status. (See “TMLT Education for Policy- holders,” below.) “The more precise the documentation, the more valuable it is,” Mr. Bragg said.
Guidance has some benefits Mr. McClendon says the attorney gen- eral’s guidance does help in some ways. If, for example, a physician needs a drug or medical device from a distributor in Texas, “it appears relatively simple to de- termine the distributor’s licensure status through contacting DSHS.” Mr. Bragg says one of the primary benefits of the state’s guidance is that it removes the burden of proof from physi- cians who use a drug or medical device purchased by a third party, such as a hospital. The attorney general’s guid- ance says the hospital or outpatient fa- cility must verify authorization. The guidance warns, however, that a physician commits a violation if he or she knows a drug or medical device is unauthorized and uses it anyway. If a physician becomes aware a hospital or outpatient facility is using unauthorized drugs or medical devices, the guidance says he or she “should take immediate action, documented in writing, to notify the hospital facility of the unauthorized drug or medical device.” Mr. Bragg says the attorney general also gives physicians notice of alleged violations and allows them 30 days to respond or correct a deficiency, based on the facts of the case.
Both attorneys say there are provi- sions in the attorney general’s guid- ance that benefit physicians who may unknowingly purchase a drug or medi- cal device from a distributor lacking a license or selling unapproved products. The attorney general will evaluate physicians’ compliance based on their good-faith efforts to follow the state’s guidance. Donald P. “Rocky” Wilcox, JD, TMA’s general counsel, says the attorney gener- al’s office adopted a more moderate posi- tion as a result of TMA’s efforts. “How- ever, that position still requires diligence for those purchasing drugs or medical devices for their patients to ensure that these items are being sold through law- ful channels,” he said.
TMLT enhances Medefense coverage
All Texas Medical Liability Trust (TMLT) policies covering individual physicians include the Medefense endorsement, which provides reimbursement for legal and tax audit expenses for disciplinary proceedings.
The endorsement covers:
• Review actions by the Texas Medical Board (TMB);
• Hospital actions regarding clinical privileges;
• Actions by the Texas Department of State Health Services or the U.S. Department of Health and Human Services;
• Noncompliance with Medicare/Med- icaid regulations, including the Re- covery Audit Contractor Program;
• Proceedings alleging violations of EM- TALA, HIPAA, or Stark laws; and
• Federal tax audits.
In 2011, TMLT enhanced the Medefense endorsement to cover pay- ment of civil fines and penalties associat- ed with disciplinary proceedings. It also increased Medefense limits to $50,000 per insured event with an annual aggre- gate limit of $100,000 per policy period. Medefense benefits are subject to a
$1,000 deductible. After the deductible, the physician pays 10 percent of the le- gal expenses as coinsurance. TMLT will waive the deductible and coinsurance and pay legal expenses directly if you hire an attorney from a panel it provides. The coverage for tax audits is limited to a $5,000 maximum reimbursement.
TMLT education for policyholders
Last year, the Texas Medical Liability Trust (TMLT) alerted its policyholders to the attorney general’s actions against physi- cians who purchase products from unlicensed distributors and to the presence of misbranded drugs on the market. (See “Drug and Device Safety — Monitoring and Use of Safety Information” at
www.tmlt.org/files/PDFs/Reporter/2011_Volume4.pdf.) To educate policyholders on the topic, TMLT offers “Buyer
Beware! Physicians Targeted for Use of Unapproved Drugs & Devices” for 1 AMA PRA Category 1 CreditTM
in ethics. The live
presentation by Jay Henderson, JD, informs physicians about applicable state and federal laws, outlines risk management considerations, and provides resources to guide them in pur- chasing drugs and medical devices. For more information on programs for policyholder groups,
contact the TMLT Risk Management Department at (800) 580- 8658.
June 2012 TEXAS MEDICINE 45
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