The presentation discusses recent paradigm shifts impacting disputes between providers, payers and patients. The role of alternative dispute resolution in the Affordable Care Act, including compliance programs and Medicare is included, as well as the enforceability and use of mandatory arbitration agreements.

1. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
THE LATEST PARADIGM SHIFT
IN HEALTH CARE
PROVIDERS, PATIENTS AND PAYERS PLAY
MUSICAL CHAIRS
ORANGE COUNTY BAR ASSOCIATION
DATE:
February 24, 2014
TIME:
12:00 PM to 1:30 PM (PST)
PLACE: The Pacific Club
4110 MacArthur Boulevard
Newport Beach, CA 92660
PRESENTER:
Craig B. Garner
Garner Health Law Corporation
PAGE: 1
MCLE Credit -- 1.00
Craig B. Garner is a State Bar of California approved MCLE provider and certifies that this activity
conforms to the standards for approved education activities prescribed by the rules and regulations
of the State Bar of California governing MCLE.

2. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
ACA MEETS ADR
PAGE: 2

3. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
The Affordable Care Act
On March 23, 2010, President Obama signed the Patient
Protection and Affordable Care Act into law.
The Health Care and Education Reconciliation Act followed a
week later.
Together, this landmark legislation became the Affordable
Care Act, also known as Health Care Reform.
March 2014 will be the fourth anniversary of the Affordable
Care Act.
PAGE: 3

4. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Federal Alternative Dispute Resolution Act
28 U.S.C. § 651
Federal law requires that all federal courts pursue alternative
dispute resolution (“ADR”) in every case.
“An [ADR] process includes any process or procedure, other
than an adjudication by a presiding judge, in which a neutral
third party participates to assist in the resolution of issues in
controversy, through processes such as early neutral
evaluation, mediation, minitrial, and arbitration as provided in
sections 654 through 658.”
PAGE: 4

5. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Federal Arbitration Act
9 U.S.C. § 2
“A written provision in any maritime transaction or a contract
evidencing a transaction involving commerce to settle by
arbitration a controversy thereafter arising out of such
contract or transaction, or the refusal to perform the whole or
any part thereof, or an agreement in writing to submit to
arbitration an existing controversy arising out of such a
contract, transaction, or refusal, shall be valid, irrevocable,
and enforceable, save upon such grounds as exist at law or in
equity for the revocation of any contract.”
PAGE: 5

6. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
California Right to Arbitration
California Code of Civil Procedure § 1281.2
“On petition of a party to an arbitration agreement alleging the
existence of a written agreement to arbitrate a controversy
and that a party thereto refuses to arbitrate such controversy,
the court shall order the petition and the respondent to
arbitrate the controversy if it determines that an agreement to
arbitrate the controversy exists, unless it determines:”
 Right has been waived
 There is a basis for revocation of agreement
 There is a pending court action with a third party
PAGE: 6

7. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
California Right to Arbitration Continued
Perry v. Thomas, 482 U.S. 483 (1987)
The Court held that the Federal Arbitration Act preempts the
California Labor Code. “[T]he present appeal addresses the
pre-emptive effect of the Federal Arbitration Act, a statute that
embodies Congress‟ intent to provide for the enforcement of
arbitration agreements within the full reach of the Commerce
Clause.”
PAGE: 7

8. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Arbitration of Medical Malpractice
California Code of Civil Procedure § 1295(a)
The first article of the contract must state: “It is understood
that any dispute as to medical malpractice . . . will be
determined by submission to arbitration as provided by
California law, and not by a lawsuit or resort to court process.
. . . Both parties to this contract, by entering into it, are giving
up their constitutional right to have any such dispute decided
in a court of law before a jury, and instead are accepting the
use of arbitration.”
PAGE: 8

9. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Arbitration of Medical Malpractice Continued
Mormile v. Sinclair, 21 Cal. App. 4th 1508 (1994) (patient’s
agreement to arbitrate all claims arising out of a physician’s
professional negligence was binding on her husband).
Warfield v. Summerville Senior Living, Inc., 158 Cal. App. 4th
443 (2007) (plaintiff’s husband, who was also a resident of the
residential care facility for the elderly, was not an agent of
plaintiff, with respect to execution of agreement to arbitrate
disputes with facility’s owner).
PAGE: 9

10. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Arbitration of Medical Malpractice Continued
California Health and Safety Code § 1430(b): “An agreement
by a resident or patient of a skilled nursing facility or
intermediate care facility to waive his or her rights to sue
pursuant to this subdivision shall be void as contrary to public
policy.”
California Health and Safety Code § 1599.81(d): “In the event
the contract contains an arbitration clause, the contract
attachment pertaining to arbitration shall contain notice that
under Section 1430, the patient may not waive his or her
ability to sue for violation of the Patient‟s Bill of Rights.”
PAGE: 10

11. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Arbitration of Patient’s Bill of Rights
Valley View Health Care, Inc. v. Chapman, 2014 WL 197778
(E.D. Cal. 2014): California Health and Safety Code Sections
1430 and 1599.81 effectively preclude arbitration of Patient’s
Bill of Rights claims.
“Under Section 1430(b), parties are able to reach no more
than a void agreement to arbitrate Patient‟s Bill of Rights
claims. Section 1430(b) precludes arbitration of Patient‟s Bill
of Rights claims by voiding agreements to arbitrate such
claims, prohibits outright arbitration of a particular claim, and
disproportionately impacts arbitration.”
PAGE: 11

12. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
COVERAGE RESOLUTION
PAGE: 12

13. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
The Appeals Process for Improved Coverage
Section 10101 of the Affordable Care Act requires a group health
plan and a health insurance issuer offering group or individual
coverage to establish an effective process for the administration
of appeals.
 42 U.S.C. § 300gg-19 (appeals process)
 42 U.S.C. § 300gg-93 (health insurance consumer information)
 45 C.F.R. § 147.136 (internal claims and appeals and external
review processes)
 29 C.F.R. 2560.503-1 (claims procedure)
 29 C.F.R. 2590.715-2719 (internal claims and appeals and
external review processes)
PAGE: 13

14. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
The Appeals Process For Improved Coverage Continued
Title 42, United States Code, Ch. 6A, Subch. XXV, Part A,
Subpart II and Part C



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

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No lifetime or annual limits (42 U.S.C. § 300gg-11)
Prohibition on rescissions (42 U.S.C. § 300gg-12)
Coverage of preventative care (42 U.S.C. § 300gg-13)
Extension of dependent coverage (42 U.S.C. § 300gg-14)
Uniform policy documents (42 U.S.C. § 300gg-15)
Highly compensated individuals (42 U.S.C. § 300gg-16)
Ensure quality of care (42 U.S.C. § 300gg-17)
Minimum medical loss ratio (42 U.S.C. § 300gg-18)
Ensure value for consumer premiums (42 U.S.C. § 300gg-94)
Uniform fraud and abuse reporting (42 U.S.C. § 300gg-95)
PAGE: 14

15. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
The Appeals Process For Improved Coverage Continued
42 U.S.C. § 300gg-19(a)(1):
“A group health plan and a health insurance issuer offering group
or individual health insurance coverage shall implement an
effective appeals process for appeals of coverage determination
and claims, under which the plan or issuer shall, at a minimum:”
(A) Have an appeals process
(B) Provide notice in “a culturally and linguistically
appropriate” manner
(C) Enrollee review of file, present evidence as part of
process, and maintain coverage pending the outcome of
the appeal
PAGE: 15

16. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
The Appeals Process For Improved Coverage Continued
42 U.S.C. § 300gg-19(a)(1)(B):
“[P]rovide notice to enrollees, in a culturally and linguistically
appropriate manner, of available internal and external appeals
processes, and the availability of any applicable office of health
insurance consumer assistance or ombudsman established . . .
to assist such enrollees with the appeals process.”
PAGE: 16

17. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Ombudsman
42 U.S.C. § 300gg-93(c):
“The office of health insurance consumer assistance or health
insurance ombudsman shall:
(1) assist with the filing of complaints and appeals;
(2) collect, track and quantify problems and inquiries encountered
by consumers;
(3) educate consumers on their rights and responsibilities;
(4) assist consumers with enrollment ; and
(5) resolve problems with obtaining premium tax credits.”
PAGE: 17

18. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Premium Tax Credit Refunds
26 U.S.C. § 36B
 In 2014, premium assistance is available for eligible enrollees
purchasing insurance from the Exchanges.
 Credit is refundable and payable in advance to subsidize the
purchase of insurance.
 Credits are eligible only for months in which there is enrollment
in Exchange coverage.
 Does not apply to insurance obtained through employer or
catastrophic plan.
PAGE: 18

19. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
The Appeals Process Continued
42 U.S.C. § 300gg-19(b): A group health plan and a health
insurance issuer offering group or individual health insurance
coverage:
“(1) [S]hall comply with the applicable state external review
process for such plans and issuers that, at a minimum, includes
the consumer protections set forth in the Uniform External
Review Model Act. . . ; or
(2) [S]hall implement an effective review process that meets
minimum standards established by [HHS].
PAGE: 19

20. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Uniform Health Carrier External Review Act
Summary
Section 2719 of the Affordable Care Act requires nongrandfathered insured health plans to comply with state external
review processes that at a minimum conform to the NAIC
Uniform External Model Review Act. Insurers in states that have
not adopted the NAIC Model Act and self-insured employee
health plans must, under section 2719, offer their enrollees an
external review process that meets minimum standards
established by HHS.
PAGE: 20

21. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Multi-State Plan Program (“MSPP”)
78 Federal Register 15560 (Mar. 11, 2013)
 Through contracts with the U.S. Office of Personnel
Management (“OPM”), health insurance issuers will offer at
least two multi-state plans (“MSPs”) on each of the Affordable
Insurance Exchanges (“Exchanges”) (Exchanges must be nonprofit).
 An MSSP issuer may phase in the states it chooses to offer
over 4 years, but it must offer MSPs on Exchanges in all states
(and D.C.) by the fourth year.
PAGE: 21

22. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Multi-State Plan Program Continued
45 C.F.R. § 800.10 (Scope)
 Establishes standards for state health insurance issuers to
contract with OPM to offer multi-State plans providing health
insurance coverage on Exchanges for each State.
 Establishes standards for appeal of a decision by OPM
affecting the issuer’s participation in the MSSP and standards
for an enrollee in a MSP to appeal denials of payment or
services by an MSPP issuer.
PAGE: 22

23. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Multi-State Plan Program Continued
45 C.F.R. § 800.115 (Level playing field)
An MSPP issuer must, with respect to its MSPs, meet the
following requirements, among others:
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Guaranteed renewal
Preexisting conditions
Rating
Quality improvement
Fraud and abuse
Prompt payment
Appeals and grievances
PAGE: 23

24. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Multi-State Plan Program Continued
45 C.F.R. § 800.116 (Process for dispute resolution)
 In the event of a dispute about the applicability to an MSP or
MSPP issuer of a state law, the state may request that OPM
reconsider a determination that an MSP or MSPP issuer is not
subject to such state law.
 Request for review to OPM, who in turn will issue a decision
within 60 days.
 Final decision under the Administrative Procedure Act.
PAGE: 24

25. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Multi-State Plan Program Continued
45 C.F.R. § 800.503 (External review)
 OPM will conduct external review of adverse benefit
determinations.
 Notice requirements.
 Issuer obligation. An MSPP issuer must pay a claim pursuant
to OPM’s final decision regardless of whether the plan or
issuer intends to seek judicial review.
PAGE: 25

26. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Multi-State Plan Program Continued
45 C.F.R. § 890.105 (Filing claims for payment or service)
 Each health benefits carrier resolves claims filed under the
plan.
 If carrier denies claim, insured may ask for reconsideration.
 If carrier affirms its denial or does not respond in a timely
fashion, the insured may ask OPM to review the claim.
 Both levels must be exhausted before seeking judicial review.
PAGE: 26

27. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
ERISA Preemption
Goldman v. BCBSM Foundation, 841 F. Supp. 2d 1021, 1026
(E.D. Mich. 2012)
“[T]he external review process is an option, not a mandatory
requirement, of administrative review. While BCBSM contends
that the new federal health care law makes external review
mandatory, the Court sees nothing . . .[to] indicate that external
review by a state agency is a prerequisite to filing an ERISA
claim. While the new law . . . seems to require a health care
provider . . . [to] provide both an internal and external review
process . . . it does not appear that the external review process
must be completed before an individual has the right to sue
under ERISA.”
PAGE: 27

28. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Second Amendment Protection
42 U.S.C. § 300gg-17(c)
U.S. Const. amend. II
Affordable Care Act
Mandatory disclosure of the lawful ownership or possession of a
firearm or ammunition, the lawful use of a firearm or ammunition,
or the lawful storage of a firearm or ammunition is prohibited in
the following examples:
 Wellness and prevention programs
 Collection of data under the Affordable Care Act
 Determination of premium rates or eligibility for health
insurance
PAGE: 28

29. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Minimum Medical Loss Ratio
The Affordable Care Act established the Medical Loss Ratio
(“MLR”) to ensure that issuers of insurance comply as follows:
 Large Group Market: An issuer must provide a rebate to
enrollees if the issuer has an MLR of less than 85% (subject to
adjustments).
 Small Group and Individual Markets: An issuer must
provide a rebate to enrollees if the issuer has an MLR of less
than 80% (also subject to adjustments).
PAGE: 29

30. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Minimum Medical Loss Ratio Continued
“[A]n issuer must rebate a pro rata portion of premium revenue if
it does not meet an 80 percent MLR for the small group market
in a State that has not set a higher MLR. If an issuer has a 75
percent MLR for the coverage it offers in the small group market
in a State that has not set a higher MLR, the issuer must rebate
5 percent of the premium paid by or on behalf of the enrollee for
the MLR reporting year after subtracting premium and
subtracting taxes and fees. . . . In this example, an enrollee may
have paid $2,000 in premiums for the MLR reporting year. If the
Federal and State taxes and licensing and regulatory fees that
may be excluded from premium revenue . . . are $150 for a
premium of $2,000, then the issuer would subtract $150 from
premium revenue, for a base of $1,850 in premium. The enrollee
would be entitled to a rebate of 5 percent of $1,850, or $92.50.”
PAGE: 30

31. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Sense of the Senate
Section 6801 of the Affordable Care Act: “It is the sense of the
Senate that:
(1) Health care reform represents an opportunity to address
issues related to medical malpractice and medical liability
insurance;
(2) States should be encouraged to develop and test alternatives
to existing civil litigation as a way of improving patient safety,
reducing medical errors, encouraging the efficient resolution
of disputes; and
(3) Congress should consider establishing a State demonstration
program to evaluate alternatives to the existing civil litigation
system with respect to medical malpractice claims.”
PAGE: 31

32. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Alternatives to Tort Litigation
42 U.S.C. § 280g-15(a): “[HHS] is authorized to award
demonstration grants to States for the development,
implementation, and evaluation of alternatives to current tort
litigation for resolving disputes over injuries allegedly caused by
health care providers or health care organizations.”
 Grants cannot exceed five years
 Allow for the resolution of disputes over injuries and promote
a reduction of health care errors
 Make the medical liability system more reliable by making
prompt and fair resolutions common
 No more than $500,000 per State
PAGE: 32

33. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
340B Drug Pricing Program
The Veterans Health Care Act of 1992 enacted Section 340B of
the Public Health Service Act. Section 340B implemented an
outpatient drug discount program for high Medicaid public and
private nonprofit hospitals, community health centers, and other
such providers.
PAGE: 33

34. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
340B Dispute Resolution Process
Section 7102 of the Affordable Care Act requires HHS to
promulgate regulations to establish and implement an
administrative dispute resolution process for the 340B Drug
Pricing Program.
 Resolution of claims by covered entities contending they have
been overcharged for drugs purchased through the 340B
Program.
 Resolution of claims by manufacturers, after audit, of
violations of the prohibition of duplicate discounts or rebates
and/or the prohibition on resale of drugs purchased under the
340B Program.
PAGE: 34

35. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
340B Dispute Resolution Process Continued
The Affordable Care Act requires HHS to promulgate additional
regulations that shall:
 Designate or establish a decision making official or decisionmaking body within HHS to be responsible for reviewing and
finally resolving claims by covered entities and manufacturers.
 Establish deadlines and procedures as may be necessary to
ensure that claims shall be resolved fairly, efficiently, and
expeditiously.
PAGE: 35

36. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
340B Dispute Resolution Process Continued
 Establish procedures by which a covered entity may discover
and obtain information and documents from manufacturers
and third parties as may be relevant to demonstrate the merits
of a claim that charges exceeded the ceiling price.
 Require that a manufacturer conduct an audit of a covered
entity as a prerequisite to initiating administrative dispute
resolution proceedings.
 Consolidate claims to permit multiple covered entities to jointly
assert claims of overcharging.
PAGE: 36

37. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
ARBITRATION OF FALSE CLAIMS
PAGE: 37

38. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Civil Actions for False Claims
31 U.S.C. § 3730(b) (Actions by private persons)
“A person may bring a civil action for a violation under section
3729 [False Claims Liability] for the person and for the United
States Government. The action shall be brought in the name of
the Government. The action may be dismissed only if the court
and the Attorney General give written consent to the dismissal
and their reasons for consenting.”
PAGE: 38

39. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Civil Actions for False Claims Continued
United States v. Bankers Ins. Co., 245 F.3d 315 (4th Cir. 2001)
“[W]here the Government has previously agreed to an arbitration
process, the statutory authority of the Attorney General is not
compromised by that agreement being honored. As Justice
Brandeis cogently observed years ago, „In a government of laws,
existence of the government will be imperiled if it fails to observe
the law scrupulously. Our government is the potent, omnipresent
teacher. For good or for ill, it teaches the whole people by its
example.‟ ” Id. at 325 (quoting Olmstead v. United States, 277
U.S. 438, 468 (1928)).
PAGE: 39

40. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Civil Actions for False Claims Continued
Morgan v. Science Applications Int‟l Corp., 612 F. Supp. 2d 81
315 (D.D.C. 2009)
 Plaintiff filed wrongful termination/false claims lawsuit.
 Statutory claims may be subject to an arbitration agreement
under the Federal Arbitration Act.
 Five factors to consider: (1) neutral arbitrators; (2) more than
minimal discovery available; (3) written award; (4) all types of
relief available that would otherwise be so in Court; (5) does
not require employee to pay unreasonable fees.
PAGE: 40

41. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
60 Days to Pay
The Affordable Care Act, Section 6402
42 U.S.C. § 1320a-7k(d) (Reporting overpayments)
 Must report and return any overpayments
 60 day deadline from the date overpayment is identified or
date any corresponding cost report is due
 Violation of this obligation may result in penalties under the
False Claims Act
 10 year “look back” period
PAGE: 41

42. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Self-Referral Disclosure Protocol (SRDP)
Affordable Care Act Section 6409.
 Applies to Stark Act violations (42 U.S.C. § 1395nn). Separate
from Self-Disclosure Protocol, which is administered by the
Office of the Inspector General and relates to the AntiKickback Statute.
 CMS is authorized to reduce any penalty based upon (1) the
nature and extent of the violation, (2) the timeliness of such
self-disclosure and (3) extent of cooperation by the provider.
 SRDP tolls the 60 Days to Pay Deadline.
PAGE: 42

43. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Self-Referral Disclosure Protocol Continued
 Must identify the disclosing provider, the issues involved, the
nature of the transactions and the individuals involved. Focus
on the details.
 Must provide a complete legal analysis relating to Stark
liability.
 Must describe a preexisting and adequate compliance
program.
 Must set out a full financial analysis of the issues.
PAGE: 43

44. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Self-Referral Disclosure Protocol Continued
 CMS is not bound by provider’s conclusions.
 CMS has no obligation to reduce the fine.
 Provider has no right to appeal resolution through settlement.
 Provider may appeal an adverse decision through the ordinary
course.
 CMS may open any Medicare cost reports filed since the
initial disclosure.
PAGE: 44

45. Craig B. Garner
Garner Health Law Corporation
MEDICARE DISPUTES
PAGE: 45
The Latest Paradigm
Shift In Health Care

46. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
The Expansive Medicare Regulations
The last 50 years have seen Medicare emerge to find itself the
blueprint upon which the nation’s health care system is based.
As a body of law, Medicare exists within the following:
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Title 42 of the United States Code
Title 42 of the Code of Federal Regulations
The CMS Online Manual System (http://www.cms.hhs.gov)
The Medicare Administrative Appeals Process
Federal Court decisions
PAGE: 46

47. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
The Five Levels of the Medicare Appeal Process
Section 1869 of the Social Security Act and 42 C.F.R. Part 405,
Subpart I, contain the procedures for conducting appeals of
claims in Original Medicare (Parts A and B).
 Redetermination by a CMS contractor (carrier, fiscal
intermediary or Medicare Administrative Contractor (MAC))
 Reconsideration by a Qualified Independent Contractor
(QIC)
 Hearings before an Administrative Law Judge (ALJ) within
the Office of Medicare Hearings and Appeals in HHS
 Review by the Appeals Council within the Department
Appeals Board of HHS
 Judicial review in federal district court
PAGE: 47

48. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Exhaustion of Administrative Remedies
The Medicare Act sets forth very stringent channeling
requirements to ensure a proper exhaustion of administrative
remedies, which comes at a price. Nevertheless:
“In the context of a massive, complex health and safety
program such as Medicare, embodied in hundreds of pages of
statutes and thousands of pages of often interrelated
regulations, any of which may become the subject of a legal
challenge in any of several different courts, paying this price
may seem justified.” Shalala v. Illinois Council on Long Term
Care, Inc., 529 U.S. 1, 13 (2000).
PAGE: 48

49. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
ACO Litigation
An ACO is a shared savings program that promotes
accountability for a patient population, coordinates items and
services under Medicare Parts A and B, and encourages
investment in infrastructure and redesigned care processes.
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Approximately 350 ACOs by the end of 2013
Quality care measures
Focus on at-risk populations
Compliance responsibilities
Disputes may arise between ACOs and their physician
partners.
PAGE: 49

50. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
TAX DISPUTES
PAGE: 50

51. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Disputes at the Points of Intersection
The ACA has become inextricably connected to the laws of
federal and state taxation, all of which may result in future
disputes. Some points of intersection include:
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Disclosure or Use of Information by Tax Return Preparers
Medical Loss Ratio (MLR) (discussed above)
Reporting Employer Provided Health Coverage in Form W-2
Net Investment Income Tax (3.8% tax as of 2013)
Additional Requirements for Tax-Exempt Hospitals
Minimum Value
Tax-Exempt 501(c)(29) Qualified Nonprofit Health Insurance
Issuers
PAGE: 51

52. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Continued. . .
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Health Flexible Spending Arrangements
Medical Device Excise Tax (2.3% tax as of 2010)
Health Insurance Premium Tax Credit
Individual Shared Responsibility Provision
Health Coverage for Older Children
Excise Tax on Indoor Tanning Salons (10% tax as of 2010)
Adoption Credit
Transitional Reinsurance Program
Medicare Shared Savings Program
Small Business Health Care Tax Credit
PAGE: 52

53. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Continued. . .
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Therapeutic Discovery Project Program
Group Health Plan Requirements
Annual Fee on Health Insurance Providers
Additional Medicare Tax (0.9% tax as of 2013)
Annual Fee on Branded Prescription Pharmaceuticals
Employer Shared Responsibility Payment
Excise Tax on “Cadillac” Plans
Patient-Centered Outcomes Research Institute
Retiree Drug Subsidies
PAGE: 53

54. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Craig B. Garner
Garner Health Law Corporation
Craig is an attorney and health care consultant, specializing in issues pertaining to
modern American health care and the ways it should be managed in its current climate
of reform.
Craig’s law practice focuses on health care mergers and acquisitions, regulatory
compliance and counseling for providers. Craig is also an adjunct professor of law at
Pepperdine University School of Law, where he teaches courses on Hospital Law and
the Affordable Care Act.
Between 2002 and 2011, Craig was the Chief Executive Officer of Coast Plaza Hospital
in Norwalk, California. Craig is also a Fellow Designate with the American College of
Healthcare Executives, a Member of the State Bar of California, Business Law Section,
Health Law Committee and a Vice Chair of the Healthcare Reform Educational Task
Force of the American Health Lawyers Association.
Additional information can be found at www.garnerhealth.com.
PAGE: 54

55. Craig B. Garner
Garner Health Law Corporation
The Latest Paradigm
Shift In Health Care
Thank You
Craig B. Garner
Garner Health Law Corporation
1299 Ocean Ave., Suite 450
Santa Monica, CA 90401
(310) 458.1560
Craig@CraigGarner.com
PAGE: 55