Deck 18: Legal Implications of Strategic Decisions

Question 1

Describe the four levels of authority in the US legal system.

Answer 1

$\bullet$ US Constitution
$\bullet$ Statutes enacted by the US Congress
$\bullet$ Regulations promulgated under those statutes
$\bullet$ Court decisions interpreting the constitution, statutes, and regulations

Question 2

Describe two examples of legal developments as drivers of strategic planning. (The examples can be from the book or from your imagination.)

Answer 2

$\bullet$ Congress enacts a law expanding coverage of goods and services under a federal health care program.
$\bullet$ The Centers for Medicare and Medicaid Services (CMS) approves a state's request for a Medicaid waiver.
$\bullet$ Congress enacts a massive health care reform law designed to provide nearly every American with health insurance coverage.

Question 3

Describe two examples of legal developments as inhibitors of strategic planning. (The examples can be from the book or from your imagination.)

Answer 3

$\bullet$ A state's administrators, led by its governor, decide not to participate in the Expanded Medicaid program created by the Patient Protection and Affordable Care Act (PPACA) of 2010 ("Obamacare").
$\bullet$ A court approves a monetary settlement between the Federal Trade Commission (FTC) and a pharmaceutical company to resolve claims that the company had violated federal law.
$\bullet$ The Internal Revenue Service (IRS), state tax authority, or local tax assessor revokes the tax-exempt status of a health care organization (health maintenance organization, health insurer, or health system) because it does not provide the necessary "community benefit" or otherwise uses its property for profit-making purposes.
$\bullet$ The Federal Trade Commission (FTC) blocks the proposed merger of two health care organizations for antitrust reasons-that it will reduce competition and increase prices.

Question 4

Legal factors can have positive or negative effects on strategic plans. In either case, explain four different ways an organization might respond to them.

Question 5

Explain what the Anti-Kickback Statute prohibits.

Question 6

What does the Exclusion Statute do that is so frightening to many health care providers - individuals or organizations?

Question 7

Compare for-profit and non-profit organizations by listing two advantages of each legal form.

Question 8

Suggest a way that the law could be used by an organization to create a competitive advantage.

Question 9

Which is more important to you? Obeying the law or your personal sense of ethics? And why?

Question 10

In the organizations you have worked for, were you aware of a formal statement of their ethical principles? What informal signs did you see? Did they appear somewhere that you could read them? What did some of them say?

Question 11

If you worked for an organization whose ethical principles clashed with your own, how would you reconcile the difference?