Tredway, Lumsdaine and Doyle LLP

Doctors have only the best intentions in mind when they examine a patient and issue recommendations after the meeting. However, years of medical education and training – as extensive as it is – does not concern itself with the legal ramifications that ripple from mundane tasks such as writing a doctor’s note.

I observed this phenomenon recently while defending a pregnancy discrimination and wrongful termination case. There, the doctor had scribbled on cartoon stationary prohibiting plaintiff from lifting more than 11 pounds. At the time, plaintiff was a certified nursing assistant at a convalescent hospital that required regular hands-on care. In fact, many of its patients were bedridden and rendered immobile. Not surprisingly, the hospital requested clarification on this note. Unfortunately, this tiny piece of paper became a seed of litigation.

It would therefore be useful to know that California Code of Regulations, Title 2, section 7291.10, subdivision (b) allows the employer to require medical certification before granting pregnancy disability leave or transfer, as long as the employer requires certification of other similarly situated employees. A “certification” is defined in 7291.2, subdivision (d) as a written communication from the health care provider that either the employee is disabled due to pregnancy or that it is medically advisable for the employee to be transferred to a less strenuous or hazardous position or duties.

The requirements are further laid out in section 7291.2, subdivision (d) as follows:
(1) The certification indicating disability necessitating a leave should contain:
     (A) The date on which the woman became disabled due to pregnancy;
     (B) The probable duration of the period or periods of disability, and
     (C) An explanatory statement that, due to the disability, the employee is unable to work at all or is unable to perform any one or more of the essential functions of her position without undue risk to herself, the successful completion of her pregnancy, or to other persons.
(2) The certification indicating the medical advisability of the transfer should contain:
     (A) The date on which the need to transfer became medically advisable;
     (B) The probable duration of the period or periods of the need to transfer; and
     (C) An explanatory statement that, due to the woman’s pregnancy, the transfer is medically advisable.

For employers, it would be wise to create a form sheet containing these questions to be answered by the doctor. For doctors, adhering to these requirements may just take preventative care to a whole new level.

As the end of 2011 approaches, there is no better time to take advantage of historically high gift tax exemptions and low tax rates to transfer assets to family members.

The Tax Relief, Unemployment Insurance Reauthorization, and Jobs Creation Act of 2010 set the estate, gift and generation-skipping transfer tax exemption amount at $5 million per person and the top rate of tax at 35 percent for 2011. As a result, a married couple is currently allowed to transfer up to $10 million of wealth without incurring a federal gift or estate tax.

The increase gift tax exemption of $5 million per person will not be around much longer, as the government is scheduled to decrease the exemption to $1 million per person beginning in 2013. Rumors of an even earlier end to the $5 million exemption are resulting from potential proposals by the Congressional Super Committee to the full Congress on how to reduce the deficit by at least $1.5 trillion over the next decade. Some proposals include rolling back the lifetime gift tax exemption from $5 million to $1 million, while other reports recommend a reduction from $5 million to $3.5 million (which was the exemption in effect in 2009) to be instituted as early as January 1, 2012.

Now is the time to make use of the current $5 million lifetime gift tax exemption. This can be done by establishing a family limited partnership or family limited liability company, using a Qualified Personal Residence Trust or implementing many other year-end tax-saving strategies. The following estate-planning advice provides a guide for gift-giving during the holiday season.

Irrevocable Trust

One way to utilize a substantial portion of the $5 million tax exemption is by making a gift to an irrevocable trust for the benefit of the family members. This method would subtract the value of the gifted asset, plus future appreciation, from your estate. Assets that have declined in value, but are expected to rebound, are ideal to transfer as gifts because the gift amount has been reduced and the increase in value would occur inside the trust, where it would not be subjected to estate tax. Making gifts to irrevocable life insurance trusts to fund premiums on insurance polices takes advantage of the increased lifetime exemption. This could provide an opportunity to leverage the gift tax exemption into a large tax-free death benefits for an estate.

Family Limited Partnerships

Family Limited Partnerships are another way to maximize gifts to family members. Funding investment properties or a closely held business into an LLC or Limited Partnership provides asset protection, management and control mechanisms. In addition, gifts to children or key employees receive the benefit of a substantial discount in value due to lack of marketability and control for a minority interest. For example, a gift by a parent of a partnership interest may have a face value of $40,000, but with an applicable valuation discounts it will fall below the annual exclusion limit of $26,000 per couple.

Annual Exclusive Gifts

Annually, each person is able to make tax-free gifts of up to $13,000 ($26,000 for a married couple) to any number of individuals. This annual exclusion will end on Dec. 31, and taking advantage of this exemption may result in a tremendous holiday gift for the recipient.

Furthermore, taxpayers may want to consider funding 529 plans (an education saving plan) by Dec. 31 to apply 2011 gift tax exclusion to the contributions. Individuals can even “front-load” these plans by making five years’ worth of annual exclusion gifts. As a result, up to $65,000 ($130,000 for a married couple) could be transferred to a 529 plan in 2011 without generating a gift tax.

Charitable and Retirement Planning

In order to obtain an income tax charitable deduction for 2011, gifts must be made by Dec. 31. Individuals over the age of 70 ½ are able to transfer up to $100,000 directly from an IRA to a public charity – this distribution would be free from income tax and would count toward required minimum distribution.

With just weeks remaining in 2011, individuals who have not yet begun the appraisal process should keep in mind that it may take several weeks for a transfer of stock via stock certificate or stock power to be complete. Additionally, gifts of property with a value in excess of $5,000 (other than publicly traded stock) require an appraisal. Contribution to Roth or traditional Individual Retirement Accounts (IRAs) for the current year must be made by April 15, 2012.

Grantor Retained Annuity Trusts

Entering into intra-family loans or establishing Grantor Retained Annuity Trusts (GRATs) can allow individuals to take advantage of the historically low interest rates. GRATs are irrevocable trusts designed to transfer the appreciation in an asset to beneficiaries at a nominal gift tax cost. As of last month, the hurdle rate is at an all-time low of 1.4 percent. Consequently, assets inside the trust need only to grow in excess of 1.4 percent in order to succeed in transferring wealth without incurring estate and gift taxes. Immediate action is advised, as Congress has proposed restricting the ability to use certain short-term GRATs in the near future.

Review Estate Planning Documents

With the recent changes in estate tax law, there has been a significant increase in estate or generation-skipping transfer tax exemptions. A review of all estate-planning documents is highly recommended to ensure that all existing formulas are still applicable.

In addition, for those who live outside of California in a state with an independent death tax, a review of formula allocations in estate-planning documents is also recommended, as the federal estate tax exemption is now significantly greater than most state death tax exemptions.

Most patients have certain expectations when they go to the doctor. They generally expect to see an actual physician. However, the reduction in medical payments from Medi-Care and private insurance has necessitated changes in the usual physician/patient relationship. One change that has created big changes in the relationship has been the use of nurse practitioners.

The nurse practitioner (NP) is a registered nurse who possesses additional education and training in physical diagnosis, psycho-social assessment, and management of health-illness needs in primary health care. The NP has been prepared in a program that conforms to Board standards as specified in California Code of Regulations and Standards of Education.

Primary Health Care

Primary health care is when a consumer makes contact with a health care provider who assumes responsibility and accountability for the continuity of healthcare regardless of the presence or absence of disease. (California Code of Regs., § 1480 (b).) In primary health care, the NP may be the only health professional to see the patient. The NP will employ a combination of nursing and medical functions approved by standardized procedures. The NP must be clinically competent and he or she will possess and exercise the degree of learning, skill, and care ordinarily possessed and exercised by a member of the appropriate discipline in clinical practice. (California Code of Regs., § 1480(c)).

Legal Authority for Practice

The NP acts utilizing standardized procedures to perform medical functions (California Code of Regs.,
§ 1485).   § 2725 of the Nursing Practice Act (NPA) provides authority for nursing functions that are also essential to providing primary health care which do not require standardized procedures. Examples include physical and mental assessment, disease prevention and restorative measures, performance of skin tests and immunization techniques, and withdrawal of blood, as well as authority to initiate emergency procedures. In order to exceed the scope of a RN, they must utilize standardized procedures. Without standardized procedures the NP is legally very vulnerable, regardless of having been certified as a RN, who has acquired additional skills as a certified nurse practitioner.

Certification

Registered nurses who have been certified as NPs by the California Board of Registered Nursing may use the title nurse practitioner and place the letters “R.N., N.P.” after their name. Additionally a NP could be registered with other expertise, including adult nurse practitioner, pediatric nurse practitioner, obstetrical-gynecological nurse practitioner, and family nurse practitioner. (California Code of Regs.,
§ 1481). Since 2008, any new applicant will be required for initial qualification to possess a master’s degree in nursing, a master’s degree in a clinical field related to nursing, or a graduate degree in nursing, and to have satisfactorily completed a nurse practitioner program approved by the board. (Business and Professions Code § 2835.5.)

Furnishing Drugs and Devices

The law also authorizes NPs to obtain and utilize a “furnishing number” to furnish drugs and devices. Furnishing or ordering drugs and devices by the nurse practitioner is defined to mean the act of making a pharmaceutical agent or agents available to the patient in strict accordance with a standardized procedure. Furnishing is carried out according to a standardized procedure. All nurse practitioners who are authorized pursuant to § 2831.1 to furnish or issue drug orders for controlled substances shall register with the United States Drug Enforcement Agency.

Controlled Substances must be furnished under physician and surgeon supervision. Standards are contained at Business & Professions Code § 2836.1. A prescription pad may be used as transmittal order forms as long as they contain the furnisher’s name and furnishing number. Pharmacy law requires the nurse practitioner’s name on the drug and/or device container label. The name of the supervising physician is no longer required on the drug/device container label. (Business & Professions Code
§ 1470 (f).)

Dispensing Medication

Business and Professions Code § 2725.1 allows registered nurses to dispense (hand to a patient) medication upon the valid order of a physician in primary, community, and free clinic. Business and Professions Code § 2725.1 was amended to extend to furnishing nurse practitioner authority to dispense drugs, including controlled substances, pursuant to standardized procedures or protocols in primary, community, and free clinics.

Other Areas Where Nursing Practitioners Work

Through collaboration among administrators and health professionals, including physicians, surgeons and nurses, pursuant to § 2725, standardized procedures may be implemented that authorize a nurse practitioner to do any of the following:

(1) Order durable medical equipment, subject to any limitations set forth in the standardized procedures.

(2) After performance of a physical examination by the nurse practitioner and collaboration with a physician and surgeon, certify disability pursuant to § 2708 of the Unemployment Insurance Code.

(3) For individuals receiving home health services or personal care services, after consultation with the treating physician and surgeon, approve, sign, modify, or add to a plan of treatment or plan of care.

Sign for the Request and Receipt of Pharmaceutical Samples and Devices

Certified furnishing nurse practitioners are authorized to sign for the request and receipt of complimentary samples of dangerous drugs and devices identified in their standardized procedures or protocols that have been approved by the physician. (Business & Professions Code § 4061 [Pharmacy law].)

Treating STDs

§ 120582 of the Health and Safety Code provides:

(a) Not withstanding any other provision of law, a physician and surgeon who diagnoses a sexually transmitted chlamydia, gonorrhea, or other sexually transmitted infection, as determined by the Department of Health Services, in an individual patient may prescribe, dispense, furnish, or otherwise provide a prescription antibiotic drugs to the patient’s sexual partner or partners without examination of that patient’s partners.

(b) A nurse practitioner practicing as a certified nurse-midwife may dispense, furnish, or otherwise provide a prescription antibiotic drug to the sexual partner or partners of a patient with a diagnosed sexually transmitted infection, as determined by the Department of Health Services, without examination of the patient’s sexual partners.

Workers’ Compensation Reports

Labor Code § 3209.10 gives nurse practitioners the ability to cosign a Doctor’s First Report of Occupational Injury or illness for a worker’s compensation claim to receive time off from work for a period not to exceed three (3) calendar days if that authority is included in standardized procedure or protocols. The treating physician is required to sign the report and to make a determination of any temporary disability.

Veterans with Disabilities Parking Placards

The Vehicle Code is amended to include nurse practitioners, nurse midwives and physician assistants as authorized health care professionals that can sign the certificate substantiating the applicant’s disability for the placard. Existing law authorizes the Department of Motor Vehicles to issue placards to persons with disabilities and veteran with disabilities and temporary distinguishing placards to temporary disabled persons, to be used for parking purposes. Prior to issuing the parking placard or temporary placard, the Department of Motor Vehicles requires the submission of a certificate, signed by an authorized health care professional providing a full description substantiating the applicant’s disability, unless the disability is readily observable and uncontested.

Medical Examination School Bus Drivers

Vehicle Code § 12517.2 allows NP to examine school bus drivers for an original or renewal certificate to drive a school bus, school pupil activity bus, youth bus, general public paratransit vehicle, or farm labor vehicle.

Informing Patient: Positive and Negative Aspects of Blood Transfusions

The Health and Safety Code authorizes the nurse practitioner and the nurse-midwife who is authorized to give blood to provide the patient with information by means of a standardized written summary as developed or revised by the State Department of Public Health about the positive and negative aspects of receiving antilogous blood and direct and nondirected homologous blood to volunteers. Previous law required that the need for a blood transfusion be determined in most cases by a physician.

Medi-Cal Billing: Nurse Practitioner Nationally Certified in a Specialty

Welfare and Institutions Code allows that services provided by a certified nurse practitioner shall be covered under Medi-Cal to the extent authorized by federal law, and subject to utilization controls. The department shall permit a nationally certified nurse practitioner to bill Medi-Cal independently for his or her services. If a nationally certified nurse practitioner chooses to bill Medi-Cal independently for his or her service, the department shall make payment directly to the nurse practitioner. For the purposes of this section, “certified” means nationally board certified in a recognized specialty.

Supervision

Supervision of the NP performing an overlapping medical function is addressed in the standardized procedure and may vary from one procedure to another depending upon the judgment of those developing the standardized procedure. As an example, in one women’s clinic the supervision requirement for performing a cervical biopsy was that a physician must be physically present in the facility, immediately available in case of emergency. For all other standardized procedure functions, the supervision requirement was for a clinic physician to be available by phone. The furnishing or ordering of drugs and devices by nurse practitioners occurs under physician and surgeon supervision. Physician and surgeon supervision shall not be construed to require the physical presence of the physician, but does include (1) collaboration on the development of the standardized procedure, (2) approval of the standardized procedure, and (3) availability by telephonic contact at the time the patient is being examined by the nurse practitioner. For furnishing purposes, the physician may supervise a maximum of no more than four (4) NPs at one time. (Business & Professions Code § 2836.1.)

Supervision of Medical Assistants

Nurse Practitioners and Certified Nurse-Midwives may supervise Medical Assistants in “community clinics” or “free clinics” in accord with approved standardized procedures and in accord with those supportive services the Medical Assistant is authorized to perform (Business and Professions Code
§ 2069(a)(1); and Health and Safety Code § 1204(a) & (b).) Examples of violations resulting in citation and fine are using the title “nurse practitioner” without being certified as a NP and failing to have standardized procedures when performing overlapping medical functions. NPs are encouraged to comply with all sections of the NPA to avoid discipline.

The United States Office of Inspector General maintains a list that contains persons and entities that are banned from working for any program which receives federal health care dollars, including most prominently Medicaid or Medicare. If any healthcare provider hires an employee or subcontractor from this list, they can not be paid any federal money, even for work not associated with the employee or subcontractor, and there can be penalties. It doesn’t matter that you had no knowledge about the list or the fact that the person or entity was on the list.

As stated by the OIG: “OIG’s List of Excluded Individuals/Entities (LEIE) provides information to the health care industry, patients and the public regarding individuals and entities currently excluded from participation in Medicare, Medicaid and all other Federal health care programs. Individuals and entities who have been reinstated are removed from the LEIE.”

This Special Advisory Bulletin describes the effect of exclusion.

If a healthcare provider discovers an excluded individual or entity in their midst, they must self report in order to avoid penalties under the anti-kickback statute and the physician self-referral (“Stark”) law.

The moral is: Before you hire an employee or subcontractor, check the list. Make sure that your application for employment and the contract with the subcontractor provides self-disclosures by the individuals and entities if they have ever been on the LEIE and that you have the necessary information to check the list.

Here’s the link: “List of Excluded Individuals and Entities.”