Behavioral Health Law: A Quick Introduction

By: Erica Erman, Dickinson Wright

Behavioral health law is an incredibly important and growing area of the law. There are numerous special rules and nuances involved, which is one of the reasons most of us likely see behavioral health law as an “exception”, i.e. you can release documents except for the substance use records, etc. Many rules deal with children or vulnerable populations, oftentimes in emergency or high-risk situations, and the consequences are as significant as they get, including suicide and trauma to name only two. It is also an incredibly rewarding area of the law to practice because you have the chance to make a significant difference in so many lives where help is truly needed.

What is behavioral health?

Behavioral health covers a variety of conditions: suicide prevention, developmental disabilities, anxiety disorders, autism spectrum disorder, bipolar disorder, depression, ADHD, eating disorders, OCD, substance use and co-occurring mental disorders, PTSD, and more.

Health care law covers a huge amount of ground. Behavioral health care law encompasses health care law and then adds even more regulations and requirements in large part due to the particularly sensitive nature of behavioral health conditions.

What are some examples of Arizona state entities involved in behavioral health care?

To name a few, there is Arizona’s Medicaid agency, AHCCCS, which includes ALTCS, Arizona’s Long Term Care System, and contracts with RBHAs, Arizona’s Regional Behavioral Health Authorities, to provide services across the state. The Arizona Department of Economic Security (ADES) includes the Division of Developmental Disabilities (the DDD) which handles essential services for autism spectrum disorder. The Department of Economic Security also includes the Arizona Early Intervention Program, which is Arizona’s statewide interagency system of services and supports for families of infants and toddlers, for children from birth to 3 years of age with disabilities or delays, including those at risk for developing autism spectrum disorder. The Arizona professional regulatory boards such as the Board of Behavioral Health Examiners, Medical Board, Board of Osteopathic Examiners, and State Board of Nursing, among others, regulate behavioral health care providers.

What are a few examples of hot topics in behavioral health law?

  1. Parity
    Mental health parity is the idea that mental health and substance use disorder (SUD) benefits and coverage be on par with medical and surgical benefits and coverage. That is what the Federal Parity Act (officially called the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, and also commonly referred to as MHPAEA) is all about.

    The Parity Act prevents group health plans and health insurance issuers from imposing more restrictive limitations on mental health or SUD benefits than on medical or surgical benefits.

    Why was this Act necessary? Historically, mental health and substance use disorders have not been treated on par with traditional medical/surgical issues. There was and still is significant stigma around addiction and behavioral health issues. The Parity Act aims to make sure that those individuals who need behavioral health benefits have them at the same levels they would for a medical or surgical issue. A few important caveats: the Parity Act doesn’t apply to small employers (under 50 employees) and it only applies to plans that do offer mental health or SUD benefits. But here is where other legislation comes into play: Plans must have “essential health benefits,” which includes “behavioral health” (treatment for mental illness, substance use disorders, and developmental disabilities) under the Affordable Care Act. The ACA established mental health care as an essential health benefit. The Parity Act was passed over 11 years ago, but it is a hot topic now because enforcement of the Parity Act over the last few years has started ramping up. Much of the successful litigation to enforce the Parity Act is based in ERISA, the Employee Retirement Income Security Act, and the idea that health insurers, health plans, and plan administrators are fiduciaries under ERISA. As fiduciaries, these entities are required to make sure the provisions of the Parity Act are being followed.

    You may have heard of the landmark case Wit v. United Behavioral Health from March 2019, which identified 8 generally accepted standards of care for behavioral health and later ordered UBH to reprocess more than 60,000 claims that had been initially denied for not meeting UBH’s medical necessity guidelines.[1] This case recently made headlines again in March 2022 when the Ninth Circuit reversed the district court’s order to reprocess the claims in a surprisingly short memorandum decision that left more questions than answers. This case continues to be significant for its 8 generally accepted standards of care for behavioral health—which were not overturned—and as a signal that parity cases may in the future shift gears from focusing on ERISA to focusing on federal and state discrimination laws for evaluating whether the application (or lack thereof) of behavioral health benefits was on par with the application of medical/surgical benefits.

  2. Tele-Behavioral Health: Reimbursement Considerations
    At the time of writing this blog post, the Federal Public Health Emergency (PHE) for COVID-19 is still in effect. An area garnering much interest from behavioral health providers is how tele-behavioral health will function in a post-PHE reality. Here is a short list of 5 relevant federal laws or guidance for behavioral telehealth reimbursement.

    (1) The 2008 Ryan Haight Act – this Act essentially limits prescribing controlled substances over telehealth if a provider has never examined the patient in-person before. There are several important exceptions, including that the Ryan Haight Act does not apply during a public health emergency. This Act will reemerge at the conclusion of the PHE unless there is new legislation to change it.

    (2) The SUPPORT Act – enacted in October 2018, this Act carved out an exception for reimbursement such that a patient being treated for SUD and co-occurring mental conditions does not need to live in a rural area or have an appointment at a health care facility for the provider to be reimbursed.

    (3) Consolidated Appropriations Act of 2021 (enacted in 2020) – this legislation created a permanent exception for reimbursement of mental health services, making it possible for providers to be reimbursed regardless of where their patient is located. However, the legislature put in an additional requirement that for those mental health services to be reimbursed, the patient must have an in-person visit within 6 months before the provision of telehealth. There are some narrow exceptions.

    (4) 2022 Medicare Physician Fee Schedule – CMS added onto the 6 month rule from the CAA of 2021 (above) a new requirement that after the telehealth visit, to be eligible for reimbursement, the patient needs to visit the provider in-person again within 12 months. Again, there are several exceptions. Additionally, CMS expanded the modality of services that can be provided: reimbursement is now possible for mental health services delivered via audio-only telecommunications technology.

    (5) Consolidated Appropriations Act of 2022 – this Act, which became law recently on March 15, 2022, does not add any permanent changes to the SUD and mental health provisions discussed above, but it does add a roughly 5 month extension to the temporary telehealth provisions currently in place after the PHE ends.

  3. Interstate Compacts
    Arizona enacted PSYPACT – the Psychology Interjurisdictional Compact that facilitates the practice of telepsychology and temporary in person, face-to-face practice of psychology across state boundaries – several years ago. Arizona providers have greater access to telepractice now that 30 states have enacted PSYPACT with more on the way.

    One Compact you may not have heard of yet that could be very helpful for the behavioral health field in the future is the Interstate Compact for Counselor Licensure. This Compact is not yet operational, as it needs at least 10 states to enact it first, but it is close with 9 already signed on. This Compact is for Licensed Professional Counselors (LPCs) only. It specifically does not include licensed marriage and family therapists or licensed clinical social workers. Arizona currently does not have legislation pending for this Compact, but we may see legislation in the future.

Conclusion

There are many facets to behavioral health law and the above barely scratches the surface. Thanks for reading and don’t forget that after July 16, 2022, anyone can dial 9-8-8 and be connected to the National Crisis Hotline/Suicide Prevention Hotline. You can reach me at 602-889-5342 or EErman@dickinson-wright.com.

[1] You can read more about this decision here: https://www.dickinson-wright.com/news-alerts/highlights-from-wit-united-behavioral-health-case


Meeting the Physician Shortage in AZ with J-1 Waivers

By: Rachel Bus, Law Offices of Brelje and Associates P.C.

It‘s no secret that Arizona is experiencing a chronic physician shortage. Arizona’s Primary Care Office reported in 2021 that Arizona contains 644 federally designated Health Professional Shortage Areas (HPSAs) along with 37 Medically Underserved Areas (MUAs) and 10 Medically Underserved Populations (MUPs).[1]  Arizona will require an additional 558 full-time primary care physicians to eliminate its shortage, and the issue will only worsen as our state’s population continues to explode. A fact not widely reported is that the recruitment of U.S.-trained International Medical Graduates, seeking a “J-1 Waiver” can be an important strategy to combat Arizona’s physician shortage.

International Medical Graduates (IMGs) are physicians who earned their medical degree abroad and then met certain credentialing and licensing requirements in order to gain acceptance into U.S. medical residency and fellowship programs. In order to be admitted to the U.S., many IMGs seek a J-1 exchange visitor visa sponsored by the Educational Commission for Foreign Medical Graduates (ECFMG). The J-1 visa comes with a stipulation, however. All J-1 physicians sponsored by ECFMG are subject to a two-year home residence requirement, under which they must return to their country of last residence for at least two years, before being allowed to come back to the U.S. under an H-1B work visa, and before receiving U.S. permanent residence (a “green card”).[2]

One way in which a J-1 physician may waive the two-year home residence requirement is through a commitment to full-time employment for three years in a medically underserved location.[3] This is one of those rare “win-win” scenarios: The IMG receives the opportunity to remain in the U.S. and put his or her medical training into practice, and some of the nation’s most underserved locations retain the talents of a physician who might not otherwise consider employment in the area.

In order for a J-1 waiver to be approved, the physician and the prospective employer must first seek the recommendation of a state health agency or an interested government agency. The state health agency recommendation is granted under a set of federal guidelines called the Conrad 30 program. Each state, irrespective of geographic size or population, has 30 J-1 waiver slots that it may award.[4] Here, the Arizona Department of Health Services (ADHS) administers the Conrad 30 program. In addition to the general federal guidelines of a contract covering three years’ full-time employment in a HPSA or MUA/P designated location, ADHS further requires that the employer demonstrate that it spent at least 6 months attempting to recruit a U.S. physician to the position and that the facility will offer sliding fee scale discounts to uninsured patients. Additionally, there are contract guidelines that must be adhered to.

Prospective employers and J-1 physicians should carefully review the ADHS requirements on its website.[5] The Arizona Conrad 30 program typically accepts applications through an electronic portal during a filing window that opens in October and closes in November each year. If more than 30 qualified applications are received, ADHS will score and rank the applications and award waiver recommendations to the top-scoring applicants. 

Aside from the Conrad 30 program, J-1 physicians may also seek a clinical care waiver recommendation through U.S. Health and Human Services if they will be providing primary care services in HPSA locations with a score of 7 or higher.[6] The U.S. Department of Veterans Affairs may also serve to recommend J-1 physician waivers, with a commitment to work for three years providing healthcare within the agency, but only after all efforts to recruit a U.S. physician have been exhausted.[7] 

Once the state health agency or interested government agency has recommended a J-1 waiver, the waiver application is then screened by the U.S. Department of State and finally approved by the U.S. Citizenship and Immigration Services. In all, applicants should anticipate the waiver process to take six to eight months. With the J-1 waiver approval in hand, the IMG’s employer may then petition for the physician to change from J-1 visitor status to H-1B work visa status, in which the physician will serve out the three-year waiver commitment. The physician may not change employers during that three-year period unless there is evidence that “extenuating circumstances” necessitated the change.[8]

With the challenges inherent in physician recruitment and retention, it is important to understand all of the available options. The use of the J-1 waiver programs available in Arizona may be one additional tool to combat Arizona’s rising physician shortage.

[1] https://www.azdhs.gov/documents/prevention/health-systems-development/data-reports-maps/reports/primary-care-needs-assessment-final.pdf

[2] 8 USC § 1182(e)

[3] 8 USC § 1184(l)

[4] 8 USC § 1184(l)(1)(B)

[5] https://www.azdhs.gov/prevention/health-systems-development/workforce-programs/j-1-visa-waiver/index.php

[6] https://www.hhs.gov/about/agencies/oga/about-oga/what-we-do/visitor-exchange-program/supplementary-b-clinical-care.html

[7] VHA Handbook 5005.01

[8] 8 USC § 1184(l)(1)(C)(ii)

New Peer Review Decisions Confirm Basic Principles and Answer Some Questions

By: Karen Owens, Coppersmith Brockelman PLC

In two related cases before the Arizona Court of Appeals, the Court affirmed important Arizona peer review principles and answered some outstanding questions in this area of law. The predicate for both cases (and a third case, discussed at the end) was the decision of a hospital governing board to revoke the medical staff membership and privileges of a cardiologist (“Physician”) based on patient care issues, disruptive behavior, and alteration of medical records. 

  • Sharifi Takieh v. O’Meara, 252 Ariz. 50 (App. Aug. 10, 2021) (“Takieh”) was the first published Arizona Court of Appeals decision addressing substantive peer review issues since 2005.  The Opinion affirmed the prohibition on discovery of peer review documents and made clear that hospitals cannot be required to prepare privilege logs in connection with claims of peer review confidentiality. 
  • In Sharifi v. Banner Health, 1 CA-CV 20-1001 (Ariz. App. May 13, 2021) (“Sharifi”), a non-published memorandum decision arising from the same peer review proceeding, the Court affirmed that a Physician challenging a hospital peer review decision must bring a statutory claim and may not file a contract action.  The Court also made clear that a hearing officer may limit the length of a peer review hearing even without express direction in the fair hearing plan.

The Sharifi Memorandum Decision

In Sharifi, the trial court conducted judicial review of the hospital board’s revocation decision under A.R.S. § 36-445.02.  The Court of Appeals upheld the trial court’s ruling affirming the hospital board’s revocation of the Physician’s medical staff membership and privileges. Relying on A.R.S. § 36-445.02, Hourani v. Benson Hospital, 211 Ariz. 427, 122 P. 3d 6 (App 2005), and other prior Arizona decisions, the Court noted the importance of peer review immunity and articulated the standard of review as review of “peer review proceedings for both procedural and substantive errors [employing] a deferential standard of review.”

The appellant Physician contended that there were numerous procedural defects in the in-hospital peer review proceedings.  Citing the statute, the Court limited its review of these challenges to the administrative record to determine whether the hospital substantially complied with its Bylaws. In perhaps the most important procedural issue, the Physician challenged the hearing officer’s imposition of a time limit on the hearing. The Court upheld the time limit, noting that the hearing panel members said they felt they had enough information and that any timing problem was “entirely of [the Physician’s] own making.” The Court saw “no evidence that the time allotted was insufficient or resulted in prejudice.”   

The Physician also challenged the revocation decision on the merits.  The Court agreed with the trial court that it should not substitute its own judgment for the hospital board’s “where expertise is involved,” and upheld the hospital board’s substantive decision.  

The Court made short work of the Physician’s separate contract claim.  Acknowledging that the medical staff bylaws create a contract with staff, the Court said the statute barred any claims other than a claim for injunctive relief based on the record.  

Finally, the Physician contended that he was entitled to a new trial based on declarations he belatedly presented to the trial court – declarations which alleged bias based on race and religion.  The Court explained that the Physician needed to “cite to evidence in the record making it affirmatively probable the alleged bias or misconduct changed the outcome of the administrative proceeding.”  The Court rejected the Physician’s claim, noting not only that the declarations were late and not in the record, but also that they failed to prove any actual bias.

While Sharifi is an unpublished memorandum, it still provides insight into the Court’s view of peer review principles and confirms some critical standards.  And while memorandum decisions are not precedential, Arizona Supreme Court Rule 111(c) allows citation of memorandum decisions to in certain circumstances: to establish claim preclusion, issue preclusion, or law of the case; to assist the appellate court in deciding whether to issue a published opinion, grant a motion for reconsideration, or grant a petition for review; or for persuasive value if the memorandum was issued on or after January 1, 2015, no opinion adequately addresses the issue before the Court, and the citation is not to a de-published opinion or portion of an opinion. 

Takieh Opinion

The Physician also filed a separate state court lawsuit alleging that the Chief of Staff, another cardiologist and cardiology group, the hospital‘s chief medical officer, and the hospital’s in-house attorney all had made defamatory statements about him.  The trial court dismissed all but one cardiologist and the in-house attorney from the case, largely because the dismissed defendants’ actions and statements were made during peer review proceedings. The Physician did not challenge those dismissals.

However, in an amended complaint, the Physician alleged the following instances of defamation by the remaining defendants:

  • That the remaining defendant cardiologist had told another cardiologist the Physician was “an idiot” who had “administered blood thinner ‘to an obvious case of intracerebral hemorrhage.’”
  • That the in-house attorney had composed letters and other communications containing false information designed to destroy the Physician’s reputation.

The Physician moved to compel the in-house attorney to disclose several categories of her own correspondence related to the peer review proceedings.  The trial court refused to order a privilege log for peer review protected documents. 

On the other hand, the trial court did order the in-house attorney to produce a log of her correspondence outside the peer review process.  The in-house counsel submitted no log, explaining that all her communications in the matter were protected peer review materials.  At this point, after the close of discovery, the Physician for the first time submitted affidavits from two former hospital employees (quite similar to the ones produced in the Sharifi case).   In one of them, the affiant alleged she had heard the in-house attorney make disparaging remarks about the Physician (that he was a terrible doctor, an idiot, a danger to patients.)  The other affiant alleged that she had heard other Physicians say the in-house attorney had encouraged them to make false statements about the Physician at the hearing.  The in-house attorney moved to strike the affidavits as untimely, and the trial court agreed.

The trial court held on summary judgment that there was no dispute the Physician had administered blood thinners to a patient with a cerebral hemorrhage, and the other cardiologist’s alleged “idiot” statement was opinion and thus not actionable. The trial court further held that the Physician had failed to produce any admissible evidence showing the in-house attorney had made “any comments about him, defamatory or otherwise,” outside the peer review process. 

The Court of Appeals affirmed both rulings.  With respect to the cardiologist’s alleged comments, the Court agreed with the trial court that the “idiot” statement was opinion, and the record “lacked clear and convincing evidence that a reasonable listener could have understood [the cardiologist’s] ‘obvious’ statement as conveying an objective fact.”   Regarding the defamation claim against the in-house attorney, the Court of Appeals affirmed the trial court’s decision refusing to order production of a privilege log for peer review privileged correspondence.  The Court cited the “overriding public interest in peer-review proceedings” and the need for confidentiality to ensure candid peer review.   The Court also agreed that the affidavits were not admissible evidence based on the Arizona discovery rules.

Ultimately, the Court affirmed the trial court’s conclusion that the Physician’s claim against the in-house attorney was groundless and pursued in bad faith.  The in-house attorney was awarded attorney fees in both the trial court and appellate court.  

Interestingly, in the two state court lawsuits arising from the peer review proceeding described in these cases, there were no depositions, no written discovery and no document production.  Judicial review of the in-hospital administrative proceedings was limited to a review of the record, as set forth in the statute.  While no one can prevent disgruntled physicians from naming individuals in lawsuits arising from peer review, the two cases are reassuring that Arizona law provides strong protection of the integrity of the peer review process.   

Postscript:  The Federal Court Case

In addition to the two state court actions discussed above, the Physician filed a complaint in federal court alleging under 42 U.S.C. § 1981 that the hospital system and multiple individuals discriminated against the Physician based on his race in terminating his physician services agreement (PSA). Takieh v. Banner Health, No. CV-10-05878-PHX-MTL (D. Arizona Jan. 27, 2021), aff’d. No. 21-15326 (9th Cir. Feb. 16, 2022).  The District Court dismissed the case in an unpublished Order, finding that the Physician himself had alleged numerous non-discriminatory reasons for the termination of the PSA, and taking into account the trial court’s decision in Sharifi.  The District Court refused to allow the Physician to amend his pleading, holding in part based on the Sharifi trial court decision that amendment would be futile.  The Ninth Circuit Court of Appeals affirmed the District Court’s decision and reliance on Sharifi because it was relevant and provided non-discriminatory reasons for the PSA termination. 

8 Ways Healthcare Attorneys Can Reduce Racial Disparities in Maternal Mortality

By: Marki Stewart, Coppersmith Brockelman PLC

Maternal mortality in the United States has more than doubled in the last 30 years—women living in the United States today are 50% more likely to die in childbirth than their mothers were a generation ago. Researchers estimate more than half of these deaths are preventable.

Alarmingly, the path to motherhood is significantly deadlier for women of color than it is for their white counterparts. Nationally, black women are three to four times as likely to die from pregnancy-related causes than white women, a disparity that has only widened in recent years.[i] Surprisingly, these disparities increase with age and education; data from the Centers for Disease Control and Prevention demonstrates that pregnancy-related deaths for black women with at least a college degree are five times higher than white women with a similar education.

Closer to home, the rates are likewise alarming. On October 22, 2021, the Arizona Society for Healthcare Attorneys (AzSHA) presented a panel discussion regarding the data in Arizona showing that women of color have higher rates of maternal mortality than their white peers. Native Americans have the highest maternal mortality rates in Arizona, at more than four times higher than white non-Hispanic women.[ii]

Although the causes of death vary—including cardiovascular diseases, hypertension, pulmonary embolism, and hemorrhage, among others—by and large, women die because they do not receive early, effective, and aggressive lifesaving treatment. Despite most preventable events being preceded by vital sign changes, structural racism and health care providers’ implicit biases may lead to delayed responses to clinical warning signs.[iii] A provider’s failure to quickly identify warning signs to rescue a pregnant woman or new mother can lead to catastrophic consequences.

Healthcare attorneys must help clients address this dire situation. Whether serving as general counsel for a hospital, counsel to a payor, or representing individual physicians or physician groups, attorneys can use their positions of power to influence key decisionmakers who directly impact this problem. Attorneys should impress upon their clients that increased maternal mortality for women of color is not only an issue of justice in healthcare, but any situation in which sub-standard care is provided also creates potential liabilities and must be urgently addressed.

Here are eight ways attorneys can leverage their influence to enact positive change:

  1. Urge hospital leadership to participate in the Arizona Alliance for Improvement of Maternal Health Collaborative (AIM).

    Administered by the Arizona Hospital and Healthcare Association, AIM is a quality improvement initiative that helps hospitals implement Patient Safety Bundles, a series of evidence-based practices that reduce provider bias and ensure a timely and tailored response to a wide variety of objective clinical warning signs. In addition to addressing certain clinical symptoms, the Patient Safety Bundles address patient support, including standards for recognizing and treating perinatal depression and anxiety. Participating hospitals also provide valuable data to better understand the challenges in Arizona and track progress toward state and national goals.[iv]

  2. Recommend that all hospital, physician, and physician group staff members interacting with patients receive implicit bias training on a recurring basis.

    Implicit bias training uses techniques to recognize and understand the magnitude of unconscious bias, helping to de-bias patient care. A variety of programs are available, and can be performed in-person or virtually, both free or for cost. The March of Dimes’ Breaking Through Bias in Maternity Care, a training session that can be done in-person or by virtual learning experience, provides an overview of implicit bias and personal assessment, strategies to mitigate racial bias in maternity care, and a plan for building a culture of equity within an organization.[v] Some healthcare organizations choose to perform internal implicit bias training sessions that are tailored to their needs.

  3. Encourage hospitals and physician groups to hire health care providers of color.

    Tragically, as with their mothers, black newborns die at three times the rate of white infants in the United States. Research demonstrates that black newborns cared for by black physicians have 50% reduced mortality compared to black newborns treated by white physicians. Furthermore, racial concordance with one’s physician can increase health care utilization among under-resourced communities.[vi] If the hospital or physician group finds it difficult to recruit providers of color, encourage them to start a scholarship program to invest in young medical and nursing students of color.

  4. Recommend hospitals and obstetric physician practices hire doulas and offer doula care to all pregnant women.

    Doulas are non-clinical professionals who provide physical, emotional, and informational support to mothers before, during, and after childbirth. Data shows doulas increase patient satisfaction with the birthing process, decrease the risk of C-section, and decrease the risk of newborns being sent to the NICU.

  5. Advocate for hospitals and obstetric practices to consider offering group prenatal care, an alternative model of prenatal care delivered in a group setting for peer social support, skill building, and education.

    Women who participate in group prenatal care with other women at similar gestation ages receive approximately 20 hours of prenatal care over the course of their pregnancies, compared to approximately two hours in traditional individual care settings. The American College of Obstetricians and Gynecologists determined that group prenatal care resulted in reductions in pre-term birth and NICU admissions, increased birth weight for infants, decreased emergency department visits in the third trimester, and increased patient satisfaction.

  6. Advise payors, such as private health insurers or AHCCCS, to adopt payment policies that are demonstrated to improve maternal care.

    Health insurers have a critical role to play because providers may not pursue necessary care if reimbursement will not follow. Payment policies that encourage good maternal care include an extension of AHCCCS coverage for pregnant women for up to one year after birth. Currently, when someone enrolled in AHCCCS gives birth, their coverage may expire just sixty days after their pregnancy ends, meaning that many low-income mothers are forced to forego necessary postpartum health care because they can’t afford the expense; indeed, almost 20% of maternal deaths occur 43 days to 1 year after delivery.[vii] Payors should also expand reimbursement for doulas, group prenatal care, home visits, and mental health treatment for pregnant and post-partum women. Some payors have begun to reimburse for implicit bias training, and others should follow suit. [viii] Payors can also provide outcome-based reimbursement incentives for providers to close gaps in maternal health.

  7. Encourage hospitals and physicians to collaborate with the Native American community to address Native communities’ lack of access to care, and to offer care options that respect the community’s culture, values, and beliefs.

    The physical distance between Native American communities and hospitals makes it hard for Native women to access care; some studies show that Native American women have half as many prenatal visits as their white counterparts, making it difficult to identify health problems at an early stage. Hospitals and physicians can adopt a home visit program in which doulas, midwives, nurses, or social workers travel to the woman’s home to provide care and offer support on a wide variety of issues impacting social determinants of health.[ix]

  8. Recommend physician and physician group clients participate in a variety of programs aimed at improving maternal care and eliminating racial biases.

    Excellent examples of existing programs and tools include:
    • The American College of Obstetricians and Gynecologists’ “Every mom. Every time.” program provides extensive training and guidance on clinical warning signs.[x]
    • The Association of Women’s Health, Obstetric and Neonatal Nurses’ Post-Birth Warning Signs Education Program teaches best practices on a variety of topics impacting maternal mortality, including disseminating information to patients to increase their recognition and response to life-threatening symptoms.[xi]
    • The Agency for Healthcare Research and Quality’s Toolkit for Improving Perinatal Safety aims to improve patient safety, team communication, and quality of care[xii], and its Guide to Patient and Family Engagement in Hospital Quality and Safety promotes better engagement between patients, families, and health professionals.[xiii]

The United States’ increasing maternal mortality rate, borne largely on the backs of women of color, has become a public health crisis that all players in the health care industry should work to improve, including health care attorneys. AzSHA is committed to continue addressing this issue, and we welcome our members’ feedback and insight into creative ways that attorneys can help. If you are interested in collaborating with other attorneys on this issue, please reach out to Marki Stewart, at mstewart@cblawyers.com.

[i] See Khiara M. Bridges, Racial Disparities in Maternal Mortality, 95 N.Y.U. L. Rev. 1229 (2020).

[ii] A 2017 report from the Arizona Department of Health Services’ Maternal Mortality Review Program

demonstrates that Arizona’s maternal mortality rate is at 25.1 deaths per 100,000 live births (2012-2015). This

ranks Arizona 25th in the nation. Native American/Indigenous women died at four times the rate (70.8

per 100,000 live births) compared to White non-Hispanic women (17.4 per 100,000 live births) despite

Native Americans representing only 6.0% of the births. The maternal mortality rate for Hispanic/Latina

women was 22.4 per 100,000 live births while the maternal mortality rate for Blacks, Asian, and Pacific

Islander women combined was 44.0 per 100,000 live births. See ADHS maternal Mortality Action Plan, June 2019, available at https://azdhs.gov/documents/operations/managing-excellence/breakthrough-plans/maternal-mortality-breakthrough-plan.pdf.

[iii] For additional information about health care providers’ implicit biases impacting their perception of pain and treatment plans for patients of color, see “Racial Bias in Pain Assessment and Treatment Recommendations, and False Beliefs About Biological Differences Between Blacks and Whites,” Kelly M. Hoffman, et al., Proc Natl Acad Sci U S A. 2016 Apr 19; 113(16): 4296–4301, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4843483/.

[iv] For more information about how to participate in AIM, see https://www.azhha.org/arizona_aim_collaborative.

[v] Further information about this training can be found here: https://ww.ahapac.org/system/files/media/file/2020/12/march-of-dimes-breaking-through-bias-maternity-care.pdf. Organizations can inquire about an in-person training session by completing this form: https://www.marchofdimes.org/professionals/implicit-bias-training-form.aspx.

[vi] “Physician-Patient Racial Concordance and Disparities in Birthing Mortality for Newborns,” Brad N. Greenwood, et al., PNAS September 1, 2020 117 (35) 21194-21200, available at: https://www.pnas.org/content/117/35/21194.

[vii] The Build Back Better package passed by the U.S. House of Representatives would mandate one year of postpartum Medicaid care. If enacted by the Senate without this provision, Arizona’s legislature would need to grant AHCCCS statutory authority to enact this change.

[viii] See https://www.forbes.com/sites/debgordon/2021/04/20/us-health-insurer-announces-new-plan-to-reduce-racial-disparities-in-maternal-health-by-50-in-five-years/?sh=3f6ad5b11ebd.

[ix] For more information on the benefits of home visits, see https://mchb.hrsa.gov/maternal-child-health-initiatives/home-visiting-overview. For information about reimbursement for home visits, see https://www.americanprogress.org/article/home-visiting-programs-vital-maternal-infant-health/.

[x] See https://www.acog.org/advocacy/policy-priorities/maternal-mortality-prevention.

[xi] See https://www.awhonn.org/education/hospital-products/post-birth-warning-signs-education-program/.

[xii] See https://www.ahrq.gov/hai/tools/perinatal-care/index.html.

[xiii] See https://www.ahrq.gov/patient-safety/patients-families/engagingfamilies/index.html.

Update on Arbitration Clauses in Medical Malpractice Cases

By: Paul J. Giancola and Claudia E. Stedman, Snell & Wilmer

Healthcare providers and counsel frequently view arbitration agreements as more efficient and more cost-effective alternatives to litigation—and indeed, in many circumstances, this form of alternative dispute resolution can be a critical tool in managing costs and helping parties reach a compromise more efficiently. Recent Arizona case law on arbitration clauses in the context of medical malpractice cases serves as a reminder of the issues that counsel should be mindful of in drafting these contractual provisions for their healthcare clients.

Heaphy v. Willow Canyon Healthcare, Inc.

On May 18, 2021, the Arizona Court of Appeals ruled in Heaphy v. Willow Canyon Healthcare, Inc. that a wife acting in the capacity of her husband’s healthcare power of attorney (HPOA) did not have authority to bind her husband or his estate to an optional arbitration agreement when admitting him to a nursing home when the wife failed to indicate that she was the legal representative or agent. 251 Ariz. 358, 491 P.3d 1165 (Ct. App. 2021).

By way of background, in 2012, Charles Heaphy appointed his wife, Shirley Heaphy, as his HPOA. In 2017, Ms. Heaphy admitted her husband to Pueblo Springs Rehabilitation Center—a skilled nursing and rehabilitation center. The contract that Mrs. Heaphy signed with the facility included an optional arbitration agreement, asked for the signature of a “Legal Representative or Agent,” and “directed an agent signing in that capacity to also execute on the same page a separate ‘Acknowledge of Legal Representative or Agent.’” Id. at 1167. Mrs. Heaphy signed her husband’s name on the resident line and signed her own name on the adjacent signature line. She did not sign as the legal representative or the acknowledgment. Mr. Heaphy passed away a few weeks after he was admitted to Pueblo Springs.

In 2019, Mrs. Heaphy, acting in her capacity as personal representative of Mr. Heaphy’s estate and on behalf of all statutory beneficiaries (Plaintiff), sued Willow Canyon Healthcare—the owner of Pueblo Springs—and the doctor who treated Mr. Heaphy. Mrs. Heaphy alleged elder abuse, negligence, negligent hiring and supervision, and wrongful death. Id. at 1167-68.

Willow Canyon filed a motion to compel arbitration based on the contract with the skilled nursing facility that Mrs. Heaphy filled out when her husband was admitted. Plaintiff argued, however, that the contract was not enforceable because it was unconscionable, and that Mrs. Heaphy lacked authority to bind either the estate or the beneficiaries. The trial court denied the motion to compel arbitration, but held an evidentiary hearing to assess whether Mrs. Heaphy had the authority to sign the contract with Willow Canyon as her husband’s agent. The trial court held that the estate’s claims were not subject to the arbitration clause in the agreement with Willow Canyon because though Mrs. Heaphy was HPOA, she was not authorized to sign the contract on her husband’s behalf, and that it was procedurally unconscionable under the circumstances.

Willow Canyon appealed the trial court’s decision, arguing that Mrs. Heaphy had actual authority, either express or implied, to sign the agreement and, even if she lacked such authority, she should be equitably estopped from denying such authority, the agreement was not unconscionable, and the Federal Arbitration Act (FAA) preempted Arizona case law “holding that an arbitration agreement cannot bind non-signatories.” Id. at 1168.

The Arizona Court of Appeals stated that it was required to defer to the trial court’s factual findings absent clear error. Therefore, the Court affirmed the trial court’s decision to deny Willow Canyon’s motion to compel arbitration for the following reasons:

First, on the issue of express actual authority, the Court examined the plain language of the HPOA and found that it authorized Mrs. Heaphy to have full authority to make decisions regarding healthcare, but only limited authority “to seek damages from a healthcare provider for its failure to comply with Charles’s refusal of treatment or his wishes . . . .” Id. at 1169. Further, because the arbitration clause was optional and “not required for Charles to be admitted into Pueblo Springs, it was not a healthcare decision as contemplated by the HPOA.” Id.

Second, the Court found that Mrs. Heaphy lacked implied actual authority to bind her husband’s estate because the HPOA did not “expand the scope of her authority such as to encompass the optional” arbitration agreement.” Id. at 1170.

Third, the Court found that the elements of equitable estoppel were not met because, among other things, Mrs. Heaphy’s signing of the optional arbitration agreement “did not represent that she had authority to bind Charles and his estate, particularly when she did not sign the line provided for the ‘Legal Representative or Agent’ and the related acknowledgement on that page.” Id.

Fourth, the Court determined that the trial court’s decision was consistent with both Arizona law and the FAA and that the arbitration agreement was unenforceable because Mrs. Heaphy lacked authority to enter into it on behalf of her husband. Id. at 1171.

In summary, the Court of Appeals found that an HPOA is limited in scope and does not confer the legal authority for the HPOA to waive legal right such as trial by jury. In contrast, an appropriately drafted power of attorney and signed arbitration provision likely would have conferred the appropriate legal authority to require that Mr. Heaphy and his estate arbitrate. A potentially open question, but likely derivative of the first question is whether the beneficiaries would also be bound by the agreement to arbitrate.

Considerations for Arbitration Clauses in the Context of Medical Malpractice

The current legal landscape is such that courts will try to enforce binding, pre-dispute arbitration agreements, even in the medical malpractice context. While there is strong public policy favoring arbitration agreements, there are common pitfalls that drafters of such agreements should watch out for.  

Drafting Considerations & Unconscionability

From a practical standpoint, it is important to consider the sometime overlooked drafting and structure of arbitration clauses. In the context of medical malpractice claims, courts balance the public policy and efficiency considerations of arbitration agreements against the fact that patients or their caregivers may fail to comprehend what legal rights they are relinquishing by signing an arbitration agreement. Therefore, courts scrutinize arbitration provisions more closely than they would in a commercial context. Courts look at both substantive (overly oppressive terms or unduly harsh to one party) and procedural (the process for entering into the agreement) unconscionability.

An unconscionability claim can be successfully argued if an arbitration provision is unduly one-sided or makes medical care contingent on agreeing to arbitrate. In Gullett v. Kindred Nursing Centers West, LLC, the nursing center moved to compel arbitration pursuant to the contract between it and the Plaintiff. 241 Ariz. 532 (Ct. App. 2017). The Plaintiff opposed the motion, arguing that the arbitration agreement was substantively unconscionable if not procedurally unconscionable. Id. at 535. In evaluating whether the arbitration agreement was substantively unconscionable, the Court considered whether the “amount of permitted discovery is so low and the burden to obtain additional discovery so high that the litigant is effectively unable to vindicate their claim.” Id. at 536.

In Gullet, the Court found that because the arbitration agreement allowed for “30 interrogatories, 30 requests for production, 10 requests for admission, six lay depositions and two expert depositions,” the agreement was not substantially unconscionable. Id. at 537. The Court likewise disagreed with the Plaintiff on the procedural unconscionability claim, finding that because the arbitration agreement required the parties to find an impartial arbitrator or select from an approved list, there was mutuality and the agreement was fair. Id. at 539.

When writing an arbitration agreement, drafters should consider writing the provision out in bold type or capitalized letters to focus the signor’s attention and highlight the particular language so that the patient is put on notice that they are giving up certain legal rights. In the case of a particularly voluminous contract—as in the Heaphy case where the entire contract with the skilled nursing facility was almost 60 pages long—drafters may want to consider having the arbitration provisions set off in an entirely separate document from the rest of the agreement. Additionally, using plain, simple language is important in defending against a potential claim that the contract is unenforceable because the patient did not understand what he or she was signing.  

Simply because a contract is one of adhesion does not make it automatically unenforceable. However, courts will consider “take it or leave it” agreements in light of whether the patient “knowingly consented to the clause and what the patient’s reasonable expectations of signing that provision were.” Broemmer v. Abortion Serv’s of Phoenix, Ltd., 173 Ariz. 148, 152 (1992). For this reason, when drafting an arbitration agreement, counsel may also want to include language clearly indicating that signing is an arbitration agreement is voluntary and that a patient’s medical care will not be contingent on whether they agree to arbitrate or not.

Drafting considerations go hand-in-hand with upholding the enforceability of an arbitration agreement. To avoid a claim that a contract is unconscionable, counsel and providers should evaluate the patient’s expectations and ensure that the patient has knowingly consented to the agreement. Patients should be informed of the arbitration agreement prior to consenting to the medical treatment or procedure. Terms that limit discovery or limit recovery of damages should likely be omitted. Finally, counsel should frequently review the terms of the arbitration agreement and update the language as necessary.

Update on the Status of the Section 1557 Health Care Non-discrimination Regulations

by: Karen Owens, Coppersmith Brockelman PLC[1]

Section 1557 of the Affordable Care Act,[2] the first health care-specific anti-discrimination provision in federal law, has been in the news again recently.  The law and its regulations have had a complicated history, and the situation is still dynamic.     

The Affordable Care Act passed in 2010, and an initial regulation set was promulgated in 2016.[3]  That set established 1557’s broad coverage, including requirements that health care entities provide signage and documents in various languages and a declaration that the term “sex discrimination” in the law extended to protect transgender individuals and pregnancy-related health care.  For the Trump Administration, rewriting the Section 1557 regulations was a priority, and 2020 saw the publication of an entirely new regulation set.  The 2020 regulations made big changes, including narrowing the entities subject to Section 1557’s anti-discrimination provisions, limiting the language and signage requirements, and removing transgender and pregnancy-related protections. 

Since then, the courts, including the U.S. Supreme Court, have weighed in on aspects of 1557 and related laws.  Now the Biden Administration is actively addressing the scope of the regulations through enforcement positions and proposed revision to the regulations themselves.  

Here is a summary of the status of the key regulatory provisions under Section 1557 and prospects for future changes.

Scope of Regulatory Coverage  

The 2016 regulations had covered essentially all health insurers, prohibiting discriminatory denials, cancellations, limitations, refusals to issue or renew policies, denials and limitation of claims, imposition of discriminatory limitations/restrictions on coverage, and discriminatory marketing practices or benefit design.

The 2020 regulations, which are still in place, removed the blanket application of 1557 to virtually all health insurers.  Currently, only the portions of an insurer’s business that receive federal funding are subject to regulation, and the only applicable federal funding is funding under title 1 of the Affordable Care Act.  The practical effect is that insurers for the most part are no longer subject to Section 1557 regulations.

To date, we do not know whether the Biden Administration will address the scope of coverage through new regulations.  

Scope of Sex Discrimination

1. Transgender Discrimination

The 2016 regulations defined sex discrimination to include discrimination based on gender identity and sex stereotyping (but not sexual orientation).  The gender identity definition explicitly included gender expression/transgender status.  This led to an explicit prohibition on denial of gender transition health care coverage and services, as well as a prohibition on the denial or limitation of services ordinarily available to only one sex/gender when a person of another sex/gender needed those services. 

A federal district court in Texas issued a nationwide injunction on this part of the 2016 regulations before it went into effect.[4]    

The 2020 regulations removed the definition of sex discrimination altogether and instructed health care entities to look to the “plain meaning in the statute,” which the Department of Health and Human Services (HHS) said was a biological binary of male/female based on birth. The 2020 regulations also removed the definition of “gender identity”; removed the requirement that individuals be treated consistent with their gender identity; removed the prohibition on refusing care ordinarily limited to one gender; and removed coverage requirements regarding gender transition services.

Then, in a game-changing opinion, in Bostock v. Clayton County, the U.S. Supreme Court held that Title VII protects employees from discrimination based on gender identity and sexual orientation.[5] In a 6-3 decision, Justice Gorsuch stated: “it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.”  Id. At 1741.   After Bostock, two federal district courts issue nationwide injunctions against enforcement of 2020 regs re gender identity and sexual orientation.[6]

The Biden Administration wasted no time in following up on Bostock.  One of the President’s first-day Executive Orders stated: “All persons should receive equal treatment under the law, no matter their gender identity or sexual orientation” and ordered agency review of all regulations, policies, guidance, etc., inconsistent with this policy.  On May 10, 2021, HHS said that the Office for Civil Rights would include gender identification and sexual orientation in its interpretation and enforcement of the Section 1557 sex discrimination prohibition. Notably, gender orientation was not in the 2016 regulations, but was approved in Bostock.

While we do not have a new set of regulations from the Biden Administration, there can be no doubt that any new regulations will renew protections for transgender individuals.  Those protections may be broader than the 2016 provisions afforded, as they will incorporate protections based on sexual orientation in accordance with Bostock.  

2. Pregnancy-Related Discrimination 

The 2016 regulations also included pregnancy-related discrimination, including discrimination related to abortion, as part of 1557’s protections against “sex discrimination.”   While the regulation allowed for a religious exemption, it was considered narrow.  This part of the 1557 regulations also was the subject of a nationwide injunction before it went into effect.[7] 

Unsurprisingly, the 2020 regulations eliminated the prohibition on discrimination based on pregnancy and pregnancy termination and created a blanket abortion and religious objection exemption.

The 2020 version remains in place.  The injunction against enforcement of the regulations with respect to pregnancy is still the law, and the Biden Administration stated that it will abide by the injunction.

Limited English Proficiency (LEP) Discrimination

The 2016 regulationsstated that a covered entity must take reasonable steps to provide meaningful access to each LEPindividual eligible to be served or likely to be encountered in a health care entity.  The entity had to evaluate and give substantial weight to the nature and importance of the health program/activity and the particular communication at issue.  The regulations also required covered entities to offer a qualified interpreter when oral interpretation as a reasonable step to provide meaningful access, use a qualified translator when translating written content, and if no live interpreter was available, offer real-time video for foreign language interpreters, using a “sharply delineated image that is large enough to display the interpreter’s face. . . .”

Importantly, the 2016 regulations required health care entities to insert taglines on all  “significant” documents and notices in top 15 languages in the state where the document would be received.  Further, employers with at least 15 employees had to provide notices about nondiscrimination policies, designate at least one employee to carry out 1557 responsibilities, adopt grievance procedures with appropriate due process standards to resolve actions prohibited under Section 1557.

The 2020 regulations made huge changes.  First, they changed the regulatory focus from individual patients to the overall handling of the LEP population.  They stated that when language services are required, they must be free, accurate and timely, and preserve the privacy and independence of the LEP individuals.  To determine whether language services would be required, the 2020 regulations adapted guidance from 2003 to call for a 4 factor test that deemphasized nature of the communication and focused on the number/proportion of LEP eligible/likely to be served; frequency of contact; nature/importance of program/activity; and resources & costs.

The 2020 regulations replaced the requirement that language interpreters be “qualified” with directives that interpreters must translates effectively, accurately, and impartially, both receptively and expressively, using any necessary specialized vocabulary, and must demonstrate proficiency in speaking or understanding, both spoken English and at least one other language.

The 2020 regulations replaced the real-time video requirement with real-time audio over a dedicated high-speed, wide bandwidth video connection or wireless connection that delivers high-quality audio without lags or irregular pauses in communication.

The 2020 regulations deleted the tagline and notice requirements entirely. 

In the LEP area, all of the 2020 revisions to the Obama-era 1557 requirements remain in place.  It remains to be seen whether the Biden Administration will re-impose any of the 2016  provisions; we can speculate that some of the 2020 streamlining may remain. For example, the tagline and multiple language provisions were widely seen as overly burdensome and may not be reimposed. 

Disability Discrimination

In contrast to the LEP discrimination changes, there have been relatively few revisions regarding disability discrimination.

The 2016 regulations required covered entities to provide appropriate auxiliary aids and services to people with impaired sensory, manual, or speaking skills, where necessary to afford an equal opportunity to benefit from the health program or activity.  They adopted the 2010 ADA Standards for Accessible Design for new construction or alternation of facilities of covered entities that receive federal funding and state-based Marketplaces.  And they required covered entities to make reasonable modifications in policies, practices, and procedures to avoid disability-based discrimination, unless doing so would fundamentally alter the nature of the health program or activity.

The 2020 regulation set omitted “acquisition or modification of equipment and devices; and other similar services and actions” from the list of examples of appropriate auxiliary aids and services.  The 2020 regulations left in place the 2010 ADA Standards for Accessible Design, and did not adopt additional exemptions for multi-story building elevators and TTY standards.  And the 2020 regulation set maintained the 2016 “reasonable modification” standards.

There has not been a great deal of attention to the more modest 2020 revisions in this area.  Again, it remains to be seen whether any regulations promulgated in the current HHS will address this area at all.

Grievances/Enforcement

The 2020 regulations made important changes to grievances and enforcement.  First, they deleted the 2016 requirement of a grievance policy and a 1557 coordinator.  Second, they removed the right to sue based on 1557 regulations.  But HHS did acknowledge that a right to sue under the statute itself remains in place.  

Again, we do not know whether HHS will pay attention to this area if and when new regulations are issued.

What’s Next? 

  • It seems likely that there will be further litigation around sex discrimination, probably addressing not only 1557 but Title VI, Title VII and Title IX.
  • The Biden HHS has promised new regulations, but if they follow the timing pattern set by both the Obama and Trump Administrations, we should not  expect them until 2024.
  • We just don’t know whether/to what extent new regulations will restore or expand Section 1557 provisions unrelated to the definition of sex discrimination (e.g., discrimination in health insurance benefit design, language access, notices, grievance procedures, enforcement, covered entities, pregnancy termination).
  • At present, virtually all of the 2020 regulations remain in place.  The extent of enforcement (outside of transgender protections) is unknown.  It may well be that the next iteration of 1557 standards will continue to be narrower than the initial version.   

[1] With thanks to Trent Stechschulte, General Counsel and Compliance Officer, Equitas Health, Columbus, Ohio, whose slides on LEP and disability discrimination are the source of those parts of this blog.

[2] 42 U.S.C. § 18116.

[3]  42 C.F.R. §§ 92.1 et seq.

[4] Franciscan Alliance v. Burwell, 227 F.Supp.3d 660 (N.D. Tx 2016).  On August 9, 2021, the court made the injunction permanent.  Franciscan Alliance v. Becerra, 2021 WL 3492338, N.D.Tex., Aug. 09, 2021.  See https://www.healthaffairs.org/do/10.1377/hblog20210811.110777/full/  for a discussion of the complicated history of this case.

[5] Bostock v. Clayton County, 140 S. Ct. 1731 (2020). 

[6] Whitman-Walker Clinic v. Azar, 485 F. Supp.  3d 1 (D.D.C. 2020); Asapansa-Johnson-Walker v. Azar, 2020 WL 6363970 (E.D.N.Y.)

[7]See note 1.

Five Things Healthcare Providers Should know about Reporting Use of Provider Relief Funds

by: Miranda A. Preston and James R. Taylor, Milligan Lawless

The Provider Relief Fund (PRF) was created to reimburse healthcare providers for lost revenue attributable to COVID-19 or health-related expenses incurred to prevent, prepare for, and respond to COVID-19. Under the CARES Act, Congress appropriated $178B for the PRF, and to date, $118B has been paid to and attested by healthcare providers throughout the country.  In Arizona, 7,813 healthcare providers have received PRF payments, totaling $1.64B.[1]  Currently, 260 Arizona providers, including hospitals, skilled nursing facilities, assisted living facilities, surgery centers, medical practices, dentists, and hospices, have each received over $750,000 in PRF payments. In light of a substantial likelihood of future audits, this article summarizes five items providers should know regarding their mandatory reporting obligations to the U.S. Department of Health and Human Services (HHS).

1. Providers who Received PRF Payments during the First Half of 2020 Must Report by September 30, 2021.

Providers who received one or more payments exceeding $10,000 in the aggregate during a PRF Payment Received Period[2] are required to submit reports to HHS as to how they used the PRF funds.  The PRF reporting portal is now open, and HHS recently issued new guidance on the use and reporting of PRF payments.  In this guidance, HHS adopted a multiphase reporting system, pursuant to which the deadlines for the provider’s use and reporting of PRF funds are based on the specific dates on which the provider received the PRF payments. Providers who received payments under the first automatic distribution on April 10, 2020 must report on the payments they received between April 10, 2020 and June 30, 2020 (“Period 1”) by September 30, 2021. HHS has made it clear that it will not grant extensions for reporting.[3]  Failing to report within the applicable time period(s) is a breach of the Terms and Conditions applicable to the recipient of the PRF distribution, and may result in recoupment of PRF funds received.[4]

2. Providers who received PRF payments after the initial automatic April 10, 2020 funding, have differing reporting requirements, as set forth in the chart below.

PeriodPayment Received PeriodDeadline to Use FundsReporting Time Period
Period 1April 10 – June 30, 2020June 30, 2021July 1 – September 30, 2021
Period 2July 1 – December 31, 2020December 31, 2021January 1 – March 31, 2022
Period 3January 1 – June 30, 2021June 30, 2022July 1 – September 30, 2022
Period 4July 1 – December 31, 2021December 31, 2022January 1 – March 31, 2023

The reporting deadlines apply to all recipients who received one or more payments exceeding $10,000 in the aggregate during a Payment Received Period.  Recipients who received PRF payments during multiple Payment Received Periods are required to submit multiple reports.  Providers need to register a PRF reporting account before they can begin reporting. HHS has published a Registration User Guide, and Reporting Portal FAQs to assist providers with the registration process.

3. There are New Flexibilities For Providers in Calculating Lost Revenues

Providers can allocate the entirety of their PRF payments to Lost Revenue. In the use of funds calculation, PRF payments that are not first allocated to unreimbursed expenses are then allocated towards a provider’s lost revenue. It was previously unclear whether providers who had no unreimbursed expenses attributable to the coronavirus could allocate the entirety of the PRF payments they received towards lost revenue. In a July 1, 2021 FAQ, HHS clarified that PRF payments could be applied solely to a provider’s lost revenues.[5]  However, lost revenues or expenses must only have been incurred during the period of availability correlating to the Payment Received Date. The FAQs clarify that a provider’s lost revenue is calculated on a quarterly basis. PRF recipients still have three options for calculating lost revenue:

Option i:   The difference between actual patient care revenues;

Option ii:  The difference between budgeted (prior to March 27, 2020) and actual patient care revenues.

Option iii: A calculation by any reasonable method of estimating revenues.

The FAQ clarify that “…for Option i and Option ii, lost revenues are calculated for each quarter during the period of availability as a standalone calculation, with 2019 quarters serving as a baseline. For each calendar year of reporting, the applicable quarters where lost revenue is demonstrated are totaled to determine an annual lost revenue amount. There’s no offset [of quarters during the period of availability where the provider didn’t experience lost revenue.]”[6]

Further, HHS clarified that for providers who have more lost revenue in a Payment Received Period than PRF payments for the same period, that portion of lost revenue can be carried forward and applied against payments received during later Payment Received Periods and included in the lost revenues reported for later reporting periods, provided expenses and lost revenues are not duplicated.[7]

4. Maintaining Detailed Documentation is Critical.

Pursuant to the Terms and Conditions that providers are bound by in connection with their receipt of PRF payments, providers are required to maintain supporting documentation demonstrating that costs were obligated/incurred during the Period of Availability. Providers aren’t required to submit that documentation when reporting, but HHS has clearly stated that it will audit the use of PRF payments and recoup payments if the provider’s expenses are not supported by adequate documentation.[8]

5. HHS is Developing an Appeals Process.

In recognition that providers may have questions regarding the accuracy of their PRF payments, HHS recently added a new FAQ stating that it will soon introduce a structured reconsiderations process to review and reconsider PRF payment uses based on the provider’s submitted supporting documentation.[9]

[1] https://taggs.hhs.gov/Coronavirus/Providers

[2] The Payment Received Period describes a specific time period when the recipient received one or more payments. The payment is considered received on the deposit date for automated clearing house (ACH) payments or the check cashed date. There are four Payment Received Periods during the time frame between April 10, 2020 to December 31, 2021. https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/reporting-auditing/index.html

[3] PRF FAQ regarding extensions (available at https://www.hhs.gov/sites/default/files/provider-relief-fund-general-distribution-faqs.pdf), states: “Are providers able to request extensions on submissions of their required reports for any of the required reporting periods? (Added 7/1/2021)” To which HHS’s reply is,  “No. Providers that received one or more payments exceeding $10,000, in the aggregate, during a Payment Received Period are required to report in each applicable Reporting Time Period. Providers that are required to report and do not submit a completed report by the applicable deadlines will be deemed out of compliance with the program Terms and Conditions and may be subject to recoupment.”

[4] The Terms and Conditions applicable to the recipients of each type of PRF distribution require the recipient to submit reports as specified by HHS in future program instructions. The Terms and Conditions also provide that non-compliance with the Terms and Conditions is grounds for HHS to recoup PRF funds.  To view the Terms and Conditions applicable to the various PRF distributions, click here.

[5] Id.

[6] Id.

[7] Id.

[8] Pursuant to HHS PRF FAQ available at https://www.hhs.gov/sites/default/files/provider-relief-fund-general-distribution-faqs.pdf, HHS states that “HHS reserves the right to audit Provider Relief Fund recipients now or in the future, and is authorized to collect any Provider Relief Fund payment amounts that have not been supported by documented expenses or revenue losses attributable to coronavirus or not used in a manner consistent with program requirements or applicable law. All payment recipients must attest to the Terms and Conditions, which require the submission of documentation to substantiate that these funds were used for health care-related expenses or lost revenues attributable to coronavirus.”

[9] Id.

New Legislation Makes Telehealth More Accessible in Arizona

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