Mid-Atlantic Health Law TOPICS

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Did You Know? Winter 2011

Medical Loss Ratios: Did you know that the Department of Health and Human Services (HHS) has published a final rule regarding minimum medical loss ratios for health insurance plans? Federal Health Care Reform established the proportion of premium revenue that insurers must expend on permitted health care and wellness costs: 85% in the large group market and 80% in the small group and individual markets. The HHS rule implements that standard, and provides that permitted health care and wellness costs include health care services, health IT activities and patient education, but not fraud prevention, marketing, provider network management, provider credentialing or utilization review. Insurers must rebate to enrollees any premium revenue in excess of the minimum medical loss ratio.

Stark Violation: Did you know that, in U.S. ex rel Singh v. Bradford, a federal district court in Pennsylvania ruled that Bradford Regional Medical Center (a Pennsylvania non-profit) and a cardiology practice violated the Social Security Act's physician self-referral prohibition (Stark) when Bradford leased a nuclear camera from the practice and secured a non-compete prohibiting the cardiologists from providing nuclear cardiology services? The court found that when the practice acquired the camera to move its diagnostic imaging referrals from Bradford, Bradford reacted by subleasing the camera from the practice. The court held that the fixed lease payments from Bradford to the practice violated Stark because the payments expressly took into account the volume and value of anticipated referrals that Bradford would retain from the practice, because Bradford's accountant included the value of the non-compete and the anticipated revenue arising out of referrals from the cardiologists in the calculation of the fair market value of the lease payments.


December 22, 2011




Rosen, Barry F.


Health Care