|Health Law Pointers
Volume II, No. 7
Tuesday, January 16, 2001
Brought to you by Hurwitz & Fine, P.C.
Editor: Lawrence M. Ross
As a public service, we are pleased to present this issue of our periodic health law newsletter addressing
the specific legal concerns of health practitioners. The primary purpose of this newsletter is to provide timely educational information and commentary for our clients and subscribers. If you know of others who may wish to subscribe to this free publication, please feel free to forward it. If you wish to subscribe or unsubscribe, please send an e-mail or call the Editor or Health Law Group Leader Lawrence M. Ross directly at 716-849-8900.
New York Enacts Legislation Prohibiting
Self-Referrals for Physical Therapy Services
New York Governor George Pataki signed new legislation prohibiting New York
physicians from referring patients to physical therapy services in which
physicians have a financial or ownership interest. The legislation is similar to
the physician self-referral prohibitions already in place with respect to
laboratory, pharmacy and x-ray services. The new legislation is scheduled to
take effect in December 2002.
Physicians who are currently referring patients to physical therapy services
should review whether their current arrangements need to be restructured in
light of the new legislation.
Department of Health and Human Services
Health Information Privacy Rules
On December 20, 2000, the United States Department of Health and Human
Services issued final regulations governing the privacy of medical records and
other patient health information. The regulations cover health plans, health
care clearinghouses and those health care providers who conduct certain
financial and administrative transactions (such as electronic billing and funds
transfers) electronically. Under the new regulations, covered entities must
obtain the patient’s consent prior to using or disclosing the patient’s medical
records and other health information. Covered entities are also required to
inform patients how their medical records and other health information is being
used and who has access to their records. The regulations apply to all medical
information, whether oral, electronic or in print form, and provide for civil
and criminal penalties for improper use and disclosure.
The new regulations go into effect on February 26, 2003. Certain smaller
health care providers have until February 26, 2004 to comply with the
regulations. The new regulations will clearly increase burdens on health care
providers and other covered entities with respect to maintaining patient
records. Health care providers and other covered entities should review their
standard operating procedures to ensure compliance with the new regulations. To
access the final regulations, click onto the Department of Health and Human
Services web site at: www.aspe.hhs.gov\admnsimp\.
HCFA Issues Final "Stark II" Regulations
On January 3, 2001, HCFA released the first of a two-part final rule
governing the prohibition against physician referral of Medicare patients for
health care services in which the physician (or members of their immediate
family) has a financial relationship. The new regulations prohibit referrals to
most entities in which the physician has an ownership interest. However, the
regulations do permit referrals to entities with which the physician has a
compensation relationship, but only if the compensation paid to the physician
does not exceed the compensation that would be paid to another person providing
the same services but who was not in a position to generate business. The
regulations also contain guidance with respect to structuring financial
relationships that do not violate the self-referral prohibition.
The final regulation is effective January 4, 2002. To access the final
regulation, click onto HCFA’s web site at: www.hcfa.gov/regs/physicianreferral/default.htm.
New York Enacts Patient Information and Quality Improvement
On October 6, 2000, New York Governor George Pataki signed sweeping
legislation regarding patient access to information concerning their physicians.
The new law authorizes the formation of an on-line database containing physician
profiles that may be used by the public in selecting a physician. The database
will contain biographical information for each physician and information
concerning any state disciplinary proceedings (including medical license
restrictions or suspensions), malpractice judgments (if there are more than two
within ten years) and/or criminal convictions involving the physician within the
past ten years. Pending malpractice actions will not be disclosed on the
Physicians should consider periodic review of their physician profile as
contained in the database to ensure that it is accurate. To access the new
legislation, click here: http://assembly.state.ny.us/cgi-bin/chaps?chap=542.
Guidelines for Providing Employee Access to Health and
In an effort to increase the fitness and general health of employees, some
employers acquire physical fitness equipment and place it on their premises for
employee use. In order to avoid unwanted liability, employers who want to
provide such equipment should take steps to ensure that the equipment is set up
and properly maintained and advise each employee how to properly operate the
equipment. Employers should also establish rules governing the use of the
equipment. Finally, the employer should consider having each employee sign a
recreational waiver to protect the employer from liability arising from employee
injuries caused by use of the equipment.
Employers should also note that providing physical fitness equipment at the
place of employment may result in injury claims that are covered by workers’
compensation laws. Because certain states, including New York, do not permit a
prospective waiver of workers’ compensation benefits, employers should be aware
that a recreational waiver generally will not insulate the employer from
liability for workers’ compensation claims.