Legal News

Please select the links below for complete Legal News articles and documents for 2008. View Legal News Archive

08.19.08 MAG becomes a plaintiff in Rivell, et al v. PHCS, et al

MAG is a plaintiff in a class action filed against Private Health Care Systems, Inc., (PHCS) and the Capella Group, Inc., (Capella) doing business as Care Entree. The class action is brought against PHCS and Capella on behalf of physicians whose agreements to participate in provider networks and charge patients discounted fees to be paid by third party payers were unlawfully sold, rented or leased by PHCS to Capella and other discount card companies that have not contracted to pay for such medical services.

MAG alleges the defendants have been wrongfully enriched by this practice at the expense and to the detriment of William Andrew Rivell, M.D., Alan B. Whitehouse, M.D., and other physicians similarly situated throughout Georgia. The physicians neither gave their consent nor authorized the transactions complained of herein.

If you should have any questions, please do not hesitate to call MAG General Counsel Donald J. Palmisano Jr., at dpalmisano@mag.org or 678.303.9281.

Read court order
Read second amended class action complaint

08.15.08 District court rules state cannot cut hours of skilled nursing care

In Moore v. Medows, the district court held that the State had no discretion under the Medicaid Act to cut the number of hours of skilled private duty nursing care deemed necessary by the child’s physician. The district court found the State may not deny or reduce the hours of skilled nursing care that is deemed medically necessary based upon the cost or lack of a secondary caregiver.

Read court's opinion for more details

08.08.08 Blue Cross Blue Shield compliance dispute resolution to benefit 12,000 physicians

The Medical Association of Georgia (MAG) has resolved a compliance dispute with Blue Cross Blue Shield of Georgia, Inc. and Blue Cross Blue Shield Healthcare of Georgia, Inc. (subsidiaries of WellPoint, Inc.) that's related to a settlement agreement that will benefit the 12,000 physicians who are under contract with Blue Cross Blue Shield in the state.

MAG used the compliance dispute process that was included in the settlement agreement that was the result of a managed care lawsuit settled in 2005 that involved WellPoint Inc. That settlement included generally-accepted medical standards, increased transparency in paying claims, streamlined communications between Blue Cross Blue Shield and its contract physicians, and a less complex claims payment system.

Read press release
Read alert to members

07.28.08 DCH has new reporting requirements for facilities operating under an exemption or letter of nonreviewability

Beginning July 1, 2008, all facilities operating under a previously granted exemption or letter of nonreviewability as provided at O.C.G.A. 31-6-40(c)(2)(A) will be required to provide notice to the department by August 15, 2008, of the following:

Name
Ownership
Location
Single Specialty
Services provided in the exempt facility

For purposes of complying with this requirement, notice may be sent through the mail, by facsimile, or e-mail.

Read full notice

07.15.08 Georgia Supreme Court agrees with MAG in Medicaid reimbursement dispute

On July 11, the Georgia Supreme Court agreed with MAG that DCH’s interpretation of terms contained in a policy manual that is incorporated into provider contracts is not entitled to judicial deference, but is subject to the rules of contract construction.

In Pruitt Corp. et al. v. Georgia Department of Community Health et al., a nursing facility and DCH disputed the meaning of a reimbursement formula-related term contained in the policy manual. The Georgia Court of Appeals held DCH’s interpretation was supported by evidence and reasonable and therefore entitled to judicial deference. In vacating the decision of the Court of Appeals, the Supreme Court determined that because the policy manual was incorporated into a contract, its terms are governed by the rules of contract construction. Additionally, because the policy manual is not subject to the same scrutiny as a statute during the legislative process or a rule during the adoption process, DCH’s interpretation was not entitled to the same deference.

Read the Supreme Court decision
Read MAG's amicus brief

07.09.08 MAG fights to prevent expansion of physician liability

On June 17, 2008, MAG urged the Supreme Court of Georgia to accept an appeal from, and reverse the decision of, the Georgia Court of Appeals. The rule announced by the Court of Appeals in Lyon v. Schramm created an exception to the statute of repose in “failure to warn” cases under which a physician committed a new negligent act or omission each time the physician failed to warn a patient of risks associated with previous treatment by a different physician.

In Schramm v. Lyon, the plaintiff filed a medical malpractice suit arising from overwhelming post splenectomy infection (OPSI) 22 years after having her spleen removed. Plaintiff alleged none of the physicians that treated her within the previous five years warned her of the risk of OPSI or recommended treatment against OPSI. Although the trial court dismissed the claims against three physicians that began treating plaintiff more than five years before the suit was filed, the Court of Appeals reversed, finding each time the physicians failed to warn constituted a new negligent act or omission.

In its amicus curiae brief, MAG urged the Supreme Court to hear the appeal and reverse the Court of Appeals decision on the basis failure to warn cases should be treated the same as misdiagnosis cases because both require the physician to exercise the same professional judgment, the Court of Appeals decision is contrary to the intent of the legislature in enacting the statute of repose, and the Court of Appeals decision is akin to adopting the “continuous treatment doctrine” previously rejected by the Supreme Court.

Read MAG's Amicus Brief

07.06.08 MAG General Counsel flags assignment of benefits payment issue

The MAG Office of the General Counsel says that physicians are reporting that insurance companies are not recognizing valid patient assignment-of-benefits forms. Physicians are consequently having to go through the additional step of recouping the payments that the insurance companies send directly to the patients from the patients.

According to MAG General Counsel Donald Palmisano Jr., this is a common tactic that insurance companies use as leverage to force physicians to become network providers. However, he adds, state law (O.C.G.A. 33-24-54) requires that insurance companies recognize a valid assignment of benefits signed by the patient for a non-participating physician.

Physicians who have had an insurance company refuse to recognize a valid assignment of benefits signed by the patient or have had an insurance company pay Medicare rates instead the pre-approved network payments should contact Palmisano at 678.0303.9281 or dpalmisano@mag.org.

06.25.08 MAG Defends Physicians' Right to Equal Access to Evidence

On June 16, 2008 the Medical Association of Georgia (MAG) filed an amicus curiae brief in the Georgia Supreme Court urging the court to uphold a Court of Appeals decision holding the HIPAA privacy rule does not prohibit ex parte communications between a medical malpractice defendant and the patient’s prior treating physicians as permitted under state law.

In Moreland v. Austin, the trial court ruled HIPAA prohibited such communications. The Georgia Court of Appeals, finding Georgia law had more stringent privacy protections than HIPAA, reversed the trial court. In its brief, MAG argues HIPAA does not preempt such ex parte communications as permitted under Georgia law and it is unjust to use HIPAA to disrupt the fair and reasonable discovery procedures allowed under Georgia law.

The case is currently pending before the Georgia Supreme Court.

Read MAG's Amicus Brief

06.10.08 MAG Attacks Plaintiff-Friendly, Judicially-Created Exception to Georgia Law in Medical Malpractice Cases

MAG has filed an amicus curiae brief with the Georgia Supreme Court urging the Court to overturn a judicially-created exception to the statute of limitations in medical malpractice cases.

In Amu v. Barnes, Plaintiff alleges Dr. Amu negligently misdiagnosed colon cancer as hemorrhoids in 2000. Plaintiff was subsequently diagnosed in 2004 with stage IV colon cancer and filed suit against Dr. Amu. The jury returned a plaintiff’s verdict and Dr. Amu appealed to the Georgia Court of Appeals. On appeal, Dr. Amu argued, among other things, the suit was time barred under Georgia’s two-year statute of limitations in medical malpractice cases. Applying a judicially-created exception to the statute of limitations in medical malpractice cases, known as the subsequent injury rule, the Court affirmed the jury’s verdict reasoning that because the statute of limitations runs from the date of injury and the metastasis of plaintiff’s cancer constituted a new injury, the suit was not time barred by the statute of limitations.

On appeal to the Georgia Supreme Court, MAG argues application of the subsequent injury rule in cancer cases is, in effect, an application of the discovery rule, under which the statute of limitation runs from the date an injury is discovered, and has been rejected in Georgia. MAG also argues the subsequent injury rule defeats the purpose of the statute of limitations, divests the legislature of its control over public policy, misconstrues how physicians diagnose disease, and misconstrues the disease process itself. As such, the Court should abandon the rule.

On June 2, the Supreme Court of Georgia affirmed the opinion of the Georgia Court of Appeals. The Georgia Supreme Court found the “new injury” exception is entirely consistent with the statutory requirement that the statute of limitation commences on the date of the injury, even if the patient is not aware of either the cause of the pain or the connection between the symptoms and the negligent act or omission. The court stated for the “new injury” exception to apply, there must be evidence that the plaintiff develop a new injury from the time period of the original misdiagnosis and the plaintiff must have been asymptomatic for a period of time following the original misdiagnosis. The Georgia Supreme Court’s opinion affirms the Whitaker line of cases decided nearly two decades ago as an exception to the statute of limitations.

Read MAG's Amicus Brief
Read Supreme Court's June 2 Ruling

05.15.08 MAG Supports Joint Commission's Efforts to Adopt MS 1.20

MAG commends the Joint Commission for its efforts in drafting and adopting the final version of MS 1.20. MS 1.20 helps ensure quality patient care by establishing a much needed standard for the elements of medical staff bylaws and by reinforcing the Joint Commission's existing standards requiring a self-governing medical staff.

Read Full Letter to the Joint Commission

05.14.08 RICO Lawsuit Compliance Dispute Leads CIGNA to Making Payment Policy Change for Developmental Screening

Effective May 1, 2008, CIGNA began paying physicians who bill CPT® 96110 (developmental screening) with an Evaluation and Management Code appended with a modifier 25. This welcome payment change came as a result of compliance disputes filed by several pediatricians under the Settlement Agreement reached between several state and county medical associations, including the Medical Association of Georgia and CIGNA in the RICO litigation. The physicians and medical societies argued that the Settlement Agreement required CIGNA to pay this code combination. Although the settlement has ended, CIGNA has agreed to make this payment change on a going forward basis.

Settlement agreements with Aetna, HealthNet, Humana, WellPoint, and the Blue Cross/Blue Shield Association remain in effect. For more information about your rights under the settlement agreements and/or if you believe that any of these companies is violating the settlement terms, please contact MAG General Counsel Donald Palmisano Jr. at 678.303.9281 or dpalmisano@mag.org or go to www.hmosettlements.com.

05.02 Judge Strikes Down Medical Malpractice Caps

Three years after the General Assembly enacted SB 3 to place a cap on non-economic damages in Georgia, a trial court judge has ruled the cap unconstitutional. MAG believes that the court’s arguments are flawed in several ways and will continue to manage this priority issue on behalf of its members so the people who live in Georgia have access to quality health care and increased peace of mind.

Read Statement from President Jack M. Chapman Jr., M.D.
Read Fulton Co. Superior Court Ruling

04.22.08 AMA to Begin Enforcement of BCBS Settlement

The AMA today issued a news release announcing that it will begin enforcement of the national Blue Cross and Blue Shield (BCBS) settlement as a signatory medical society to the agreement.

Read AMA Press Release

03.26.08 MAG Alert: Court Ruling Allows Workers' Compensation Board to Regulate Medical Copy Charges, Not Health Records Act

On March 24, the Georgia Court of Appeals made the following decision:

    "The Workers' Compensation Board regulates the medical photocopying charges in a Workers' Compensation proceeding rather than the Health Records Act (O.C.G.A. 31-33-3). This decision answers a question on whether the Health Records Act applies to workers' compensation cases."

Read the Court's Opinion

02.28.08 MAG Alert for CMS: Filing Site for 990-N Up and Running

The Internal Revenue Service (IRS) launched its electronic filing system this week for small tax-exempt organizations now required to file an annual return. In the past, small tax-exempt groups with annual gross receipts of $25,000 or less were not required to file a return. But a provision in the Pension Protection Act of 2006 stipulates that these organizations must start filing an electronic Form 990-N, or e-Postcard.

The form is brief, and asks for a few basic pieces of information, including: the organization’s employer ID number; its tax year, legal name and mailing address; other names used; web address; the name and address of a principal officer; and a statement confirming the organization’s annual gross receipts.

The e-Postcard must be filed electronically, both to facilitate timely filing and because the IRS intends the information to be accessible by the public.

“The information on the form, which will be available to the public, will help ensure that potential donors have the basic information they need about the organization,” said Lois Lerner, director of the IRS Exempt Organizations Division.

The due date for filing Form 990-N is the 15th day of the 5th month after the close of the tax year. For example, an organization whose most recent tax year ended on Dec. 31, 2007 must file a Form 990-N by May 15 of this year. The new law provides that organizations that fail to file Form 990-N for three consecutive years will lose their tax-exempt status.

01.22.08 MAG Spearheads National Advocacy in CON Lawsuit

The Medical Association of Georgia escalated the state’s ongoing Certificate of Need (CON) debate to the national forefront today with the filing of a motion to intervene in the Superior Court of Dougherty County. The intervention comes in response to a suit filed in December by the Georgia Alliance of Community Hospitals which challenges the Department of Community Health Board vote to make general surgery a single specialty. In an effort to fight this troublesome development, MAG has created the Legal Defense Fund to support our involvement in this legal battle. Please read the President's letter to Members for details.

Read MAG President's Letter to Members
Read Executive Director's Message
View Full Press Release
View MAG's Motion to Intervene
View Georgia Alliance of Community Hospitals' Lawsuit

01.18 MAG Advocates for Member Awareness of Physician Tiering Programs in Georgia

As insurance companies roll out physician tiering programs in Georgia, it is important for you to be aware of the programs’ existence and to know that MAG is fighting to assure that these programs are based on meaningful data and do not disparage physicians or interfere with the physician-patient contract.

Click Here for More Information Including:

  • MAG Executive Director's Letter to Members

  • MAG's Initial Letter to Aetna

  • New York Attorney General's Letter

  • MAG Issue Brief: Physician Tiering Programs in Georgia

  • Physician Tiering Guide Developed for the American Medical Association

  • Template of Letter to Distribute to Patients

*Some of the documents listed here are available in PDF format and can be viewed using Adobe Acrobat Reader®. This free software can be downloaded from the Adobe® site, http://www.adobe.com.