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2017 Legislation Muddies the Water for Kentucky Physicians and Providers

Kentucky’s 2017 legislative session has been described as the most productive regular session in modern history by Majority Floor Leader Damon Thayer. Over a hundred bills during the session addressed healthcare-related issues reflecting the priorities of Republican Leadership and its initiative to repeal the Affordable Care Act (Obamacare). While many bills failed to gain traction, several important new laws were enacted that not only require Kentucky physicians and providers to change their practices, but also offer possible protection from lawsuits. The following is a review of some of the most important new legislation resulting from the 2017 session.

Senate Bill 4 – Medical Review Panels

This new law creates a mandated buffer between providers and malpractice suits. The intent of the law is for proposed medical malpractice suits to undergo a form of peer review before they reach court as a way of weeding out potentially frivolous suits and reducing litigation costs. Pretrial medical review panels make qualitative and quantitative assessments about liability and causation, thereby acting as a screen to separate valid claims from frivolous claims.

Kentucky’s legislation and implementing regulation require a pretrial review to be conducted by a Medical Review Panel. Before a suit for medical malpractice may commence, a Medical Review Panel must convene, take evidence from all parties named in the proposed complaint, and produce a report that will then be submitted to the court if the malpractice suit is ultimately filed. Each review panel consists of an attorney as chairperson and three healthcare providers. Each party chooses a healthcare provider panelist, and then those two panelists select the third together. Healthcare providers can only be excused from service on the panel for “good cause” which will likely be interpreted in a manner similar to the “good cause” that must be shown to be excused from jury duty. Within nine months, the panel must submit a written opinion addressing whether the healthcare provider acted in a manner consistent with the appropriate standard of care. The Medical Review Panel’s opinion may be used as an expert opinion in litigation if the plaintiff decides to file suit, and the panel members may be called to testify as witnesses.

It is unclear how this system will affect providers in the long run, as it is different than most programs in other states that have attempted similar systems. Kentucky’s system requires more participation from the healthcare community. At the time of this writing, a legal challenge to the Medical Review Panel statute and regulation is pending before the Franklin Circuit Court in the case of Claycomb v. Cabinet for Health and Family Services. The plaintiffs allege that the new law discriminates against certain classes of litigants and claims by creating an unconstitutional barrier to access to the courts. The case has been submitted to Honorable Phillip Shepherd, but regardless of his decision, the outcome will likely be appealed.

House Bill 333 – The Opioid Bill

To curb the growing epidemic of opioid abuse, the Kentucky Legislature took aim at fentanyl, a newly-prevalent opioid experiencing a resurgence of use in the state. Fentanyl is a powerful synthetic opioid, often mixed with heroin. The new law creates harsh penalties for trafficking and importation, but it also creates new restrictions for healthcare providers.

Under the new provisions, healthcare practitioners may only prescribe three days of a Schedule II drug to treat pain for an acute medical condition. These drugs include oxycodone, hydrocodone, and, of course, fentanyl, carfentanyl and fentanyl derivatives. There are some exceptions, such as when the practitioner documents that more than a three-day supply is medically necessary, the drugs will be dispensed in-house, or the medication is prescribed for chronic pain, pain following major surgery or trauma, or pain associated with a cancer diagnosis, hospice or other end-of-life treatment. Medical necessity for the medication must comply with the Kentucky Board of Medical Licensure’s standards for prescribing controlled substances and House Bill 1.

The law also clarifies definitions and requirements for the prescription of controlled substances, defines prescribing authority within long-term care facilities, and allows the Cabinet for Health and Family Services Office of Inspector General to investigate patterns of prescribing and report irregularities to appropriate authorities including licensure boards

HB 333 took effect on June 29th, and the Kentucky Board of Medical Licensure issued a proposed amendment to 201 KAR 9:260, which sets out standards for prescribing and dispensing controlled substances. Public comment on the proposed amendment ended on August 31st, so final regulations should be published sometime soon.

Senate Bill 79 – Direct Primary Care (“DPC”)

Senate Bill 79 allows patients and physicians to enter into a Direct Primary Care Membership Agreement to receive and pay for services without forfeiting insurance or Medicaid coverage. The Direct Primary Care Model is controversial and Kentucky’s statute does little except create more ambiguities and murky waters for physicians who offer these services while participating in Medicaid, Medicare and insurance programs. This statute raises many questions as there are significant penalties for physicians who accept cash payments from Medicaid or Medicare patients for covered services. Likewise, most insurance contracts with providers prohibit physicians from billing patients for services that are covered by the insurance contract. As more physicians explore concierge medicine, which has numerous regulatory issues, the Direct Primary Care contract may provide a viable option for physicians who opt out of programs. Because Medicaid’s existing regulations effectively prohibit these agreements with Medicaid patients, Medicaid regulations are currently in direct conflict with the new law, so it will likely face legal scrutiny. Concierge physician services can be a viable way to enhance physician payment and provide prompt access, but many concierge arrangements directly conflict with Medicaid and Medicare statutes and regulations. Senate Bill 79 attempts to address the issues, but it is not a comprehensive fix by any means.

House Bill 314 – KASPER Reporting Changes

HB 314 changes KASPER requirements for toxicology reports by hospitals, requiring them to report all positive toxicology screens that were performed by the hospital’s emergency department to evaluate a suspected drug overdose. Healthcare practitioners and pharmacists may also now review KASPER data on the birth mother of an infant if that baby is being treated at that time for neonatal abstinence syndrome or if the baby’s symptoms suggest neonatal drug exposure. The new law also defines “fair market value” for purposes of a Medicaid application to the Department of Medicaid Services as the value set by an appraiser or the property valuation administrator or the price brought at auction.

Conclusion

It’s too early to gauge the impact of these new laws, as several directly conflict with existing statutes, regulations and federal law, creating ambiguities and complexities for physicians and other healthcare providers. Medical review panels, in particular, are designed to stymie malpractice suits, and may prove effective in weeding out frivolous claims; However, the Plaintiff Bar is already concerned enough about the constitutionality of the statute that most plaintiff attorneys are filing lawsuits in addition to requesting Medical Panel Review to prevent any statute of limitations problems that may arise if the statute is declared unconstitutional. This statute may ultimately provide some protection for physicians, but we won’t know until the courts rule upon the constitutionality issues. We do know that prescribing medication has become even more complicated in Kentucky as a result of the legislative changes. HB 333 adds even more new restrictions to already tightly-controlled prescribing practices for Kentucky physicians, nurse practitioners, and physician assistants. Of course, the changes in classification by schedule of medication complicate Kentucky providers’ prescribing practices and require strict attention to avoid classification as a pain treatment center. With all the new legislative and regulatory changes, physicians and all providers must carefully review their prescribing practices to assure compliance with new state laws.

Lisa English Hinkle is a Member of McBrayer, McGinnis, Leslie & Kirkland PLLC. Ms. Hinkle chairs the healthcare law practice and is located in the firm’s Lexington office. Contact Ms. Hinkle at lhinkle@mmlk.com or (859) 231-8780, or reach out to any of the attorneys at McBrayer. We take a team approach to deliver effective counsel to all our clients, so other attorneys in the firm may perform these services as well.

This article does not constitute legal advice.

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