New Stark Law Self Disclosure Settlement Announced

CMS routinely posts settlements that it reaches with providers under its Stark Law Sefl-Disclosure protocol program.  Four new cases recently appeared on the CMS website that reports these settlements.  These cases involve providers who detect violations of the Stark Law and voluntarily disclose those violations to CMS.  Two of the settlements involved relatively small payment amounts that related to exceeding the yearly cap on the payment of non-monetary compensation to physicians.  The other two settlements were a bit more costly for the providers and involved more serious violations of the hospitals’ failure to comply with the personal service and management agreement Stark Law exceptions.

The Self Referral Disclosure Protocol can be used by providers to disclose violations of the Stark Law that they may discover.  Although not guaranteed, the protocols allow the government to settle on self disclosures for less than the amount that may be assessed for the reported violation.

CMS To Publish Self Disclosure Proposed Rules Today

Just one day before Valentines Day, CMS released a long awaited proposed rule defining provider obligations to report Medicare and Medicaid overpayments within 60 days.  Section 6402 of the Patient and Program Protection Act created possible False Claims Act liability and possible program exclusion for the knowing concealment or avoidance of a repayment obligation.  The new proposed rule is intended to add definition to the general obligation that was included in the initial statutory provisions.  Section 6402 of PPACA requires providers to report and return over-payments within 60 days of identification.  The original statute broadly defined the provider obligations but did not provide specifics on several topics such as when an overpayment is deemed to be “identified” or how long providers were obligated to look back when identifying potential over-payments.

The Proposed Rule created an extremely onerous lookback period of ten years.  This menas that providers will be obligated to report overpayment obligations that they discover which date back as far as ten years from th date of discovery.  The actual disclosure rules are somewhat less oppresive than the self disclosure rules that were already in place with regard to the Anti-kickback Statute and the Stark Law.  Nevertheless, many aspects of the proposed regulations, and in particular the ten year lookback rule, are likely to generate comments from affected parties. The proposes rule should be officially published sometime today.

Health care attorneys and compliance officers should pay close attention to this one an consider responding to the proposed rules during the comment period.  Check the published rule for the comment deadline.  Contact me if you need any assistance.

About The Author

John Fisher, JD, CHC  is a seasoned health care attorney and is certified in Health Care Compliance by the Health Care Compliance Association.  Mr. Fisher is available to assist physician groups and other health care providers nationwide in the development and operation of Compliance Programs.

Mr. Fisher has significant experience in the various legal and regulatory matters that are faced by physicians including the Stark Law, Anti-Kickback Statute and Safe Harbors, Medicare and Medicaid reimbursement rules, HIPAA, False Claims Act, antitrust laws, employment laws, contract matters, business ventures and laws governing financial relationships between physicians, and others.

Mr. Fisher practices with the Ruder Ware law firm in Wausau, Wisconsin.  His practice on compliance and Federal Law issues is nationwide.

Physician Compensation – A Look In Time At The Covenant Healthcare

Waterloo, Iowa.  Population 70,000 (give or take).  Who would expect that this town would be the focal point of one of the biggest physician compensation/Stark Law settlements in history.

In 2009, Covenant Medical Center in Waterloo agreed to pay the Federal government $4.5 million to settle charges that it had overpaid five doctors.  The Stark Law is violated if a physician is paid in excess of fair market value for services or if the compensation is not commercially reasonable.

The Affordable Care Act made it clear that Stark Law violations can trigger liability under the Federal False Claims Act.  The result is that amounts that are billed under the “cloud” of Stark can lead to treble damages plus up to $11,000 per claim.  If the Stark Law violation involves payment in excess of fair market value to a physician, the basis for assessing damages can be three times the amount of the physician’s billing plus up to $11,000 for each claim.  The application of the False Claims Act to Stark Law violations has placed a renewed focus on physician compensation issues.

In the Covenant care, the government alleged that the five physicians were paid commercially unreasonable compensation, far in excess of fair market value.  The hospital denied any wrongdoing but paid the government $4.5 million plus interest to settle the claims.

 Physician compensation has become a more sensitive issue than it ever was in the past.  The Waterloo, Iowa case demonstrates that smaller towns are not immune from the impact of the Stark Law and False Claims Act.

Screening For Excluded Providers
Key Elements Of Your Compliance Program

Most hospitals and larger healthcare organizations have gone through the process of developing compliance programs and are aware of the prohibitions against entering relationships with parties who have been excluded from a federal health care program.  Smaller organizations may not be aware of their responsibilities to screen all employees, vendors and contracting parties for exclusion.

Providers, such hospitals, medical groups, ambulatory surgery centers and home health agencies are subject to civil monetary penalties for submitting claims for healthcare items or services that are provided by excluded individuals or companies.  Fines can reach as high as $10,000 per item or service.  The fines can be astronomical if goods or services are regularly provided by the excluded party.

For this reason, compliance programs will generally include policies and procedures that require screening prior to contracting or employment.  Regular periodic screening is also highly recommended.  Smaller organizations and physician practices are at the most risk of violating these provisions.  These organizations have generally not yet faced the creation of formal compliance programs; although compliance programs will be mandatory in upcoming years.

 All health care providers must establish policies and procedures to be certain that they do not contract with excluded parties.

Mandatory Compliance Programs – Is Your Practice Ready?

The Office of Inspector General has encouraged health care providers to adopt compliance programs since the late 1990s.  Most larger organizations have implemented compliance programs as a way to detect and mitigate risk of non-compliance and to reduce penalties if a problem is detected.  However, many smaller providers, such as physician practices, have not adopted any type of formal compliance program.  The Patient Protection and Affordable Care Act (the “PPACA”) makes compliance programs mandatory for the first time  for all suppliers and healthcare providers enrolled in federal healthcare programs. Providers of all sizes will be required to certify that they have an effective compliance program in place as a condition of participation of federal healthcare programs.

The Office of Inspector General is charged with issuing regulations that define the core elements that providers must implement in order to certify compliance with the mandatory compliance program requirement.  The first set of regulations have been issued relative to nursing home who must certify their compliance programs as of 2013.  Regulations addressed at other provider types have not yet been issues but are expected soon. We can expect that the regulations will be similar to the guidance that has been provide by the OIG covering various industry sectors over the years.

Requirements for nursing home compliance plans have been released.  The nursing home regulations require the following:

• The adoptions of formal written compliance policies, standards and procedures that are effective at reducing the risk of compliance violations.
• The assignment of compliance responsibility to a Specific individual within the organization.  The individual should be a high ranking member of the management team and should report directly to the governing body.
• The compliance program must be adequately funded to assure its proper operations.
• Systems must be put in place to assure that authority is not delegated to individuals who may show a propensity to commit compliance violations.  For example, a program should be put in place to screen employees, staff members, vendors and others against OIG and GSA exclusions lists.
• The program elements and the ability to report compliance violations must be stressed and an atmosphere of compliance should be created.
• A strong system of anti-retaliation for individuals reporting compliance concerns must be maintained and communicated throughout the organization.
• Effective communication of the standards and procedures to all employees and required participation in training programs.
• Systems of monitoring and auditing should be put in place to help detect potential practices that could lead to compliance violations.
• Disciplinary processes must be maintained in order to enforce the compliance program.  Discipline should be coordinated with existing policies and procedures regarding employee discipline.
• The compliance program should “learn from itself.”  In other words, systems of corrective actions should be put in place that includes revisions of policies and procedures based on compliance concerns that are detected or reported.
• Continued review of the effectiveness of the compliance program should be undertaken.  Simply having a compliance program in place is not sufficient.  The organization must assure that the program is effective by continually reassessing and testing the program.

The exact date that compliance programs will become mandatory is not yet certain.  Nevertheless, enforcement activity is on a rise.  Prudent providers will take proactive efforts to reduce their compliance risks.  This includes that creation of an effective compliance program that is specifically tailored to the compliance risks associated with the specific provider.  Many smaller providers have never contemplated creating such a program in the past.  Mandatory requirements, increased enforcement activities and penalties, are all factors forcing providers to take proactive steps to reduce their exposure.  This creates a disproportionate burden on smaller providers such as small group practices.  At the same time, the OIG has in the past recognized that smaller organizations do not need to go to the same extremes as larger systems to meet their compliance obligations.  In other words, compliance programs are permitted to have a degree of scalability and allow for the size and resources of the organization.  It is critical for small providers to know where to place their compliance resources.  A “shotgun” approach will provide very little benefit.  Creating an overbroad plan that can never be operationalized does nothing more than create a roadmap leading authorities to the actions that your organization is not taking.

It is most prudent for providers of all sizes to have some level of compliance plan in place sooner rather than later.  A well focused plan scaled to your biggest risk areas is much better than a robust plan that you can never operationalize.  The point is to start with your compliance efforts and build upon them as time passes and new risk areas are identified.  Your plan should be structured to operationalize the identification of risk areas and address them as they arise in your practice.

OIG Video Series – Effective Compliance Program Development

The Office of Inspector General (“OIG”) has released a series of videos relating to compliance issues.  Recent videos cover compliance program/type and basic elements of compliance programs.  Access OIG Compliance Videos

Recent OIG advice includes:

• Foster a culture of compliance
• Devote adequate resources to compliance
• Create useful policies and procedures
• Train your staff
  • Offer training often
  • Be creative with training to foster interest
  • Stay current on compliance issues
  • Promote communication
    • Be visible within your organization
    • Communicate the hotline
    • Communicate and reinforce non-retaliation for making complaints
    • Take appropriate corrective action
• Team approach to investigations
• Investigate to resolution
• Create appropriate corrective action
• Use results to improve compliance process
• Conduct regular audits
• Determine risk areas
  • Coding
  • Contracts
  • Quality of care
  • Review compliance program regularly

 Access OIG Compliance Videos

Agressive Anesthesia Billing Advice Can Be Costly

I wanted to alert anesthesia groups to what I consider to be some very bad advice that is being provid ed by some billing consultants.  If taken, the advice could put your group in the midst of a lawsuit with a third-party payor or even a claim of insurance fraud under state insurance laws.

By now, pretty much everyone understands the general rule for billing multiple medically directed CRNAs.  It is industry standard to compensate a provider for up to four medically directed CRNAs; provided that the seven basis elements for medical direction are performed and documents in the patient’s record.  Industry standard and Medicare regulation permit reimbursement for multiple medical directions, but total reimbursement is never allowed in amounts that would exceed 100% of what the anesthesiologist would be paid if he or she had performed the service on their own.

 Medicare imposes the 100% restriction by compensating both the anesthesiologist and the CRNA 50% each when the anesthesiologist is medically directing up to four CRNAs.  The overall limitation is generally followed in the private insurance context by either reimbursing 100% of the anesthesiologist charge or by paying 100% of the first claim to be processed.

Some billing companies have begun giving extremely aggressive, and I believe extremely risky, advice to their anesthesia clients.  In some cases, there may be a history of the anesthesia group “self-discounting” their medically directed cases so they cannot be viewed as double billing for medically directed cases.  Double billing would occur if the group billed and collected for 100% of both the anesthesiologist and the CRNAs charge.  This is fairly clear.  Billing for both providers can be justified in some instances, but the presence of both providers must be medically directed and well documented in the medical record.  Special coding modifiers are used to indicate when a claim is being made for 100% of both the CRNA and anesthesiologist’s time.

Some aggressive billing companies will recommend that the anesthesia group end a previous practice of pre-discounting their bills without notice to the insurance provider.  This is sometimes done by the billing company without first advising the client.  This practice has the effect of greatly increasing revenues because it in effect double bills the insurer for medically directed cases.  The case coding remains the same as the group previously coded; indicating a medically directed case.  The effective per unit cost doubles virtually overnight.  In some cases, it may continue undetected.  Usually the insurance company will eventually notice that anesthesia costs are increasing.  At the point of discovery, the insurance company will seek recoupment of amounts that it has overpaid.  Most contracts will permit the insurance company to withhold future payments to offset previously overpaid amounts.

Even though the group may have relied on the advice of a billing company, the group really has no meaningful defense once the insurance company discovers that a change in billing practice without prior notice resulted in a significant overpayment.  The amount of overpayment can climb into the millions of dollars before it is discovered.

 If this practice took place involving the Medicare program, there is no question that it would create liability under the False Claims Act and could possibly even trigger criminal charges for false billing.  Most states have insurance fraud statutes that create civil and/or criminal liability for submitting false or fraudulent insurance claims that could apply to the type of practice.

The Federal False Claims Act could expose the practice to three times the actual total amount of the improperly billed claims plus between $5,000 and $11,000 per claim.  There can be hundreds of claims involved, so the dollar amount of exposure can be financially devastating.  The application of state insurance law statutes will vary by state.  However, the financial and criminal exposure from this type of practice can be significant under state law as well.

The group will always remain “on the hook” for the consequences of billing for their services; even when they were advised to undertake the practice and often even when the practice was commenced without their knowledge.  You may have a lawsuit against the billing company, but the insurer, the OIG, DOJ or state enforcement agencies will look primarily to the physician or the group when problems arise.

If you have been presented with “unique” billing opportunities that promise to net your increased revenue, take great care.  It is always possible that you can legitimately amend your practices to net more revenue.  You should be cautious before implementing any changes in billing practices.  If you are being promised something that may be too good to be true, it probably is.  If you have any doubts, contact a health care attorney before changing your practices.

Once the issue is raised by a third party, you will necessarily be on the defensive.  The additional revenues that you receive along the way will not come close to justifying the pain and anguish you will go through following detection.

Be careful of who you choose to do your billing.  Make certain that you bind them to a contract that restricts the type of activity described in this article.  Make certain that you have an ongoing dialogue with your billing company about their practices.  Make certain that you periodically audit their activities under your compliance program.

Mandatory Compliance Programs Under the Affordable care Act

Now Is The Time To Re-Examine Compliance “Best Practices” In Your Organization

Historically, compliance programs have not been per se mandatory.  However, most larger health care organizations have established formal compliance programs to foster an atmosphere of compliance and to take advantage of possible benefits under the Federal Sentencing Guidelines.  The Patient Protection and Affordable Care Act of 2010 has made compliance programs mandatory for many providers.  The exact scope of what type of provider will be required to establish formal compliance programs has not yet been set in stone by the Office of Inspector General.  However, it can probably be expected that most providers will be required to formalize their compliance efforts.

Institutional health care compliance has been growing for well over a decade now.  Compliance is becoming of major importance to health care providers of all nature and size.  The OIG has promoted compliance programs by releasing compliance guidance covering a number of industries, including billing companies, physician practices, hospitals, home health agencies, long term care facilities, ambulatory surgery centers and others.  Smaller providers who have previously not had the establishment of formal compliance programs on their radar will now be required to adopt formal plans.

It is not enough to simply adopt a compliance plan, place it on a shelf, and let it collect dust.  A compliance program requires active monitoring.  There are seven basic elements that are necessary for a compliance program to meet regulatory requirements and the requirements under the Federal Sentencing Guidelines.  The seven primary elements of an effective compliance program include:

1)      The establishment of written compliance policies and procedures;

2)      The designation of a high ranking individual within the organization to serve as compliance officer;

3)      The establishment of an effective training and education program for all levels of personnel;

4)      The establishment of effective lines of communication, such as a compliance hotline,  to enable individuals within the organization to report compliance breaches;

5)      Performing ongoing internal auditing and monitoring

6)      The creation of a system that enforces breaches of the compliance program including appropriate discipline and corrective measures

7)      The establishment of effective measures to respond to compliance problems that are detected.

 An effective compliance program establishes an atmosphere of compliance that permeates the entire organization.  A compliance program should be tailored to the specific circumstances of the provider.  The program should also feed and grow on itself.  As problems are detected appropriate changes should be made to the program and related policies and procedures.

 Mandatory compliance programs also highlight the importance of compliance on larger institutions who may have already adopted formal programs.  These institutions should take the signal that compliance is of growing importance.   Providers who have already adopted compliance plans should take the opportunity to dust them off and re-examine the role of compliance within their organization.  Now is the time to increase the focus on compliance and assure that compliance is an active system rather than a written plan that is sitting on the shelf.

Best Practices In Compliance Program Operation

 Given the increased importance of compliance, it is helpful to for providers to get a feel for what constitutes “best practice” when operating a compliance program.  “Best Practices” is a term that is thrown around all of the time in the business world.  It is used in many contexts and takes on a variety of meanings depending on who is using it and for what purpose.  Wikipedia defines “best practices” as follows:

Best practices are generally-accepted, informally-standardized techniques, methods or processes that have proven themselves over time to accomplish given tasks. Often based upon common sense, these practices are commonly used where no specific formal methodology is in place or the existing methodology does not sufficiently address the issue. The idea is that with proper processes, checks and testing, a desired outcome can be delivered more effectively with fewer problems and unforeseen complications. In addition, a “best” practice can evolve to become better as improvements are discovered.  Best practice is considered by some as a business buzzword, used to describe the process of developing and following a standard way of doing things that multiple organizations can use.  http://en.wikipedia.org/wiki/Best_practice

As I was thinking about the concept of “best practices” in health care compliance, the Wikipedia definition seems to fall al little bit short of what I would have in mind when discussing “best practices” in health care compliance programs.

The Miriam-Webster Dictionary defines “Best” as the superlative form of “good.”  “Best” means “excelling all others” and “offering or producing the greatest advantage, utility, or satisfaction.”  I believe that the definition from Wikipedia is an accurate depiction of what the term “best practices” has become in the business world.  The term has been thrown around loosely to the  point that is no longer carries the meaning of the plain words that make up the two word “buzzword.”

In the health care compliance context, I believe that it is not advisable to direct you efforts toward the standard “buzzword” meaning of “best practices.”  Instead, you should focus toward attempting to achieve the meaning of “best practices” that is tied to the superlative form of the word “good.”  You should not focus on the “we are doing what everyone else is doing” or the “what we are doing will pass by in most cases” version of best practices when looking at your compliance plan.  The consequences of that approach could easily come back to bite you in the superlative.

 In reality, you may never be able to meet the truly “best” standard.  However, the point of the compliance program requirement is that you are trying to make your compliance program and your organization “the best” when it comes to compliance.  Here are a few tips to help you attempt to meet the “best practices” standard:

 1.         Act as if you are under a Corporate Integrity Agreement.  Always assume that the government is looking over your shoulder and that you will be called upon at some point to justify the effectiveness of your compliance program.

2.         Follow the government guidelines to the tee.  Familiarize yourself with the Federal Sentencing Guidelines and OIG Industry Guidance and integrate these requirements into your compliance plan.

3.         Keep up with government releases, speeches, regulations, comments, advisory opinions, and all other communication that help to define your obligations.

4.         Make your compliance plan a “living and breathing” documents that is continually up for revision based on specific things that you learn about your specific organizations.

5.         Make sure your compliance officer focuses on compliance and does not wear other hats that compete for time, attention or perspective.

6.         Make certain that sufficient resources are devoted to compliance.  Adopt the view that it is better to spend money on compliance that to pay for mistakes down the road.

 If there is any area where you are not able to achieve “best practices” for financial or other reasons, be prepared to justify your shortcomings.  Key to all of this is to operate as if you will someday be required to defend the effectiveness of your compliance program.  In all likelihood you will someday be in exactly that position given the current state of the health care industry and mentality of the governmental agencies that are charged with enforcement.

 These are just a few tips to get you thinking about your compliance approach.  Health care reform has made compliance programs mandatory for the first time.  There are also multiple indications that the government wants organizations to devote more to compliance as a way to save health care costs.  It is clearly time for organizations of all types and sizes to re-focus their efforts on compliance within their organizations.

Ambulatory Surgery Center – Anti-kickback Issues and Safe Harbor Regulation Compliance

More and more procedures are being performed in Ambulatory Surgical Centers. The CMS has recently expanded the procedures that it considers to be safely performed in an ASC. Clearly, the trend is to move many procedures to an outpatient facility unless the health care needs of the patient clearly require an inpatient presence. One of the primary sources of capital for these new ASC ventures is the physicians who are involved in performing procedures in the ASC or sending business to the ASC.

From a purely business point of view, it makes sense to have investors who have a direct financial interest in seeing that the business succeeds. However, from the point of view of the party paying for the care, this same financial interest can lead to an increased and arguably unnecessary levels of procedures performed in the facility.  For this reason, the Medicare and Medicaid program, and many states, have enacted the Anti-kickback Statutes and other anti-referral laws that prohibit, or at least limit, the financial interests that a referring provider can have with an organization where there is any control over the referral flow to that entity.

 Anti-Kickback Statute Prohibition

The Federal Anti-Kickback Statute proscribes the offering, payment, solicitation or receipt of any remuneration in exchange for a patient referral or referral of other business for which payment may be made by any Federal health care program. Violations of the Anti-Kickback Statute is a federal felony and can result in substantial prison time and criminal monetary penalties. Violation of the Anti-Kickback Statute can also serve as a basis for imposition of Civil Monetary Penalties. Enforcement of the Federal Anti-kickback Statute has been on the rise since the mid-1980s. Today, the federal government has made health care fraud one of its top priorities. We are hearing about new prosecutions on an almost daily basis as the government ramps up its enforcement through the creation of the HEAT program.

ASC Ownership and the Federal Anti-Kickback Statute

When we look at a typical Ambulatory Surgical Center venture, the primary concern is when the physicians (or hospital) who make referrals to the entity and provide services in the entity receive remuneration from the entity. This normally will involve remuneration in the form of a return on an investment interest. We are not concerned with the reimbursement applicable to the physician’s personally performed service.  What raises the issue is the physician receiving a portion of the technical component related to the use of the Ambulatory Surgery Center where the physician is in the position to make or influence referrals.  The referring physician may purchase an ownership or investment interest in the company that is set up to operate the ASC. The ASC can be set up with capital contributions from a number of physicians or it may involve a hospital sponsored ASC that seeks capital investment from physicians.

 Regardless of the exact structure, the Anti-kickback Statute will come into play to govern the structure and ongoing operation of the ASC. The ASC venture must be structured from the start to comply with the Anti-Kickback Statute. It must also be monitored on an ongoing basis to assure that it does not fall out of compliance with the Anti-Kickback Statute.

 ASC Safe Harbors – The Four ASC Types Qualifying For Safe Harbor Protection

 The ASC Safe Harbor regulations identify four types of Ambulatory surgery center structures that can meet safe harbor protection.  These four types of ASCs include Surgeon-Owned ASCs, Single Specialty ASCs, Multi-Specialty ASCs and Hospital/Physician ASCs.  Each category has different requirements that must be met in addition to the threshold requirements identified above that are applicable to all ASCs to meet the safe harbor.

• Surgeon-Owned ASCs

 Owners in a surgeon owned ASC can only include general surgeons or surgeons in the same surgical specialty.  The surgeons must be in a position to make referrals to the ASC and to perform surgical procedures in the ASC on the patients that they refer.  Each surgeon owner must meet a source of income test for the previous fiscal year or 12 month period.  Each surgeon must derive at least one-third of their total medical practice income from performing surgical procedures that require an ASC or Hospital surgical setting.  This does not require all of these procedures to be performed in the ASC in which they are an investor.  However, when the surgeons annual revenues are calculated at least one-third of the physicians medical practice revenues from all sources must be derived from the surgeon’s performance of procedures that are listed as Medicare covered services in an ASC.  The surgical services can be performed in an ASC or in a hospital outpatient department and are not limited to the procedures actually performed in the surgeon owned ASC.

• Single-Specialty ASC

This safe harbor permits physicians within the same specialty, whether or not they are surgeons, to invest in an ASC to which they refer their patients and perform surgical procedures on their patients in the ASC.  Group practices composed of a single specialty may also own and refer to their own ASC.

 Multi-Specialty ASCs

This safe harbor permits physicians who are in a variety of specialties to form an ASC and make referrals to the ASC.  Physician investors in multi-specialty ASCs must meet the one-third practice revenue test described above in relation to surgeon owned ASCs.  However, unlike surgeon-owned ASCs, physicians in multi-specialty ASCs must actually perform one-third of their ASC procedures in the ASC in which they hold an investment interest.  This has become referred to as the “one-third/one-third” test.  The reasoning behind this requirement is that in these types of ASCs, the physicians are actually using the ASC as an extension of their medical office and this does not create significant incentives to generate referral revenues for other investors.  Group practices composed exclusively of physicians who meet the one-third/one-third test may also invest in multi-specialty ASCs.

• Hospital/Physician ASC

Under this safe harbor, at least one hospital must be an investor in the Ambulatory Surgery Center.  The remainder of the investors must be physicians (or group practices) who meet the requirements for a surgeon-owned ASC. There are a number of additional requirements that must be met by physician/hospital ASCs.

Hospital Physician Owned ASC Safe Harbor Provisions

In a previous post, I discuss the requirements for a Hospital/Physician Owned Ambulatory Surgery Center to meet the ASC safe harbor requirements. Under the Hospital/Physician ASC safe harbor, at least one hospital must be an investor in the Ambulatory Surgery Center.  The remainder of the investors must be physicians (or group practices) who meet the requirements for a surgeon-owned ASC. There are some additional requirements that must be met by physician/hospital ASCs.

The ASC may not use an operating room, recovery room, or other space of the hospital unless it is properly leased from the hospital to the ASC under a lease agreement that meets the requirements of the safe harbor for space rental.  Likewise, any equipment provider by the hospital or services provided by the hospital must be pursuant to an agreement that complies with the equipment rental and/or services safe harbor provisions.

The hospital cannot be in a position to make or influence referrals to the ASC.  This excludes physicians who are employees of the hospital from becoming investors in the Ambulatory Surgery Center.  The hospital is also prohibited from including costs associated with the ASC in its Medicare cost report.

Summary

             The Anti-kickback Statute must be considered in any ambulatory surgical venture where potential referral sources could potentially receive remuneration of any kind.  The Anti-kickback Statute and safe harbors will have a large influence on the structure of most ASC ventures.  At the same time, the Anti-kickback Statute is not the only legal issue that must be considered when structuring ASCs.  In some cases, the Stark Law may be a consideration.  Even though ASC services are not “designated health services” under Stark, the ACS might provide other types of services that are covered by Stark.  Reimbursement issues may also have an impact on structure.  Where a hospital is involved, tax exempt tax issues will also play a role.

             For more information regarding Ambulatory Surgery Center structure and other health care law issues, contact John Fisher in the Ruder Ware Health Care Industry Focus Group.

OIG Fraud and Abuse / HEAT Program Videos

The Office of Inspector General is posting a series of video presentation on the HEAT program.  Topics covered include general information on health care fraud laws, the Anti-kickback Statute, the False Claims Act and dealing with investigations.  The OIG will be posting a total of 11 videos and audio podcasts that are part of the award-winning Health Care Fraud Prevention and Enforcement Action Team (HEAT) Provider Compliance Training initiative. The first educational presentation was posted on the OIG website the week of December 5.  New posting will be made over the next few months.

As of the time of this post, the OIG page includes 4 new videos.  One is an introduction to the new video program.  Other current videos cover the False Claims Act, Anti-kickback Statute and Program Exclusions.

You can access the OIG video web site here:  OIG Fraud and Abuse Videos

Through the OIG video presentation page, you can also access a series of 16 videos covering a variety of compliance related topics including: