Top Trends to Look For in Healthcare in 2020

Rapid Emergence of Consumerism

Healthcare consumers continue to pay more and more toward their out-of-pocket healthcare costs, driving a shift away from volume-based compensation models toward outcomes-based payment arrangements. By all accounts, meaningful consumerism in the healthcare market is rapidly emerging.

Historically, healthcare transactions were business-to-business encounters with traditional healthcare business processes that tended to neglect consumer wants and needs. With the rise of consumerism, however, healthcare providers and supporting industry actors are quickly adopting consumer-centric processes so they can more effectively work with consumers. Healthcare providers and supporting industry actors will risk losing relevance if they do not embrace the new role of the consumer in healthcare.

In the coming year, the healthcare industry will continue to adopt tools and techniques to better understand consumer behavior, provide consumers with the information necessary to inform and drive consumer decision-making and offer greater consumer convenience. Examples include minute clinics in grocery and other retail stores, settings with extended hours seven days a week, urgent and walk-in care clinics, telemedicine visits and around-the-clock access to nurses and other healthcare providers by telephone.

The data suggest that these trends will accelerate and lead to even more profound market transformation in the years to come.

Disruptive Innovation

Innovation in clinical care delivery and healthcare business processes have the potential to reshape the healthcare market. Healthcare providers and others who support the industry will rapidly lose market share if they do not evolve their business and clinical care models to leverage innovation.

Recognizing this dynamic, healthcare providers and others who support the industry are and will continue to collaborate with a vast variety of businesses and other organizations to leverage innovation. For example, many healthcare providers are using technology to enable patients to access clinical care through video visits, e-visits and other virtual visits. Still other healthcare providers are using improved techniques to enhance diagnostic medicine, precision medicine, remote monitoring, patient engagement and patient experience, to name just a few.

The need for the rapid adoption of transformation in the healthcare industry will continue to drive provider demand for access to capital, resources and administrative scale, causing ongoing consolidation (both vertical and horizontal) among healthcare providers. And these consolidated healthcare providers will need to develop organizational structures that capitalize on new core competencies, such as data analytics that inform and improve patient outcomes, experiences and cost. With these transformational changes, the healthcare industry will look to engage consultants and recruit an even more modern workforce that is adept at leveraging innovation.

Prescription Drug Pricing

The rising cost of prescription drugs will remain a top healthcare priority throughout the nation in 2020. Some prescription drugs that have been on the market for years have now quadrupled in cost, leaving patients to determine with their physicians the best cost-effective drug regimes. While the availability of generic and biosimilar medicines is a tested solution to lowering the cost of prescription drugs, many medications do not offer those alternative options. Patients affected by the increase in prescription drug pricing claim that they are skipping doses, splitting pills and
abandoning treatments altogether.

To help reduce the growth of prescription drug prices and out-of-pocket costs, several 2020 presidential candidates are now proposing policies in their campaigns. Some lawmakers have already introduced legislation requiring that television commercials for prescription drugs disclose prices, while other lawmakers have approved programs that would cap the monthly co-pays for life-saving drugs. In 2020, pharmaceutical companies will likely be required to disclose even more financial information to help both government officials and the public understand how they establish drug prices. Also on the horizon in 2020 is government regulation on the rate at which drug prices can increase.

Opioid Use Disorder

Death by overdose has been at epidemic levels in the United States for the past 20 years, with opioid overdoses rising every year — killing 130 Americans every day. In 2018 alone, the United States allocated more than $600 billion to tackling the opioid crisis, and in the past four years, it has spent over $2 trillion. The costs associated with opioid use disorder include costs related with criminal justice, lost productivity, treatment of overdoses and treatment of babies born dependent on opioids.

At the state level, the opioid crisis has affected health care systems, public safety and corrections, child protective services and other agencies. Eleven states have partnered to examine proposed strategies for combating the opioid crisis through Medicaid programs and public health departments, with the hope of better informing the public of the consequences of opioid misuse. Some states, such as Florida, have implemented prescription drug monitoring programs (PDMPs) to limit the amount of opioid prescriptions to no more than a three-day supply. While these strategies slightly lowered the number of opioid overdoses in 2019, it is expected that both state and federal governments will allocate further resources to continue to address the opioid use disorders crisis.

Read more national trends, legislation, regulation and litigation that we expect to have a significant impact on the workplace in 2020.

H-1B Visa Processing Delays Underscored by Extraordinary Need for Healthcare Workers

Processing delays for immigration cases have increased by 46 percent in the past two fiscal years and 91 percent since FY 2014. One healthcare staffing company has sued Department of Homeland Security and U.S. Immigration and Citizenship Services, alleging the delays in issuing H-1Bs “is impairing [their] ability to effectively and efficiently meet the medical needs of individuals nationwide.” Our colleague in the Immigration practice group discusses the effect USCIS processing delays have on businesses and families. Read more here.

U.S. House Passes Health-Worker Violence Bill; Presidential Veto Likely

On November 21, 2019, the House passed H.R. 1309, Workplace Violence Prevention for Health Care and Social Service Workers Act (the Bill), with notable bi-partisan support (251-158). If passed into law, the Bill would largely implement the State of California’s healthcare workplace violence standards nationally. The Bill has not made it to the Senate, however, and the President Trump administration has stated it intends to veto it as written.

As summarized on the congressional website:

“This bill requires the Department of Labor to … promulgate an occupational safety and health standard that requires certain employers in the health care and social service sectors … to develop and implement a comprehensive plan for protecting health care workers, social service workers, and other personnel from workplace violence.” Employers would also be required to “investigate workplace violence incidents, risks, or hazards as soon as practicable”; “provide training and education to employees who may be exposed to workplace violence hazards and risks”; “meet record keeping requirements”; and “prohibit acts of discrimination or retaliation against employees for reporting workplace violence incidents, threats, or concerns.”

The Bill defines “workplace violence” as “(i) the threat or use of physical force against a covered employee that results in or has a high likelihood of resulting in injury, psychological trauma, or stress, without regard to whether the covered employee sustains an injury, psychological trauma, or stress; and (ii) an incident involving the threat or use of a firearm or a dangerous weapon, including the use of common objects as weapons, without regard to whether the employee sustains an injury, psychological trauma, or stress.” OSHA reports that healthcare and social assistance workers are four times more likely to experience serious workplace violence (meaning incidents that require time off work to recuperate) than employees in other industries.

The American Hospital Association (AHA) opposes the Bill. “Federal support of research to identify best practices for different workplace settings and circumstances, and disseminating information about such best practices would do more to advance and promote workplace safety than the adoption of a ‘one-size-fits-all’ standard for compliance and enforcement,” Thomas Nickels, AHA’s executive vice president, stated in a public letter on the topic. Supporters of the Bill include many labor unions.

Stay tuned for any legislative developments. As always, please contact your Jackson Lewis attorney regarding best practices for responding to any workplace concerns, including proactively addressing workplace violence issues.

Physician Employment Agreements: Potential Risks under Stark Law, Anti-Kickback Statute, False Claims Act

Healthcare employers, human resource directors, in-house counsel, and other professionals who routinely deal with contracting issues should understand that physician employment arrangements are unlike other employment contracts. Physician employment (and independent contractor) agreements pose unique and heightened risks that deserve utmost caution. Our colleague in the Health Law and Transaction practice group published an informative article on these unique risks. You can read more about it here.

Jury Finds Against Female Physician’s Unequal Pay Claims

A federal jury in Iowa has rejected Equal Pay Act claims by a female physician alleging she was paid less than her male colleagues in the same network for performing substantially equal work under the same compensation formula. Bertroche v. Mercy Physician Assoc., Inc., No. 1:18-cv-00059 (N.D. Iowa Nov. 13, 2019).

The jury also found the physician network that employed her did not breach her employment agreement. After a six-day trial, the federal jury deliberated for less than three hours before delivering a complete defense verdict.

Plaintiff, Sharon Bertroche, M.D., worked as a family practice physician at Mercy for more than 20 years. During approximately the same period, three male physicians worked for the same network under the same form of employment agreement. All agreements required the same primary care physician duties under the same compensation system. Bertroche claimed that, although primary care physicians performed the same basic job duties, Mercy paid female physicians less than male physicians for substantially equal work in violation of the Equal Pay Act.

While acknowledging that each physician received a different amount of total compensation, Mercy argued that those differences were based on the specific practice of the physician at issue. Each physician was treated as a “profit center” and the contract formula was not applied differently between male and female physicians. Mercy paid physicians under a system that measured earnings by production quantity and quality based on physician revenue cost and profits. Some physicians maximized profitability by seeing more patients and delegating duties to nursing staff.

On a motion for summary judgment, the trial court denied Mercy’s request for dismissal, but decertified the case as a collective action. Two other female physicians, Gina Perri and Arleen Zahn-Hauser, who opted into the case after it was removed to federal court were permitted to proceed to trial on their Equal Pay Act and state law claims. But the trial court held each of their cases required separate inquiries on issues such as whether they received the same staffing support and revenue as the male doctors at issue. The trials for Perri and Zahn-Hauser are scheduled to take place next year.

In her trial, Bertoche conceded that all doctors were paid under the same formula and that their pay varied based on the services they performed and the way they ran their practice. Defense counsel argued the salaries of physicians who were performing services under the same formula applicable to Bertroche varied. Some female doctors made significantly more and some male doctors made less. The jury concluded that there was no violation of the Equal Pay Act.

Physician compensation systems continue to be vulnerable to litigation. Even a system based on a contractual formula can be subject to claims of differential treatment based on a protected status under the law. The healthcare industry has paid attention to recent reports on physician pay, and many employers are now performing attorney-client privileged pay equity audits to assess liabilities and take a proactive approach to these types of claims. Contact Jackson Lewis with any questions about privileged pay audits, pay policies, or pay equity training.

Healthcare Employers’ Title VII Obligations in Harassment, Discrimination of Employees by Patients

Title VII of the Civil Rights Act requires healthcare employers to protect their medical staff and employees from harassment and discrimination and respond to any such behaviors swiftly and effectively, even if the actor is a patient, rather than a coworker or supervisor. A decision from the U.S. Court of Appeals for the Fifth Circuit illustrates employers’ obligations when the harasser is a patient. Gardner v. CLC of Pascagoula, L.L.C., 915 F.3d 320 (5th Cir. 2019). You can read more here.

Two Federal Courts Strike Down Health and Human Services ‘Conscience Protection Rule’

Two federal courts have struck down the U.S. Department of Health and Human Services’ (HHS) “Conscience Protection Rule,” which was slated to go into effect on November 22, 2019. The Rule purported to enforce pre-existing “conscience laws” that protect the rights of certain employees of healthcare institutions that receive federal funds to refuse to participate in certain healthcare procedures (i.e., abortion, sterilization, and assisted suicide) based on religious or moral objections. You can read more about the rule here.

Religious Accommodation and Patient Safety in Healthcare Industry

During a recent webinar, our Healthcare team provided practical case studies with clear takeaways and best practices for reasonably accommodating employees’ sincerely-held religious beliefs without compromising patient safety. You can watch the webinar recording at your convenience. Additionally, the team compiled a list of frequently asked questions about Title VII of the Civil Rights Act reasonable accommodation requirements. You can read more here.

Pay Equity Challenges Continue: EEOC Sues Nursing Home for Paying Female Nurse Less

Pay equity challenges continue to make the news in the healthcare setting, primarily in the context of physician pay equity gaps. This month, the journal Pediatrics published data from the American Academy of Pediatrics’ Pediatrician Life and Career Experience Study (PLACE), which included 1,000 physician responses on income and 1,300 responses on household responsibilities. The income data (from 2016) showed that female pediatricians were paid only 76 percent of their male peers’ income. At the same time, based on the household responsibilities data (from 2015), female pediatricians reported that they had more time-consuming responsibilities in their own home life than male physicians.

Although the issue of physician pay certainly deserves continued focus, it is also important that your organization is dialed in on any pay gaps in non-physician roles. This month, the EEOC sued a Kansas City nursing home in the Western District of Missouri under the Equal Pay Act (EPA), alleging that the employer paid a female LPN $21 dollars an hour, but paid two male LPNs performing the same job $25 dollars per hour. EEOC v. Edgewood Manor OPCO LLC, Case No. 19-cv-00760.

The EPA generally prohibits employers from paying men and women differently for a job that requires the same skill, effort, responsibility, and working conditions. The employee does not need to prove any intentional sex discrimination to make out an EPA claim. Rather, if an employer cannot prove that there is a factor other than sex that explains the difference in pay between the female employee and her male counterpart(s), the employer will be liable for the difference (plus an equal amount in liquidated damages).

In this case, the EEOC is alleging that the difference was “willful,” meaning that if the suit is successful the plaintiff may be entitled to up to three years’ back pay as damages. In a press release the EEOC issued regarding the lawsuit, it stated that “[t]he fact that it’s still necessary to enforce the Equal Pay Act 56 years after its passage is astonishing. But the EEOC is dedicated to enforcing the law against both public and private employers who it finds have violated this key civil rights statute.” This case is in its early stages, but it is a good reminder (and a warning) that you should not wait for an EEOC Charge to address any pay gaps at your organization as appropriate, and at any and all levels. In addition, employers need to be concerned about state agencies and plaintiff’s attorneys who may bring claims under the many state laws that are more demanding than the EPA.

For more information on how to get ahead of pay equity issues, contact your Jackson Lewis attorney.

OCR Recognizes Insider Threats to HIPAA PHI, You Should Too

As we have observed here, news reports of security risks, hackings and breaches caused by individuals, terror groups or even countries around the world certainly are important and can be unsettling. But, for many organizations, including healthcare providers and business associates, a significant and perhaps more immediate area of data risk is malicious insiders. On August 29, the Office for Civil Rights (OCR) published its 2019 summer cybersecurity newsletter entitled, “Managing Malicious Insider Threats,” acknowledging this threat and providing some best practices to neutralize it. Our colleague in the Privacy, Data and Cybersecurity practice group published an informative article on the various forms of insider threats and how to stop them. You can read more about it here.

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