Cignet gone wrong

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Cignet gone wrong

Since Congress is unlikely to repeal healthcare reform in the face of President Obama's veto, any repeal in the next two years would have to come through the courts, and that prospect is becoming more likely. A federal judge in Florida became the first to reject the whole law, rather than just its highly unpopular mandate to buy insurance.

He concluded the law is not "severable," meaning if one part is removed, the rest would have to go, too. That's a legal concept, but it is also an apt description of the interlocking nature of the law's provisions.

Keeping the popular protection for people with preexisting conditions, for example, requires that everyone have insurance. Without such a mandate, people would have no reason to buy coverage until they got sick.

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The core case against the mandate rests on Constitutional law, which President Obama used to teach, but Constitutional law has some slippery concepts. The Commerce Clause grants Congress the authority to regulate "activities that substantially affect interstate commerce," which courts have interpreted to mean Congress cannot regulate "inactivity.

But the lawsuits — and there are about 20 of them, including the Florida case, which includes 26 states — insist that no matter what the administration says, not buying insurance is still "inactivity. Sebelius found that the individual mandate violates the Commerce Cignet gone wrong.

As expected, Secretary Sebelius and the Obama administration disagree that the mandate is in violation of the Clause, arguing instead that Congress has the "constitutional authority to enact laws that are necessary and proper to achieve the goal of providing health services at a reasonable cost to those who cannot obtain or afford it under the current system," according to the AHLA report.

Aside from potential issues with the Commerce Clause, the Obama Administration also argues it has the authority to tax individuals who decide not to purchase qualifying coverage. District Judge Henry Hudson, the Virginia District Judge who found the individual mandate in violation of the Clause, also rejected this argument.

He found the "tax" imposed on individuals who chose not to purchase coverage is in fact a penalty, based on the use of the word "penalty" in the minimum essential coverage section of the statute.

He argued that the distinction between a tax intended to raise funds and a penalty intended to regulate behavior is constitutionally meaningful, according to the AHLA report. Everyone expects the Supreme Court to ultimately decide the issue, which could take as long as two years. The high court's five-member conservative majority may well hold together.

Rulings on these cases have been stubbornly partisan so far, with two Democrat-appointed judges in favor of the law and two Republican-appointed judges against it.

Cignet gone wrong

Also, the Constitutional issue involves an expansion of federal authority, an issue that can get a conservative jurist's blood boiling. Never before has Congress required purchase of a private good or service, wrote a Virginia judge ruling against the mandate.

The Supreme Court could strike down the individual mandate or it could go all the way and repeal the whole law. The high court generally shies away from this, not wanting to be seen as usurping the powers of Congress.

But the healthcare reform law could be an exception. Breaches of electronic data have become a major problem, as more providers switch to electronic systems. In addition, interoperability of systems is expected to create yet more breaches, as information is traded between networks.

Laptop theft is the most common type of data breach, accounting for 24 percent of reported breaches, according to HHS. Desktop computers were involved in 16 percent of breaches and portable devices such as smart phones were involved in 14 percent. Almost all the states have developed their own data-breach laws.

California enacted the first such law inand 46 states quickly followed. However, the laws vary on what counts as personal information, how notice of the breach has to be made and the amount of fines for noncompliance.

Affected patients must be notified in writing within 60 days of discovering the breach, and if more than people are impacted, local media outlets must be alerted, and the breach must be posted on the HHS website.

If a breach affects fewer than individuals, the provider can notify HHS on an annual basis. And if the data is encrypted in accordance with HHS guidances, an organization is exempt from notification because the information is unusable by unauthorized individuals.

The notice followed a finding by HHS' Office of Civil Rights that the health system failed to provide 41 patients with copies of their medical records.

Cignet also allegedly failed to respond to requests from the Office for Information on the complaints. The allegations involved the loss of documents — a patient schedule containing names and medical record numbers for patients, as well as billing encounter forms containing the name, date of birth, medical record number, health insurer and policy number, diagnosis and name of providers for 66 of those patients.

Cignet Health's settlement underscores the necessity of cooperating with OCR investigations.

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Federal antitrust laws will likely have to be reinterpreted to make way for accountable care organizations. ACOs present a new legal problem because competing hospital systems would be able to come together and share pricing information, which could be viewed as "per se" illegal under Section One of the Sherman Act.

The possibility that ACOs could be a means for hospitals to raise prices runs counter to the basic concept of ACOs, which is to bring hospitals together to lower prices, but it could happen.

CMS, which is currently drafting proposed regulations for ACOs, doesn't have a direct concern with antitrust. Raising prices due to market dominance is not an issue for Medicare, because it set prices unilaterally.

However, private payors, who are beginning to create their own ACO-like relationships with hospitals and physicians, are exposed to market forces and have a strong interest in ensuring strong antitrust regulations for providers — even as insurers themselves enjoy wide exemptions from antitrust laws under the McCarran-Ferguson Act.

The two federal antitrust agencies, the Federal Trade Commission and the Department of Justice's Antitrust Division, also want to keep antitrust enforcement strong. But it is not a perfect fit and antitrust agencies are expected to provide more guidance.The way the men's chan ging rooms are designed or run are completley wrong!

Cignet gone wrong

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