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We publish a quarterly newsletter to update clients on legal and firm developments.  The newsletter is written by Bruce and devoted to topics in mental healthcare and health law.  Back issues of the newsletter from the past three years are reprinted here, the most recent first.  Information in the newsletter is not legal advice for any particular client or matter.  Consult with an attorney individually for legal advice tailored to your legal needs and situation.  All newsletters are copyrighted.


Requirement of continuing education on boundaries for psychotherapists. The New York State Board of Regents will soon consider and likely approve a requirement that all psychologists, social workers and mental health practitioners (LMHC’s, LMFT’s, LCAT’s and LP’s) complete three hours of continuing education credits on issues related to maintaining appropriate boundaries with patients and clients. The Board believes that although, "professional education programs ... include overviews of professional ethics that underlie those professions and discussions about transference and countertransference, licensees may be faced with real world challenges when engaged in practice that go beyond those covered by these educational requirements. Newly licensed and experienced professionals may blur the boundaries that separate the professional from the personal." Examples given by the Board include clinicians leaving multiple inappropriate voicemail messages, sending "inappropriate text messages ... causing patients to think that the licensee and patient were friends," and leaving text messages for patients "which were not therapy related." 

It has indeed been my experience that psychotherapists are sometimes uncertain about maintaining boundaries with patients when using social media and messaging, especially given the expectations of some younger patients. I guess it is the hope of the Board that an educational approach may be ameliorative in such circumstances. On the other hand, it has been my experience as a defense attorney that it is not a lack of knowledge that causes most sexual boundary violations and other exploitative dual relationships.

May a psychotherapist have a sliding fee scale by which different patients pay different fees for the same service? This is a question commonly asked, and not one that lends itself to a simple answer, though I guess an answer would be, "Yes, but only if certain conditions are met." New York State insurance regulators have opined with regard to an aspect of this issue, which is sometimes called the issue of "dual fee scheduling," that practitioners may not "charge uninsured patients lower rates than ... charge(d)... insured patients for the same services..." because "the charging of lower rates to non-insureds or to patients who pay by cash may suggest that the ... usual and customary rate is not being accurately reported to the insurer,... which may be in violation of NY Penal Law 176.05" (Insurance Fraud). See NYS DFS Opinion, December 10, 2000.

But does that mean that a practitioner may not set different fees for different patients that are in part based on patients’ insurance coverage? In my opinion, therapists may set different fees in part based on insurance coverage. But the differential should be based not just on insurance coverage, but rather should be part of an objective scale that includes other criteria for calculating a fee for a given patient such as family size, earnings, debt and wealth, health, and other necessary expenses. Another way to ensure that your sliding fee scale would not be considered fraudulent would be if your basic fee, that is, the fee that "slides" up or down given patients’ particular circumstances is also the average fee that you charge all patients.

Notwithstanding the above, waiving or forgiving deductible or co-payments should be avoided, as doing so might well be considered fraudulent by out of network insurers. Whatever fee is stated on a bill given to a patient or on a claim submitted to an out of network insurer should be the fee that the practitioner uses his or her customary good faith efforts to collect in full. Use of a collection agency, or suing for unpaid fees is not required however, as long as your collection practices are consistent across all patients, those who pay on a sliding scale and those who pay the basic fee.

Federal telehealth flexibility extended. In the Federal omnibus spending bill signed in March, Congress extended Medicare telehealth reimbursement waivers related to the COVID-19 Public Health Emergency (PHE) to July 15, 2022. They may be extended even further if the PHE continues. The waivers include that telehealth services: may be delivered to patients wherever they are, including at their homes (previously they had to be at clinics); may be audio only (previously they had to be audio-visual); and need not include an in-person visit within 6 months of the beginning of treatment, and annual in-person visits thereafter. In addition, Congress is considering the Telehealth Extension and Evaluation Act that may make the above flexibilities permanent.

Progress in interstate practice. New York State has just introduced legislation to join PsyPact allowing participating psychologists to practice in all the states, currently 33, that have joined the Pact. Senate Bill 2394 Last year the Department of Defense issued a grant to the Council of State Governments (CSG) and the NASW to develop an interstate licensure compact for social workers. The CSG began drafting model legislation in April 2022. Nine states have signed the Interstate Counseling Compact (for licensed mental health counselors) into law, but so far New York has not indicated any interest in joining.

New York City postpones enforcement of its salary transparency law. Last year the City passed the law that was to have taken effect on May 15, 2022, but that date has been changed to November 1, 2022. On that date it will be required of all employers of four or more employees located in New York City that in advertising for both employees and contractors, they state the minimum and maximum compensation range, annually or hourly, for the position, and the range "must extend from the lowest to the highest salary the employer in good faith believes at the time of the posting it would pay for the advertised job..." The is no monetary penalty for a first violation as long as the employer corrects it within 30 days.

Changes in the new DSM-5-TR. Not much has changed in the revision, at least not much that affects diagnosis or getting paid for treatment Most changes are in terminology. One new diagnosis has been added, in the category of "Trauma and Stressor Related Disorders," i.e., "Prolonged Grief Disorder, F43.8." From commentary, it appears to be a controversial change as it is interpreted by some as further pathologizing grief. There are some new codes for self-destructive behaviors that do not meet criteria for an official diagnosis, but that may enhance the precision of, and possible likelihood of reimbursement for, official diagnoses, for example "Suicidal Behavior" as a behavior that accompanies a diagnosis of a depressive disorder, or "Non-Suicidal Self-Injury" as behavior, e.g., cutting, that accompanies a diagnosis of a personality disorder.

HEALTH LAW SUPPLEMENT          Spring 2022, #80

Termination of the “agency exemption” in New York State and possible expansion of the scope of licensure of certain mental health practitioners.   Licensed mental health practitioners, a statutorily defined category of masters level clinicians that includes mental health counselors, marriage and family therapists, creative arts therapists and psychoanalysts are not licensed to diagnose mental and emotional disorders. Education Law Sections 8402-8405.  Rather, in a distinction with symbolic significance but without much general practical difference, their scope of licensure allows them to “assess” and “evaluate” most such disorders, including using DSM and ICD criteria in making their assessments.  An exception is “severe mental illnesses” as defined by State statute ( Education Law Section 8407.1); that law restricts mental health practitioners from treating the severely mentally ill without first consulting with a physician.  In contrast to mental health practitioners, licensed clinical social workers and psychologists (as well as nurse practitioners in psychiatry and psychiatrists of course) have within their scopes of licensure the capability of diagnosing and treating all mental and emotional disorders with verbal and behavioral interventions. Unlicensed persons may not diagnose or treat such disorders unless they are otherwise “authorized” to do so under supervision; that authorization extends only to limited permit holders and student interns.

            However, the above limitations regarding diagnosis and treatment that are imposed on mental health practitioners and the above prohibitions placed on unauthorized unlicensed persons in private practice settings have not been imposed at “exempt settings,” that is programs operated, regulated, funded, or approved by the Department of Mental Hygiene (OMH, OPWDD & OASAS), Department of Health, Office of Children and Family Services and some other State agencies.  At such settings, currently, mental health practitioners may diagnose and treat all mental and emotional disorders and so may unlicensed unauthorized persons, though those in the latter category must be supervised by licensed personnel, 14 NYCRR 599.9.

            Exempt settings and their representatives have argued that their exemption is necessary because without it they would be unable to staff and fund their programs and would suffer a “workforce crisis,” e.g., see the website of The Coalition for Behavioral Health. Professional associations have generally taken the opposite position, arguing that “it is discriminatory to provide two tiers of mental health services determined by whether it is a state funded program or reimbursed through private pay.”  Website of the New York Society for Clinical Social Work, Legislative News.

            The “agency exemption” was first passed in 2002, and was meant to be temporary.  Nevertheless, it has been extended without interruption since then, most recently by Chapter 159 of the Laws of 2021.  However, the extension is scheduled to expire on June 24, 2022.  Starting then, as it is in private practice settings, an individual will need to be licensed or authorized in order to be employed in a State program and will be limited by the scope of their licensure.  The loss by State programs of their exemption will not affect individuals who were hired prior to June 24, 2022 and who will be allowed to continue in employment at such programs.

            A response to the termination of the agency exemption has been the introduction in the New York State legislature of bills to expand the scope of licensure of three types of mental health practitioners, LMHC’s, LMFT’s and LP’s, (for some reason, LCAT’s are excluded) to include the specific ability to “diagnose and to develop assessment-based treatment plans” once they take twelve credit hours of continuing education in those topics or provide evidence of having conducted such activities at State programs previously, See A.6008-A/S5301-A.  

Expansion of the scope of practice of licensed behavior analysts (LBA’s) in New York State .  Heretofore, licensed behavior analysts were permitted to provide their services only to “persons with autism and  autism  spectrum  disorders  and  related disorders.” (ASD’s) NY Education Law Section 8802.  Also under that law, LBA’s could provide their services only “pursuant to a diagnosis and prescription... from a person who is licensed or otherwise authorized to provide such  diagnosis and prescription pursuant to a profession enumerated in this title...” Persons licensed to provide such diagnosis include physicians, nurse practitioners, clinical social workers and psychologists.

            On December 31, 2021, Governor Hochul signed a bill significantly expanding the scope of practice of LBA’s.  Now LBA’s may provide their services to all “individuals with behavioral health conditions that appear in the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders published by the American Psychiatric Association...” not just to those with ASD’s. New York State Bill A3523/S1662.   The new law also added a new requirement that LBA’s consult annually with the diagnostician/prescriber of their services, i.e., “licensed behavior analysts providing services pursuant to a prescription or order... shall provide a report at least annually regarding the status of the  individual served to the licensed person prescribing or ordering such service or more  frequently, if needed, in order to report significant changes in the condition of the individual.” (ibid).  The new law takes effect in June 2023.

Is an in-person visit currently necessary before prescribing a controlled substance in New York State?    As of now, under federal regulations there continues to be a national public health emergency caused by COVID, see https://aspr.hhs.gov/legal/PHE/Pages/COVID19-14Jan2022.aspx  That emergency preempts the requirement of the federal Ryan-Haight Act that an in-person visit is necessary prior to a physician or other prescriber prescribing a controlled substance, see "Telemedicine" at https://www.deadiversion.usdoj.gov/coronavirus.html .  A federal bill has been introduced that would extend the waiver of the Ryan-Haight Act another two years, the Telemedicine  Extension and Evaluation Act.

            However, a  regulator at the New York State Bureau of Narcotic Enforcement recently informed me that it is the Bureau’s opinion that the State has never waived its requirement of such a preliminary in-person examination.  The regulator cited 10 NYCRR 80.63, which in pertinent part at  (d)(1) reads “No controlled substance prescription shall be issued prior to the examination of the patient by the practitioner except as otherwise permitted by this subdivision,” and at (d)(4) “A practitioner may prescribe a controlled substance to his or her patient after review of the patient's record if the record contains the result of an examination performed by a consulting physician or hospital and such record warrants the prescribing.”  Apparently the Bureau reads “examination” as necessarily being in-person.  In my experience, many psychiatrists are ignorant of this interpretation by State regulators.

HEALTH LAW SUPPLEMENT Winter 2021-22, #79

Remaining Emergency Regulations in New York State.  Most COVID emergency regulations that were promulgated in March 2020 by then Governor Cuomo that changed, usually by relaxing, licensure and related requirements for professionals, expired on June 25, 2021.  Some changes have been continued or re-issued though.  Clinical experience and supervision requirements imposed on permit holders and other supervisees in social work and the mental health professions (those professions  include mental health counselors, marriage and family therapists, creative arts therapists and psychoanalysts) that prior to the pandemic were required to be in-person may continue through remote means, i.e.. characterized by NYSED as using “distance technology.”   See FAQ 20 at  http://www.op.nysed.gov/COVID-19FAQS.html.  The same appears to be true for limited permit psychologists and behavior analysts but the guidance is less clear, see FAQ’s 44, 45, 46 at the above, seeming to state a “don’t ask, don’t tell” policy of the licensing boards for those professions.  Executive Order No 4 issued on September 27, 2021 allows physicians, nurse practitioners, and social workers (and some other physical healthcare professionals) licensed in other states to practice in New York due to continued staffing shortages. Apparently there is no shortage of psychologists, mental health professions (as defined above) or licensed behavior analysts, as out of state licensees in those professions are no longer permitted to practice in New York without first obtaining licensure here.

Confusion regarding telehealth for Connecticut residents by out of State licensees. As New York State did during the pandemic, so Connecticut did as well, allowing out of State licensed healthcare professionals to practice in Connecticut.  Apparently the outcome of this relaxation was a success because on May 11, 2021, pursuant to an order signed by Governor Ned Lamont, Connecticut announced that though June 30, 2023, “Section 5(b) of Executive Order 7G allows a clinician licensed in another state to treat someone in CT through telehealth without getting licensed in CT.”  See https://portal.ct.gov/Coronavirus/Covid-19-Knowledge-Base/Telehealth Thus it appeared that the relevant emergency regulation permitting out of state licensees to practice in CT that was scheduled to expire on July 20, 2021 would be extended for two years.  But apparently the Governor neglected to consult with the Commissioner of Public Health because more recent guidance from CT indicates that the Commissioner of Public Health has not issued an order that is necessary for the Governor’s Executive Order to be effected.  I guess this will be clarified shortly.  It may just represent a lag between the Governor’s office and regulators or perhaps ongoing tension about the extent of governors’ emergency powers.

Progress in interstate practice.  When we have represented licensed professionals (almost all psychotherapists) accused of practicing in a state in which they are not licensed, the rationale given by regulators for the prosecution (always civil, not criminal, in my experience) is that their state’s citizens need recourse to their state’s licensing boards and courts in order to be protected from professional misconduct, incompetence and negligence, and that such recourse is lacking when a professional treating them is only licensed and has an office in another state, not their state. For example, neither a licensing board in California, nor courts in that State, have jurisdiction over a therapist licensed only in New York State who treats a California resident by telehealth.  Some states have recently resolved this issue by requiring registration with their licensing boards and the appointment of a registered agent by out of state licensees, and with such registration and appointment, allowing out of state licensees to practice telehealth in their states without obtaining full licensure there.  Such registration and retaining of a registered agent subjects the out of state licensee to the jurisdiction of the licensing board and courts of the state in which they are thereby permitted to practice.  Florida, Arizona and West Virginia have recently taken such action, the former two including as a reason for the change that they wish to accommodate their snowbirds by allowing them access to their healthcare providers in their home states while they winter in warmer climes. See https://flboardofmedicine.gov/licensing/out-of-state-telehealth-provider-registration/ https://azgovernor.gov/governor/news/2021/05/governor-ducey-signs-legislation-dramatically-expand-telehealth and https://code.wvlegislature.gov/30-1-26/

And so has New Jersey begun an experiment in interstate practice.  Somewhat similar to the above three states, New Jersey has recently implemented a policy of apparently allowing out of state licensed professional entities to practice telehealth in NJ if they register in NJ and appoint a registered agent there.  The particulars of the policy are a bit unclear however. The fee required by NJ for registration there is more expensive than elsewhere, $1500 annually, and there is a deadline for registration, January 3, 2022. The reason for the deadline is unstated; it was extended once and may be again.  See https://dohlicensing.nj.gov/telehealthtelemedicine/

New York City expands the Fair Chance Act (FCA).  The FCA limits the type of inquiries that employers can make regarding criminal history during the hiring process. Changes in it took effect on July 29, 2021 that expand the protection afforded to job applicants.  Now, employers are required to conduct background checks in a piecemeal fashion.  Initially when employers assess a candidate’s qualifications, the employer may not undertake any review of criminal history.  Then depending on the outcome of that assessment, the employer may make a conditional offer of employment to the applicant.  Only after a conditional offer is made may a check of criminal history be conducted.  The conditional offer may then be rescinded only if there is a direct conflict between the applicant’s criminal history and the prospective job, or if employing the applicant would present an unreasonable risk to property or persons.

It should be noted that professional misconduct for licensed professionals in New York State includes conviction of a misdemeanor or felony, New York State Education Law §6530 (9)(a), and that the New York State Board of Regents publishes on its website a listing of all professionals who have been sanctioned since 1994. Thus  a review of a licensees professional status and disciplinary history will reveal any recent criminal convictions, see http://www.op.nysed.gov/opd/rasearch.htm

Required disclosure under the new federal “No Surprises Act.  Although effective January 1, 2022, it may take a while (a couple of months) before enough is known and disseminated about the interaction between mental health practice and the NSA in order for definitive advice to be given.  In the meantime, in my opinion, practitioners should give at the outset of therapy (immediately for current patients) a written notice on their letterhead to each of their (a) uninsured self-pay patients and (b) out of network patients who are effectively self-pay, that is who intend not to submit claims to their insurers, with the following information on that notice (1) the patient’s name, diagnosis (TBD may suffice), and proposed type of treatment, e.g., individual psychotherapy (2) the fee per session, (3) the frequency of sessions, (4) the total estimated length of treatment and (5) the total estimated cost of treatment.  It may be best to err on the side of lengthier estimates.  Ranges may be acceptable.  Estimates should be revised annually but new ones given to patients before exceeding the estimates, and especially before the total estimated cost is exceeded.   Patients should be told, preferably in writing, that the fee per session is subject to change and that because of individual differences in responses to mental health treatment among patients, frequency and length of treatment, and hence the total estimated cost are really just educated guesses at a point in time, and might change significantly over the course of treatment. The current form recommended by CMS is at https://www.cms.gov/regulations-and-guidancelegislationpaperworkreductionactof1995pra-listing/cms-10791 The NASW has tried to adapt the form for psychotherapy practice, see  http://www.socialworkblog.org/wp-content/uploads/Model-Good-Faith-Estimate.pdf 

HEALTH LAW SUPPLEMENT          Autumn 2021, #78

 The possible expansion of telehealth in New York.

            Bills are pending in the State legislature that would mandate that all insurers permit beneficiaries to use out of network benefits for telehealth (not just in-network benefits as is currently the case), and  that telehealth services be reimbursed at the same rate and to the same extent as in-person services, (S5505, A6256).  The New York Health Plan Association opposes the bills on the basis that the use of technology should benefit consumers through lowering costs, and that mandatory and equivalent coverage for telehealth would represent “... a revenue maximizing opportunity for providers, which could incentivize unnecessary care and services.”  NYHPA, Memorandum in Opposition May 8, 2021.

            It appears that with the exception of the expansion of PSYPACT for psychologists, with which New York has chosen not to participate, interstate licensure restrictions will return as the pandemic ends. Relaxed policies enacted in many States during the pandemic have largely expired.  Locally, Connecticut is an exception having extended until June 2023 its allowance for out of State licensees to practice telethealth there.  Florida remains in the vanguard, with a telehealth license predating the pandemic that allows registered out of State licensees to practice telehealth there.

Parity law enforcement in New York.

            United Healthcare, United Behavioral Health and Oxford have agreed to pay $15.6 million to settle allegations that they violated the federal and New York State mental health parity laws.  The allegations included that the companies (I) reduced reimbursement rates for out of network non-physician mental health providers by 25-35% without imposing the same cuts on physical healthcare providers, and (ii) audited mental health providers in a manner that was “broader and more aggressive” than programs for reviewing medical and surgical benefits.  Part of the settlement agreement requires United to cease issuing denials for coverage of psychotherapy benefits in New York State until 2023.

New employer mandates for COVID safety plans. 

            Effective August 5, 2021, the State Commissioner of Health designated COVID-19 a highly contagious communicable disease that presents a serious risk of harm to the public health under New York State's HERO (Health and Essential Rights ) Act, which requires all employers to implement workplace safety plans in the event of an airborne infectious disease to prevent workplace infections. The NY HERO Act mandates extensive new workplace health and safety protections in response to the COVID-19 pandemic. Under the law, all employers are required to adopt a workplace safety plan, and implement it. Employers can adopt a model safety plan as crafted by the New York State Department of Labor, or develop their own safety plan in compliance with HERO Act standards.  See https://dol.ny.gov/ny-hero-act for the model plan. Of note is that the Act applies to employers of any size and also to employers who retain only independent contractors (1099's) and not formally designated W-2 “employees.”


ESA (Emotional Support Animal) certifying letters.

           It is generally considered by ethics committees to be a dual relationship for a psychotherapist to evaluate a patient, purportedly objectively (therapists are assumed to have a positive bias), for an ESA.  Due to that ethical issue, most ethics committees recommend that therapists decline requests by patients for ESA letters and instead refer patients to an independent objective mental health evaluator.  However, some airlines and landlords require that the person requesting an ESA be under the care of a mental health professional, and that it be that treating professional who certifies them for an ESA, so patients can be caught in a bind.

            Practically speaking, patients, who are the only ones with standing to do so, have no motivation to complain if their therapists do certify them for an ESA, and I have never had to defend a therapist against an allegation of a boundary violation in such circumstances, although I believe a great many of them do certify ESA's for patients.  I guess that some therapists certify patients for an ESA because it's the path of least resistance with little risk of any repercussions.

            A couple of definitional issues of which to be aware if considering whether to certify a patient for an ESA are (1) The patient should meet the definition of “disabled” under the Americans with Disabilities Act, under which a disability is defined as not just a diagnosable illness, but rather in addition to a diagnosed illness, a related and accompanying physical or mental impairment that substantially limits a major life activity.  Many diagnosed mental or emotional disorders do not limit a major life activity. Some major life activities that may be related to mental health conditions are caring for oneself, eating, sleeping, learning, reading, concentrating, thinking, communicating, and working; an ESA helps to alleviate the disability associated with the diagnosis, and (2) An ESA is not a “Service Animal,” with that term being limited to animals, almost always dogs, belonging to a patient where the dog  (for patients with psychiatric diagnoses, the animal is usually called a “Psychiatric Service Animal”) has been individually and specifically trained to perform tasks that assist the disabled individual to detect the onset of psychiatric episodes and lessen their effects, e.g., tasks performed by psychiatric service animals may include reminding the patient to take medicine, providing safety checks or room searches, turning on lights for patients with PTSD, interrupting self-mutilation by persons with dissociative identity disorders, and keeping disoriented individuals from danger.

            The only negative outcome I have seen is when as a result of certifying an ESA for a tenant, a clinician is then subpoenaed as a witness by a landlord who contests the necessity for the animal.  In such situations, you would want there to be some supporting research and/or theory for you to have approved the ESA for that particular patient with his or her particular diagnosis.  You also might wish to have in place an agreement with the patient regarding terms and conditions should you become involved in any consequent legal proceeding.


Cyberattacks and insurance. Clients are asking about the advisability of purchasing cyberinsurance policies or endorsements. Professional liability (malpractice) coverage protects against data breaches that result in malpractice claims by injured patients, but they provide no protection for cybersecurity lapses that do not trigger malpractice claims. According to the Cybersecurity and Infrastructure Security Agency, 91 healthcare providers suffered cyberattacks in 2020, up from 50 in 2019. In 2020, 20 billion dollars was lost in the healthcare industry due to downtime caused by ransomware attacks. Attacks are generally against large healthcare centers and not private practices. Medical devices such as x-ray machines and defibrillators are often a point of entry for hackers because they are generally less secure than the systems that store patient records.

Attacks are typically precipitated by: phishing emails that contain a malicious attachment; clicking on malicious links; and viewing ads that contain malware. Some believe that the recent increase in attacks is in part due to increased vulnerability from providers accessing data remotely while working on unprotected systems during the COVID pandemic.

Attackers usually link unwitting users to their websites by using an address that looks familiar such as Microsoft or Google, but is actually the scammer's site. Such scams can be avoided by carefully examining URL’s, or website addresses. URL’s should be read from right to left because it is the right side that contains information about where the website originates, and whether or not it's actually what it appears to be. It's a good idea to avoid clicking links from email, and instead to type out the web address whenever possible. Backing up data locally is a means of minimizing the impact of a cyberattack because then data remains accessible even after the attack. Cloud backups do the same, but downloads may be more time-consuming and costly.

Cyberinsurance coverage for attacks may be worth the additional expense but usually comes with conditions and limitations. It typically provides coverage for costs only after the insured notifies the insurer of the attack. Insurers may require notification of law enforcement, and pre-approval of any ransom paid.

New York’s telehealth law now includes audio-only communication. Since 2015, New York State has had a telehealth law that mandates that insurers provide in-network coverage for services rendered by telehealth if that same service would be covered if rendered in-person. NY Public Health Law Article 29G. New York Bill S.8416/A.10404 passed in 2020 changes the definition of telehealth to include audio-only.

The sponsors of the bill wrote: “In response to the COVID-19 pandemic, telemedicine is again at the forefront of the healthcare landscape. As the crisis transforms - and often mandates - changes to the way the medical community interacts with patients and caregivers, both video and audio telemedicine have become integral components of the delivery of care. The law currently mandates that use of telemedicine include both audio and video services. However, we must recognize that many vulnerable residents in our under-served communities may not have access to video-enabled devices. This bill will amend the current law to allow the use of audio-only telemedicine services in order to ensure that patients in every corner of New York State have the ability to access care and speak with a medical professional remotely.”

The new law leaves New York providers in a quandary regarding CPT coding of their audio-only telehealth services. AMA CPT coding requires specific designation of telehealth by the use of modifiers, either “95" or “GT” after the ordinary code for the service if it were rendered in person. But, as defined in the CPT, those two modifiers are for use only for services “rendered via a real-time interactive audio and video telecommunications system.” For now, it seems that different insurance companies are giving different instructions to practitioners about how to acceptably code audio-only sessions, so it’s best to ask insurers about coding.

Should I bill for a consultation when I don’t then offer treatment? Probably not in my opinion. After initial consultation, a health care practitioner is free to decline to offer treatment to a prospective patient and in doing so prevent the creation of a therapist-patient relationship. Because in such cases there is no therapist-patient relationship created, the practitioner has no duty to support continuity of care, i.e., no obligation not to abandon. In a relationship that involves consultation only, neither is there any obligation to offer referrals, although many practitioners do offer them in such circumstances. While there is nothing improper about billing for only a consultation as long as the practitioner clearly describes the fee as being only for such, billing for services in general is considered one indication of the creation of a therapist-patient relationship. In addition, I have noticed that when therapists charge prospective patients a fee for a consultation which does not eventuate in an offer of treatment by the therapist, patients often feel aggrieved and may complain to a licensing board about perceived misrepresentation, incompetence or of a “bait and switch” tactic by the therapist. They may also post negative comments online. Not charging seems largely to avoid those outcomes. Adopting such a policy however, puts greater stress on the initial telephone contact to screen out inappropriate prospective patients.

Risk management and boundaries. I guess that I’m preaching to the choir in addressing this issue with those who read this newsletter, but I continue to defend a significant number of psychotherapists alleged to have violated boundaries, where I believe that the allegations might have been prevented had certain risk management strategies been used.

At the outset of treatment when the therapeutic contract is made, it is advisable to inform certain patients of the boundaries of the therapeutic relationship in order to disabuse them of expectations that are of a personal rather than professional relationship. With certain exceptions, e.g., exposure therapies, perhaps some adolescent patients, restrict meetings with patients to in-office or videoconference sessions; for the latter, locate yourself and ensure the patient is located in a private setting. Don’t promise what you cannot deliver in terms of availability and support, e.g., “I’ll always be there for you;” there will inevitably be times when you are unavailable to the patient and times when you will be perceived as unsupportive. Self-disclose only when it’s for a legitimate and specific therapeutic purpose; usually requests by patients for personal information about therapists should first be met with re-direction to the meaning of the inquiry. Don’t discuss other patients with any identifiable details and as with self-disclosure, only with accepted and specific therapeutic purpose. Don’t use terms that may cause patients to misunderstand the therapist-patient relationship, i.e., no terms of endearment, no signing correspondence with “love.” Don’t hug or kiss patients even if you think the contact will be understood as platonic, and especially don’t if a patient requests it. Don’t accept gifts except perhaps infrequently and of small value. (The prior two caveats may be relaxed in therapy with children.) If you believe patients may have misunderstood the boundaries of the therapeutic relationship, then consult with a colleague about the appropriateness of continuing with therapy, and if you haven’t already, carefully document your assessment and handling of a patient’s issues with the maintenance of boundaries. In long term treatment especially, document patients’ progress to avoid allegations that treatment is primarily self-serving to the therapist, a fostering of dependency, rather than focused on patients’ progressing, even if slowly, toward stated treatment goals.


The new federal prohibition on "information blocking. "Beginning April 5, 2021, a portion of the federal "21st Century Cures Act," Section 4004, called "Interoperability, Information Blocking and ONC Health IT Certification," will require that health care providers, including private practitioners who maintain electronic health records (EHR) provide access electronically to patients to all of their healthcare information. The law applies only to EHR, not to paper records or to practitioners who maintain only paper records. Previously, patients who wanted access to their EHR records had to request a copy in writing and then wait 10 days (the time limit set by New York State’s access law, Section 18 of the Public Health Law) to 30 days (the time limit set by federal HIPAA regulation). Now, patients must be granted immediate electronic access to all of their records with certain exceptions. Thus the new law modifies HIPAA regulations regarding access.

"Psychotherapy Notes," a defined term under HIPAA for notes kept in addition to and separate from progress notes are excepted (these notes are more aptly characterized as "Personal Notes and Observations" under NYS PHL, Section 18). Likewise excepted are records that might cause harm to the patient or others, though it seems that practitioners will now need to pre-determine whether that is the case, and file such records separately from those that will not cause harm; the new law places the burden on the practitioner to justify denying access. The Office of National Coordinator for Health Information Technology has stated that psychological distress does not meet the criterion for harm that would justify denying access. Another exception is due to "infeasibility" in providing access, for example if a practitioner’s EHR system does not have the capacity to allow instant patient access. In such cases, the practitioner must provide a written response to the requestor within 10 business days of receipt of the request with the reason why the request is infeasible. The infeasibility exception does not permit practitioners to disable an existing capability in their EHR systems that allows for patient access. Some EHR vendors who currently lack such capability will likely update their systems to facilitate direct patient access in order to comply with the new Health IT Certification requirements, but some vendors will probably not make changes. There is no requirement to switch EHR vendors to ones that have direct access capability. There are other exceptions less likely to be applicable to private practices, see https://www.epic-care.com/wp-content/uploads/2020/10/ONC-Information-Blocking-Exceptions.pdf

For practitioners with EHR, writing progress notes clearly, succinctly and sensitively will become more important than ever. As of yet, there are no penalties imposed on practitioners for non-compliance with the prohibition, but only on health IT developers and health information exchange networks.

Incident to billing (billing under a supervisor’s license/NPI). According to the National Council for Behavioral Health, "For behavioral health providers, "incident to" is an attractive option because it increases patient access to services since practitioners without a Medicare

billing number (or who are not themselves credentialed with a commercial insurer), or who are not recognized by Medicare (or a commercial insurer), but also not excluded, can provide care and bill under the supervising (provider). The organization is then reimbursed at 100% of the (provider) fee schedule, as long as the guidelines are followed." Incident to billing is allowed by Medicare in accordance with federal regulations. Some, not all, private insurance carriers also allow it. Empire Blue Cross Blue Shield and Cigna have recently begun to allow it if certain conditions are met. Criteria imposed by Medicare (commercial criteria may differ) for delivery of incident to services whereby a supervisor bills as rendering provider are as follows:

1. The services must be provided by an employee or contractor (supervisee) of the supervisor and the supervisor must be a physician, psychologist or nurse practitioner (some private insurers allow LCSW's, LMHC's, LMFT's and LCAT's to supervise too);

2. The supervisee must be licensed by or, possibly, be a permit holder from the State and services provided by the supervisee must be within the scope of the license, or permit if permittees are allowed, of the supervisee (usually, supervisees cannot be graduate students on externship or internship or candidates in LQ programs, i.e., anyone without an NPI, although sometimes commercial group provider contracts with licensed clinics and institutes may allow it);

3. The services may only be provided to established patients, that is, to patients personally evaluated by the supervisor for whom the supervisor has established a treatment plan. Thus incident to billing cannot be used for a patient's first visit. If an established patient presents with a new problem, the supervisor must see the patient and establish a treatment plan for the new problem (some commercial insurers have less stringent requirements regarding the involvement of the supervisor than those of Medicare);

4. The services must be provided in the supervisor's office and must be incidental to the supervisor's own services, that is, the supervisor must him or herself provide personal services to the patient of appropriate frequency to indicate active involvement in the patient's care;

5. The supervisor must be in the office suite and immediately available when the supervisee renders services; and

6. The supervisor must directly supervise the supervisee on the care of the patient and must sign the supervisee's notes as such to indicate that the care provided was appropriate. A record of supervision should also be maintained.

Some insurers allow a supervisor to supervise no more than 4 or 5 supervisees at any one time.

In network providers should not use incident to billing unless it is explicitly permitted by their contract with the insurer or they have otherwise been given written approval for the procedure. If a provider is out of network but accepts assignment (i.e., the insurer pays the provider directly rather than reimbursing the patient who has already paid in full), they also should not use incident to billing unless the insurer has given permission to do so in writing. (Providers who accept assignment are expected to observe limitations on reimbursement set by insurers in the same manner as in-network providers.)

Out of network providers who do not accept assignment (i.e., insurance companies only reimburse patients who have already paid in full), still should check with commercial insurers about their acceptance of incident to billing for patients who have out of network benefits and wish to submit claims for those benefits. In such cases, while there is no specific prohibition on incident to billing, neither is there any allowance of it, and if an audit occurs, reimbursement may be sought by the insurer if their policies disallow incident to billing.

HEALTH LAW SUPPLEMENT          Winter 2020, #75

Waiver of co-payments and deductibles and insurance fraud.  This topic has been addressed before briefly in the Supplement but bears in-depth review now.  There have recently been a spate of audits by the New York State Comptroller’s Office in instances where they suspect that an out-of-network provider is waiving or reducing co-payments and deductibles for patients insured by the New York State Health Insurance Plan (NYSHIP), or Empire Plan, that includes coverage for out-of-network services. NYSHIP is one of the nation’s largest public sector health insurance programs and covers over 1.2 million active and retired State, local government and school district employees and their dependents. Commercial insurers also seem to be increasing the frequency and targets of their financial audits, previously limited to large providers.

            The Comptroller is of the opinion that a significant cost savings to NYSHIP (and therefore for State taxpayers) would occur if more out-of-network providers who improperly waive or reduce members’ out-of-pocket costs discontinued the practice and joined the Empire Plan network instead.  In-network providers are, of course, paid rates significantly less than that of typical out-of-network providers, usually about half.  One might wonder why the Comptroller and commercial insurers don’t increase payment for in-network services rather than investigating billing practices of out-of-network providers in order to increase in-network participation, but that does not seem to have occurred or be planned.  See Preventing Inappropriate and Excessive Costs in the New York State Health Insurance Program, Office of the NYS Comptroller, State Health Insurance Program, A Summary of Audits Identifying Out-of-Network Providers Engaged in Routine Waiving, Office of the NYS Comptroller, 2016-D-1, MAY 2018.

            Waiver occurs as follows: Suppose a patient is insured under a health insurance policy obligating the insurer to reimburse the insured 80% of the provider’s charges.  If the provider informs the insurer, by way of filing a claim for reimbursement either directly to the provider or to the patient, that their charge for a procedure is $300, the insurer would, in anticipation that the provider would require the patient to pay the provider $60, reimburse the provider or the insured $240. If however, the provider were to waive the $60 co-payment, the provider’s true charge would not be $300 but would be $240. Under those circumstances, the obligation of the insurer would be $192.

            The Comptroller or commercial insurance auditor would believe that an overpayment of $48 had been made on the above claim.  On audit, the insurance company would demand repayment of all alleged overpayments made by use of an extrapolation formula. For example, if an auditor found that in the audited sample 50% of patient co-payments had been waived, they may demand the return of alleged overpayments for 50% of all claims paid by the insurer over the past six years. The Statute of Limitations on civil fraud in New York State is 6 years, NY CPLR Section 213(8).

            Similarly, if a patient’s insurance policy required them to pay a $1000 deductible before the insurer reimbursed the provider or patient for the provider’s charges, and the provider reported to the insurer that their charge for services was $1500, the insurer would pay the provider $500 expecting that the provider would require the patient to pay the remaining $1000. By waiving the $1000 deductible, the provider would be charging less for the services than they reported to the insurer.  And similarly, on audit, an insurer might demand repayment based on an extrapolation formula. 

            It is generally accepted by insurance auditors that a provider may occasionally waive or reduce a co-payment or deductible due from an indigent patient.  Auditors seem to believe that this might be justifiable if done for a small minority of patients, maybe no more than 10%, and with some formal procedure for the provider to determine financial need.  In addition, a decision by a provider not to pursue the full legal remedies available to collect a debt may be acceptable if exercised with good faith business judgment and in accordance with the provider’s customary collection procedures.

            If, however, the health care provider were to make such waivers or reductions a common practice and were the provider not to amicably resolve the matter with an auditing insurer by repayment satisfactory to the insurer, then the health care provider might be sued for civil insurance fraud in violation of  NY Insurance Law Section 403(c), the penalties for which are a fine of $5000 plus the entire amount of the fraudulent claims.  The provider may also be threatened with criminal prosecution pursuant to NY Penal Law Section 176.05(2) on the grounds that the claim submitted to the insurer contained “materially false information.”  On some occasions, in my experience, insurers have even filed licensing board complaints with the State Education Department alleging the “filing of false claims” in violation of Rules of the Board of Regents, Part 29.1 (a)(6). Whether waivers constitute fraud, however, would depend upon the facts of each case and, importantly, the intent of the provider, which is difficult to prove. Generally, waivers and reductions must be routine rather than occasional for allegations of fraud to be viable.

            If Medicare or Medicaid were involved, then a federal criminal statute, 42 USC Section 1320a-7b, might also be implicated as such routine waivers are considered to constitute illegal remuneration, i.e., a kick-back by the provider to the patient.

            Given the above, some clients then ask how they are to accommodate patients with limited financial means, if not by waiving or reducing co-payments and deductibles.  The answer is to reduce the fee of the patient such that the patient is able to pay in full whatever amount remains owed to the provider once insurance reimbursement is received. Sometimes clients are averse to reducing their standard fee for fear of being accused of fraud for having a dual fee structure (one fee for insured patients, another for the uninsured), but, in my opinion, that accusation is tenable only if there is no true standard reasonable fee from which deviations are occasionally (not routinely) made.  Some clients are of the belief that varying charges to patients based on patients’ financial capability is ethically questionable, but I know of no ethics precept that prohibits fees that are reasonable and are not exploitative or unconscionable, and there is a long tradition in psychotherapy practice of adjusting fees for patients of differing means. 

(Some of the above article is  based on an Opinion of the General Counsel, NYS Department of Financial Services, 05-04-07.)

Interstate practice for COVID “Countermeasures.”  This month the Public Readiness and Emergency Preparedness Act (PREP Act), was amended by the US Department of Health and Human Services (HHS) to expand access to COVID-19 “Covered Countermeasures” through telehealth. The amendment preempts, under certain circumstances, state laws that have limited cross-border practice using telehealth. The licensure exception is limited to providers who are ordering or administering “Covered Countermeasures,” defined as drugs, diagnostic tests, devices or vaccines that diagnose, prevent, treat, or cure COVID. The  amendment does not pertain to mental healthcare, but it may help foster the development of interstate practice in physical and mental healthcare in its implication that the requirement for multiple state licenses is an impediment to the efficient delivery of healthcare.

Bruce has just been approved by the New York State Education Department as a provider of CE credits for psychologists in New York State, #PSY-0011.  Beginning January 1, 2021, psychologists are required to take approved CE courses to maintain licensure in the State.  Bruce offers classes on ethics and law in psychotherapy practice, for social workers in addition to psychologists. Inquiries about private online-live classes for up to 40 participants are welcome.

HEALTH LAW SUPPLEMENT          Autumn 2020, #74

            New and revised CPT codes. Codes for mental health services have been revised or added for: cognitive function intervention services (usually for older patients with a focus on compensatory strategies); online assessment and management; telephone assessment and management; and screening, brief intervention and referral to treatment services (SBIRT).  Notable is that these online and telephone assessment and SBIRT codes are for use by both physicians and non-physician providers and that they allow for brief periods of assessment and treatment, for as little as 5 minutes.  For example, G2061 is for use when a patient contacts a practitioner (the patient must initiate the contact) online with a mental health issue, and a therapist performs an intervention of 5-10 minutes.

            Psypact expansion. Soon Pennsylvania and Virginia will participate in Psypact, the program that allows psychologists to practice in multiple states.  States already participating include Arizona, Colorado, Delaware, Georgia, Illinois, Missouri, Nebraska, New Hampshire, Nevada, Oklahoma, Texas and Utah.  Psychologists (not other professions) licensed in one of those states may apply to be permitted to practice in all of them either by telehealth or, temporarily, in-person.  If approved, then for a fee, they are issued an “interjurisdictional” license.  In addition to licensure, approval requires a doctoral degree, no history of professional disciplinary sanction, and no criminal record.  New York has not indicated any interest in joining the pact; doing so requires some ceding of State sovereignty.

            Medicare and Medicaid providers should retain patient records for 10 years. Although New York State mandates that healthcare practitioners must retain records of adult patients for six years after treatment ends (Rules of the Board of Regents 29.2(a)(3)), practitioners who accept Medicare or Medicaid insurance, including through Medicare Advantage Plans and Medicaid Managed Care Plans, are now advised to retain treatment records of their Medicare and Medicaid insured patients for 10 years.  In a 2019 decision, Cochise Consultancy Inc v US, the US Supreme Court, ruled that the Federal False Claims Act allows actions against providers for up to 10 years when there are allegations of fraudulent billing.  Presumably, to defend oneself against such allegations, one should have records.  Without them, defense would be problematic at best.

            Stephen’s Law. Steven C, a patient at a New York State OASAS clinic died of a drug overdose in August 2018.  He had signed a  release  that granted access to medical information to his mother.  She was, however, not notified by the clinic of his recently missed appointments and positive drug screens.   New York State legislators thought it an appropriate response to this tragedy to pass a law that  would require that OASAS programs notify every patient of their right to identify individuals who should be contacted in case of emergency.  The intent of the legislation is to codify what is now considered “best practice” in order to provide a consistent approach statewide.  The law as passed by the Assembly and Senate (A 9536, S4741B) and expected to be signed shortly by the Governor requires that (1) patients be encouraged to name and allow treatment  information to be disclosed to emergency contacts, and (2) treatment programs develop recommended protocols for communicating with emergency contacts.  This new law may approach, albeit indirectly, the imposition of a legal duty to protect patients with alcohol and substance use disorders from self-harm by disclosure of any heightened risk status to authorized contacts.

            Undue influence and exploitation for financial gain in concierge medical practice.  The Office of Professional Medical Conduct found that a physician had exercised undue influence in his concierge practice by: (1) not informing patients in advance what his fees were; (2) collecting credit card information in advance of informing patients about fees; and (3) providing services to patients on a flat fee basis, $3,000 to $5,000 for apparently relatively brief consultations in their hotel rooms.   An appeals court confirmed the finding, G v NYS Board for Professional Medical Conduct, 96 NYS 379 (3rd Dept, 2019.) I have noticed in my disciplinary defense of health care professionals before New York State licensing boards that the boards carefully review fixed non-refundable fees by professionals for what the board believes may be indications of undue influence and exploitation. 

            New York State removes its religious exemption for vaccinations.  New York State law requires that students be vaccinated before admission to schools, Public Health Law 2164.  The law previously allowed exemptions for medical and religious reasons.  The religious exemption has now been removed (A2371/S2994, 2019), leaving only the medical exemption.  New York is now one of only five states that does not have a religious exemption, the others being Maine, Mississippi, West Virginia and California.  Some fifteen states (not New York) even add an exemption for “personal and philosophical beliefs.”   Some states are currently debating mandatory vaccinations of all citizens, not just students, against COVID. 

            Governor Cuomo vetoes extension of mental health Freedom of Choice Law. New York’s current Freedom of Choice law currently requires commercial insurers to provide reimbursement for mental health services by psychologists, LCSW/R’s and nurse practitioners as well as physicians, NY Insurance Law 3216.  The Assembly and Senate of the State voted to extend that mandate to the four State-licensed masters-level “mental health practitioners,” i.e., LMHC’s, LMFT’s, LCAT’s and LPsa’s (see A670-A, S6212-A).  However, the Governor vetoed the bill because he believed it might increase insurance costs.  While many commercial insurers elect to reimburse for services provided by those mental health practitioners, they are not required by law to do so.

            Whither out of network benefits for teletherapy once the pandemic ends?  New York State law requires insurers to cover telehealth service for mental health or substance use disorder treatment if the service would have been covered if the insured went to a provider’s office or facility.  NYS Public Health Law Section 29-G. However, it allows insurers to require that telehealth services, in order to be reimbursed, be provided by an in-network provider.  During the pandemic most insurers have paid for out of network teletherapy but there is no law or regulation that requires them to do so, and no assurance that those that now reimburse for teletherapy will continue to do so as office-based practices resume and after the pandemic ends.

            The NYS telehealth mandate does not apply to self-insured group health plans (aka self-funded plans), ones in which the employer itself, rather than an insurance company, assumes the financial risk for providing health care benefits to its employees. Self-funded plans many not be evident as such because insurers and managed care companies often serve as third-party administrators (aka TPA’s) for such plans. 

            The answer to the above question is a critical one for the seemingly significant number of psychotherapists who are out of network and who are closing their physical offices in anticipation of offering their services in the foreseeable future exclusively by telehealth.           

HEALTH LAW SUPPLEMENT          Summer 2020,  #73

                         Will COVID be the cause of a paradigm shift toward delivery of mental health services by  telehealth?   The American Psychiatric Association in May found that 86% of psychiatrists responding to a survey were seeing 75% or more of their patients by telehealth means, presumably with similar efficacy of treatment as that for office visits.  The survey also found that for telehealth visits, the rate of no-shows was less and the rate of patient satisfaction was higher than for office visits. Consequently, on June 1, the Association wrote to the Administrator of the Centers for Medicare and Medicaid Services (CMS) asking that the regulatory flexibility extended by CMS to telehealth during the pandemic be made permanent. 

            That flexibility has included: the removal of geographic and originating site limitations (not just in under-served and rural areas); allowing all mental health services to be rendered remotely (including group therapy); removing restrictions on frequency of telehealth services (currently some services may be rendered only once weekly); maintaining parity of payment for telehealth services with in-person services; allowing use of audio only care (not requiring services to include both audio and video components); and allowing supervision of trainees to be conducted remotely (currently such supervision must be “direct,” i.e., in person).

            If CMS does make these changes permanent, then if precedent is a guide, Medicaid and commercial insurers will ultimately follow suit, even if with some delay.


            Will COVID result in all commercial insurance companies being legally compelled to reimburse for telehealth?   In 2014, New York State enacted legislation requiring that health insurers provide coverage for services provided by telehealth where the service would otherwise be covered as an in-network service if rendered face-to-face.  However, the law did not apply to out of network benefits, or under ERISA (the Employee Retirement Income Security Act) to large multi-state employers, union plans and self-insured businesses.

            Now before the US House of Representatives is HR 6644 which would temporarily require all group health plans and insurers - with no exceptions - to cover telehealth services if the service would otherwise be covered if rendered in-person.  The legislation would expire when the COVID pandemic ends. Notable about the legislation is that it is supported by the “Mental Health Liaison Group” which includes virtually all professional and consumer organizations representing mental health practitioners and consumers (letter to Rep. Kim Schrier from MHLG dated May 11, 2020).  Because of bipartisan support, the bill is expected to pass.  As with the changes in CMS policy during the pandemic (see above), once such changes are made, they are difficult politically to reverse because that deprives some of what they now view as their right.


            Liability of professionals for COVID transmission at their offices   

1.  In general, for a practitioner to be found to have negligently allowed the transmission of an infectious disease such as COVID, a duty of care, already established by the practitioner-patient relationship, must be breached.  For a mental health practitioner, breach ordinarily means violation of a directive of a State Department of Health or the federal Centers for Disease Control.  For COVID, these might be: failure to “test” (testing may be by questioning rather than by physical testing) employees and patients for the virus; failure to screen employees, patients and any guests for symptoms; failure to enact reasonable safety protocols such as mandating the use of masks and requiring social distancing measures to protect patients; failure to adequately train staff in implementation of safety measures; and failure to enact disinfectant and social distancing guidelines for employees. Assurance of compliance with State guidelines is maintained by completing and affirming online the New York Forward Business Reopening Tool, found at https://www.businessexpress.ny.gov/app/nyforward.  Not only should appropriate measures be taken and confirmed, but patients and staff should be notified of them.  The best consent and notice to patients that I have reviewed is one published by the American Psychological Association: https://www.apaservices.org/practice/clinic/covid-19-informed-consent

            After establishing a breach of duty, there is a need to demonstrate that the breach was the actual cause of the plaintiff’s harm, in other words, that the virus was transmitted at the premises of the practitioner.  Such  proof may be quite difficult to establish.

2.  In April, New York State  passed the “Emergency Disaster Treatment Protection Act,” (the “Act”) that provides immunity from liability to healthcare professionals for certain actions taken during the pandemic. Healthcare professionals covered by the Act include all mental health professionals and their contractors and employees.  Under the Act, healthcare professionals are immune from any civil or criminal liability for harm alleged to have been sustained as a result of an act or omission in the course of providing “health care services,” if the healthcare services were being lawfully provided in accordance with State directives; the act or omission occurred while providing healthcare services; the treatment of the patient was affected by the professional’s actions taken as a result of the COVID outbreak; and the professional acted in good faith. Under the Act, “Health care services” include: any treatment for COVID, but more importantly for mental health practitioners who do not directly diagnose or treat COVID, “the care of any other individual who presents ... to a healthcare professional during the period of the COVID-19 emergency declaration.”  Immunity does not apply to gross negligence* or intentional or reckless  misconduct.  In my opinion, at least for the duration of the pandemic,  the Act contains significant protection for practitioners against any allegations that their actions negligently caused the transmission of COVID to a patient.  It also establishes a public policy of shielding practitioners who act in good faith that may influence legal decisions afterwards.

            * Gross negligence is  deliberate and reckless disregard for the safety of others.  In contrast, “simple” negligence is the failure to use the level of care and caution that an ordinary person would use in similar circumstances, usually involving carelessness or inattentiveness that causes an injury.

3. Any claim by an individual that she or he became infected at a professional’s office  may be covered for defense costs and indemnification under the professional’s business owner’s or general liability policies* that insure against “bodily injury” arising from an “occurrence.”  An individual who becomes sick as a result of exposure to COVID suffers a covered “bodily injury.” Such policies also commonly require an “occurrence,” which is usually defined as being “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.”   From the standpoint of the insured, any viral transmission was the result of an “accident,” i.e., was unexpected and unintentional.  To decline coverage, insurers may try to argue that there was no “occurrence” or “accident” as such if (1) viral spread is so significant that a substantial portion of the relevant population are carriers (i.e., contagion was expected) or (2) a claimant asserts that the virus was transmitted by an employee or independent contractor of the insured who showed visible symptoms of COVID or who is known to have contracted the virus (i.e., contagion was intentional).        

            * Business and general liability insurance are different from professional liability (or malpractice) insurance. The main difference between business and general liability insurance and professional liability insurance is in the types of risks they each cover. Business and general liability covers physical risks, such as bodily injuries and may also cover property damage. Professional liability covers errors and omissions made in the course of providing your  professional services.

HEALTH LAW SUPPLEMENT          Spring 2020, #72

                An advantage of a duty to warn statute: relative immunity for practitioners.  In the last issue, I discussed the uncertainty that exists in New York State about whether mental health professionals are obligated to make unauthorized disclosures in order to protect patients from self-harm or prevent them from harming others.  Most mental health professionals believe that they should breach confidentiality in such circumstances, and the ethics codes of all professions allow such breaches as the principle of beneficence prevails over that of respect for patients’ rights to privacy  From a risk management perspective also, when healthcare attorneys  advise practitioners to weigh the possibility of a wrongful death lawsuit against that of a complaint of breach of confidentiality, for most practitioners the former seems to present a greater magnitude of risk.

                Often discussed are the reasons for and against laws mandating that mental health professionals breach confidentiality to preserve life.  The reasons against them involve the uncertainty of prediction, discouraging at-risk patients from seeking treatment, and possible risks presented to clinicians who fail to report.  From a more theoretical viewpoint, some oppose further state intrusions into private relationships.

                What may be overlooked in such discussions is the risk to clinicians of not having a mandate.  In three decades of defending mental health professionals in licensing board proceedings, I have represented a number who breached confidentiality in the belief that it was necessary for them to do so in order to preserve the life of a patient or third party, and who, as a result, had complaints of breach lodged against them.  They were compelled to explain to their peers, in an adversarial proceeding where their judgment was scrutinized, why they did so.  Under regulations governing professional conduct, the peer reviewers were tasked with ascertaining whether the practitioner’s actions were “negligent,” that is, whether they were at variance with that of a reasonable practitioner in the same circumstances.

                The current bill before the NYS legislature, S02372, that imposes a duty to warn on mental health practitioners, contains an immunity provision.  As is usually the case, the mandate and immunity operate in tandem.  Under the proposed statute,  “The decision of a mental health practitioner to disclose or not to disclose the patient’s or client’s confidential treatment information to others in accordance with this section, when made reasonably and in good faith, shall not be the basis for any civil or criminal liability of such  mental health practitioner, including liability pursuant to unprofessional conduct…” S.2372, 9.42(d). 

                The principle underlying immunity is that when one is compelled to take action because public policy dictates it, one should be protected from legal consequences. In such statutory contexts, “reasonableness” means legitimate, and “good faith” means without malice or recklessness. The current negligence standard imposed by the licensing board in the absence of a reporting statute may seem similar to that imposed by the reporting statute – both contain a “reasonableness” requirement after all– but in practice they are different.  Currently a practitioner must in essence prove to a licensing board that the course of action they took was the most reasonable.  With the statutory immunity provision, they need only prove only that their actions were a reasonable course, i.e., there may have been other equally reasonable measures.  

                In addition, if there were a statutory duty to protect, then for public policy reasons, prosecutors would almost certainly be reluctant to allege misconduct because doing so might discourage mandatory reports and that would contradict the policy.  That is the case now with the two current mandates in the State, to report child abuse and neglect and to report dangerousness to criminal justice authorities (but for the sole purpose of regulating ownership of firearms, i.e., the SAFE Act.)   Both include immunity for mandated reporters, and generally, prosecutors at the licensing board almost always decline to question the rationale of a mandated reporter who reports under one of the mandates.

                The coronavirus pandemic.  In emergency measures for the duration of the pandemic, the US Congress has expanded Medicare coverage for telehealth services to residents of all geographic areas, not just of rural areas, and permitted interstate telehealth practice; the United States Department of Health and Human Services has relaxed enforcement of the requirement of HIPAA compliant platforms for telehealth services; New York State has mandated that insurers waive in-network co-payments for telehealth visits; and the NYS Workers Compensation Board has for the first time permitted reimbursement for telehealth services.  With regard to the New York State waiver, bear in mind that insurance coverage for out-of-network telehealth services in New York State remains optional at the discretion of commercial insurers and some of them decline any payment for telehealth services by out-of-network providers.  New York State has also expanded the ability of Office of Mental Health operated and licensed facilities to offer Telemental Health Services, requiring only an attestation filed by such facilities that providers of telehealth services will have a professional license or permit and that they are HIPAA compliant. 

                Defining interns who are exempt from labor laws.  Clients sometimes ask whether they must observe minimum wage and other federal and State labor laws when they retain the services of what the New York State Education Department calls “exempt students.” (By that categorization, NYSED refers to the exemption from licensure, not from labor laws.)   NYSED defines such students as those enrolled in licensure qualifying graduate programs who are required to obtain clinical experience as a requirement of their programs and who receive credit from their academic institutions for such experience.  A recent federal case, Velarde v GW GJ Inc, 2019 UP All Lexis 3536 (2d Cir) determined that interns were not employees if certain criteria were met: the intern does not expect to be paid; the internship provides clinical training; the student receives academic credit; the internship accommodates the intern’s academic calendar; and the work of the intern complements rather than displaces that of paid employees.

                Professionals, Arizona wants you! Arizona is the first and so far only State in the US to pass a law that automatically grants licensure to professionals licensed in other states who reside in Arizona for a year.  There is no examination requirement, just a background check.  Arizona HB 2569. 


Is there an affirmative "Tarasoff" duty to protect in New York State? This is perhaps the most discussed issue at risk-management seminars that I give. The short answer is a qualified “probably.” A longer answer follows:

The legal principle of the well-known Tarasoff case is: When a therapist knows that a patient is likely to harm a specific third party, the therapist has an affirmative duty to the intended victim to protect and warn the potential victim of the danger; if the therapist fails to fulfill this duty, and the third party is harmed, the therapist may be liable to the victim. The Tarasoff court, a California court whose ruling applies only in California, held that the duty to protect can include notifying the police and taking whatever other steps are reasonably necessary under the circumstances, Tarasoff v Regents of Univ of Calif, 551 P2d 334 (1976). Many states' highest courts and legislatures have reacted to the Tarasoff ruling with holdings or laws that adopt, sometimes with limitations, sometimes with expansions, its basic principle. Since its appearance, the principle had been judicially rejected in only one state, Florida, Boynton v Burglass, 590 So2d 446 (1991).

No New York court has yet to find a therapist liable to a third party for failure to protect or warn that third party. In one case, however, a New York court did state without holding (and thus with little value as precedent or as guidance) that "where a patient may be a danger to himself or others, a physician is required to disclose to the extent necessary to protect a threatened interest," MacDonald v Klinger, 446 NYS2d 801 (4th Dept 1982).

New York courts have directly addressed a related issue however, namely whether a therapist who warns a third party of intended harm from a patient is liable to the patient for the unauthorized disclosure or breach of confidentiality. One court found that a breach of confidentiality by a therapist was justified when a therapist's patient threatened a third-party. A psychologist working at a State facility told the police that his patient had threatened the life of the psychologist's son's schoolmate during a therapy session. The psychologist also called the schoolmate's family and warned them about his patient's dangerous intent. The patient sued for breach of confidentiality, but the court held that the psychologist was justified in breaching, Oringer v Rotkin, 556 NYS2d 67 (1st Dept 1990). See also, enunciating the same principle, but with a different outcome, Juric v Bergstraesser 2013 NY Slip Op 02808 (3rd Dept, 2013).

One New York statute does even explicitly permit breaches of confidentiality to protect specific third parties. New York Mental Hygiene Law (MHL) § 33.13(c)(6) permits releases of information without a patient's consent by psychiatrists and psychologists working in State licensed facilities "to an endangered individual and a law enforcement agency when a treating psychiatrist or psychologist has determined that a patient or client represents a serious and imminent danger to that individual." This law is significant for several reasons. First, it defines what type of danger must be presented before a breach of confidentiality can be justified, i.e., "a serious and imminent danger to an individual." Second, it is stated specifically in the statute that it does not impose an obligation to protect third parties on which basis a third party might sue. Finally, it applies only to practitioners working in State licensed facilities, and not to private practitioners. Some commentators have suggested that this statute indicates that New York has rejected any affirmative Tarasoff duty because an option is not a mandate.

Another New York statute permits a limited breach of confidentiality but is meant to protect the public generally, and not specific individuals, from violence by firearms. The SAFE (Secure Ammunition and Firearms Enforcement) Act at Section 9.46 of the MHL imposes on certain specified mental health professionals a requirement that they report their individual patients to the County Director of Community Services, for forwarding to the NYS Division of Criminal Justice (DCJS), when they believe such patients are "likely to engage in conduct that will cause serious harm to self or others." DCJS then determines whether the reported patient has or has recently applied for a permit for firearms, and if they have, then officials will suspend or revoke the license and remove the firearm. It is not a requirement of the law that the patient own a firearm. The law grants immunity to mental health professionals who decide whether or not to report "reasonably and in good faith." Importantly, the law imposes no duty on mental health professionals to break confidentiality and warn significant others, third-parties, and/or general law enforcement authorities when a patient presents an imminent risk of danger to self or others, as a Tarasoff duty would.

An issue that’s legally related to whether psychotherapists have a duty to intended victims of violent patients is whether outpatient therapists have sufficient control over patients so that therapists’ actions, or lack thereof, might be legally viewed as a possible cause of harm to endangered third parties. In one New York case, an appellate court ruled that an outpatient counselor had no duty to warn a husband of his wife's threat to him, Wagshall v Wagshall, 538 NYS2d 597 (2nd Dept 1989). The wife had shot her husband while they were in marriage counseling. The court seemed to base its decision on two findings: one, that the husband already knew of the wife's threat to him (she had assaulted him before): and two, that the wife was not under the control of the therapist, and therefor the therapist's failure to warn the husband could not be legally viewed as a proximate cause of his injuries. This case might also be seen as a rejection of a Tarasoff duty, but it may be limited by its peculiar facts.

So what is the answer to the question in the title of this article? I think it’s this: New York courts and our State legislature have not clearly decided whether a Tarasoff duty exists in New York, but there are enough suggestions in our cases and our law so that it’s probably safer for a therapist to act as if there is such a duty. Some additional support for this position are findings by New York's highest court that, under some circumstances, a doctor can be liable to third parties for potential harm caused by the doctor's care of a patient, similar to but not exactly the same as the underlying principle of the Tarasoff case. See Tenuto v. Lederle Laboratories, 605 NYS2d 17 (1997) and Davis v South Nassau Communities Hosp, N.Y. Slip Op 09229 (2015) Physicians were found negligent for, respectively, failing to warn an immune-compromised father of risks to him of administration of oral polio vaccine to his daughter, and failing to warn a third party of the danger posed to her when their patient drove a car following their administration to him of an opiate drug.

Although New York courts and the legislature have not imposed an affirmative duty to protect and warn third parties as yet (a law has recently been proposed however), they have, in certain cases, removed the rationale formerly used for not acting when a third party was threatened, that is, that it would be an unjustified breach of confidentiality. So the legal risk to a therapist of protecting third parties, a lawsuit or professional disciplinary complaint for breach of confidentiality, is significantly lessened, while the legal risk of not protecting and warning third parties is, albeit uncertain, potentially great, i.e., a suit for wrongful death.


New York now allows credit card surcharges. By a decision of the Court of Appeals, the State now allows credit card surcharges, Expressions Hair Design v Schneiderman,, No 100, 10/23/2018. New York is now among the majority of states that allow merchants to charge customers a surcharge for credit card fees when payment is made for goods or services by credit or debit card. Prior to the change, merchants were allowed only to charge discounts for cash payments (confusing, but think of how gas stations advertised prices). The Court reinterpreted General Business Law, Section 518, to now allow credit card surcharges as long as certain consumer disclosures are made. The Court did impose a condition, that “the merchant posts the total dollar and cents price charged to credit card users.” That translates to the following operative principles according the State Attorney General: (1) consumers cannot be expected to themselves calculate credit card charges, (2) surcharges should not be listed as percentages but as a set amount; and (3) the prices for the goods or services, both with and without the surcharges, should be disclosed. Most merchants charge an additional 3-4% for credit card surcharges. The surcharges are typically called “surcharge,” “additional fee” or “extra cost.”

Patients increasingly prefer to pay by credit card or payment apps. My experience is that therapists who accept credit card payment have greater collection rates. Credit card companies, both traditional ones and newer ones such as Square, unlike payment apps such as Pay Pal, Venmo and Zelle, are HIPAA compliant (though that does not mean that the payment apps are non-secure). Based on recent experience however, some customers seem to dislike credit card surcharges perhaps because they are unaccustomed to them. If therapists decide to accept credit cards, then to comply with State law, it is advisable that: (1) wherever prices for services are listed, whether online or on brochures, in-office postings, on office policy or consent documents, two prices be listed. One would be for the service when payment is by cash or check, and another for the service when paid by credit card., e.g., “The fee for a 45 minute individual psychotherapy session is $200 when paid for by check or cash, and $208 when paid for by credit or debit card,” and (2) on invoices, statements and bills that are payable by patients, if a surcharge is imposed when payment is made by credit or debit card, then it should be separately listed, e.g., “Individual psychotherapy - $200, credit card surcharge - $8, total fee payable $208.”

A new law and legal resource to help enforce mental health parity in New York State. The recently passed Behavioral Health Insurance Parity Reforms (BHIPR) law, part of the State budget bill, will take effect on January 1, 2020. The law covers all health insurance and health benefit plans doing business in the State. It is designed to help enforce Timothy’s Law, the State’s initial mental health parity law that was passed in 2007. Among other provisions, the new law requires that insurers: cover all mental health conditions, substance use disorders and autism spectrum disorders; not require preauthorization of substance use disorder services during the initial 28 days of inpatient or outpatient treatment; not require preauthorization of inpatient psychiatric services for minors for the first 14 days; make available medical necessity criteria to insureds, prospective insureds, and in-network providers; not take adverse action in retaliation against a provider for filing a complaint, making a report, or commenting to a government body regarding policies and practices that violate the statute; post information regarding their in-network mental health providers, including whether a provider is accepting new patients; and complete a compliance report to be made public by the State Department of Financial Services.

To complement BHIPR, the State legislature created the Community Health Access to Addiction and Mental Healthcare Project (CHAMP) to concretely address the issues that patients and providers confront with insurers regarding parity for mental health care. CHAMP has an online “red flag tool” to help patients and providers identify violations of the BHIPR and encourages them to call the Project helpline for assistance, 888-614-5400.

Insurance coverage for expanded definition of “eating disorders” in New York. Both houses of the State legislature have just passed bills that require health care insurers to provide full coverage for inpatient and outpatient treatment of all “eating disorders.” The previous parity law included only “bulimia and anorexia.” Specifically, the new law expands the parity law by including a provision that “the term eating disorders means pica, rumination disorder, avoidant/restrictive food intake disorder, anorexia nervosa, bulimia nervosa, binge eating disorder, other specified feeding or eating disorder, and any other eating disorder contained in the most recent version of the diagnostic and statistical manual of mental disorders published by the American Psychiatric Association.” Justification for the bills was that the legislature believed that many insurance companies were denying coverage for eating disorders that did not fit within their narrowly interpreted definitions of anorexia and bulimia. (A1619 and S3101).

Domestic violence to be considered in equitable distribution of marital property in divorce. The NYS Senate just passed a bill that requires that judges in divorce actions must now consider any prior acts of domestic violence in distributing marital property between the divorcing spouses. With limited exceptions, marital property is any property acquired during the course of a marriage. Prior to the passage of this bill, it was left to the discretion of judges whether to consider such violence. Judges often did not, believing that only economic factors should be taken into account in dividing marital property. [6050 amending New York Domestic Relations Law 236B(5)(d)]. This change follows a national trend in which abusers are held financially and legally accountable for their actions.


Clinical social workers and nurse practitioners in psychiatry to be workers compensation providers. As of this date and for the past 30 years, the only non-medical mental health professionals in New York State who could be approved as independent workers compensation providers were psychologists. As recently as the 2018 session of the State Assembly, a bill that was introduced to include clinical social workers as independent workers compensation providers was tabled due to strong opposition by both unions, representing employees, and the business community, representing employers. A lot changed in 4 months due to the change in party control of the legislature and to the governor’s stated commitment to reduce the inefficiency and cost of the system and increase access to mental health care. On April 12, 2019, the governor signed a major revision of the workers compensation law that expanded the types of providers permitted to treat injured workers independently and be compensated through the workers compensation system to include clinical social workers and nurse practitioners, as well as certain other non-medical professions. (New York State Bill A02005C.) The law goes into effect January 1, 2020. With the increase in fees payable by workers compensation insurers to providers of mental health care that went into effect April 1, 2019 (currently $132.75/CPT 90834 in NYC for LCSW’s and NP-P’s working for and supervised by MD’s), it seems likely that LCSW’s and NP’s in Psychiatry will apply in significant numbers to be approved by the Workers Compensation Board as qualified independent providers. Based on its history approving psychologists, one obstacle may be the reluctance of the Board to approve individual mental health professionals who lack expertise in treating injured workers and their disorders with which they typically suffer, e.g. post-traumatic stress.

Ruling against UBH regarding its restrictive guidelines for medical necessity for mental health care. On February 28, 2019, in David Witt vs. United Behavioral Health, Case No. 14-cv-02346-JCS, a class action lawsuit, the US District Court for Northern California, ruled that UBH/Optum, the largest mental health managed care organization in the country, illegally denied coverage for mental and substance use disorders based on flawed medical necessity criteria. The denials were deemed to violate the federal mental health parity act. Among the court’s findings were that: UBH was wrong to focus exclusively on patients’ current symptoms and should instead have allowed treatment of patients’ underlying mental and emotional conditions because mental and substance use disorders are chronic conditions; guidelines for effective treatment should not focus exclusively on resolution of symptoms, but should include services necessary to maintain therapeutic gains and prevent deterioration; allowable treatment duration must be based on the individual needs of patients, not group norms; UBH was wrong to require less intensive and less restrictive (read less expensive) treatments where those treatments could also be expected to be less effective; and the unique needs of children and adolescents must be taken into account in making level of care decisions. (The plaintiff Witt’s daughter was denied residential treatment for substance abuse.) The case is expected to have a wide-ranging and meaningful impact. Those of us who represent individual mental health providers in insurance audits are familiar with the above (mis)applied criteria for medical necessity used by insurers, but contesting them and trying to protect clients from clawback attempts is complicated by the insurers use of procedural pretexts for denial and by the inequality of legal and financial resources.

A local case and an exclusion of wilderness therapy may also have violated mental health parity. In Gallagher v Empire HealthChoice, 399 F Supp 3d 248, SDNY 2018, a plaintiff insured by Empire alleged that the categorical exclusion by the insurer of payment for wilderness therapy as mental health treatment violated the federal parity act. The judge agreed that it might. The judge stated that if Empire paid for skilled nursing and rehabilitation care for medical/surgical patients, then it could not have a blanket exclusion of wilderness therapy for mental health patients, because the two types of care are analogs, the one for physical care, the other for mental health care. The court essentially ruled that Empire had to base any denials on the needs of individual patients, not on an absolute exclusion of wilderness therapy.

Emailing patients as a non-covered entity using unencrypted email. Many of our small group and sole practitioners fall into the category of non-covered entities who need not be HIPAA compliant because they do not bill insurers electronically; rather they are what the Department of Health and Human Services call “country doctors” who exclusively bill patients with paper bills and as out of network providers. Even if not following HIPAA regulations however, because of the continued stigma of mental healthcare, psychotherapists must be especially mindful of privacy concerns when using unencrypted email, and should be aware that encryption has become, in my opinion, a necessary element of maintenance of confidentiality, a standard of care, even for non-covered entities if (1) email is used customarily and regularly to communicate with patients, even if just regarding scheduling, and/or (2) email is used to transmit substantive personal health information, e.g., sending bills with diagnoses to patient, asking prospective patients to complete and return questionnaires about their mental status, transmitting narrative summaries or records of treatment. In the above situations, if unencrypted email is nevertheless used, then (1) it should be at the request of the patient, and (2) the patient should be advised, and sign written acknowledgment of notice of the potential for unauthorized access and the risk to privacy to unencrypted email.

Medical marijuana for opioid replacement. The NYS Department of Health added opioid replacement as an additional medical condition for which medical marijuana might be prescribed in the State. The DOH stated as its reasons that the prescription of medical marijuana for pain might reduce prescriptions of opioids for that purpose and might also reduce patient deaths due to opioid overdoses. 10 NYCRR 1004.2, 12/26/2018.

A NY court refuses to enforce a restrictive covenant. In Long Island Minimally Invasive Surgery PC vs St Johns Hospital, 164 AD3d 575, 2d Dept 2018, a court refused to enforce a restrictive covenant of 2 years and 10 miles against a surgeon in the New York City metropolitan area (Rockville Centre). The court stated that the hospital’s covenant was unreasonable because it (1) was not required to protect a legitimate interest of the hospital, (2) imposed an undue hardship on the former employee, and (3) was injurious to the public. Employer-clients are routinely advised of the difficulty involved in enforcing restrictive covenants.


Websites and ADA compliance:  An increasing number of businesses with websites that cannot be navigated by blind and deaf persons have been sued for lack of compliance with the Americans with Disabilities Act (ADA).  It’s Title III of the ADA that’s relevant in that it requires “public accommodations,” which include offices of healthcare providers  to remove barriers that are “readily achievable,” meaning that are accomplishable without undue difficulty or expense. In applying the ADA to businesses, courts first look to see whether there is a nexus between a website and a physical location for the business, a criterion that is almost always met for healthcare providers. Next, courts look to see whether a website actually markets goods or services, or simply advertises their availability at a physical location.   If the former and a website markets services -  for example, allows patients to schedule appointments or to contact the provider for telehealth services -  then the lack of accessibility to disabled users is more likely to be legally actionable.  The US Department of Justice has not issued guidelines so questions about the meaning of “readily available” remain, especially for small practices.  Rewriting source codes for websites to include text to audio conversion for the blind and audio to text conversion for the deaf is complex and expensive.  There were 814 website-access ADA lawsuits against businesses in 2017 and 2250 in 2018, most in New York or California (Seyforth, Shaw, ADA Title III News and Insights).  Plaintiffs in such suits are not permitted money damages, only legal fees.  Legal fees are usually under $20,000 and the suits usually result in an agreement by the business to improve the accessibility of its website.

It may get even harder to hire independent contractors.  In recent years, regulatory and taxing authorities have increasingly narrowed the definition of independent contracting.  Healthcare practices in New York State that  hire 1099 contractors, usually to save money, have increasingly been audited and informed that they have mischaracterized as contractors persons who should have been properly labeled as W2 employees, with attendant and significant taxes and penalties due for the prior mischaracterization.  Often the basis for the adverse finding is that the practice hired the supposed contractor full-time, or supervised or imposed restrictions on him or her, whereas exclusive labor, supervision and restrictions are generally limited to an employment relationship.  Now the California Supreme Court in Dynmex Operations West v Superior Court has added an even more stringent criterion that virtually prohibits independent contracting of the type used by mental health practices.  The test is that “the service provider must perform services that are outside the usual scope of the company’s business.”  Thus, if audited, a healthcare practice that hires 1099 contractors must demonstrate that the licensed provider it engaged as such provides a service that is outside the usual scope of services of the practice.  The court seemed to indicate that it would deem all providers to be in the same business even when the providers have different specialties or licenses.  In other words, a mental health practice cannot hire mental health professionals, even ones with differing licensure, as contractors.  Given current legal trends, it may be only a matter of time before this test spreads beyond the borders of California. If it is adopted in New York, then independent contracting among health care professions will become an obsolete practice.

Finally, continuing education required for psychologists in NYS.  On December 21, 2018 the governor signed a bill (S.7398/A.9072) that will require psychologists to complete at least 36 hours of continuing education (CE), including in ethics, every three years in order to be able to reregister their licenses as is required triennially.  For unclear reasons, psychology is the last of the mental health professions in New York State on which this CE requirement has been imposed.

The soft cap on nonprofit healthcare executive compensation is struck down.  The New York Court of Appeals (LeadingAge Inc v Shah, 2018) has eliminated a limitation on the salaries of NYS nonprofit healthcare entities that had been imposed by regulators at the NYS Department of Health (DOH).  Regulators in January 2012 had promulgated Executive Order 38 (EO38) comprised of a two-part cap on compensation of such executives.  The regulators and governor formulated the regulation without any enabling legislative action having been taken. The first or hard cap of EO38 limited the proportion of state funds (Medicaid, etc) that a provider could use to compensate executives to 15% of those funds.  The second, or soft cap essentially limited executive compensation to $199,000 annually from any source, public or private, with some exceptions allowed in accordance with comparability surveys and an accompanying waiver.  In my experience of late, exceptions to the rule had become more common than adherence to it.  The Court stated that DOH regulators had exceeded their authority in imposing a limit on how a nonprofit entity uses its private funds, stating that in the absence of a law (not regulation) to the contrary, it remained the prerogative of a nonprofit agency to use its private funds to “compensate its executive staff handsomely or even excessively.”  The Court indicate that the limit might be reinstated by legislative, not regulatory, action.

Supervisor and not supervisee is liable for malpractice.  In Blendowski v Wiese (4th Dept, 2018) the court dismissed as a defendant a resident who had been sued for his participation in an operation alleged to have been botched.  The supervising surgeon was also sued, and was retained as a defendant.  The court ruled that because the resident did not exercise “independent medical judgment,” he could not be liable.  The standard for liability of a supervisee was enunciated as follows: “A resident who assists a doctor during a medical procedure and who does not exercise any independent medical judgment, cannot be held liable for malpractice so long as the (supervising) doctor’s directions did not so greatly deviate from normal practice…” I am often asked about the relative liability of supervising psychotherapists and their supervisees.  This case clearly states the standard:  the supervisor and not the supervisee is primarily liable unless directions given by the supervisor are so outside the accepted standards of care that even the supervisee should know that.


Selling a psychotherapy practice: So you’re planning on retiring or moving, or just want or need a change and are wondering whether you might be able to sell your psychotherapy practice. The first consideration is whether your practice is saleable, whether the value you have created for yourself can be transferred to another owner. Unincorporated solo practices, practices based in home offices, group practices that rely on payments from third party payors but are without group provider contracts, practices whose referrals are inextricably coupled with the owner’s name and presence, practices where the owner’s departure is imminent and will be complete, practices on the wane often due to the age or health of the owner, and practices where the services of the owner produce the bulk of revenue collected, all may be difficult to sell.

If you think you have a practice worth selling, then preparation for the sale is necessary, often well in advance. That may mean incorporating a practice that had previously operated as a sole proprietorship as a PC or PLLC. In New York State, PC’s can practice only one profession and thus can be co-owned only by professionals licensed in the same profession. A PC can hire other professionals whose scope of practice is wholly encompassed by that of the owners of the PC, however. For example a PC owned by psychologist(s) may employ LCSW’s, LMSW’s, LMFT’s, LP’s, LCAT’s and LBA’s, and likewise with a PC owned by an LCSW/R. Multi-disciplinary ownership of a psychotherapy practice is theoretically possible in NYS by means of a PLLC, but because most mental health professions, including MD’s, LCSW’s, LMHC’s, LMFT’s, LP’s, LCAT’s and LBA’s legally have opted out of or are unable to form PLLC’s with other professions, in reality, the only PLLC’s co-owned by members of different mental health disciplines in NYS are those co-owned by psychologists and nurse practitioners in psychiatry.

There are other ways to prepare for selling a practice. Choose or change to a name for the business that is not personal. For example, instead of “John Smith, LCSW PC,” name your practice something like “Midtown Psychotherapy LCSW PC.” Employ therapists as W-2 employees rather than 1099 contractors; the former are considered a more solid base for a practice and are generally more likely to stay with a practice upon its sale. Somewhat paradoxically, choose long-term leases where assignment is possible and without limiting factors, as those are preferred by buyers. Negotiate group contracts allowing billing for supervisees with managed care companies and focus especially on developing business with insureds from the companies with whom the practice has such group contracts. But also cultivate multiple referral sources and if possible, assignable service contracts, for example a contract with a school district to conduct outside evaluations. Establish a website with a good Google ranking, solicit good online reviews (N.B. former patients only) and have a presence in other advertising and social media venues. Maintain as current any equipment, information technology (EMR, billing programs) and furnishings. Plan on staying with the practice for awhile after its sale. Try to sell when the practice is at its peak; that’s when it’s most saleable and commands the highest price.

A critical aspect of preparation is deciding how to value your practice. An imprecise but easy way is to calculate a multiple of revenue; often 1-3 times revenue is the appraised value of a service business. This formula doesn’t work as well if the owner generates significant revenue and is leaving. Another calculation is EBITDA, meaning annual “earnings before the deduction of interest, tax, depreciation, and amortization.” This is really just a means of defining profits; the sale price is often set at 1-3 times EBITDA. Keep in mind that buyers are usually not interested in capitalizing on opportunities that you foresee for your practice but that you yourself have not taken advantage of. Rather they are looking for an established track record and whether it will continue after you leave. Loyal staff, an advertised telephone number that receives several new referrals a day or week, current information technology, and complete and accurate financial records and tax returns are essential in pricing. Growth opportunities are generally not. An exception to this is documentation of new patient inquiries and, historically, what portion of them become patients; excess demand for services can increase the sales price. Buyers usually expect and demand that a seller have an excellent reputation; “goodwill” is taken for granted in a sale and does not usually result in an enhanced sale price.

Once you have an idea of the price you hope to be paid, you must find a buyer. Buyers might include your staff, a new practitioner, an established practitioner or larger practice wishing to expand, a hospital, or seldom, in part due to NYS’s strict prohibitions on the corporate practice of healthcare and the complication and expense of “workarounds” to the prohibition, venture capitalists and private equity firms. The means of finding a buyer can be personal contacts, or more typically, a business broker. These brokers can be effective but charge up to 10% of the sale price. Unless a sale to staff is planned, it is usually best not to inform them of plans for a sale as, fearing the worst, they may seek employment elsewhere. You will need an attorney to help structure and document the sale and a CPA to explain and prepare financial and tax aspects and documents.

If you have difficulty finding a buyer, you might consider offering potential buyers financing, essentially receiving the sale price in installments, in which you receive only a portion of the sale price upon the actual sale, and the rest with interest over time. Sometimes these financed sales include a variable price, dependent on the practice earning certain anticipated revenue, with a reduced sale price if it does not, aka, an “earn out.” Installment sales may also include a clawback whereby if the buyer reneges, the seller can repossess the practice.

Almost always, the buyer will wish you to continue for a set period of time, usually 6 months-3 years as an employee or contractor. You may wish to stay on as a part owner, though in NYS, to do that you must have some active involvement in the practice, as passive investment in professional entities is prohibited. Regardless, the buyer will likely ask you to sign a non-compete agreement to prevent you from establishing a competing business nearby.

With your attorney, you will prepare a confidentiality and non-disclosure agreement (“NDA”), in which a prospective buyer agrees not to share any of the information you give them during their examination of the business and finances of the practice, i.e., their “due diligence.” Once there is a tentative agreement, you may prepare a “Letter of Intent” by which you and the prospective buyer memorialize but do not yet commit yourselves to the terms of the sale. Then finally there is the actual sale at a closing (like for the sale of a house). At the closing, an Asset Purchase or Stock Purchase Agreement specifying assets being sold and your and the buyers roles and responsibilities as co-owners of the practice if you are continuing as such, an Assignment of Lease, an Agreement regarding Custodianship of Medical Records, and an Employment or Independent Contractor Agreement (of you by the new owner) with Non-Competition and Non-Solicitation provisions may all be executed. And then a new phase of life begins for you.


NGS Medicare begins enforcing ban on handwritten claims. The ban was effective November 13, 2017, but has begun to be enforced just recently. All Medicare claims must be either printed from typewritten fillable pdf’s or submitted electronically. Handwritten claims are being returned with a note stating that they are unacceptable. Some clients have mistaken the note to mean that they must now submit all claims electronically and therefore, if they weren’t already, become HIPAA compliant. That is not the case. Medicare will still allow “small providers,” that is those with 10 or fewer employees, to submit claims by mail rather than electronically and thus avoid HIPAA compliance*. However, now those mailed claims forms must be printed by computer and not completed by hand. Fillable CMS 1500 forms for mailing are available online as single documents, often from other Medicare providers, or programs can be bought. And of course, if providers wish they may file claims most directly electronically through NGS Connex, though that necessitates HIPAA compliance.

* HIPAA compliance is mandatory for the entire practice if a provider electronically bills any insurer, whether governmental or commercial.

Are you at risk of an audit by Medicare? In August 2017, the Office of Inspector General announced a program to retroactively review payments for psychotherapy services to “determine whether they were allowable in accord with Medicare documentation requirements.” To determine which Medicare providers to audit, the Centers for Medicare & Medicaid Services (CMS) and its contractors use Comparative Billing Reports (CBR’s). CBR’s are prepared by comparing an individual psychotherapy practitioner to State averages developed by CMS in the following three areas: minutes per visit; visits per beneficiary per year; and charges per beneficiary per year. According to CMS, in New York State the average psychotherapy visit is 47.34 minutes (CPT 90834), the average number of visits per year by any given patient is 13.90, and the average charge per beneficiary per year is $1019.03. If a Medicare provider is statistically significantly higher than the State average in any two of those three metrics, an audit by CMS or one of its contractors becomes more likely.

Audits also become more likely if the psychotherapist is near or above the 50th percentile for annual payments by Medicare ($5,000) or treats 10 or more Medicare beneficiaries in a given year. An audit does not necessarily result in a clawback (demand for monies previously paid for claims to be reimbursed to Medicare). Of course medical necessity must be adequately documented and the lack of it is usually the cause of a clawback. See https://downloads.cms.gov/medicare-coverage-database/lcd_attachments/31887_33/Outpatient_Psych_Fact_Sheet09.18.14.pdf regarding standards for adequate documentation. In my experience, however, the bases for many clawbacks are often procedural rather than substantive, for example, that the practitioner did not sign each progress note, or did not denote starting and ending times for sessions.

New mandate regarding sexual harassment for employers in New York City and State. Effective September 6, 2018, all employers in New York City must display a poster and distribute written information to all employees regarding rights and responsibilities to prevent sexual harassment in the workplace. The poster and informational sheet are available free at https://www1.nyc.gov/site/cchr/index.page.  Effective October 9, 2018, all employers in New York State will be required to adopt an anti-sexual harassment policy and training program that either tracks or exceeds the model policy and program that has yet to be published by the New York State Department of Labor and Division of Human Rights. Also under the new State law, employers may now be held liable to victims of sexual harassment who are contractors (1099); previous legal protections were afforded only to employees (W-2).

HIPAA compliance and payment methods. Quite a number of clients have ventured into new methods of payment. However, clients who are HIPAA compliant should be aware that some of the newer methods are not HIPAA compliant. PayPal is not compliant. Square is. HIPAA compliant practitioners should ask any prospective payment app if it is HIPAA compliant, including whether it is willing to sign a Business Associate Agreement. Although I am aware of no cases as yet, use of a non-compliant payment method by a HIPAA compliant practice could lead to significant penalties imposed on the practice by federal regulators (Health and Human Services/Office of Civil Rights) in the event of a breach, that is, if the payment program were ever hacked and data about patients of the practice released. Non-HIPAA compliant practitioners have more leeway to use non-HIPAA compliant payment programs, but if they do, it is advisable that they obtain informed consent regarding the lack of security or privacy (for example in mining data) entailed in the use of the programs.

New law mandates mental health education. New York schools are required to provide health education to elementary, middle school and high school students. Required elements of that health education have not heretofore included mental health. Effective July 1, 2018, schools are now required to include mental health in the health education curriculum. See Section 804 of Article 19 of NYS Education Law.

Liability for a clinician who released subpoenaed records. A recent decision by the Connecticut Supreme Court found a doctor liable for complying with a subpoena for patient records that was unaccompanied by a valid authorization of the patient to release the records, Byrne v Avery Ctr, 327 Conn 540 (2018). Upon receipt of the subpoena, the doctor assumed a safe (and, I guess, expedient ) course of action would be just to send the records to the court, and did so. The case serves as a reminder to healthcare professionals that subpoenas are difficult to understand and that blind compliance may lead to liability for breach of confidentiality. Consultation with an attorney is almost always warranted when a subpoena is served.


 Mental health diagnosis by unlicensed staff at NYS agencies will be phased out beginning next year . For over a decade, in order to render mental health diagnoses as part of psychotherapy practice in a private setting in the State, an individual has been required to have a State-granted license whose scope included the capability to diagnose (LCSW, LMSW under supervision, PhD, NP-P or MD), or a State-granted limited permit (in one of the above-mentioned non-medical mental health professions), or be an exempt student, i.e., be enrolled in a licensure-qualifying graduate program in one of the mental health programs, and be working under supervision for academic credit at an externship that is required and approved by the academic institution. (LMHC’s, LMFT’s, LCAT’s and LPsa’s have within the scopes of their licensure the ability to “assess” even using established diagnostic critieria to do so, but not to diagnose, an unclear but stubborn distinction. Within the scopes of their practice, they may function as psychotherapists, albeit with MD consultation when treating severe mental illnesses. LBA’s may treat ASD’s when the diagnosis is made by a clinician whose scope of practice includes diagnosis of mental disorders.)

However, a “temporary” exemption from this requirement of “license, permit or student status” in order to diagnose and treat mental health disorders was granted in 2004 to State approved and State operated facilities, which are agencies with operating licenses from the Office of Mental Health (OMH), Department of Health (DOH), Office for People with Developmental Disabilities (OPWDD), Office of Alcoholism and Substance Abuse Services (OASAS), Office of Children and Family Services (OCFS) and several other State agencies (all sometimes known collectively as “the O’s).

The rationale given for this exemption by the State - that the O’s were to be permitted to hire as mental health clinicians, including with both psychodiagnostic and treatment capability, unlicensed masters-level practitioners - was that to do otherwise would cause financial strain to the agencies due to the additional salaries that would be required if they were compelled to hire only licensed staff. Although meant to be a temporary exemption until additional funding was made available, the State legislature continued renewing and extending it, the last extension occurring in 2016 and planned to be reviewed for renewal in 2021.

The exemption law and its extensions have been opposed by just about every professional association in the State, but passed repeatedly nevertheless due to a fear of budget overruns if the exemption were ended. State agencies declared that their current budgets simply did not allow for the additional cost of hiring only licensees, and legislators declined to increase their funding. Professional associations opposed the exemption for obvious guild-related reasons, but also because of the apparent double standard it represented, i.e., an implicit State policy that patients, generally of lower income, who sought mental health care from State approved agencies did not need or deserve the same level of care and protection afforded to those who sought care privately. The NASW was especially active in lobbying against the extension of the exemption, citing social justice concerns. The State’s response to this argument was that the regulatory requirements imposed on State-approved agencies, including that unlicensed clinicians be supervised by licensed staff, compensated for the lack of licensure of the therapists themselves. Those in favor of continuing the exemption in perpetuity seemed to be winning the argument. In fact, as late as 2013, Governor Cuomo stated his support for making the exemption permanent.

Now a compromise has been reached that promises a permanent resolution. No longer will the exemption need review for renewal every five years. The State legislature passed a Health and Mental Hygiene budget bill (A9507c, Part Y) on March 30th that in part removes the exemption, and in part makes it permanent. Unlicensed staff at State agencies will no longer be permitted to diagnose mental health conditions. Only LCSW’s, LMSW’s under supervision, NP-P’s, PhD’s and MD’s will be able to do that. (LMHC’s, LMFT’s, LCAT’s, LPsa’s and LBA’s will continue to be able to be hired by State agencies as non-diagnosing mental health treatment providers.) It appears however that unlicensed masters level staff will still be able to function as psychotherapists while under supervision, perhaps under the title of “psychotherapy assistants,” at least those who are “grandparented” in when the implementing regulations are issued by the State Education Department. Formal guidance by NYSED to clarify these issues is expected by Spring 2019.

LCSW’s and NP-P’s as future Worker’s Compensation Board providers. In a communique dated April 17, 2018 (Subject No. 046-105), the NYS Workers Compensation Board stated its intention to support Governor Cuomo’s proposal to expand access for injured workers to medical care providers by permitting certain medical providers who are licensed in the State to diagnose and treat but not yet able to be authorized WCB providers, to obtain that authorization. The professions that are planned to be authorized include nurse practitioners and licensed clinical social workers.

In NYS, no suspension of professional licenses for defaulting on student loans. In nineteen states, persons in default on their student loans may have their professional licenses suspended as a result. The NYS legislature in its FY 2019 Budget expressly prohibited the State from suspension for that reason, citing the “financial death spiral” created thereby. (A9507C, S 7507C)

GDPR compliance. The new “General Data Protection Regulation” of the European Union went into effect last month. Called the “right to be forgotten” law, it strengthens protection of consumer data with requirements of 72 hour breach reporting, stronger consumer consent and high fines as penalties for violations. It is applicable to business entities wherever they may be located (including in the USA) if the entity collects personal data or behavioral information from anyone in the EU.


Proposed expansion of NYS’s Managed Care Bill of Rights. The current Bill of Rights protects managed care panel members from being terminated as providers without a written explanation and a hearing that includes a clinical peer as a decision-maker. It is believed that some managed care companies evade these due process requirements by waiting until the renewal date of the managed care company’s contract with the provider, and then simply “non-renew,” an action with no due process requirements. The proposed amendments to the Bill of Rights would require managed care companies to observe the same due process requirements for non-renewal as for termination, and would enhance those due process requirements by mandating that the hearing panel include three members, one appointed by the provider. S 3943, A.2707.

Curbside “patient” consultations and confidentiality. This topic was recently in the news following Matt Lauer’s departure from the Today Show due to allegations of sexual harassment. Dr. Laura B, a licensed clinical social worker and sex therapist, revealed to the press that Mr. Lauer had previously consulted with her about his sex life prior to her appearance on his show. Mr. Lauer had asked others to leave the makeup room, and then disclosed to Dr. B that he was having marital difficulties, particularly regarding sex, and asked her whether sex toys might help. Dr. B thought herself able to disclose these revelations made by Mr. Lauer because she believes that she did not engage in a professional relationship with him and therefore owed no duty of confidentiality to him.

These types of consultations are often (mis)characterized as curbside “patient” consultations. In my opinion, from legal (malpractice) and professional (licensing board) perspectives, Dr. B was correct that Mr. Lauer was not a patient and no legal duty of confidentiality was owed to him. He was not a patient because he didn’t pay her, and she presumably took no history from him and therefore did not offer him any individualized professional advice, but rather only generic suggestions.

The ethics of such consultations may be less clear however. Some ethicists have said that if a person attempts to engage a healthcare professional in a private informal consultation, and the professional agrees, then the consulting person might reasonably expect that the professional will maintain the confidentiality of their communications. An alternative for the professional would be to decline to accept any personal information, telling the person that any advice can only be given after establishment of a formal professional relationship.

In a published survey, 75% of health care professionals thought that when a person asks them for advice outside the office setting, it is unacceptable to reveal details of the conversation to others, and 60% thought a professional should be subject to reprimand if he or she discusses with the media a conversation that took place outside the office. “Was Matt Lauer too naive about patient-doctor confidentiality,” Arthur Caplan, PhD, Medscape, 01/08/2018.

Legal risks of using untrained interpreters. Federal law (Title VI of the Civil Rights Act of 1964), NY State law (PHL 4403, 4408 10 NYCRR 405.7) and local law (NYC Human Rights Law, Ch 1, Sec 8-107) all require that healthcare professionals provide interpreters for patients designated “limited English proficient” (LEP). The latter refers to anyone over age 5 who reports speaking English less than “very well.” Enforcement tends to be lax and penalties slight, especially at the federal level. Further, lawsuits by LEP patients are unusual because, it is surmised, the patients are often recent legal or undocumented immigrants who fear being deported. Suits do occur however, occasioned by failure to get an accurate history, to obtain informed consent, or to explain how treatment works, when those failures directly result in patient harm. In a recent study of 35 malpractice cases involving LEP patients, 32 involved the use of incompetent interpreters. In the cases, friends, family members and even children of patients were used as interpreters. In NYS, Medicaid funds are available for payment of interpreters, 42 CFR 438.10, but otherwise the legal requirement is an unfunded mandate, an extra cost to practitioners. Even so, to comply with the laws and reduce malpractice risk, more practitioners than ever are using professional interpreters. “Legal risks when patients don’t speak English well” Leigh Page, Medscape, 02/07/2018.

License tag for professionals in NYS? Proposed legislation approved by The Medical Society of the State of New York, S 5870, A.560, would require all licensed healthcare professionals during all patient encounters to wear a visible and apparent photo identification name tag that includes the practitioners name, large bold lettering which specifies the type of license held by the practitioner, and the expiration date of the license. In its Memorandum of Support, MSSNY cited a study that indicated that 44% of patients believe it is difficult to identify who is a medical doctor and who is not.

Georgia refuses psychology licensure to graduate of online psychology program. In Welcker v Georgia Board of Examiners of Psychologists, A1611970, 03/16/2017, a Georgia Court of Appeals upheld the Board’s decision to deny licensure to a graduate of Fielding Graduate University, an online APA approved PhD program. In 2010, the Georgia Board added to the educational component of its licensure requirement that, “continuous full-time residence” at a doctoral program meant “continuous physical presence” and that “video teleconferencing or other electronic means to meet the residency requirement are not acceptable.” Unlike Georgia, New York State does allow accredited online programs to meet licensing requirements in some circumstances, that is, where the examiners deem the online program the "substantial equivalent" of a New York State licensure-qualifying program.


 Medical marijuana in NYS for a psychiatric condition. On November 11, 2017, Governor Cuomo signed a bill that adds post-traumatic stress disorder (PTSD) to the other conditions, all physical ones, that can legally be treated with medical marijuana in the State. A7006, S.4788. The governor apparently felt he needed political cover for the extension as he deliberately made the announcement on Veteran’s Day and focused on veterans with PTSD as potential beneficiaries. New York has taken a more sober view of marijuana than its neighbors: Maine and Massachusetts have legalized recreational use of marijuana and the new governor of New Jersey has promised to do the same.

The constitutionality of Certificates of Merit of malpractice claims. As do most states, New York requires that prior to filing a medical malpractice action, plaintiff’s counsel must submit a Certificate of Merit certifying that the attorney has consulted with an expert witness who is a licensed healthcare professional of the same profession as the proposed defendant. The expert must have had knowledge of and reviewed the respective legal and factual issues in the case, and have concluded that there is a reasonable basis to believe that malpractice occurred, NY CPLR 3012-a. This type of law has long been advanced as a means to prevent frivolous and expensive malpractice lawsuits. Recently, two States’ courts, in Oklahoma and Kentucky, in reviewing challenges to similar laws in those States, decided that the laws were unconstitutional because they present “an impermissible barrier on a plaintiff’s guaranteed right to court access.” John v. St Francis Hospital, 2017 OK 81, #115620, 10/24/2017. The States of Washington and Arkansas had previously made similar rulings. New York law attempts to deal with the constitutional issue with exceptions that allow a case to proceed if the plaintiff is representing her or himself, or if an attorney has made three good faith attempts to enlist an expert and still cannot obtain one.

New York’s statutory charges for copies of healthcare records may violate HIPAA*. Last year, the Office of Civil Rights that enforces HIPAA clarified that where HIPAA grants greater record access rights to patient records than does state law, HIPAA prevails, see https://www.hhs.gov/hipaa/for-professionals/privacy/guidance/access/#newlyreleasedfaqs . Under NY Public Health Law Section 18, practitioners are permitted to charge no more than 75¢/page and it has become customary for them to do so. But under HIPAA, according to the OCR, practitioners may charge only a “ reasonable, cost-based fee” calculated, for paper copies, by using the cost of labor for creating the copies, supplies, ie, paper and toner, and postage costs. If a summary is prepared, there may be additional labor costs. According to the OCR, for copies of records maintained electronically, practitioners may charge either a flat rate of $6.50, or calculate costs as above, but substituting the cost of the electronic media for paper costs. *Please note that HIPAA, including this OCR clarification only applies to “covered entities,” that is, those who bill insurers electronically. Non- HIPAA-compliant entities are subject only to State law.

And for some records, a recently enacted New York law prohibits any charges. A new law in the State prohibits healthcare providers from charging any fees when records must be produced in order for a patient to apply for Social Security disability or Medicaid benefits. S.6078. Records in such instances must be provided free of charge. The rationale for the law is to assist low-income disabled patients to obtain their entitlements.

A new mental health profession for NYS appears likely, “school psychologists.” This past Summer, the State Senate passed a bill providing for the licensure of school psychologists, S. 00692B. Currently the State Education Department certifies school psychologists to work only in schools, that is, they are not licensed to offer services to the public. The new bill, if it passes the Assembly and is signed by the Governor as seems likely, will permit masters level “licensed school psychologists” to offer psychological assessments and psychotherapy to persons under twenty-two years of age. The scope of practice law states that their interventions should be “educationally-related.” Practically, that limitation probably means that clients of school psychologists would have to be students, or maybe just prospective students, enrolled or planning to enroll in an academic institution. In effect, a new category of psychotherapists will be created whose scope of practice will be limited by the population it may serve, i.e., students under 22 years of age. The NY Association of School Psychologists has been lobbying for this legislation for years. The American Psychological Association takes the position that a doctoral degree should be required of those licensed by states as “psychologists.”

Child neglect occurs with domestic violence if child is unaware but present. A father choked a mother while a four month old was sleeping in the same room. The child could not be characterized as a witness to the domestic violence, nor was the child directly endangered, but the Appellate Court overturned the Family Court and decided that the proximity of the four month old to the violence was enough to support a finding of child neglect. Matter of Isabella S. 2017 NY Slip Op 07533, First Department, 10-26-17. Mandated reporters are advised to call the CPS Hotline if domestic violence by a parent occurs in the presence of a child, regardless of any other circumstance.


The duty to investigate Medicare overpayments. Clients sometimes ask if they need to take any action when they think that they may have been overpaid by Medicare either because of an error in billing by the practitioner, or an error by the carrier, NGS. Yes, they must and the consequences for failure to do so are significant. The Affordable Care Act includes a 60-day repayment rule that was recently confirmed in final federal regulations. Under that Rule, if repayments of known overpayments are not made within 60 days of discovery, penalties in the amount of three times the overpayment can be assessed. The 60 days begins to run when the practitioner “identifies” the overpayment. Identification occurs upon actual discovery, or when the practitioner “should have” identified the overpayment through “reasonable diligence.” From the latter is derived a duty to investigate. Thus, whenever there is any credible evidence of overpayment, an investigation by the practitioner should ensue promptly, and if any overpayment has occurred, a refund sent. Medicare has a form that accompanies refunds of overpayments: https://www.ngsmedicare.com/ngs/wcm/connect/5ea07b7f-0367-4bf5-884f-3b7939824572/648_0315_Vol+Refund+Form_JKB_508.pdf?MOD=AJPERES.

Nurse Practitioners growing in number, the issues of multi-disciplinary practice and liability for collaborating physicians. The number of Nurse Practitioners in New York State increased by nearly 15% in 2016, and by my observation, a significant portion of that growth is in the specialty, Nurse Practitioner in Psychiatry (NP-P’s). NP’s have full prescribing privileges in New York State. Among non-prescribing mental health professions in NYS, only psychologists may form jointly-owned multi-disciplinary practices, PLLC’s, with NP-P’s. (In NYS, jointly owned NP-MD and PhD-MD practices are prohibited.) One factor inhibiting the growth of such multi-disciplinary practices seems to be uncertainty regarding the potential liability of the physicians who collaborate with NP’s. NYS requires that NP’s have a written practice agreement with a collaborating physician until the NP has 3600 hours of experience, and thereafter the NP (called an “independent” NP) must have a “collaborative relationship,” though not a written agreement with a collaborating physician or facility. In a recent article on Medscape, (“Physicians who work with NP’s: What’s the liability risk?” By Carolyn Buppert, MSN, JD, 09/01/2017) a researcher found nationally only 6 cases of collaborating physician liability. Four involved actual conjoint treatment of a patient by an NP and MD. Two involved physicians not in compliance with state regulations governing oversight. The definition of a “collaborative relationship” required for independent NP’s in NYS is so vague, i.e., according to the New York State Education Department, it is “...for the purpose of exchanging information in order to provide comprehensive care or to make referrals, as necessary,” that it appears little oversight or actual collaboration by an MD on any given case is necessary. The Webscape commentator opined that to reduce, if not eliminate risk, collaborating physicians should simply avoid becoming involved in individual cases of an NP.

New York State’s new Paid Family Leave Law, effective January 1, 2018. This new law will require employers of any size to provide a paid family leave benefit; the New York State Department of Labor calls it, “the nation’s strongest and most comprehensive paid family leave policy. “ NYS paid family leave supplements federal FMLA and provides coverage for: parents during the first 12 months following the birth, adoption, or fostering of a child; employees caring for a spouse, domestic partner, child, parent, parent-in-law, grandparent, or grandchild with a serious health condition; and employees assisting loved ones when a spouse, child, domestic partner, or parent is deployed abroad on active military duty. Eligible employees include: employees with a regular work schedule of 20 or more hours per week after 26 weeks of employment; employees with a regular work schedule of less than 20 hours per week after 175 days worked. Insurance coverage will typically be included as a rider to an employer's existing mandatory disability insurance policy (NYS DBL), and can be fully funded by employees through payroll deductions. Paid family leave will be phased in over four years, beginning January 1, 2018. In 2018, employees may take up to eight weeks of paid leave at 50% of an employee's average weekly wage up to 50% of the New York State Average Weekly Wage. That increases to 12 weeks of paid leave in 2021 paid at 67% of an employee's average weekly wage up to 67% of the New York State Average Weekly Wage.

As of July 1, 2017, employers are being advised to immediately contact their NYS DBL carriers to ensure coverage will begin on January 1, 2018, and also, if they so wish, to begin employee deductions at that time. Perhaps the most difficult aspect of the law involves the requirement imposed upon small employers that they reserve positions for their employees who take paid leave.

Mental health providers’ participation in managed care networks. In a recent national study, it was found that 58.4% of primary care providers participated on managed care panels. A lesser percentage, 42.7%, of psychiatrists participated. Even lower was the percentage of nonphysician mental health practitioners who participate in networks, 19.3%. The authors of the article cite barriers erected by the managed care networks as the reason for low participation by mental health professionals, and consequently question the commitment of networks to mental health parity. Zhu, J, Zhang Y and Polsky, D, Networks in ACA marketplaces are narrower for mental health care than for primary care. Health Affairs, V 36, No 9, 09/2017.

Prevalence of Mental Illness in US. A recent study of households found that from 2012-2014, among adults 18 years and older who were asked if they had any mental illness in the past year, 18.3% answered “yes.” New Jersey was the state with the lowest percentage of positive responders with 15.83%. The highest responding state was Oregon with 22.72%. New York State had almost the same percentage as the national average, 18.23%. The authors note that the percentages reflect only those who reported mental illness (presumably some would deny it), and not military personnel, the homeless and those in jails and hospitals. State and sub-state estimates of any mental illness form the 2012-2014 national surveys on drug use and health, SAMHSA.


Ethical and legal issues in collection. An article in the New York Times of April 19, 2017 caused some consternation among clients. It detailed a disciplinary complaint against a psychologist in New Jersey based in part on his taking collection action against former patients in which patients’ names, diagnoses, and treatments were disclosed to courts. As a defense, the psychologist countered that while he disclosed that information to his attorneys in order for them to pursue payment, he did not himself make any unauthorized disclosures and relied on his attorneys not to take any unlawful action.

Regarding the issue of therapists taking collection action, in compliance with ethics codes and federal and state regulations, healthcare professionals are permitted to take legal action against patients for non-payment.* Before doing so however, they should notify the patient in delivery-confirmed correspondence that a disclosure of otherwise confidential information will be required if payment is not made and collection action is consequently made necessary. The information that is to be disclosed in order to seek collection should be described to the patient in the correspondence, and such information should be limited to the minimum necessary to obtain payment. If the professional is HIPAA compliant, then he or she should sign a Business Associate Agreement with the collection agent. (It is better, but in my opinion, not essential, that the professional also state the above collection policy in any informed consent documentation given to the patient at the outset of treatment.)

Regarding the psychologist’s defense: Alas! There is a “reasonable reliance doctrine” to the effect that a person is excused for committing an offense if they reasonably relied on a statement of the law, later determined to be mistaken, that was obtained from a public officer or public body whose responsibility includes interpretation of the law.

But reliance on bad advice provided by a private attorney is not a viable defense. It does not constitute an exception to the general rule that a mistake of law is no excuse. The reason for this is that if an accused could be excused from penalty because their action was taken upon the advice of counsel, then such advice effectively becomes superior to the law. In my experience, however, some tribunals, including licensing boards, do reduce penalties based on respondents having acted in good faith on the erroneous advice of their lawyers.

* From a risk management perspective, it is inadvisable to allow debts to accrue and sometimes to take any or certain types of collection action.

New NYS participating provider directory. The New York State Department of Health has initiated a new website, the NYS Provider & Health Plan Look-up, that purports to give information to consumers as to the health insurance plans in which licensed healthcare professionals participate, https://pndslookup.health.ny.gov/. Many practitioners have found themselves listed as participating providers on plans when in fact the they are not. Clients are advised to check and correct their listings, by means of the “Contact” function at the website, in order to avoid problematic referrals based on any incorrect information.

Fee-splitting prohibition may be relaxed in New York State. NYS has had some of the strictest laws and policies against fee-splitting, which among other prohibitions forbid licensed healthcare practitioners from paying their billing or management companies on a percentage basis based on patient fees. The State Senate has voted to allow fee-splitting provided that the health care professionals receive third-party payments in their own name and do not receive referrals from the business entity who is paid on a percentage basis, S 2247. The Assembly has not yet voted on the bill, A193. The bills preserve the essential function of the prohibition to prevent the corporate practice of healthcare and referral fees (kickbacks).

New York State Department of Labor says employees must be allowed to discuss their wages with one another. In regulations published on February 1, 2017, the NYS DOL said that NYS Labor Law Section 194 regarding pay equality prohibits employers from trying to prevent employees from discussing their wages among themselves. The law is part of a trend to eliminate wage disparities due to discrimination, especially on the basis of gender, by enhancing transparency. It is consistent with Section 8 of the federal National Labor Relations Act which requires employers to allow employees to discuss wages among themselves for the purposes of labor organizing and collective bargaining.

Sometimes clients use employment contracts that attempt to bind employees to confidentiality regarding the terms of the contracts, but under the NYS and NLRA regulations, confidentiality provisions of any employment contract would be void and unenforceable insofar as discussion of employee compensation with other employees is concerned.

The “Goldwater Rule” remains intact. On March 16, 2017, the American Psychiatric Association reaffirmed its support for the Goldwater Rule that psychiatrists should not give professional opinions about the mental status of persons whom they have not personally evaluated. The rule is followed by all other mental health associations as well. It was first enunciated in 1964 following the publication of mostly negative commentary by psychiatrists on the mental status of then presidential candidate Barry Goldwater. Several clients interested in publishing their views of current political leaders have asked about consequences of violating the Rule. In my opinion, both defamation actions and ethics complaints are possible.

HEALTH LAW SUPPLEMENT          Spring 2017,  #60

HIPAA under the Trump administration. There was renewed interest by clients in HIPAA last year due to enhanced audits and enforcement efforts.  During 2016, the last year of the Obama administration, a permanent random audit program called “Phase 2” was launched and there was an unprecedented level of audits, enforcement actions and fines.  Audits were undertaken of randomly chosen practices without regard to size of the practice or prior complaints.  To compare, in 2014 the OCR (Office of Civil Rights that enforces HIPAA) collected $7.4 million in fines; in 2016 that amount increased to $23 million. The single largest fine was $5.5 million against Advocate Health Care System for the theft of five of its laptops, and misuse of PHI by its biller.  The Trump administration has stated its intention to reduce the federal regulatory burden by eliminating unfair and unnecessary oversight, and fewer (or no) HIPAA audits except in response to complaints would seem to be consistent with that goal.  But HIPAA fines are a way to raise funds, and given other of the Trump administration’s goals, e.g., cutting taxes, it may continue to aggressively pursue those monies.

HIPAA and cloud service providers (CSP’s).  At the end of 2016, the Department of Health and Human Services (HHS) issued formal guidance regarding CSP’s, opining that they are not “conduits” (as telephone companies are) because they retain and do not just transmit PHI, and thus do not fall within any HIPAA safe harbor.  Covered entities were advised to enter into Business Associate Agreements with their CSP’s.

HIPAA and confidentiality with caregivers. Under the recently passed “Compassionate Communications on HIPAA” provision of the federal “21st Century Cares Act,  the Secretary of HHS is required by December 13, 2017 to issue guidance to clarify situations in which HIPAA permits mental health care professionals to communicate with caregivers of adults with a serious mental illness to facilitate treatment, with and without the patient’s consent.  “Serious mental illness” is defined as “a diagnosable mental, behavioral or emotional disorder that results in serious functional impairment and substantially interferes with or limits one or more major life activities.” Introduced by Representative Tim Murphy, an advocate for families of the mentally ill, the provision is intended to clarify HIPAA constraints for professionals so that they do not inappropriately deprive families of necessary information to assist in the treatment of the mentally ill.  Representative Murphy’s stated objective is to “allow the mental health professional to provide the diagnosis, treatment plans, appointment scheduling, and prescription information to the family member and known caregiver for a patient with a serious mental illness.  This change would apply for those who can benefit from care yet are unable to follow through on their own self-directed care.” (from the Helping Families in Mental Health Crisis Act of 2015).   Even if HIPAA guidance relaxes confidentiality requirements under the federal regulation and allows certain unauthorized disclosures to the families of the mentally ill, New York State regulators, who strictly enforce State confidentiality laws and regulations, may not follow suit.  Absent adjudicated incompetence or imminent danger, NYS requires that patients authorize disclosures to family members.

Social media defamation harder to prove in New York State.  In 2 recent NYS cases, Jacobus v Trump 2017 NY Slip Op 27006 (Sup Ct, NY Cty, 01/09/2017) and Stolatis v Hernandez, 51 Misc 3d 1203 (Sup Ct, West. Cty 2016), the courts decided that reasonable readers of social media should know that statements of commentators that might appear to be factual (and therefore if proven false, provide the basis for a finding of defamation), were, given the context, “merely rhetorical hyperbole, and not statements of fact...”  In the first case, Trump (the current president) tweeted that a Republican TV commentator was “a real dummy,” “really dumb,” “a major loser, zero credibility” who had “begged” him for a job; the court said that even if the tweeted statements might be demonstrably false, their context should have signaled readers that “Jacobus and Trump were engaged in a petty quarrel,” and that Trump’s comments were therefor “nonactionable opinion,” and not actual statements of fact.  These cases seem to me to have implications for healthcare professionals considering taking legal action for defamation against social media commentators who impugn the reputations of the professionals; i.e., courts may give the commentators a wider latitude because of the medium used for the communication.

New law in New York City protecting independent contractors.  Practices that retain 1099 independent contractors will shortly have another reason to beware (independent contractors are already a suspect class as far as the IRS and NYS Department of Labor, Unemployment Insurance and Workers Compensation are concerned).  Beginning May 15, 2017 the Freelance Isn’t Free Act (FIFA) will take effect in NYC.  It’s the first such law in the country.  It requires that contractors work under a written contract and receive timely payment, and also that they be protected from retaliation for filing complaints or otherwise seeking to enforce their rights in the same manner as W-2 employees are protected.

Proposed NYS legislation requiring collection of school information.  A352 and S2113 require that physicians obtain the name of the school attended by their school-aged patients and maintain that information in their medical records.  If passed, the requirement may be extended to other health care professionals.  The purpose of the law is to facilitate health care professionals’ communication with schools to warn of dangers posed to other students by reason of their patients’ physical or mental health conditions. The law is opposed by the Medical Society of the State of New York, not because it may herald the imposition of a new duty to report, which it may in my opinion, but rather because it imposes a new paperwork requirement.

Authorizations under 42 CFR Part 2 may be generic.  The federal Substance Abuse and Mental Health Services Administration (SAMHSA) updated its rules in January so that patients and institutions are now explicitly allowed to use a general designation such as “all of my current and former treating providers” to indicate entities with which their PHI may be shared.  Prior to the passage of this final rule, it was believed by many covered entities that authorizations to release patient information had to refer to specific parties by name to whom PHI was to be released.  The rationale for the change is to allow patients to benefit more easily from integrated health care.


Mental health parity is proving difficult to achieve but steps are being taken.

There are large class action lawsuits pending to enforce the federal Mental Health Parity and Addictions Equity Act (MHPAEA) including locally New York State Psychiatric Association v United Healthcare and American Psychiatric Association v Anthem Health Plans. The plaintiffs in these cases assert that these insurers curtail psychotherapy for patients requiring long-term treatment; allow no more than weekly psychotherapy for patients when greater frequency is recommended, and in cases of risk of hospitalization or self-harm, necessary; make it difficult to obtain initial and continuing authorizations for mental healthcare; systematically reimburse providers of mental health services at less favorable rates than providers of other healthcare services in order to discourage providers from accepting health insurance; use more stringent medical necessity review standards for mental healthcare than for medical-surgical benefits; and engage in a pattern of denying coverage for out-of-network mental health services due to purported failures by providers to respond to requests for back-up clinical information when in fact no such requests have been made. Further, the suits allege that the insurers manipulate non-quantitative treatment limitations, CPT code changes, reimbursement rates and documentation requirements in order to deny mental health patients insurance benefits to which they are entitled.

On October 28, 2016, a presidential task force took action to enhance enforcement of MHPAEA by awarding $10 million dollars to certain states including New York for enforcement efforts, creating a website to assist consumers to understand their rights under the law and to file complaints with the Department of Labor regarding violations of it, http://www.hhs.gov/mental-health-and-addiction-insurance-help.

A bill was also introduced in the New York State legislature, S07988, for the State to enhance enforcement of MHPAEA and the State equivalent (Timothy’s law) by providing consumers with information about their rights, see http://www.ag.ny.gov/sites/default/files/pdfs/publications/Mental-Health-Parity-Flyer-for-providers.pdf, and creation, based on objective analysis and patient complaints, of a “...mental health parity report that includes a ranking from best to worst based upon each (insurance) company’s compliance with mental health and substance abuse parity laws...”

Iowa becomes the fourth state to allow psychologists to prescribe.

This year, Iowa followed New Mexico, Louisiana and Illinois in granting prescription privileges to psychologists. As with the other states, the Iowa law requires that psychologists pass a certification exam, complete postdoctoral study in psychopharmacology, undergo a specified period of supervised experience, and utilize only a limited formulary. There are similar bills pending in the New York State legislature, S 5824 and A 9236, but if past experience in the State with such bills is a predictor, they stand little chance of passage given the strong opposition to them by the New York State Psychiatric Association. The Psychiatric Association asserts (on its website) that by lobbying for the bill, the State Psychological Association “apparently intends to renege on its 2002 agreement by seeking to remove the statutory prohibition on prescribing.” The State Psychological Association claims (on its website) that due to their more comprehensive therapeutic approach, psychologists have enhanced alliances with and better knowledge of their patients, and also that “rural areas of New York state are often underserved in the area of mental health and often have no immediate access to psychiatric care.”

Introduction of a duty to protect bill in New York.

This year, bills were introduced that would impose a duty to protect upon private mental health practitioners, A 9484, S 7424. Most practitioners and healthcare attorneys assume such a duty exists ethically and perhaps in State common law, but it has not as yet been made statutory in New York. There are philosophical and ethical arguments for and against such a bill, of course, and the bill would provide a certain clarity for clinicians. But in my opinion, it suffers from certain drafting deficiencies as well. As justification for the bills, the authors state that mental health professionals working in facilities licensed by the State Office of Mental Health already have such a duty. They do not. They have permission to break confidentiality when individuals are endangered, not a mandate to do so. See Mental Hygiene Law 33.13 (c)(6). Permissive laws have certain advantages over mandates, protecting clinicians from liability for disclosures without potentially imposing liability for failure to disclose. Secondly, and perhaps more semantic than substantive, the bill mandates disclosure in the event of threatened “serious imminent harm.” That seems to me to confuse or equate “harm” with “danger.” The former is broad and vague, while the latter is generally interpreted as relating to actions that may be life-threatening. Compare, for example, MHL 33.13 (c)(6) with 33.13(c)(9)(v). Perhaps the drafters adopted the “harm” standard from the New York Safe Act, Mental Hygiene Law 9.46, but the Guidance Document to that Act at least states that the threatened harm must also be “physical.”

State guidelines issued concerning providers and shared space.

Issued by the NYS DOH, OMH and OASAS on September 14, 2016, these guidelines pertain to arrangements where multiple providers, at least one of which is licensed by one of the above state regulatory agencies, share the same space either at different times or the same time. However, they provide guidance that is useful for all clinicians who share space with other clinicians. In such situations, a risk of vicarious liability may arise if clients might reasonably believe that services are being provided by a single group, with such belief founded on misleading displays (e.g., a sign on the door of an office suite housing several individual practices that reads, for example, “Island Mental Health Associates”) or a lack of notification disclaiming affiliation. According to the Guidelines, patients must understand exactly who is providing services to them, through the “use of clear signage ... that the providers are separate and distinct.” And of course, medical records must be separated and secured, and shared only as consistent with State and federal law.


Will the Tarasoff rule be expanded to require protection of the public at large? Maybe, at least in California, the State in which the Tarasoff rule originated in 1976. The Tarasoff rule, followed in most states, and assumed to be an implicit permissive if not mandatory standard of care in many others including New York, is that psychotherapists have a duty (or permission) to protect and warn when "a patient has communicated to a psychotherapist a serious threat of physical violence against a reasonably identifiable victim or victims." See NY Mental Hygiene Law 33.13(c)(6). Now, in a case before the California Supreme Court, Rosen v Board of Regents of the UCLA, that Court is to decide whether to expand the duty of psychotherapists to protect to cases where a patient is deemed a threat to the general public rather than to a specified individual or individuals. 

DT, a student at UCLA, was treated at UCLA’s hospital and diagnosed as paranoid and possibly schizophrenic. He was assessed there as having general "ideations of harming others" but had no plan or intent to harm anyone in particular. As conditions of his continued attendance at the university, he was barred from UCLA housing and required to attend therapy sessions. He also agreed to take anti-psychotic medication. However, he continued to exhibit paranoid behavior toward fellow students in a chemistry lab, and later, while working at the lab, stabbed another student, Rosen, who required extensive medical care in order to survive the attack. Rosen sued UCLA alleging that it had assumed a duty to protect its students from other students deemed potentially dangerous. Rosen won a judgment in trial court, but lost at an appellate court. Now the case is before the California Supreme Court for a decision that will have significant implications for psychotherapists there, and maybe, perhaps inevitably, beyond.

There are some commentators, e.g., the Project on the Foundations of Private Law, who view the case as one which should affirm the duty of a university to competently manage known risks presented by one of its students to others, i.e., that the measures taken by UCLA were inadequate and negligent. Other organizations, however, including the American Psychiatric Association which has filed an Amicus Brief in the case, see the case as having the potential to expand the Tarasoff rule as a precedent that would "eliminate any expectation of confidentiality in the therapeutic relationship." The APA believes that patients with any violent ideation, fantasies or urges (and presumably lacking intent or plan so not covered by current reporting laws or standards) would be unlikely to seek treatment if they believed that their mental health practitioner might be required to report them to law enforcement or other authorities.

New York State rejects hebephilia as the basis for civil commitment. Under NY’s Sex Offender Management and Treatment Act, convicted sex offenders can be confined and ordered to undergo psychological treatment after they have served their prison terms. Ralph P is a 72 year old man who was convicted in 2001 of a sex offense against a 14 year old boy. In 2014 New York State sought to further civilly detain Mr. P based on his potential future dangerousness due to a diagnosis of "hebephilia." Hebephilia, defined as attraction to pubescent children from ages 11 - 14, was rejected, however, as a diagnosis by the American Psychiatric Association when the DSM 5 was published in 2013. The APA rejected a proposal to expand the definition of pedophilia (involving attraction to pre-pubescent children) to include attraction by adults to pubescent minors. The judge in the Ralph P. case ruled that because hebephilia had not gained sufficient scientific recognition as an accepted mental disorder, it could not be used as a justification for further confinement of Mr. P under the Sex Offender Management and Treatment Act. To certain of the mental health experts who had testified for the defense, attraction to pubescent minors is not inherently abnormal psychologically. Under rulings of the US Supreme Court, in order to civilly commit a convicted sex offender after his or her prison sentence has been served, states, under their so called Sexually Violent Predator laws, must prove that the released offender still suffers from a recognized mental disorder.

New York’s Record Access Law may violate HIPAA’s access requirements. Under New York Public Health Law Section 18.1(e), when patients or other qualified persons (usually third parties designated by or legally responsible for patients) seek access to their records, healthcare practitioners may exclude from the records, "information maintained by a practitioner concerning or relating to the prior examination or treatment of a subject received from another practitioner, provided however, that such information may be requested by the subject directly from such other practitioner..." For example, if a psychotherapist has requested, with the patient’s authorization, a discharge summary from a hospital at which the patient was previously treated, then upon a request for that patient’s records, the therapist would exclude the discharge summary and direct the requester to seek a copy of that summary directly from the hospital. Presumably, the rationale for this exception is to allow the practitioner or institution that rendered service to the patient to decide for itself whether release of its records might harm the patient or others and thus legitimately decline access itself to its records as long as proper procedures are followed, i.e, using forms promulgated by the NYS Department of Health that give notice to the patient of a right to appeal and the procedures for doing so.

But in a recent ruling, the Office of Civil Rights of the US Department of Human Services, the enforcer of the HIPAA Rules, published a decision that stated that a practitioner may not deny access to a patient of his or her records maintained by the practitioner on the basis that the portion of records to which the patient is denied access are from another practice or institution. This seems to run directly counter to the New York State access law, and where the federal HIPAA Rules grant greater rights or security to patients, they are deemed to supercede contrary state laws. It is possible that the NYS law may still be valid because it does add a qualifier to the exception, that is, that the records denied be available from the direct provider of services. But for now, the HIPAA ruling does leave New York practitioners without definitive guidance as to whether to include in responses to access requests treatment information they have obtained from other providers.


HIPAA Phase 2 audits are coming, slowly at first. Pursuant to the HIPAA Omnibus Rule that was passed in 2013, beginning this year, 2016, the federal Office of Civil Rights (OCR) of the Department of Health and Human Servicese will begin its Phase 2 HIPAA audits. Unrelated to complaints, these audits of small and large covered entities have as their purpose the assessment of compliance with the HIPAA Privacy and Security Rules. The OCR audit protocol is to first screen to form a pool of potential auditees, from that pool select auditees and then through both desk and on-site audits, examine policies and procedures, documentation, training, business associate agreements and most importantly, comprising more than half of the audit, risk analysis and management. 200 actual audits after 800 screening surveys are expected in 2016, increasing annually.

In its Phase 1 audits, a pilot project of just a few audits that took place from 2013 to 2015, OCR commonly found deficiencies in these areas (most to least): risk analysis, lack of written policies, lack of staff training, lack of contingency planning, lack of internal auditing, lack of breach notification policies, and inadequate IT support. After Phase 2 audits the OCR will try to resolve any deficiencies through voluntary compliance, corrective action plans and resolution agreements, although fines are mandatorily imposed in the minimum amount of $10,000 if the covered entity has engaged in "willful" violations. As with other types of audits, the OCR plans to eventually outsource the audits and have them produce revenue. So increasingly, fines are expected even for lesser violations, such as when the covered entity did not know of a particular requirement and by exercising reasonable diligence would not have known ($100 minimum fine per violation), or when the covered entity violated the rules but with reasonable cause and not due to willful neglect ($1,000 minimum fine per violation.)

ACA Risk adjustment audits are already underway, and quite common. These audits, begun in 2016, are by commercial insurers, and are mandated by the Affordable Care Act ("Obamacare") in order to equalize risk among insurers. The commercial insurers who conduct or authorize their agents to conduct the audits are those whose plans sell through the federal and state insurance exchanges. The immediate purpose of the audits is to assign a risk score to a certain patient based on a review of that patient’s treatment records from his or her different healthcare providers. The audits are not to determine medical necessity or to assess record-keeping, so will not result in a demand for reimbursement (clawback) or a prospective denial of benefits. Practitioners subject to the audits are contracted in-network providers.

Patient consent to provide records to the auditor is generally not required because (1) HIPAA allows disclosure without authorization for purposes of "payment and healthcare operations" which includes insurer audits and (2) New York State recognizes the principle of "implied consent" whereby if a patient authorizes a practitioner to bill his or her insurer, the patient also impliedly consents to the practitioner providing all treatment information to the insurer. Ethical practice probably requires that patients be informed of the auditor’s request and if they decline in writing, then that declination should be respected; the consequences of declinations to risk adjustment audits are as yet unknown, but conceivably could be a denial of benefits. Records to be sent cannot be de-identified as that would defeat the purpose of the audit, but "psychotherapy notes" per se should not be sent, and "psychotherapy note" material that may have been (unnecessarily) included in clinical records should probably, from an ethical and even legal (HIPAA’s minimum necessary disclosure) viewpoint, be redacted.

New York’s highest court gets closer to enunciating a Tarasoff-type duty to protect. In Davis v South Nassau Communities Hospital, 2015 WL 8789470, the Court of Appeals held that a healthcare provider owes a duty to warn patients that medications prescribed by the provider may impair the ability of the patient to drive a car, and that failure by the provider to fulfill that duty may result in liability of the provider to the third parties injured as a result. In the case, a patient treated at the hospital was administered drugs that impaired her ability to drive, was not warned by hospital staff not to drive after the medical procedure, did drive and was involved in an accident with a third party, who sued the hospital. The Court noted that in the past it had been reluctant to expand the duty of care "from physicians past their patients to members of the community individually." The Court held that the duty of care should be assigned to the party that can most effectively meet the obligation. A limitation of the ruling is that in the case, the duty to protect arose as a direct result of the hospital and physician’s actual treatment (administration of medication), and not through the agency of the patient as it would in psychotherapeutic treatment.

New York’s ban on assisted suicide. In Myers et al v Schneiderman, 151162/15, NY Cty, 10/16/15, a New York Supreme Court upheld the constitutionality of a NY Penal Law {125.13(3)} that "a person is guilty of manslaughter (when he or she) intentionally ... aids another person to commit suicide." The plaintiffs were attempting to de-criminalize assisted suicide for mentally competent, terminally ill patients who request assistance by obtaining prescriptions of lethal drugs from physicians. The plaintiffs alleged that the ban is unconstitutional for lack of equal protection and denial of due process. The Court disagreed on the bases that there were no suspect classifications (such as race, gender etc) and no infringement of a fundamental right in the ban (no right to die by one’s own hand). The Court stated that the issue was one for the legislature to decide, not courts.

In fact, there is "aid in dying" legislation that has been introduced in the NYS legislature this year that would allow terminally ill competent patients to end their own lives by administering to themselves lethal drugs prescribed by a physician. S 5814-A, A 5261-C.

Possible required mental health training for teachers. Pending before the NYS legislature is a bill that would mandate that teachers in the State complete training every five years beginning July 1, 2016, in identifying signs and symptoms of mental illness, de-escalation of crises, and situations that warrant notification to school administrators. S 6234, A 9299. Lawmakers sponsoring the bill state that teachers are in a unique position to identify the 20% of students that have a mental health problem due to their frequent and personal contact. The Mental Health Association of NYS has endorsed the bill, but the teachers’ union, NYSUT, has not, and has noted that there are currently psychologists, social workers and nurses who have extensive mental health training.


The New York State telehealth coverage law which took effect January 1, 2016 adds a new Article and section to New York Public Health Law, Article 29-G and Section 4406-g respectively. It amends several sections of New York Insurance Law, including Sections 3216, 3217-h, 3221, 3229, 4303 and 4306-g, and amends New York Social Law Section 367-u. New York is now one of 28 states that has a telehealth parity law. The new law requires commercial health insurers to cover services provided by means of telehealth if those services would be reimbursed if rendered face-to-face in an office setting. Telehealth is defined as assessment, diagnosis, consultation, and treatment by the "use of synchronous two-way electronic audio- visual communication" while a patient is at a site other than the provider’s office, including at the patient’s place of residence. 

Professions covered by the new law include physicians, nurse practitioners, psychologists and social workers among others. The professions of mental health counseling, marriage and family therapy, psychoanalysis and creative arts therapy are not included and likely will not be reimbursed for telehealth services. Telehealth services do not include "audio-only telephone communications (i.e., telephone calls), facsimile machines or electronic messaging (i.e., email) alone."

Inexplicably, the new law allows commercial insurers to deny reimbursement for telehealth services to providers who are out-of-network. In an apparent attempt to prevent insurers from "red-flagging" telehealth for more frequent audits, the law, while it allows insurers to subject telehealth services to utilization review and quality assurance requirements, mandates that those measures be "consistent with those established for the same service when not delivered via telehealth."

The new law also establishes Medicaid reimbursement for telehealth services for certain providers, but the provisions applicable to Medicaid differ from those applicable to commercial insurers in that Medicaid reimbursement is disallowed when patients are receiving services at their own homes; they must be located at one of a variety of healthcare facilities.

Commercial insurers who have addressed the new law have indicated that they will reimburse for psychiatric and psychotherapeutic services as required by the new law when the customary CPT codes for such services are used with a "GT" modifier, with GT indicating a "face-to-face encounter utilizing interactive audio-visual communication technology," e.g., United Healthcare Reimbursement Policy, Administrative 114.24, January 1, 2016. It would seem that the site of service on a typical claim form (e.g., CMS 1500, item 24B) would be either "Office" or "Home;" perhaps the former because the latter is often non-reimbursable.

"Interactive audio-visual communication technology" of course includes Skype, but that service is not HIPAA compliant. Two HIPAA compliant technologies are Vsee and Securetelehealth.

In recent communications involving teletherapy, New York State licensing boards for the mental health professions have indicated that they recommend, if not as yet require, the use of written consent forms specific to teletherapy when that modality is used. Clients can contact our office for a sample consent form to teletherapy.

The New York State Department of Health has promised but has not as yet delivered further implementing regulations for the new telehealth law, see NYS DOH "New York Telehealth Parity Law Update," Lisa Ullman, November 2015.

Note that this new law does nothing to expand the interstate practice of teletherapy. All states have regulations prohibiting the practice of psychotherapy by practitioners who are unlicensed, and practice location is usually defined as the place where the patient is when services are rendered. Indeed, due to those regulations, because of their states of residence, certain patients of New York practitioners should probably not be offered teletherapy at their homes. This category of patients would include those who live in neighboring states and otherwise commute to their visits with a therapist licensed and located in New York State.

"Date of Discovery" Rule proposed for New York State malpractice actions. New York’s Statute of Limitation for malpractice is a "Rule of Injury" type, that is, lawsuits must be commenced within 2½ years for physicians or 3 years for other mental healthcare professionals, from the date the alleged malpractice occurred. In general, New York courts have strictly construed these time limits. Bills have been introduced in the Assembly (A285) and Senate (S911) that would change New York’s law to a "date of discovery" type, which would allow the Statutes of Limitation to run from the date an injured patient discovers or should have discovered, that they have been injured by malpractice, but no longer than 10 years after the date of the alleged malpractice. Date of discovery rules are also called "awareness doctrines."

Advocates of the new law argue that the extension would bring New York into alignment with the majority of other states that have "date of discovery" rules. The "date of discovery" rule was "formulated to avoid the harsh results produced by commencing the running of the statute of limitations before a claimant was aware of any basis for an action." Hammer v Hammer 418 NW2d 23 (Wis Ct App 1987). In the area of mental healthcare law, "date of discovery" rules are considered essential by attorneys who represent plaintiffs who claim sexual abuse and other boundary violations by therapists. Victims of such boundary violations may not recognize the harm or the extent of the harm that they have suffered as a result of the violations for a significant period of time after the violations have occurred, often not until the "rule of injury" time bar has elapsed.

Opponents of the change include the New York Medical Society and argue that it would greatly increase malpractice actions and damages, and therefore premiums for malpractice insurance. They argue that if justice indeed requires such a change, then it should be accompanied by statutory caps on non-economic damages (i.e., pain and suffering) in order to offset the costs of the change.

A new bill to add protections for in-network providers. Currently, under New York law, health insurers cannot terminate, that is prematurely end a provider’s contract before the term expires without affording the practitioner certain due process rights including an explanation of the reasons for termination and an opportunity to offer a defense. However these protections do not apply when an insurer wishes to non-renew a practitioner’s contract; that is, not offer a new contract when the current contract term expires. The new bill, A1212, would require insurance companies to provide the same due process rights upon non-renewal as for termination.


The New York State telehealth coverage law which takes effect January 1, 2016 is still lacking interpreting regulations. The law itself lacks clarity about particulars of coverage. For example, it’s unclear whether a physician’s order is required for ongoing treatment. Also unclear is whether telephone services are covered, i.e., must services be audio-visual? And how are telehealth services to be coded? Does the law cover mental health services only when they’re rendered by a MD, PhD or LCSW (and not by LMHC’s, LMFT’s, LP’s and LCAT’s)? Hopefully, regulations to answer these questions will be issued shortly.

Rest easy, advice columnists. A Kentucky state licensing board alleged that an advice columnist who gives psychological advice must be licensed in the state in which the advice is published. The licensing board sought to sanction a psychologist unlicensed in Kentucky (but licensed in North Carolina) who wrote a column for the Lexington Herald Leader. Kentucky officials issued a cease and desist order to the columnist. A US District Court judge overruled the Kentucky authorities, on the general principle that occupational licensing laws cannot censor free speech. The judge ruled that there was no patient relationship involved in writing an advice column, Kentucky had no compelling state interest necessary to forbid otherwise permissible speech, and that the cease and desist order was therefore unconstitutional. The judge stated that, “to permit the state to halt this lawful expression would result in a harm far more concrete and damaging to society than the speculative harm which the state purportedly seeks to avoid...” Rosemond v Conway et al., Kentucky Eastern District Court, No. 3/2013cv00042, 09/30/2015.

Change to “incident-to” billing rule. On November 16, 2015, the Center for Medicare and Medicaid Services issued new regulations that now require that the supervisor of the ancillary personnel who deliver services to patients must be the party whose billing number is connected to the “incident-to” service. Prior to the passage of this clarification, it was unclear whether services by ancillary personnel had to be connected in billing to the actual supervisor, or whether supervision could be provided by another supervisor. “Incident-to” is a much misunderstood category of healthcare service by which, if strict conditions are met, a supervisor may bill for the services of a supervisee as if the supervisor him or herself rendered the service, i.e., billing is at the supervisor’s rate. N.B. Almost all mental health managed care contracts with private practices prohibit “incident-to” billing.

New York State seeks to ban “conversion therapy.” A bill prohibiting conversion therapy was passed by the State Assembly in 2015 (A4958) but has not passed the State Senate. The proposed bill would protect minors from being offered “conversion” or “reparative” therapy whose goal is to change sexual orientation. All the major professional societies have condemned conversion therapy (also called Sexual Orientation Change Effort or SOCE) and support legislation similar to that proposed by New York. Illinois, California, New Jersey and the District of Columbia have passed such legislation. Legislation prohibiting SOCE has been constitutionally upheld as a legitimate restraint on free speech due to the state’s interest in protecting youngsters from the harm caused by it, US Ct of Appeals, 9th Circuit, Welch v Brown, Pickup v Brown, 2013.

Mental Health Public Awareness Tax Check Off. Something new. On November 23, 2015, Governor Cuomo signed the Mental Health Tax Check Off Bill into law. As of January 2016, New York State income tax forms will allow tax payers to make a tax free donation to a fund that will help end the stigmatization of mental illness. There are now 11 such check off boxes on NYS income tax forms. Others check-offs have raised up to $51 million. Funds collected from the new check off will be made available to the NYS Office of Mental Health.

For those who accept credit card payments. In October 2015, US credit card payment networks changed the rules for responsibility for credit card fraud. Prior to that date, credit card issuers took responsibility for fraudulent credit card transactions. As of October 2015, financial liability for fraudulent transactions shifted to merchants if they don’t use EMV (Europay Mastercard and Visa) chip-enabled devices to process credit card transactions. For the past few months, credit card issuers have been sending consumers new cards that have an embedded high-tech chip as well as the traditional magnetic strip. Merchants are supposed to follow suit and upgrade their credit card processors to accept the new EMV cards. If fraud occurs because a merchant used an older processor that wasn’t EMV enabled, then the merchant will be financially liable. The new standards do not mandate that merchants obtain the new processors, and do not render the old processors unusable (the new cards still have magnetic strips); they only shift liability. In Europe the new cards reduced credit card fraud by 63%. They don’t help cut down on online credit card fraud however.

Questionable means to control negative online reviews Negative reviews are, at the very least, a nuisance to healthcare practitioners. Sometimes they adversely affect livelihoods and reputations. Some consulting firms recommend that practitioners include a provision in their contracts with patients either prohibiting them from posting reviews or, alternatively, that assign all rights to online publications about the practitioner to the practitioner. The former type of clause prohibiting consumer reviews by patients was found by a New York court to violate consumer protection laws. New York v Network Associates, 758 NYS2d 466 (2003). The latter type, a copyright assignment by which practitioners are granted rights that allow them to control and remove negative reviews of themselves by their patients with a simple takedown notice are apparently increasingly used. In my opinion, they are subject to legal challenge because of the superior bargaining position of the practitioner, because patients don’t notice, understand and can’t really change them, and because they are unrelated to the provision of healthcare. They are also, in my opinion, ethically suspect because they place the practitioner’s financial interests ahead of the patient’s rights to free speech.


ICD-10 (International Statistical Classification of Diseases and Related Health Problems-10; Chapter V, Mental and Behavioral Disorders (aka "The Blue Book")): On October 1, 2015, all HIPAA compliant entities will be required to use ICD-10 diagnostic codes. Non-compliant entities will risk non-payment by insurers of submitted claims if the providers fail to use ICD-10 coding. ICD-10 codes are considered an upgrade from ICD-9 because there are more of them, permitting greater specificity in diagnosis.

ICD-10 does not make DSM 5 obsolete. In fact, it makes the DSM 5 even more essential. Providers are expected to use DSM 5 to make correct diagnoses, and then "cross-walk" from the DSM diagnosis to the ICD-10 code. The ICD-10 does not itself contain information adequate to determine diagnosis; it is just a listing of illnesses and their codes. The DSM 5 published by the American Psychiatric Association contains all corresponding ICD-10 codes. (The DSM IV only contains ICD-9 codes so it is now wholly unusable.)

On July 6, 2015, the American Medical Association (AMA) and the Centers for Medicare and Medicaid Services (CMS) jointly announced that the CMS will have a grace period until October 1, 2016 during which Medicare claims won’t be denied solely on the basis of lack of specificity of ICD-10 coding.

Technicians and Psychological Testing in NYS: As of June 17, 2015, both the Assembly and Senate of the New York State Legislature had passed a bill which would allow unlicensed testing technicians to administer and score standardized objective psychological and neuropsychological tests which involve specific predetermined and manualized procedures (A3563-A, S01865 ). The Governor has not yet signed the bill.

As the rationale for the bills, the accompanying Memo reads: "Prior to the enactment of the psychology scope of practice law (Chapter 676 of the Laws of 2002) testing technicians routinely and successfully administered and scored standardized objective psychological and neuropsychological tests. The legislative intent of the psychology scope of practice law was not to change the practice of psychology. In 2003, the State Education Department issued a letter interpreting the 2002 statute as excluding the use of testing technicians for administering and scoring neuropsychological tests, on the grounds that test administration and scoring was captured within the scope of the practice of psychology. The proposed legislation would reverse the negative impact of the 2003 interpretive letter, which severely limited access to these critically needed services, particularly for ethnic minority patients and those from low socioeconomic backgrounds. The legislation would require that testing technicians have a Bachelor’s degree in psychology or a related field; be trained by a licensed psychologist in a non-school setting where the ratio of technician to licensed psychologist does not exceed 3:1; and also requires that technicians not provide opinions or interpret data."

Mandatory Offering of Out-of-Network Coverage Proposed for NYS: Many clients who are mental health professionals and are not on insurance panels have worriedly inquired of us about the future of insurance reimbursement to their patients for the providers’ out of network services. NASW-NYS, NYSSCSW, and both NYSPA’s are supporting a bill that would require health care insurers in New York State to offer optional coverage for care provided by out-of network practitioners (A00790). The Affordable Care Act ("ACA" or "Obamacare") does not mandate out-of-network coverage, and as a result many insurers have discontinued offering consumers the option of an insurance plan that provides such coverage. No current New York State law requires that insurers offer out-of-network coverage either, and consequently most do not. This bill would require insurers who offer health insurance in New York State, whether inside our exchange (the New York State of Health) or outside of it, to offer out-of-network coverage as at least one policy option, and as an optional rider on other policies. Of course, such an option would likely cost more than those with limited networks, but, as the legislation states, it would, "provide and protect consumer choice, and ensure patients can maintain access to the provider of their choice."

Change to Medicare Opt-Out Law: Under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), valid opt out affidavits signed by practitioners on or after June 16, 2015 will automatically renew every 2 years. Prior to the enactment of MACRA, practitioner opt out affidavits were only effective for 2 years. Note however, that valid opt out affidavits signed before June 16, 2015 will still expire after 2 years; if practitioners who filed affidavits before that date want to extend their opt out , they must submit a renewal affidavit within 30 days after their current opt out period ends. If practitioners do not wish their opt out affidavits to automatically renew, then they must cancel the affidavit in writing at least 30 days prior to the start of the next (2 year) opt out period.

HIPAA Privacy Rule and Email: There seems to be a lot of confusion about whether HIPAA permits the use of email between health care professionals and their patients. I have seen misinformation disseminated, some well-intentioned, some self-serving. Here is what HHS (the United States Department of Health and Human Services) on its FAQ page says in response to the question of whether HIPAA compliant practitioners may email patients:

"Yes. The Privacy Rule allows covered health care providers to communicate electronically, such as through e-mail, with their patients, provided they apply reasonable safeguards when doing so. For example, certain precautions may need to be taken when using e-mail to avoid unintentional disclosures, such as checking the e-mail address for accuracy before sending, or sending an e-mail alert to the patient for address confirmation prior to sending the message. Further, while the Privacy Rule does not prohibit the use of unencrypted e-mail for treatment-related communications between health care providers and patients, other safeguards should be applied to reasonably protect privacy, such as limiting the amount or type of information disclosed through the unencrypted e-mail. In addition, covered entities will want to ensure that any transmission of electronic protected health information is in compliance with the HIPAA Security Rule requirements .

Note that an individual has the right under the Privacy Rule to request and have a covered health care provider communicate with him or her by alternative means or at alternative locations, if reasonable. For example, a health care provider should accommodate an individual’s request to receive appointment reminders via e-mail, rather than on a postcard, if e-mail is a reasonable, alternative means for that provider to communicate with the patient. By the same token, however, if the use of unencrypted e-mail is unacceptable to a patient who requests confidential communications, other means of communicating with the patient, such as by more secure electronic methods, or by mail or telephone, should be offered and accommodated.

Patients may initiate communications with a provider using e-mail. If this situation occurs, the health care provider can assume (unless the patient has explicitly stated otherwise) that e-mail communications are acceptable to the individual. If the provider feels the patient may not be aware of the possible risks of using unencrypted e-mail, or has concerns about potential liability, the provider can alert the patient of those risks, and let the patient decide whether to continue e-mail communications." http://www.hhs.gov/ocr/privacy/hipaa/faq/health_information_technology/570.html


The child abuse reporting mandate does not necessarily waive privilege in criminal proceedings. In a case before the New York Court of Appeals, New York’s highest court, the Court ruled that although physicians (in this case a psychiatrist) must by law report suspected child abuse by parents or legally responsible persons to child protective services, physicians cannot be compelled to testify in related criminal proceedings against the perpetrator of the abuse. In The People v David Rivera, 2015 NY Slip Op 03764, 05/05/2015, the adult defendant had disclosed to his psychiatrist that he had sexually abused an 11 year-old relative. The psychiatrist notified CPS as required by the child abuse reporting mandate. The defendant was subsequently criminally charged with sexual assault against a child. The trial court judge decided that the admission made by the defendant to his psychiatrist was admissible, even though the defendant objected that his statements to the psychiatrist were protected by the physician-patient privilege under NY CPLR 4504. The defendant was convicted and appealed.

The appeals court ruled that the trial court erred. "It is one thing to allow the introduction of statements or admissions in child protection proceedings whose aim is the protection of children, and quite another to allow the introduction of those same statements, through a defendant’s psychiatrist, at a criminal proceeding, where the People seek to punish the defendant and potentially deprive him of his liberty." The New York State Psychiatric Association had filed an amicus brief in support of the defendant’s appeal.

The Court would almost surely have come to the same conclusion if the treating professional had been a psychologist, as the privilege statute for psychologists is even more protective of patient confidentiality than the physician-patient privilege. NY CPLR 4507. In my opinion, it is likely though not certain that the Court would have come to the same conclusion had the professional been a social worker. The social worker privilege does not apply to the contemplation of crimes or when the client is under 16 and the victim of a crime. Neither exception directly applies to this case - it was not contemplation of a crime that was disclosed, but the committing of one and the client was an adult perpetrator and not a child-victim; but these exceptions might weaken the perceived intent of the social worker privilege generally, although logic would suggest the same rationale for upholding the privilege for social worker-psychotherapists. NY CPLR 4508.

Interestingly, the Court of Appeals in a footnote once again declined to address the issue of whether New York should adopt the so-called "Tarasoff" doctrine, by which mental health professionals might be required to breach confidentiality to protect intended third party victims of violence by patients.

Social workers are not yet workers compensation providers. Governor Cuomo vetoed a bill that would have authorized clinical social workers to become providers under New York’s workers compensation program. His stated reason was that the program is currently being reviewed in its totality and piecemeal changes should not be made at this time. Bill No. A05299B, vetoed memo. 533.

The deadline for e-prescribing has been pushed forward to March 27, 2016. Governor Cuomo signed legislation that allows for a one-year delay in the e-prescribing requirement.

New York’s new "surprise medical bill" law. As of March 31, 2015, a new law took effect to protect consumers from "surprise" medical bills for out-of-network services. All providers in New York State are now required to (i) for non-emergency services, disclose verbally to patients their right to know what they will be billed for any proposed procedure and the total cost of the procedure, (ii) inform patients of their network and hospital affiliations in writing or on their websites, (iii) indicate verbally when patients make appointments whether they participate in the patient’s network, and (iv) advise patients of other professionals who might be involved in the patient’s care, and of how to learn whether and to what extent their networks will cover the cost of the other professionals’ care. For patients who receive out-of-network care, practitioners must include claim forms when sending out bills. Failure to follow the new requirements results in patients being responsible for paying only what they would have for in-network care. The new law has many other provisions that apply to emergency care, clinics, hospitals and health insurers. Part H of Chapter 60 of the Laws of New York (2014).

The Nurse Practitioner Modernization Act has become law (S.4611A). Effective January 1, this law permits nurse practitioners with more than 3600 hours of practice (about 2 years, full-time) to practice (i) without signed practice agreements with physicians and (ii) without practice protocols. The requirements of a signed practice agreement and mutually agreed upon practice protocols had previously been imposed on all nurse practitioners and are still imposed on NP’s with less than 3600 hours of practice. Experienced NP’s are still required to "maintain collaborative relationships", that is, they should communicate with physicians as needed by phone or in writing to exchange information and to make referrals to provide comprehensive patient care. Effectively, however, experienced NP’s have become independent practitioners with full prescriptive authority in their practice areas.

This law is significant for psychologists because under New York’s very limited allowance for multi-disciplinary practice, psychologists and nurse practitioners in psychiatry (NPP’s) may together form professional limited liability companies (PLLC’s). This contrasts with psychologists and psychiatrists who may not form practices together, i.e., only other MD’s may practice with an MD in a PLLC. (And for unknown reasons, the law also prohibits social workers from forming multi-disciplinary PLLC’s.) Psychologists and nurse practitioners in psychiatry may form PLLC’s in order to provide the full array of mental health services - medical, diagnostic and therapeutic - to their patients. In the past our experience has been that the legal requirement that NPP’s have signed collaborative agreements with MD’s inhibited NPP’s from practicing with psychologists. Presumably, now more psychologists and NPP’s will find it mutually advantageous to form multi-disciplinary practices.


Bruce to offer CE course for LMSW’s and LCSW’s. Bruce has been approved by the New York State Education Department as a provider of NYS Continuing Education credits for LMSW's and LCSW's. (Bruce V Hillowe, JD, PhD, SWCPE #0047.) He is offering a 5 hour, 5 CEU credit course on "Legal and Ethical Issues for Social Worker - Psychotherapists" on Saturday May 30, 2015 from 8:30 AM to 1:30 PM at Adelphi University in Garden City. Continental Breakfast will be served. The cost is $99 for pre-registration, $129 for registration at the door. Topics will include record-keeping, informed consent, child abuse reporting, at-risk patients, access to records, confidentiality, privilege, subpoenas, termination of treatment and avoiding abandonment, and general risk management. He will also provide templates for documentation. Participants will receive a personalized Certificate of Completion as required for social worker licensure registration. There is further information about the course and a registration form at our website, www.brucehillowe.com at the "CE Programs" tab. You may also call him at 516-877-2016 for more information.

Telehealth reimbursement comes to New York State. In December 2014, Governor Cuomo signed into law a telemedicine/telehealth mandate. The new law (Chapter 550 of the Laws of 2014) becomes effective January 1, 2016 and requires that health insurers and Medicaid reimburse for health care services that are provided by electronic means if the health services would be otherwise covered. For instance, if a health insurer reimburses for in-person psychotherapy, then they must reimburse for telephonic or Skype-type psychotherapy. The new law makes specific reference to psychologists and social workers making clear that psychotherapy is a covered service under the new mandate. (Under New York Freedom of Choice law, insurers are not obligated to reimburse for the services of licensed mental health counselors, psychoanalysts, marriage and family therapists, and creative arts therapists, NY Insurance Law §3221 et seq). New York State joins 22 other states that already have similar mandates. It remains to be seen how these newly reimbursable teleheatlh services will be coded, as the AMA’s CPT has previously taken the position that current psychotherapy codes are appropriate only for face-to-face sessions (Medicare reimburses for limited instances of teletherapy and uses the standard codes, but adds a "GT" modifier.)

The new law removes one of the two major obstacles to telehealth, that of insurance reimbursement. The remaining obstacle is state licensing laws that were enacted when telehealth was unimaginable. Most states construe their licensing laws to require that if a practitioner who is licensed in a state wishes to use electronic means to treat a patient in another state, then the practitioner must also be licensed in the state where the patient is located when treatment is provided. Most states grant temporary guest licensure to professionals licensed in another state but that resolves only the short term problem of facilitating transfer of treatment when a patient moves to another state. In September 2014, the Federation of State Medical Boards finalized a model for an interstate compact for licensure of health care professionals with the goal of reducing barriers for practitioners who are looking to obtain licenses in multiple states to facilitate both portability and telemedicine. Incorporation of that compact into state law will be the last hurdle for telemedicine.

New York may drop its physician profile website. Governor Cuomo has proposed defunding of the www.nydoctorprofile.com website that contains information about physicians’ education, litigation and disciplinary actions. Physicians are now obligated by law to maintain the accuracy and completeness of their profiles. Created in 2000, the rationale for the website was greater transparency. The Governor believes that privately maintained websites that rate physicians have made the State website redundant. A coalition of patient and consumer advocacy groups opposes the defunding.

Elder abuse training; should it be mandatory in NYS? A bill (A04422) has been introduced in the New York State legislature to require physicians and psychologists, as well as a group of physical healthcare practitioners, to complete two hours of coursework in identifying and reporting abuse of the elderly. All states have elder abuse reporting laws. In most cases, reporting is mandated; in a few states, among them New York, reporting is merely encouraged (NY Social Service Law §473). But New York also requires that licensed healthcare professionals maintain confidentiality unless authorized by patients to disclose, or unless a disclosure is legally required such as of child abuse or under the NY SAFE Act. New York currently provides no legal protection for healthcare professionals from prosecution by licensing boards for unauthorized or non-mandatory disclosures of elder abuse.

A bill to allow physicians and psychologists to form multi-disciplinary practices. A bill (S03481) was introduced in the New York State legislature that would allow physicians and psychologists to form PLLC’s, PC’s and partnerships as co-owners. Currently such co-owned multi-disciplinary practices violate NY State’s prohibition against fee-splitting. Votes on the legislation have been delayed for the past two years. The New York State Psychiatric Association (NYSPA) strongly opposes the bill, primarily based on its belief that it will encourage non-psychiatrist physicians and psychologists to form multi-disciplinary entities that will replace psychiatrists who are better qualified to medically treat mental illness. NYSPA believes that the psychologists in such entities would give advice regarding psychotropic medications to the prescribing non-psychiatrist physicians (NYSPA, Memorandum in Opposition, 02/27/2013). Based on my experience, that may not be a fair criticism. We are regularly asked by physicians and psychologists who work together if they can form co-owned multi-disciplinary practices, and the physicians doing the asking are almost always psychiatrists, not non-psychiatrist physicians. And, in any case, it would be a foolhardy non-psychiatrist physician who would prescribe beyond the scope of his or her competence based on the advice of a non-physician.


E-prescribing to be required March 27, 2015  Effective March 27, 2015, under the I-STOP law, e-prescribing will be mandatory in New York State. Even though the purpose of the law is to reduce prescription drug abuse, all prescriptions and not just those of controlled substances, will be required to be issued by prescribing practitioners directly and electronically to pharmacies. Covered practitioners include dentists, midwives, nurse practitioners, optometrists, physicians, physician assistants, and podiatrists. Limited exceptions to the mandate exist where: the prescriber has a waiver from the Department of Health; there is a temporary technological failure; it would be impractical for the patient to obtain prescribed drugs in a timely manner; or the pharmacy that will dispense the medicine is outside New York State. Waivers from the mandate will be granted for reasons of economic hardship or technological limits outside the control of the prescriber, and must be renewed annually.

Prescription privileges for psychologists in New York   State Senator Catherine Young has introduced a bill to the New York State Senate (S-7488) that provides for the certification of psychologists to prescribe psychotropic drugs. The prescribing privilege would be granted to psychologists who obtain a masters degree or its equivalent in psychopharmacology, which must include clinical experience. Senator Young cited as reasons for the proposed legislation a shortage of physicians, the success of prescribing psychologists in New Mexico, Louisiana, and the US military, and studies that suggest that because psychologists prescribe fewer medicines and instead utilize behavioral therapeutic strategies, the incidence of side effect complications of psychotropic medicines would be reduced.

The New York State Psychiatric Association is opposed to prescribing privileges for psychologists, arguing that the ability to prescribe psychotropic medications should be limited to physicians who alone possess the requisite education, training and experience to safely prescribe.

The New Jersey Assembly passed a bill in June 2014 that grants prescribing privileges to psychologists. The bill has not passed the NJ Senate and is not law. The arguments pro and con are the same as in NY.

Insurance coverage for gender dysphoria and other DSM conditions  In an opinion dated December 11, 2014, the New York State Department of Financial Services (formerly State Insurance Department) stated that insurers in New York State may not exclude coverage for the diagnosis or treatment of Gender Dysphoria (DSM 5, 302.85). The opinion extended to all diagnoses covered by the DSM. "Issuers in New York should use the DSM as the recognized independent standard of current medical practice in determining what constitutes a mental health condition. Therefore since the DSM recognizes a diagnosis of gender dysphoria, an issuer’s definition of mental health condition is also required to include gender dysphoria, entitling a person with gender dysphoria to MHPAEA’s (the federal Mental Health Parity Act) protections." Insurers have typically excluded other DSM-recognized mental health conditions from coverage, e.g., personality disorders, and are presumably now precluded from doing so.

Do State Boards have jurisdiction over VA (or other federally employed) psychologists?  In a case of first impression, the Montana Board of Psychologists answered this question in the affirmative. A VA psychologist evaluated a veteran at the VA Medical Center at Fort Harrison, and downgraded the veteran’s neuropsychological disability rating from 70% to 10%. The veteran unsuccessfully exhausted all appeals with the VA, and then complained to the Montana State Board that the psychologist was practicing outside the scope of his competence. The Board ruled that the psychologist had inadequate training to perform neuropsychological evaluations and sanctioned him for practicing outside areas of his expertise. Perhaps more importantly, the Board also ruled that it had jurisdiction over the federally-employed but State-licensed psychologist. A federal attorney had argued that the Board did not have such jurisdiction over an employee of the federal government working in a federal facility..

Restrictive covenants in employment agreements with professionals  Most employment contracts with mental health professionals contain restrictive covenants (a.k.a. non-compete agreements). These place limits on the professional’s ability to work in a specific geographic area for a particular period of time after employment. They may also prevent the professional from soliciting patients, employees or referral sources (non-solicitation clauses), and require confidentiality.

Many states limit or disallow restrictive covenants. In New York however, under certain conditions, restrictive covenants are valid and enforceable in court. The conditions are that the restrictions must be reasonable in time and area, must be necessary to protect an employer’s legitimate (not speculative) interests, must not be harmful to the general public (for example, they should reasonably accommodate the right of patients to select the practitioners of their choice) and must not be unduly burdensome to the practitioner.

Restrictive covenants are never favorable for practitioners. Almost always, practitioners should negotiate or have their attorneys negotiate to ensure that the restrictions are only as restrictive as they must be to protect the interests of the employer.

NB. Restrictive covenants are inappropriate in independent contracting arrangements and indeed likely convert the contractor into an employee.


Googling patients, ethical or not? In our Spring 2012 Supplement, I discussed the position taken by the American Psychological Association that only in "rare cases" and with the patient’s consent should a therapist google or otherwise search online for information about a patient. www.apa.org/gradpsych/features/2010/client-searches.apx Quoting a past chair of the Ethics Committee of the American Psychological Association in the article, "Spying just because you can is inappropriate." Without a patient’s consent, the psychologist-ethicists quoted in the position paper indicated that a search should be undertaken only to protect the safety of a patient or third party.

A member of The American Psychiatric Association Ethics Committee, in "Psychiatric News," recently took a more lenient position toward googling of patients by mental health practitioners. http://psychnews.psychiatryonline.org.newsArticle.aspx?articleid=1902164. She stated that "Googling a patient is not, in and of itself, unethical." Echoing the psychologists’ concerns, the psychiatrist-ethicist stated that online searching should be undertaken "...only in the interests of promoting patient care and well-being and never to satisfy the curiosity or other needs of the psychiatrist." While stating that face-to-face interviews are the standard of practice for learning about a patient’s medical condition, the writer acknowledged that some patients may be unable or unwilling to provide important information, and in such situations, "... googling a patient ... may provide useful information." The key difference between the two APA’s seems to be that in non-emergent situations, the Psychiatric Association does not require consent from the patient to google a patient, but only that the practitioner have a good faith belief that searching for information from the internet will be of benefit to the patient’s treatment.

Florida’s "Docs vs. Glocks" law upheld. In a July 25, 2014 ruling, the US Court of Appeals for the 11th Circuit upheld a 2011 Florida law that prohibits doctors from asking patients about their gun ownership or recording information about gun ownership unless it is medically necessary. The AMA and American Psychiatric Association had taken the position that doctors asking about gun ownership is an important health-related screening tool, similar to asking about alcohol and substance use, smoking, and eating, and that the law violated doctor’s First Amendment free speech rights. In 2012, a US District Court judge agreed with the AMA that the law unconstitutionally infringed on speech rights. The Appeals Court disagreed, and stated that the law is meant to and does protects patients’ privacy rights, that any infringement on free speech rights is "incidental," and that the law is a "legitimate regulation" of medical conduct. Doctors who violate the law could be fined and subject to professional discipline. Presumably, the law would not prevent a doctor from conducting a medically necessary assessment of dangerousness by a patient by questioning means of lethality when ideation, intent or plan are present. But that remains to be seen.

Licensed Psychoanalysts approved for assessment, screening and treatment of alcohol and substance abuse. The New York State Office of Alcohol and Substance Abuse Services (OASAS) maintains a list of agencies and professionals capable of providing screening, assessment and treatment of alcohol and substance abuse dependency for persons charged with or convicted of an impaired driving offense. Physicians, psychologists, nurse-practitioners, LCSW’s, LMFT’s and LMHC’s had previously been deemed eligible professionals for the listing. In an opinion letter dated February 7, 2014, OASAS General Counsel deemed licensed psychoanalysts to have a scope of practice consistent with that necessary to perform mental health services to impaired driving patients, and added them to the listing of eligible professionals.

What are psychotherapy notes (under HIPAA)? Though the Privacy Rule and its establishment of a category of clinical notes termed "psychotherapy notes" have been in existence since 2003, there remains confusion among many psychotherapists. "Psychotherapy notes" are a category of records that are granted special protection from disclosure under HIPAA. Many client-psychotherapists who receive authorizations or judicial subpoenas for the release of entire records "except psychotherapy notes" believe that all of their progress notes are psychotherapy notes because they are notes related to psychotherapeutic treatment and are therefore not subject to disclosure. But under HIPAA the definition of psychotherapy notes is not a straightforward one. They are notes of a mental health professional of a counseling session that are kept separate from and in addition to the rest of the medical record. There is no requirement that psychotherapists keep psychotherapy notes, and in my experience, most don’t as such notes are formally defined. Psychotherapy notes do not include: diagnosis, symptoms, functional status, treatment plan, prognosis, treatment frequency and progress, start and stop times, clinical test results or information about medications. Psychotherapy notes may contain information that is typically labeled "personal notes and observations" under NYS Health Law §18, or "process notes" colloquially. In my experience, most mental health clinicians maintain one set of notes that contains both material that ought be part of the medical record, and additional more sensitive and private material that would better be kept as separate "psychotherapy note"material, but is not. Simply stated, if there is no second set of notes, there are no psychotherapy notes.

Are non-medical psychotherapists held to a different standard than physicians in professional disciplinary (licensure) proceedings? We have represented many lay psychotherapists and also psychiatrists in such proceedings, and in my opinion, the answer to the question is "yes." I think a reason is that when applying a standard of care to the conduct of psychotherapists, because of a lack of commonly accepted scientific data regarding efficacy, the standards imposed are instead those of ethics. Standards of care should be minimum standards, and ethical standards, as they state explicitly therein, are not meant to be that. Ethical standards tend to be aspirational and open to subjective interpretation. Non-medical therapists are therefore often judged by a standard of what they ought to be doing according to an ethical standard, not a standard based on what similarly situated practitioners are actually doing, whereas medical practitioners are held to accepted and customary standards based on scientific evidence of proven efficacy.


New CMS 1500 now required. As of April 1, 2014, CMS is requiring the use of the new CMS 1500 claim form (02/12) for Medicare claims and may reject claims sent using older forms. The new form supports the use of ICD 10 diagnoses, which will be required as of October 1, 2015 (not October 1, 2014; it was postponed a year by recent legislation). The new form also expands the number of possible diagnoses from four to ten.

HIPAA Guidance Document on Mental Health Information and the Privacy Rule. The US Department of Health and Human Services recently issued a new Guidance Document with FAQ’s regarding the privacy of healthcare information in mental healthcare, for example regarding communication with the families of patients, see www.hhs.gov/ocr/privacy/hipaa/understanding/special/mhgiudance.html.

Mandatory Continuing Education for Social Worker and Mental Health Practitioners comes to NYS. Chapters 443 and 448 respectively of Laws of 2013 require 36 hours of continuing education per triennial registration for social workers (LMSW’s and LCSW’s) and for Mental Health Practitioners (LMHC’s, LMFT’s, LP’s, and LCAT’s). The requirement for social workers becomes effective on January 1, 2015 and for mental health practitioners on January 1, 2017. There remains no mandatory continuing education for psychologists.

Forensic Transparency Bill introduced in New York Assembly. Bill A8342 would require "uniform access to court ordered forensic mental health evaluation reports and underlying data by litigants, their counsel and attorneys for the child." Underlying data includes all notes, audio and video tapes, test data and materials, and any other material provided to or relied upon by the forensic evaluation. Many, but not all, judges currently restrict access to forensic evaluations to protect the privacy of children and informants and to decrease the potential for more litigation. As the name of the bill indicates, however, it would provide greater transparency to expert testimony in child custody litigation.

Clinical Social Workers may soon be Workers Compensation providers The New York State Assembly and Senate have passed bills that permit clinical social workers to independently treat workers who are insured by workers compensation insurance (A5299, S2360). All that remains is for the governor to sign the law.

Asking professional license applicants about their mental health may violate the ADA. In a letter dated February 5, 2014, the civil rights division of the US Department of Justice wrote that some of the questions asked of bar (attorney) applicants on the standard National Conference of Bar Examiners questionnaire (used by many but not all states) were unduly broad and violate the Americans with Disabilities Act. The DOJ stated that professional licensure systems cannot make discriminatory inquiries about mental health diagnoses and treatment, cannot burden applicants with supplemental investigations based on their mental health status or treatment, and cannot implement intrusive conditions on licensure that are based on mental health diagnoses or treatment. Licensure systems, such as New York State’s, that limit their queries to whether the applicant has a current mental health condition that impairs their ability to practice the profession seem to comply with the DOJ’s guidance and do not seem to violate the ADA. This letter from the DOJ might be useful as information for mental health professionals to reassure patients whose future plans include professional licensure that treatment for a mental health condition need not present a barrier.

New York law regarding consensual sex between teachers and students. We are sometimes asked by clients whether sex between students and their teachers is illegal in and of itself. All states prohibit consensual sex between adults and minors below a certain age. In New York State the age of consent for sexual relations is 17; sex with a person below that age cannot be considered consensual and an adult perpetrator can be criminally prosecuted for statutory rape. That is, however, the only law that applies to consensual teacher-student sex in New York. If a teacher has consensual sexual relations with a student 17 or older in New York State, the teacher will almost certainly be dismissed, but will not be criminally prosecuted.

In contrast, Connecticut criminal law defines sexual assault as including sexual intercourse between a school employee and a student under 18 enrolled in a school in which the employee works (CGS § 53a-71). Otherwise the age of consent for sexual relations in Connecticut is 16.

Unprotected sex while knowingly HIV positive is reckless endangerment in second, not first degree. So ruled a court in People v Williams, 111 AD3rd 1435 (4th Dept 2013). Under New York Penal Law § 120.25, Reckless Endangerment in the First Degree, a felony, requires that the person, "under circumstances evincing a depraved indifference to human life ... engages in conduct which creates a grave risk of death to another person." The court ruled that the victim, who was indeed infected by the perpetrator, was not at "grave risk of death" because the ability to treat HIV has increased dramatically over the past 15 years, and being HIV positive is no longer considered a death sentence. Second degree Reckless Endangerment, a misdemeanor, requires only the creation of a "substantial risk of serious physical injury to another person."

Skype and HIPAA compliance. We’re frequently asked if the use of Skype for teletherapy is HIPAA compliant. We’re also frequently asked whether the use of Skype is prohibited for HIPAA compliant practices. The answers are "no" to both questions, in my opinion. Skype is not HIPAA compliant, that is, it does not use the HIPAA encryption standard, does not provide a protocol for trail audits or breach notification and does not offer to sign Business Associate Agreements (BAA). But Skype does provide strong encryption, stronger than that used by telephone companies, and Skype officials themselves are of the stated opinion that Skype, like telephone companies, is merely a conduit and need not be HIPAA compliant. (Apparently, Skype can and does use its encryption key to listen in on calls, i.e., for law enforcement purposes, and according to some, that makes it a Business Associate and makes a BAA required.) Reportedly, CMS, the federal agency that interprets HIPAA regulations, when directly asked, declined to opine about whether Skype is HIPAA compliant. And HIPAA regulations emphasize the flexibility and scalability of security measures. So, I do not believe it can be definitively stated that use of Skype for teletherapy is prohibited by HIPAA compliant practices.

There are video-conferencing services that are HIPAA compliant, e.g., Vsee, Secure Telehealth, eTherapi, that is who use government-standardized encryption and will sign Business Associate Agreements. If a practice regularly uses teleconferencing for teletherapy, then we suggest they use one of the HIPAA compliant video-conferencing services.

Whatever video-conferencing is used, written informed consent in which security measures and their limits are discussed is recommended.

Also keep in mind that this issue is moot for non-HIPAA compliant practices, i.e., those which don’t bill electronically. The use of video-conferencing for teletherapy does not itself necessitate HIPAA compliance.


ICD 10 compliance is nearing: The deadline for use on insurance claims of ICD 10 diagnostic coding, in addition to or instead of DSM 5, is October 1, 2014. The US has been using ICD 9 in addition to the DSM for mental health for decades while most other nations have been using ICD 10. HIPAA mandates the use of ICD 10 throughout the US by the October deadline. Even non-covered entities such as Workers Compensation will be switching to ICD 10. Conversions from DSM 5 diagnoses to ICD 10 can be found in the DSM manual but the crosswalk sometimes works imperfectly. For example ICD 10 still uses "substance abuse" and "substance dependence" as diagnostic criteria but DSM 5 has eliminated those distinctions. In many cases, clinical documentation will still be expected by insurers to conform to DSM 5. Mental health practitioners will likely need to be well versed in both systems. Information about ICD 10 can be found at www.cms.gov/ICD10/.

A new mental health profession in New York State: Governor Cuomo signed a bill creating a new licensed mental health profession: Licensed Behavior Analyst. The law goes into effect on July 1, 2014, except that persons who are currently certified by the Behavior Analyst Certification Board may apply immediately for licensure. Board Certified Behavior Analysts will continue to be automatically eligible for licensure, while those without such certification will be eligible for licensure if they have a Master’s degree in an appropriate field and meet character and fitness requirements. The scope of practice for Licensed Behavior Analysts is limited to providing behavioral analysis and treatment for persons on the autistic spectrum, with that diagnosis being provided by another mental health professional who is licensed to make such diagnoses, e.g., MD, PhD, LCSW. Licensed Behavior Analysts are not themselves permitted to make diagnoses. The law also creates a bachelors level certification, Assistant Behavior Analyst, for paraprofessionals.

California law prohibiting gay conversion therapy is constitutional: In August 2013, the US Court of Appeals in California upheld a California law banning gay conversion therapy. The law had been challenged on the grounds that it violated the First Amendment of the US Constitution because it prohibited certain psychotherapists from expressing their viewpoints about same-sex relationships, and thus abridged their right of free speech. The decision of the court hinges on the distinction it made between protected speech on the one hand, and conduct that can be regulated on the other. The court found that California had banned certain conduct - gay conversion therapy - that only incidentally involved speech. The conduct involved can be regulated just as the state can regulate any medical or mental health service by a professional licensed by the state.

Liability protection proposed for Medicare and Medicaid providers: The recently proposed federal Saving Lives, Saving Costs Act, if passed, would create "safe harbors" for healthcare professionals who follow best practices guidelines that would be established and published by a panel of experts. A healthcare professional being sued for malpractice by a Medicare or Medicaid recipient would then be able to claim that he or she followed best practices guidelines in treating the patient. The malpractice action would be suspended and the issue of whether the guidelines had been adhered to would be decided by an independent review panel. If the panel found that the guidelines had been followed, then the malpractice case would be dismissed unless the plaintiff was able to prove that the review panel was in error, "by clear and convincing evidence" (a threshold midway between "preponderance of the evidence" and "beyond a reasonable doubt" criteria).

The final parity rule; who will enforce it? The rule enforcing the federal 2008 Mental Health Parity and Addiction Equity Act was finally published by the Departments of Treasury, Labor and Health and Human Services in November 2013. Because health insurance plans change each January 1, the new rule won’t take effect widely until January 2015. The rule establishes the principle that state governments rather than the federal government will have the main role in enforcement. In New York State, that means enforcement will be by the Department of Financial Services (formerly the State Insurance Department). Stakeholders including professional associations are currently advocating for DFS to create a bureau specially dedicated to enforcing the parity rule. As discussed in our last Newsletter, violations of the parity rule appear to be common, largely because of a lack of enforcement. Maybe a new State bureau would fix that.

Appellate court rules that underpayments must be considered when determining overpayment by insurer: A New York State appellate court in Bulmahn v NYS OMIG, 106 AD3d 1504 (4 Dept 2013) affirmed the principle that insurers may use extrapolation methods to calculate overpayments when the number of claims is voluminous, and that the extrapolation method will be presumed valid unless there is evidence to the contrary. However, in the case, the Court found that the failure by the insurer to consider underpayments to the provider when calculating potential overpayments was "irrational and unreasonable" and resulted in an inaccurate calculation of the amount of overpayment.

Professional discipline for sexual misconduct occurring 28 years ago approved: Alabama, like New York State, has no statute of limitations for professional disciplinary complaints to licensing boards. (In contrast, the statute of limitations in New York State for civil malpractice for non-physicians is 3 years, for MD’s 2½ years). A psychologist was found guilty of sexual misconduct that occurred in 1982, but claimed that it would be unfair to prosecute him due to the general legal principle of a "right of repose" (a right of alleged wrongdoers to be left alone if alleged victims don’t seek to vindicate their rights within a reasonable amount of time) and also because the records he maintained that might exculpate him had been destroyed in accord with Alabama laws permitting destruction of records after a mandatory retention period. The court found that the psychologist had not demonstrated with specificity how the passage of time or destruction of records placed him at an unfair disadvantage and so allowed the prosecution of the psychologist. Alabama Board of Examiners in Psychology v Hamilton, Court of Civil Appeals of Alabama 2013.

While my experience with prosecutors of licensing board complaints in New York State is that they do not as a general rule prosecute very old cases as a matter of prosecutorial discretion, this case suggests the legal arguments that would ensue if they chose to do so.


A proposed change in the law to allow psychologists to use testing technicians. New York State Senate bill number S4176 would allow psychologists to use unlicensed technicians to administer and score standardized psychological and neuropsychological tests. This was the common practice among psychologists prior to the passage of their 2002 scope of practice law. But following passage of that law, an interpretation of it in 2003 by the State Education Department opined that use of unlicensed technicians constituted the unlicensed practice of psychology because administration and scoring of tests was within the scope of practice of psychologists. The new bill, if passed by the New York State legislature and signed by the governor, would require unlicensed testing technicians to possess a bachelor’s degree and to be trained by a psychologist in a setting where the ratio of technicians to licensed psychologists did not exceed 3:1, and would prohibit technicians from interpreting data or giving opinions. Medicare permits the use of technicians under CPT code 96119. The American Psychological Association and other professional associations representing neuropsychologists support the proposed change in the law.

The US Department of Labor will investigate some managed care organization (MCO) denials as parity violations. Patients who work for employers who have over 50 employees and provide health care coverage have recourse to the Employee Benefits Security Administration (EBSA) of the USDOL if they believe that their MCO has used criteria or processes for determining medical necessity for mental health care different from those criteria and processes used for making determinations for medical and surgical care. Despite these being violations of the federal parity law, the Mental Health Parity and Addiction Equity Act of 2008, they continue to be common practices among MCO’s. One essential difference often found between the two types of criteria is that for medical/surgical decision-making regarding medical necessity, the standard used is a national standard of care related to current scientific knowledge and clinical practice, while for mental health care, the MCO used an internal and much more restrictive standard, one unrelated to customary clinical practice. Another difference is a procedural one: "pre-certification" is usually not required for medical or surgical care, but it is often needed for psychotherapy.

To make a complaint, a patient or practitioner would go to the EBSA/DOL website called "Request for Assistance from The Department of Labor, EBSA," at www.askebsa.dol.gov/WebIntake/Home.aspx, click on "Plan is not complying with legal requirements (such as ERISA, COBRA, HIPAA, Affordable Care Act)," and then describe how the process of determining medical necessity or the requirement for pre-certification differs between mental health and medical care. Attaching the MCO’s benefits booklet can be helpful. A complaint can be submitted online or by mailing the printable form.

The Affordable Care Act (ACA), changes to Medicaid and Medicare, and the impact on psychotherapy practice. Two areas where psychotherapists are likely to see changes in their practices relatively soon are in referrals of lower income patients who now, under the ACA, qualify for Medicaid, and in the reorganization of Medicare based on Accountable Care Organizations (ACO’s). Under the ACA, employers of more than 50 employees can either purchase coverage for employees or not; if the latter, then the employer pays a fine of $2000 per employee. Still, the fine is less than insurance, and employers may decide to forgo the difficulties of negotiating and maintaining insurance for employees. If they do so, then many lower income workers now covered by employer-sponsored insurance are likely to be forced, under the individual mandate whereby individuals must buy insurance or pay a fine, to seek private insurance on the federal or state exchanges. When buying private insurance, a significant portion of such lower income workers are likely to be directed to Medicaid, which is relatively low-cost and has expanded eligibility requirements under the ACA. Most mental health practitioners do not accept Medicaid because of low reimbursement rates and the hassles involved with record-keeping and billing. Thus psychotherapists may lose a significant portion of their lower income patients.

Under the ACA, Medicare is to be reorganized based on ACO’s. ACO’s will provide, on a capitated basis, comprehensive care to patients, with contracts renewable every 3 years. The foundation of ACO’s will be primary care practices, hospitals and consortiums of provider entities. If ACO’s meet certain quality standards, then they will be eligible to share savings that presumably will result. Only one quality standard pertains to mental health, and that is screening for depression. Under the ACO model, "allied health professions," including non-medical mental health professionals cannot share in these savings. Rather, those who do share savings will make the decision whether to refer to allied health professionals when doing so decreases their potential savings. Referring ACO’s will likely be reluctant to refer for psychotherapy and any speciality services where patient outcomes are not clearly beneficial in terms of a cost/benefit analysis, and that calculation will be hard to make regarding mental health care where quality standards are lacking.

Uncertain is whether these changes in Medicaid and Medicare coverage will also occur with non-governmental private insurers. If they do, then the practices of private psychotherapists, especially those working primarily out-of-network, may be adversely affected by the ACA, despite the Act creating more insured persons than before. Reimbursement rates for psychotherapy may decrease, or fail to increase. Private insurers may mimic Medicare ACO’s in insisting on cost-benefit analyses weighing the cost of care with quality of care outcome measures. Insurance payment for extended psychotherapy for all who seek it with its often slow progress may be replaced by more patients seen for brief interventions.


New HIPAA Omnibus Rule and new HIPAA Manual now available. By September 23, 2013, covered entities are supposed to be in compliance with the new HIPAA Omnibus Rule. Much has changed including new provisions in the Policy and Procedures Handbook, Notice of Privacy Practices, Business Associate Agreement, Authorization Form, and other forms. What has not changed is the definition of "covered entity," so if you were not required to be HIPAA compliant before now - that is, if you don’t bill insurers electronically, which to the Department of Health and Human Services makes you a "country doctor"- then you still need not be compliant. The new fourth edition of our HIPAA Compliance Manual for Small Mental Health Practices in New York State, in hard copy with CD ROM, will be ready for distribution the first week of October. Those who order the book before then are also entitled to receive the Manual as an ebook in the meantime. The cost of the book is $81.25 which includes tax and shipping and it comes with a money-back guarantee. Please call my secretary Rita to order the book.

Whither BCBA’s? On July 25, 2013, the NYS Department of Financial Services (formerly Insurance Department) promulgated implementing regulations for Board Certified Behavior Analysts to provide services to persons with Autism Spectrum Disorders under the provisions of New York’s 2011 Autism insurance reform law. Provision of services under that law by BCBA’s has been delayed because the DFS had earlier ruled that BCBA’s must be State licensed to provide applied behavior analysis (ABA), a mental health service. The new regulation indicates that licensure is not necessary to provide ABA services, but apparently that treatment planning for ABA must be developed by a licensed professional. In a somewhat complicated resolution of the problem, approved by the State legislature (A.6963 and S.4862) but as yet unsigned by Governor Cuomo, BCBA will become a licensed profession in the State, and those with the certification will be licensed under an expedited process upon filing with the State Education Department. Right now, it appears that New York will shortly have a new licensed mental health profession.

A new State agency, the Justice Center for the Protection of People with Special Needs, was opened in June 2013. Its constituency includes over 1 million New Yorkers with developmental disabilities, mental illness, substance abuse disorders, and children in residential facilities, who are in or treated in State run facilities or State licensed facilities, i.e., those licensed by the Department of Health (DOH), Office of Mental Health (OMH), Office for People with Developmental Disabilities (OPWDD), Office of Children and Family Services (OCFS), the Office of Alcoholism and Substance Abuse Services (OASAS) and the State Education Department (NYSED). It assumes most of the functions and responsibilities of the Commission on Quality of Care (CQC). Among other functions, it will operate a statewide 24 hour hotline and incident reporting system. All health care professionals who are now mandated reporters of child abuse and neglect to the Statewide Central Register (SCR) are hereafter also mandated reporters of child abuse and neglect to the VCR (Vulnerable Persons’ Central Register) at 855-373-2122 if the child suspected of being abused is a "Vulnerable Person," that is, a child receiving residential services in a facility operated or licensed by the OCFSS. Suspicion of child abuse or neglect in a day care setting, foster care or within a family home is not to be reported to the VCR, but rather continues to be reportable to the SCR. The Justice Center will also conduct background criminal checks of anyone who is applying to be an employee, volunteer or consultant at a facility operated or licensed by the OMH, OPWDD and OCFS.

Am I responsible for an employee’s breach of confidentiality? This has been an unanswered question for health care professionals under New York State law but will be answered soon. In Doe v Guthrie Clinic (2d Cir., 03/25/2013), a nurse who worked at the Clinic disclosed without authorization to a patient’s girlfriend that the patient had a sexually transmitted disease. The nurse was fired, and the patient sued the Clinic. Under New York law, an employer is liable for the actions of an employee only if the employee was acting within his or her scope of employment and the employee’s actions were foreseeable. Under New York law, employers had not been held responsible for actions of employees taken for personal reasons, and this nurse’s actions were deemed to have been taken for personal not professional reasons. The federal court reviewing the case decided that not to find the Clinic liable under these circumstances might render meaningless the Clinic’s obligation to maintain confidentiality because unauthorized breaches are usually made outside the scope of employment. So the federal court asked New York’s top court to re-consider the issue, which it agreed to do. Whatever the New York court’s answer, it is imperative that health care professionals with employees educate them about the necessity of maintaining the confidentiality of patient information. HIPAA compliant employers must have employees sign an acknowledgment that they have been so educated.

The NYS Department of Labor’s strict guidelines for independent contractors. Many clients render professional services through independent contractors, and recently quite a number have been subject to audit by the NYSDOL because of it. Contractors are hired to save on some of the expenses incurred by employers for employees, i.e, for withholding income and FICA taxes, unemployment insurance, workers compensation insurance, and mandatory disability insurance. The NYSDOL auditors have been imposing strict criteria, stricter than those of the IRS, for who can be characterized as a contractor. Contractors who do not have a private practice of their own and who do not offer (or are not permitted to offer due to restrictive covenants) their services to other practices are often deemed to be employees rather than contractors. Other criteria include a written contract, contractors’ ability to refuse work and set their own hours, having their own D.B.A., EIN or corporate entity, having their own liability insurance, and not being or having to be officially supervised (that means that limited permittees and LMSW’s cannot be contractors as they must be officially supervised). Re-characterization of contractors as employees by the NYSDOL can carry significant financial penalties.

In June 2013, OMH announced a new program, OnTrackNY, designed to help schizophrenic young adults. This OMH program partners with private institutions including North Shore LIJ and Kings County Medical Center, and provides to young persons ages 16-30 with emerging psychoses support services so that they might be better able to stay in school and obtain work. Participants are treated by a team consisting of a recovery coach, employment/educational specialist, and a psychiatrist and nurse among others.

In August 2013, the I-STOP (Internet System for Tracking Over-Prescribing) went into effect. The law requires all prescribers to consult with the Prescription Monitoring Program (PMP) before prescribing controlled substances. The State DOH will maintain information on the PMP of all patients’ controlled substance prescription history. If the practitioner suspects diversion, then he or she may contact the Bureau of Narcotic Enforcement.


Agency exemption continues. Governor Cuomo’s 2013 budget extends to 2016 the former July 1, 2013 expiration date for the exemption for State licensed programs (DOH, OMH, OASAS, OPWDD) that allows them to hire unlicensed mental health clinicians to perform services that would require a license to perform in the private sector. The State-licensed agencies argued that a requirement that they hire only licensed professionals would increase their costs significantly. Professional associations argued that patients at State-licensed agencies should be granted the same protection - services rendered only by licensed professionals - that patients receiving care in the private sector are granted. The exemption is still time-limited and not the permanent one that the agencies lobbied for, and in that sense, represents a victory for the professional associations.

New HIPAA rules. By September 23, 2013, covered entities must be in compliance with the new HIPAA Privacy, Security, Enforcement and Breach Notification Rules (aka the Omnibus Rule) which were finalized on January 25, 2013. There are quite a number of new provisions, but many of them had already been proposed in the interim HITECH rules of 2009 and updates of 2010. The current edition of our firm’s HIPAA Manual anticipated many of the changes, but will be fully updated in the Fall. For now, we are recommending that covered entities add to their Notice of Privacy Practices the following section:

Omnibus Final Rule

Final modifications to the HIPAA Privacy, Security, and Enforcement Rules mandated by the Health Information technology for Economic and Clinical Health (HITECH) Act, and recent changes to New York State law, are as follows:

We are required by law to report to the authorities patients who are at imminent risk of harming themselves or others for the purpose of those authorities checking to see whether such patients are owners of firearms, and if they are, or apply to be, then limiting and possibly removing their ability to possess them.

You have the right to be notified of a data breach.

You have the right to ask for a copy of your electronic medical record in an electronic form.

You have the right to opt out of fundraising communications from us, and we cannot sell your health information without your permission.

Certain uses of your medical data, such as use of patient information in marketing, require prior disclosure and your authorization. Uses and disclosures not described in this Notice will be made only with your authorization.

If you pay in cash in full (out of pocket) for your treatment, you can instruct us not to share information about your treatment with your health plan.

More on HIPAA enforcement. In it first prosecution and settlement of a breach of unprotected electronic protected health information (ePHI), a fine of $50,000 was imposed on a hospice for that infraction by the US Department of Health and Human Services (HHS). The hospice, as required by the breach notification provisions of the Omnibus Rule, notified HHS that a laptop computer containing ePHI was stolen. The hospice had not conducted a risk analysis to safeguard ePHI and the ePHI was apparently neither password-protected nor encrypted. HHS recommends encryption for ePHI maintained on computers. See www.hhs.gov/ocr/privacy/hipaa/enforcement/examples/honi-agreement.pdf (Thanks to Dr. David Phillips for referring me to this case.)

Medicare Physician Quality Reporting System ( PQRS). This voluntary reporting system applies to PhD’s and LCSW’s, not just MD’s. If you fail to participate in PQRS in 2013 (on at least half your cases, so you must start by July 1, 2013 at the latest) you will be penalized 1.5% of your 2015 Medicare billings. There is an incentive as well: a bonus payment of 0.5% of all Medicare charges for the year. There are about a dozen measures available to non-medical mental health care practitioners. More information about how to use the PQRS is available at the websites of CMS, the American Psychological Association, NASW and on youtube.

Federal Parity Law cases, 2013. The New York State Psychiatric Association has brought suit against UnitedHealth Group, including United Behavioral Health, alleging violations of the federal Mental Health Parity and Addiction Equity Act. Allegations include that the insurer allows only weekly psychotherapy sessions for seriously mentally ill patients, and that the insurer has made authorizations for initial and continuing care difficult to obtain. In a similar case in Vermont brought by a patient (C.M.) against insurer Fletcher Allen Health Care Inc, the patient alleged a lack of parity with physical healthcare because for mental healthcare the insurer required preapproval, concurrent treatment reviews and automatic reviews triggered by a fixed number of visits for psychotherapy. These cases are likely the first of many more to come.

Treatment records destroyed. With another hurricane season upon us, procedures for dealing with records that are destroyed should unfortunately be reviewed. First, salvage any records that are savable. If you hire a salvage company and are HIPAA compliant, have them sign a Business Associate Agreement. Reconstruct destroyed records to the extent possible, dating any reconstruction contemporaneously. Write treatment summaries of prior treatment for which records cannot be saved. If you’ve provided copies of destroyed records to someone in the past, ask them to send you copies. For those who might request copies of the destroyed records, record the date of the loss, the exact extent of the loss, salvage and reconstruction efforts and their outcome, and reports made to insurers that support the claim of destruction.

Bruce is a "Superlawyer" again. Bruce is pleased to announce that he’s been named a New York Metro Area Super Lawyer for 2013 in the category of Health Care Law. Each year, only 5% of lawyers receive this honor from Thomson Reuters, the world’s leading source of information for businesses and professionals. Super Lawyers can be found online at superlawyers.com and the listing will also be published in the October 6, 2013 edition of the New York Times Magazine. This is the second time Bruce has been named to the list.


The SAFE (Secure Ammunition and Firearms Enforcement) Act was signed into law on January 15, 2013, and contains provisions affecting mental health professionals. Those provisions are effective March 16, 2013. One provision of the Act creates what is only the second statutory reporting mandate in New York State; the other is mandatory reporting of child maltreatment (New York State has no mandatory reporting of elder abuse and no statute or case imposing any "Tarasoff"- type duty).

The new reporting duty is at Section 9.46 of the Mental Hygiene Law (MHL) and is imposed on physicians, psychologists, nurses and licensed clinical social workers. For unknown reasons, it is not imposed on licensed master social workers and mental health practitioners, which includes licensed mental health counselors, marriage and family therapists, psychoanalysts and creative arts therapists. Also, it appears to apply to "unlicensed psychologists," which presumably means persons whose job title is "psychologist" but who don’t have State licenses and who work in exempt settings (federal, state county and municipal agencies and chartered elementary, secondary and degree-granting educational institutions).

Physicians, psychologists, nurses and LCSW’s, whatever their work setting, are required to report when in the exercise of their professional judgement, they believe an individual, whether a child or adult, who is in their care is "likely to engage in conduct that will cause serious harm to self or others." The Office of Mental Hygiene (OMH) in attempting to clarify this standard states that it is meant to be the equivalent of the standard for emergency involuntary commitment embodied in Section 9.01 of the MHL, i.e., a clinical determination is made that the patient’s mental status creates either, "a substantial risk of physical harm to the person, as manifested by threats or attempts at suicide or serious bodily harm or other conduct demonstrating that the person is dangerous to himself or herself, or (b) a substantial risk of physical harm to other persons as manifested by homicidal or other violent behavior which places others in reasonable fear of serious physical harm." Of note is that the OMH also states that the standard is different from that for non-emergency involuntary commitment where dangerousness may be imputed even if the mentally ill person doesn’t actively display dangerous behavior, conduct or threats but has a history of dangerous conduct associated with noncompliance with mental health treatment. OMH seems to be stressing that reporting is necessary only when a patient by his or her behavior or threats poses an immediate risk of serious harm.

Note that it is not a requirement of the new law that the patient own a firearm. As with the reporting of child abuse, the State wishes to leave to itself the determination of whether the person is actually a threat by means of possession of a firearm.

To alleviate concerns about breaching confidentiality on the one hand, and failing to report based on a good faith but incorrect assessment of non-dangerousness on the other, the law grants immunity to mental health professionals who decide whether or not to report "reasonably and in good faith." If that standard is met, there can be no civil or criminal liability on the part of the clinician. I suggest that to have the greatest chance to enjoy such immunity, clinicians document their decisions carefully and consult with colleagues and mental health attorneys to corroborate their clinical assessments and the legal standard for reporting when a possible occasion for it arises.

There is also an important exception to the reporting requirement: when in the mental health professional’s reasonable professional judgment, a report would endanger him or her or would increase the danger to the potential victim or victims. This exception would seem to apply in many instances: dangerous patients are often likely to become angered if their firearms are taken from them, and even to react violently. I think the key to interpreting the exception is similar to interpreting the law itself. The danger presented to the reporter or victim(s) must be demonstrable through the behavior or threats of the patient and pose an imminent risk. Again, documentation and consultation are, in my opinion, essential to risk management.

If a report is necessary, then it is made to the County Director of Community Services (DCS), who if he or she agrees with the report, submits it to the State Division of Criminal Justice Services (DCJS). DCJS then determines whether the reported patient has or has recently applied for a pistol permit or has registered an assault weapon. If the reported patient has a pistol permit or registered assault rifle, then the State Police and county firearms licensing officials must suspend or revoke the license and remove the pistol or assault rifle. (The report is also kept on file for 5 years in the event the person applies for a permit.) Note that in New York State (except New York City) no license or registration is required for most long guns (non-assault rifles or shotguns). So a dangerous patient with those types of firearms may go unnoticed by officials.

Of note is that nothing in the law states that officials must use the information from the report for any other purpose other than to determine if a patient owns a certain type of firearm, and if so, to suspend or prevent the license for it and/or remove it. But OMH has issued a statement that it may review the reports to determine whether involuntary hospitalization is also warranted.

A report under the 9.46 mandate is actually made, not by calling anyone as with child maltreatment, but rather online. When a report is necessary, the reporter is to go to https://nysafe.omh.ny.gov and complete the reporting form that will appear when the "9.46 Reporting" button is clicked.

The new law has no effect on the assumed duty of mental health professionals to break confidentiality and warn significant others, third-parties, and/or general law enforcement authorities when a patient presents an imminent risk of danger to self or others (there is no statute or case precedent in New York imposing such a duty but most clinicians and healthcare attorneys assume it exists). For example, if a patient jilted by his lover is assessed to present a risk to her due to threats he expresses, a 9.46 report must be made, but a "Tarasoff"- type warning may also be warranted and legally recommended to be issued to the former lover, and the police may need to be notified as well. And with a suicidal patient, in addition to the 9.46 report, significant others and the police may be contacted without the patient’s consent if they can assist in preserving the patient’s life. In such situations, it is always best to consult with a knowledgeable attorney.

Those of you who use written informed consent forms will need to add to the section on limits of confidentiality a statement such as, "I am mandated to report to the authorities patients who are at imminent risk of harming themselves or others for the purpose of those authorities checking to see whether such patients are owners of firearms, and if they are, or apply to be, then limiting and possibly removing their ability to possess them." A similar statement should be added to the HIPAA Notice of Privacy Practices.


New CPT codes for much psychotherapy starting January 1, 2013. Beginning January 1, many but not all of the most frequently used psychotherapy codes will change. Among the new codes are 90791 replacing 90801, 90832 replacing 90804, 90834 replacing 90806 and 90837 replacing 90808. The codes now specify a single duration: 90832 is 30 minutes, 90834 is 45 minutes and 90837 is 60 minutes, but there remains some flexibility. The CPT states that 90832 can be used for therapy of 16 - 37 minutes length, 90834 can be used for therapy of 38 - 52 minutes length, and 90837 can be used for therapy of 53 or more minutes of length. There are other changes and clients are advised to seek a comprehensive listing and crosswalk from their professional associations or the AMA. With these changes, and also based on recent audits by insurers, we are advising clients to list on every progress note in patients’ charts the starting and ending times of psychotherapy sessions. Please note that start and end times of coded services should be based on time spent face-to-face with patients. For example, if a patient is 15 minutes late to a 45 minute session, he or she should be charged for a 30-minute session (90832) with the additional 15 minutes being billed as un-coded (and non-reimbursable) "reserved time."

Health insurance for autism services, scheduled to take effect in November, partially delayed. As of November 1, 2012, under the New York Autism Mandate, coverage must be provided for care provided for autism spectrum disorders by psychiatrists, psychologists and LCSW/R’s. Also supposed to be covered under the mandate was applied behavior analysis provided by behavior analysts (BCBA’s) certified by the Behavior Analyst Certification Board, a national professional credentialing (but not state licensing) body, with a limit of $45,000/year for coverage of applied behavior analysis. However, the NY Department of Financial Services in Emergency Regulation 201 on October 31, 2012 determined that to allow reimbursement to unlicensed albeit certified BCBA’s would violate State policy against unlicensed practice. So reimbursement for applied behavior analysis is limited for now to those professionals who are both licensed mental health professionals in NYS and BCBA’s. There are just a few such dually credentialed professionals in the State making applied behavior analysis services difficult to access for many patients. There are bills pending that would license BCBA’s in New York (A10064, S7017) but the legislature has not yet acted on them. There are 31 states with some form of mandatory coverage for autism and 8 of them license BCBA’s.

States are starting to mandate coverage for telehealth services. 13 states now mandate that private insurance companies cover telehealth services that would otherwise be covered when provided face-to face. New York is not among them. Many clients call to ask about billing for telephone psychotherapy. Our experience has been that some insurers will approve telephone sessions for brief periods during a course of therapy that is otherwise face-to-face in the event of extenuating circumstances such as patient need when combined with patient disability, business or vacation travel*, or crisis management. Without pre-approval of the insurer, telehealth services should not be billed as a coded service by New York practitioners, as the codes remain reserved for face-to-face services.

* When patients travel out of state, there is the additional problem of establishing the right to practice in the state in which the patient is located; many states have guest licensure provisions that allow practitioners to provide telehealth services for a brief period of time.

Is judicial oversight required for release of child’s record in a custody dispute? In a case reported in the NY Law Journal on October 23, 2012, a judge refused to allow a parent to use records of a child’s therapy in a custody dispute between the parents. The father of a 9 year old girl obtained the child’s therapist’s treatment records with a properly executed HIPAA authorization. The therapist was reluctant to provide the records but did so upon the advice of her professional association that she was required to do so under HIPAA. The judge ruled that the lawyer for the father should have first come to the judge for approval of the release to secure the records. The judge also seemed to state that the therapist should have declined to provide records under the provision of HIPAA that permits a health professional to withhold information about a child’s treatment from a parent if it is in the best interests of a child to do so, 45 CFR §164.502(g). There is a similar provision in New York State’s access law, New York Public Health Law §18 (2)(c). The judge did not take into account that, by law in New York State, such denials of access by practitioners are subject to review by medical access review committees, not judges. NYPHL §18(3)(e). The judge also did not address the issue of whether therapists might be obligated to deny access to parents if they believe a child patient might be harmed; denial of access is permitted but not required under the federal and State access laws. Unanswered was the question of how a therapist might ascertain that records sought by a parent are to be used in a custody dispute. My thanks to Joe Scroppo JD, PhD for directing me to this case.

No firing permitted as retaliation for reporting suspected child abuse. A school nurse alleged that she was fired by a private religious school in retaliation for reporting suspected child abuse as required by law; the nurse was a mandated reporter. The school moved to dismiss the lawsuit on the basis that failure to report suspected child abuse did not present a "substantial and significant danger to public health or safety," and therefore the nurse was not protected by New York State’s "Whistleblower" Law, NY Labor Law §240. The court disagreed with the school and found that a report of suspected child abuse was indeed indicative of a public health threat. Two of the appellate judges dissented arguing that a single instance of suspected child abuse did not present a threat to public health. This is the first time that New York’s Whistleblower Law has been used to protect a mandated reporter from retaliation for a report. Villarin v RHL School, 96 AD3d 1 (1st Dept 2012).


Minors’ consent to mental health care in New York State:

The age of majority in New York for the purpose of consenting to any health care is 18 in New York State. (NYPHL 2504(1), NY Fam Ct Act 119(c). Certain classes of persons under 18 are also considered competent in New York to consent to health care, including mental health treatment. These persons are:

* the parents of a child for themselves and the child,

* any married persons for themselves and on behalf of their children,

* any pregnant woman for care relating to prenatal care; (NY PHL 2504 (2) and (3) and

* an emancipated minor, NY MHL 33.21(a)(1).

For parents, married persons and pregnant girls, clinicians are specifically allowed by law to rely solely on the person's statements and need not seek other verification of their status. NY PHL 2404(6). A pregnant minor seeking psychotherapy frequently seeks counseling for psychological issues related to her pregnancy. This arguably falls within the definition of "prenatal counseling." An emancipated minor is defined as one who no longer lives with his or her parents and no longer relies on them for financial support. An expanded definition of emancipation was provided by one court:

Children are emancipated if they become economically independent of their parents through employment, entry into military service, or marriage, and may also be deemed constructively emancipated if, without cause, they withdraw from parental control and supervision. (Alice C v Bernard GC, 602 NYS2d 623 (2d Dept, 1993); also NY Fam Ct Act 413.


Sometimes, minors who do not fall into one of the above categories will independently seek mental health care and not want their parents to know about or be contacted to consent to the treatment. New York State has a specific statute governing such situations. Although the law specifically governs only actions taken in State licensed facilities, psychotherapists in private practice may also follow the guidelines. The risk of not following them is that a parent of the minor might sue or file a complaint alleging that treatment was rendered without appropriate consent. With a private therapist, this could still be alleged even if the guidelines were followed, but the therapist would have a greater chance of justifying his or her actions if the guidelines were followed.

Section 33.21(c) of New York Mental Hygiene Law states that psychiatrists, psychologists, and therapists supervised by a member of those two professions may provide minors with treatment without parental consent if the following three conditions are met:

One, the minor is knowingly and voluntarily seeking treatment;

Two, the therapy is clinically indicated and necessary to the minor's well-being; and

Three, no parent is reasonably available, that is, cannot be contacted despite the clinician’s diligent efforts; or obtaining a parent's consent would have a detrimental effect on the course of treatment; or a parent has refused consent and a physician has determined that treatment is necessary and in the best interests of the minor.

The law further requires that the clinician fully document the reasons for his or her determinations and have the minor sign a written statement indicating that the conditions are met. The term "knowingly and voluntarily" in the statute refers to the minor's capacity to consent. This is to be assessed by the clinician and is defined as "the minor's ability to understand and appreciate the nature and consequences of the proposed treatment, including the benefits and risks of, and alternatives to such proposed treatment, and to reach an informed decision." NY MHL 33.21 (a)(5). 

Notice that this law does not seem to allow clinical social workers, mental health counselors, marriage and family therapists, psychoanalysts, or psychiatric nurse practitioners practicing independently to treat minors without parental consent. As mentioned above, however, this law, governs only State licensed facilities. The restriction by profession does not seem to me to be founded on any sound reasoning or on comparative scopes of practice, perhaps especially regarding LCSW-R’s whose scope of licensure has been found by a court to be essentially the same as psychologists. People v RR, 13 Misc3d (Sup Ct, NY Cty, 2005). From my experience of the lack of professional prosecution, licensed experienced therapists who treat a minor without parental consent and who follow these guidelines may find the level of risk of doing so acceptable.

Note also that the law treats differently those situations where a parent knows of the child's desire for treatment and has actively refused to consent to it and, on the other hand, situations where the parent doesn't know of the child's desire for treatment. Where the parent has actively refused, the therapist must consult with a physician and obtain from the physician an opinion that treatment is necessary. And note that written informed consent by the minor is needed. (Contact our office for a sample of such a form).

One final caution should be added regarding the treatment of minors: it is inadvisable for private non-medical psychotherapists to treat minors without parental consent specifically for alcohol or substance abuse. New York law permits physicians and only physicians to treat minors for alcohol or substance abuse without parental consent if the physicians make similar determinations to those listed above. NY MHL 22.11(c). That this law does not contain permission for any non-medical therapists to do the same could be construed as a determination that only physicians have the required training for such treatment. This limitation does not extend to non-medical therapists treating minors in institutional or clinic settings however.


Case appears to limit Tarasoff-type duty in New York State. In a recent case, a New York Appellate court dismissed a medical malpractice case against a psychiatrist at a voluntary in-patient facility who had been treating a patient who committed murder while out on a pass. The court held that the family of the decedent had a cause of action for negligence against the facility because it controlled the patient’s access to passes, but that the family had no cause of action against the psychiatrist for medical malpractice because mental health practitioners have no duty to the general public. This case suggests that while there may be a Tarasoff-type duty in New York State to protect specific individuals known to be endangered by patients, there is no duty to protect the public at large from dangerous patients. For example, if a patient is known to drive drunk, there is no duty to protect unidentified members of the public from harm from such a patient. As reasons for its decision, the court cited the unwillingness of mental health professionals to treat patients if they were to be held liable for any harm they might cause, and the possibility that mentally ill patients might be unnecessarily confined as a defensive measure by mental health professionals. Fox v. Marshall, 2011 Slip Opinion 062148, 8/9/2011.

Another mental health profession in New York State? A bill is being held for consideration by the New York State Assembly and Senate to create a new masters-level profession, "Rehabilitation Counselors" whose scope of practice would include "assist(ing) persons with physical, mental, developmental, cognitive and emotional disabilities to achieve their personal, career and independent living goals ... through....psychological, vocational, social and behavioral interventions" including, "diagnosis and treatment planning" and "individual and group treatment interventions..." About 15 states now license Rehabilitation Counselors specifically as such, with other states licensing or certifying those with education and training in rehabilitation counseling as generic "professional counselors."

APA issues a report on telepsychotherapy. Division 29 of the American Psychological Association in its "Report from the Task Force on Telepsychotherapy" lists each state’s requirement for temporary or guest license availability. Temporary licenses typically allow licensed psychotherapists in one state to offer therapy (including by telephone) to residents of another state for a certain limited period of time each year, often 20-30 days. Psychotherapists are usually required to seek this exemption from the other state’s licensing board. Although it offers only a temporary solution, psychotherapists who wish to offer therapy to a resident of another state, for example, an established patient who’s recently moved, may find this legal exemption suitable. See our newsletter of Summer 2009 for a general review of legal issues in teletherapy.

Handling bad online reviews. Clients have asked us how to deal with bad reviews hoping there’s a legal solution. There isn’t. We recently wrote Yelp on behalf of a client whose former patient had written a bad review, and Yelp wrote back stating (correctly) that they were essentially legally immune and would remove nothing from their site without a court order. Even if you know the identity of the complaining patient, you can’t respond directly because doing so might identify the patient as such, which would be a breach of confidentiality. Yelp and other review sites do allow you to create your own profile and on it you can explain why you can’t respond to patient complaints. Some clients have asked family, friends and ex-patients (not current patients; that’s unethical) to post positive reviews. Others have retained the services of firms like www.reputation.com who seem to be able to reduce the visibility of negative reviews.

Court rules that sanction by a licensing board cannot be an automatic bar to Medicaid eligibility. The Office of the Medicaid Inspector General (OMIG) had been automatically barring practitioners from participation in Medicaid if they had been found guilty of or pleaded no contest to, charges of professional misconduct made by a licensing board. In Koch v Sheeran, Ap Div, 4th Dept, 3/23/12, a court ruled that OMIG must perform an independent evaluation of a practitioner’s ability to safely treat Medicaid patients. The Court said it made no sense to have a licensing board sanction allow the practitioner to continue to treat patients, but then have OMIG strip the practitioner of his or her ability to treat Medicaid patients.

Medicare providers must re-validate their enrollment. The Affordable Care Act requires that Medicare providers who enrolled in Medicare before March 25, 2011 re-validate their enrollment information in the Medicare Provider Enrollment, Chain and Ownership System (PECOS) prior to March 2015. But re-validation should not be undertaken until providers are sent notices and instructions about how to re-validate using the Internet PECOS. The notices are being sent in yellow envelopes. The re-validation process is separate from enrollment updates so updates should continue to be made as necessary.

Psychologist v psychologist. One psychologist complained to the State licensing board about another psychologist, alleging that the other had harmed detainees at Guantanamo Bay. The Office of Professional Discipline (OPD) declined to investigate or prosecute because no therapist-patient relationships were implicated. The complaining psychologist then went to court to try to compel the OPD to prosecute on the grounds that the value and prestige of his license had been diminished by the alleged unethical conduct of the psychologist who had worked with the Behavioral Science Consultation Team at Guantanamo Bay. The court upheld the declination of the OPD on the basis that State board prosecutions are meant to protect the welfare of patients. Reisner v Catone, 929 NYS2d 403 (Sup Ct, NY Cty).

Bruce named a "Top Lawyer" by Long Island Pulse Magazine. In collaboration with LexisNexis Martindale-Hubbell ™, Long Island Pulse magazine selected those attorneys whose legal ability and ethical standards comply with the highest standards. Bruce was among them.


No action yet on EMR incentives for mental health professionals. Congress allocated about 20 billion dollars as part of the American Recovery and Reinvestment Act of 2009 (ARRA) to encourage the use of electronic medical records (EMR) (aka electronic health records, EHR). Medical professionals who participate in Medicare and/or Medicaid and who use certified EHR technology are eligible for financial incentives of up to over $100,000 if they begin participation by 2012. Psychologists and social workers were not included in the original legislation. Recently, a bill was introduced in the US Senate to expand the Medicare and Medicaid EHR incentive programs to include mental health professionals, "The Behavioral Health Information Technology Act of 2011 (S.539)." Psychiatric facilities were also left out of the original ARRA and would be included under S. 539. No action has yet been taken on S. 539.

Many health care professionals are under the impression that there is a mandate to convert to EHR. There isn’t. Rather, HHS is employing a "carrot and stick" approach using financial incentives under ARRA, and as of 2015, reductions in Medicare reimbursement for those who have not converted to EHR.

ICD-10 coding to become mandatory under HIPAA. Starting October 2013*, healthcare providers will be required to convert to using ICD-10-CM (International Classification of Diseases, 10th Revision, Clinical Modification) as a coding system for diagnoses. The ICD system is created by the US National Center for Health Statistics and Centers for Medicare and Medicaid Services. The American Psychiatric Association will shortly release its revised DSM- 5. However, the DSM derives its code numbers from the ICD system and the DSM is not itself approved by HIPAA. In fact, some of those who have objections to the new DSM-5 (based on preliminary drafts) assert that rather than use the DSM-5's new classification system, they will ignore it and simply use and convert old DSM-IV diagnoses to their ICD-10-CM diagnostic code numbers; the conversions are available online. *The date may be extended.

APA recommends not googling patients. The American Psychological Association through a published statement by its Ethics Committee to graduate students, takes the position that psychologists should not search patients online without their consent, apparently out of concern for the impact on the therapeutic relationship. Presumably, privacy interests were also implicated. Searches may be warranted if the motivation is to protect the safety of a patient or someone else. Enforcement will likely prove problematic. (APA Web Exclusive, Chamberlin, J., "Is it ever OK for a therapist to snoop on clients online?")

NYS Subpoena duces tecum law amended. The law regarding subpoenas duces tecum (for records) of healthcare information in NYS was unclear in that it previously stated that practitioners might ignore subpoenas if they were unaccompanied by a HIPAA-compliant authorization of the patient. (CPLR 3122(a)). The law gave no guidance as to what action a practitioner should take if a subpoena was unaccompanied by a patient authorization, but was signed by a judge ("So ordered"). Attorneys were divided on the proper response to such subpoenas; some advised healthcare clients to move to quash them and some advised clients to comply in some manner with the judge’s order regardless of the lack of an authorization. A new law has clarified the issue. Laws of New York, 2011, Chapter 307, states explicitly that a judicial order can substitute for the absence of a patient authorization.

Medicare "doc fix" passed but psychotherapy extender declined. On February 17, the US Senate approved legislation delaying for a year (again, as it has every year since 1998), until January 1, 2013, a scheduled 27.4% reimbursement cut in payments for all medical services. But Congress voted to eliminate the "psychotherapy extender" effectively cutting Medicare reimbursement of psychotherapy services by 5%. The psychotherapy extender had been passed four of the last six years, but not this time.

NPDB re-opens data access to researchers. The National Practitioner Data Bank (NPDB) was created in 1986 to improve the quality of health care by restricting the ability of health care professionals to change practice locations without the disclosure or discovery of their previous negligence or incompetence. The law assumes that malpractice awards and settlements, and certain sanctions of health care professionals by State Boards and health care institutions, are evidence of negligence or incompetence.

Malpractice insurers are required to report to the NPDB all settlements and awards paid on behalf of health professionals. State Boards are required to report sanctions of health professionals involving professional competence or conduct to the NPDB.

Reports to the NPDB include the name, address, license number and academic background of the health professional; a description of the acts or omissions of the provider on which the claim or sanction was based; and the amount of any settlement, or disposition.

Information at the NPDB is not available to the general public, and is considered confidential. It is available to: hospitals and other health care institutions; state licensing boards; professional societies that engage in formal peer review; and health professionals who request information about themselves. Until recently it had also been available to researchers who were not, however, provided with any identifying data about reported practitioners.

Last year, a researcher, a reporter for the Kansas City Star who had gained access to NPDB information used the data in combination with other research, i.e., a cross reference to court records, and publicly identified a neurosurgeon with a long history of malpractice awards and settlements. The Department of Health and Human Services promptly cut access of all researchers to the NPDB. Recently HHS reopened access to researchers again, but with new rules that prohibit them from using NPDB data to publicly identify reported practitioners.


New York State has a new autism treatment law and relatedly a new mental health profession.. Signed into law by Governor Cuomo in October and to take effect November 1, 2012, the law (Assembly 8512) requires insurers to cover screening, diagnosis and treatment for autism spectrum disorders. The new law will include routine toddler screenings, behavioral health treatment, speech therapy, occupational therapy and physical therapy. About 1 in 110 children are now diagnosed with an autism spectrum disorder. The association of health insurers believes that premiums may rise hundreds of dollars as a result of the law and has stated an intention to negotiate changes to reduce coverage before the law takes effect. Supporters of the law foresee only very small increases in premiums.

One aspect of the law is the creation of a new mental health profession, and one that shares a privileged status together with MD’s, Ph.D.’s and LCSW/R’s as mandatorily reimbursable for its services. The new profession is "board certified behavior analyst" (BCBA). The new profession is limited in those services it may provide, that is, it may provide only "behavioral health treatment" to individuals with an "autism spectrum disorder." The law includes a $45,000.00 annual cap on coverage for "such applied behavior analysis." It also appears that BCBA’s may be permitted to supervise others to conduct behavioral health treatment for persons with autistic spectrum disorders. The commissioners of health and education are delegated authority to promulgate enabling regulations. It remains to be seen how BCBA’s will be established and regulated as a profession, including relative to the already established licensed mental health professions.

Homicide rates correlate with civil commitment. A new study ("Civil commitment law, mental health services and US homicide rates, S. Segal, Soc. Psychiatry Epidemiology, 11/10/2011) finds that mental health factors account for about 17% of the variance in homicide rates. Broader civil commitment laws and the availability of psychiatric beds especially are related to lower homicide rates. In its latest rating by the National Alliance for the Mentally Ill (NAMI), New York State rated a "B" in those areas as compared to the national average of "D."

Independent contractors or employees. A number of clients, mostly large practices, have been audited by the New York State Department of Labor regarding alleged mis-classification of professional employees as independent contractors. Often, the audits are instigated by the DOL when a former "contractor" applies for unemployment benefits, to which he or she would not be entitled unless reclassified as an employee. While there are several factors that determine the difference and consultation with attorneys and accountants is advised in all cases, the DOL has seemed to focus on the lack of written contracts, and where there are written contracts, restrictive covenants prohibiting professional "contractors" from working for other practices, as indicative of employment rather than of a genuine contracting arrangement.

Termination by the therapist and the risk of a professional complaint. In my experience, complaints of patient abandonment to licensing boards when termination of treatment is initiated by a therapist are common. When therapists discontinue treatment of patients who would rather continue with them, patients may feel abandoned and rejected, as well as aggrieved due to perceived lost investments of time and money. Often the complaints are dismissed following investigation because the therapist’s clinical actions are found to have been justified. But even when therapists are ultimately absolved of any wrongdoing, dealing with a complaint is unpleasant and stressful, and it takes significant time and legal assistance to mount an effective defense.

Professionally and legally, therapists may terminate with patients for almost any reason, the only prohibited reason being discrimination based on the patient’s membership in a protected class. But when terminating with a patient in need of continued care, it’s not enough to simply make appropriate referrals as some believe. Absent extraordinary circumstances or clinical contraindications, if patients are in need of continuing care, then therapists must give the patients advance notice of termination and offer to continue to treat them in regularly scheduled sessions for that period of time that affords an adequate opportunity to them to seek alternative care.

The practical application of the legal and professional standard* is as follows. The therapist must notify the patient unequivocally that the therapist plans to terminate care, and set a date after which care will no longer be provided. That date is based on research by the therapist into the time needed for the patient to transfer his or her care to those referrals chosen by the therapist (not necessarily in consultation with the patient) that match the clinical and financial needs of the patient. The therapist must also offer to facilitate transfer by consulting with subsequent practitioners chosen by the patient. Correspondence to the patient confirming termination is strongly recommended for risk management purposes and because the emotional reaction of the patient to the premature termination so often leads to misunderstanding. From a legal standpoint it is not of consequence whether the patient actually transfers care, only that notice of termination is given and a transitional period of treatment is offered. (If, however, a patient does not transfer care because his or her judgment is so impaired regarding the need for continued care, then the therapist must assess whether a breach of confidentiality is warranted to notify relatives or others who might assist the patient to obtain the needed treatment.)

Usually this legal and professional standard requires a two-step termination procedure. Take the example of non-payment. The first step would be to inform the patient that unless past-due payments are paid by a certain date, a termination process will begin. Then, if payment by the date set is not forthcoming, the above steps are taken, i.e., an actual termination date is set, a transition period is offered and referrals given, and all aspects are confirmed in correspondence to the patient.

There are extraordinary circumstances when a therapist is constructively relieved of all or some legal duties by the conduct of a patient; for example, when a patient is guilty of criminal misconduct against or sues a therapist. Therapists may also terminate without notice and a transitional period if it’s necessary for the welfare of the patient; for example, when further contact with the patient is clinically contraindicated, such as when a patient is overwhelmed by and attempts to act on an erotic transference or becomes imminently dangerous and immediately requires a higher level of care.

* There is an additional ethical standard upon termination that, unless clinically contraindicated, the therapist offer a transitional period of adequate length to permit the patient to engage in a termination process.


Deadline for waivers of corporate practice prohibition extended. Governor Cuomo signed a law that extends to February 1, 2012 the deadline established by the recently enacted Education Law §6503-a by which not-for-profit corporations formed for charitable, educational or religious purposes might be granted a waiver by the Department of Education of the prohibition on corporate practice of the mental health professions. The law established an exception that allowed not-for-profits that are unlicensed by the Departments of Health or Mental Hygiene to nevertheless offer psychotherapy to their clients as conducted by social workers, psychologists, mental health practitioners and other licensed professionals. Unlicensed corporations, including non-profits, generally are prohibited from offering healthcare and mental healthcare services to the public under New York State’s relatively strict prohibition on corporate practice of professions. Recent changes in New York State law restrict the practice of psychotherapy to licensed individuals and entities; the practice of psychotherapy had not previously required a license. This exception to the corporate practice prohibition implicitly recognizes the significant demand for mental health services that has been and will continue to be met by social service agencies and educational institutions.

PPACA may finally change billing company compensation arrangements. It was in April 1997 that the New York State Department of Health first issued an opinion that healthcare practitioners who compensated their billing companies based on a percentage of the amount billed or collected were violating New York State’s prohibition against "fee splitting." Nevertheless the practice has continued and in my experience remains the compensation arrangement used by most billing services. That may change soon. The recently enacted Federal Patient Protection Affordability Care Act (PPACA) requires billing services who bill Medicaid to register and as part of the enrollment process disclose their fee schedules, which must be in compliance with Federal and pertinent state laws. To avoid violation of New York State’s prohibition on fee splitting, billers should be paid based on the cost of processing bills, and not based on any formula that depends on the amount billed or collected.

Conflicting views on malpractice liability and reform. Public Citizen reports that the number of malpractice payments to plaintiffs declined for the seventh consecutive year in 2010 based on reports to the National Practitioner Data Bank. Between 2000 and 2010, malpractice awards and settlements have declined about 12%, while healthcare costs in general rose over 90%. Public Citizen argues that malpractice litigation doesn’t inflate healthcare costs and that limits on damages now imposed by some states are unfair to those who suffer devastating injuries as a result of medical malpractice.

But the federal HEALTH Act (Help Efficient Accessible Low-Cost Timely Healthcare) of 2011, supported by the AMA and other healthcare associations but not as yet passed, would impose a $250,000 cap on non-economic damages ("pain and suffering") and preempt less strict existing state laws, like New York’s which has no such limit. The rationale for the HEALTH Act is that malpractice payments are under-reported, that reform is needed to reduce the number of frivolous claims made, and that apprehension about large malpractice awards drives medical decision-making and increases costs. In one survey of emergency physicians, 53% said that the number of tests they conducted was directly related to a fear of being sued.

Elder Abuse Reporting in New York State. A common but mistaken belief among healthcare professionals is that reporting of in-home elder abuse is mandatory in New York State, just like child abuse is. In fact it is not. Forty-two states in the US have mandatory reporting of in-home adult or elder abuse, but not New York. That is not to say that New York ignores the problem. New York laws define adult abuse as including physical abuse, financial exploitation, active and passive neglect and sexual abuse of a person over 18 years of age, create Adult Protective Services agencies in each county to investigate and intervene, and provide immunity for reporters. See New York Social Services Law, Article 9-B, Adult Protective Services. Statistics indicate that neglect is the most common type of abuse and adult children are the most frequent perpetrators.

Adult Protective Services do not have the same power to intervene as Child Protective Services. Adults have a right to remain in an abusive situation if they have capacity and so choose. Lack of capacity can only be determined by a medical evaluation and ruling by a court. Abused adults have the option of obtaining an Order of Protection to prevent further abuse, which may include expulsion of the perpetrator, or in some cases, of having the perpetrator arrested under the State’s Domestic Violence Law. In cases of financial exploitation and a lack of capacity of the victim, a guardian may be appointed.

For healthcare professionals, because reporting is not mandatory, it is first necessary to assess the capacity of the patient. If the patient has legal capacity, which is generally assumed in the absence of a legal adjudication or clear clinical evidence otherwise, and declines to authorize reporting to Adult Protective Services, then a report against the patient’s wishes may result in a professional complaint of breach of confidentiality. It is unclear whether the immunity granted by Social Service Law §473-b would apply to a healthcare professional in such a situation. If the patient is incapacitated, then ethical considerations would seem to require reporting despite the legal uncertainty.

There is an exception to the general rule that reporting elder abuse is not mandatory. New York Public Health Law §2803-d mandates reporting of adult and elder abuse to the Department of Health when the adult is "receiving care or services in a residential health care facility." In such situations, regardless of capacity of the patient, healthcare professionals must report the abuse or neglect and are provided immunity for doing so.

Bruce is named a New York Super Lawyer ™ 2011. Bruce was selected for inclusion in the New York Super Lawyers - Metro Edition within the primary area of practice of health law. Only 5% of lawyers in the State are selected. The selection process is based on peer nominations, blue ribbon panel review and independent research by Thomson Reuters. Recipients will be featured in a special supplement to the New York Times Magazine on October 2, 2011.

New divorce law seems to increase use of mediation. Last year New York State enacted a law for the first time permitting spouses to divorce for "irreconcilable differences." It was the last State in the US to offer its citizens this type of no-fault divorce. Property division, maintenance, parenting and child support arrangements need to be resolved and one party must swear that the marriage has been irretrievably broken for 6 months. Bruce, a trained mediator who has been conducting divorce mediation since 1986, has noticed an increased use of mediation since the change in the law.



Compliance with Subpoenas Duces Tecum: Many knowledgeable clients are aware that there is a relatively new New York State law, CPLR §3122(a) that requires that subpoenas for records (Subpoenas "duces tecum" in contrast to subpoenas ad testificatum "for testimony") be accompanied by a patient authorization when the records demanded are healthcare records. Indeed that statute theoretically allows health practitioners to ignore subpeonas for records that are unaccompanied by such authorizations. Many lawyers however are still unaware of the statute or its applicability to mental health practitioners, and routinely seek contempt citations if their subpoenas are ignored.

The HIPAA compliant authorization form promulgated by the New York State Office of Court Administration, form OCA 960, to accompany subpoenas duces tecum is complicated, states that it excludes "psychotherapy notes," (under HIPAA "psychotherapy notes" are process-type notes kept in addition to and separate from the clinical record; progress notes are not considered "psychotherapy notes") and requires additional initialing by the patient (items 1 and 9(a) right) to be valid for the release of "mental health information." In our experience, a significant portion of these forms are incorrectly completed by attorneys issuing subpoenas.

Rules governing the release of information obtained from collaterals in psychotherapy, that is, anyone other than the identified patient (IP’s) are complicated in New York State by an apparent difference of opinion between the Department of Education (governing licenses of healthcare professions) and the Department of Health (governing access to patient information). In many instances, it may be recommended, if not necessary, to obtain authorizations from collaterals as well as IP’s.

There is a split of authority as to whether a "So Ordered" subpoena duces tecum, i.e., one signed not only by an attorney but also countersigned by a judge, must be obeyed if it’s unaccompanied by an authorization (see Campos v Payne 76 NYS 2d 535, 2003 and In re C.D 6 Misc 3d 1034, 2005). Judges "So Order" subpoenas to expedite proceedings and expect prompt compliance regardless. Records ordered to be produced may be provided under seal, that is, under separate cover, directly to the judge and with a stated understanding of the applicable privacy protections.

Federal subpoenas duces tecum, those issued in US not State court actions, for healthcare information also require accompaniment by patient authorizations, but in any case, cannot be ignored. A motion to quash must be filed if authorization is lacking (Federal Rules of Civil Procedure, Rule 45).

Failure to comply with a subpoena duces tecum may result in service of an Order to Show Cause upon the non-compliant practitioner, necessitating attorney representation at a court appearance. Even a civil contempt citation with a small fine cannot be taken lightly by a licensed healthcare professional.

All of which is to say, if served with a subpoena, obtain legal assistance from an experienced healthcare attorney. Most malpractice carriers cover the cost, up to a limit, of attorney representation when an insured is served with a subpoena.

Waiving co-payments or deductibles: It’s common but risky for practitioners. Insurance companies consider it to be fraud (under NY Penal Law §176.05 and NY Insurance Law §403(c)), and call it NOOPEING (no out of pocket expense). If you’re out-of-network and don’t try to collect co-payments and deductibles, fee-for service insurers believe that you have falsely stated your fee. For example, suppose you submit a claim stating that your fee is $150/psychotherapy session knowing that the insurance company reimburses 80% ($120), and then you don't try to collect the other 20% ($30) from the patient. The insurance company believes that in such a case, your true fee is $120, not $150, and that they should only reimburse 80% of $120 ($96).

If you’re in-network and your reimbursement is set by contract with a managed care company, it's still ill-advised to waive co-payments as it is likely a breach of the contract. Managed care companies count on patients' co-payments as a means of reducing utilization. Patients who know they are responsible for some out-of-pocket expense will presumably be less willing to seek treatment. So managed care companies typically have in their contracts with providers some clause to the effect that the company is not responsible for paying the provider for any services for which the patient is not also responsible for paying the provider. This provision is usually enforced after an audit that uncovers a waiver of co-payments and results in a demand from the insurance company for a refund of all fees paid to the provider.

Questions arise as to whether you can ever waive a co-payment or deductible, and what type of efforts must be made to collect the patient's portion of the fee. Physicians have traditionally extended the "courtesy" to other physicians and their families of waiving co-payments and deductibles without any outcry from insurers. Psychotherapists should theoretically be allowed certain exceptions as well. One might be for professional courtesy, although most therapists don't use that practice because of the extensiveness of most psychotherapeutic treatment. Another might be in cases where you have examined with the patient and documented an inability to pay. This however should be in highly exceptional cases, no more than a small percentage of your caseload, and if you have a provider agreement with a provision regarding non-payment as described in the paragraph above, then it would be wise to discuss the waiver with an insurance company representative before allowing it. If asked by an insurer for your usual and customary fee, you should be able to truthfully state it to be, and document that it is, the fee you almost always charge your patients. With managed care companies, you should be able to document that you almost always collect co-payments.

Insurers may ask you to document "good faith" efforts to collect patient co-payments and deductibles. What constitutes a good faith effort is largely determined by the amount of money at stake, and by your customary billing and collection practices. For example, your office policy may be to limit collection efforts to phone calls on amounts less than $300, to send letters on amounts greater than $300 but less than $500, and to refer other matters over $500 to a collection agency. If you follow such a policy and document its implementation in each case, that would seem to be evidence of good faith collection efforts.


Supervision and Consultation: The Legal Differences: The training of psychotherapists includes clinical mentoring that is usually characterized as "supervision." When a therapist who is independently licensed is seeking the mentoring, however, the relationship is more accurately characterized as "consultation" most of the time, although there are exceptions. Students, those working with Limited Permits in a profession, LMSW’s practicing clinical social work, and LCSW’s when gaining experience required for the additional "R" credential must all be supervised. Otherwise though, most mentoring relationships among mental health professionals are actually, from a legal perspective, consultative rather than supervisory.

There are important legal distinctions between supervision and consultation, especially in the area of legal liability. A consultative relationship poses less risk of legal liability to the consultant than a supervisory relationship. And contrariwise, a supervisory relationship offers greater protection to the supervisee.

A consultant who simply offers advice based upon information provided by a consulting colleague usually will not be subject to legal liability for the treatment of the colleague's patient. The basis for the consultant's lack of liability is his or her lack of control. The consulting clinician remains in control and retains the option to either follow the consultant's advice or to disregard it. A consultant's role is considered educational, and primarily for the benefit of the consulting colleague. It is only secondarily for the benefit of the patient. A consultant does not bill the patient and usually has no direct contact with the patient.

On the other hand, a supervisor often does assume responsibility for the evaluation, diagnosis, and treatment of patients of the supervisee. A supervisor undertakes a much greater role than a consultant in the treatment and progress of patients. If a supervisor and supervisee both expect the supervisee to rely on the supervisor's specific recommendations regarding evaluation and treatment, then the supervisor may be liable to the patient, even if the supervisor has no direct contact with the patient. A supervisee ordinarily is not free to ignore the supervisor's advice. Due to the expanded nature of the supervisor's responsibilities, the law may view him or her as jointly or even primarily liable for services provided to the patient.

One New York court offered guidelines to distinguish consultative from supervisory roles. A consultant: does not know the patient or, often, even his or her identity; does not examine the patient; does not speak with the patient; is not referred the patient for in-person consultation or treatment by the consulting colleague; gives opinions only and directly to the consulting colleague; and gives recommendations for the consulting colleague to follow or not as the consulting colleague decides. (Gilinsky v. Indelicato, 894 F.Supp. 86, 92 , EDNY 1995)

Thus, between therapists, both of whom are licensed, most of what is called "supervision" is in fact, by legal definition, consultation. So:

For consultants, it is legally wise to name and bill for your services as consultations if that is what they truly are. Keep in mind though that if you really act as a supervisor, you will be legally responsible to the patient regardless of what you call the relationship.

But here's some conflicting advice for supervisees. If you are relatively inexperienced, it may be to your advantage, in case your decisions are questioned in a legal proceeding, to present yourself as one who was following the directions of a supervisor. Your responsibility will be diluted and your supervisor will share liability and damages, if any are found.

If you are a psychotherapist who hires other therapists as independent contractors, do not provide the independent contractor with supervision. (Consultation is acceptable, indeed is recommended or even required for certain fee arrangements, e.g., those involving fee-splitting between contractors of the same profession.) But presumably, you want the independent contractor to be solely responsible and liable for his or her actions to the fullest extent possible; don't contradict that intention by stating in a written contract that you are supervising him or her.

Consultants should bear in mind that in acting and labeling themselves as such, although they may avoid liability to patients for the negligence of the consulting colleague, it is possible, albeit unlikely, that they may still be liable to the consulting colleague for negligence in consulting. Lawsuits by consulting colleagues against consultants are quite unusual, and the standard of care of consultants to consulting colleagues is different from and less than that involved in professional-patient relationships. Some courts have found that a consultant's duty to a consulting colleague is to advise and make appropriate recommendations based solely on information provided by the consulting colleague, and not based on the patient's actual condition or needs. Some courts have refused to find that medical consultants have any duty at all to their consulting colleagues. Still, it’s probably wise to avoid what are sometimes called "curbside consultations" with colleagues, informal consults for which liability is unlikely, but which can result in involvement in a lawsuit brought against the colleague by a patient.

Confidentiality and consent requirements are also implicated in supervisory and consultative relationships. Patients are usually informed of supervisory relationships and the identity of supervisors. Usually, patients need not be informed of consultative relationships because no identifying information about them is released to the consultant. There are tax ramifications as well: in most circumstances supervisees must be employees, while consultants may be independent contractors.

Whether consultation or supervision, documentation must be maintained by both parties. Notation of supervision or consultation should contain the date, time, issues, questions, suggestions and decisions. Please call our office if you’d like a template of a Consultation/Supervision Note.


New York State’s new Family Health Care Decisions Act. Signed into law earlier this year, this law allows family members to make health care decisions, including with special protections for end-of- life decisions, for an incapacitated person even in the absence of a previously executed health care proxy. Many persons were under the mistaken impression that they could make such decisions for their next of kin, but that was not the case in New York State until now. The new law uses a listing of those surrogates to whom decision-making will be delegated in the following order: a legally appointed guardian, spouse or domestic partner, adult child, parent, sibling, and finally, close adult friend or relative. It’s still advisable to have a signed health care proxy because the priority established by law may be different from what you would wish, multiple individuals (e.g. children) may have the same priority and may disagree, surrogates may not know your wishes as you would state them in a proxy appointment, and a proxy has more power than a surrogate appointed by operation of the new law.

New York’s new Palliative Care Information Act. Just signed into law, this Act requires physicians and nurse practitioners to offer terminally ill patients or their proxies or surrogates information and counseling about palliative care and end-of-life medical treatment options such as the right to comprehensive pain management. The healthcare practitioner is only required to offer to provide such information; the patient may decline or accept the offer. The practitioner also has the option of referring the patient to obtain the information from another practitioner. Physicians opposed the law because there are criminal penalties for non-compliance, and from a concern that the information might give the appearance that the practitioner would not treat the terminal illness aggressively.

New York’s new HIV testing law. Passed in September and intended to increase HIV testing, this law requires that HIV testing be offered to anyone between the ages of 13 and 64 receiving hospital care, clinic care or treatment from a physician, physician’s assistant or nurse practitioner. A particular seven points of information about HIV are required to be given to obtain consent to the testing. The consent for testing may be oral if test results can be made available within an hour. If results take longer, then written consent that contains information about the test is necessary, but the form is simpler than the one previously required. Persons under 18 do not need parental consent to be tested for HIV (or other sexually transmitted infections for that matter). Post-testing, the special provisions regarding the confidentiality of HIV information under New York law continues in effect.

Psychiatrists are allowed use of and reimbursement for generic E/M codes in NYS. The New York State Insurance Department has recently issued an interpretation of New York Insurance Law that requires insurers to reimburse psychiatrists for all current Evaluation and Management (E/M) CPT codes. Insurers may not limit the types of CPT codes that they accept from psychiatrists to those specifically designated as "psychiatric." Many insurers had limited psychiatrists to use of psychotherapy with E/M codes (the 908 codes), but NYSID stated that as physicians, psychiatrists must also have access to general medical E/M codes (99201-99499) for those services that are more medically oriented. For instance, psychiatrists may counsel patients with mental illnesses about many types of issues related to general medical health that are not strictly related to managing psychiatric medications.

Funeral or bereavement leave for same-sex partners in NYS. Many institutional clients have a policy of granting funeral or bereavement leave to employees whose spouse or member of the spouse’s family dies. Such a policy is optional and not required by law. Effective October 29, 2010, New York Civil Rights Law §79-N2 requires that if there is such a policy then it also must apply to same-sex committed partners and relatives of the partner. Those clients who have a written policy granting leave to spouses are advised to give written notice to all employees of the extension of the policy to same-sex partners. Failure to give such notice of change in the policy may give rise to allegations of unequal treatment based on ignorance of the change.

Does your answering service do this? Your answering service is your agent for whose actions you are vicariously liable. The first question a service should ask is, "Is this an emergency?" And, for those cases where the answer is affirmative, the service should either have immediate access to you or respond by informing patients to call 911 or go to an emergency room. If you use an automated messaging system, then the same information should be given.

Should I say I’m sorry? There is a movement afoot (called "Sorry Works!") encouraging healthcare professionals to apologize to patients for mistakes as a means of risk management and for humane reasons. A significant legal issue may arise with apologies however, in that by common law they are considered admissions of wrongdoing, and despite being hearsay, are admissible in subsequent legal proceedings, e.g., malpractice and disciplinary proceedings. About half of all states now have laws that disallow apologies by healthcare practitioners to be used as evidence. New York State has no such protection for apologies however. In my practice, this vulnerability arises for mental health clinicians who have a patient suicide or injured by a suicide attempt. I generally advise the clinician to offer condolences or sympathy but in a manner that clearly does not and cannot be construed as an admission of any wrongdoing or responsibility.

DSM-5 expected in 2013. The new Diagnostic and Statistical Manual of Mental Disorders is expected to be completed by the American Psychiatric Association in 2013. Drafts can be viewed at www.dsm5.org. One immediately apparent change is the use of Arabic rather than Roman numbers for this and future revisions.


NYS autism treatment law in question. Governor Patterson is considering whether to sign or veto a law (S7000-B) that would require health insurers to cover treatments for persons on the autism spectrum for the life of the person. The bill, however, sets a high standard for reimbursable treatments, that is, that they be "evidence-based, clinically proven and peer reviewed." Many treatments that benefit persons with autism such as occupational, physical and speech therapy, and even some "off-label" uses of psychiatric medications, might not be covered because they don’t meet those criteria and treat symptoms rather than the disorder itself. Moreover, early intervention reimbursement costs would be borne by counties and not private health insurers. Twenty-three states, including Connecticut, Massachusetts and New Jersey have comparable legislation. Autism Speaks, a large national advocacy organization favors signing of the legislation. Some smaller State-based groups oppose the legislation and want it re-written for the above reasons.

New automated system in NYS to monitor patients’ prescriptions for controlled substances. In April 2010, the Narcotic Enforcement Bureau of the NYS Department of Health established a new, voluntary and automated system for physicians to monitor the history of their patients’ prescriptions of controlled substances (e.g., pain medications, tranquilizers, and stimulants are the main prescription drugs of abuse) by different physicians and from different pharmacies. Nothing requires physicians to participate, but doing do will have the obvious function of preventing "doctor shopping."

OMRDD no more. On July 13, 2010, Governor Patterson signed legislation changing the name of the NYS Office of Mental Retardation and Developmental Disabilities (OMRDD) to the Office for People with Developmental Disabilities (OPWDD). Parents, advocates, providers and the disabled had all lobbied for the change as all agree that the word "retardation" was offensive and antiquated. 48 other states have dropped the word retardation from the title of similar statewide offices; only Rhode Island retains it at this point.

New part 599 clinic regulations. These new regulations of outpatient mental health clinics licensed by the NYS Office of Mental Health contain significant and comprehensive changes. Their effective date is October 1, 2010. The new part 599 newly defines services, financing and program rules with emphases on recovery, more responsive services, revised more "cost-efficient" Medicaid reimbursement, a phase out of COPs payments, use of HIPAA compliant coding, and provision for uncompensated care. The clinic restructuring effort is complex to say the least. The OMH is offering classes and online guidance for clinic personnel.

Parental rights of the psychiatrically disabled. New York State Social Services law Section 384-b(4)(c) contains the following grounds for termination of parental rights: "The parents are presently and for the foreseeable future unable by reason of mental illness or mental retardation to provide proper and adequate care for a child who has been in the care of an authorized agency for a period of one year." The Mental Health Association has been lobbying strongly to eliminate this provision because, they assert, it is discriminatory, based on condition and not behavior, vague, drastic, does not promote recovery, and violates the public policy of encouraging the mentally ill to seek treatment for fear they will lose their children.

Got a website? More and more clinicians do. If you’re HIPAA compliant, then you must post your Notice of Privacy Practices on your website. New York also has strict laws for professionals regarding testimonials, and you need written consent from anyone whose photograph is used on the site.

Another acronym and requirement from Medicare - PECOS. It stands for Provider Enrollment, Chain and Ownership System, and requires Medicare providers to enroll in an online system by April 5, 2010 (not January 4, 2010 as originally required). Even if you’re already enrolled in Medicare, you are supposed to enroll in PECOS. Beginning on April 5, 2010, claims for items or services that you, as a Medicare provider, order for your patients, will be denied if you are not in the PECOS. Most non-medical providers, i.e., psychotherapists, do not order durable medical equipment, prosthetics, orthotics, supplies, home health services and laboratory and imaging services, but some PhD’s and LCSW’s do refer to specialists for which PECOS enrollment is necessary.

Prescription privileges for psychologists, nationwide. Some within the profession faulted psychological associations in New York State in 2003 when they agreed to forgo a fight with psychiatry for prescription privileges, in exchange for psychology being granted a scope of practice that included the independent treatment of mental illness but without prescribing. The New York psychologists’ action may now seems more foresighted. In April 2010, Governor Kulongnoski of Oregon vetoed a law permitting psychologists to prescribe. He thought that more safeguards were necessary to ensure patient safety. A similar law permitting prescribing by psychologists was vetoed in Hawaii in 2007. New Mexico in 2002 and Louisiana in 2004 are the only two states to have passed such laws. Whatever the arguments for better coordination of care when psychotherapy and medications are provided by the same practitioners, it seems that these more current developments suggest that prescription privileges for psychologists (1) may not be inevitable as some have maintained, (2) depend on there being actual shortages of psychiatrists in the state in which they are proposed and (3), last but not least, are dependent on the relative lobbying strengths of the medical and psychology professions in each state.


Kendra’s law to expire or be renewed. First passed in 1999 and renewed temporarily in 2005, the law expires this month. It was named after a woman who was pushed in front of a subway by a mentally ill man with a history of hospitalizations. It allows courts to order severely mentally ill patients to attend involuntary (assisted) outpatient treatment programs (AOT’s). A recent study found evidence that mentally ill persons under court order are less likely to be arrested or hospitalized, and also that 82% of AOT orders were for residents of Nassau, Suffolk and New York City. About 2/3 of those under court order are black or Hispanic. Organizations of family members of the mentally ill generally favor the law, while patient advocacy organizations generally do not, feeling that the law may be discriminatory and is based on a misunderstanding that the mentally ill are prone to violence. Forty-four states have similar laws. The New York State Psychiatric Association opposes renewal of the law.

American Psychological Association changes its ethics rule (Standard 1.02) regarding conflicts between ethics and law. Previously, psychologists were required first to seek to resolve any conflict, but then were permitted to follow the law in the event that the conflict proved irreconcilable. This permission was often used by psychologists served with court orders to produce patient records over patient objections, especially in family matters, e.g., in a custody dispute, a therapist treating a wife might be ordered to produce treatment records without the wife’s authorization when a judge overrode privilege because he or she felt the records might assist in making a necessary decision about the best interests of the child. The APA believed, however, that this general deference of ethics to law, seemed to give license to psychologists to engage in torture or punishment that might be legally sanctioned but should nevertheless be deemed unethical. The new standard, effective this month, eliminates the language that gave explicit permission ultimately to follow all legal mandates, and substitutes a statement that psychologists may not "justify or defend violating human rights." This change settles the issue that psychologists may not engage in torture or inhumane punishment even if it’s legal, but seems to me to leave psychologists with less clarity as to how to handle more commonplace ethical-legal conflicts like the family law example above.

Employees and contractors must be screened for Medicaid and Medicare ineligibility. With increasing coordination, whenever healthcare professionals are subject to serious criminal charges, or professional misconduct sanctions such as any type of suspension, they may also penalized by the NYS Office of the Medicaid Inspector General (OMIG) and the federal DHHS Office of the Inspector General (OIG) by being placed on a list of providers ineligible to participate in Medicaid or Medicare. Submitting bills for the services of such excluded providers violates State and federal law. The OMIG and OIG have recently published their positions that all employers and contractors of healthcare professionals for whose services Medicaid or Medicare may be billed must perform a web search upon hire of each employee, and must re-screen all employees on a monthly basis. To facilitate the latter, they maintain a "short list" at their websites which lists changes over the past 30 days. OMIG is at www.omig.state.ny.us at "Resources" under "Disqualified Individuals." OIG is at http://oig.hhs.gov/fraud/exclusions.asp.

Red Flag Rules compliance delayed again until December 31. The FTC has again delayed the enforcement deadline for its Red Flag Rules. The Rules require creditors, which according to the FTC include healthcare practitioners, to develop plans for identifying and preventing identity theft. In May, the AMA and other groups filed suit to prevent the FTC from applying the rules to physicians and other healthcare practitioners. The delay is intended to resolve the conflict about the types of businesses to which the law should apply. (The new edition of our HIPAA Manual, described below, contains Red Flag Rules compliance guidelines for small mental health practices; because the Rules are "scalable" and to some extent overlap with the HIPAA Rules, the guidelines are not, in my opinion, onerous.)

A new edition of our HIPAA Manual is now available from our office. The older 2007 edition of the Manual is now outdated. Pursuant to the federal HITECH legislation of 2009, new HIPAA Rules take effect in 2010 that mandate changes in the Notice of Privacy Practices, Policies and Procedures Handbooks and Business Associate Agreements, and new breach notification procedures, among others. Relatedly, the FTC has a new "Red Flags Rule" to prevent identity theft, and New York State has changed its record access denial forms and now has its own breach notification law. Certain of the recommended means to comply with the HIPAA Rules have also changed.

The "HIPAA Compliance Manual for Small Mental Health Practices in New York State, Third Edition 2010" has all of the instructions and forms needed for current compliance with the HIPAA Rules and related laws and is designed especially for small mental health practices, those of psychologists, psychiatrists, social workers, mental health counselors, nurse practitioners-psychiatry, marriage and family therapists, creative arts therapists and psychoanalysts. The new edition of the Manual contains 14 new pages (a total of 102), 4 new forms (a total of 21), and numerous textual changes. As with prior editions, we have tried to make it the most accurate, simple, and cost-effective compliance program possible. The new Manual also contains as supplements basic record-keeping templates for psychotherapists and informed consent forms for individual, child, couple and family, and group therapy. Finally, a CD-ROM (Word file) containing the entire Manual is included. Even practitioners who are not HIPAA compliant will find much of the information and many of the forms useful; HIPAA has established new standards of care for the privacy and security of patient health information that are relevant for all practitioners.


Changes to NYS Managed Care Laws: Several changes, all favorable for practitioners, were recently enacted into law in New York State as part of a comprehensive bill (A. 8402). They became effective January 1, 2010. The most significant were:

1. The Prompt Pay Law was amended to reduce the amount of time that health plans have to pay claims submitted electronically. It was 45 days; now it’s 30.

2. Health plans may no longer require practitioners to submit claims within 60 or 90 days or else forfeit payment, a common practice now. The plans must allow 120 days, and if in filing after 120 days, the practitioner can demonstrate a prior pattern of timely compliance, the plan must still pay at least 75% of the claim.

3. Health plans must process credentialing applications of prospective panel members within 90 days.

4. Plans may no longer unilaterally change material provisions of their contracts, including reimbursement rates, with panel members, as they have done so frequently in the past. They must provide 90 days notice of any material change, and affected practitioners will have the right to terminate the contract on the effective date of the change.

Federal Mental Health Parity Law takes effect: The federal Mental Health Parity and Addiction Equity Act passed by Congress in 2008 took effect January 1, 2010. It applies to benefits offered by employers of more than 50 persons, including self-funded (ERISA) plans and plans subject to state laws. This federal law does not require that all health plans offer coverage for mental illness; however, if they do, then benefits must be on a parity with coverage for physical disorders, i.e., no differences in deductibles, co-payments, length of hospital stays, number of psychotherapy sessions, out-of-network coverage. It also allows plans to exclude coverage entirely for certain mental disorders. But it defers to state laws that may mandate broader benefits and coverage. For example, in New York State, under Timothy’s Law, all health plans must offer certain limited mental health benefits (20 outpatient visits and 30 days in hospital) and all plans offered to groups of 50 or more must offer parity coverage of "biologically based" adult mental illness and "severe emotional disturbances" of children.

And Medicare follows suit: The above-mentioned Federal Mental Health Parity Law does not apply to general Medicare Part B. But another law, also passed in 2008, does. The Medicare Improvements for Patients and Providers Act (MIPPA) is a mental health parity law for all Medicare insureds that takes effect gradually, beginning January 1, 2010. Prior to passage of the law, Medicare insureds paid 50% of the cost of their Medicare-covered outpatient mental healthcare. During calendar years 2010 and 2011, that patient co-payment will be reduced to 45%. The co-payment will continue to be incrementally decreased until January 1, 2014, when Medicare patients will pay just 20% of covered charges, the same as they have always paid for their other Part B benefits. Note that diagnostic evaluations are covered at parity - 80% - immediately, as of this year, and will not be subject to the gradual phase-in.

A consequence of parity: Some Medicare Advantage managed care plans already have full parity for mental health benefits. A recent study indicated that patients insured under these plans appear to have significantly higher rates of usage of their mental health benefits than patients with intermediate or no parity. (But also note prior studies that patients who make use of their mental health benefits are less likely to use more expensive physical healthcare benefits.) (over)

Malpractice risks in psychiatry: A recent article complained of the lack of precise data but attempted to list in order the malpractice risks for psychiatrists: patient suicide; lack of emergency availability; failure to warn third parties of danger from patients; medication side-effects; boundary violations with patients; and internet therapy and prescribing. Patient suicide is not the most frequent cause of lawsuits but is considered the highest risk because of economic exposure; damages sought are the loss of lifetime earnings. Psychiatrists who solely prescribe and don’t provide psychotherapy have less risk of lawsuits. Psychiatrist-psychoanalysts have fewer claims against them than psychiatrists with other psychotherapeutic orientations, presumably because the intense relationship between analyst and analysand inoculates against legal action.

Crackdown coming on employees mis-characterized as independent contractors: Healthcare practices that retain healthcare professionals and others as 1099 independent contractors are advised to have such relationships reviewed closely now by an attorney or accountant. Last month the IRS announced it would begin a new initiative to penalize any mis-classification of employees as contractors. New York State has recently begun a similar effort. Issues of mis-classification by our healthcare clients that have arisen upon audit have most often been due to: the use of full-time contractors or those without other engagements; required supervision of the ongoing work of contractors; control over work hours of contractors; restrictive covenants imposed on contractors; and payment arrangements for contractors that simulate hourly wages. Penalties for mis-classification can be severe and multiple.

Penalties for HIPAA violations increase: Prior to the 2009 HITECH revision of HIPAA (see the Winter 2009 Newsletter at our website), the federal Department of Health and Human Services did not impose penalties if a covered entity established that it was reasonably diligent in its compliance efforts but still did not know that its conduct violated HIPAA standards. This "lack of knowledge" defense was abolished last month. Penalties will now be imposed on all violations, ranging from $100 for violations attributable to "lack of knowledge," to $50,000 for uncorrected willful neglect. Ignorance even if justified is no longer an excuse. The previous educational approach taken by HHS toward first-time non-willful offenders is no more.

The military endorses online therapy: As of last year, on an experimental basis, TRICARE (formerly CHAMPUS to you old-timers; a single payer health insurance available to members of the US military, including the National Guard, and their families) has offered video-webcam online short-term mental health counseling to its insureds in the US. Skype is used to deliver the service. It’s free, available 24 hours a day, and is staffed by psychologists. It was theorized that this means of access might alleviate concerns about confidentiality and stigmatization that are believed to predominate among members of the military. It seems inevitable to me that this method of delivering mental health services to the public will eventually be reimbursable by most insurers.

HEALTH LAW SUPPLEMENT      Winter 2009, #31

Notice to patients of breaches of their health information now required under HIPAA. A new HIPAA regulation took effect September 23, 2009 under the Health Information Technology for Economic and Clinical Health Act (HITECH). It requires notice of breaches of security by practitioners to the affected patients, the HHS Secretary, and if more than 500 individuals are involved then also to the media. A breach is defined as unauthorized acquisition, access, use or disclosure of protected health information (PHI). There is a "harm threshold" provision that removes the requirement of notice if the breach does not pose a threat of harm. For example, a fax containing PHI sent to the wrong number but quickly returned or destroyed might not be expected to cause harm so would not be reportable. In my experience, for small practices, the most common reportable breach would be the loss or theft of records.

New York State also has a breach notification law, GBL §899-aa that requires notification to customers of any breach of "private information," defined as social security, driver’s license or other identifying numbers, account or credit or debit card numbers, or security codes or passwords.

The Red Flag Rule is further delayed. The "Red Flag Rule," a set of regulations issued by the Federal Trade Commission, was first scheduled to take effect August 1, 2009 and then November 1, 2009. Now the effective date has been pushed back to June 1, 2010. The purpose of the Rule is to reduce identity theft. The FTC has so far insisted that it will be applicable to health care practitioners because they are "creditors" who bill patients and insurers for services. The Rule would require practitioners to establish policies and procedures to identify and prevent identity theft. The FTC has issued a "Do it yourself" kit for small businesses to comply with the Rule, at www.ftc.gov/bcp/edu/microsites/redflagsrule/RedFlags_forLowRiskBusinesses.pdf Among other health care associations, the AMA continues to lobby against the application of the Rule to health care providers, so there is still a chance that the Rule may not be applied to them in June.

An unintended corporate practice problem. There has been an unintended consequence of the new laws enacted over the past few years, one of whose purposes was to limit the practice of psychotherapy exclusively to licensed professionals and State licensed entities. Prior to the passage of those laws requiring licensure, many educational corporations and not-for-profit corporations had provided non-medical mental health services to the public even though they were without an operating license from one of the State agencies that issues them, the DOH, OMH, OASAS or OMRDD. Now the ability of such organizations to legally provide such services is in question. Organizations such as these, for example, some "clinics" affiliated with social service organizations or psychotherapy training institutes, serve a large segment of the public. Also in question is whether social workers and mental health practitioners who work in such settings under supervision may use that supervised experience as qualifying experience for licensure or advanced credentialing. Regulators and lawmakers have devised a proposed solution, which is to institute a sort of quasi-licensing procedure by which the educational and not-for-profit organizations would register with and meet certain requirements of the State Education Department. The registration would apparently have retroactive effect to resolve the issue of licensure qualifying experience. The legislature has not yet acted on the bills, A 8897 and S 5921.

Hiring a student extern. Some practitioners and practices hire student externs to assist in providing mental health services to patients. Professional regulations generally permit the practice if the student is in a licensure qualifying graduate program and the site has been approved by the program as providing an approved supervised practicum experience and such experience is required for completion of the program. Some clients engage in this practice to save money as well as to provide training. If there really is a financial benefit to the employer however, then the student should probably be paid as an employee.

The NYS Department of Labor has guidelines that distinguish between externs (or "trainees" as the Department calls them) who need not be paid, and those who must be employees and as such be paid at least minimum wage. To qualify as a trainee who need not be paid, one must be provided training similar to that received in school, not displace a regular employee, be closely supervised, be the primary recipient of any benefit from his or her labor, and not provide any immediate advantage to the employer by his or her labor. The last two qualifications are the most significant in differentiating those externs who must be paid. If the practice bills for the labor of the extern, then the practice is the recipient of benefit and is deriving an advantage from the labor of the extern.

Bottom line: if you bill clients or insurers for the services performed by an extern, then the extern should probably be a W-2 employee with all that this entails, i.e., withholding of federal, State and City income taxes, FICA and UEI, and provision of NYS DBL and worker’s comp insurance. N.B. Students may not be retained as independent contractors because of the requirement of close supervision imposed by their lack of licensure and academic programs.

Sex with a patient you plan to marry is still not OK. Ethics codes for mental health practitioners are clear in prohibiting sex with patients and former patients, with the latter either forever or for a considerable period of time. It’s been unclear however whether there was some type of implicit exception, at least in terms of enforcement by a licensing board, if a practitioner began an intimate relationship with a patient or recent ex-patient that developed into a marital one. An appellate court in New York opined that there was no such exception. The physician had argued that his constitutionally guaranteed right to marry was implicated. The court disagreed and held that a physician can be disciplined for moral unfitness even if the patient with whom he engaged in a sexual relationship eventually becomes his fiancé. Angelo v State Board for Professional Medical Conduct, Appellate Division, Third Department, October 22, 2009, NYLJ No. 505410.

For LMHC’s and LMFT’s, a change in status under the National Health Care Reform Bill. The House version of the health care reform bill (H.R. 3962) contains, among many other provisions, one that authorizes licensed mental health counselors and licensed marriage and family therapists to bill Medicare. We’ll see whether the change stays in any bill that may eventually be passed.


Debt collection by psychotherapists: In addition to the difficulties faced by all creditors, therapists trying to collect on overdue accounts must deal with the legal, professional and ethical obligation to continue to respect the confidentiality of former patients. Regardless of whether therapists decide to refer overdue accounts (1) to an attorney or (2) to a collection agency or (3) to handle the matter themselves in Small Claims Court, all of these actions involve the release of some confidential information about patients. From legal and ethical perspectives, however, as long as prior notice is given, the unauthorized release is justified. Therapists are entitled to be paid and to redress the wrong of patients breaching contracts (to pay for services) and being unjustly enriched (by receiving services without paying for them).

After telephone calls have failed, the first written attempt to collect any overdue account of an ex-patient should be by brief correspondence, mild in tone, reminding the patient of the debt, and requesting either payment in full or the willingness to pay in installments within a brief period. The letter should be sent addressed to the patient or if the patient was a minor, to a parent, and marked, "Personal and Confidential."

Most risk managers and malpractice carriers will recommend that therapists not sue patients for overdue accounts unless the amount is substantial enough to justify the risks. Risk arises for two reasons. The first is that suing provides motivation to countersue. If the patient is a person who usually pays bills, he or she probably did not pay because of some dissatisfaction with the treatment and has decided to express this dissatisfaction by withholding the therapist’s fee. If payment is compelled, the patient may express frustration in a more direct way by countersuing for malpractice.

The second reason for risk is that by suing, the therapist provides the debtor-patient with a no-cost forum in which to counter-attack. It is common for the defending patient, often upon advice of legal counsel, to offer as a rationale, or "counterclaim," that he or she didn't and won't pay because the clinician was negligent in providing services, i.e., was guilty of malpractice. The clinician must now notify his or her malpractice insurer and defend the treatment against the counterclaim, as well as assert the debt in the main action. And the clinician must then report whenever asked, such as on applications for employment, for provider status on managed panels, and for malpractice insurance that he or she has been sued for malpractice, with the lengthy explanations and risks of possible exclusion or higher premiums.

For these reasons, many therapists do not refer collection matters to attorneys or sue as a matter of course. Although attorneys' letters themselves may bring results, the action they threaten is a lawsuit. Not wanting to risk having to take the matter to court, many therapists instead use collection agencies that do not threaten or initiate lawsuits, at least not at first and not unless the therapist specifically requests it in a given case. Rather than threaten lawsuits, collection agencies may instead threaten to report unpaid debts to major credit reporting agencies. With the implications this has for credit ratings and future applications for credit cards, loans and mortgages, many debtors who are able to pay do so.

Some therapists wish to sue debtor patients without legal assistance in Small Claims Court, where, in New York State, the limit is $5,000. This avoids paying fees to attorneys or collection agencies, which are often up to half of the amount collected. If this is your preferred course of action, then to prevent countersuits, consider waiting for three years after treatment ends before initiating the legal collection action. Once three years has passed, assuming the ex-patient is an adult, the statute of limitations in New York State for malpractice will have expired. But the debt will still be actionable because the statute of limitations for breach of contract (non-payment) is six years. Thus the ex-patient can no longer countersue you for malpractice. Therapists who wish to handle debt collection in Small Claims Court often also have written contracts with patients which state that unpaid debts will accrue interest at a set rate.

Ideally, therapists should inform patients in writing at the outset of therapy about the collection procedures of the practice and the limited breach of confidentiality patients can expect in any future collection action, i.e, name, address and telephone number of patient, dates and types of service, and amount due. If this is not done at the start of treatment, then it must be done prior to any collection action. Even if patients are notified at the outset of therapy of the possibility of collection action and its concomitant release of otherwise confidential information, it is probably wise to do so again immediately prior to the collection action. A "final collection letter" should be used to notify patients of the imminent and specific collection action you are planning to take and of the breach of confidentiality that will occur if you do. Such a letter must also be sent marked "Personal and Confidential," give the patient the legally required opportunity to dispute the claim, state options for payment, and be sent by some form of receipted mail.

State and federal debt collection laws establish guidelines for all creditors that are relevant to the contents of a collection letter. See New York State Debt Collection Procedures, NY General Business Law Article 29-H, and federal Fair Debt Collection Practices Act (FDCPA) 15 USC §1692 et seq. These laws forbid creditors from: stating that they represent or possess authority from a governmental body, law enforcement agency, attorney or the judicial process if they don't; asserting a right to collect fees that are not actually due; threatening to disclose information about credit-worthiness of a debtor that they know to be false; communicating with the debtor's employer before they have a judgment against the debtor; threatening to disclose information concerning the debt if the debtor disputes the debt, without also disclosing the fact of the dispute; communicating with the debtor in an abusive or harassing manner; and threatening to take any action which they don't in fact take in the ordinary course of business.

Of course, the best outcome is to avoid the necessity of any collection procedures at all. Regular billing, not letting balances accrue, and making non-payment a clinical issue (as it almost always is if fees are reasonable and affordable to patients) are all tried and true preventive practices. Also, therapists with large practices who accept credit card payments find that helps to reduce problems and is worth the cost.

Inebriated patient driving; duty to protect third parties? A legally knowledgeable client asked if she had a duty to call the police as a drunken client left a session stating an intention to drive home despite the therapist’s attempts to persuade him otherwise. She believed she might be so required because she had read of a recent case in Massachusetts, Coombes v Florio, 450 Mass 182 (2007), where a physician was found liable for not taking action to prevent a patient, to whom he had just administered and prescribed medicines with CNS depressant effects, from driving while impaired. (The patient did drive, got into an accident, and hurt someone; the victim sued the physician.) New York has had no similar case precedent so there’s no definitive answer. Still, in NY, under current legal principles and in some circumstances it’s possible that a prescribing physician might be obligated to try to prevent harm in such situations, including perhaps by calling the police. See ALI, Restatement of Torts, §41 (2005). A healthcare practitioner who has not prescribed or administered, however, such as the psychotherapist who called me, has some duty, but perhaps an attenuated one and only to the patient and not to third parties, that might be fulfilled by strongly advising the patient not to drive and by offering to assist with alternatives such as calling a relative or a taxi. I could not advise the client to call the police given the uncertainty in the law and countermanding risk of a complaint of breach of confidentiality.


Financial and legal issues in telephone psychotherapy. Private insurers generally do not reimburse for telephone psychotherapy. No CPT code for psychotherapy can be used for telephone therapy because it’s not a face-to-face service. Because it can be considered misleading, patients treated telephonically should not be billed for "individual psychotherapy," nor should their services be coded as 90806 or any other CPT code. Rather, in billing use the description "telephone psychotherapy" without any accompanying CPT code. Some insurers will, however, allow use of such CPT coding for and reimbursement of episodic telephone sessions such as when an established patient is away on vacation or home ill. But as far as I know, none allow these for regularly planned or frequent telephone therapy. Exceptions may be granted; you, the patient, or both of you may make a case to insurers that one is warranted, but prior full disclosure to the insurers would be required.

There are standard of care issues as well. Can you provide psychotherapeutic treatment that meets customary standards for safety and efficacy by means of planned regular use of the telephone as a primary means of communication? Presumably, you will be lacking information that you might otherwise glean from face-to-face encounters with patients. Resolution of these questions require recourse to professional research and ethical and community standards. You might address them additionally in an informed consent document, in which you label as experimental the telephonic aspect of treatment, and if possible, offer patients alternative non-telephonic referrals if and when exigent circumstances arise.

Whether a healthcare practitioner is permitted to provide telephonic professional services to a client in a state where the practitioner is unlicensed is unresolved. Public policy of states and risk management policy of practitioners would seem to militate against it. States wish to have jurisdiction by means of licensure over healthcare practitioners who provide services to their residents. Although it has not occurred to my knowledge, there is the possibility that a practitioner might be accused of unlicensed practice by the state in which the client resides (and in which the practitioner is unlicensed); unlicensed practice is a crime. Additionally, there is the possibility that, should the practitioner be sued for malpractice, insurance coverage might be questioned by the practitioner’s malpractice carrier for services rendered out-of-state on the basis of the practitioner having engaged in unauthorized practice.

Having an out-of-state patient sign an agreement that for all purposes the site of delivery of all services shall be considered New York State and subject exclusively to the laws of this State might provide a technical solution to these issues, but is as yet untested also. Having initial and then some ongoing regular contact in New York State, i.e., an in-person intake and occasional face to face sessions, would bolster a position that New York is properly considered the situs of the services.

Out-of-state telephonic "coaching"presents significantly less exposure than telephone therapy because coaching usually does not require a license, is not necessarily a professional activity, and has standards of care that are looser and vaguer.

A court affirms that treatment records belong to the clinician. With so much written lately about patients’ rights, HIPAA and the like, it’s easy enough to understand why some patients, and even some clinicians, might believe that treatment records belong to or can be controlled by patients. Some clients have called us in confusion after a patient has demanded that all of his or her treatment records be destroyed or has demanded possession of the original treatment records (and not a copy). Under HIPAA and New York State Public Health Law §§ 17 and 18, upon their written request, patients are indeed entitled to copies of their records in most cases (there are exceptions where denial of access may be appropriate, albeit with notice of a right to appeal). But the original records of treatment are the exclusive property of the practitioner. For many reasons, among them regulatory requirements (see Rules of the Board of Regents 29.2 (a)(3) mandating record maintenance and retention) and defense against all manner of allegations, clinicians ought not destroy, alter, or transfer possession of their original records. In Chervonskaya v Bentley, 867 NYS2d 107 (2 Dept. 2008), a patient who sued a physician and had mistakenly obtained original treatment records was compelled to return them to the physician because that is to whom they belonged..

Malpractice exculpatory agreements generally invalid in New York State. A client called recently and asked if she might require low fee or pro bono psychotherapy patients to sign an agreement not to sue her for malpractice. The "consideration" received by the patient in exchange for relinquishing this right, necessary for even the possibility of a valid contract to be considered, was the low or no fee. While the therapist’s proposal might seem reasonable and equitable from a certain perspective, if legally challenged it would likely be invalidated by a court as "void for public policy" reasons, that is, that public policy precludes its enforcement. That’s what happened to such an agreement promulgated by a low cost dental clinic in Ash v NYU University Dental Center 564 NYS2d 308 (1st Dept 1990). The two rationales for the court’s decision were that (1) allowing such agreements might foster a two-tier health care system where the less affluent got lesser care because their providers were less accountable; and (2) the agreement was based on abuse of a special relationship between healthcare practitioner and patient where the clinician had inherently more bargaining power, and where it was antithetical to the fiduciary nature of the relationship for the clinician to act in such a purely self-protective manner.

A different but similarly intended approach might be to require all patients, not just those paying lower fees, to mediate or arbitrate disputes with a practitioner, rather than sue. There is considerable interest currently in such arrangements and the law is less clear about their enforcement.

Medicaid reimbursement for clinical social worker services at FQHC’s. As of February 6, 2009, psychotherapy conducted by social workers at Federally Qualified Health Centers is billable to Medicaid. Prior to the change, neither "medical social services" nor psychotherapy were billable, although psychological evaluation was, see 10 NYCRR 86-4.9 (c). FQHC’s are non-profit medical clinics licensed by the State operating in under-served areas that accept Medicare and Medicaid (of approximately 1000 licensed facilities in the State, 58 are FQHC’s). The new regulation includes as social workers not only LCSW’s but also LMSW’s practicing under supervision. The State was compelled to make this change in order to conform to Federal law. The change is a victory for the poor more than for any profession, and it highlights that non-medical psychotherapy has become an integral part of general healthcare services.