We have heard a lot about reforming healthcare through clinical integration lately. On October 5, 2010, the Federal Trade Commission “will co-host a workshop on several issues associated with Accountable Care Organizations (ACOs), organizations authorized by the new Affordable Care Act that seek to deliver high-quality and efficient health care services to consumers. Joining the FTC in hosting the event are the Centers for Medicare & Medicaid Services (CMS) and the Department of Health and Human Services’ Office of Inspector General.” The Federal Trade Commission (FTC) and U.S. Department of Justice define clinical integration as the implementation of: …an active and ongoing program to evaluate and modify practice patterns by the network’s physician participants and create a high degree of interdependence and cooperation among the physicians to control costs and ensure quality. This program may include: (1) establishing mechanisms to monitor and control utilization of health care services that are designed to control costs and assure quality of care; (2) selectively choosing network physicians who are likely to further these efficiency objectives; and (3) the significant investment of capital, both monetary and human, in the necessary infrastructure and capability to realize the claimed efficiencies. According to the American Hospital Association, several legal barriers to the implementation of clinical integration currently exist. They include: Antitrust laws designed to protect competition in order to protect consumers. The Ethics in Patient Referrals Act (Stark Law) enacted to keep doctors from referring patients to hospital and other facilities in which the doctor has a financial interest. The Civil Monetary Penalty Law which prohibits hospitals from rewarding doctors for reducing or withholding services to Medicare or Medicaid recipients. The anti-kickback law which makes it a felony to knowingly and willfully receiving or paying anything of value to influence the referral of federal health program business, including Medicare and Medicaid. The Internal Revenue Code which prohibits a tax-exempt not-for-profit organization such as a hospital from providing payments to benefit any private individual, including physicians. ACOs may provide a structure through which clinical integration can be achieved. What are your thoughts? Technorati Tags: Mediation

by Holly Hayes When we saw this link on mediate.com about nurses requesting mediation to achieve safe staffing levels, we wondered where else mediation was being requested in healthcare conflict. A search found that in September, mediation was used, but failed, between the Minnesota Nurses Association and St. Luke’s Hospital in Duluth, MN. A nurses’ union in New Jersey requested mediation in July for their negotiations with hospital management. In June, negotiators for Twin Cities nurses and 14 hospitals met with federal mediators to attempt to resolve differences regarding a new labor contract. We welcome your comments on the use of mediation in health care labor relations. _________________________________________________________________________ Holly Hayes is a mediator at Karl Bayer, Dispute Resolution Expert where she focuses on mediation of health care disputes. Holly holds a B.A. from Southern Methodist University and a Masters in Health Administration from Duke University. She can be reached at holly@karlbayer.com. Tags: Mediation

In a very troubling opinion, the First Court of Appeals of Texas has held that providing a special master with unrestricted access to all documents on a hard drive and discretion to employ or modify search terms is impermissible when discovery is ordered in a special appearance context. In In re Howard K. Stern, No. 01-09-00438-CV, (Tex. App.—Houston [1st Dist.] August 25, 2010) celebrity Anna Nicole Smith’s mother, Virgie Arthur, alleged in an underlying lawsuit that she had been defamed by the relator, Howard K. Stern, and others who conspired with him to defame her. Arthur alleged that Stern’s actions damaged her ability to gain custody and visitation of her granddaughter. Stern, Smith’s former attorney and companion, filed a special appearance in which he denied all bases for personal jurisdiction in Texas. Arthur alleged that a Texas resident acted as Stern’s agent and because of this, personal jurisdiction attached to Stern. Stern objected to discovery beyond communications relevant to the establishment of personal jurisdiction and agreed to provide Arthur with e-mails from October 12th, 2006 to March 14th, 2008. Stern’s counsel stated that due to the type of email provider used by Stern, no emails would exist on his personal computer or hard drive, but offered to file a subpoena with Stern’s email provider, Yahoo! Business, in order to obtain the relevant emails maintained on the company’s server. Arthur then supplemented an earlier motion to compel by requesting that Stern be ordered to submit his “computers, external hard drives, jump drives, and other such electronic media” to a forensic examiner appointed by the trial court. Prior to resolution of Stern’s special appearance, the trial court ordered him to produce his computer hard drive to a special master for forensic examination. Stern then filed a petition for a writ of mandamus challenging the scope of the discovery ordered both in general and as ordered prior to the hearing on his special appearance. The trial court’s May 11, 2009 order appointed a special master and forensic expert, providing in part: (3) To facilitate production of such documents . . . the Court previously appointed . . . a Special Master . . . to conduct an independent forensic examination of relevant computer hard drives, external hard drives, jump drives, and other such repositories of electronic communications. . . . That appointment now is extended to include examination of Howard K. Stern’s electronic media. (4) To facilitate the work of the Special Master, this Court ORDERS Defendant Howard K. Stern to contact the Special Master . . . within 10 days of the signing of this order to make arrangements for capture and examination of Howard K. Stern’s electronic media. (5) At the option and expense of Defendant Howard K. Stern, [the] Special Master . . . may travel to California, where the electronic media is currently located, to examine and copy the electronic media. If Stern chooses this option, he will pay in advance for [the Special Master]’s time, portal-to-portal, 24-hours per day, at the rate of $250 per hour. Defendant Howard K. Stern will also pay for First Class or Business Class airfare and a good hotel. . . . (6) Also at the option and expense of Defendant Howard K. Stern, [the] Special Master . . . shall produce a copy of Defendant Howard K. Stern’s electronic media and present that copy to the computer forensic expert of Defendant Howard K. Stern’s choosing. If Defendant Howard K. Stern chooses this option, [the special master] will hold the original of Defendant Howard K. Stern’s electronic media without viewing its contents for a period of 10 days after delivery of the copy to Defendant Stern’s expert to allow that expert an opportunity to view the contents first. At the expiration of that 10-day period, [the] Special Master . . . will begin forensic examination of the electronic media and shall: a. have discretion to employ or to modify search terms; b. capture all remaining electronic communications, including but not limited to emails to or from the persons, entities and email addresses listed in parts 1 and 3 of Plaintiff’s Requests for Production, and submit them to Defendant Howard K. Stern for privilege review prior to production. (7) Within 14 days after receipt of the captured documents from the Special Master . . . Defendant Howard K. Stern shall produce a privilege log to [the] Special Master . . . and to [Arthur] listing all documents submitted by [the] Special Master . . . to Defendant Howard K. Stern, which Defendant Howard K. Stern has not produced to [Arthur] and the reasons for withholding the documents from production. [The] Special Master . . . shall then produce all documents within the scope of paragraph one above that are not listed on the privilege log to [Arthur]. . . . (8) [Arthur] shall have an opportunity to challenge any designation listed on the log and, in the event that a designation is challenged, [the] Special Master . . . shall submit the log, along with the disputed document(s), to the Court for in camera inspection. . . . . (10) No waiver of privilege or confidentiality occurs if any otherwise privileged or confidential information is observed by [the] Special Master . . . during the imaging and review process. (11) [The] Special Master . . . is expressly prohibited from using or disclosing any information obtained through the imaging and examination of Defendant Howard K. Stern’s electronic media other than providing to Defendant Howard K. Stern documents captured during his examination, except as specified in this order. The Court of Appeals held that the trial court abused its discretion by ordering discovery without a showing that the discovery was relevant to the jurisdictional facts because the plain language of Texas Rule of Civil Procedure 120(a)(3) authorizes discovery prior to a ruling on a special appearance only with respect to those facts essential to justify an opposition to the special appearance. According to the court, […]

The Fifth Circuit has held that it lacks inherent authority to impose sanctions for conduct which occurred during arbitration. In Positive Software Solutions, Inc. v. New Century Mortgage Corp., No. 09-10355, (5th Cir., September 13, 2010), Positive Software Solutions sued New Century for allegedly infringing telemarketing software licensed to New Century. The case was subsequently ordered to arbitration under the terms of the parties’ contract. During arbitration, attorney Ophelia Camina advised New Century on various discovery matters despite that the arbitrator had a previous professional relationship with Camina. As a result of this relationship, the district court vacated the arbitration award. The Fifth Circuit reversed the vacatur and remanded the case. After the case was remanded, New Century declared bankruptcy. Positive Software moved for sanctions against Camina under Federal Rule of Civil Procedure 37, 28 U.S.C. § 1927, and the court’s inherent authority. The district court sanctioned Camina a portion of Positive Software’s attorneys’ fees under its purported inherent authority. Camina then appealed the sanction. The Circuit Court declared that a district court has a limited inherent authority to impose sanctions in order to control the litigation before it. A court’s inherent authority may be exercised only if doing so is essential to preserve the authority of the court. The court then stated that a district court’s inherent power to impose sanctions does not extend to collateral proceedings. According to the court, arbitration itself is a collateral proceeding regardless of whether a court ordered the parties to arbitration. The court further stated, “Because Camina’s conduct was neither before the district court nor in direct defiance of its orders, the conduct is beyond the reach of the court’s inherent authority to sanction.” The Circuit Court also held that the lower court’s sanction award violated the Federal Arbitration Act (FAA) because it went beyond a court’s narrowly defined authority under the act. Under the FAA, a court may only determine whether arbitration should be compelled and whether an arbitration award should be confirmed, vacated or modified. Because the FAA specifically provides for limited judicial involvement in an arbitral dispute, to enforce the lower court’s order would expand the judiciary’s role in the arbitration in direct conflict with the FAA. The Fifth Circuit reversed the sanctions award and remanded the case. Technorati Tags: ADR, law, arbitration