Healthcare Matters

   A Complimentary Newsletter From:

Barmak and Associates, LLC  

Managing Liability for Long Term Care and Health Care Providers

Volume 16, Issue 8                  ADVERTISEMENT                                August 2015

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In This Issue
Placing Video Cameras In Resident Rooms in Nursing Homes
Physician Hiring for Administrative Positions with Healthcare Providers, Partially Funded by Medicare/Medicaid Currently Target Area of the Center for Medicare and Medicaid Services Audits
David Barmak, Esq.
Gerald V. Burke, M.D., Esq. 
Jo Ann Halberstadter, Esq.
Jo Ann Halberstadter, Esq.

Click on Attorney's Picture for more Information 




Placing Video Cameras In Resident Rooms in Nursing Homes
By: Jo Ann Halberstadter, Esq. 

The news stories are all chillingly similar, a concerned family member or an authorized government official places a hidden video camera in a nursing home resident's room without notifying the nursing home or its staff.  The collected video tape reveals shocking abuse and brutality by a staff member against the resident.  Can a nursing home create and adopt a policy prohibiting the placement of video cameras in residents' rooms?
In many states, the answer is yes.  Currently, there are no federal laws either prohibiting or specifically authorizing the use of video monitoring in a nursing home.  Many states, including Arkansas, Louisiana, Michigan, North Carolina, Ohio, South Carolina, and New Jersey, are considering such legislation but have yet to enact anything.  Only Texas, New Mexico, Oklahoma, Washington and, as of August 21, 2015, Illinois have passed laws permitting video cameras to be installed in nursing home residents' rooms.  Maryland enacted legislation that provides guidance to nursing facilities should they choose to allow residents to install video cameras but leaves the choice to the nursing facility.
While many legislators and senior advocacy groups, including AARP, applaud a resident and her family member's right to install a video camera for protection, surveillance or other legitimate purposes, they caution that any proposed legislation must take into account a resident's right to consent and privacy concerns.  On the other hand, unions representing healthcare workers generally oppose such legislation, particularly if the video cameras are allowed to be hidden, as violating a worker's right to privacy and creating an environment of mistrust.  Nursing home operators are concerned that such measures could lead to higher staff turnover and therefore support measures that would require the video cameras to be in plain view with some form of notice posted outside the resident's room in order to address staff privacy issues.
The new Illinois law, which becomes effective on January 1, 2016, requires both resident and roommate consent for the monitoring devices to be installed. Under the law, residents or their families are responsible for all costs associated with purchase and installation of the device. The law also prohibits facilities from retaliating against those who use the devices and makes it a crime to tamper with or obstruct a recording.  The Illinois law also specifies that the recordings or tapes are admissible as evidence in court.
Rather than resisting statewide efforts to enact laws permitting video monitoring of nursing home residents, facilities could preempt such efforts by initiating discussions with staff, residents, and family members.  Staff should be alerted to the inevitability of such measures and educated on the pros and cons of permitting video cameras in resident rooms.  Similarly, the creation of policies permitting video cameras might go a long way in fostering a culture of confidence and trust with residents and their families.

If you have any questions regarding this article, please contact Jo Ann Halberstadter, Esq. at or call (609)-454-5351.

Physician Hiring for Administrative Positions with Healthcare Providers, Partially Funded by Medicare/Medicaid Currently Target Area of the Center for Medicare and Medicaid Services Audits

By: Gerald V. Burke, M.D., Esq. 
Many physicians and institutions are finding it mutually advantageous to enter into contractual agreements that have the physician providing administrative services to the institution. From a physician's perspective, these employment opportunities are often quick, easy ways to make extra income. From the institution's perspective, these positions, which are mandatory for the licensing and accreditation of their institution, also offer the institution the opportunity to reward physicians or practices that heavily patronize the institution.  However, if these arrangements are not established correctly, there is significant potential liability for both the physician and the institution.  These contractual relationships are currently target areas of the Center for Medicare and Medicaid Services  (CMS) audits.
CMS is concerned that any such contractual arrangement be established through "arms length" negotiations and that the arrangement is in no way an inducement of one party to the other party for services for which CMS is the payor.  These arrangements must be entered into solely for the purpose of providing the institution with administrative services that only a physician can render.  An example of an administrative position that is frequently coming under scrutiny is that of a medical director for a nursing home. What CMS is vigilant about is if this relationship is entered into as a "kickback" to the physician for bringing business to the institution or nursing home.
There are specific guidelines that any such contract between a physician and an institution receiving any form of financial funding from CMS needs to adhere closely to in order to avoid fines and other penalties when a CMS audit occurs.  These fines and penalties can apply to both the physician and the institution alike.
In the spirit of avoiding any appearance of impropriety, the arrangement must be governed by a written contract. This contract must be arrived at as the result of "arms length" negotiations. There can be no influence, either directly or indirectly, by any other relationship that the physician and the institution may have. The contract negotiations have to involve solely the administrative responsibilities that are required of the position.  Reimbursement for all professional services rendered by the physician in the institution must come from the medical practice and not the hiring institution. Any suggestion that there may have been outside influences in the contracting process may negate the validity of the contract under the scrutiny of a CMS audit.
The physician's services should be reimbursed at a "Fair Market Value" (FMV). The FMV is not a number that is pulled out of thin air. Instead, there are very specific guidelines for determining what is the appropriate FMV for a given position in a given market area. One means to calculate the FMV is to pay the physician at equal to or less than the 50th percentile of the hourly rate of emergency room physicians at the four nearest hospitals geographically. The other means of calculating the FMV for physician services are several national reviews of physician salaries. The physician may not be compensated above the 50th percentile for his or her particular specialty area. If the physician is compensated above this level, without a legitimate reason for this higher compensation, CMS may regard this as a "bribe" to the physician for bringing his patients and business to the facility.
Specific duties should also be assigned to the physician in the contract. For certain positions, such as that of the medical director for a nursing home, F tag 501 specifies what the physician duties are to be in order to be compliant with CMS guidelines. While the employer can specify other duties, the basic duties need to be included or the contract may be considered tainted on a CMS audit.
Finally, there must be an accurate accounting, on a monthly basis, of the time spent by the physician in discharging his duties. This should involve the physician submitting a monthly, signed statement that clearly notes the services and the time spent on each service provided that month.  This is the first step in attesting that the money paid to the physician is truly for the provision of administrative services.  This statement must be submitted monthly by the physician prior to a check being issued for the administrative services rendered. Failure to enforce this policy will result in the potential appearance of improprieties on the part of both parties involved and may result in fines and sanctions for both parties.
Professional medical services rendered by the physician to individual residents or patients are to be billed directly by the physician to either the insurance carrier or the patient. The institution is not to compensate the physician for professional medical services.
In order to avoid or minimize the possibility of a CMS audit resulting in the imposition of fines, sanctions or both, all contracts between any CMS reimbursed institution and a physicians needs to be reviewed by a healthcare lawyer knowledgeable in this area. Dollars spent in contract review and modification can result in saving tens of thousands of dollars in fines and potential suspension from the Medicare and Medicaid programs.

If you have questions regarding this article, please contact Gerald V. Burke, MD.,Esq. at or by telephone at (609) 454-5351.

Barmak and Associates, LLC      


Our law firm provides integrated regulatory, transactional, employment and litigation/advocacy services to skilled nursing facilities and other healthcare providers.


Representative Clients: 

Entities:  Skilled nursing facilities; Home health agencies; Hospice agencies; Hospitals.


Providers: Physicians; Therapists; Orthotists and Prosthetists


Suppliers:  Durable medical equipment; Long-term care pharmacies; Retail pharmacies.


Businesses: Billing; Management service organizations; Independent provider associations


Regulatory Issues: Corporate Compliance Programs (Fraud, waste & abuse; Privacy & Data Security; Employment); Healthcare facility; Licensed Professionals; Medicare & Medicaid (certification, survey and reimbursement); Auditing (legal; clinical; administrative; and reimbursement).


Transaction Issues: General Counsel Services; Contracts.
Employment Issues: Wage and hour; Equal employment opportunity; Discrimination; Whistle-blowing; Employment agreements; Severance packages; Employee release agreements, Non-compete agreements; Non-solicitation agreements; Confidentiality agreements, Employee leave issues, Electronic monitoring and employee privacy, Employee separation (suspensions, terminations and reductions in force); Documentation.


Litigation/Advocacy: Contracts; Employment; Fiduciary issues; Commercial leases; Payment (Managed Care Organizations; Medicare; Medicaid); Guardianship; Professional and facility licensing; Healthcare regulatory; Fraud and privacy issues.
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This newsletter has been prepared by Barmak and Associates, LLC for informational purposes only and is not intended to provide legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.


For more information, please contact:

David S. Barmak, Esq.

Telephone (609) 454-5351
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