Law & Medicine

Question: Intending to help an elderly patient suffering from dementia and Parkinsonism, a neurologist applied a series of therapeutic ultrasound treatments to her head. The patient had seen other neurologists previously, but their conventional measures were ineffective. The neurologist had used the novel method in the past, and claims it had been safe and effective. The medical literature contains only a few anecdotal reports on such use. Assuming the patient experienced no harm, but derived no benefit from the new treatment, which of the following statements is most accurate?

A. The treatment method is best characterized as clinical innovation.

B. Clinical innovation, like human experimentation, can help advance medical progress.

C. Intended patient benefit, clear safety, and informed consent are minimum requirements when the use of novel diagnostic or therapeutic modalities is considered.

D. The physician cannot be successfully sued because no harm came to patient.

E. All are correct.

Answer: E. This hypothetical is adapted from an actual case in Singapore in which the court ruled in favor of the treating neurologist. In striking the balance between inhibiting novel approaches that benefit patients vs. exposing patients to unwarranted risk, U.S. courts have occasionally allowed innovation, even though by definition it represents a departure from a customary or acceptable standard. However, clinical innovation can place a patient at risk for injuries, and can invite medical malpractice lawsuits and state medical board investigations into professional misconduct. It is definitely not something a clinician should indulge in casually or carelessly.

In medical experimentation, which typically takes the form of clinical trials, efficacy is still unproven, and any potential benefit is directed at future patients, not those being studied who may be on a standard drug or even a placebo. Accordingly, the courts tend to demand a higher standard of care, especially in regard to disclosure of risks. Investigators also are obligated to obtain prior approval from an institutional review board that is governed by the Food and Drug Administration and Department of Health and Human Services. Clinical innovation, on the other hand, is usually within the doctor-patient relationship, and refers to the use of a testing or treatment method that is not generally in use or accepted by peers, but whose intent is to benefit a particular patient based on published data or experience of efficacy and safety.

In Brook v. St .John’s Hickey Memorial Hospital (380 N.E. 2d 72 [Ind. 1978]), a radiologist injected contrast dye intramuscularly into the calves of a 23-month-old infant after he was unable to locate a vein for intravenous administration. He had successfully done this in the past because there were reports that use of the recommended sites (the buttocks or thighs) had met with occasional adverse results. The patient subsequently developed a shortening of the Achilles tendon that was arguably related to the injection. The court declined to characterize the technique as a medical experiment or find the defendant negligent in choosing an injection site that had not been specifically recommended by the medical community. The court wrote that "too often courts have confused judgmental decisions and experimentation. Therapeutic innovation has long been recognized as permissible to avoid serious consequences. The everyday practice of medicine involves constant judgmental decisions by physicians as they move from one patient to another in the conscious institution of procedures, special tests, trials and observations recognized generally by their profession as effective in treating the patient or providing a diagnosis of a diseased condition. Each patient presents a slightly different problem to the doctor. A physician is presumed to have the knowledge and skill necessary to use some innovation to fit the peculiar circumstances of each case."

When the patient’s condition is critical or terminal, or when usual measures have failed, an innovative or even experimental approach may be the only option. Such a case was Karp v. Cooley (493 F.2d 408 [5th Cir. 1974]), in which Dr. Denton Cooley, a well-known cardiac surgeon, transplanted a mechanical heart for the first time to save a patient who was dying from heart failure. There was no evidence that the patient’s treatment was other than therapeutic, and fully informed consent was obtained for all aspects of the novel surgery. The patient died within 3 days following transplant surgery. In the wrongful death suit that followed, the court, relying on conventional malpractice evidentiary standards, ruled in favor of Dr. Cooley on the issue of experimentation.

Sometimes a so-called "innovative" treatment stems from the doctor’s inexperience and poor judgment. In Felice v. Valleylab (520 So.2d 920 [La. 1987]), two medical trainees negligently used an electrosurgical unit to perform a circumcision on a child, burning and destroying his penis in the process. They had been trained in – but chose not to use – the time-tested surgical technique with a scalpel. The court ruled that the doctors were negligent, as they had used an unorthodox technique without reading the manual or the warning label on the device. In Edenfield v. Vahid (621 So.2d 1192 [La. 1993]), the court found a surgeon liable for his use of a polypropylene nonabsorbable suture during an anal fistulectomy operation. A medical review panel concluded that nonresorbable sutures were inappropriate in the anorectal area because they predisposed the wound to infection. The court held that it was more probable than not that the patient’s injuries were caused by the doctor’s improper choice of suture.

Physicians should tread cautiously when considering novel and unproven modalities. Depending on the facts and circumstances, a doctor’s unorthodox use of drugs, devices, or complementary and alternative medicine may be deemed to be below the standard of care and thus may invite state disciplinary investigation and/or civil action.

Dr. S. Y. Tan is an emeritus professor at the University of Hawaii. He reported no conflicts of interest related to this column. This article is meant to be educational and does not constitute medical, ethical, or legal advice. It is adapted from the author’s book, "Medical Malpractice: Understanding the Law, Managing the Risk" (2006). For additional information, readers may contact the author at [email protected].

Question: Intending to help an elderly patient suffering from dementia and Parkinsonism, a neurologist applied a series of therapeutic ultrasound treatments to her head. The patient had seen other neurologists previously, but their conventional measures were ineffective. The neurologist had used the novel method in the past, and claims it had been safe and effective. The medical literature contains only a few anecdotal reports on such use. Assuming the patient experienced no harm, but derived no benefit from the new treatment, which of the following statements is most accurate?

A. The treatment method is best characterized as clinical innovation.

B. Clinical innovation, like human experimentation, can help advance medical progress.

C. Intended patient benefit, clear safety, and informed consent are minimum requirements when the use of novel diagnostic or therapeutic modalities is considered.

D. The physician cannot be successfully sued because no harm came to patient.

E. All are correct.

Answer: E. This hypothetical is adapted from an actual case in Singapore in which the court ruled in favor of the treating neurologist. In striking the balance between inhibiting novel approaches that benefit patients vs. exposing patients to unwarranted risk, U.S. courts have occasionally allowed innovation, even though by definition it represents a departure from a customary or acceptable standard. However, clinical innovation can place a patient at risk for injuries, and can invite medical malpractice lawsuits and state medical board investigations into professional misconduct. It is definitely not something a clinician should indulge in casually or carelessly.

In medical experimentation, which typically takes the form of clinical trials, efficacy is still unproven, and any potential benefit is directed at future patients, not those being studied who may be on a standard drug or even a placebo. Accordingly, the courts tend to demand a higher standard of care, especially in regard to disclosure of risks. Investigators also are obligated to obtain prior approval from an institutional review board that is governed by the Food and Drug Administration and Department of Health and Human Services. Clinical innovation, on the other hand, is usually within the doctor-patient relationship, and refers to the use of a testing or treatment method that is not generally in use or accepted by peers, but whose intent is to benefit a particular patient based on published data or experience of efficacy and safety.

In Brook v. St .John’s Hickey Memorial Hospital (380 N.E. 2d 72 [Ind. 1978]), a radiologist injected contrast dye intramuscularly into the calves of a 23-month-old infant after he was unable to locate a vein for intravenous administration. He had successfully done this in the past because there were reports that use of the recommended sites (the buttocks or thighs) had met with occasional adverse results. The patient subsequently developed a shortening of the Achilles tendon that was arguably related to the injection. The court declined to characterize the technique as a medical experiment or find the defendant negligent in choosing an injection site that had not been specifically recommended by the medical community. The court wrote that "too often courts have confused judgmental decisions and experimentation. Therapeutic innovation has long been recognized as permissible to avoid serious consequences. The everyday practice of medicine involves constant judgmental decisions by physicians as they move from one patient to another in the conscious institution of procedures, special tests, trials and observations recognized generally by their profession as effective in treating the patient or providing a diagnosis of a diseased condition. Each patient presents a slightly different problem to the doctor. A physician is presumed to have the knowledge and skill necessary to use some innovation to fit the peculiar circumstances of each case."

When the patient’s condition is critical or terminal, or when usual measures have failed, an innovative or even experimental approach may be the only option. Such a case was Karp v. Cooley (493 F.2d 408 [5th Cir. 1974]), in which Dr. Denton Cooley, a well-known cardiac surgeon, transplanted a mechanical heart for the first time to save a patient who was dying from heart failure. There was no evidence that the patient’s treatment was other than therapeutic, and fully informed consent was obtained for all aspects of the novel surgery. The patient died within 3 days following transplant surgery. In the wrongful death suit that followed, the court, relying on conventional malpractice evidentiary standards, ruled in favor of Dr. Cooley on the issue of experimentation.

Sometimes a so-called "innovative" treatment stems from the doctor’s inexperience and poor judgment. In Felice v. Valleylab (520 So.2d 920 [La. 1987]), two medical trainees negligently used an electrosurgical unit to perform a circumcision on a child, burning and destroying his penis in the process. They had been trained in – but chose not to use – the time-tested surgical technique with a scalpel. The court ruled that the doctors were negligent, as they had used an unorthodox technique without reading the manual or the warning label on the device. In Edenfield v. Vahid (621 So.2d 1192 [La. 1993]), the court found a surgeon liable for his use of a polypropylene nonabsorbable suture during an anal fistulectomy operation. A medical review panel concluded that nonresorbable sutures were inappropriate in the anorectal area because they predisposed the wound to infection. The court held that it was more probable than not that the patient’s injuries were caused by the doctor’s improper choice of suture.

Physicians should tread cautiously when considering novel and unproven modalities. Depending on the facts and circumstances, a doctor’s unorthodox use of drugs, devices, or complementary and alternative medicine may be deemed to be below the standard of care and thus may invite state disciplinary investigation and/or civil action.

Dr. S. Y. Tan is an emeritus professor at the University of Hawaii. He reported no conflicts of interest related to this column. This article is meant to be educational and does not constitute medical, ethical, or legal advice. It is adapted from the author’s book, "Medical Malpractice: Understanding the Law, Managing the Risk" (2006). For additional information, readers may contact the author at [email protected].

Question: Intending to help an elderly patient suffering from dementia and Parkinsonism, a neurologist applied a series of therapeutic ultrasound treatments to her head. The patient had seen other neurologists previously, but their conventional measures were ineffective. The neurologist had used the novel method in the past, and claims it had been safe and effective. The medical literature contains only a few anecdotal reports on such use. Assuming the patient experienced no harm, but derived no benefit from the new treatment, which of the following statements is most accurate?

A. The treatment method is best characterized as clinical innovation.

B. Clinical innovation, like human experimentation, can help advance medical progress.

C. Intended patient benefit, clear safety, and informed consent are minimum requirements when the use of novel diagnostic or therapeutic modalities is considered.

D. The physician cannot be successfully sued because no harm came to patient.

E. All are correct.

Answer: E. This hypothetical is adapted from an actual case in Singapore in which the court ruled in favor of the treating neurologist. In striking the balance between inhibiting novel approaches that benefit patients vs. exposing patients to unwarranted risk, U.S. courts have occasionally allowed innovation, even though by definition it represents a departure from a customary or acceptable standard. However, clinical innovation can place a patient at risk for injuries, and can invite medical malpractice lawsuits and state medical board investigations into professional misconduct. It is definitely not something a clinician should indulge in casually or carelessly.

In medical experimentation, which typically takes the form of clinical trials, efficacy is still unproven, and any potential benefit is directed at future patients, not those being studied who may be on a standard drug or even a placebo. Accordingly, the courts tend to demand a higher standard of care, especially in regard to disclosure of risks. Investigators also are obligated to obtain prior approval from an institutional review board that is governed by the Food and Drug Administration and Department of Health and Human Services. Clinical innovation, on the other hand, is usually within the doctor-patient relationship, and refers to the use of a testing or treatment method that is not generally in use or accepted by peers, but whose intent is to benefit a particular patient based on published data or experience of efficacy and safety.

In Brook v. St .John’s Hickey Memorial Hospital (380 N.E. 2d 72 [Ind. 1978]), a radiologist injected contrast dye intramuscularly into the calves of a 23-month-old infant after he was unable to locate a vein for intravenous administration. He had successfully done this in the past because there were reports that use of the recommended sites (the buttocks or thighs) had met with occasional adverse results. The patient subsequently developed a shortening of the Achilles tendon that was arguably related to the injection. The court declined to characterize the technique as a medical experiment or find the defendant negligent in choosing an injection site that had not been specifically recommended by the medical community. The court wrote that "too often courts have confused judgmental decisions and experimentation. Therapeutic innovation has long been recognized as permissible to avoid serious consequences. The everyday practice of medicine involves constant judgmental decisions by physicians as they move from one patient to another in the conscious institution of procedures, special tests, trials and observations recognized generally by their profession as effective in treating the patient or providing a diagnosis of a diseased condition. Each patient presents a slightly different problem to the doctor. A physician is presumed to have the knowledge and skill necessary to use some innovation to fit the peculiar circumstances of each case."

When the patient’s condition is critical or terminal, or when usual measures have failed, an innovative or even experimental approach may be the only option. Such a case was Karp v. Cooley (493 F.2d 408 [5th Cir. 1974]), in which Dr. Denton Cooley, a well-known cardiac surgeon, transplanted a mechanical heart for the first time to save a patient who was dying from heart failure. There was no evidence that the patient’s treatment was other than therapeutic, and fully informed consent was obtained for all aspects of the novel surgery. The patient died within 3 days following transplant surgery. In the wrongful death suit that followed, the court, relying on conventional malpractice evidentiary standards, ruled in favor of Dr. Cooley on the issue of experimentation.

Sometimes a so-called "innovative" treatment stems from the doctor’s inexperience and poor judgment. In Felice v. Valleylab (520 So.2d 920 [La. 1987]), two medical trainees negligently used an electrosurgical unit to perform a circumcision on a child, burning and destroying his penis in the process. They had been trained in – but chose not to use – the time-tested surgical technique with a scalpel. The court ruled that the doctors were negligent, as they had used an unorthodox technique without reading the manual or the warning label on the device. In Edenfield v. Vahid (621 So.2d 1192 [La. 1993]), the court found a surgeon liable for his use of a polypropylene nonabsorbable suture during an anal fistulectomy operation. A medical review panel concluded that nonresorbable sutures were inappropriate in the anorectal area because they predisposed the wound to infection. The court held that it was more probable than not that the patient’s injuries were caused by the doctor’s improper choice of suture.

Physicians should tread cautiously when considering novel and unproven modalities. Depending on the facts and circumstances, a doctor’s unorthodox use of drugs, devices, or complementary and alternative medicine may be deemed to be below the standard of care and thus may invite state disciplinary investigation and/or civil action.

Dr. S. Y. Tan is an emeritus professor at the University of Hawaii. He reported no conflicts of interest related to this column. This article is meant to be educational and does not constitute medical, ethical, or legal advice. It is adapted from the author’s book, "Medical Malpractice: Understanding the Law, Managing the Risk" (2006). For additional information, readers may contact the author at [email protected].

Question: An internist added a DPP-4 inhibitor to treat an uncontrolled diabetic patient on increasing doses of insulin. The Physicians’ Desk Reference does not indicate this to be an approved use of the drug. However, some endocrinologists in the community are using it in this manner, and a speaker at a recent drug promotion dinner stated that such use is effective. The internist did warn the patient of the increased risk of hypoglycemia, but did not specifically disclose that the drug’s use in combination with insulin is not approved by the Food and Drug Administration. The patient subsequently developed hypoglycemia. Which of the following statement best describes the legal consequences?

A. The doctor is liable for off-label use.

B. The doctor is liable for failure to obtain informed consent.

C. The drug company is liable for off-label marketing.

D. All are correct.

E. All are incorrect.

Best answer: C. The FDA reminds physicians that if they use a product for an indication that is not in the approved labeling, they have the responsibility to be "well informed about the product, to base its use on a firm scientific rationale and on sound medical evidence, and to maintain records of the product’s use and effects." There is no liability for off-label prescriptions. However, disclosure of known risks is necessary, although it is uncertain if lack of FDA approval needs to be a part of the discussion. On the other hand, manufacturers are absolutely forbidden from marketing their drugs (or medical devices) for a nonapproved use, and some firms have incurred heavy fines for off-label promotions by sales representatives during office visits, or by paid speakers at dinner programs.

The FDA reviews all prescription products for specific uses or “indications.” By law, FDA approval must be based on “substantial evidence” of efficacy and safety from adequate and well-controlled investigations, typically in the form of prospective, randomized, double-blind, and placebo-controlled clinical trials.

On the other hand, physicians may use their professional judgment in deciding whether to use such drugs to benefit their patient, even in ways not approved by the FDA. Such off-label practice is widespread, accounting for 21% of overall prescriptions in the outpatient setting, the most commonly implicated being cardiac and anticonvulsant medications (Arch. Intern. Med. 2006;166:1021-6). In that study, the authors identified two drugs – gabapentin (83%) and amitriptyline (81%) – as having the greatest proportion of off-label use among 160 medications. They also concluded that some 73% of off-label drug use had little or no scientific merit.

Off-label use commonly takes the form of a prescription for a condition that is not specified in the package insert, in doses other than those approved, or during pregnancy or in populations such as children. For example, three-fourths of the prescription drugs in the United States lack full pediatric approval and are labeled with such disclaimers. Lack of FDA approval simply means that the agency has not reviewed the product for that use. Unapproved use must be distinguished from disapproved or contraindicated uses. Professional organizations (for example, the American Academy of Pediatrics) and the FDA itself have endorsed off-label use under appropriate conditions. The AAP emphasizes the best interest of the patient, allowing off-label use based on "sound scientific evidence, expert medical judgment, or published literature" (Pediatrics 2002;110:181-3).

Off-label use is not dabbling in human experimentation, and liability is a factor only if the action itself is negligent, which is determined by the same legal parameters irrespective of whether the product’s use is approved or unapproved. In Femrite v. Abbott Northwestern Hospital (568 N.W. 2d 535) in 1997, the Minnesota Court of Appeals held that the off-label use of a screw device for spinal surgery was not negligent. The plaintiffs had argued that the product could be used only within the context of clinical investigation. But the defendant contended that implantation of the screw device in spinal-fixation surgeries is an off-label use because the FDA had already approved the device for use in long and flat bones. As such, it involved medical discretion, which was beyond FDA regulation. The court concluded "as a matter of law that the physicians’ implantation of the screw devices in appellants’ surgeries was a permissible ‘off-label’ use not in violation of FDA regulations."

In Weaver v. Reagen (886 F. 2d 194) in 1989, the state of Missouri failed in its effort to exclude certain Medicaid patients who did not meet FDA criteria from access to the anti-AIDS drug, azidothymidine. The 8th U.S. Circuit Court of Appeals noted that FDA-approved indications were not intended to limit or interfere with the practice of medicine or to preclude physicians from using their best judgment in the interest of the patient. The fact that the FDA had not approved labeling of a drug for a particular use did not necessarily bear on those uses of the drug that were established within the medical and scientific community as medically appropriate.

It is unsettled whether a physician is obligated to inform patients that a drug’s proposed use is considered off label. As a practical matter, it may be difficult to explain why its use is as yet unapproved by the FDA. Besides, the public is guarded over off-label prescriptions, approximately half believing that such uses should be prohibited. A patient may reasonably want to know whether a drug or device is being used in an approved or unapproved manner, in addition to knowing its benefits and risks. This has led some observers to call for a legal requirement of disclosure.

Dr. Tan is a former professor of medicine and adjunct professor of law at the University of Hawaii. This column, "Law and Medicine," regularly appears in Internal Medicine News, an Elsevier publication; it is meant to be educational and does not constitute medical, ethical or legal advice. It is adapted from the author’s book, "Medical Malpractice: Understanding the Law, Managing the Risk" (2006). For additional information, readers may contact the author at [email protected].

Question: An internist added a DPP-4 inhibitor to treat an uncontrolled diabetic patient on increasing doses of insulin. The Physicians’ Desk Reference does not indicate this to be an approved use of the drug. However, some endocrinologists in the community are using it in this manner, and a speaker at a recent drug promotion dinner stated that such use is effective. The internist did warn the patient of the increased risk of hypoglycemia, but did not specifically disclose that the drug’s use in combination with insulin is not approved by the Food and Drug Administration. The patient subsequently developed hypoglycemia. Which of the following statement best describes the legal consequences?

A. The doctor is liable for off-label use.

B. The doctor is liable for failure to obtain informed consent.

C. The drug company is liable for off-label marketing.

D. All are correct.

E. All are incorrect.

Best answer: C. The FDA reminds physicians that if they use a product for an indication that is not in the approved labeling, they have the responsibility to be "well informed about the product, to base its use on a firm scientific rationale and on sound medical evidence, and to maintain records of the product’s use and effects." There is no liability for off-label prescriptions. However, disclosure of known risks is necessary, although it is uncertain if lack of FDA approval needs to be a part of the discussion. On the other hand, manufacturers are absolutely forbidden from marketing their drugs (or medical devices) for a nonapproved use, and some firms have incurred heavy fines for off-label promotions by sales representatives during office visits, or by paid speakers at dinner programs.

The FDA reviews all prescription products for specific uses or “indications.” By law, FDA approval must be based on “substantial evidence” of efficacy and safety from adequate and well-controlled investigations, typically in the form of prospective, randomized, double-blind, and placebo-controlled clinical trials.

On the other hand, physicians may use their professional judgment in deciding whether to use such drugs to benefit their patient, even in ways not approved by the FDA. Such off-label practice is widespread, accounting for 21% of overall prescriptions in the outpatient setting, the most commonly implicated being cardiac and anticonvulsant medications (Arch. Intern. Med. 2006;166:1021-6). In that study, the authors identified two drugs – gabapentin (83%) and amitriptyline (81%) – as having the greatest proportion of off-label use among 160 medications. They also concluded that some 73% of off-label drug use had little or no scientific merit.

Off-label use commonly takes the form of a prescription for a condition that is not specified in the package insert, in doses other than those approved, or during pregnancy or in populations such as children. For example, three-fourths of the prescription drugs in the United States lack full pediatric approval and are labeled with such disclaimers. Lack of FDA approval simply means that the agency has not reviewed the product for that use. Unapproved use must be distinguished from disapproved or contraindicated uses. Professional organizations (for example, the American Academy of Pediatrics) and the FDA itself have endorsed off-label use under appropriate conditions. The AAP emphasizes the best interest of the patient, allowing off-label use based on "sound scientific evidence, expert medical judgment, or published literature" (Pediatrics 2002;110:181-3).

Off-label use is not dabbling in human experimentation, and liability is a factor only if the action itself is negligent, which is determined by the same legal parameters irrespective of whether the product’s use is approved or unapproved. In Femrite v. Abbott Northwestern Hospital (568 N.W. 2d 535) in 1997, the Minnesota Court of Appeals held that the off-label use of a screw device for spinal surgery was not negligent. The plaintiffs had argued that the product could be used only within the context of clinical investigation. But the defendant contended that implantation of the screw device in spinal-fixation surgeries is an off-label use because the FDA had already approved the device for use in long and flat bones. As such, it involved medical discretion, which was beyond FDA regulation. The court concluded "as a matter of law that the physicians’ implantation of the screw devices in appellants’ surgeries was a permissible ‘off-label’ use not in violation of FDA regulations."

In Weaver v. Reagen (886 F. 2d 194) in 1989, the state of Missouri failed in its effort to exclude certain Medicaid patients who did not meet FDA criteria from access to the anti-AIDS drug, azidothymidine. The 8th U.S. Circuit Court of Appeals noted that FDA-approved indications were not intended to limit or interfere with the practice of medicine or to preclude physicians from using their best judgment in the interest of the patient. The fact that the FDA had not approved labeling of a drug for a particular use did not necessarily bear on those uses of the drug that were established within the medical and scientific community as medically appropriate.

It is unsettled whether a physician is obligated to inform patients that a drug’s proposed use is considered off label. As a practical matter, it may be difficult to explain why its use is as yet unapproved by the FDA. Besides, the public is guarded over off-label prescriptions, approximately half believing that such uses should be prohibited. A patient may reasonably want to know whether a drug or device is being used in an approved or unapproved manner, in addition to knowing its benefits and risks. This has led some observers to call for a legal requirement of disclosure.

Dr. Tan is a former professor of medicine and adjunct professor of law at the University of Hawaii. This column, "Law and Medicine," regularly appears in Internal Medicine News, an Elsevier publication; it is meant to be educational and does not constitute medical, ethical or legal advice. It is adapted from the author’s book, "Medical Malpractice: Understanding the Law, Managing the Risk" (2006). For additional information, readers may contact the author at [email protected].

Question: An internist added a DPP-4 inhibitor to treat an uncontrolled diabetic patient on increasing doses of insulin. The Physicians’ Desk Reference does not indicate this to be an approved use of the drug. However, some endocrinologists in the community are using it in this manner, and a speaker at a recent drug promotion dinner stated that such use is effective. The internist did warn the patient of the increased risk of hypoglycemia, but did not specifically disclose that the drug’s use in combination with insulin is not approved by the Food and Drug Administration. The patient subsequently developed hypoglycemia. Which of the following statement best describes the legal consequences?

A. The doctor is liable for off-label use.

B. The doctor is liable for failure to obtain informed consent.

C. The drug company is liable for off-label marketing.

D. All are correct.

E. All are incorrect.

Best answer: C. The FDA reminds physicians that if they use a product for an indication that is not in the approved labeling, they have the responsibility to be "well informed about the product, to base its use on a firm scientific rationale and on sound medical evidence, and to maintain records of the product’s use and effects." There is no liability for off-label prescriptions. However, disclosure of known risks is necessary, although it is uncertain if lack of FDA approval needs to be a part of the discussion. On the other hand, manufacturers are absolutely forbidden from marketing their drugs (or medical devices) for a nonapproved use, and some firms have incurred heavy fines for off-label promotions by sales representatives during office visits, or by paid speakers at dinner programs.

The FDA reviews all prescription products for specific uses or “indications.” By law, FDA approval must be based on “substantial evidence” of efficacy and safety from adequate and well-controlled investigations, typically in the form of prospective, randomized, double-blind, and placebo-controlled clinical trials.

On the other hand, physicians may use their professional judgment in deciding whether to use such drugs to benefit their patient, even in ways not approved by the FDA. Such off-label practice is widespread, accounting for 21% of overall prescriptions in the outpatient setting, the most commonly implicated being cardiac and anticonvulsant medications (Arch. Intern. Med. 2006;166:1021-6). In that study, the authors identified two drugs – gabapentin (83%) and amitriptyline (81%) – as having the greatest proportion of off-label use among 160 medications. They also concluded that some 73% of off-label drug use had little or no scientific merit.

Off-label use commonly takes the form of a prescription for a condition that is not specified in the package insert, in doses other than those approved, or during pregnancy or in populations such as children. For example, three-fourths of the prescription drugs in the United States lack full pediatric approval and are labeled with such disclaimers. Lack of FDA approval simply means that the agency has not reviewed the product for that use. Unapproved use must be distinguished from disapproved or contraindicated uses. Professional organizations (for example, the American Academy of Pediatrics) and the FDA itself have endorsed off-label use under appropriate conditions. The AAP emphasizes the best interest of the patient, allowing off-label use based on "sound scientific evidence, expert medical judgment, or published literature" (Pediatrics 2002;110:181-3).

Off-label use is not dabbling in human experimentation, and liability is a factor only if the action itself is negligent, which is determined by the same legal parameters irrespective of whether the product’s use is approved or unapproved. In Femrite v. Abbott Northwestern Hospital (568 N.W. 2d 535) in 1997, the Minnesota Court of Appeals held that the off-label use of a screw device for spinal surgery was not negligent. The plaintiffs had argued that the product could be used only within the context of clinical investigation. But the defendant contended that implantation of the screw device in spinal-fixation surgeries is an off-label use because the FDA had already approved the device for use in long and flat bones. As such, it involved medical discretion, which was beyond FDA regulation. The court concluded "as a matter of law that the physicians’ implantation of the screw devices in appellants’ surgeries was a permissible ‘off-label’ use not in violation of FDA regulations."

In Weaver v. Reagen (886 F. 2d 194) in 1989, the state of Missouri failed in its effort to exclude certain Medicaid patients who did not meet FDA criteria from access to the anti-AIDS drug, azidothymidine. The 8th U.S. Circuit Court of Appeals noted that FDA-approved indications were not intended to limit or interfere with the practice of medicine or to preclude physicians from using their best judgment in the interest of the patient. The fact that the FDA had not approved labeling of a drug for a particular use did not necessarily bear on those uses of the drug that were established within the medical and scientific community as medically appropriate.

It is unsettled whether a physician is obligated to inform patients that a drug’s proposed use is considered off label. As a practical matter, it may be difficult to explain why its use is as yet unapproved by the FDA. Besides, the public is guarded over off-label prescriptions, approximately half believing that such uses should be prohibited. A patient may reasonably want to know whether a drug or device is being used in an approved or unapproved manner, in addition to knowing its benefits and risks. This has led some observers to call for a legal requirement of disclosure.

Dr. Tan is a former professor of medicine and adjunct professor of law at the University of Hawaii. This column, "Law and Medicine," regularly appears in Internal Medicine News, an Elsevier publication; it is meant to be educational and does not constitute medical, ethical or legal advice. It is adapted from the author’s book, "Medical Malpractice: Understanding the Law, Managing the Risk" (2006). For additional information, readers may contact the author at [email protected].

Delayed diagnosis renders dominant hand and wrist useless

A WOMAN HOSPITALIZED WITH RESPIRATORY SYMPTOMS was treated and released 4 days later. She returned by ambulance the next day and was readmitted for chronic obstructive pulmonary disease and respiratory failure. She had a history of tobacco use. It turned out she had suffered a myocardial infarction. After a cardiac consultation, she was started on 3 anticoagulants, including enoxaparin.

When her condition failed to improve after 4 days, she was transferred to another hospital. Before the transfer, bruising and slight swelling were observed on the patient’s left side and chest, and a physician reportedly ordered that the enoxaparin be discontinued. The plaintiff received another dose of enoxaparin just after she arrived at the second hospital and 3 more doses before the drug was discontinued 2 days later. On the day after admission, the patient’s right forearm, her dominant arm, was noted to be swollen, firm, and painful; her torso was bruised. No immediate evaluation was performed.

An orthopedic consultation the following day led to a diagnosis of compartment syndrome. Emergency surgery resulted in loss of muscle and nerves in the arm and chronic pain. The patient also developed anemia, hypovolemic shock, and retroperitoneal hemorrhage requiring a number of blood transfusions. The patient lost almost all function in her right wrist and hand.

PLAINTIFF’S CLAIM The defendants were negligent in failing to promptly diagnose compartment syndrome and subsequent hemorrhaging.

THE DEFENSE No negligence occurred.

VERDICT $1.525 million Ohio verdict.

COMMENT Subtle and nonspecific findings make compartment syndrome a challenging diagnosis. The combination of extremity pain, swelling, and bruising in the context of anticoagulation should trigger consideration of this condition.

Failure to suspect endocarditis ends in heart surgery and memory deficit

GENERAL ACHES, FATIGUE, AND OCCASIONAL FEVER of 102.5°F led a 43-year-old woman to seek treatment at a local clinic. The nurse practitioner who examined her suspected influenza. Six days later the patient returned, complaining that her symptoms were making it difficult to care for her 4 children. She didn’t have a fever at the time. The nurse practitioner suggested that the woman might want to go to the local hospital for an examination; she also said she could prescribe oral antibiotics to see if they helped. The patient chose the antibiotics.

Her symptoms improved over the next week but then reappeared, prompting her to return to the clinic with complaints of headache, muscle aches, fatigue, chest tightening, an unproductive cough, and night sweats so severe she had to wrap herself in a towel to avoid soaking her bed. Although she was still having regular periods, a physician told her she was probably premenopausal. He also told her that overweight people often sweat at night and attributed her fatigue to her 4 children. He prescribed rizatriptan on the theory that the headaches might be migraines. Because the woman didn’t have a fever at the time of the visit and had just finished a course of antibiotics, the physician said he was sure that she didn’t have an infection.

After 6 days with no improvement, the patient went to a hospital emergency department (ED) for a complete checkup because she was planning to drive to Arizona with her family and wanted to make sure she was all right before leaving. The ED physician ordered scans, a spinal tap, and blood tests; he diagnosed a viral infection.

Three days later, the patient went to the clinic, accompanied by her entire family, to find out the results of the blood tests. She still had symptoms and had developed a swollen, tender sternum. The nurse practitioner noted a positive culture result for Streptococcus veridans on the test report; she allegedly told the patient, in the presence of her 10-year-old son, that it must be a skin contaminant. She advised the patient to go on vacation and have additional blood work if she didn’t feel better.

The nurse practitioner gave the patient another pack of oral antibiotics in case she had a lingering low-grade infection. The patient also received another prescription for rizatriptan and an acetaminophen and oxycodone prescription for pain.

The nurse practitioner claimed that she suggested that the patient could stop by the hospital for a blood test before leaving on vacation, but the patient denied that the nurse made the suggestion, and no notes supported the claim. The oral antibiotics relieved the patient’s symptoms only temporarily. The family cut short their vacation so the patient could return to the clinic, where she received another ineffectual antibiotic. When her condition continued to deteriorate, her husband took her to the ED of a larger hospital in the area.

The ED physician diagnosed subacute endocarditis, which was confirmed by subsequent tests. Testing also identified a bicuspid aortic valve, which increased the patient’s susceptibility to endocarditis. She was started on appropriate intravenous antibiotics and improved initially.

The patient subsequently noticed red patches on her hand and forearm. She also experienced problems with mental processing. She returned to the hospital, where a scan showed increased vegetative growth on her aortic valve. Pieces of the growth were breaking off, causing embolic injury to the patient’s brain, hand, and other areas of her body. The patient underwent open heart surgery to replace the aortic valve and prevent further embolic injury. She continues to suffer from significant short-term memory loss and will require warfarin for the rest of her life to prevent blood clotting.

PLAINTIFF’S CLAIM The patient should have been referred earlier for a complete workup, and the nurse practitioner should have taken seriously the culture showing S veridans. The nurse practitioner was mistaken in thinking that S veridans was found on the skin. Had she looked it up, which she should have done, she would have discovered that the organism is the most common bacterial cause of subacute endocarditis.

The patient had the classic symptoms of subacute endocarditis. The delay in diagnosis allowed bacteria to build up on her aortic valve, forming a biofilm barrier that inhibited the effect of the IV antibiotics and the body’s natural defenses and precipitated the embolic injury.

THE DEFENSE The patient was responsible for the delay in diagnosis, especially in light of the fact that she had a nursing background. Any negligence on the part of the nurse practitioner had no effect on the outcome.

VERDICT $1 million Washington settlement.

COMMENT Subacute bacterial endocarditis remains a challenging diagnosis with potentially devastating consequences. Be on the alert for this subtle masquerader.

Delayed diagnosis renders dominant hand and wrist useless

A WOMAN HOSPITALIZED WITH RESPIRATORY SYMPTOMS was treated and released 4 days later. She returned by ambulance the next day and was readmitted for chronic obstructive pulmonary disease and respiratory failure. She had a history of tobacco use. It turned out she had suffered a myocardial infarction. After a cardiac consultation, she was started on 3 anticoagulants, including enoxaparin.

When her condition failed to improve after 4 days, she was transferred to another hospital. Before the transfer, bruising and slight swelling were observed on the patient’s left side and chest, and a physician reportedly ordered that the enoxaparin be discontinued. The plaintiff received another dose of enoxaparin just after she arrived at the second hospital and 3 more doses before the drug was discontinued 2 days later. On the day after admission, the patient’s right forearm, her dominant arm, was noted to be swollen, firm, and painful; her torso was bruised. No immediate evaluation was performed.

An orthopedic consultation the following day led to a diagnosis of compartment syndrome. Emergency surgery resulted in loss of muscle and nerves in the arm and chronic pain. The patient also developed anemia, hypovolemic shock, and retroperitoneal hemorrhage requiring a number of blood transfusions. The patient lost almost all function in her right wrist and hand.

PLAINTIFF’S CLAIM The defendants were negligent in failing to promptly diagnose compartment syndrome and subsequent hemorrhaging.

THE DEFENSE No negligence occurred.

VERDICT $1.525 million Ohio verdict.

COMMENT Subtle and nonspecific findings make compartment syndrome a challenging diagnosis. The combination of extremity pain, swelling, and bruising in the context of anticoagulation should trigger consideration of this condition.

Failure to suspect endocarditis ends in heart surgery and memory deficit

GENERAL ACHES, FATIGUE, AND OCCASIONAL FEVER of 102.5°F led a 43-year-old woman to seek treatment at a local clinic. The nurse practitioner who examined her suspected influenza. Six days later the patient returned, complaining that her symptoms were making it difficult to care for her 4 children. She didn’t have a fever at the time. The nurse practitioner suggested that the woman might want to go to the local hospital for an examination; she also said she could prescribe oral antibiotics to see if they helped. The patient chose the antibiotics.

Her symptoms improved over the next week but then reappeared, prompting her to return to the clinic with complaints of headache, muscle aches, fatigue, chest tightening, an unproductive cough, and night sweats so severe she had to wrap herself in a towel to avoid soaking her bed. Although she was still having regular periods, a physician told her she was probably premenopausal. He also told her that overweight people often sweat at night and attributed her fatigue to her 4 children. He prescribed rizatriptan on the theory that the headaches might be migraines. Because the woman didn’t have a fever at the time of the visit and had just finished a course of antibiotics, the physician said he was sure that she didn’t have an infection.

After 6 days with no improvement, the patient went to a hospital emergency department (ED) for a complete checkup because she was planning to drive to Arizona with her family and wanted to make sure she was all right before leaving. The ED physician ordered scans, a spinal tap, and blood tests; he diagnosed a viral infection.

Three days later, the patient went to the clinic, accompanied by her entire family, to find out the results of the blood tests. She still had symptoms and had developed a swollen, tender sternum. The nurse practitioner noted a positive culture result for Streptococcus veridans on the test report; she allegedly told the patient, in the presence of her 10-year-old son, that it must be a skin contaminant. She advised the patient to go on vacation and have additional blood work if she didn’t feel better.

The nurse practitioner gave the patient another pack of oral antibiotics in case she had a lingering low-grade infection. The patient also received another prescription for rizatriptan and an acetaminophen and oxycodone prescription for pain.

The nurse practitioner claimed that she suggested that the patient could stop by the hospital for a blood test before leaving on vacation, but the patient denied that the nurse made the suggestion, and no notes supported the claim. The oral antibiotics relieved the patient’s symptoms only temporarily. The family cut short their vacation so the patient could return to the clinic, where she received another ineffectual antibiotic. When her condition continued to deteriorate, her husband took her to the ED of a larger hospital in the area.

The ED physician diagnosed subacute endocarditis, which was confirmed by subsequent tests. Testing also identified a bicuspid aortic valve, which increased the patient’s susceptibility to endocarditis. She was started on appropriate intravenous antibiotics and improved initially.

The patient subsequently noticed red patches on her hand and forearm. She also experienced problems with mental processing. She returned to the hospital, where a scan showed increased vegetative growth on her aortic valve. Pieces of the growth were breaking off, causing embolic injury to the patient’s brain, hand, and other areas of her body. The patient underwent open heart surgery to replace the aortic valve and prevent further embolic injury. She continues to suffer from significant short-term memory loss and will require warfarin for the rest of her life to prevent blood clotting.

PLAINTIFF’S CLAIM The patient should have been referred earlier for a complete workup, and the nurse practitioner should have taken seriously the culture showing S veridans. The nurse practitioner was mistaken in thinking that S veridans was found on the skin. Had she looked it up, which she should have done, she would have discovered that the organism is the most common bacterial cause of subacute endocarditis.

The patient had the classic symptoms of subacute endocarditis. The delay in diagnosis allowed bacteria to build up on her aortic valve, forming a biofilm barrier that inhibited the effect of the IV antibiotics and the body’s natural defenses and precipitated the embolic injury.

THE DEFENSE The patient was responsible for the delay in diagnosis, especially in light of the fact that she had a nursing background. Any negligence on the part of the nurse practitioner had no effect on the outcome.

VERDICT $1 million Washington settlement.

COMMENT Subacute bacterial endocarditis remains a challenging diagnosis with potentially devastating consequences. Be on the alert for this subtle masquerader.

Delayed diagnosis renders dominant hand and wrist useless

A WOMAN HOSPITALIZED WITH RESPIRATORY SYMPTOMS was treated and released 4 days later. She returned by ambulance the next day and was readmitted for chronic obstructive pulmonary disease and respiratory failure. She had a history of tobacco use. It turned out she had suffered a myocardial infarction. After a cardiac consultation, she was started on 3 anticoagulants, including enoxaparin.

When her condition failed to improve after 4 days, she was transferred to another hospital. Before the transfer, bruising and slight swelling were observed on the patient’s left side and chest, and a physician reportedly ordered that the enoxaparin be discontinued. The plaintiff received another dose of enoxaparin just after she arrived at the second hospital and 3 more doses before the drug was discontinued 2 days later. On the day after admission, the patient’s right forearm, her dominant arm, was noted to be swollen, firm, and painful; her torso was bruised. No immediate evaluation was performed.

An orthopedic consultation the following day led to a diagnosis of compartment syndrome. Emergency surgery resulted in loss of muscle and nerves in the arm and chronic pain. The patient also developed anemia, hypovolemic shock, and retroperitoneal hemorrhage requiring a number of blood transfusions. The patient lost almost all function in her right wrist and hand.

PLAINTIFF’S CLAIM The defendants were negligent in failing to promptly diagnose compartment syndrome and subsequent hemorrhaging.

THE DEFENSE No negligence occurred.

VERDICT $1.525 million Ohio verdict.

COMMENT Subtle and nonspecific findings make compartment syndrome a challenging diagnosis. The combination of extremity pain, swelling, and bruising in the context of anticoagulation should trigger consideration of this condition.

Failure to suspect endocarditis ends in heart surgery and memory deficit

GENERAL ACHES, FATIGUE, AND OCCASIONAL FEVER of 102.5°F led a 43-year-old woman to seek treatment at a local clinic. The nurse practitioner who examined her suspected influenza. Six days later the patient returned, complaining that her symptoms were making it difficult to care for her 4 children. She didn’t have a fever at the time. The nurse practitioner suggested that the woman might want to go to the local hospital for an examination; she also said she could prescribe oral antibiotics to see if they helped. The patient chose the antibiotics.

Her symptoms improved over the next week but then reappeared, prompting her to return to the clinic with complaints of headache, muscle aches, fatigue, chest tightening, an unproductive cough, and night sweats so severe she had to wrap herself in a towel to avoid soaking her bed. Although she was still having regular periods, a physician told her she was probably premenopausal. He also told her that overweight people often sweat at night and attributed her fatigue to her 4 children. He prescribed rizatriptan on the theory that the headaches might be migraines. Because the woman didn’t have a fever at the time of the visit and had just finished a course of antibiotics, the physician said he was sure that she didn’t have an infection.

After 6 days with no improvement, the patient went to a hospital emergency department (ED) for a complete checkup because she was planning to drive to Arizona with her family and wanted to make sure she was all right before leaving. The ED physician ordered scans, a spinal tap, and blood tests; he diagnosed a viral infection.

Three days later, the patient went to the clinic, accompanied by her entire family, to find out the results of the blood tests. She still had symptoms and had developed a swollen, tender sternum. The nurse practitioner noted a positive culture result for Streptococcus veridans on the test report; she allegedly told the patient, in the presence of her 10-year-old son, that it must be a skin contaminant. She advised the patient to go on vacation and have additional blood work if she didn’t feel better.

The nurse practitioner gave the patient another pack of oral antibiotics in case she had a lingering low-grade infection. The patient also received another prescription for rizatriptan and an acetaminophen and oxycodone prescription for pain.

The nurse practitioner claimed that she suggested that the patient could stop by the hospital for a blood test before leaving on vacation, but the patient denied that the nurse made the suggestion, and no notes supported the claim. The oral antibiotics relieved the patient’s symptoms only temporarily. The family cut short their vacation so the patient could return to the clinic, where she received another ineffectual antibiotic. When her condition continued to deteriorate, her husband took her to the ED of a larger hospital in the area.

The ED physician diagnosed subacute endocarditis, which was confirmed by subsequent tests. Testing also identified a bicuspid aortic valve, which increased the patient’s susceptibility to endocarditis. She was started on appropriate intravenous antibiotics and improved initially.

The patient subsequently noticed red patches on her hand and forearm. She also experienced problems with mental processing. She returned to the hospital, where a scan showed increased vegetative growth on her aortic valve. Pieces of the growth were breaking off, causing embolic injury to the patient’s brain, hand, and other areas of her body. The patient underwent open heart surgery to replace the aortic valve and prevent further embolic injury. She continues to suffer from significant short-term memory loss and will require warfarin for the rest of her life to prevent blood clotting.

PLAINTIFF’S CLAIM The patient should have been referred earlier for a complete workup, and the nurse practitioner should have taken seriously the culture showing S veridans. The nurse practitioner was mistaken in thinking that S veridans was found on the skin. Had she looked it up, which she should have done, she would have discovered that the organism is the most common bacterial cause of subacute endocarditis.

The patient had the classic symptoms of subacute endocarditis. The delay in diagnosis allowed bacteria to build up on her aortic valve, forming a biofilm barrier that inhibited the effect of the IV antibiotics and the body’s natural defenses and precipitated the embolic injury.

THE DEFENSE The patient was responsible for the delay in diagnosis, especially in light of the fact that she had a nursing background. Any negligence on the part of the nurse practitioner had no effect on the outcome.

VERDICT $1 million Washington settlement.

COMMENT Subacute bacterial endocarditis remains a challenging diagnosis with potentially devastating consequences. Be on the alert for this subtle masquerader.

Question: Which of the following is not a violation of Medicare/Medicaid fraud statutes?

A. Referring patients to a lab of which your spouse is part owner.

B. Hospital “remuneration,” such as below-market office leases or expensive tickets to events.

C. Forgiving the copay portion of a retired colleague's bill.

D. Marketing Food and Drug Administration-approved drugs for off-label use.

E. Negligently submitting a wrong-patient Medicare claim.

Best answer: E. Choice E is analyzed under the False Claims Act, which imposes liability for knowingly submitting a payment demand to Medicare/Medicaid. Legally, this means having actual knowledge (scienter) that the claim is false or acting in deliberate or reckless indifference to the truth. However, an error that is negligently committed is insufficient to constitute a violation. Choice A is a direct violation of the Stark Law against self-referral, and B and C are violations of the Anti-Kickback Statute (AKS). The current 2011 threshold is $359 for “complimentary” tickets to events, and the government has warned that routinely waiving copayments could implicate the AKS. Choice D, of special relevance to pharmaceutical and device manufacturers, is illegal under the False Claims Act. Whereas doctors are allowed to prescribe drugs or devices for an off-label indication, the law forbids a manufacturer from marketing its products for a non-FDA–approved use.

With an annual budget of almost $1 trillion, it is estimated that some 10% or up to $100 billion of Medicare/Medicaid funds are lost to fraud, waste, and abuse. The Office of Inspector General is the independent oversight agency regulating such sources of loss. “Fraud” includes the obtaining something of value through intentional misrepresentation or concealment of material facts, “waste” includes the incurring of unnecessary costs as a result of deficient management, practices, systems, or controls, and “abuse” includes any practice that is not consistent with the goals of providing patients with services that are medically necessary, meet professionally recognized standards, and are fairly priced. A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse is available at http://oig.hhs.gov/compliance/physician-education/index.asp

To combat fraud, waste, and abuse, Congress has enacted three separate laws: The False Claims Act, the Anti-Kickback Statute, and the Physician Self-Referral Statute. In addition, states have their own versions of these laws. Stiff penalties for violations include fines, restriction of practice privileges, and imprisonment. More than 5,000 physicians in the United States are currently excluded from participation in Medicare/Medicaid programs because of violations (N. Engl. J. Med. 2011;364:102-3).

It is illegal under the False Claims Act to submit false or fraudulent claims for payment to Medicare or Medicaid (31 U.S.C. §§3729-3733). Private individuals, frequently former employees, consultants, even competitors, can file a so-called qui tam action alone or in concert with the government, and they stand to collect a substantial bounty in the event the prosecution proves successful. The Act originated during the Civil War, when increased government procurement led to fraudulent claims by contracting parties, prompting President Abraham Lincoln to state: “Worse than traitors in arms are the men who pretend loyalty to the flag, feast and fatten on the misfortunes of the Nation while patriotic blood is crimsoning the plains of the South, and their countrymen are moldering in the dust.”

In the health care field, claims may be false if the service is not actually rendered to the patient, is provided but already covered under another claim, is miscoded, or is not supported by the medical record. Intent to defraud is not a required element; deliberate ignorance or reckless disregard of the truth will suffice. Whistle-blowers, that is, qui tam plaintiffs, can receive up to 30% of any False Claims Act recovery. Penalties are severe and include treble damages, costs and attorney fees, and fines of $11,000 per false claim. Imprisonment and criminal fines are additional penalties.

One of the latest criminal schemes to defraud Medicare involved organized crime's establishment of more than 100 bogus clinics in 25 states, using stolen identities of doctors and patients. The government became suspicious when submitted bills purportedly came from ophthalmologists for bladder tests, ENT surgeons for ultrasounds, and office visits from a forensic pathologist. The Department of Justice has reportedly arrested 28 people linked to this fraud (BMJ 2010;341:c5865).

Under the Anti-Kickback Statute (42 U.S.C. §1320a-7b), it is illegal to knowingly or willfully offer, pay, solicit, or receive remuneration, directly or indirectly, in cash or in kind, in exchange for referring an individual or furnishing or arranging for a good or service, and for which payment may be made under Medicare or Medicaid. Importantly, the case of the United States v. Greber established that there is a statutory violation even if only one purpose of the remuneration is to induce referrals. Several hospitals have paid multimillion dollar settlements for kickback “remunerations.”

The Physician Self-Referral Statute, commonly called the Stark Law, prohibits a physician from making a referral to an entity for the furnishing of a designated health service for which payment may be made under Medicare or Medicaid if the physician or an immediate family member has a financial relationship with the entity, unless an exception applies. This being a strict liability law, no proof of specific intent is required. There are strict, complex, and narrowly construed “safe harbors” and exceptions to both the Anti-Kickback and Stark laws, but the field is complex, so providers contemplating health care business deals should proceed cautiously and seek specific advice from experienced legal counsel.

Question: Which of the following is not a violation of Medicare/Medicaid fraud statutes?

A. Referring patients to a lab of which your spouse is part owner.

B. Hospital “remuneration,” such as below-market office leases or expensive tickets to events.

C. Forgiving the copay portion of a retired colleague's bill.

D. Marketing Food and Drug Administration-approved drugs for off-label use.

E. Negligently submitting a wrong-patient Medicare claim.

Best answer: E. Choice E is analyzed under the False Claims Act, which imposes liability for knowingly submitting a payment demand to Medicare/Medicaid. Legally, this means having actual knowledge (scienter) that the claim is false or acting in deliberate or reckless indifference to the truth. However, an error that is negligently committed is insufficient to constitute a violation. Choice A is a direct violation of the Stark Law against self-referral, and B and C are violations of the Anti-Kickback Statute (AKS). The current 2011 threshold is $359 for “complimentary” tickets to events, and the government has warned that routinely waiving copayments could implicate the AKS. Choice D, of special relevance to pharmaceutical and device manufacturers, is illegal under the False Claims Act. Whereas doctors are allowed to prescribe drugs or devices for an off-label indication, the law forbids a manufacturer from marketing its products for a non-FDA–approved use.

With an annual budget of almost $1 trillion, it is estimated that some 10% or up to $100 billion of Medicare/Medicaid funds are lost to fraud, waste, and abuse. The Office of Inspector General is the independent oversight agency regulating such sources of loss. “Fraud” includes the obtaining something of value through intentional misrepresentation or concealment of material facts, “waste” includes the incurring of unnecessary costs as a result of deficient management, practices, systems, or controls, and “abuse” includes any practice that is not consistent with the goals of providing patients with services that are medically necessary, meet professionally recognized standards, and are fairly priced. A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse is available at http://oig.hhs.gov/compliance/physician-education/index.asp

To combat fraud, waste, and abuse, Congress has enacted three separate laws: The False Claims Act, the Anti-Kickback Statute, and the Physician Self-Referral Statute. In addition, states have their own versions of these laws. Stiff penalties for violations include fines, restriction of practice privileges, and imprisonment. More than 5,000 physicians in the United States are currently excluded from participation in Medicare/Medicaid programs because of violations (N. Engl. J. Med. 2011;364:102-3).

It is illegal under the False Claims Act to submit false or fraudulent claims for payment to Medicare or Medicaid (31 U.S.C. §§3729-3733). Private individuals, frequently former employees, consultants, even competitors, can file a so-called qui tam action alone or in concert with the government, and they stand to collect a substantial bounty in the event the prosecution proves successful. The Act originated during the Civil War, when increased government procurement led to fraudulent claims by contracting parties, prompting President Abraham Lincoln to state: “Worse than traitors in arms are the men who pretend loyalty to the flag, feast and fatten on the misfortunes of the Nation while patriotic blood is crimsoning the plains of the South, and their countrymen are moldering in the dust.”

In the health care field, claims may be false if the service is not actually rendered to the patient, is provided but already covered under another claim, is miscoded, or is not supported by the medical record. Intent to defraud is not a required element; deliberate ignorance or reckless disregard of the truth will suffice. Whistle-blowers, that is, qui tam plaintiffs, can receive up to 30% of any False Claims Act recovery. Penalties are severe and include treble damages, costs and attorney fees, and fines of $11,000 per false claim. Imprisonment and criminal fines are additional penalties.

One of the latest criminal schemes to defraud Medicare involved organized crime's establishment of more than 100 bogus clinics in 25 states, using stolen identities of doctors and patients. The government became suspicious when submitted bills purportedly came from ophthalmologists for bladder tests, ENT surgeons for ultrasounds, and office visits from a forensic pathologist. The Department of Justice has reportedly arrested 28 people linked to this fraud (BMJ 2010;341:c5865).

Under the Anti-Kickback Statute (42 U.S.C. §1320a-7b), it is illegal to knowingly or willfully offer, pay, solicit, or receive remuneration, directly or indirectly, in cash or in kind, in exchange for referring an individual or furnishing or arranging for a good or service, and for which payment may be made under Medicare or Medicaid. Importantly, the case of the United States v. Greber established that there is a statutory violation even if only one purpose of the remuneration is to induce referrals. Several hospitals have paid multimillion dollar settlements for kickback “remunerations.”

The Physician Self-Referral Statute, commonly called the Stark Law, prohibits a physician from making a referral to an entity for the furnishing of a designated health service for which payment may be made under Medicare or Medicaid if the physician or an immediate family member has a financial relationship with the entity, unless an exception applies. This being a strict liability law, no proof of specific intent is required. There are strict, complex, and narrowly construed “safe harbors” and exceptions to both the Anti-Kickback and Stark laws, but the field is complex, so providers contemplating health care business deals should proceed cautiously and seek specific advice from experienced legal counsel.

Question: Which of the following is not a violation of Medicare/Medicaid fraud statutes?

A. Referring patients to a lab of which your spouse is part owner.

B. Hospital “remuneration,” such as below-market office leases or expensive tickets to events.

C. Forgiving the copay portion of a retired colleague's bill.

D. Marketing Food and Drug Administration-approved drugs for off-label use.

E. Negligently submitting a wrong-patient Medicare claim.

Best answer: E. Choice E is analyzed under the False Claims Act, which imposes liability for knowingly submitting a payment demand to Medicare/Medicaid. Legally, this means having actual knowledge (scienter) that the claim is false or acting in deliberate or reckless indifference to the truth. However, an error that is negligently committed is insufficient to constitute a violation. Choice A is a direct violation of the Stark Law against self-referral, and B and C are violations of the Anti-Kickback Statute (AKS). The current 2011 threshold is $359 for “complimentary” tickets to events, and the government has warned that routinely waiving copayments could implicate the AKS. Choice D, of special relevance to pharmaceutical and device manufacturers, is illegal under the False Claims Act. Whereas doctors are allowed to prescribe drugs or devices for an off-label indication, the law forbids a manufacturer from marketing its products for a non-FDA–approved use.

With an annual budget of almost $1 trillion, it is estimated that some 10% or up to $100 billion of Medicare/Medicaid funds are lost to fraud, waste, and abuse. The Office of Inspector General is the independent oversight agency regulating such sources of loss. “Fraud” includes the obtaining something of value through intentional misrepresentation or concealment of material facts, “waste” includes the incurring of unnecessary costs as a result of deficient management, practices, systems, or controls, and “abuse” includes any practice that is not consistent with the goals of providing patients with services that are medically necessary, meet professionally recognized standards, and are fairly priced. A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse is available at http://oig.hhs.gov/compliance/physician-education/index.asp

To combat fraud, waste, and abuse, Congress has enacted three separate laws: The False Claims Act, the Anti-Kickback Statute, and the Physician Self-Referral Statute. In addition, states have their own versions of these laws. Stiff penalties for violations include fines, restriction of practice privileges, and imprisonment. More than 5,000 physicians in the United States are currently excluded from participation in Medicare/Medicaid programs because of violations (N. Engl. J. Med. 2011;364:102-3).

It is illegal under the False Claims Act to submit false or fraudulent claims for payment to Medicare or Medicaid (31 U.S.C. §§3729-3733). Private individuals, frequently former employees, consultants, even competitors, can file a so-called qui tam action alone or in concert with the government, and they stand to collect a substantial bounty in the event the prosecution proves successful. The Act originated during the Civil War, when increased government procurement led to fraudulent claims by contracting parties, prompting President Abraham Lincoln to state: “Worse than traitors in arms are the men who pretend loyalty to the flag, feast and fatten on the misfortunes of the Nation while patriotic blood is crimsoning the plains of the South, and their countrymen are moldering in the dust.”

In the health care field, claims may be false if the service is not actually rendered to the patient, is provided but already covered under another claim, is miscoded, or is not supported by the medical record. Intent to defraud is not a required element; deliberate ignorance or reckless disregard of the truth will suffice. Whistle-blowers, that is, qui tam plaintiffs, can receive up to 30% of any False Claims Act recovery. Penalties are severe and include treble damages, costs and attorney fees, and fines of $11,000 per false claim. Imprisonment and criminal fines are additional penalties.

One of the latest criminal schemes to defraud Medicare involved organized crime's establishment of more than 100 bogus clinics in 25 states, using stolen identities of doctors and patients. The government became suspicious when submitted bills purportedly came from ophthalmologists for bladder tests, ENT surgeons for ultrasounds, and office visits from a forensic pathologist. The Department of Justice has reportedly arrested 28 people linked to this fraud (BMJ 2010;341:c5865).

Under the Anti-Kickback Statute (42 U.S.C. §1320a-7b), it is illegal to knowingly or willfully offer, pay, solicit, or receive remuneration, directly or indirectly, in cash or in kind, in exchange for referring an individual or furnishing or arranging for a good or service, and for which payment may be made under Medicare or Medicaid. Importantly, the case of the United States v. Greber established that there is a statutory violation even if only one purpose of the remuneration is to induce referrals. Several hospitals have paid multimillion dollar settlements for kickback “remunerations.”

The Physician Self-Referral Statute, commonly called the Stark Law, prohibits a physician from making a referral to an entity for the furnishing of a designated health service for which payment may be made under Medicare or Medicaid if the physician or an immediate family member has a financial relationship with the entity, unless an exception applies. This being a strict liability law, no proof of specific intent is required. There are strict, complex, and narrowly construed “safe harbors” and exceptions to both the Anti-Kickback and Stark laws, but the field is complex, so providers contemplating health care business deals should proceed cautiously and seek specific advice from experienced legal counsel.

Question: Which of the following is not a violation of Medicare/Medicaid fraud statutes?

A. Referring patients to a lab of which your spouse is part owner.

B. Hospital "remuneration," such as below-market office leases or expensive tickets to events.

C. Forgiving the co-pay portion of a retired colleague’s bill.

D. Marketing Food and Drug Administration-approved drugs for off-label use.

E. Negligently submitting a wrong-patient Medicare claim.

Best answer: E. Choice E is analyzed under the False Claims Act, which imposes liability for knowingly submitting a payment demand to Medicare/Medicaid. Legally, this means having actual knowledge (scienter) that the claim is false or acting in deliberate or reckless indifference to the truth. However, an error that is negligently committed is insufficient to constitute a violation. Choice A is a direct violation of the Stark Law against self-referral, and B and C are violations of the Anti-Kickback Statute (AKS). The current 2011 threshold is $359 for "complimentary" tickets to events, and the government has warned that routinely waiving co-payments could implicate the AKS. Choice D, of special relevance to pharmaceutical and device manufacturers, is illegal under the False Claims Act. Whereas doctors are allowed to prescribe drugs or devices for an off-label indication, the law forbids a manufacturer from marketing its products for a non-FDA–approved use.

With an annual budget of almost $1 trillion, it is estimated that some 10% or up to $100 billion of Medicare/Medicaid funds are lost to fraud, waste, and abuse. The Office of Inspector General is the independent oversight agency regulating such sources of loss. "Fraud" includes the obtaining something of value through intentional misrepresentation or concealment of material facts, "waste" includes the incurring of unnecessary costs as a result of deficient management, practices, systems, or controls, and "abuse" includes any practice that is not consistent with the goals of providing patients with services that are medically necessary, meet professionally recognized standards, and are fairly priced. [See: A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse.]

To combat fraud, waste, and abuse, Congress has enacted three separate laws: The False Claims Act, the Anti-Kickback Statute, and the Physician Self-Referral Statute. In addition, states have their own versions of these laws. Stiff penalties for violations include fines, restriction of practice privileges, and imprisonment. More than 5,000 physicians in the United States are currently excluded from participation in Medicare/Medicaid programs because of violations (N. Engl. J. Med. 2011;364:102-3).

It is illegal under the False Claims Act to submit false or fraudulent claims for payment to Medicare or Medicaid (31 U.S.C. §§3729-3733). Private individuals, frequently former employees, consultants, even competitors, can file a so-called qui tam action alone or in concert with the government, and they stand to collect a substantial bounty in the event the prosecution proves successful. The Act originated during the Civil War, when increased government procurement led to fraudulent claims by contracting parties, prompting President Abraham Lincoln to state: "Worse than traitors in arms are the men who pretend loyalty to the flag, feast and fatten on the misfortunes of the Nation while patriotic blood is crimsoning the plains of the South, and their countrymen are moldering in the dust."

In the health care field, claims may be false if the service is not actually rendered to the patient, is provided but already covered under another claim, is miscoded, or is not supported by the medical record. Intent to defraud is not a required element; deliberate ignorance or reckless disregard of the truth will suffice. Whistle-blowers, that is, qui tam plaintiffs, can receive up to 30% of any False Claims Act recovery. Penalties are severe, and include treble damages, costs and attorney fees, and fines of $11,000 per false claim. Imprisonment and criminal fines are additional penalties. One of the latest criminal schemes to defraud Medicare involved organized crime’s establishment of more than 100 bogus clinics in 25 states, using stolen identities of doctors and patients. The government became suspicious when submitted bills purportedly came from ophthalmologists for bladder tests, ENT surgeons for ultrasounds, and office visits from a forensic pathologist. The Department of Justice has reportedly arrested 28 people linked to this fraud (BMJ 2010;341:c5865).

Under the Anti-Kickback Statute (42 U.S.C. §1320a-7b), it is illegal to knowingly or willfully offer, pay, solicit, or receive remuneration, directly or indirectly, in cash or in kind, in exchange for referring an individual or furnishing or arranging for a good or service, and for which payment may be made under Medicare or Medicaid. Importantly, the case of the United States v. Greber established that there is statutory violation even if only one purpose of the remuneration is to induce referrals. It is relatively easy for a medical center to run afoul of this law, and several hospitals have paid multimillion dollar settlements for kickback "remunerations."

The Physician Self-Referral Statute, commonly called the Stark Law, prohibits a physician from making a referral to an entity for the furnishing of a designated health service for which payment may be made under Medicare or Medicaid if the physician or an immediate family member has a financial relationship with the entity, unless an exception applies. This being a strict liability law, no proof of specific intent is required. There are strict, complex, and narrowly construed "safe harbors" and exceptions to both the Anti-Kickback and Stark laws, but the field is complex, so providers contemplating health care business deals should proceed cautiously and seek specific advice from experienced legal counsel.

Dr. S.Y. Tan is a former professor of medicine and adjunct professor of law at the University of Hawaii. This article is meant to be educational and does not constitute medical, ethical or legal advice. It is adapted from the author’s book, "Medical Malpractice: Understanding the Law, Managing the Risk" (2006). For additional information, readers may contact the author.

Question: Which of the following is not a violation of Medicare/Medicaid fraud statutes?

A. Referring patients to a lab of which your spouse is part owner.

B. Hospital "remuneration," such as below-market office leases or expensive tickets to events.

C. Forgiving the co-pay portion of a retired colleague’s bill.

D. Marketing Food and Drug Administration-approved drugs for off-label use.

E. Negligently submitting a wrong-patient Medicare claim.

Best answer: E. Choice E is analyzed under the False Claims Act, which imposes liability for knowingly submitting a payment demand to Medicare/Medicaid. Legally, this means having actual knowledge (scienter) that the claim is false or acting in deliberate or reckless indifference to the truth. However, an error that is negligently committed is insufficient to constitute a violation. Choice A is a direct violation of the Stark Law against self-referral, and B and C are violations of the Anti-Kickback Statute (AKS). The current 2011 threshold is $359 for "complimentary" tickets to events, and the government has warned that routinely waiving co-payments could implicate the AKS. Choice D, of special relevance to pharmaceutical and device manufacturers, is illegal under the False Claims Act. Whereas doctors are allowed to prescribe drugs or devices for an off-label indication, the law forbids a manufacturer from marketing its products for a non-FDA–approved use.

With an annual budget of almost $1 trillion, it is estimated that some 10% or up to $100 billion of Medicare/Medicaid funds are lost to fraud, waste, and abuse. The Office of Inspector General is the independent oversight agency regulating such sources of loss. "Fraud" includes the obtaining something of value through intentional misrepresentation or concealment of material facts, "waste" includes the incurring of unnecessary costs as a result of deficient management, practices, systems, or controls, and "abuse" includes any practice that is not consistent with the goals of providing patients with services that are medically necessary, meet professionally recognized standards, and are fairly priced. [See: A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse.]

To combat fraud, waste, and abuse, Congress has enacted three separate laws: The False Claims Act, the Anti-Kickback Statute, and the Physician Self-Referral Statute. In addition, states have their own versions of these laws. Stiff penalties for violations include fines, restriction of practice privileges, and imprisonment. More than 5,000 physicians in the United States are currently excluded from participation in Medicare/Medicaid programs because of violations (N. Engl. J. Med. 2011;364:102-3).

It is illegal under the False Claims Act to submit false or fraudulent claims for payment to Medicare or Medicaid (31 U.S.C. §§3729-3733). Private individuals, frequently former employees, consultants, even competitors, can file a so-called qui tam action alone or in concert with the government, and they stand to collect a substantial bounty in the event the prosecution proves successful. The Act originated during the Civil War, when increased government procurement led to fraudulent claims by contracting parties, prompting President Abraham Lincoln to state: "Worse than traitors in arms are the men who pretend loyalty to the flag, feast and fatten on the misfortunes of the Nation while patriotic blood is crimsoning the plains of the South, and their countrymen are moldering in the dust."

In the health care field, claims may be false if the service is not actually rendered to the patient, is provided but already covered under another claim, is miscoded, or is not supported by the medical record. Intent to defraud is not a required element; deliberate ignorance or reckless disregard of the truth will suffice. Whistle-blowers, that is, qui tam plaintiffs, can receive up to 30% of any False Claims Act recovery. Penalties are severe, and include treble damages, costs and attorney fees, and fines of $11,000 per false claim. Imprisonment and criminal fines are additional penalties. One of the latest criminal schemes to defraud Medicare involved organized crime’s establishment of more than 100 bogus clinics in 25 states, using stolen identities of doctors and patients. The government became suspicious when submitted bills purportedly came from ophthalmologists for bladder tests, ENT surgeons for ultrasounds, and office visits from a forensic pathologist. The Department of Justice has reportedly arrested 28 people linked to this fraud (BMJ 2010;341:c5865).

Under the Anti-Kickback Statute (42 U.S.C. §1320a-7b), it is illegal to knowingly or willfully offer, pay, solicit, or receive remuneration, directly or indirectly, in cash or in kind, in exchange for referring an individual or furnishing or arranging for a good or service, and for which payment may be made under Medicare or Medicaid. Importantly, the case of the United States v. Greber established that there is statutory violation even if only one purpose of the remuneration is to induce referrals. It is relatively easy for a medical center to run afoul of this law, and several hospitals have paid multimillion dollar settlements for kickback "remunerations."

The Physician Self-Referral Statute, commonly called the Stark Law, prohibits a physician from making a referral to an entity for the furnishing of a designated health service for which payment may be made under Medicare or Medicaid if the physician or an immediate family member has a financial relationship with the entity, unless an exception applies. This being a strict liability law, no proof of specific intent is required. There are strict, complex, and narrowly construed "safe harbors" and exceptions to both the Anti-Kickback and Stark laws, but the field is complex, so providers contemplating health care business deals should proceed cautiously and seek specific advice from experienced legal counsel.

Dr. S.Y. Tan is a former professor of medicine and adjunct professor of law at the University of Hawaii. This article is meant to be educational and does not constitute medical, ethical or legal advice. It is adapted from the author’s book, "Medical Malpractice: Understanding the Law, Managing the Risk" (2006). For additional information, readers may contact the author.

Question: Which of the following is not a violation of Medicare/Medicaid fraud statutes?

A. Referring patients to a lab of which your spouse is part owner.

B. Hospital "remuneration," such as below-market office leases or expensive tickets to events.

C. Forgiving the co-pay portion of a retired colleague’s bill.

D. Marketing Food and Drug Administration-approved drugs for off-label use.

E. Negligently submitting a wrong-patient Medicare claim.

Best answer: E. Choice E is analyzed under the False Claims Act, which imposes liability for knowingly submitting a payment demand to Medicare/Medicaid. Legally, this means having actual knowledge (scienter) that the claim is false or acting in deliberate or reckless indifference to the truth. However, an error that is negligently committed is insufficient to constitute a violation. Choice A is a direct violation of the Stark Law against self-referral, and B and C are violations of the Anti-Kickback Statute (AKS). The current 2011 threshold is $359 for "complimentary" tickets to events, and the government has warned that routinely waiving co-payments could implicate the AKS. Choice D, of special relevance to pharmaceutical and device manufacturers, is illegal under the False Claims Act. Whereas doctors are allowed to prescribe drugs or devices for an off-label indication, the law forbids a manufacturer from marketing its products for a non-FDA–approved use.

With an annual budget of almost $1 trillion, it is estimated that some 10% or up to $100 billion of Medicare/Medicaid funds are lost to fraud, waste, and abuse. The Office of Inspector General is the independent oversight agency regulating such sources of loss. "Fraud" includes the obtaining something of value through intentional misrepresentation or concealment of material facts, "waste" includes the incurring of unnecessary costs as a result of deficient management, practices, systems, or controls, and "abuse" includes any practice that is not consistent with the goals of providing patients with services that are medically necessary, meet professionally recognized standards, and are fairly priced. [See: A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse.]

To combat fraud, waste, and abuse, Congress has enacted three separate laws: The False Claims Act, the Anti-Kickback Statute, and the Physician Self-Referral Statute. In addition, states have their own versions of these laws. Stiff penalties for violations include fines, restriction of practice privileges, and imprisonment. More than 5,000 physicians in the United States are currently excluded from participation in Medicare/Medicaid programs because of violations (N. Engl. J. Med. 2011;364:102-3).

It is illegal under the False Claims Act to submit false or fraudulent claims for payment to Medicare or Medicaid (31 U.S.C. §§3729-3733). Private individuals, frequently former employees, consultants, even competitors, can file a so-called qui tam action alone or in concert with the government, and they stand to collect a substantial bounty in the event the prosecution proves successful. The Act originated during the Civil War, when increased government procurement led to fraudulent claims by contracting parties, prompting President Abraham Lincoln to state: "Worse than traitors in arms are the men who pretend loyalty to the flag, feast and fatten on the misfortunes of the Nation while patriotic blood is crimsoning the plains of the South, and their countrymen are moldering in the dust."

In the health care field, claims may be false if the service is not actually rendered to the patient, is provided but already covered under another claim, is miscoded, or is not supported by the medical record. Intent to defraud is not a required element; deliberate ignorance or reckless disregard of the truth will suffice. Whistle-blowers, that is, qui tam plaintiffs, can receive up to 30% of any False Claims Act recovery. Penalties are severe, and include treble damages, costs and attorney fees, and fines of $11,000 per false claim. Imprisonment and criminal fines are additional penalties. One of the latest criminal schemes to defraud Medicare involved organized crime’s establishment of more than 100 bogus clinics in 25 states, using stolen identities of doctors and patients. The government became suspicious when submitted bills purportedly came from ophthalmologists for bladder tests, ENT surgeons for ultrasounds, and office visits from a forensic pathologist. The Department of Justice has reportedly arrested 28 people linked to this fraud (BMJ 2010;341:c5865).

Under the Anti-Kickback Statute (42 U.S.C. §1320a-7b), it is illegal to knowingly or willfully offer, pay, solicit, or receive remuneration, directly or indirectly, in cash or in kind, in exchange for referring an individual or furnishing or arranging for a good or service, and for which payment may be made under Medicare or Medicaid. Importantly, the case of the United States v. Greber established that there is statutory violation even if only one purpose of the remuneration is to induce referrals. It is relatively easy for a medical center to run afoul of this law, and several hospitals have paid multimillion dollar settlements for kickback "remunerations."

The Physician Self-Referral Statute, commonly called the Stark Law, prohibits a physician from making a referral to an entity for the furnishing of a designated health service for which payment may be made under Medicare or Medicaid if the physician or an immediate family member has a financial relationship with the entity, unless an exception applies. This being a strict liability law, no proof of specific intent is required. There are strict, complex, and narrowly construed "safe harbors" and exceptions to both the Anti-Kickback and Stark laws, but the field is complex, so providers contemplating health care business deals should proceed cautiously and seek specific advice from experienced legal counsel.

Dr. S.Y. Tan is a former professor of medicine and adjunct professor of law at the University of Hawaii. This article is meant to be educational and does not constitute medical, ethical or legal advice. It is adapted from the author’s book, "Medical Malpractice: Understanding the Law, Managing the Risk" (2006). For additional information, readers may contact the author.

Question: Which of the following is not a violation of Medicare/Medicaid fraud statutes?

A. Referring patients to a lab of which your spouse is part owner.

B. Hospital "remuneration," such as below-market office leases or expensive tickets to events.

C. Forgiving the co-pay portion of a retired colleague’s bill.

D. Marketing Food and Drug Administration-approved drugs for off-label use.

E. Negligently submitting a wrong-patient Medicare claim.

Best answer: E. Choice E is analyzed under the False Claims Act, which imposes liability for knowingly submitting a payment demand to Medicare/Medicaid. Legally, this means having actual knowledge (scienter) that the claim is false or acting in deliberate or reckless indifference to the truth. However, an error that is negligently committed is insufficient to constitute a violation. Choice A is a direct violation of the Stark Law against self-referral, and B and C are violations of the Anti-Kickback Statute (AKS). The current 2011 threshold is $359 for "complimentary" tickets to events, and the government has warned that routinely waiving co-payments could implicate the AKS. Choice D, of special relevance to pharmaceutical and device manufacturers, is illegal under the False Claims Act. Whereas doctors are allowed to prescribe drugs or devices for an off-label indication, the law forbids a manufacturer from marketing its products for a non-FDA–approved use.

With an annual budget of almost $1 trillion, it is estimated that some 10% or up to $100 billion of Medicare/Medicaid funds are lost to fraud, waste, and abuse. The Office of Inspector General is the independent oversight agency regulating such sources of loss. "Fraud" includes the obtaining something of value through intentional misrepresentation or concealment of material facts, "waste" includes the incurring of unnecessary costs as a result of deficient management, practices, systems, or controls, and "abuse" includes any practice that is not consistent with the goals of providing patients with services that are medically necessary, meet professionally recognized standards, and are fairly priced. [See: A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse.]

To combat fraud, waste, and abuse, Congress has enacted three separate laws: The False Claims Act, the Anti-Kickback Statute, and the Physician Self-Referral Statute. In addition, states have their own versions of these laws. Stiff penalties for violations include fines, restriction of practice privileges, and imprisonment. More than 5,000 physicians in the United States are currently excluded from participation in Medicare/Medicaid programs because of violations (N. Engl. J. Med. 2011;364:102-3).

It is illegal under the False Claims Act to submit false or fraudulent claims for payment to Medicare or Medicaid (31 U.S.C. §§3729-3733). Private individuals, frequently former employees, consultants, even competitors, can file a so-called qui tam action alone or in concert with the government, and they stand to collect a substantial bounty in the event the prosecution proves successful. The Act originated during the Civil War, when increased government procurement led to fraudulent claims by contracting parties, prompting President Abraham Lincoln to state: "Worse than traitors in arms are the men who pretend loyalty to the flag, feast and fatten on the misfortunes of the Nation while patriotic blood is crimsoning the plains of the South, and their countrymen are moldering in the dust."

In the health care field, claims may be false if the service is not actually rendered to the patient, is provided but already covered under another claim, is miscoded, or is not supported by the medical record. Intent to defraud is not a required element; deliberate ignorance or reckless disregard of the truth will suffice. Whistle-blowers, that is, qui tam plaintiffs, can receive up to 30% of any False Claims Act recovery. Penalties are severe, and include treble damages, costs and attorney fees, and fines of $11,000 per false claim. Imprisonment and criminal fines are additional penalties. One of the latest criminal schemes to defraud Medicare involved organized crime’s establishment of more than 100 bogus clinics in 25 states, using stolen identities of doctors and patients. The government became suspicious when submitted bills purportedly came from ophthalmologists for bladder tests, ENT surgeons for ultrasounds, and office visits from a forensic pathologist. The Department of Justice has reportedly arrested 28 people linked to this fraud (BMJ 2010;341:c5865).

Under the Anti-Kickback Statute (42 U.S.C. §1320a-7b), it is illegal to knowingly or willfully offer, pay, solicit, or receive remuneration, directly or indirectly, in cash or in kind, in exchange for referring an individual or furnishing or arranging for a good or service, and for which payment may be made under Medicare or Medicaid. Importantly, the case of the United States v. Greber established that there is statutory violation even if only one purpose of the remuneration is to induce referrals. It is relatively easy for a medical center to run afoul of this law, and several hospitals have paid multimillion dollar settlements for kickback "remunerations."

The Physician Self-Referral Statute, commonly called the Stark Law, prohibits a physician from making a referral to an entity for the furnishing of a designated health service for which payment may be made under Medicare or Medicaid if the physician or an immediate family member has a financial relationship with the entity, unless an exception applies. This being a strict liability law, no proof of specific intent is required. There are strict, complex, and narrowly construed "safe harbors" and exceptions to both the Anti-Kickback and Stark laws, but the field is complex, so providers contemplating health care business deals should proceed cautiously and seek specific advice from experienced legal counsel.

Dr. S.Y. Tan is a former professor of medicine and adjunct professor of law at the University of Hawaii. This article is meant to be educational and does not constitute medical, ethical or legal advice. It is adapted from the author’s book, "Medical Malpractice: Understanding the Law, Managing the Risk" (2006). For additional information, readers may contact the author.

Question: Which of the following is not a violation of Medicare/Medicaid fraud statutes?

A. Referring patients to a lab of which your spouse is part owner.

B. Hospital "remuneration," such as below-market office leases or expensive tickets to events.

C. Forgiving the co-pay portion of a retired colleague’s bill.

D. Marketing Food and Drug Administration-approved drugs for off-label use.

E. Negligently submitting a wrong-patient Medicare claim.

Best answer: E. Choice E is analyzed under the False Claims Act, which imposes liability for knowingly submitting a payment demand to Medicare/Medicaid. Legally, this means having actual knowledge (scienter) that the claim is false or acting in deliberate or reckless indifference to the truth. However, an error that is negligently committed is insufficient to constitute a violation. Choice A is a direct violation of the Stark Law against self-referral, and B and C are violations of the Anti-Kickback Statute (AKS). The current 2011 threshold is $359 for "complimentary" tickets to events, and the government has warned that routinely waiving co-payments could implicate the AKS. Choice D, of special relevance to pharmaceutical and device manufacturers, is illegal under the False Claims Act. Whereas doctors are allowed to prescribe drugs or devices for an off-label indication, the law forbids a manufacturer from marketing its products for a non-FDA–approved use.

With an annual budget of almost $1 trillion, it is estimated that some 10% or up to $100 billion of Medicare/Medicaid funds are lost to fraud, waste, and abuse. The Office of Inspector General is the independent oversight agency regulating such sources of loss. "Fraud" includes the obtaining something of value through intentional misrepresentation or concealment of material facts, "waste" includes the incurring of unnecessary costs as a result of deficient management, practices, systems, or controls, and "abuse" includes any practice that is not consistent with the goals of providing patients with services that are medically necessary, meet professionally recognized standards, and are fairly priced. [See: A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse.]

To combat fraud, waste, and abuse, Congress has enacted three separate laws: The False Claims Act, the Anti-Kickback Statute, and the Physician Self-Referral Statute. In addition, states have their own versions of these laws. Stiff penalties for violations include fines, restriction of practice privileges, and imprisonment. More than 5,000 physicians in the United States are currently excluded from participation in Medicare/Medicaid programs because of violations (N. Engl. J. Med. 2011;364:102-3).

It is illegal under the False Claims Act to submit false or fraudulent claims for payment to Medicare or Medicaid (31 U.S.C. §§3729-3733). Private individuals, frequently former employees, consultants, even competitors, can file a so-called qui tam action alone or in concert with the government, and they stand to collect a substantial bounty in the event the prosecution proves successful. The Act originated during the Civil War, when increased government procurement led to fraudulent claims by contracting parties, prompting President Abraham Lincoln to state: "Worse than traitors in arms are the men who pretend loyalty to the flag, feast and fatten on the misfortunes of the Nation while patriotic blood is crimsoning the plains of the South, and their countrymen are moldering in the dust."

In the health care field, claims may be false if the service is not actually rendered to the patient, is provided but already covered under another claim, is miscoded, or is not supported by the medical record. Intent to defraud is not a required element; deliberate ignorance or reckless disregard of the truth will suffice. Whistle-blowers, that is, qui tam plaintiffs, can receive up to 30% of any False Claims Act recovery. Penalties are severe, and include treble damages, costs and attorney fees, and fines of $11,000 per false claim. Imprisonment and criminal fines are additional penalties. One of the latest criminal schemes to defraud Medicare involved organized crime’s establishment of more than 100 bogus clinics in 25 states, using stolen identities of doctors and patients. The government became suspicious when submitted bills purportedly came from ophthalmologists for bladder tests, ENT surgeons for ultrasounds, and office visits from a forensic pathologist. The Department of Justice has reportedly arrested 28 people linked to this fraud (BMJ 2010;341:c5865).

Under the Anti-Kickback Statute (42 U.S.C. §1320a-7b), it is illegal to knowingly or willfully offer, pay, solicit, or receive remuneration, directly or indirectly, in cash or in kind, in exchange for referring an individual or furnishing or arranging for a good or service, and for which payment may be made under Medicare or Medicaid. Importantly, the case of the United States v. Greber established that there is statutory violation even if only one purpose of the remuneration is to induce referrals. It is relatively easy for a medical center to run afoul of this law, and several hospitals have paid multimillion dollar settlements for kickback "remunerations."

The Physician Self-Referral Statute, commonly called the Stark Law, prohibits a physician from making a referral to an entity for the furnishing of a designated health service for which payment may be made under Medicare or Medicaid if the physician or an immediate family member has a financial relationship with the entity, unless an exception applies. This being a strict liability law, no proof of specific intent is required. There are strict, complex, and narrowly construed "safe harbors" and exceptions to both the Anti-Kickback and Stark laws, but the field is complex, so providers contemplating health care business deals should proceed cautiously and seek specific advice from experienced legal counsel.

Dr. S.Y. Tan is a former professor of medicine and adjunct professor of law at the University of Hawaii. This article is meant to be educational and does not constitute medical, ethical or legal advice. It is adapted from the author’s book, "Medical Malpractice: Understanding the Law, Managing the Risk" (2006). For additional information, readers may contact the author.

Question: Which of the following is not a violation of Medicare/Medicaid fraud statutes?

A. Referring patients to a lab of which your spouse is part owner.

B. Hospital "remuneration," such as below-market office leases or expensive tickets to events.

C. Forgiving the co-pay portion of a retired colleague’s bill.

D. Marketing Food and Drug Administration-approved drugs for off-label use.

E. Negligently submitting a wrong-patient Medicare claim.

Best answer: E. Choice E is analyzed under the False Claims Act, which imposes liability for knowingly submitting a payment demand to Medicare/Medicaid. Legally, this means having actual knowledge (scienter) that the claim is false or acting in deliberate or reckless indifference to the truth. However, an error that is negligently committed is insufficient to constitute a violation. Choice A is a direct violation of the Stark Law against self-referral, and B and C are violations of the Anti-Kickback Statute (AKS). The current 2011 threshold is $359 for "complimentary" tickets to events, and the government has warned that routinely waiving co-payments could implicate the AKS. Choice D, of special relevance to pharmaceutical and device manufacturers, is illegal under the False Claims Act. Whereas doctors are allowed to prescribe drugs or devices for an off-label indication, the law forbids a manufacturer from marketing its products for a non-FDA–approved use.

With an annual budget of almost $1 trillion, it is estimated that some 10% or up to $100 billion of Medicare/Medicaid funds are lost to fraud, waste, and abuse. The Office of Inspector General is the independent oversight agency regulating such sources of loss. "Fraud" includes the obtaining something of value through intentional misrepresentation or concealment of material facts, "waste" includes the incurring of unnecessary costs as a result of deficient management, practices, systems, or controls, and "abuse" includes any practice that is not consistent with the goals of providing patients with services that are medically necessary, meet professionally recognized standards, and are fairly priced. [See: A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse.]

To combat fraud, waste, and abuse, Congress has enacted three separate laws: The False Claims Act, the Anti-Kickback Statute, and the Physician Self-Referral Statute. In addition, states have their own versions of these laws. Stiff penalties for violations include fines, restriction of practice privileges, and imprisonment. More than 5,000 physicians in the United States are currently excluded from participation in Medicare/Medicaid programs because of violations (N. Engl. J. Med. 2011;364:102-3).

It is illegal under the False Claims Act to submit false or fraudulent claims for payment to Medicare or Medicaid (31 U.S.C. §§3729-3733). Private individuals, frequently former employees, consultants, even competitors, can file a so-called qui tam action alone or in concert with the government, and they stand to collect a substantial bounty in the event the prosecution proves successful. The Act originated during the Civil War, when increased government procurement led to fraudulent claims by contracting parties, prompting President Abraham Lincoln to state: "Worse than traitors in arms are the men who pretend loyalty to the flag, feast and fatten on the misfortunes of the Nation while patriotic blood is crimsoning the plains of the South, and their countrymen are moldering in the dust."

In the health care field, claims may be false if the service is not actually rendered to the patient, is provided but already covered under another claim, is miscoded, or is not supported by the medical record. Intent to defraud is not a required element; deliberate ignorance or reckless disregard of the truth will suffice. Whistle-blowers, that is, qui tam plaintiffs, can receive up to 30% of any False Claims Act recovery. Penalties are severe, and include treble damages, costs and attorney fees, and fines of $11,000 per false claim. Imprisonment and criminal fines are additional penalties. One of the latest criminal schemes to defraud Medicare involved organized crime’s establishment of more than 100 bogus clinics in 25 states, using stolen identities of doctors and patients. The government became suspicious when submitted bills purportedly came from ophthalmologists for bladder tests, ENT surgeons for ultrasounds, and office visits from a forensic pathologist. The Department of Justice has reportedly arrested 28 people linked to this fraud (BMJ 2010;341:c5865).

Under the Anti-Kickback Statute (42 U.S.C. §1320a-7b), it is illegal to knowingly or willfully offer, pay, solicit, or receive remuneration, directly or indirectly, in cash or in kind, in exchange for referring an individual or furnishing or arranging for a good or service, and for which payment may be made under Medicare or Medicaid. Importantly, the case of the United States v. Greber established that there is statutory violation even if only one purpose of the remuneration is to induce referrals. It is relatively easy for a medical center to run afoul of this law, and several hospitals have paid multimillion dollar settlements for kickback "remunerations."

The Physician Self-Referral Statute, commonly called the Stark Law, prohibits a physician from making a referral to an entity for the furnishing of a designated health service for which payment may be made under Medicare or Medicaid if the physician or an immediate family member has a financial relationship with the entity, unless an exception applies. This being a strict liability law, no proof of specific intent is required. There are strict, complex, and narrowly construed "safe harbors" and exceptions to both the Anti-Kickback and Stark laws, but the field is complex, so providers contemplating health care business deals should proceed cautiously and seek specific advice from experienced legal counsel.

Dr. S.Y. Tan is a former professor of medicine and adjunct professor of law at the University of Hawaii. This article is meant to be educational and does not constitute medical, ethical or legal advice. It is adapted from the author’s book, "Medical Malpractice: Understanding the Law, Managing the Risk" (2006). For additional information, readers may contact the author.

Question: Because of a particularly busy day, you started but could not complete charting for a patient whom you saw at 4 p.m. The patient had complained of chest pain, but the EKG was normal. You had to leave for a hospital emergency and were further delayed by a traffic accident. You later discovered that your 4 p.m. patient had collapsed from a myocardial infarct after he left your office. It is now 11 p.m., you have not had dinner, and you are very tired and mildly disoriented. Which of the following is best?

A. You must complete the record at 11 p.m. before going home.

B. Wait until the next day and continue writing as though you were not interrupted.

C. Write "incomplete" and leave the note as is.

D. Complete the note the next day with an explanation of the interruptions, date and time both notes, and document the normal EKG.

E. Medical records are kept for the convenience of the doctor. One should spend more time taking care of the patient and less time taking care of the records.

Answer: D. All medical entries should be made contemporaneously and it is a bad idea to put off charting to another day, as clinical impressions may be forgotten or inaccurately recalled, and new events have a habit of overtaking the busy doctor. However, fatigue can lead to errors, so it may be better to defer writing anything if circumstances so dictate.

The hypothetical case above appears to fit this picture. A late or separate entry should bear the actual date and time it was written, and not any other. Charting is particularly critical when there is any hint of a potential malpractice complaint. Note that this case concerns a patient who may have developed a myocardial infarct that was "missed" in the doctor’s clinic. In his defense, the doctor did obtain a normal EKG that may or may not be enough, depending on the clinical presentation and the patient’s risk for a coronary event. If a suit is filed at a later date, the documentation of a normal EKG can serve as exculpatory evidence.

Anything arising out of the doctor-patient encounter can constitute part of the patient’s medical record. This includes items like handwritten, typed, or electronic clinical notes; notes recorded from telephone conversations; all correspondence including letters to and from other health care professionals, insurers, patients, family, and others; laboratory reports; radiographs and other imaging records; electrocardiograms and printouts from monitoring equipment; audiovisuals; and other computerized/electronic records, including e-mail messages. This last category is assuming increasing importance as a favored mode of communication, and carries with it special medicolegal risks.

The medical record is of extreme importance in litigation, which typically takes place many months or years after the incident when memories regarding what was said or done may have faded. Furthermore, what was not documented can be legally construed to mean that it was not done. There are statutory requirements in each state that stipulate how long medical records are to be kept, for example, at least 7 years in Hawaii.

A subpoena is nothing more than a legal request. A subpoena to produce documents including medical records is termed a subpoena duces tecum. A court order (sometimes incorrectly called a court-ordered subpoena), that is, one signed by a judge, to produce clinical records must be complied with or the practitioner risks being found in contempt of court. However, not all subpoenas are the same. One that originates from a lawyer’s office, even if it appears official and is signed by the clerk of the court, does not have the same force of law.

A doctor may challenge a subpoena that lacks a patient’s authorization, but the doctor should not simply ignore it. Refusal to produce may force the attorney to obtain a court order, at which time the practitioner is legally obligated to produce the records. Indiscriminate release of records can lead to violation of patient confidentiality, and a New Jersey appellate court has ruled against a physician for disclosing medical records in response to an improper subpoena without prior patient authorization. A good rule of thumb is to always insist on obtaining a patient’s signed consent before releasing any information to anyone.

How HIPAA Affects Medical Records

The Health Insurance Portability and Accountability Act of 1996 (HIPAA), which went into effect in April 2003, is a set of comprehensive federal laws that governs all aspects of a patient’s protected health information (PHI). The Act, a weighty document, attempts to strike a balance between the rights of patients to privacy to their health information and the smooth and efficient delivery of health care. HIPAA overrides state statutes that are less protective of patient access and privacy, but stricter state requirements continue to have priority. States have enacted their own statutes relating to medical records, and it is therefore necessary for physicians to consult their state statutes to ensure full compliance with the law.

The intent of HIPAA is to inform consumers how their health information is being used as we embrace the electronic computer age. The emphasis is on preserving privacy of PHI and ensuring security of electronic transmission of such data. In practice, this means informing all patients, via postings in the office or hospital, direct mailings, brochures, etc., of the conditions under which the contents of their records will be shared with others, and the procedures in place to safeguard improper disclosures.

HIPAA creates criminal and civil penalties for the improper use or disclosure of PHI by covered entities. Business associates, like covered entities, are now also subject to HIPAA rules under the Health Information Technology for Economic and Clinical Health Act (HITECH Act), which is a part of the American Recovery and Reinvestment Act of 2009. Fines start at $100 for each violation. Criminal penalties are severe for knowing and wrongful disclosures, with fines up to $50,000 and up to a year in prison.

If the violation is committed under false pretenses, the penalty can reach $100,000 and 5 years in prison. Where the disclosure is coupled with the intent to sell or to use for commercial advantage or personal gain, the punishment reaches $250,000 and up to 10 years in prison. Recent changes in HIPAA rules include an increase of the maximum civil penalty to $1.5 million.

HIPAA does not create a private right of action, that is, only the government, not private individuals, can prosecute a violation. However, HIPAA can serve to set the standard governing privacy of health information, and it has been used as evidence to support a case of emotional distress that allegedly resulted from the improper disclosure of records.

Dr. Tan is a former professor of medicine and adjunct professor of law at the University of Hawaii. This article is meant to be educational and does not constitute medical, ethical or legal advice. It is adapted from the author’s book, "Medical Malpractice: Understanding the Law, Managing the Risk" (2006). For additional information, readers may contact the author at [email protected].

This column, “Law & Medicine,” appears regularly in Internal Medicine News, a publication of Elsevier.

Question: Because of a particularly busy day, you started but could not complete charting for a patient whom you saw at 4 p.m. The patient had complained of chest pain, but the EKG was normal. You had to leave for a hospital emergency and were further delayed by a traffic accident. You later discovered that your 4 p.m. patient had collapsed from a myocardial infarct after he left your office. It is now 11 p.m., you have not had dinner, and you are very tired and mildly disoriented. Which of the following is best?

A. You must complete the record at 11 p.m. before going home.

B. Wait until the next day and continue writing as though you were not interrupted.

C. Write "incomplete" and leave the note as is.

D. Complete the note the next day with an explanation of the interruptions, date and time both notes, and document the normal EKG.

E. Medical records are kept for the convenience of the doctor. One should spend more time taking care of the patient and less time taking care of the records.

Answer: D. All medical entries should be made contemporaneously and it is a bad idea to put off charting to another day, as clinical impressions may be forgotten or inaccurately recalled, and new events have a habit of overtaking the busy doctor. However, fatigue can lead to errors, so it may be better to defer writing anything if circumstances so dictate.

The hypothetical case above appears to fit this picture. A late or separate entry should bear the actual date and time it was written, and not any other. Charting is particularly critical when there is any hint of a potential malpractice complaint. Note that this case concerns a patient who may have developed a myocardial infarct that was "missed" in the doctor’s clinic. In his defense, the doctor did obtain a normal EKG that may or may not be enough, depending on the clinical presentation and the patient’s risk for a coronary event. If a suit is filed at a later date, the documentation of a normal EKG can serve as exculpatory evidence.

Anything arising out of the doctor-patient encounter can constitute part of the patient’s medical record. This includes items like handwritten, typed, or electronic clinical notes; notes recorded from telephone conversations; all correspondence including letters to and from other health care professionals, insurers, patients, family, and others; laboratory reports; radiographs and other imaging records; electrocardiograms and printouts from monitoring equipment; audiovisuals; and other computerized/electronic records, including e-mail messages. This last category is assuming increasing importance as a favored mode of communication, and carries with it special medicolegal risks.

The medical record is of extreme importance in litigation, which typically takes place many months or years after the incident when memories regarding what was said or done may have faded. Furthermore, what was not documented can be legally construed to mean that it was not done. There are statutory requirements in each state that stipulate how long medical records are to be kept, for example, at least 7 years in Hawaii.

A subpoena is nothing more than a legal request. A subpoena to produce documents including medical records is termed a subpoena duces tecum. A court order (sometimes incorrectly called a court-ordered subpoena), that is, one signed by a judge, to produce clinical records must be complied with or the practitioner risks being found in contempt of court. However, not all subpoenas are the same. One that originates from a lawyer’s office, even if it appears official and is signed by the clerk of the court, does not have the same force of law.

A doctor may challenge a subpoena that lacks a patient’s authorization, but the doctor should not simply ignore it. Refusal to produce may force the attorney to obtain a court order, at which time the practitioner is legally obligated to produce the records. Indiscriminate release of records can lead to violation of patient confidentiality, and a New Jersey appellate court has ruled against a physician for disclosing medical records in response to an improper subpoena without prior patient authorization. A good rule of thumb is to always insist on obtaining a patient’s signed consent before releasing any information to anyone.

How HIPAA Affects Medical Records

The Health Insurance Portability and Accountability Act of 1996 (HIPAA), which went into effect in April 2003, is a set of comprehensive federal laws that governs all aspects of a patient’s protected health information (PHI). The Act, a weighty document, attempts to strike a balance between the rights of patients to privacy to their health information and the smooth and efficient delivery of health care. HIPAA overrides state statutes that are less protective of patient access and privacy, but stricter state requirements continue to have priority. States have enacted their own statutes relating to medical records, and it is therefore necessary for physicians to consult their state statutes to ensure full compliance with the law.

The intent of HIPAA is to inform consumers how their health information is being used as we embrace the electronic computer age. The emphasis is on preserving privacy of PHI and ensuring security of electronic transmission of such data. In practice, this means informing all patients, via postings in the office or hospital, direct mailings, brochures, etc., of the conditions under which the contents of their records will be shared with others, and the procedures in place to safeguard improper disclosures.

HIPAA creates criminal and civil penalties for the improper use or disclosure of PHI by covered entities. Business associates, like covered entities, are now also subject to HIPAA rules under the Health Information Technology for Economic and Clinical Health Act (HITECH Act), which is a part of the American Recovery and Reinvestment Act of 2009. Fines start at $100 for each violation. Criminal penalties are severe for knowing and wrongful disclosures, with fines up to $50,000 and up to a year in prison.

If the violation is committed under false pretenses, the penalty can reach $100,000 and 5 years in prison. Where the disclosure is coupled with the intent to sell or to use for commercial advantage or personal gain, the punishment reaches $250,000 and up to 10 years in prison. Recent changes in HIPAA rules include an increase of the maximum civil penalty to $1.5 million.

HIPAA does not create a private right of action, that is, only the government, not private individuals, can prosecute a violation. However, HIPAA can serve to set the standard governing privacy of health information, and it has been used as evidence to support a case of emotional distress that allegedly resulted from the improper disclosure of records.

Dr. Tan is a former professor of medicine and adjunct professor of law at the University of Hawaii. This article is meant to be educational and does not constitute medical, ethical or legal advice. It is adapted from the author’s book, "Medical Malpractice: Understanding the Law, Managing the Risk" (2006). For additional information, readers may contact the author at [email protected].

This column, “Law & Medicine,” appears regularly in Internal Medicine News, a publication of Elsevier.

Question: Because of a particularly busy day, you started but could not complete charting for a patient whom you saw at 4 p.m. The patient had complained of chest pain, but the EKG was normal. You had to leave for a hospital emergency and were further delayed by a traffic accident. You later discovered that your 4 p.m. patient had collapsed from a myocardial infarct after he left your office. It is now 11 p.m., you have not had dinner, and you are very tired and mildly disoriented. Which of the following is best?

A. You must complete the record at 11 p.m. before going home.

B. Wait until the next day and continue writing as though you were not interrupted.

C. Write "incomplete" and leave the note as is.

D. Complete the note the next day with an explanation of the interruptions, date and time both notes, and document the normal EKG.

E. Medical records are kept for the convenience of the doctor. One should spend more time taking care of the patient and less time taking care of the records.

Answer: D. All medical entries should be made contemporaneously and it is a bad idea to put off charting to another day, as clinical impressions may be forgotten or inaccurately recalled, and new events have a habit of overtaking the busy doctor. However, fatigue can lead to errors, so it may be better to defer writing anything if circumstances so dictate.

The hypothetical case above appears to fit this picture. A late or separate entry should bear the actual date and time it was written, and not any other. Charting is particularly critical when there is any hint of a potential malpractice complaint. Note that this case concerns a patient who may have developed a myocardial infarct that was "missed" in the doctor’s clinic. In his defense, the doctor did obtain a normal EKG that may or may not be enough, depending on the clinical presentation and the patient’s risk for a coronary event. If a suit is filed at a later date, the documentation of a normal EKG can serve as exculpatory evidence.

Anything arising out of the doctor-patient encounter can constitute part of the patient’s medical record. This includes items like handwritten, typed, or electronic clinical notes; notes recorded from telephone conversations; all correspondence including letters to and from other health care professionals, insurers, patients, family, and others; laboratory reports; radiographs and other imaging records; electrocardiograms and printouts from monitoring equipment; audiovisuals; and other computerized/electronic records, including e-mail messages. This last category is assuming increasing importance as a favored mode of communication, and carries with it special medicolegal risks.

The medical record is of extreme importance in litigation, which typically takes place many months or years after the incident when memories regarding what was said or done may have faded. Furthermore, what was not documented can be legally construed to mean that it was not done. There are statutory requirements in each state that stipulate how long medical records are to be kept, for example, at least 7 years in Hawaii.

A subpoena is nothing more than a legal request. A subpoena to produce documents including medical records is termed a subpoena duces tecum. A court order (sometimes incorrectly called a court-ordered subpoena), that is, one signed by a judge, to produce clinical records must be complied with or the practitioner risks being found in contempt of court. However, not all subpoenas are the same. One that originates from a lawyer’s office, even if it appears official and is signed by the clerk of the court, does not have the same force of law.

A doctor may challenge a subpoena that lacks a patient’s authorization, but the doctor should not simply ignore it. Refusal to produce may force the attorney to obtain a court order, at which time the practitioner is legally obligated to produce the records. Indiscriminate release of records can lead to violation of patient confidentiality, and a New Jersey appellate court has ruled against a physician for disclosing medical records in response to an improper subpoena without prior patient authorization. A good rule of thumb is to always insist on obtaining a patient’s signed consent before releasing any information to anyone.

How HIPAA Affects Medical Records

The Health Insurance Portability and Accountability Act of 1996 (HIPAA), which went into effect in April 2003, is a set of comprehensive federal laws that governs all aspects of a patient’s protected health information (PHI). The Act, a weighty document, attempts to strike a balance between the rights of patients to privacy to their health information and the smooth and efficient delivery of health care. HIPAA overrides state statutes that are less protective of patient access and privacy, but stricter state requirements continue to have priority. States have enacted their own statutes relating to medical records, and it is therefore necessary for physicians to consult their state statutes to ensure full compliance with the law.

The intent of HIPAA is to inform consumers how their health information is being used as we embrace the electronic computer age. The emphasis is on preserving privacy of PHI and ensuring security of electronic transmission of such data. In practice, this means informing all patients, via postings in the office or hospital, direct mailings, brochures, etc., of the conditions under which the contents of their records will be shared with others, and the procedures in place to safeguard improper disclosures.

HIPAA creates criminal and civil penalties for the improper use or disclosure of PHI by covered entities. Business associates, like covered entities, are now also subject to HIPAA rules under the Health Information Technology for Economic and Clinical Health Act (HITECH Act), which is a part of the American Recovery and Reinvestment Act of 2009. Fines start at $100 for each violation. Criminal penalties are severe for knowing and wrongful disclosures, with fines up to $50,000 and up to a year in prison.

If the violation is committed under false pretenses, the penalty can reach $100,000 and 5 years in prison. Where the disclosure is coupled with the intent to sell or to use for commercial advantage or personal gain, the punishment reaches $250,000 and up to 10 years in prison. Recent changes in HIPAA rules include an increase of the maximum civil penalty to $1.5 million.

HIPAA does not create a private right of action, that is, only the government, not private individuals, can prosecute a violation. However, HIPAA can serve to set the standard governing privacy of health information, and it has been used as evidence to support a case of emotional distress that allegedly resulted from the improper disclosure of records.

Dr. Tan is a former professor of medicine and adjunct professor of law at the University of Hawaii. This article is meant to be educational and does not constitute medical, ethical or legal advice. It is adapted from the author’s book, "Medical Malpractice: Understanding the Law, Managing the Risk" (2006). For additional information, readers may contact the author at [email protected].

This column, “Law & Medicine,” appears regularly in Internal Medicine News, a publication of Elsevier.