As the Affordable Care Act continues to reward enterprises such as Accountable Care Organizations that (i) improve the health experience of patients,  and (ii) operate efficiently by reducing costs, a health care practitioner should not lose sight on schemes that could run afoul of prohibited self-referral or anti-kickback laws.  Since 1972, Congress prohibited practitioners from entering into “kickback” arrangements if such arrangements involved a paid referral that related to the Medicare Program.  As enforcement of the anti-kickback law has expanded to include self-referrals as a prohibited activity, the anti-kickback and self-referral laws now cover the Medicaid and Tricare Programs .  In fact, 2016 is expected to be a busy year with respect to enforcement of Stark and Anti-kickback violations.

As the year continues to unfold, it is important to be reminded generally what (i) anti-kickback and (ii) self-referral means in the ever changing economics of providing health care.  In general, the anti-kickback prohibition or specifically Section 1320a-7b of Title 42 of the United States Code prohibits any person from:

(i)         knowingly and willfully

(ii)        soliciting, receiving, offering to pay, or paying any

(iii)       remuneration (including any kickback, bribe, or rebate) in return for

(a) referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made under a federal health care program, or

(b) purchasing, leasing, ordering, arranging any good, facility, service, or item for which payment may be made under a federal health care program.  (42 U.S.C.A. §1320a-7b(b).)

The anti-kickback statute has been interpreted to cover and prohibit any arrangement where one purpose of the remuneration is to obtain money for the referral of services or to induce further referrals even if there are many other legitimate purposes of the remuneration.  (United States v. Kats, (9th Cir. 1989) 871 F.2d 105.)

The self-referral (i.e. Stark) or Section 1395nn of the United States Code prohibits a “physician” from making referrals for certain “designated health services” to an entity with which the physician has a “financial relationship” unless an exception applies.  (See 42 U.S.C.A. §1395nn(a)(1).)  The term “physician” includes a doctor of dental surgery or of dental medicine who is legally authorized to practice dentistry in the state in which he or she performs such function.  (42 U.S.C.A. § 1395x.)  A “financial relationship” includes an ownership or an investment interest in an entity or a compensation arrangement between the physician or dentist and the entity.  (42 U.S.C.A. §1395nn(a)(2).)

Under the Stark law, “designated health services” or “DHS” is defined to include clinical laboratory services; physical therapy services; occupational therapy services; radiology services; radiation therapy services and supplies; durable medical equipment and supplies; parenteral and enteral nutrients, equipment, and supplies; prosthetic, orthotics, and prosthetic devices and supplies; home health services; outpatient prescription drug; inpatient and outpatient hospital services; and outpatient speech-language pathology services.  (42 U.S.C.A. § 1395nn(h)(6).)

In essence, Stark and anti-kickback are intended to eliminate financial influences that could result when a physician has some economic interest in transactions that involve her patients and the care that is provided.  Since health care practitioners are entrusted with the health of their patients, referrals must not be influenced by possible economic gain for simply making the referral.  To do so, would increase health care costs, cause unnecessary treatment and an over utilization of health care services to the patient’s and the taxpayer’s detriment.

  By Michael G. Polis

For more information, check out this month’s April Labor and Employment Newsletter, “Simply Sex? Distinguishing between sex, gender, gender identity, and gender expression,” by Samson R. Elsbernd, Esq.

*This is not legal advice.  Please click here to review our Disclaimer.

   By Samson R. Elsbernd

The Fair Employment and Housing Act (“FEHA”) makes it an unlawful employment practice to discriminate, harass, or retaliate against employees based on a protected class.  FEHA also requires that employers take all reasonable steps to prevent and remedy illegal discrimination and harassment in the workplace.  The FEHA regulations were recently amended, effective April 1, 2016, and clarify that taking all reasonable steps includes an affirmative duty to develop a written harassment, discrimination, and retaliation prevention policy that lists the protected classes.  Some of the protected classes need little explanation (race, religious creed, national origin), but others, like “sex,” “gender,” “gender identity,” and “gender expression,” are not so straight-forward.

There is a difference between sex, which is determined at birth (e.g., male or female), and gender, which is an individual’s sense of self, but the distinction is blurred by the legal definition of the terms under FEHA.   FEHA defines “sex” to include pregnancy, childbirth, breastfeeding, and medical conditions relating to those conditions.  FEHA also defines “sex” to include “gender,” including “gender identity” and “gender expression.”  Consequently, discrimination based on gender, gender identity or gender expression would also constitute discrimination based on sex.  On the other hand, discrimination based on sex may or may not also constitute discrimination based on gender, gender identity, or gender expression.

Gender identity and gender expression are different, too. Under FEHA “gender identity” means “a person’s identification as male, female, a gender different from the person’s sex at birth, or transgender.”  “Gender expression” means “a person’s gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth.”  In other words, an employee’s gender expression may or may not match the employee’s gender identity.  For example, an employee whose birth sex is male and identifies as female may present at work as female or as male.  How that employee presents at work (as male or as female) does not affect the employee’s gender identity as female.
The new regulations also define “transgender,” which means “a person whose gender identity differs from the person’s sex at birth.”  The employee in the example, therefore, would be a transgender employee because the employee’s gender identity (female) is different from the employee’s birth sex (male).  Additionally, keep in mind that sexual orientation (e.g., heterosexuality, homosexuality and bisexuality), which is another protected class under FEHA, is not connected to an employee’s gender.  This means that employees whose gender differs from their birth sex may be heterosexual, homosexual, or bisexual just like employees whose gender identity is the same as their birth sex.

At a minimum, employers should ensure that they have written harassment, discrimination, and retaliation prevention policies.  Employers should also educate their employees about the differences between the various protected classes, such as sex, gender, gender identity, and gender expression.  In addition to written harassment, discrimination, and retaliation prevention policies, employers might also consider stand-alone gender policies that answer common questions concerning gender non-conforming employees, and that provide guidance concerning the procedures to change names on employment records, the pronouns to use to refer to employees, the use of restrooms, employee privacy, dress codes and health benefits.  Employers may also consider workplace transition plans to guide them when employees transition from one gender to another in the workplace.

This is not legal advice.  Please click here to review our Disclaimer.

Happy 2016!

To help get the year started on the right foot, we would like to share with you the attached 2016 Employment Law calendar.  We hope you find the information helpful as you face various employment issues in 2016.

Please take note that the California minimum wage increased to $10 an hour, effective January 1, 2016, so you will want to reevaluate the salaries of your exempt employees in light of the increased State minimum wage.  Keep in mind that some cities and counties may have adopted higher minimum wages than the State minimum, so you may also need to adjust pay rates accordingly to comply with the requirements of the city and/or county in which your employees are actually working.

Click on the link below to download your copy of the 2016 Labor & Employment Calendar!

2016 Labor & Employment Calendar

A number of employment-related bills came out of the 2015 California Legislative session. The following bills represent just a few summary highlights from the session.

Fair Pay Act

SB 358

The California Chamber of Commerce supported Senate Bill 358 (Senator Hannah-Beth Jackson), a bill to promote gender wage equity. The Fair Pay Act addresses two main issues – salary disclosure and how determinations of gender pay disparities are viewed.

Pursuant to the Act, employees cannot be punished for either revealing or discussing wages with other employees. The more significant change relates to the components used to determine whether a pay differential between employees of the “opposite sex” is justified or if it constitutes gender wage discrimination. While wage differentials based on seniority, merit or production remain acceptable, the “bona fide factor other than sex” exception has been tightened. The law now requires a comparison of persons doing “substantially similar” work, which means that different job titles and different work sites are less relevant in the evaluation of wage differentials. This will require many employers to reevaluate how they determine compensation throughout their company.

The onus will be on the employer to show there is a bona fide business necessity reason, other than sex, for paying a person of the opposite sex differently for substantially similar work. The employee then has the ability to void the employer’s justification if the employee can show that an alternative business practice exists where a sex-based wage differential would not exist.

Time off

AB 304

The California mandatory paid sick leave law (the Healthy Workplaces, Healthy Families Act of 2014) went into effect on January 1, 2015. Accrual under the law was delayed, and did not begin until July 1, 2015. AB 304 (Gonzalez) was an urgency measure amending the sick leave law and changing various requirements, including accrual methods. The amendment provides clarification regarding which workers are covered, how the paid time off is accrued, and protections for employers that already provided paid sick leave before January 1, 2015.

AB 987

Employers generally must make reasonable accommodations for the religious beliefs and/or any disability of their employees pursuant to the Fair Employment and Housing Act (FEHA). AB 987 (Levine) codifies that employers may not discriminate or retaliate against employees for making a request for an accommodation due to religion or disability, even if the request is not granted.

SB 579

SB 579 (Jackson) requires that employers with 25 or more employees (at the same location) allow an employee time off (up to 8 hours in any calendar month) to find, enroll or re-enroll their child in school or day care, or to participate in activities of the school or day care, or to deal with a child care or school emergency.

Wage and Hour

AB 970

AB 970 (Nazarian) expands the Labor Commissioner’s authority by authorizing the Labor Commissioner to investigate and, upon a request from the local entity, to enforce local laws regarding overtime hours or minimum wage provisions (e.g., city minimum wage ordinances setting the minimum wage for workers in that city higher than the State minimum wage) and to issue citations and penalties for violations, except when the local entity has already issued a citation for the same violation.

AB 1506

Employee wage statements must contain certain information under California law. Statements that fail to include all the required information have subjected employers to increasingly frequent lawsuits by employees under the Private Attorney General Act (PAGA). PAGA permits employees to pursue such violations on behalf of the State. AB 1506 (R. Hernandez) amends PAGA to allow employers to correct wage statements that do not contain the inclusive dates of the pay period and/or the name and address of the employer, which are statutorily required to appear on the wage statements. In order to fix the omission(s), employers must provide three years’ worth of fully-compliant wage statements for each pay period.

SB 327

SB 327 (E. Hernandez) responds to a recent appellate court decision and clarifies that health care employee meal period waiver provisions in existing Industrial Welfare Commission wage orders have been valid and enforceable since October 1, 2000 (e.g., health care employees can waive 1 of their 2 meal periods when their shifts are longer than 12 hours).

AB 622

E-Verify is an internet-based system for employers to check the employment authorization status of their employees. AB 622 (R. Hernandez) prohibits employers from using E-Verify in a manner inconsistent with federal law and creates financial civil penalties for employers who maliciously use E-Verify against their workforce.

By: Shannon Smith-Crowley

Legislative Advocate – ssmith-crowley@wilkefleury.com

Shannon Smith-Crowley is an attorney and has been a registered lobbyist in California for over 15 years. On behalf of her clients, Shannon attained a series of legislative successes. She helped develop California law that requires maternity coverage in all health insurance policies, well before the enactment of similar provisions in the Affordable Care Act. She worked on bills creating California’s public umbilical cord blood banking program, which provides unique material for lifesaving stem cell transplants and groundbreaking biomedical research. She contributed to bills allowing HIV+ men to safely create families using Assisted Reproductive Technologies. Most recently she played a pivotal role in developing the Modern Family Act, protecting the rights of intended parents, donors and surrogates.

With all the recent Powerball Lotto excitement the question some potential billionaires are astutely asking is what the tax implications are when they win their fortunes.

While lotto winners reap considerable rewards, the federal government is also a big winner.  With a current top tax bracket of 39.6% the federal government’s take is not insubstantial.  However, where lottery winners err is that only 25% of the jackpot is withheld for taxes on the initial payout.  Many incorrectly assume that the 25% withholding is the extent of the federal income tax liability, but that is only a partial payment.  Another 14.6% may be due when the winner’s income tax return is filed!

Fortunately, though, California is indeed the Golden State of for lotto winners.  Lotto winnings from California lotteries are not taxable in California.  So while winners in other states may face additional state income taxes on their winnings, California winners avoid the additional tax obligation.     

 By Trevor Stapleton

Wilke Fleury is pleased to announce that Steve Marmaduke has been elected the firm’s Managing Partner beginning January 1, 2016.  Steve joined Wilke Fleury in 1978 and has been a Partner since 1991.  He served a prior term as Managing Partner at Wilke Fleury from 2001-2008 and is pleased to serve a second term at this exciting time in the firm’s history.

Thank you, Ron Lamb!!

Steve Marmaduke succeeds Ron Lamb, who held the role of Managing Partner from 2011 through 2015.  Ron led the firm through several years of change and development, including 2015 when Ron and the Management Committee directed strategic planning with a renewed vision for the future.

Steve’s Service to Clients and the Community

Steve serves clients in matters ranging from corporate structure, M&A, joint ventures, regulatory and employment matters.  His deep legal knowledge and experience, along with his strategic approach to resolving complicated issues, are just two reasons Steve is able to effectively serve both clients and the firm.  In addition, Steve’s open communication style and great sense of humor often add much-needed levity when conflicts, challenges or obstacles present opportunities to change, adapt, or evolve.

Further, Steve is dedicated to serving the Sacramento community. Not only will Steve serve as Wilke Fleury’s Managing Partner beginning in 2016, but he will also begin a two-year term as President of Sacramento Children’s Home.  Wilke Fleury is incredibly proud to support Steve and the great work of Sacramento Children’s Home.

Honor the Past, Focus on the Future

Steve will work closely with the firm’s Management Committee to continue to advance the firm’s focus on client development, strategic growth, and attorney excellence.  The firm’s Management Committee consists of Steve Marmaduke, John Valencia, Dan Egan, and Tony Eaton.  Steve has said that he is fortunate to work alongside a group of extraordinarily talented attorneys – all of whom are truly committed to honoring the firm’s long-standing history of providing excellent counsel and valuing individuality..

With Steve Marmaduke at the helm, Wilke Fleury is excited about the future, committed to the “next generation” of talented Sacramento lawyers, and continues to establish Wilke Fleury as the preeminent law firm in Sacramento.

 Wilke Fleury is a thriving mid-sized general practice law firm located in California’s business and political epicenter, Sacramento. Our attorneys offer broad expertise, creativity, and strong ties to local businesses, families and individuals, making Wilke Fleury one of the region’s most respected and long standing law firms.  Our support of local charitable organizations, universities, law schools, political interests and the community reveals the character of the firm and our sincere commitment to the Sacramento region.