By Reesa Handelsman*
December 23, 2009
Employment Tax Audits of Exempt Hospitals Could Turn Up Other Issues
An employment tax audit of hundreds of exempt organizations, scheduled by the Internal Revenue Service (IRS) to commence in February 2010, could present challenges for nonprofit hospitals and other tax-exempt organizations, according to attorneys. The random examinations called for by the Tax Exempt and Government Entities Division as part of a broader agency-wide initiative will be conducted by experienced and specially trained agents and could pose problems even for those nonprofit hospitals with sophisticated compliance programs because of the complexity of the issues under consideration and the myriad employment relationships many exempt hospitals utilize, they said.
According to the IRS, in addition to reviewing the employment status of individuals who work for or provide services in exempt hospitals and charitable entities, the examinations are designed to address fringe benefits, executive compensation, and employee business expense reimbursement as part of its efforts to gauge compliance with employment tax regulations in the nonprofit sector. A larger, parallel initiative focused on for profit businesses is likely to bring the same audits to at least some for-profit hospitals as well. Many exempt organizations will be participating in an employment tax audit for the first time, which could give some of them the jitters, several practitioners said. Even those nonprofit hospitals that are not audited may feel the effects of those that are because of the way most practitioners said they expect IRS to utilize the information it obtains.
While the IRS is planning to use the information it uncovers to assess compliance at the examined organizations, the service has made no secret of its intention, as with information obtained from exempt organizations in their completed Forms 990, to use the aggregate audit data to inform and focus future compliance initiatives. Practitioners also recommended that nonprofit hospitals conduct an immediate review of their compensation arrangements, worker classifications, and benefits--both fringe and otherwise--to ensure that they are prepared should they receive an audit notice. Those who discover they have misclassified employees or uncover other compensation or benefits problems may want to self-report, they added.
Employment Tax Audits of Exempt Hospitals Could Turn Up Other Issues, Attorneys Warn, BNA'S HEALTH L. REP. (Dec. 23, 2009) (note: registration is required to view this content).
MedImmune Recalls 3,000 H1N1 Vaccine Doses
Drugmaker MedImmune is voluntarily recalling several lots of its H1N1 2009 influenza nasal spray vaccination, the FDA announced. Routine tests performed by the company have indicated that the potency of thirteen lots of its Monovalent Vaccine Live Intranasal has decreased below acceptable levels, according to Norman Baylor, PhD, of the Food and Drug Administration's (FDA's) Center for Biologics Evaluation and Research.
Patients who were innoculated in October or November with vaccine from those lots are not at risk of losing the vaccine's full protective benefits, he added, and revaccination is deemed unnecessary at this time. He added that there are no safety concerns related to the recall.
"These are biologics, made from living organisms, so it's not abnormal to see vaccines decrease in potency before the end of their expiration," Baylor said. The recall affects about 3,000 remaining doses of the vaccine in the possession of distributors, and potentially more in the offices of clinicians and other healthcare providers. Baylor said the company will be sending notification letters to these parties.
Initially, 4.7 million doses in these lots were distributed, but most were shipped in October and November, when potency was acceptable. MedImmune recommends that all lots marked with an expiration date between January 19, 2010, and January 26, 2010, not be used. The decreased potency was discovered during routine quality control testing, which Baylor said MedImmune performs on a weekly basis.
Last week, sanofi-aventis voluntarily recalled four lots of vaccine as a result of lost potency. Baylor said both the FDA and the companies are looking into the issue of lost potency among H1N1 2009 flu vaccines. Their typical shelf life is eighteen weeks.
Kristina Fiore, MedImmune Recalls 3,000 H1N1 Vaccine Doses, MedPage Today (Dec. 22, 2009).
Senate Healthcare Bill Clears Latest Hurdle
Sweeping healthcare legislation continued its methodical plod through the Senate, clearing a number of procedural hurdles Tuesday morning and staying on a course that could see it pass on Christmas Eve. The series of three votes, all needed to navigate the legislation past Senate procedure and Republican roadblocks, passed 60-39, with no Republicans voting in favor. The next set of votes on the reform package is slated for this afternoon (Wednesday), allowing for a vote on the legislation's final passage on Thursday, scheduled for 8:00 am EST.
With passage of the bill in little doubt, Republicans for the second straight day plan to meet to discuss the legislative schedule for the balance of the year. One option could have them break off their debate on healthcare reform and move more quickly to a must-pass bill that would raise the federal government's debt ceiling. But many Republicans have made a great show of stalling the reform package and few want to cut the debate short. "The flight that I have is Christmas morning, and I don't plan on changing that reservation," Sen. Bob Corker (R-TN) said.
"I think everybody is prepared to stay," Sen. Olympia Snowe (R-ME) said, adding with a smile, "Except if some miracle takes place."
Matthew DoBias, Senate healthcare bill clears latest hurdle, Modern Healthcare's Daily Dose (Dec. 22, 2009) (note: registration is required to view this content).
Joint Commission Seeks Comments on Revised Medical Staff Standard
On December 17, The Joint Commission issued for comment revised medical staff standard MS.01.01.01 (formerly MS.1.20) after making changes intended to allay widespread concerns raised by industry about the impact on relationships between hospital leadership and medical staff. Comments on the new standard are due January 28, 2010, The Joint Commission said.
In 2007, The Joint Commission Board suspended a previous revision to the standard (MS.1.20) after hospitals and physicians raised numerous concerns, including the role of the medical executive committee and criticisms that the standard required too many details to be put into medical staff bylaws. In December 2007, The Joint Commission established an eighteen-member task force to gather feedback from the field on redrafting the standard, including representatives of the American Hospital Association (AHA) and the American Medical Association. "Having a good working relationship between the governing board and the medical staff is essential to quality improvement, and the purpose of this Joint Commission standard is to articulate essential ingredients for such a relationship," said Tucker Bonner, an AHA representative on the task force.
According to a frequently asked questions (FAQ) document posted on The Joint Commission website on December 17, the revised draft provides more flexibility for governing bodies and medical staffs to determine what will be placed in the medical staff bylaws and what will be placed in other documents. "The working draft also provides for notification by the medical staff to the medical executive committee (MEC) when it wishes to propose a change to a rule, regulation, or policy directly to the governing body," the FAQ said. At the same time, the MEC must provide notice to the medical staff concerning proposed changes to rules or regulations. The proposed standard also calls for a process to manage conflict that might occur.
As for concerns that the new MS.01.01.01 will require time-consuming and costly revisions of medical staff bylaws, The Joint Commission said it "does not believe that this will be the case." "For those medical staffs and governing bodies who have engaged in robust discussion regarding what is to be placed in medical staff bylaws, rules and regulations, and policies, there is no need to totally revise their medical staff bylaws," the FAQ said. "Given the proposed flexibility provided for in the draft standard, a limited amount of revision is all that may be needed. In some cases, no revisions will be required."
Joint Commission Seeks Comments On Revised Medical Staff Standard, BNA'S HEALTH L. REP. (Dec. 23, 2009) (note: registration is required to view this content).
*We would like to thank Reesa N. Handelsman, Esquire (Hall Render Killian Heath & Lyman PLLC, Troy, MI), for providing this week's update.
AHLA Teaching Hospital Updates are intended to provide quick summaries of cutting-edge issues of interest to teaching hospitals and their counsel. Additional information and more in-depth coverage on these topics may be available from AHLA Health Lawyers Weekly and appropriate AHLA Practice Groups.