point during the next twelve months.

  • If applicable,  provide examples of all tags, labels, instruction manuals, containers and  product packaging used for any and all of the company’s goods.

  • If applicable,  provide examples of signs, photographs, brochures or advertisements for any and  all of the company’s goods and services.

  • Identify all  trademarks the company has considered adopting in the past twelve months.

  • Identify any  and all of the company trademarks that have been the subject of a potential or  actual trademark dispute being either asserted by or asserted against the  company.

  • Identify any  and all third party trademarks which the company knows or has reason to believe  conflict, or which others have claimed conflict, with those owned or licensed  by the company.

  • Identify any  litigation (including administrative proceedings before a government body)  involving a claim of trademark infringement and/or unfair competition in which  the company was a party.

  • Identify all  agreements and/or licenses (including those terminated or expired within the  past twelve months and those that have not yet begun) whereby the company is  given the right to use a third party’s trademarks.

  • Identify all  agreements and/or licenses (including those terminated or expired within the  past twelve months) whereby the company has given to a third party the right to  use any of the company’s trademarks.

  • Provide any and  all trademark assignments involving trademarks currently being used by the  company including those where use of the trademarks stopped within the  preceding twelve months and those where use of the trademarks is contemplated  to begin at any point during the next twelve months.

  • Identify any  and all domain names currently owned by the company.


Once information about the portfolio of marks is consolidated, active  management can begin.  For example, uniform  use of marks in the marketplace can be assured.   Core marks can be identified and focused upon.  Expansion  of trademarks can be decided based on a company’s strategic interests.  Licensing programs outside a company’s  traditional space can prove surprisingly lucrative.  With a trademark administrator in place, brand  extension opportunities can be easily identified and analyzed.

A trademark administrator also generates company wide awareness of the  value of the company’s marks.  This encourages  the proper use of marks within a company as well as a heightened awareness of  the need to protect marks in the marketplace.

Finally, by placing responsibility for a portfolio of marks with a  trademark administrator, a company will be able to easily grant security  interests in its marks if desired or ready them for sale in the event of an  asset purchase, merger or acquisition.

Paul Kruse is Best Lawyers 2012 Trademark Lawyer of the Year and  creator of CoreFour, a Trademark Vigilance Program.

Want to Limit Liability Against Copyright Infringement Claims when Hosting User Content on your Website?

If you host a website that invites the public to submit content, often called UGC (or User Generated Content), you may want to read the recent summary judgment decision in Arista Records LLC v. Myxer Inc. and stay tuned to the final outcome at trial.  Website hosts that allow UGC run the risk of being sued for copyright infringement, among other claims, because users sometimes submit material whose copyright belongs to someone else.  If a copyright owner sues you for copyright infringement in your role as a website host, one of the most common defenses asserted is that the web hosting is protected under the DMCA (Digital Millennium Copyright Act). 

On April 1, 2011, a federal court in California issued the above decision in a case pitting content owners against website hosts.  UMG Records and other music companies sued Myxer and its principals for copyright infringement because Myxer hosts a website that invites the public to upload music and then download it as ring tones on cell phones.  Myxer doesn't pay UMG anything, and UMG argues that it loses money every time a ring tone is downloaded through Myxer.

Myxer asserted two primary defenses: that its use was fair use and that it was protected by the DMCA's "safe harbors."  On summary judgment, the court rejected Myxer's fair use defense, finding that converting the songs into ring tones did not qualify as a "transformative" use and finding that Myxer's business model likely cut into UMG's market. 

But the court kept alive Myxer's DMCA defense.  It found that genuine issues of fact existed regarding Myxer's implementation of a DMCA policy and regarding the speed with which it removed allegedly infringing material.  Now it will be up to Myxer to prevail on this defense at trial.

Just like Myxer is hoping to do, businesses that allow the public to post content on their websites may limit their liability against copyright infringement lawsuits by following some steps under the DMCA.  As a ground rule, if you create or direct content on your website that infringes on another's copyright, you can't turn to the DMCA for help.  But if all you do is host content created by others, to get the benefits of DMCA protection you need to (1) adopt a  DMCA policy and communicate it to your users, (2) appoint a DMCA agent, (3) follow the DMCA steps of quickly responding to accusations of hosting material that infringes another's copyright, (4) permanently remove repeat infringers, and (5) receive no financial benefit directly attributable to any infringing activity on your site. 

To read more about how to protect your business under the DMCA, check out this great resource from the EFF (Electronic Frontier Foundation), or contact an attorney with experience in copyrights and intellectual property law.

Change at the TABC

In March we saw a change in the  composition of the Tennessee Alcoholic Beverage Commission.  Governor Haslam appointed two new members,  and in an unusual political move, reappointed longtime TABC member John  Jones.  Given his historical ties to the  Democratic party, Jones was likely reappointed to provide continuity and  historical perspective to the three person commission and bring consistent  application of the complicated and often arcane laws that regulate liquor in Tennessee.  Jones’ father served on the original TABC  when it was established in the 1960’s, and a Jones family member has always  served as a TABC Commissioner.  We see the appointment of Jones as being consistent with the Governor’s broad vision  of enhancing Tennessee's  reputation as a business-friendly state.

The two new Commissioners are  Mary McDaniel and Bryan Kaegi.

Commissioner Kaegi, the Middle  Tennessee representative, has a long history of support for prominent  Republican campaigns.  He currently works  with Persuasion Partners, a high-profile political campaign service.  Commissioner Kaegi served on the 2010  Tennessee Victory Leadership Team that led and funded the successful TNGOP get  out the vote campaign, was Finance Director for Senator Lamar Alexander and  also the former Finance Director for the Tennessee Republican Party. He served  as Finance Director for the Tennessee Victory program for President Bush in  2000 and 2004.  His sister, Kim Kaegi,  was Governor Haslam’s finance director.

Commissioner McDaniel, the West Tennessee representative, is recently retired FedEx  Vice President of Aircraft Materiel.  Her  career with FedEx spanned 30 years and she managed aircraft parts inventory and  technical support for the FedEx global fleet.   She is President of the Board of Trustees for Southwest Tennessee   Community College, her  alma mater, and leads fundraising efforts for the college.

We say farewell to Senator Harlan  Matthews and Cynthia Bond, who served the state as Commissioners for the past  eight years, and welcome Commissioners Kaegi and McDaniel to our insane little  world.  We are glad to see the return of  Commissioner Jones for another term.

At the conclusion of April's  regular TABC meeting, Commissioner Jones announced that he was stepping down as  chair. Commissioner Jones has chaired the Tennessee ABC for longer than we  recall.  Commissioner McDaniel was  appointed the new Chair and promised to spend a lot of time with the staff  helping out with TABC functions.  For  example, Commissioner McDaniel attended the National Conference of State Liquor  Administrators and spoke to the group.

Commissioner McDaniel’s  assistance could not come at a better time.  The staff at the TABC is pretty thin and seems to be getting thinner all  the time.  There are numerous high level  vacancies.  Acting Assistant Director  Melinda Arrington departed in May. Former Assistant Director Carolyn Smith  departed late last year. Senior ABC agents Mike Cawthon and Al Watson have  retired.  Hiring freezes have left a  number of key positions vacant.

The ABC was already a thinly staffed agency charged with overseeing several thousand licenses.  Director Danielle Elks is now filling the role of three staff attorneys and also leading the agency. ABC agents are  sparse.  Although licensees do not look  forward to stings, ABC agents are vital to conducting inspections necessary for  issuance of licenses to new businesses and changes of ownership.  In addition, the General Assembly is passing laws that create more classes of licenses and opening up the number of eligible  locations and entities that can obtain licenses; thus, further increasing the workload of a diminished staff.

So far, the ABC has done an admirable  job of working through this tough time. We hope that help is on the way, as  backlogs are certain to build up and morale can easily suffer.

Griffin Technology Hosts WaterCooler

WaterCooler is a monthly networking event for "young" entrepreneurs.  (I take liberty with use of the word "young" since my co-founder and I are pushing 40, and since we'd like to stay involved for a while.  With that in mind, we include anyone in their 20s, 30s and 40s.)  We started this fun venture in September 2009 and highlight a different local business or expert each time.  Lately we've been enjoying the field trips, visiting Yazoo Brewery, Olive & Sinclair Chocolate Co., and (coming up on April 18) Corsair Distillery.  It's a casual way to meet others who are active in the business, cultural and philanthropic worlds of Nashville.  Hopefully connections will be made at WaterCooler that spur new entrepreneurial and community collaborations. Griffin Technology graciously hosted us on April 23.  Jackie Ballinger, its Marketing and PR guru, welcomed each guest and provided us with an incredible array of food and drink.  Also greeting guests as they arrived was this VW bus, which employees use for impromptu meetings, and which Griffin has traveled in for marketing at SXSW and Bonnaroo, to name a few:
Photo courtesy of Griffin Technology

Mark Rowan, Griffin's President, spoke about its background, its international reach and its commitment to Nashville.
Photo courtesy of Griffin Technology

It was clear that Griffin is a dominant player in the global tech scene, and we're lucky to have it right here in our own backyard.

After, Jackie led us on a tour of their new work space.  We saw the wall of awesome accessory covers, the vending machine stocked with beer, and the work station decked out in action figures -- none of which is a regular feature where most of us work:



In the highest form of flattery (jealousy), everyone decided to ditch their current job and apply to work at Griffin.

Here are some photos of the event:









Two Easy Ways Social Media Experts can Improve Philanthropy

Many people are ashamed of their birthdays, ashamed of growing older.  Not my mom -- she's lived a rich life and dedicated it to serving others.  We're having a birthday party for her soon, and 40 or 50 friends will be there to help her celebrate.  That's because she's given of herself and made deep connections in her community.  Happy birthday, Mom!  My mother,  my father and countless others are examples of how selfless acts of community involvement provide unbelievable personal returns. I had lunch yesterday with the Head of Cabedge himself, Chris Blanz.  (That's the best job title I've ever seen!)  We had a lot of fun and let a ton of ideas fly all around the room.  One of the best issues we discussed was: "How can social media experts/users get involved in the philanthropy of our city?"  Here's two easy ways:1.  Use social media to spread the word about non-profits.  You do this all day every day about other topics, any way.  For many of you, social media is your job.  Find those non-profits in town that interest you, follow them, and help spread the word about their events and needs.  Big fundraiser coming up?  Think of how many extra people might attend all because you tweet about it.  Cool People Care has a great resource that lets you follow and friend your favorite non-profits.  Facebook has a Causes app to raise funds and awareness of your favorite charities, and SixDegrees.org lets you place donation links on your social networks that directs funds to the charity of your choice.  Easy stuff.  Big results.

2.  Join the board/volunteer your skills with a non-profit.  This is where face-to-face human interaction is invaluable.  Here in Nashville I'm on the board of an organization that I love, where the time I spend feels like sheer fun: Conexion Americas, which serves as a bridge between the recently arriving Latino community and the community of people who have been here a while.  Every non-profit needs help from social media experts to help build bridges to the people they serve and to funders, friends and decision-makers.  These boards need your expertise.  Choose one that interests you.  Don't have any experience on a board?  Then call the CEO and say you want to volunteer for a year.  I promise they'll plug you in.  If you're under 40, apply for the Young Leaders program, which trains you how to sit on a board.  Or contact Hands On Nashville, which offers similar classes.

Two Easy Ways Social Media Experts can Improve Philanthropy

Many people are ashamed of their birthdays, ashamed of growing older.  Not my mom -- she's lived a rich life and dedicated it to serving others.  We're having a birthday party for her soon, and 40 or 50 friends will be there to help her celebrate.  That's because she's given of herself and made deep connections in her community.  Happy birthday, Mom!  My mother,  my father and countless others are examples of how selfless acts of community involvement provide unbelievable personal returns. I had lunch yesterday with the Head of Cabedge himself, Chris Blanz.  (That's the best job title I've ever seen!)  We had a lot of fun and let a ton of ideas fly all around the room.  One of the best issues we discussed was: "How can social media experts/users get involved in the philanthropy of our city?"  Here's two easy ways:1.  Use social media to spread the word about non-profits.  You do this all day every day about other topics, any way.  For many of you, social media is your job.  Find those non-profits in town that interest you, follow them, and help spread the word about their events and needs.  Big fundraiser coming up?  Think of how many extra people might attend all because you tweet about it.  Cool People Care has a great resource that lets you follow and friend your favorite non-profits.  Facebook has a Causes app to raise funds and awareness of your favorite charities, and SixDegrees.org lets you place donation links on your social networks that directs funds to the charity of your choice.  Easy stuff.  Big results.

2.  Join the board/volunteer your skills with a non-profit.  This is where face-to-face human interaction is invaluable.  Here in Nashville I'm on the board of an organization that I love, where the time I spend feels like sheer fun: Conexion Americas, which serves as a bridge between the recently arriving Latino community and the community of people who have been here a while.  Every non-profit needs help from social media experts to help build bridges to the people they serve and to funders, friends and decision-makers.  These boards need your expertise.  Choose one that interests you.  Don't have any experience on a board?  Then call the CEO and say you want to volunteer for a year.  I promise they'll plug you in.  If you're under 40, apply for the Young Leaders program, which trains you how to sit on a board.  Or contact Hands On Nashville, which offers similar classes.

James A. Crumlin, Jr. to Present at TBA’s Introduction to Trial Practice

Bone McAllester Norton attorney James A. Crumlin, Jr. is one of twelve speakers presenting at the Tennessee Bar Association’s Introduction to Trial Practice program on March 31, 2011.


 This CLE is designed to recreate a “real” trial experience with seasoned lawyers. Attendees will observe key aspects of a basic trial including voir dire, direct and cross examination of an expert, and other areas often left out of law school curriculum.


Click here for more details and to register for this program.


 

"Online Physician Review Sites: Fighting Back to Protect Your Reputation" by Stephen J. Zralek

With the explosion of social media, physicians, dentists and other medical professionals (collectively “physicians”) are becoming daily victims of anonymous online defamation.


 Websites like vitals.com, physicianreports.com, ratemds.com, bookofdoctors.com and drscore.com now provide every patient with a megaphone to say whatever they want to the widest possible audience.


Giving patients the ability to review physicians has many upsides, but it also has downsides, as well.  Online reviews, at their best, have replaced word-of-mouth feedback from prior patients, providing patients with multiple reviews in mere minutes, unlike before.  When the reviews are honest and accurate, they help patients quickly distinguish between providers.  The downside for patients who turn to online physician reviews is that often they are no more reliable than many healthcare websites, which can scare patients into thinking that appearance of blood in their stool is colon cancer when the real culprit is the beets they had for lunch.


Similarly, online physician reviews provide both pros and cons for physicians.  Online reviews allow really good physicians to garner more wide-spread recognition.  But what about when a review is dishonest or inaccurate?  Opinion does not constitute defamation, but reviews that contain untrue facts likely could serve as the basis of a defamation claim.  What about when the reviewer is not a former patient, but rather a competitor?  How does a physician fight back?


Sometimes the negative comments are minor and the best advice is to brush them off.  But other times the comments are serious and deserve a stronger response, such as when they are tantamount to suggesting malpractice, or that your nurse practitioner has a terrible bedside manner.  These comments can damage your reputation and harm you economically if they steer business away from you.  When that happens, especially if it happens more than once from the same person, you may have grounds to assert a claim of business interference, and not just defamation.


One of the biggest challenges with the Web 2.0 is the fact that most online review websites provide no quality assurance – many of them the posting of any comment without regard to its truth, as long as it does not contain profanity.  Even worse, most online review comments are made anonymously.  If that’s the case, how can you protect yourself?  How can you even find out the identity of the poster?


Fortunately, victims are not without recourse.  Most people think that they can say whatever they want online and that no one will ever know who said it.  This is incorrect.  There are ways to find out the identity of online posters, but you need to act quickly since Internet service providers (ISPs) often destroy records of online activity after 180 days.


If you find that you are the victim of disparaging comments made online, you won’t get very far suing the website that hosts the comments (known as user generated content or “UGC”).  Websites that host UGC are immune from liability related to comments made by third parties under Section 230 of the Communications Decency Act.


The first step is to examine the website’s Terms of Usage or Terms of Service.  Each website that invites UGC should have its own rules of conduct.  Most sites have rules that allow those parties who have been reviewed to notify them if a comment is untrue.  Some sites, like vitals.com, have rules that allow physicians to remove up to two negative reviews within a certain time period.  If you can resolve the issue by contacting the host website, this is the fastest and most economic route.


If you cannot resolve the issue by informally contacting the physician review site, ask your attorney to send a cease and desist letter to the website demanding that the comments be removed.  Sometimes websites comply; other times their terms and conditions do not allow them to comply without a court order.


When you want to find the identity of the anonymous poster, and not just have the comments removed, you can also file a “John Doe” lawsuit against unknown defendants, empowering you to subpoena the host website for the IP address of the person posting the comments.  From there, you can determine the ISP.  Because the Cable Communications Policy Act of 1984 prohibits ISPs from disclosing personally identifying information about Internet users to non-governmental entities without a court order, the next step is to obtain a court order allowing you to subpoena the ISP for the identity of the poster.  Recently, a court in Nashville refused to allow an anonymous poster to hide his identity, and allowed the victim to move forward with its subpoena of the ISP.


Keep in mind that filing suit for defamation requires a plaintiff to provide details in the complaint about the allegedly defamatory statements.  Sometimes filing suit is the best option.  Other times, publicly amplifying the negative comments only adds fuel to the fire.


Finally, responding to anonymous online defamation often requires a multi-faceted approach.  Recently, one of my business clients found several comments online that accused its employee of criminal and scandalous conduct.  These comments harmed both the business and the employee.  Given the context, the client needed legal advice on not just the social media issues above, but also with employment law issues.  If the comments had been true, the employer may have needed to terminate the employee, since the comments reflected poorly upon the business.


If defamatory comments are made that threaten to damage your reputation as a physician, don’t just sit back and take it.  Instead, consider your options in fighting back.


© Stephen J. Zralek 2011.  All rights reserved.


 

Stephen Zralek to Present "Legal Issues in Social Media"

Bone McAllester Norton attorney Stephen Zralek will present “Legal Issues in Social Media” at the Nashville Business Journal’s Crash Course on Social Media half-day seminar held Wednesday, March 30 at Lipscomb University Shamblin Theater.


Discussions will include how to create, implement and measure a successful social presence for your business and coaching for building a social media marketing plan.


Click here to register.


 

It Takes only one Expletive in a Tweet to Lose your Job

Chrysler did exactly what it should have done: immediately terminated its relationship with its social media agency New Media Strategies after the agency used the F-Bomb in a tweet on Chrysler's behalf.  Here's the tweet (with my redactions): "“I find it ironic that Detroit is known as the #motorcity and yet no one here knows how to f****** drive.”  Even more ironic is that Eminem (who cusses like a sailor) is Chrysler's new spokesman.  (Props to him for an awesome Superbowl ad!)  Still, this was not exactly the image Chrysler was going for. As reported in Automotive News, the social media agency immediately fired the employee.  And Chrysler is ending its relationship with the agency on account of the tweet.  No surprise here on either move. Michael Humphreys said it best in his Forbes blog: "Twitter is not a private room.  It's not a quiet corner in a public square.  It is THE public square."

It Takes only one Expletive in a Tweet to Lose your Job

Chrysler did exactly what it should have done: immediately terminated its relationship with its social media agency New Media Strategies after the agency used the F-Bomb in a tweet on Chrysler's behalf.  Here's the tweet (with my redactions): "“I find it ironic that Detroit is known as the #motorcity and yet no one here knows how to f****** drive.”  Even more ironic is that Eminem (who cusses like a sailor) is Chrysler's new spokesman.  (Props to him for an awesome Superbowl ad!)  Still, this was not exactly the image Chrysler was going for. As reported in Automotive News, the social media agency immediately fired the employee.  And Chrysler is ending its relationship with the agency on account of the tweet.  No surprise here on either move. Michael Humphreys said it best in his Forbes blog: "Twitter is not a private room.  It's not a quiet corner in a public square.  It is THE public square."

Opportunities Abound at PodCamp Nashville

PodCamp Nashville used to be a best-kept secret.  Not any more. If you're want to find your voice and find your audience, if you want to build your brand and link to potential customers throughout the world, if you want to speak your mind by creating online documentaries or podcasts, or if you want to meet other people interested in your world and your community, sign up.  PodCamp Nashville will be held downtown at Cadillac Ranch on Saturday, March 26.  And it's Free. People from all industries and skill-sets (and I mean All) will be there.  Over 400 have signed up to attend so far.There's no doubt that PodCamp is a chance to network.  I got introduced to PodCamp and its sister, BarCamp (held in the fall), through a friend at work. I've met some incredible Nashvillians in the music, entertainment, marketing, technology and digital fields; made some good friends; and developed some clients.

But more than that, it's a chance to learn from some of the best and brightest in our community.  Where else can you hear all these great luminaries under one roof?  Kate O'Neill will talk about how blogging made her a better leader; Courtenay Rogers will talk about "The Power of Digital Stalking," (she says we all do it); Jake Jorgovan will discuss "How to Effectively Utilize YouTube."  And I'm excited to hear Raj Menon talk about how to launch a podcast.

I can't wait to hear David Corrigan explain how to "Mak[e] your Mobile App idea a Reality."  I came up with about 20 ideas the other day on my drive into work (I'm sure 15 of them have already been invented), but I'm eager to hear what to do the next time creativity hits!

As one of the only lawyers speaking that day, I'll be leading a session with marketing guru Taylor Vick.  She and I are teaming up to talk about how businesses can accomplish their marketing goals through social media without running into trouble.  When clients come to me with a crisis involving online communications, it often takes a tag-team approach between legal solutions and SEO know-how.  Taylor and I will use some specific case-studies to frame our discussion, highlight the issues that can help businesses and bloggers avoid liability, and give some pointers along the way.  Quoting Shakespeare, we titled our session: "Kill All the Lawyers: The Legal & Marketing Aspects of Using Social Media."  We'd love to have you join us and add to the conversation.

Spread the word.  And sign up!

Opportunities Abound at PodCamp Nashville

PodCamp Nashville used to be a best-kept secret.  Not any more. If you're want to find your voice and find your audience, if you want to build your brand and link to potential customers throughout the world, if you want to speak your mind by creating online documentaries or podcasts, or if you want to meet other people interested in your world and your community, sign up.  PodCamp Nashville will be held downtown at Cadillac Ranch on Saturday, March 26.  And it's Free. People from all industries and skill-sets (and I mean All) will be there.  Over 400 have signed up to attend so far.There's no doubt that PodCamp is a chance to network.  I got introduced to PodCamp and its sister, BarCamp (held in the fall), through a friend at work. I've met some incredible Nashvillians in the music, entertainment, marketing, technology and digital fields; made some good friends; and developed some clients.

But more than that, it's a chance to learn from some of the best and brightest in our community.  Where else can you hear all these great luminaries under one roof?  Kate O'Neill will talk about how blogging made her a better leader; Courtenay Rogers will talk about "The Power of Digital Stalking," (she says we all do it); Jake Jorgovan will discuss "How to Effectively Utilize YouTube."  And I'm excited to hear Raj Menon talk about how to launch a podcast.

I can't wait to hear David Corrigan explain how to "Mak[e] your Mobile App idea a Reality."  I came up with about 20 ideas the other day on my drive into work (I'm sure 15 of them have already been invented), but I'm eager to hear what to do the next time creativity hits!

As one of the only lawyers speaking that day, I'll be leading a session with marketing guru Taylor Vick.  She and I are teaming up to talk about how businesses can accomplish their marketing goals through social media without running into trouble.  When clients come to me with a crisis involving online communications, it often takes a tag-team approach between legal solutions and SEO know-how.  Taylor and I will use some specific case-studies to frame our discussion, highlight the issues that can help businesses and bloggers avoid liability, and give some pointers along the way.  Quoting Shakespeare, we titled our session: "Kill All the Lawyers: The Legal & Marketing Aspects of Using Social Media."  We'd love to have you join us and add to the conversation.

Spread the word.  And sign up!

Third Circuit Addresses Hospital Contract with Hospital-Based Physician Group

Appeared in the July 2009 Physicians Organizations Practice Group Newsletter reprinted courtesy of the American Health Lawyers Association.

On January 21, 2009, in the case of United States ex rel. Kosenske v. Carlisle HMA, Inc.(1), the Third Circuit reversed the decision of the district court(2) which had dismissed an action under the False Claims Act(3) which alleged that an arrangement between an anesthesiology group and a for-profit hospital violated the Stark and Anti-Kickback Acts(4) (collectively, the Acts). The Third Circuit agreed with the district court that the arrangement implicated the Acts but disagreed with the lower court’s conclusion that a written agreement entered into in 1992 continued to meet all of the requirements of the personal service exception under the Stark Act. The Third Circuit applied the Stark Act broadly to the relationship between the hospital and physician group, but strictly construed the criteria necessary to qualify for an exception. The Third Circuit’s opinion provides useful guidance for hospitals and hospital-based physicians by clarifying that a hospital-based physician group’s relationship with the hospital must be documented by a written agreement that clearly sets forth the terms of an arrangement that currently meets the requirements of an exception under the Stark Act.


Background


In December 1992, Blue Mountain Anesthesia Associates PC, a group of four anesthesiologists (Group), entered into an agreement (1992 Agreement) with Carlisle Hospital and Health Systems, Inc. (CHHS) to provide anesthesia services to the hospital facility (Hospital). The 1992 Agreement provided that: (1) the Group would provide anesthesia coverage on a twenty-four-hours-a-day, seven-days-a-week basis; (2) the Hospital would provide the space, equipment and supplies reasonably needed by the Group to provide the services without charge; and (3) the arrangement would be an exclusive one for both the Hospital and the Group. The 1992 Agreement did not mention the services being provided outside the Hospital and, at the time they entered into the 1992 Agreement, no pain management services were provided by the Group.


A little more than a year after the 1992 Agreement was signed, Ted Kosenske, a member of the Group, began providing pain management services in space that the Hospital used for other purposes.  In 1998, CHHS built a new, stand-alone facility containing an ambulatory surgery center and a pain management clinic (Pain Clinic). The Group provided pain management services at the Pain Clinic and CHHS did not charge the Group for the space, equipment or personnel. The Group’s physicians providing pain management services at the Pain Clinic did not provide anesthesiology services at the Hospital. For both the anesthesia and pain management services, the Group submitted claims to Medicare for the professional services and CHHS submitted claims for the facility and technical components. In June 2001, Carlisle HMA Inc. (HMA) purchased the assets of the Hospital from CHHS. The 1992 Agreement was not assigned by any written document. However, both the Group and HMA continued the arrangement with each other as if the 1992 Agreement was assigned.


Kosenske, a former member of the Group(5), brought a qui tam action under the False Claims Act against HMA and its parent company, Health Management Associates Inc., alleging that they submitted outpatient hospital claims to the Medicare program and other federal healthcare programs falsely certifying that such claims were in compliance with the Acts.


Analysis


The district court considered the issues raised in the claim in connection with the parties’ cross-motions for summary judgment and held that the arrangement between HMA and the Group implicated the Stark and the Anti-Kickback Acts. The district court noted that both of the Acts prohibit a health care provider from paying physicians any form of compensation to induce them to refer patients to the provider, and from holding a financial interest in a healthcare entity to which they refer patients. The district court also held that the relationship between HMA and the Group involved both referrals and compensation.


Under the arrangement, HMA provided the Group office space, supplies, equipment and personnel without charge, as well as other benefits. Under the 1992 Agreement, the Group was granted the exclusive right to provide anesthesiology and pain management services. The district court agreed with the claimant, Kosenske, that these benefits constituted remuneration under the Acts. Kosenske also argued that the right to receive payment from a third-party payor for services to patients referred to the Group by the Hospital was a benefit that constituted remuneration for the purposes of the Acts. The district court rejected this argument, stating: “The court need not decide whether payment from third party payors or the expectation of payment constitutes remuneration for the purposes of the Stark Act. However, the court would be remiss if it did not express its doubts as to the merits of this attenuated argument.(6)


However, the benefits to the Group under the 1992 Agreement resulted in a compensation arrangement and financial relationship between the Group and the Hospital. The district court determined that the Group ordered numerous pain management services, and that these orders constituted referrals. Therefore, because the Hospital submitted claims to Medicare for these services, the arrangement would violate the Stark Act unless it qualified for an exception. The district court noted that the Anti-Kickback Act requires the “knowing and willful” payment of remuneration to a provider for the referral of services covered by a federal health care program, but it concluded without any additional factual consideration that the Anti-Kickback Act was also violated.


Although the relationship between the Hospital and the Group fell within the ambit of the Stark and the Anti-Kickback Acts, the district court determined that the Hospital demonstrated it met the requirements of the exception for personal services under the Acts. On Appeal, the Third Circuit agreed with the district court that there was clearly a financial relationship between the Hospital and the Group, but rejected the district court’s holding that the relationship qualified for the personal services exception.


The Third Circuit held that HMA had failed to show that the requirements of the Stark personal service exception had been met. The Third Circuit found the arrangement between the Group and HMA failed to meet the criteria of the exception by failing to have a written agreement that covered all of the services to be provided by the Group and by not adequately demonstrating that the compensation under the agreement was at fair market value.


The personal services exception applies if:


(i) the arrangement is set out in writing, signed by the parties, and specifies the services covered by the arrangement,
(ii) the arrangement covers all of the services to be provided by the physician…to the entity,
(iii) the aggregate services contracted for do not exceed those that are reasonable and necessary for the legitimate business purposes of the arrangement,
(iv) the compensation to be paid over the term of the arrangement is set in advance, does not exceed fair market value, and… is not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties, and
(v) the services to be performed under the arrangement do not involve the counseling or promotion or a business arrangement or other activity that violates any state or federal law(7).


The district court held that the 1992 Agreement continued to satisfy the requirement that the “arrangement be set forth in writing,” even though there was no written assignment of the 1992 Agreement when the assets of the Hospital were sold to HMA. The district court pointed out that the 1992 Agreement contained a provision stating that it would be binding on the parties’ successors and assigns. The district court applied Pennsylvania law and held that, because the actions of the parties after the sale of assets demonstrated their intent that HMA succeed to the position of CHHS under the 1992 Agreement, no specific assignment of the 1992 Agreement was necessary to satisfy the requirements of the exception(8).  The district court also determined that the 1992 Agreement satisfied the second requirement of the exception that the written agreement cover all services to be provided by the physician. When the 1992 Agreement was entered into, the Group was providing only anesthesia services to the Hospital, and it was not until 1998 that the Hospital opened the Pain Clinic. However, the 1992 Agreement included language granting the Group the right to provide physician services in the event the Hospital obtained, opened, or operated another facility or location at which anesthesiology or pain management services were required or offered. The district court held that this language in the 1992 Agreement adequately described the full range of services provided by the Group to the Hospital and met the Stark exception’s second requirement.


The Third Circuit disagreed with the district court’s analysis and stated:


In this case, the only written contract in existence between the parties is one that did not, and obviously was not intended to apply to services at a non-existent facility. It was negotiated in 1992, in a context wholly different from the one that existed six years later after the opening of the Pain Clinic. . . and the opening of the Pain Clinic represented a very substantial change(9).


The 1992 Agreement did not mention the provision of space, equipment and personnel without charge, and the Third Circuit appeared to find that broad language contemplating that the parties might provide each other additional services at a future date was not enough to support an argument that these services continued to be covered by a written agreement.


The Third Circuit also disagreed with the district court’s holding that the compensation under the 1992 Agreement satisfied the “fair market value” requirement under the Stark exception. The district court held that there was a “mutuality of rights and responsibilities imposed by the 1992 agreement” and that this was evidence that the compensation to the parties was a fair market value exchange. The district court went on to conclude the following, “By definition, the terms of the contract reflect the fair market value of the benefits conferred on each party(10).”  Not surprisingly, the Third Circuit rejected this argument. The Third Circuit concluded that it is impossible for a contract entered into six years earlier to reflect current fair market rates and further dismissed the lower court’s interpretation of the definition. Instead, the Third Circuit corrected the district court and stated that “as a legal matter, a negotiated agreement between interested parties does not ‘by definition’ reflect fair market value.” The Third Circuit concluded that the arrangement between the Group and the Hospital was exactly the type of situation which the Stark Act recognizes as potentially abusive. The Hospital and the Group were in a position to generate business for each other; therefore, their negotiations were not arms’ length(11).


The Third Circuit and the district court agreed that the exclusive arrangement between a hospital and a hospital-based physician group implicated the Acts. Both Courts concluded that the reciprocal responsibilities are enough to create a financial relationship and referrals governed by the Acts. The Third Circuit specifically rejected HMA’s argument that there is no fair market value issue because the Hospital and the Group were being compensated for their services by a third-party payor. The Third Circuit also rejected HMA’s argument, based on 42 C.F.R. § 413.65(d)(2)(vi), that the arrangement did not include referrals, and that the Stark Act did not apply because the facility was provider-based and the patients treated by the Group were Hospital patients:


HMA reads this sub-section [42 C.F.R. § 413.65(d)(2)(vi)] as depriving physicians at the facility of any discretion in making referrals of their patients, i.e., as mandating referrals to the main provider. We believe HMA reads too much into this provision. While Pain Clinic patients clearly must have access to all services provided by the Hospital in order for it to be considered a part thereof, we are unpersuaded that BMAA physicians at the Clinic have been deprived of the right to refer their patients in accordance with their best medical judgment(12).


Conclusion


Even if the Third Circuit had upheld all of the district court’s holdings, the result in this case would have supported the position that arrangements between hospitals and hospital-based physicians fall within the ambit of the Acts and should be structured to qualify for an exception under the Stark Act and a safe harbor under the Anti- Kickback Act.


In addition, Kosenske makes it clear that the parties’ intent to extend an arrangement that might have originally fallen within an exception to the Acts will not necessarily continue to protect the parties from prosecution if there has been a significant change in circumstance. Compliance with the Acts requires that hospitals and physicians review and revise their contracts when an arrangement has developed into something more than the original services, or when enough time has passed that the compensation’s value may have changed. Finally, the Third Circuit decision once again reminds providers and their lawyers that a complete and well drafted paper trail is important to compliance under Stark and the Anti-Kickback Act.


_____________________________________________________________________________________
1. 554 F.3d 88, 98 (3d Cir. 2009), rev’g No. 1:05-CV-2184, 2007 WL 3490537 (M.D.Pa., Nov. 14, 2007).
2. 2007 WL 3490537
3. 31 U.S.C. §§ 3729-3733 (“False Claims Act”).
4. 42 U.S.C. § 1395nn (“Stark Act”); 42 U.S.C. § 1320a-7b (“Anti-Kickback Act”).
5. Kosenske left the Group in 2005 to establish an independent pain management practice.
6. 2007 WL 3490537 at *7, n.9.
7. 42 U.S.C. § 1395nn(e)(3)(A); see also 42 C.F.R. § 411.357(a)(1).
8. 2007 WL 3490537 at *8 & n.14 (citing Bogart v. Phase II Pasta Machines, Inc., 817 F.Supp 547, 548 (E.D.Pa. 1993) for the proposition that, under Pennsylvania law, acquiring corporations become successors if they expressly or impliedly agree to assume the liabilities of the seller or if they continue to operate the seller’s business).
9. 554 F.3d. at 96-97.
10. 2007 WL 3490537 AT *10.
11. 554 F.3d. at 97.
12. Id. at 98.


 

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Video of Recent Presentation on Legal Issues in Social Media

In late January, Indie Connect asked me to speak with professionals in the music industry about the pressing legal issues in social media.  It was an honor being with them.  They were kind enough to capture a video of the presentation, which you can watch here.If you'd like me to come speak about Social Media Law with your business or group, email me at This email address is being protected from spambots. You need JavaScript enabled to view it..

Last week I spoke on social media legal issues to the Tennessee Bar Association.  Yesterday, the Nashville Business Journal selected me to be one of four panelists at an upcoming presentation on social media to the business community.  And in late March, I'll be co-presenting with Taylor Vick of Point3 Media on the collaboration needed in social media between legal and marketing; we'll be at PodCamp in Nashville.  Our title is "Kill All the Lawyers: Marketing through Social Media the Legal Way."  Sign up to attend -- it's free, and there will be incredible sessions on social media all day long.