Pennsylvania Litigation Blog : Pennsylvania Litigation Lawyer & Attorney : Barley Snyder Law Firm : Serving Lancaster, Reading, York, Chambersburg

The EHB recently issued a decision in TRRAAC v. DEP, et al, EHB Docket No 2008-315-L, addressing the EHB's de novo review of DEP actions. DEP approved a remedial investigation and cleanup plan for a site in Lancaster County. TRRAAC appealed the approval. TRRAAC noted in its pre-hearing memorandum that it intended to call a DEP inspector as a witness at the hearing. The DEP employee was not involved in the review of the action under appeal. Clean up at the site commenced and materials from the site were disposed of at a landfill. The DEP employee he was involved in inspections at the landfill. 

DEP filed a motion in limine seeking to prohibit TRRAAC from calling the DEP landfill inspector. DEP argued that the inspector had no part in review of the remedial investigation and clean up plan, rather his involvement related to implementation of the clean up plan. Issues relating to the implementation of the clean up plan have no bearing on an appeal of DEP's review and approval of that plan.

The EHB held that all evidence up to the time of the hearing is potentially relevant. The EHB cited 35 P.S. Section 7514(c) for the proposition that a DEP action is not final as to the person taking the appeal, until the EHB decides that the action is final. DEP focused on the action under appeal itself, the clean up plan, as the issue and viewed the issues TRRAAC wanted to address as separate compliance issues. The EHB took the position that issues related to the approval might be borne out by subsequent evidence, not before the Department at the time it took action.

The EHB determined that its focus should properly be on the appealed action itself, rather that DEP conduct in completing its review. Details regarding the nature of DEP's review are not as important as whether the decision itself was correct, as such pointing out harmless errors in the review process, is unproductive. The EHB does not conduct a record review, rather it creates its own record. 

The EHB distinguished its decision in this case from CRY v. DER, 639 A.2D 1265 (Pa. Cmwth. 1994). In CRY, the appellant appealed the issuance of a permit for a landfill. The appellant in CRY sought to introduce evidence relative to the fact that the liner was torn during its installation, in an effort to argue the permit should not have been issued. The EHB excluded the evidence. The Court determined that evidence relative to the tear in the liner was irrelevant, it had no bearing on whether the permit should have been issued. 

The EHB provided an example of when evidence obtained after DEP acts, may be relevant to an appeal of that action. If DEP were to approve a dam permit, which approval gets appealed, the dam is later constructed and subsequently fails. Evidence relative to the cause of the failure may be relevant to the appeal of the permit for the dam. The later evidence may go to the propriety of the decision to issue the permit, rather than an unrelated compliance issue as was the case in CRY. Blanket prohibitions of evidence, based on the time the evidence came into existence, are improper. 

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 In Geryville Materials, Inc. v. DEP, Docket No. 152 MD 2009 DEP issued a letter to Geryville Materials indicating that it was going to suspend review of Geryville Material's permit application for a quarry. DEP suspended its review of the permit application based on a letter from the Lehigh Valley Planning Commission ("LVPC") that the proposed quarry was not consistent with the comprehensive plan. Quarry use is a permitted use as a special exception. Geryville Materials is pursuing a special exception. Geryville Materials filed an equity actions in the Commonwealth Court's original jurisdiction seeking an order that required DEP to continue to review its application. The Court in an unreported decision authored by Judge Pellegrini, denied DEP's preliminary objections. The Judge pointed out to DEP that the comprehensive plan is simply a planning document, it was not consistent with the zoning ordinance regarding the proposed use and that DEP misapplied its obligations under Act 67 and Act 68 by suspending its review of the permit application.

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 The new federal stimulus bill, American Recovery and Reinvestment Act of 2009 (ARRA), includes the Health Information Technology for Economic and Clinical Health (HITECH) Act, which contains, among other things, an expansion of HIPAA privacy law requirements for health care providers. The HIPAA provisions go into effect on a rolling schedule over the next several years, and further guidance for compliance will be forthcoming over that time period. Since much is still unknown, hospitals and other health care providers may wish to go about tackling the technical maze of new requirements (and avoiding HIPAA-steria) with an equally graduated, and systematic approach to enforcement. This Alert will focus on the breach notification provision, which is scheduled to go live in September of 2009.

General Rule.  Under HITECH, any hospital or other covered entity which maintains protected health information (PHI) must notify the patient in the event of a breach of the data. Importantly, this provision only applies to data which is “unsecured;” if a breach of “secured” data occurs, no notification is required.

What is a Breach?  A breach is the unauthorized access, use or disclosure of PHI which compromises the security or privacy of the information. There are, however, some important exceptions. For example, a disclosure may not be a breach requiring notification if you would not expect the person to whom the information was disclosed to remember it. This could cover a misdirected fax, depending upon the procedures followed. Also, if an employee acting in good faith, within the scope of his/her job duties, improperly accesses a record, as in the  case of inadvertent or accidental access, this is not reportable so long as there is no further disclosure.

What makes data “secure?”  Per DHHS’ April 27th guidance (74 Fed. Reg. 19006), electronic data is “secure” if encrypted as further specified in the HIPAA Security Rule and in guidelines promulgated by the National Institute of Standards and Technology and available at http://www.csrc.nist.gov/. The encryption method should use a process which transforms data into a form “in which there is a low probability of assigning meaning without the use of a confidential key or process.” As for hard copy records, per the guidance that hard copy PHI is only “secure” if destroyed in a manner which makes it unreadable. 

Form/Timing of Notification.  Notification must be made in writing, by mail or e-mail if that is the patient’s preference. The notification must be made within 60 days of discovery of the breach. If the breach involves disclosure of PHI of 500 or more people, notification also must be made to the media and to DHHS, and the incident will be posted on a DHHS public website.

Further Guidance to Come/Start Date.  On August 24, 2009, DHHS published its final interim rules on breach notification (74 Fed. Reg. 42740). In its April guidance, DHHS asked for public comments, and the final interim rules are expected to address industry comments and concerns. These rules will then apply to breaches occurring 30 days after the publication of the rules, or no later than September 15, 2009.

Next Steps.  Hospital and other health care providers should consult with their health care professional to flesh out a plan for HITECH compliance. Some things to consider in making your plan include:

• Review of Business Associate agreements to ensure that BA’s are required to give timely notice of breaches to allow for your compliance with HITECH’s 60 day deadline for notification.

• Review of most common breach circumstances and reportability; does every misdirected fax require a breach notification? This must be thoroughly analyzed and a policy created to supplement your existing HIPAA compliance program. Policies should be worded broadly enough to allow for analysis of each individual situation.

• Education. While staff may be aware of the need for privacy of PHI, these new requirements, along with HITECH’s substantially increased financial penalties, put a much greater emphasis on the importance of maintaining confidentiality on a day to day basis.

The Future.  At the American Health Lawyers Annual Meeting in early July, a representative from the Office for Civil Rights (OCR) addressed the agency’s enforcement philosophy, saying, “I love the word reasonable,” when asked about the new HIPAA provisions. The commitment to this philosophy will be borne out in the coming months and years.

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Recently the Superior Court of Pennsylvania held that settling co-defendants may be excluded from verdict sheets where the evidence will not support a prima facie case of negligence against a settling co-defendant.  In the matter Hyrcza v. West Penn Allegheny Health System, 2009 WL 1977500 (Pa.Super., July 1, 2009), Plaintiff brought a medical malpractice action on behalf of her decedent against numerous defendants on various theories of liability.  Certain Defendants settled with Plaintiff prior to trial and were omitted from the verdict sheets.  At trial a verdict was entered in favor of plaintiff and against the remaining defendants.  On appeal, the remaining defendants argued the exclusion of the other settling defendants from the verdict sheets denied them a right to have liability apportioned against them.  The Superior court affirmed the trial court ruling that the evidence did not support a prima facie case of negligence against the settling defendants, and therefore they were properly excluded.

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As of August 9, 2009, health care providers (including hospitals, doctors, nurse midwives, CRNPs,

and others) in Pennsylvania are prohibited from “knowingly” seeking payment for certain

“preventable serious adverse events” or for any services needed to correct or treat the condition

created by the preventable serious adverse event when the event occurred under the provider’s

control. Likewise, private insurers and patients do not have to pay providers for such events. 

Governor Rendell signed the Preventable Serious Adverse Events Act into law on June 10,

2009 (Act 1 of 2009). It is the first Pennsylvania law that addresses payment for preventable

serious adverse events, but it is not the first law of its kind that applies to Pennsylvania

health care providers. On January 14, 2008, the Department of Public Welfare (DPW)

issued a Medical Assistance (MA) Bulletin announcing that hospitals would no longer be

paid for certain “preventable serious adverse events,” the rationale being that they were not

“medically necessary services” to patients who receive MA benefits. (In fact, Act 1 of 2009

tracks key definitions used in the MA Bulletin.) The MA Bulletin followed federal regulation

providing that the Centers for Medicare and Medicaid Services would no longer pay for eight

“never events” suffered by Medicare recipients. 

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Commonly, a defendant during patent litigation will seek to declare a patent unenforceable using the doctrine of inequitable conduct, which stems from 37 CFR 1.56 (commonly referred to as Rule 56). Rule 56 details the duty of candor placed upon the inventors and any individual, substantially involved in the preparation or prosecution of the patent application. They must disclose to the Patent Office all information they are aware of that is material to patentability. Critikon Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253, 1256 (Fed. Cir. 1997).   The party seeking to invalidate the patent, the moving party must demonstrate clear and convincing evidence that such conduct occurred, in the form of: (1) affirmative misrepresentations of a material fact; (2) failure to disclose material information; or (3) submission of false material information. Baxter Int’l v. McGaw, Inc., 149 F.3d 1321, 1327 (Fed. Cir. 1998). If the duty is found to be breached there is said to be “inequitable conduct” and the entire patent is unenforceable.

In a recent decision, Exergen Corp. v. Wal-Mart Stores, Inc., et al., Case Nos. 2006-1491, 2007-1180 (Fed. Cir. 2009), the ability to plead such a defense has become more burdensome. The Federal Circuit, in Exergen, decided that “a pleading that simply avers the substantive elements of inequitable conduct, without setting forth the particularized factual bases for the allegation, does not satisfy Rule 9(b).” (Slip Op. at 21).  More particularly, the Federal Circuit held “that in pleading inequitable conduct cases, Rule 9(b) requires identification of the specific who, what, when, where, and how of the material misrepresentation or omission before the PTO,” (Slip Op. at 22) directing moving parties to motion a factual pleading rather than a notice pleading.

As such, the pleading must include sufficient factual allegations to permit a reasonable inference “that a specific individual (1) knew of the withheld information or of the falsity of the material misrepresentation, and (2) withheld or misrepresented this information with a specific intent to deceive the PTO.” (Slip Op. at 24-25). To comply with this new standard, the pleading must first name the specific individuals who are alleged to have committed inequitable conduct. The pleading should provide pincites to both the patent claim and a withheld reference, and establish that the allegedly material pincite is not to be found in the prior art of record. Finally, it is no longer permissible to allege merely that “on information and belief,” the information was withheld with intent to deceive. The pleading must include factual allegations that a specific person knew of the specific information in a withheld reference.

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Tilden Township and Frank Perano v. DEP et al EHB Docket No. 2009-066-L, DEP issued a letter to Perano, a mobile home park operator, that the NPDES permit for its waste water treatment plant would not be reissued. The Department then issued an Order directing the Township to revise its Official 537 Plan to provide sewer service to the Perano's mobile home park. Perano filed appeals of the letter he received and the Order issued to the Township. DEP argued in a motion to dismiss, that Perano had no standing to appeal the Order issued to the Township. The EHB found that Perano had standing to appeal and denied DEP's motion. 

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