iProtean—Boards, Executives and Attorneys Eye Legal Issues for 2014

The Affordable Care Act (ACA) and other compliance issues will challenge boards and executives throughout 2014. Many of these challenges have legal implications. AHLA Connections recently provided a list of the top 10 health law issues in 2014 (“Top 10 Health Law Issues 2014, AHLA Connections, February 2014):

  • ACA implementation
  • Moving from quantity to quality based reimbursement
  • States’ role in implementing healthcare reform
  • Data breaches and security
  • Fraud and abuse enforcement
  • Impact of ACA on employers
  • Mental health and addiction
  • Compliance mandates for long term care under ACA
  • Telemedicine expansion
  • Remaining challenges to ACA


We have reported on many of the issues related to health reform implementation over the last few years. Two in the list above deserve our attention today: data breaches and security and telemedicine expansion.


Data Breaches and Security

According to the American Health Lawyers Association, data breaches resulting from security problems accounted for four out of five of the Office for Civil Rights’ enforcement actions last year. Lapses in physician security (lost thumb drives, stolen laptops, for example) account for the majority of data breaches.


However, network security is of increasing concern, according to contributing authors of the AHLA Connections article. “EHRs are a lucrative commodity in the illicit trade of personal data,” they wrote. The comparison to other forms of illicit trade in personal data is astounding: black market prices for credit card numbers are worth approximately $1.00 each, Social Security numbers about $3.00 each. But EHRs go for $45.00 each because they contain a vast amount of personal information. The variety of personal data in each EHR can be used by cybercriminals to circumvent fraud detection.


Another reason for the high black market value of EHRs is, of course, Medicare fraud. The Federal Trade Commission notes that medical identity theft allows thieves to visit healthcare providers, get prescription drugs and file insurance claims. “While the healthcare industry learns to combat this problem, criminals likely will seek to hack hospital servers . . . [healthcare executives and boards] should be proactive and evaluate security vulnerabilities to avoid a big data breach,” the authors wrote.



Cost and accessibility are two key components of health reform. Technology contributes to efficiency and access—thus the movement to EHRs and other technology-driven enhancements to provider business operations and the delivery of patient care. An upsurge in telemedicine is expected, yes, in 2014.


CMS defines telemedicine as “the provision of clinical services to patients by practitioners from a distance via electronic communications.” It covers a range of services, from remote monitoring of stroke and cardiac patients to diagnostic interpretations completed at a distant location.


Telemedicine has its own set of legal issues:

  • Reimbursement will remain a barrier to telemedicine in 2014. Coverage under Medicare is limited and Medicaid reimbursement varies from state to state. “Providers should be aware of the reimbursement requirements and restrictions that may affect their billing practices,” the authors wrote.
  • Credentialing and privileging will be challenging. When entering into written agreements with distant sites, healthcare organizations must confirm that any written agreement they sign reflects current legal requirements.
  • Peer review must continue so hospitals and telemedicine entities should develop policies and procedures for monitoring telemedicine practitioners and sharing internal review information so privacy of peer review and patient information is protected.
  • Patient privacy must be protected, so the telemedicine entity and the hospital will need to ensure secure communication channels and all that entails.
  • Compliance with state requirements may change, but today most states require physicians engaging in telemedicine to be licensed in the state where the patient is located. Healthcare organizations need legal guidance to navigate individual state requirements, including licensure, consent and practice of medicine issues.


iProtean subscribers, a new advanced Finance course, Strategic Responses to the Competitive Environment featuring Michael Irwin and Dan Grauman, will be in your library next month. Topics include: payment innovations and increasing competition, the continuum of competitive strategies, four competitive models, the risk of being “cautions” and capital requirements. This course is the first in a two part series; the second will be released in early June.


For a complete list of iProtean courses, click here.


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