They State of the Drug Rehab Industry in March 2019

1) As this year goes on, it seems that rehab center growth are is slowing and/or are having a harder time filling their beds with high quality insurance plans.

There may be several reasons for this:

1) The insurance company’s are cracking down on fraud and waste
2) There may be less insured people
3) The war on addiction may be seeing a plateau.
4) Harder licensing by states.
5) More competition with a over concentration of rehab centers

The data still needs to come in on all three of these.

2) Another seeming trend are more rehabs going ‘in-network’ with insurance plans. It may be because they have found that good PPO out-of-network plans aren’t filling their beds like they used to. You’ll hear more and more how rehabs are advertising their in-network status.

3) That smaller rehabs are attempting to sell, or are just flat out going out of business. This would make sense given the glut of rehabs in some regions, and the cost to operate them and the increased laws and prosecutions against fraudulent rehab companies and body-brokers (people who essentially sell patients to rehabs for reimbursements)

4) Large healthcare systems or large funds, are buying several rehabs. It makes sense, especially in light of how much money it takes to advertise amongst the fierce competition.

I would say at this point, the rehab bubble may have burst, but there is still money to be made, especially if a company can move efficiently to in-network status and advertise themselves correctly.

New Federal Law Will Finally Allow Doctors to Prescribe Controlled Substances Via Telemedicine W/O a 'Face-To-Face'​ Visit First

President Trump signed a law on October 25, 2018, the “Special Registration for Telemedicine Act of 2018” (the Act), requiring the Drug Enforcement Administration (DEA) to create a special registration allowing physicians and nurse practitioners to prescribe controlled substances via telemedicine without an in-person exam.

The DEA has no more than one year to complete making the system to register practitioners to prescribe controlled substances online via telemedicine.

Currently, the federal Ryan Haight Online Pharmacy Consumer Protection Act of 2008 (Ryan Haight Act) made it difficult for practitioners to prescribe controlled substances unless the practitioner either:

(1) conducted a prior in-person exam; or (2) met one of seven “practice of telemedicine” exceptions.

However, the “practice of telemedicine” exceptions are very narrow. They created an unintended barrier for legitimate practitioners seeking to use telemedicine to address practitioner shortages and deliver clinically-appropriate medical care to patients located in settings such as homes, schools, and rural areas (all common “originating sites” in contemporary direct-to-patient telemedicine service models).

One of the exceptions – the special registration exception – was designed to allow telemedicine prescribing in these other settings without an in-person exam. However, for nearly ten years, the DEA never activated that special registration.

The President’s new law changes that, and requires the DEA to activate that registration. As date of the article, the registration and its procedures have not been created yet.

We will be monitoring the change of that law. #dea

If you have questions or comments about telemedicine and its rules, please contact our office for a free consult.




Physician Investment in MSOs, Laboratories, and Other Medical Companies

If you are a physician looking to invest, or a lay person wanting a wanting a partnership or investment from a physician, for medical companies like labs, MSOs, surgical centers, etc, there are several laws that you must be aware of when you are going into such ventures--the federal Anti-Kickback Statute (AKS) and Stark Law (physician self-referral), and state's with a 'mini AKS' or 'mini Stark Law.' The federal government, and some state governments, through these laws regulate these arrangements to limit 'kickbacks' or 'referral fees' based on medical services. One 'safe harbor' exception is for physician investment.

The typical investment is in a Management Services Organization (MSO) (See my article), laboratory, or having a business with a lay person.

Luckily for us, the law is clear in regards to Safe Harbors. One of those safe harbors is legitimate investments, as laid out in 42 CFR 1001.952. Please keep in mind each state may have its own kickback or self referral laws, in addition to the federal AKS or Stark law.

What is a kickback or 'remuneration?' under the AKS?

The AKS makes illegal any remunerations to be given to a physician as a kickback. The AKS is a criminal law that prohibits the knowing and willful payment of "remuneration" to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients).

Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies. 

In some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime. The statute covers the payers of kickbacks-those who offer or pay remuneration- as well as the recipients of kickbacks-those who solicit or receive remuneration. Each party's intent is a key element of their liability under the AKS.

Investment Safe Harbor

If a physician wants to make money from a business investment, they may try to squeeze the arrangement in the ‘Investment Safe Harbor’ to stay compliant with the law.

As used in section 1128B of the AKS, “remuneration” does not include any payment that is a return on an investment interest, such as a dividend or interest income, made to an investor as long as all of the applicable standards are met within one of the 3 following standards:

(1) the company is a publicly traded company making more that $50M a year.

  • (i) the share price and terms must be the same for everyone, and not something special to just the investor and must be paid in the same way and time as everyone else who invested. There is more to this standard.

 (2) If the physician possesses investment interests that are held by either active or passive investors, all of the following eight applicable standards must be metL

  • (i) No more than 40 percent of the value of the investment interests of each class of investment interests may be held in the previous fiscal year or previous 12 month period by investors who are in a position to make or influence referrals to, furnish items or services to, or otherwise generate business for the company

  • (ii) The terms must be no different from the terms offered to other passive investors.

  • (iii) The terms must not be related to the previous or expected volume of referrals, items or services furnished, or the amount of business otherwise generated from that investor to the company.

  • (iv) There is no requirement that a passive investor, if any, make referrals as a condition for remaining as an investor.

  • (v) The company or any investor must not market or furnish the company's items or services (or those of another company as part of a cross referral agreement) to passive investors differently than to non-investors.

  • and 3 others.

(3) This 3rd standard involves an investment in a 'underserved' area defined by the law.


There are many way for a physician to get involved in owning part of a company, under the AKS and Stark Law. One of them is being a ‘investor.’ However, these types of arrangements and contracts have to be carefully analyzed and constructed, and consulting a healthcare attorney would be worth your time.

If you have any questions or comments, please contact my office at any time.,

New California Specific Drug and Alcohol Facility Anti-Referral Fee Laws Passed (CA SB1228)

FYI: To California drug and alcohol healthcare practitioners and facilities, a new law (CA SB 1228) passed on 9/26/2018 puts extra teeth in the existing anti-referral fees laws (CA BP 650 and 650.1) and targets the drug and alcohol industry.

Specifically, it prohibits a licensed alcoholism or drug abuse recovery and treatment facility, or an employee of that facility, from giving or receiving remuneration or anything of value for the referral of a person who is seeking alcoholism or drug abuse recovery and treatment services. The bill authorizes DHCS among other departments to investigate and impose specified sanctions for violations of this prohibition, or regulations adopted to implement this prohibition, including, among others, assessing a penalty or revoking a license.

The State is hiring more investigators as well.…/billTextClient.xhtml…

CA SB1228



 The Legislature finds and declares all of the following:

(a) The opioid epidemic is a nationwide scourge that claimed approximately 1,925 lives in California in 2016, and drug and opioid overdoses are currently in the top 20 causes of death statewide.

(b) The need for quality recovery services has grown, driven by the opioid crisis and changes in federal law that requires insurance coverage of substance use disorders. Yet, only one in five people who need treatment for opioid use disorders currently receives treatment, according to the United States Surgeon General.

(c) Desperation is fueling a surge in patient brokering or patient trafficking, where unscrupulous services refer people with substance use disorders to programs that are inappropriate for their needs in order to gain access to insurance payments.

(d) All people in recovery from substance use disorders are entitled to safety and security throughout their recovery.

(e) California has an interest in ending patient brokering and trafficking and increasing the availability of quality recovery services to encourage recovery and stability for all patients.

SEC. 2.

 Section 11831.6 is added to the Health and Safety Code, to read:


 (a) The following persons, programs, or entities shall not give or receive remuneration or anything of value for the referral of a person who is seeking alcoholism or drug abuse recovery and treatment services:

(1) An alcoholism or drug abuse recovery and treatment facility licensed under this part.

(2) An owner, partner, officer, or director, or shareholder who holds an interest of at least 10 percent in an alcoholism or drug abuse recovery and treatment facility licensed under this part.

(3) A person employed by, or working for, an alcoholism or drug abuse recovery and treatment facility licensed under this part, including, but not limited to, registered and certified counselors and licensed professionals providing counseling services.

(4) An alcohol or other drug program certified by the department in accordance with the alcohol or other drug certification standards established pursuant to Section 11830.1.

(5) An owner, partner, officer, or director, or shareholder who holds an interest of at least 10 percent in an alcohol or other drug program certified by the department in accordance with the alcohol or other drug certification standards established pursuant to Section 11830.1.

(6) A person employed by, or working for, an alcohol or other drug program certified by the department in accordance with the alcohol or other drug certification standards established pursuant to Section 11830.1, including, but not limited to, registered and certified counselors and licensed professionals providing counseling services.

(b) Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), the department may, if it deems appropriate, implement, interpret, or make specific this section by means of provider bulletins, written guidelines, or similar instructions from the department, until regulations are adopted.

SEC. 3.

 Section 11831.7 is added to the Health and Safety Code, to read:


 (a) The department may investigate allegations of violations of Section 11831.6. The department may, upon finding a violation of Section 11831.6 or any regulation adopted pursuant to that section, do any of the following:

(1) Assess a penalty upon an alcoholism or drug abuse recovery and treatment facility licensed under this part.

(2) Suspend or revoke the license of an alcoholism or drug abuse recovery and treatment facility licensed under Chapter 7.5 (commencing with Section 11834.01), or deny an application for licensure, extension of the licensing period, or modification to a license. Article 4 (commencing with Section 11834.35) of Chapter 7.5 shall apply to any action taken pursuant to this paragraph.

(3) Assess a penalty upon an alcohol or other drug program certified by the department in accordance with the alcohol or other drug certification standards established pursuant to Section 11830.1.

(4) Suspend or revoke the certification of an alcohol or other drug program certified by the department in accordance with the alcohol or other drug certification standards established pursuant to Section 11830.1.

(5) Suspend or revoke the registration or certification of a counselor for a violation of Section 11831.6.

(b) The department may investigate allegations against a licensed professional providing counseling services at an alcoholism or drug abuse recovery and treatment program licensed, certified, or funded under this part, and recommend disciplinary actions, including, but not limited to, termination of employment at a program and suspension and revocation of licensure by the respective licensing board.

(c) Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), the department may, if it deems appropriate, implement, interpret, or make specific this section by means of provider bulletins, written guidelines, or similar instructions from the department, until regulations are adopted.

The SUPPORT Act’s New 'Recovery Kickback Prohibition' Explained

Current President Donald Trump signed The SUPPORT for Patients and Communities Act Of 2018 on Wednesday October 24, 2018, which along with authorizing $8 Billion to combat the opioid epidemic over 5 years, there were additional provisions that specifically dealt with the rampant ‘patient brokering’ that the substance abuse industry has been plagued with.

There has been significant concern nationally about patient brokering in connection with substance use disorder treatment centers. While some state laws, such as those in Florida, California, Massachusetts and Texas, address some of these issues, many states don’t specifically address it.

There are other Federal laws that prohibit patient referral or brokering fees. For instance, the well known Federal Anti-Kickback statute, 42 U.S.C. 1320a-7b(b) (Federal AKS)] applies only to Federal health care programs, such as those connected to Medicaid, Medicare, Tricare, etc. The Federal AKS does not apply to privately insured patients.

The ‘Recovery Kickback Prohibition’ law is focused specifically on patient brokering connected to private insurance based treatment centers and the overutilization of laboratory-based toxicology (urine drug testing) screening. The Recovery Kickback Prohibition is Congress’ attempt to close the gap left by the Federal AKS and to reach certain patient brokering arrangements, including those involving laboratories, that fall outside its scope.

The Law

Section 8122 of the SUPPORT for Patients and Communities Act sets forth the referral prohibition as follows:

a) OFFENSE.—Except as provided in subsection (b)[, which establishes certain exceptions to the prohibition], whoever, with respect to services covered by a health care benefit program, in or affecting interstate or foreign commerce, knowingly and willfully:

(1) solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind, in return for referring a patient or patronage to a recovery home, clinical treatment facility, or laboratory; or

(2) pays or offers any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind—

(A) to induce a referral of an individual to a recovery home, clinical treatment facility, or laboratory; or

(B) in exchange for an individual using the services of that recovery home, clinical treatment facility, or laboratory, shall be fined not more than $200,000, imprisoned not more than 10 years, or both, for each occurrence.

The Federal AKS makes it a crime to knowingly and willfully provide anything of value in return for or to induce or reward referrals of Federal health care program business. (emphasis added) Section 8122 of the SUPPORT Act creates a new, separate prohibition in Title 18 of the U.S. Code. There are some similarities between the Federal AKS and the new Recovery Kickback Prohibition. For example, both laws make it a crime to offer, pay, solicit, or receive “remuneration (including any kickback, bribe, or rebate)” in connection with referrals. The Federal government has interpreted the term “remuneration” broadly to cover “anything of value.” 

And there are differences: The Federal AKS applies to only federal health care programs and does not apply to privately insured patients. The Recovery Kickback Prohibition would apply to any health care benefit program, which is defined as “any public or private plan or contract, affecting commerce, under which any medical benefit, item, or service is provided to any individual, and includes any individual or entity who is providing a medical benefit, item, or service for which payment may be made under the plan or contract.” Additionally, the Recovery Kickback Prohibition applies only to referrals and services of certain types of entities, namely recovery homes, clinical treatment facilities, and laboratories as defined in the statute. In this way, the Recovery Kickback Prohibition is narrower than the Federal AKS.

The Exceptions to the Prohibition

The Recovery Kickback Prohibition includes certain exceptions including the following:

1. Certain properly disclosed discounts under a health care benefit program;
2. Certain payments to bona fide employees and independent contractors;
3. Discounts on drugs furnished under the Medicare coverage gap discount program;
4. Payments for services that meet the Federal AKS safe harbor for personal services and management contracts;
5. Certain coinsurance and copayment waivers and discounts; 
6. Certain federally qualified health center arrangements that meet the Federal AKS exception; and
7. Remuneration made pursuant to alternative payment models and certain payment arrangements that the Secretary of HHS determines to be necessary for care coordination or value-based care.

Of note, the exception for bona fide employees and independent contractors is an instance in which the Recovery Kickback Prohibition differs from the Federal AKS in a significant way. The Federal AKS exception for bona fide employees is quite broad, protecting any payment for furnishing covered items or services. In addition, another exception, the Federal AKS personal services and management contracts safe harbor, which applies to independent contractors, is narrow, requiring that the aggregate payment over the term be set in advance, effectively making an hourly or other event-based payment outside of the safe harbor.

In contrast, the Recovery Kickback Prohibition exception for payments to bona fide employees and independent contractors, payments cannot be determined by or vary by the number of individuals referred, the number of tests or procedures performed, or the amount billed to or received from the health care benefit program (insurance) of the referred individual.

While all this is complicated, speaking to a healthcare attorney to sort out what your marketing contracts would be worth your time to make sure you are not accidentally breaking Federal or state laws.

If you have questions or comments about any of this, please email Khatri Med Law at or visit

Jeff Sessions' DOJ won't defend the Affordable Care Act-- What does that mean?

The Department of Justice (DOJ) in a brief filed in a federal court on June 8, 2018 said it will not defend the Affordable Care Act (ACA) in a lawsuit claiming the ACA's individual mandate, and therefore the entire law, is unconstitutional.

Separately, 16 states and the District of Columbia, which were granted legal standing to intervene in the case, on June 8, 2018 filed a brief defending the ACA.

The Lawsuit Details

The Supreme Court in 2012 upheld the ACA's individual mandate, ruling that although Congress could not force U.S. residents to purchase insurance, lawmakers could impose a tax penalty on individuals who did not enroll in health coverage.

But, a group of 20 Republican-led states, led by Texas Attorney General (AG) Ken Paxton (R) and Wisconsin AG Brad Schimel (R), in February filed a lawsuit in the U.S. District Court in the Northern District of Texas, in which they claimed that a recently enacted tax reform law eliminates the individual mandate's tax penalty starting in 2019 by setting the penalty U.S. residents must pay for remaining uninsured under the ACA at $0. The AGs in the suit argued that by zeroing out the tax penalty, the tax reform law has rendered the individual mandate, and by extension the entire health reform law, unconstitutional.


DOJ's move does not have any immediate effects on any ACA provisions, but the Post reports that it does place the ACA "on far more wobbly legal footing in the case," and "raises the possibility that major parts of the law could be struck down." According to Politico's "Pulse," the case still must move through the courts, and many experts have said they do not believe the 20 states challenging the ACA will prevail in the lawsuit.

California AG Xavier Becerra (D), who has filed a motion in the case in support of the ACA, said, "The … lawsuit is based on a dubious legal claim with the sole goal of stripping Americans of their health care."

Don Verrilli, who served as Solicitor General under former President Obama's administration and successfully defended the ACA in the 2012 Supreme Court case, criticized DOJ's decision, saying the department "has a duty to defend federal laws when reasonable arguments can be made in defense of the law."

Larry Levitt, senior vice president for health Reform at the Kaiser Family Foundation (KFF) and senior advisor to KFF's president, said, "Any time there's uncertainty about the future, insurers are going to build extra cushion into their premiums to make sure they get revenues while they can"


Ultimately, if the plaintiffs win, it could be a deathblow to the ACA, however, it would be equally a death blow to the rule of law, as the DOJ is constitutionally bound to uphold the laws enacted by congress. Bagley, in a blog post wrote, "If [DOJ] can just throw in the towel whenever a law is challenged in court, it can effectively pick and choose which laws should remain on the books." He continued, "That's not a rule of law I recognize. That's a rule by whim. And it scares me."

(Armour, Wall Street Journal, 6/7; Goldstein, Washington Post, 6/7; Beech/Lambert, Reuters, 6/7; Scott, Vox, 6/7; Diamond, "Pulse," Politico, 6/8).

*Adapted from Advisory Board 

How to License a Residential and Outpatient Substance Abuse Rehab in New Jersey

The opioid epidemic is raging, and in places like New Jersey, the need for residential and outpatient treatment is badly needed.

Our firm has identified the key steps to licensing a residential or outpatient substance abuse facility in New Jersey. It is a document specific process, which must be very accurate before a site visit and subsequent inspection is done and certainly before the license is granted.


To license a facility in NJ, the following is an overview of key information and steps for licensing:

Agency in NJ: Dept of Health, Office of Licensing (OOL)  and Technical Assistance Unit (TAU)

Licenses are not transferable so a new license must be submitted on new ownership. 

Submit: 1 application form and 1 copy

Fees: Outpatient: $2,050; Residential $1000 + $500 per bed

3 phases: 

  • App review
  • Physical Plant inspection
  • Licensing

Qualified and CPR trained staff must be hired before licensing.

There is a specific list of persons needed: Clinical director, licensed counseling staff, etc.

50% of counseling staff must be licensed.

There is a 60 day notice before coming on site by the state for an inspection.

Partial list of key documents needed:

  • EIN
  • Certificate of Incorporation or partnership
  • Org chart
  • Out of state compliance 
  • Tentative Staffing roster with resumes
  • Complete Policies and Procedures manual
  • Emergency plan
  • Job Descriptions

Partial list of Physical Plant documents needed:

  • Certificate of Occupancy needed with proper zoning
  • Lease agreement
  • Fire inspection
  • Smoke or Fire detection certification
  • Elevator and Sanitation certification if applicable
  • Boiler and sprinkler certification 
  • Housekeeping contract
  • Pest control contract

Once granted, the license is conditional for 6 months, and will be surprise-inspected within that time frame.

Licensing and getting a facility up and running is complicated and intense. Doing it correctly means the difference between starting in 4 months vs starting in over a year+.  If you have any questions or comments on how to license or starting your facility, please let us know at "The intersection between medicine and law." 

Low Voter Turn out

I wrote this to someone in response to them saying that low voter turnout was because of American laziness:

“While some of what you said may be true, the real reason why there is low voter turn out is because some citizens simply can't afford to vote, as a vast majority of voting municipalities the day to vote is historically a Tuesday, a workday.

The US was an agrarian society at the founding, so having voting mid week wasn't an issue. Sunday was a day of rest, and Monday was needed for travel to the voting booth.

But America today is a different landscape for workers—in a culture where Americans get little time off, whether it’s to vote or do anything else. Forty-two percent of Americans didn’t take a single vacation day last year, partially because they felt too economically insecure to afford it and partially because many of their employers actively discouraged them from doing so. Meanwhile, 23 percent of American workers did not receive paid vacation time, 24 percent did not receive paid holidays, and nearly 40 percent did not receive paid sick leave.

As a result, a Caltech/MIT survey on voting patterns discovered that three of the five most common reasons given by eligible adults who did not vote had an economic component to them: they were too busy, they struggled with transportation, or they faced registration problems. One telling statistic is that 40 percent of voters reported waiting in line to vote—with 17 percent being forced to wait for more than half an hour. That’s prohibitively expensive in a country where time is literally money.

Not surprisingly, the end result is that low-income Americans turn out to vote in far lower numbers. The U.S. Census found that only 47 percent of eligible adults with family incomes of less than $20,000 a year voted in the 2012 presidential election, compared to 80 percent of those whose earning exceeded $100,000. Overall, only 19 percent of likely voters come from families with incomes of less than $30,000 a year, even though that same group comprises 46 percent of nonvoters. Bottom line is that people can't afford to vote.

Childcare costs, leaving work in the middle of the week is too expensive for many people. Very very sad. Effectively disenfranchisement.

Clinical Laboratories Beware: A Summary of the OIG’s Unfavorable Advisory Opinion 16-12


On November 28, 2016, the U.S. Department of Health and Human Services’ Office of Inspector General (OIG) issued OIG Advisory Opinion 16-12, concerning whether a clinical laboratory may provide free labeling of test tubes and specimen collection containers to dialysis facilities.1 The OIG publishes such advisory opinions in response to written requests to review an existing or proposed business arrangement in light of the OIG’s fraud and abuse authorities. Favorable advisory opinions protect the requestor(s) from administrative penalties so long as the arrangement is implemented and maintained as described in the request submitted for the OIG’s review. Unfavorable advisory opinions are also directly applicable only to the actual requestor(s) under the specific facts described in the opinion. Although not binding or controlling on the healthcare industry at large, all of the OIG’s advisory opinions have the potential to provide relevant and important insight into the OIG’s current enforcement priorities and interpretations of laws and regulations, as well as critical guidance in an area that lacks extensive case law.

Advisory Opinion 16-12 addresses whether the Requestor, a laboratory that provides testing services to dialysis patients, may provide free labeling of test tubes and specimen collection containers to some, but not all, of the dialysis facilities with which it does business (the “Proposed Arrangement”). If not provided for by another source, such labeling of test tubes and specimen collection containers is performed internally by the dialysis facilities’ own personnel at the dialysis facilities’ expense. Under the Proposed Arrangement, the Requestor would offer such free services on a case-by-case basis to certain dialysis facilities. According to the Requestor, the Proposed Arrangement would help the Requestor compete with other laboratories which, according to the Requestor’s submission to the OIG, already provide such free labeling services to dialysis facilities. The Requestor represented that its decision whether to offer the free labeling would depend on whether such an offer would help obtain the business of the particular dialysis facility.

Relevant Background

A. Advisory Opinion 08-06 and Subsequent Change to ESRD Reimbursement

The facts of the Proposed Arrangement at issue in Advisory Opinion 16-12 are identical to the facts contained in previous OIG Advisory Opinion No. 08-06, which was solicited by the same Requestor in 2008.3 The primary difference between the two advisory opinions is that, subsequent to Advisory Opinion 08-06, the Centers for Medicaid & Medicare Services (CMS) made changes to the way it reimburses for services related to treating end-stage renal disease (ESRD).4 In making these changes, CMS acknowledged that physicians in ESRD settings sometimes order valuable and necessary laboratory tests that are not directly related to treating ESRD, and therefore had not been covered in the bundled reimbursement.5 Thus, the change in ESRD reimbursement included a mechanism whereby CMS would provide supplemental reimbursement to independent laboratories, hospital-based laboratories, and ESRD facilities for such laboratory services not already covered by the ESRD bundled payment. Under the previous system, “separate payments for administrative tasks associated with laboratory tests, such as labeling test tubes and specimen collection containers,” were prohibited.6

B. The OIG’s Focus on Clinical Laboratories

Utilization of clinical laboratory services has seen a tremendous increase as more options for services, such as various genetic and toxicology testing, become available.7 The OIG has taken notice of such increased utilization and has specifically listed clinical laboratory services as a target focus area in its annual work plans in 2015, 2016, and 2017. The OIG has a longstanding position that “the provision of free or below-market goods or services to actual or potential referral sources” is viewed as suspect for potentially violating the Anti-Kickback Statute (AKS).9 The OIG has further articulated that “when a laboratory offers or gives an item or service for free or less than fair market value to a referral source, an inference arises that the item or service is offered to induce the referral business.”10 Such an inducement could violate the AKS, which makes it a criminal offense to knowingly and willfully offer, solicit, pay, or receive any remuneration in exchange for federal healthcare program business.11 Importantly, the term “remuneration” under the statute is not limited to a direct exchange of money, but extends to the conferral of any tangible benefit.

The OIG’s Analysis in Advisory Opinion 16-12

Upon reviewing the Requestor’s submission, the OIG concluded that the Proposed Arrangement posed “more than a minimal risk of fraud and abuse.”12 According to the OIG, under the Proposed Arrangement the Requestor would provide a tangible benefit directly to dialysis facilities because “most, if not all, of the services the Requestor would provide…would substitute for services the dialysis facilities otherwise would be required to perform at their own expense,” and such an expense is not reimbursable by CMS regardless of it occurring at an ESRD facility. By alleviating a non-reimbursable duty that the dialysis facilities would otherwise be required to perform, the Requestor would be providing remuneration to those facilities, thereby leading to the inference that the Requestor was trying to influence the dialysis facilities’ laboratory preferences. The OIG noted that such an inference is “consistent with, and supported by, the Requestor’s representation that the labeling services would be offered to the dialysis facilities when necessary to retain or obtain their business.”

Finally, though technically not binding on any entity other than the Requestor, Advisory Opinion 16-12 states that similar arrangements involving Requestor’s competitors may “run afoul” of the AKS. It is important to note that the OIG’s advisory opinion is not a definitive finding that the Proposed Arrangement actually violates the AKS because such a violation requires specific intent, which the OIG acknowledged is fact-specific and beyond the scope of such an opinion. Thus, while such arrangements would likely result in a negative inference regarding intent from the OIG, a laboratory or dialysis facility currently involved in such an arrangement could possibly rebut the inference with facts demonstrating the lack of such unlawful intent, although this would be a steep, uphill battle.


Advisory Opinion 16-12 is the latest example in a continuing trend of government enforcement in the laboratory space. In 2015, several laboratories settled multi-million dollar False Claims Act (FCA) matters with the U.S. Department of Justice (DOJ) involving CMS reimbursement for laboratory services.15 For example, in April 2015 Health Diagnostic Laboratory (HDL) agreed to pay $47 million to settle allegations that it had paid physicians a “processing and handling fee” worth between $10 to $17 per referral when the physicians ordered certain blood tests, allegedly in violation of the AKS and the FCA.16 In October 2015, Millennium Health agreed to pay $256 million for allegedly providing free drug screen cups to clinics in exchange for physicians ordering drug screens and genetic tests the government believed to be medically unnecessary, also allegedly in violation of the AKS and the FCA.17 Finally, in addition to the OIG’s advisory opinion, CMS has also stated in its own guidance that a laboratory providing free items or services to a physician could also violate the Stark law

Based on the guidance and settlements discussed above, laboratories should remain extremely cautious of providing any benefit to a referral source, and referral sources, such as providers, should be careful when accepting one, as any such benefit could potentially be viewed as an unlawful inducement in violation of federal fraud and abuse laws.

Reposted from Scott R. Grubman and Gregory A. Tanner, Chilivis, Cochran, Larkins & Bever, LLP, Atlanta, GA


Can you prescribe your patients controlled medications remotely under the Federal Ryan Haight Act without ever meeting them?

Can you prescribe your patients controlled medications remotely without ever meeting them? These medications include suboxone, buprenorphine, and any DEA schedule II and III drugs. ( It would appear NO under the Federal Ryan Haight Online Pharmacy Protection Act. (

The Federal Ryan Haight Online Pharmacy Protection Act is a law that came about in the late 90s with the proliferation of online pharmacies to stem the fraudulent distribution of controlled meds without prescriptions.

It's very restrictive, because there is an absolute requirement for one (1) in-person visit for a controlled med to be prescribed. However, there are seven (7) exceptions and I'll explain the easiest one to allow you prescribe.  The easiest exception for when the patient is located at a facility registered with the DEA and is being treated by a DEA-registered provider who is in the physical presence of the patient.

Real Life Example For Illustration 


  • Patient A is at a mental health clinic that is not registered with the DEA.
  • Patient A is in the physical presence of a mental health worker, but is not in the physical presence of a DEA registered provider.
  • Psychiatrist B is registered with DEA and treats the patient via telemedicine.
  • Physiatrist B’s treatment includes a prescription for a controlled substance.

DEA finds that this issuance of a prescription via telemedicine violates the Ryan Haight Act.


The easy solution is to find a local to your patient DEA registered clinic (ER, Urgent Care, etc) who has a Doc/NP/PA who is registered with the DEA (most prescribers are), and have patient go to that clinic, and in the presence of that DEA registered provider, have your remote visit and prescribe controlled meds. 

Not the most elegant solution but there are some proposals for new laws to be come in, however they have not been passed as of writing this article. (

The “Improving Access to Remote Behavioral Health Treatment Act” would allow certain community mental health centers and addiction treatment centers to obtain DEA registration as a clinic, thereby allowing telemedicine providers to prescribe controlled substances to patients present at those sites without the need for an in-person examination. Currently, treatment  sites are restricted to DEA-registered hospitals and some very limited other non-hospital clinics.

If you have more questions, please contact my law firm at or if you have need more advice on how to stay compliant. 


Corporations Can Hire Nurse Practitioners In California

There is no restriction on who can hire a nurse practitioner in California. However, there needs to be a contract between a NP and a physician to supervise.

"In California, nurse practitioners may form professional corporations, but there are no restrictions on what type of entities can employ nurse practitioners. Nevertheless, the employment of nurse practitioners is generally restricted due to the physician supervision requirement."

What's interesting about this supervision, the supervision really has to do with prescriptions for drugs or medical devices to patients. Not their medical records etc on a daily basis, like you would a medical resident or PA

"If a physician employs or contracts with nurse practitioners (“NPs”) or physician assistants (“PAs”), the physician must properly supervise these mid-level practitioners to avoid liability under Section 2264.  With respect to NPs, a physician: (1) may only supervise four at any one time, and (2) must develop written standardized protocols and procedures in order to allow the NP to furnish drugs or medical devices to patients.[13]  With respect to PAs, a physician must exercise control by one or more of the following: (1) examination of the patient the same day care is given to the patient by the PA; (2) countersigning and dating all medical records written by PA within 30 days; or (3) review, countersign, and date a minimum 5% sample of medical records written by the PA."

California Hospital Paid More Than $3.2 Million to Settle Allegations That It Violated Stark Law

The reality of Stark Law is always present and very real.

Last year, according to a press release by the Justice Department, Tri-City Medical Center, a hospital located in Oceanside, California, agreed to pay $3,278,464 to resolve allegations that it violated the Stark Law and the False Claims Act by maintaining financial arrangements with community-based physicians and physician groups that violated the Medicare program’s prohibition on financial relationships between hospitals and referring physicians.


The Stark Law generally forbids a hospital from billing Medicare for certain services referred by physicians who have a financial relationship with the hospital unless that relationship falls within an enumerated exception. The exceptions generally require, among other things, that the financial arrangements do not exceed fair market value, do not take into account the volume or value of any referrals and are commercially reasonable. In addition, arrangements with physicians who are not hospital employees must be set out in writing and satisfy a number of other requirements.


The settlement resolved allegations that Tri-City Medical Center maintained 97 financial arrangements with physicians and physician groups that did not comply with the Stark Law. The hospital identified five arrangements with its former chief of staff from 2008 until 2011 that, in the aggregate, appeared not to be commercially reasonable or for fair market value. The hospital also identified 92 financial arrangements with community-based physicians and practice groups that did not satisfy an exception to the Stark Law from 2009 until 2010 because, among other things, the written agreements were expired, missing signatures or could not be located.

“Patient referrals should be based on a physician’s medical judgment and a patient’s medical needs, not on a physician’s financial interests or a hospital’s business goals,” said U. S. Attorney Laura E. Duffy of the Southern District of California. 


This settlement illustrates the government’s emphasis on pursuing health care fraud cases and is another example of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. 


One of the most powerful tools the Justice Department has is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $27.1 billion through False Claims Act cases, with more than $17.1 billion of that amount recovered in cases involving fraud against federal health care programs.


What we can learn from this case is that for you as a physician group, hospital, or provider who is taking Medicaid or Medicare funds and doing Designated Health Services (DHS) is to ensure that your financial arrangements for clinical services and otherwise do not exceed fair market value (FMV), do not take into account the volume or value of any referrals, and are commercially reasonable. If you are a physician who is not hospital employee, then your agreement must be set out in writing. However, your arrangement may also fall into a ‘safe harbor’ exception to Stark Law, which means that Stark Law may not affect as much or at all.

If you have questions or comments, or if your arrangement could fit into a ‘safe harbor’ then please contact our office at any given time.  

Call for a free 15 min consultation today





(310) 896-5183

Creating a Vivitrol/Naltrexone Clinic to Help Fight the Opioid Epidemic In the $35 Billion Addiction Market

There is a huge need for outpatient programs in every state that offer Vivitrol/naltrexone because of the opioid epidemic that has taken our nation.

The Opioid Epidemic

The epidemic has ravaged our country. Of the 20.5 million Americans 12 or older that had a substance use disorder in 2015, 2 million had a substance use disorder involving prescription pain relievers and 591,000 had a substance use disorder involving heroin.

It is estimated that 23% of individuals who use heroin develop opioid addiction. Drug overdose is the leading cause of accidental death in the US, with 52,404 lethal drug overdoses in 2015.

Because of the epidemic, the addiction market is $35 Billion a year, according to Forbes Magazine.

What this means is that there is a huge need and demand for addiction outpatient services, such as Vivitrol injections and Naltrexone implants, that insurance is currently mandated to pay for to help save people from crisis.

What is more, services that can be delivered by addiction companies owned by non-clinicians and clinicians alike.

What is Naltrexone?

Naltrexone blocks the effects of opioid medication, including pain relief or feelings of well-being that can lead to opioid abuse. An opioid is sometimes called a narcotic. Naltrexone is used as part of a treatment program for drug or alcohol dependence.

Vivitrol is the brand name of naltrexone.

Naltrexone is used to prevent relapse in people who became dependent on opioid medicine and then stopped using it. Naltrexone can help keep you from feeling a "need" to use the opioid.

Naltrexone is also used to treat alcoholism by reducing a clients' urge to drink alcohol. This may help client drink less or stop drinking completely. Naltrexone will not cause a client to "sober up" and will not decrease the effects of alcohol you recently consumed.

It is fast to diagnose and to deliver, meaning that with right marketing and partnerships, there will always be someone needing and benefiting from it.

Outpatient Clinic Naltrexone Reimbursement by Insurance and Private Pay

Insurance companies are much more likely to pay and quicker to reimburse for medical/pharmacological intervention than mental health for addiction, although they are both necessary for a client’s recovery.

The cost of naltrexone differs by insurance type and is often covered by a client’s insurance.

For instance, Vivitrol reimbursements is usually range from $2,000 to $5,000 per month. Naltrexone implants, which is a simple 10 min outpatient procedure can pay from $6,000 to $26,000

(Stahl, S. M. (2014). Prescriber's guide: Stahl's essential psychopharmacology (5th ed.). New York: NY: Cambridge University Press.)

But keep in mind, sometimes insurance companies will require you to submit a prior authorization before they will cover naltrexone. A prior authorization requires you to meet certain criteria. Please ask us if you have questions about what prior authorization.

Starting an Outpatient program

Unfortunately, addiction is around us everywhere. But, we can help those who are suffering by having simple but effective outpatient program that can get people the help they deserve.

The steps are simple in concept, but, heavily regulated in practice.

The first steps, is to find an outpatient facility that is up to code with local zoning ordinances. For most municipalities, a general commercial zoned building is enough, but check with your local zoning office to be sure.

Second step, is to license that facility. Every state, has its own licensing criteria and procedures for licensing a medical or outpatient program. If you are unsure, contact a local licensing expert.

Third step, finding staffing, with the most important person being a licensed physician to help diagnose, write orders, perform some outpatient services, and chart with additional staff to assist the physician with outpatient procedures, and others for mental health services, and others to do billing, HR and other back office duties. 

Fourth step, making sure that all medical records, and procedures are done within regulation and compliant with any law.

Fifth step, is to be able to send out proper bills to the client’s insurance companies that fit within their definition of medical necessity, and be compliant.

If you have any questions about anything within this article, Khatri Med Law can assist you with answers, and assist a complete start to finish services for a turnkey Naltrexone Implant/Vivitrol business.

Call for a free 15 min consultation today.


Khatri Med Law, PC

“At the intersection of medicine and Law”


Rebilling Denied Claims and Appeals in Substance Abuse Billing

For substance abuse rehab services where overhead is very high, think mortgage/lease, payroll, ancillary services, having a couple of insurance claim denials can be the difference between thriving, and thinking about shuttering. I’ve seen it many times at this point in my healthcare career.

As kids playing in the schoolyard, we get ‘do-overs.’ Do you get a ‘do-overs’ as a rehab facility if there is a denied claim? The short answer: yes. The long answer: I wouldn’t necessarily call appealing and billing again a denied claim a ‘do-over,’ but the important thing is that if you suffer a denial, you can still get paid. Welcome to the world of ‘rebilling.’

What is a rejected claim?

What is the difference between a claim and a denial?  According Universal American article, “Rejected claims are defined as claims with invalid or missing data elements. Some examples are illegible claim fields or missing or invalid codes and/or missing or invalid member or provider ID numbers.” This M-Scribe article further explains that these errors “prevent the insurance company from paying the bill as it is composed, and the rejected claim is returned to the biller in order to be corrected.”

Two take away points here:

  1. Rejected claims are returned to the healthcare provider without registration in the the insurance company’s claim processing system.
  2. The rehab facility then has a certain period of time—as defined the insurance company—to correct the claim.

If the rejection occurs because the provider failed to submit the original claim or the corrected claim on time, the facility will have their claim rejected. This is why billing or rebilling promptly and timely is super important, and should be done accurately.

What is a denied claim?

These occur after the insurance company receives your claims, and they’re typically the result of not proving medical necessity or other fatal errors. There are about 9:

1.    Lack of medical necessity

2.    Data-entry mistakes

3.    Wrong insurance information

4.    Missing claim information (e.g., ICD-10 codes, G-codes, and modifiers)

5.    Missing or invalid referral/authorization

6.    Credentialing or provider issues (licensing).

7.    Submission outside of timely filing window

8.    Wrong subscriber information

9.    Failure to submit insurance requested information


What does a billing or rebilling service do when you have a denied claim?

You will know your facility’s claim was denied, because you will receive notification on the Explanation of Benefits letter (EOB). When you receive a denial you, your billing company, or the rebilling company should:

  1. Identify the error code, or reason for denial.
  2. Contact the insurance company to clarify the reason for the denial.
  3. Follow the insurance company’s instructions for correcting and rebilling the claim, including finding medical necessity in existing charts.
  4. Make sure they document this conversation—along with any and all interactions they have with the insurance company.
  5. Appeal



Appeals come into play when you as the facility don’t agree with the insurance companies final determination. For example: you or your billing company correct a claim and rebill, and you still receive a denial. In these situations—the denied claim should be appealed within seven (7) days of the insurance company’s final determination, as you’ll have a 67% chance of getting paid. Conversely, if you wait any longer, the denied claims have a 60% chance of not getting paid.

Lastly, when an appeal is made for your claim, a rebilling company will make sure they provide the insurance company with a clear narrative, all related patient documentation and charting, and documentation of all interactions you had with the insurance company in relation to the denial.


What happens if your facility keeps getting denials?

A good billing or rebilling company can help you get a system to address every denial as soon as you get it. For instance, they can help get a system to help you:

  1. Know the reason for denial and/or code.
  2. Logging this information.

Why have a log? Because these reasons can help a company get to the root cause of systemic issues. For example, if a denial is due to lack of coverage or failure to obtain authorization, you know you’ve got a front office issue. If medical necessity isn’t demonstrated or the insurance carrier requirements aren’t met, you can understand that the issue with the rehab. If the wrong codes were billed or there are modifiers missing, you know it’s a billing-related problem.

Once the source of the denials is figured out, the rebilling company can help you address the issues, and get you paid. For instance, the company help you create better policies and procedures to eliminate future errors, they can make sure your staff is trained thoroughly. They can help you ensure through trainings that everyone understands insurance company requirements, and the rehab’s policies and procedures. They can also help a rehab create a culture of accountability. After all, what’s the point of having standard polices and procedures if no one has to be held to them?


Khatri Med Law PC can handle your rebilling and insurance claim needs. KML is lead by a seasoned healthcare attorney, doctor, and treatment center owner, and has recovered hundreds of thousands of dollars for many companies. Please call us for further consultation or information, anytime.; (310) 896-5183;

The Insurance Benefits of Accreditation for Drug Rehabs During the Time of Trump

Billing medical insurance for drug rebab services can be tricky, especially when the Affordable Care Act is under attack and has already been repealed in the US House, which is why insurance companies are looking more and more to accredited rehab facilities to ensure that their reimbursements are only going to highly effective programs. The process of going through accreditation by companies such as Joint Commission, clinicians can become informed not only about how to effectively chart for medical necessity, but also about the proper way to prepare for insurance billing and reimbursement. As a behavioral health service provider, you give clients the ability to get back to living life without drug and new shot at life; as a businessperson, you should reap the benefits of quick reimbursement.

Accreditation shows high functionality of a company through standardizing:

  • Client records

  • HR

  • Emergency management

  • Infection control

  • Patient care and services

  • Information management

  • Performance improvement

  • Quality and assurance programs

The number of clients that need drug rehab services is phenomenal. As millions of clients still suffer under the opioid epidemic, millions have insurance and qualify for services. With this many clients needing care and the ACA's mental health and rehab benefits on the chopping block by the Trump administration, any practitioner or rehab who interacts with insurance companies needs to be best prepared for the future.

Currently, the trend has been that more insurance providers are requiring accreditation before they reimburse because of how unregulated the drug rehab industry has historically been before the ACA, and recently at time of writing this, has been intensifying presumably because of the unsure future of mental health benefits. For instance, talking with a detox center client of mine just last week, they told me they turned down four detox clients with good plans (low deductible, co-pay, and total out-of-pocket) because the detox center did not have an accreditation. What's more, if a rehab wants to take any type of Federal, State, or Military insurance plan, those plans specifically will want accreditation.

Accreditation is also an integral part of many Blue Cross Blue Shield, State, Federal, and smaller commercial insurance plans. Rehabs, especially those working with detox and IOP clients, this accreditation becomes more pertinent as there is more competition out their for them. Unless the staff or program director staff has much educational training on this, it is almost impossible to know the standards or the ramifications of the accreditation processes.

Another benefit of accreditation, is that billing may become less opaque. What may seem complex, but when you comply with the accreditation rules, the process can be quite smooth because your clinicians know what to chart for. What's more, being accredited will allow you to advertise and use that logo on your website.

Conclusion: Accreditation can be a difficult process. However, this is not an arduous process if you find professionals who know what to do and when to do it. Accreditation is one way to alleviate some of the hassles of insurance reimbursement for you and your clients. Give your company the best shot at success.

About the Author: Rishi Khatri is both an healthcare attorney and doctor and has worked in healthcare clinical practice and law since 2008. He advices and consults for a vast variety of healthcare companies for compliance, mergers and acquisitions, clinical practices, accreditation, including drug rehabs.

Please contact him at or (310) 896-5183 for questions or free consultation.

Management Services Organizations (MSO) vs The Anti-Kickback Statute (AKS)

I've written on this before (see above), but this time, I wanted to tackle a real life example.

With the continued growth of the healthcare industry, it only makes sense that Management Services Organizations (“MSO”) have grown rapidly in number and profitability in the last decade as well. MSOs are companies that provide administrative services such as back office management, billing, marketing, HR, etc to healthcare providers or organizations, allowing healthcare providers to concentrate on delivering high quality healthcare services.

However, there are many laws that MSOs and providers must stay compliant of. At the Federal level, those laws, to name two, are Stark Law and Anti-Kickback Statute. Each state has their own individual laws as well, but the Office of Inspector General ("OIG") of the Federal Department of Health and Human Services is highly influential to State decisions. Stark Law and AKS both have civil and criminal liability.

The OIG has given some guidance (Advisory Opinion No. 11-17 ) for MSOs. A request for the OIG review was for a contract in which the Requestor "MSO," was a laboratory services management company--

“Under the [Agreement], the MSO proposes to provide allergy testing and immunotherapy laboratory services and related items to primary care physicians and physician practices ("Physicians") within the Physicians' medical offices. Specifically, the MSO would enter into exclusive contracts with the Physicians to operate an allergy testing laboratory on the Physicians' behalf.

The MSO would provide all of the necessary laboratory personnel (including laboratory technicians), equipment, supplies, training, and billing and collection services to Physicians on an as-needed basis. Additionally, the MSO would assist the Physicians with marketing allergy services to patients by providing patient education materials and reviewing patient files to identify candidates for [The MSO's] allergy laboratory services.

The Physicians would provide: (1) space within their offices to operate the laboratory; (2) administrative staff for patient scheduling and other administrative tasks; (3) general medical office supplies and furniture; (4) general liability and malpractice insurance; and (5) physician supervision and interpretation of laboratory results.

The Physicians would bill Federal health care programs, [Medicare and Medicaid], and third-party payors, [commercial insurance companies], for the laboratory items and services provided under the Agreement under the Physicians’ provider identification numbers. The MSO would provide billing and collection services on behalf of the Physicians for the allergy testing services.

In consideration for the MSO's services, under the Agreement, Physicians would pay the MSO a fee equal to 60% of the Physicians' gross collections from the testing and services, a fee that The MSO stated as equal to fair market value (FMV).”

The Physicians were to agree to use the MSO as their exclusive provider of antigen-based immunotherapy laboratory services and as the sole allergy testing unit for the Physician’s patients.


There are ‘exceptions’ under the AKS, which are equipment leases and personal services and management contracts. In this case, they could have been potentially applicable (42 CFR 1001.952(c) and (d)).  


 The OIG concluded that the Agreement would not qualify for safe harbor protection under the anti-kickback statute for two reasons:

1)   The services would be provided on an as-needed basis; the agreement therefore would not specify the schedule of intervals, the precise interval length, or the charge for such intervals.

2)   The relevant safe harbors provide that total compensation to be paid under the contract must be set in advance and cannot be determined in a manner that takes into account the volume or value of any business generated between the parties that is payable by a federal health care program (such as Medicare). 

(Keep in mind, there are similar laws as the AKS in many states, such as CA, FL, and NY.)

The salient point the OIG noted is is that in the MSO agreement, the Physicians would pay the MSO a percentage of their gross collections from insurance, Medicare and Medicaid. For services under their arrangement, the total fees would not be set in advance, and they would be based, in part, on the volume or value of the reimbursement from insurance, which did not pass the seven point requirements for personal services contract safe harbor.

The OIG concluded that the Agreement does not fit into a safe harbor. The OIG further stated it must examine “the totality of the facts and circumstances to determine the extent of the risk posed by the Agreement” with respect to inducements to refer.


Ultimately, OIG determined that the Agreement would not be afforded protection because:

1)    “Percentage compensation arrangements are inherently problematic under the anti-kickback statute, because they relate to the volume and value of business generated between the parties, rather than the fair market value of the services provided.” Which is what the MSO agreement was to rely upon.

2)   The MSO was going to review the Physicians patient files to identify marketing candidates for the MSO lab services, which the OIG said was "a suspect marketing activity." The OIG stated: “We are concerned that this type of marketing activity could encourage Physicians to order medically unnecessary tests that could pose a risk of patient harm.” 

All this being said, that are numerous ways to fit MSO agreements into 'safe harbors exceptions,' and each state has their own exceptions too for MSO contracts. Khatri Med Law can help you build a safe, compliant, profitable and effective MSO in whatever state you wish to conduct business in.

If you have further questions or comments, please give us a call at (310) 896-5183 or for more information or consultation.

Bad Faith Denial of Insurance Coverage

I decided to write a new blog about Bad Faith denial of coverage after hearing so many stories from my clients and their patients and how so many of their legitimate insurance claims were being denied, for little or no reason.


It is simply when an insurance carrier refuses to pay a claim without a reasonable basis or even if insurer has a reasonable basis for denial, failing to properly investigate the claim in a timely manner. It can also mean a failure by an insurance carrier to defend or indemnify or settle claim within policy limits without a reasonable basis, or failing to properly and timely investigate or defend the claim. 

Each state has their own law. Where I currently live, in California, to prove an insurance bad faith claim, the insured must prove:

  1. Benefits due under the policy were withheld; and
  2. The reason for withholding benefits was unreasonable or without proper cause. 

In other words, the insurance company must have acted unreasonably or without proper cause in withholding benefits that were warranted under the policy.

What To Do If Your Insurance Carrier Is Not Cooperating

You can make an appeal directly through the insurance companies and their process. However, if they aren’t cooperating or giving you a hard time, it might be time to take to it to the next level.

All plans must have an external review process to keep appealing if you have completed the health plan's internal appeals process and are not satisfied. Contact a competent law firm, attorney, and your state insurance division for help.

The Federal Center for Medicaid and Medicare Services (CMS) can also enforce mental health parity if states do not enforce the law. If you have concerns that your insurance plan is not following parity, contact the CMS help line at 1-877-267-2323, extension 6-1565.

If you have a self-insured plan—a plan where the employer assumes the financial risk for providing health care benefits to its employees—the U.S. Department of Labor (DOL) has authority to enforce parity. To find out more, call the DOL’s toll free number at 1-866-444-3272 or contact a benefit advisor in one of the DOL regional offices.

If you have a health plan under Medicare or Medicaid there are different appeals processes. Contact your plan for details.

More Evidence of Bad Faith

There are other types of insurance conduct which may be bad faith and can further corroborate how the insurance company is not acting fairly:

1. An insurer may be acting in bad faith if the insurer delays, discounts or denies payment without a reasonable basis for its delay, discounting or denial.

2. Failure of insurer to acknowledge and reply promptly upon notification of a covered claim.

3. Failure of Insurer to pay a covered claim as a result of failing to do a proper, prompt and thorough investigation as to reasonable liability and damages based upon all available information.

4. Failure of insurer to affirm or deny coverage of claims within a reasonable time upon receipt of claim and/or proofs of loss.

5. Failure to offer or attempt to effectuate prompt, fair and reasonable evaluation of damages and equitable settlements of claims to insured within a reasonable time where liability is reasonably clear.

6. Insurer attempts to settle a claim for less than the amount to which a reasonable person would have believed was entitled or attempts to substantially diminish a claim requiring an insured to initiate litigation.

7. Attempting to settle claims on the basis of an application and/or policy which was altered without notice, knowledge or consent of the Insured.

8. Making payment(s) for claims without accompanying statement indicating the coverage for which payment(s) are being made.

9. Insurer failure to make known any arbitration award appeals policy in an attempt to settle a claim for less than the arbitration amount awarded.

10. Insurer requiring claimant or physician to submit both a preliminary claim report and formal proof of loss forms which contain substantially the same information.

11. Failure of insurer to promptly settle claims, where liability and coverage is reasonably clear under one portion of the insurance policy in order to influence settlements of coverage for another portion(s) of the policy.

12. Failure of insurer to promptly provide reasonable explanation and basis when denying or making a compromise offer of claim settlement.

13. Failure of insurer, when making a cash payout to settle a first party auto insured claim, to pay the same amount which the insurer would pay if repairs were made.

14. Requesting over burdensome documentation demands not required by the policy.

15. Reference or focusing on recovering on the uninsured portion of the loss.

16. Using illegal and fraudulent investigative methods and procedures.

17. Using harassing, intrusive or demeaning investigative methods and procedures which victimize the insured.

18. Failure of an insurer to settle a claim directly, when and where settlement is required, and instead requiring the insured to pursue a claim against another party first before offering settlement.

19. Failure of Insurer to make full and satisfactory payment of a first party claim prior to requiring settlement or exhausting the limits of a third-party insurer (i.e. in uninsured motorist cases).

20. Failure of Insurer to unreasonably refuse to waive subrogation thus hindering or preventing a claimant from reaching settlement with the party at fault (i.e. in uninsured motorist cases).

21. Unjustified contention and/or "lowballing" regarding the value of a loss.

22. Intentionally withhold, misinterpret or misconstrue claims information and/or failure to not inform insured of provisions and covered benefits under the policy pertinent to a claim.

23. Attempts to use indiscriminate measures, reference and/or procedures that diminish or reduce the top line amount or value representing full payment of the claim.

24. Intentional or irresponsible non-disclosure and withholding of information, misinterpretation of file documents and/or policy provisions, that would be in favor of the claimant.

25. Unsubstantiated and unwarranted accusations of arson.

26. Wrongful threats not to pay claims.

27. Utilization and/or development of deceptive insurer schemes or use of outside company services set up or conducted to carry out the same false pretense schemes (i.e. "Independent Medical Examiner Paper Reviews") for the purpose to be able to wrongfully deny or reduce payment of claims.

28. Insurer advice to claimant not to hire a lawyer.

29. Treatment of insureds represented by attorneys as insurer adversaries.

30. Treatment of insureds and claimants as adversaries.

31. Significant increase in amount of premium as a result of making a claim where insured was not at fault and in conflict with industry standards.

32. Cancellation of a policy as a result of making a claim or result of an accident where insured was not at fault and in conflict with industry standards.

33. Failure to live up to, conform or comply to industry standards.

34. Using inaccurate or wrongful information of a factual or legal nature to diminish, deny or delay payment of a claim.

35. Not being forthcoming with facts regarding coverage to deny, delay or reduce the amount of the claim.

36. Using extreme undue persecution, wrongful and victimizing tactics and actions, meant to crush, threaten, thwart, intimidate, oppress, in order to scare away and get the claimant not to make or pursue a claim.

37. Failure to convey to insureds settlement offers and demands of adversaries in accident and liability cases.

38. Changing or altering policy coverage without informing or receiving the consent of insured.

39. Representation by an insurer that an investigation "of fact" is taking place, knowing that no investigation is being done, in order to intentionally stop and dismiss an inquiry by a plaintiff, plaintiff's attorney or DOI examiner.

40. Biased investigation of that which is supposed to be neutral and unbiased.

41. Utilization of internal one-sided or outside companies biased schemes, such as in so-called "IME" bias (independent medical examiner bias), which are supposed to be objective and neutral, in order to wrongfully enable, facilitate and support insurer's position to fraudulently deny, reduce or discontinue payments of claims.

42. Repeated and constant reference and intentional miscommunication and misrepresentation by insurer downplaying the size of a claim to insured's attorney.

43. The same claims person of an insurer handling conflicting and both sides of the same or related claims.

44. Deviating from standard procedures called for in an insurer's claims manuals.

45. Attempting to prevent the court or an insured's attorney with due exception from securing a copy of an insurer's claims manual.

46. Abusing and/or misusing the judicial court system in order to delay or settle in good faith payment of a claim where liability to the claim is clear and amount of the claim is reasonable in order to delay insurer's having to make payment of a claim.

47. Fraudulently misrepresenting and revealing various conflicting financial information that mischaracterizes the true financial information and status of an insurer.

48. Attempting to shift blame and responsibility of investigation to insured and away from the insurer.

49. Threatening to harm insured and/or take legal action against an insured to recover amounts paid by insurer as in a short-term workmen's compensation or short-term disability claim in order for insurer to discontinue having to make payment on a longer or long-term basis.

50. Insurer refusal to settle a third party claim against an insured within the limits of the insured's policy thereby exposing the insured to additional liability.

51. Intentionally misinterpreting or misconstruing the law to the disadvantage of the insured and benefit of the insurer.

52. Deny treatment for a covered health benefit because of its expensive cost and instead misrepresenting and suggesting a less costly procedure in its place to be just as effective when it is not.

53. Unreasonable denial of a covered health benefit because of its high cost.

54. Unreasonable misinterpretation of policy language.

55. Taking undue excessive advantage of unlimited time when knowing there may be no time limitations established on alleged investigations of such matters or matters of fact.

56. Making health insured patients pay their standard copay when the cost of both the drug and the pharmacy's fee for dispensing the managed care prescription is lower than the copay amount.

57. Causing health insureds to pay a copay that is higher than what the cost of the prescription is to the insurer because of common secretive rebate deals between insurers and drug manufacturers which subsequently are not disclosed and therefore do not accurately represent the true cost of the drug.

58. Health insurers not acting in the best interests of the patient and/or acting for their own self-enrichment at the health expense and disadvantage of the patient.

59. Some health insurer secretive deals are alleged to result in the health insurer selection of a more expensive drug to be on their list of acceptable drugs ("Formulary list"), services or procedures deceptively generating greater insurer profits, excessive higher costs to patients and illegally billing federal Medicare or state Medicaid programs.

60. Good faith insurers look for and find ways to accept and pay claims properly and promptly ... Bad faith insurers unlawfully look for and find ways to not pay, delay, diminish, disapprove and deny payment of claims, provisions or exclusions.

Contact Us at Khatri Med Law if you have more questions or need help with your claim at or (310) 740-0366

3 Myths of Teletherapy using Video Conferencing

Teletherapy using Video from a Clinician’s Point of View: 

1. Teletherapy is not the same as face to face therapy:

As mental health care meets the internet, we are seeing more and more clinicians providing care to their clients through the means of telepsychiatry tools such as video conferencing.  A few years ago, video conferencing was a plan B in my practice, reserved for those times when either my clients or I were not able to make it to the office. I felt connected to my clients via video conferencing in our teletherapy sessions, but I attributed that to the fact that our original sessions were face-to-face.

When I was first introduced to teletherapy online for substance abuse/mental health treatment that is strictly conducted via video conferencing, I had some reservations as to how connected the participants and therapists would feel. I am happy to report that teletherapy feels exactly the same as in-person therapy!

After the first 30 seconds or so, once the initial newness wears off, you forget that you are sitting in front of your computer. As the clinician, I am able to assess the client’s body language, eye contact, and verbal content just as I would in person.

Clients report feeling comfortable being in their own space, and are able to be open to the therapeutic process. I find that an additional benefit is that clients are now learning helpful tools via telepsychiatry to cope with their concerns in the environment where they need it most… home.

2. Teletherapy using video is  only for those who live in remote areas:

With all the healers, therapists, and counselors out there, it’s easy to think that therapeutic video conferencing would only be for those who do not have easy access to mental health care professionals. While it is true that teletherapy using video conferencing now opens the door to those in remote areas, it also meets the needs of many other people.

We gain the flexibility to work with individuals whose jobs make scheduling in-person therapy difficult, parents who are raising children, teenagers who are in school, college students, couples and families who live in separate locations, folks without transportation, people with physical disabilities, and clients with social anxiety, as well as those who are not comfortable with the social stigma of going to therapy or a treatment center. Now, because of therapeutic video conferencing, there is telemental health program or therapist out there that can work around your life.

Telepsychiatry video from the WVU Health Report

3. Teletherapy can feel disconnected:

As I mentioned earlier, the fact that you are actually on your computer seems to vanish within the first minute of teletherapy and it feels as natural as ever. Individual therapy is always meant to be a personal path for a client. Therefore, as long as client and therapist are connected, therapy is working! In terms of group therapy, video conferencing allows for the same compassion, understanding, feedback, and friendship that any face to face group can offer. It ensures confidentiality all while letting clients in different geographical locations learn to trust each other, grow together, and inspire each other.

Technological advances and new therapeutic programs are giving us the opportunity to reach clients in ways that are unimaginable a few years ago. The Telepsychiatry space is still new, and tools such as therapeutic video conferencing allows for confidentiality, a safe container, unconditional positive regard, and the awareness that any client would get in the room. In short, teletherapy using video conferencing retains the benefits of traditional in-person therapy while expanding its range and increasing accessibility.

By: Heather Konopa LMFT, Clinical Director of iMedRecovery 
Telehealth Based Adult and Adolescent Substance Abuse and Mental Health Recovery Program
"We Bring Recovery Home."
(888) 496-2029

Appealing Medical Insurance Claims When Denied

The fact of the matter is that claims are not always paid. When a claim is denied, you will gather all of the information relevant to the claim and review it: the claim form, the remittance advice or EOB (explanation of benefits), the remark codes by each claim line explaining why this claim was rejected, the patient’s medical record documentation, and the 3rd-party payer’s fee schedule (if one is provided). If a review of these forms seems to support a payment of the claim—and if that support is well documented—the provider may wish to appeal the claim.

Appeals are often made if:

  • A claim is denied for lack of pre-authorization but there were evident reasons why pre-authorization could not be obtained.
  • A claim is denied because the payer deems a procedure not medically necessary, yet the physician believes it was medically necessary.
  • The third-party payer denies a claim based on a pre-existing condition that the physician does not believe falls under the terms of pre-existing conditions.
  • Payment is denied without reason or a lower payment is made without adequate explanation.
  • Services are bundled and only one of the bundled codes will be reimbursed.
  • No modifiers are used (however, the third-party payer will not directly state this is missing).

The appeal process may vary slightly depending upon the third-party payer, but most of the steps are very similar. The appeal must be made in writing and must state the reason for the appeal (some carriers, like Medicare and Tricare, have forms to be filled out that will act as the written request). Since most carriers have a set time in which an appeal must be made, timeliness is important. There is a window in which appeals must be started they must be dated and make copies of all documents used in appeals process. Attached to this written appeal will be all supporting documents and records.

Following Up on Appeals

The third-party payer will review the appeal. (They usually have internal time limits on their review process, as well—typically 30 days.) They will inform the provider of their decision through a phone call or a letter. If unsatisfied with the decision, the payer may allow for one or more followup “levels” of appeal. At this point, if the payer’s decision is still unsatisfactory, there are steps that can be taken. Some payers will use an objective peer review. The peer review is a group of physicians who can review the claim as well as the supporting documentation and arbitrate the differences between the payer and the provider. They can decide, based on the medical care, the necessity of the procedures performed or services provided, and the payments made, whether the healthcare provider is entitled to a payment or partial payment.

Government insurers, such as Medicare and Tricare, have more prescribed steps in the appeal and review process. These should be followed exactly and within the time limits set forth by their guidelines. For more information on Medicare appeals, visit their

For Tricare appeals information, visit their website:

For more information of appealing denied claims, utilization review, or general healthcare legal questions, please contact us at or (310) 896-5183 and speak with a healthcare law expert. 

Khatri Medical Licensing & Law: "Where medicine and law meet."

The Business Associate Agreement (BAA) and a Template

Whenever you do business or have some sort of regular transactional relationship in or around a healthcare business setting, that person, or entity then becomes a "business associate."

According to U.S. Department of Health & Human Services, a business associate is a person or entity, other than a member of the workforce of a covered entity, who performs functions or activities on behalf of, or provides certain services to, a covered entity that involve access by the business associate to protected health information.  A “business associate” also is a subcontractor that creates, receives, maintains, or transmits protected health information on behalf of another business associate.  The HIPAA Rules generally require that covered entities and business associates enter into contracts with their business associates to ensure that the business associates will appropriately safeguard protected health information.  The business associate contract also serves to clarify and limit, as appropriate, the permissible uses and disclosures of protected health information by the business associate, based on the relationship between the parties and the activities or services being performed by the business associate.  A business associate may use or disclose protected health information only as permitted or required by its business associate contract or as required by law.  A business associate is directly liable under the HIPAA Rules and subject to civil and, in some cases, criminal penalties for making uses and disclosures of protected health information that are not authorized by its contract or required by law. A business associate also is directly liable and subject to civil penalties for failing to safeguard electronic protected health information in accordance with the HIPAA Security Rule.

Please find the following BAA template: 

Template Business Associate Agreement Provisions

    [Words or phrases contained in brackets are intended as either optional language or as instructions to the users of these sample provisions.]

Business Associate Agreement

by and between

[contracted company]


[Your Company]


Catch-all definition:

The following terms used in this Agreement shall have the same meaning as those terms in the HIPAA Rules: Breach, Data Aggregation, Designated Record Set, Disclosure, Health Care Operations, Individual, Minimum Necessary, Notice of Privacy Practices, Protected Health Information, Required By Law, Secretary, Security Incident, Subcontractor, Unsecured Protected Health Information, and Use.

Specific definitions:

(a) Business Associate.  “Business Associate” shall generally have the same meaning as the term “business associate” at 45 CFR 160.103, and in reference to the party to this agreement, shall mean [Insert Name of Business Associate].

(b) Covered Entity.  “Covered Entity” shall generally have the same meaning as the term “covered entity” at 45 CFR 160.103, and in reference to the party to this agreement, shall mean [Insert Name of Covered Entity].

(c) HIPAA Rules.  “HIPAA Rules” shall mean the Privacy, Security, Breach Notification, and Enforcement Rules at 45 CFR Part 160 and Part 164.

Obligations and Activities of Business Associate

Business Associate agrees to:

(a) Not use or disclose protected health information other than as permitted or required by the Agreement or as required by law;

(b) Use appropriate safeguards, and comply with Subpart C of 45 CFR Part 164 with respect to electronic protected health information, to prevent use or disclosure of protected health information other than as provided for by the Agreement;

(c) Report to covered entity any use or disclosure of protected health information not provided for by the Agreement of which it becomes aware, including breaches of unsecured protected health information as required at 45 CFR 164.410, and any security incident of which it becomes aware;

[The parties may wish to add additional specificity regarding the breach notification obligations of the business associate, such as a stricter timeframe for the business associate to report a potential breach to the covered entity and/or whether the business associate will handle breach notifications to individuals, the HHS Office for Civil Rights (OCR), and potentially the media, on behalf of the covered entity.]

(d) In accordance with 45 CFR 164.502(e)(1)(ii) and 164.308(b)(2), if applicable, ensure that any subcontractors that create, receive, maintain, or transmit protected health information on behalf of the business associate agree to the same restrictions, conditions, and requirements that apply to the business associate with respect to such information;

(e) Make available protected health information in a designated record set to the [Choose either “covered entity” or “individual or the individual’s designee”] as necessary to satisfy covered entity’s obligations under 45 CFR 164.524;

[The parties may wish to add additional specificity regarding how the business associate will respond to a request for access that the business associate receives directly from the individual (such as whether and in what time and manner a business associate is to provide the requested access or whether the business associate will forward the individual’s request to the covered entity to fulfill) and the timeframe for the business associate to provide the information to the covered entity.]

(f) Make any amendment(s) to protected health information in a designated record set as directed or agreed to by the covered entity pursuant to 45 CFR 164.526, or take other measures as necessary to satisfy covered entity’s obligations under 45 CFR 164.526;

[The parties may wish to add additional specificity regarding how the business associate will respond to a request for amendment that the business associate receives directly from the individual (such as whether and in what time and manner a business associate is to act on the request for amendment or whether the business associate will forward the individual’s request to the covered entity) and the timeframe for the business associate to incorporate any amendments to the information in the designated record set.]

(g) Maintain and make available the information required to provide an accounting of disclosures to the [Choose either “covered entity” or “individual”] as necessary to satisfy covered entity’s obligations under 45 CFR 164.528;

[The parties may wish to add additional specificity regarding how the business associate will respond to a request for an accounting of disclosures that the business associate receives directly from the individual (such as whether and in what time and manner the business associate is to provide the accounting of disclosures to the individual or whether the business associate will forward the request to the covered entity) and the timeframe for the business associate to provide information to the covered entity.]

(h)  To the extent the business associate is to carry out one or more of covered entity's obligation(s) under Subpart E of 45 CFR Part 164, comply with the requirements of Subpart E that apply to the covered entity in the performance of such obligation(s); and

(i) Make its internal practices, books, and records available to the Secretary for purposes of determining compliance with the HIPAA Rules.

 Permitted Uses and Disclosures by Business Associate

(a) Business associate may only use or disclose protected health information

[Option 1 – Provide a specific list of permissible purposes.]

[Option 2 – Reference an underlying service agreement, such as “as necessary to perform the services set forth in Service Agreement.”]

[In addition to other permissible purposes, the parties should specify whether the business associate is authorized to use protected health information to de-identify the information in accordance with 45 CFR 164.514(a)-(c).  The parties also may wish to specify the manner in which the business associate will de-identify the information and the permitted uses and disclosures by the business associate of the de-identified information.]

(b) Business associate may use or disclose protected health information as required by law.

(c) Business associate agrees to make uses and disclosures and requests for protected health information

[Option 1] consistent with covered entity’s minimum necessary policies and procedures.

[Option 2] subject to the following minimum necessary requirements: [Include specific minimum necessary provisions that are consistent with the covered entity’s minimum necessary policies and procedures.]

(d) Business associate may not use or disclose protected health information in a manner that would violate Subpart E of 45 CFR Part 164 if done by covered entity [if the Agreement permits the business associate to use or disclose protected health information for its own management and administration and legal responsibilities or for data aggregation services as set forth in optional provisions (e), (f), or (g) below, then add “, except for the specific uses and disclosures set forth below.”]

(e) [Optional] Business associate may use protected health information for the proper management and administration of the business associate or to carry out the legal responsibilities of the business associate.

(f) [Optional] Business associate may disclose protected health information for the proper management and administration of business associate or to carry out the legal responsibilities of the business associate, provided the disclosures are required by law, or business associate obtains reasonable assurances from the person to whom the information is disclosed that the information will remain confidential and used or further disclosed only as required by law or for the purposes for which it was disclosed to the person, and the person notifies business associate of any instances of which it is aware in which the confidentiality of the information has been breached.

(g) [Optional] Business associate may provide data aggregation services relating to the health care operations of the covered entity.

Provisions for Covered Entity to Inform Business Associate of Privacy Practices and Restrictions

(a) [Optional] Covered entity shall notify business associate of any limitation(s) in the notice of privacy practices of covered entity under 45 CFR 164.520, to the extent that such limitation may affect business associate’s use or disclosure of protected health information.

(b) [Optional] Covered entity shall notify business associate of any changes in, or revocation of, the permission by an individual to use or disclose his or her protected health information, to the extent that such changes may affect business associate’s use or disclosure of protected health information.

(c) [Optional] Covered entity shall notify business associate of any restriction on the use or disclosure of protected health information that covered entity has agreed to or is required to abide by under 45 CFR 164.522, to the extent that such restriction may affect business associate’s use or disclosure of protected health information.

Permissible Requests by Covered Entity

    [Optional] Covered entity shall not request business associate to use or disclose protected health information in any manner that would not be permissible under Subpart E of 45 CFR Part 164 if done by covered entity. [Include an exception if the business associate will use or disclose protected health information for, and the agreement includes provisions for, data aggregation or management and administration and legal responsibilities of the business associate.]

Term and Termination

(a) Term. The Term of this Agreement shall be effective as of [Insert effective date], and shall terminate on [Insert termination date or event] or on the date covered entity terminates for cause as authorized in paragraph (b) of this Section, whichever is sooner. 

(b) Termination for Cause. Business associate authorizes termination of this Agreement by covered entity, if covered entity determines business associate has violated a material term of the Agreement [and business associate has not cured the breach or ended the violation within the time specified by covered entity].  [Bracketed language may be added if the covered entity wishes to provide the business associate with an opportunity to cure a violation or breach of the contract before termination for cause.]

(c) Obligations of Business Associate Upon Termination.

[Option 1 – if the business associate is to return or destroy all protected health information upon termination of the agreement]

Upon termination of this Agreement for any reason, business associate shall return to covered entity [or, if agreed to by covered entity, destroy] all protected health information received from covered entity, or created, maintained, or received by business associate on behalf of covered entity, that the business associate still maintains in any form.  Business associate shall retain no copies of the protected health information. 

[Option 2—if the agreement authorizes the business associate to use or disclose protected health information for its own management and administration or to carry out its legal responsibilities and the business associate needs to retain protected health information for such purposes after termination of the agreement]  

Upon termination of this Agreement for any reason, business associate, with respect to protected health information received from covered entity, or created, maintained, or received by business associate on behalf of covered entity, shall:

    1. Retain only that protected health information which is necessary for business associate to continue its proper management and administration or to carry out its legal responsibilities;
    2. Return to covered entity [or, if agreed to by covered entity, destroy] the remaining protected health information that the business associate still maintains in any form;
    3. Continue to use appropriate safeguards and comply with Subpart C of 45 CFR Part 164 with respect to electronic protected health information to prevent use or disclosure of the protected health information, other than as provided for in this Section, for as long as business associate retains the protected health information;
    4. Not use or disclose the protected health information retained by business associate other than for the purposes for which such protected health information was retained and subject to the same conditions set out at [Insert section number related to paragraphs (e) and (f) above under “Permitted Uses and Disclosures By Business Associate”] which applied prior to termination; and
    5. Return to covered entity [or, if agreed to by covered entity, destroy] the protected health information retained by business associate when it is no longer needed by business associate for its proper management and administration or to carry out its legal responsibilities.

[The agreement also could provide that the business associate will transmit the protected health information to another business associate of the covered entity at termination, and/or could add terms regarding a business associate’s obligations to obtain or ensure the destruction of protected health information created, received, or maintained by subcontractors.]

(d) Survival.  The obligations of business associate under this Section shall survive the termination of this Agreement.

Miscellaneous [Optional]

(a) [Optional] Regulatory References. A reference in this Agreement to a section in the HIPAA Rules means the section as in effect or as amended.

(b) [Optional] Amendment. The Parties agree to take such action as is necessary to amend this Agreement from time to time as is necessary for compliance with the requirements of the HIPAA Rules and any other applicable law.

(c) [Optional] Interpretation. Any ambiguity in this Agreement shall be interpreted to permit compliance with the HIPAA Rules.



Print name and title______________________________________






 [Your Company]by ________________________________