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Archive for the ‘Safe Harbor Regulations’ Category

Ambulatory Surgery Center National Legal Practice ASC Compliance Issues

Monday, January 30th, 2017

Ambulatory Surgery Center Compliance Legal Practice

Ruder Ware has developed an active practice counseling ambulatory surgery center providers and has served as special counsel in several cases involving ambulatory surgery center exclusions.  The firm’s health care and compliance attorneys are knowledgeable on the numerous legal and regulatory requirements that are applicable to ASCs.  The regulations applicable to these entities are complex and nuanced.  The consequences of failing to comply or with taking improper steps to exclude providers can be very costly.

Some of the issues that our health care practice has recently addressed include the following:

  • Counseling ASC’s on the application of the Stark law, Anti-Kickback Statute, and ASC safe harbor issues.
  • Advising and representing providers on issues relating to conditions of participation and governmental surveys.
  • Representing organizations in preparing and submitting self-disclosure to the government.
  • Development of ASC investment entities.
  • Establishment of ASC compliance programs
  • Decisions regarding exclusion of “under-performing” providers.
  • Structuring exclusion provisions to minimize risk of violating regulations or enhancing the risk of litigation.
  • Sale and purchase of surgery centers.
  • ASC licensure and governmental approval.
  • Compliance with patient confidentiality and privacy laws.
  • Risk assessment, audits, compliance work plans, staff compliance training.
  • Contractual relationships with outside parties.

Ambulatory Surgery Center Lawyers – Ambulatory Surgery Center Lawyers

Ambulatory Surgery Center Attorney

John H. Fisher has practiced health care law for over 25 years.  One of John’s significant areas of expertise involves the regulatory and business aspects of ambulatory surgery centers.  Over the years, John has represented numerous clients on legal and compliance issues related to ambulatory surgery centers.  John consults as a subject matter expert and provider legal backup to other attorneys and law firms from around the country on issues relating to ambulatory surgery centers.  Some of John’s more recent ASC related projects include:

  •  Representation of an ASC in connection with the exclusion of non-complying owners.
  • Representation of excluded providers in litigation and settlement.
  • Creating operating documents that comply with ambulatory surgery center safe harbors and other applicable regulatory requirements.
  • Creation of policies and procedures required to gain certification as an ASC.
  • Consultation with local litigation attorneys regarding regulatory issues relevant to ASC litigation.
  • Consultation with ASCs on establishment of compliance programs and identification of related risk areas.
  • Assisting ASC providers in addressing detected deviations in operating and compliance requirements.

Self Disclosure Settlements Help Identify Compliance Risk Areas

Friday, January 27th, 2017

Self Disclosure Settlements Indicate Areas of Compliance Risk

Compliance officers can identify areas of potential compliance risk in a number of ways.  One way is to examine self disclosure settlements under the Stark Law and OIG self disclosure process.  This helps indicate issues that other providers are disclosing to the government and can help identify potential risk areas within your organizations.

Here are a handful of self disclosure settlements that have been published:

A Massachusetts hospital settled several Stark law violations involving failure to satisfy the requirements of the personal services arrangements exception with department chiefs and medical staff for leadership services, and for arrangements with physician groups for on-site overnight coverage for patients at the Hospital. Settlement Amount – $579,000.00

An Ohio physician group practice settled two Stark law violations involving prescribing and supplying a certain type of DME that did not satisfy the requirements of the inoffice ancillary services exception. Settlement Amount – $60.00

A Mississippi critical access hospital settled several violations of the Stark law relating to its failure to satisfy the requirements of the personal services arrangements exception for arrangements with hospital and emergency room physicians. Settlement Amount – $130,000

A California hospital settled two Stark law violations that exceeded the annual nonmonetary compensation limit for physicians. Settlement Amount – $6,700

A hospital in Georgia settled violations involving two physicians and the annual nonmonetary compensation limit. Settlement Amount – $4,500

A physician group practice in Iowa settled Stark law violations after disclosing that its compensation for certain employed physicians failed to satisfy the requirements of the bona fide employment relationship exception. Settlement Amount – $74,000

An Arizona acute care hospital settled a Stark law violation after disclosing a single physician arrangement that did not meet the personal service arrangements exception. Settlement Amount – $22,000

A hospital located in North Carolina settled six Stark law violations for $6,800 after disclosing that it exceeded the calendar year nonmonetary compensation limit for two physicians during three consecutive years. Settlement Amount – $6,800

An Alabama hospital resolved a Stark violation involving a rental charge formula that did not satisfy the requirements of the rental of equipment exception. Settlement Amount – $42,000

A hospital in Maine settled potential Stark law violations relating to arrangements with a physician and physician group practice that failed to satisfy the requirements of the personal services exception. Settlement Amount – $59,000

A Massachusetts hospital settled violations concerning arrangements with two physician practices for call coverage that did not satisfy the personal service arrangements exceptions. Settlement Amount – $208,000

A hospital located in Florida resolved arrangements with three physicians that did not satisfy the personal service arrangements exception. Settlement Amount – $22,000

A Missouri hospital settled Stark law violations involving two physicians for the provision of dental services that did not meet the requirements of the personal service exception. Settlement Amount – $125,000

A North Carolina-based general acute care hospital and its hospice agreed to settle several Stark law violations involving arrangements and payments that failed to meet the physician recruitment, fair market value, and personal services arrangement exceptions. Settlement Amount – $584,700

A hospital in California settled a Stark law violation, which arose from its failure to meet the physician recruitment exception. Settlement Amount – $28,000

An acute care hospital in California settled a violation of the Stark law after disclosing that it failed to meet the personal service arrangements exception for an on-call arrangement with a physician. Settlement Amount – $1,600

A South Carolina general acute care hospital settled several violations of the Stark law involving arrangements with physicians and physician group practices that failed to satisfy the requirements of the FMV compensation exception, the personal services arrangements exception, and the rental office space exception. Settlement Amount – $256,000

A Massachusetts acute care hospital settled several Stark law violations involving arrangements with physicians that failed to satisfy the definition of “entity”, the rental office space exception, and the personal services arrangement exception. Settlement Amount – $199,400

A Louisiana acute care hospital used the SRDP to resolve violations related to professional service arrangements with physicians, a professional staffing organization, and a physician group practice. Settlement Amount – $317,620

A Minnesota hospital agreed to settle a Stark violation that stemmed from a recruitment arrangement that failed to satisfy the requirements of the physician recruitment exception. Settlement Amount – $760.00

A Texas rehabilitation hospital resolved several Stark violations through the SRDP involving arrangements for ownership interests held by certain physicians that failed to satisfy the whole hospital exception. Settlement Amount – $23,730

A general acute care hospital in New York agreed to settle a violation of the Stark law that involved an arrangement that failed to satisfy the requirements of the rental office space exception. Settlement Amount – $78,500

A Florida acute care hospital settled several Stark violations relating to arrangements with multiple physicians for emergency cardiology call-coverage that did not satisfy the requirements of any applicable exception. Settlement Amount – $109,000

A general acute care hospital in Florida settled several Stark violations involving arrangement with a group practice to provide residency program services, a physician to provide electronic health records subject matter expert services, a physician to provide Medical Director services, and a physician to provide leadership services for a hospital committee, none of which satisfied applicable exceptions. Settlement Amount – $76,000

An Alabama acute care hospital resolved a violation of the Stark law involving an arrangement with a physician group practice for the rental of office space that did not satisfy the exception. Settlement Amount – $187,340

A Wisconsin critical access hospital used the SRDP to resolve a violation of the Stark law relating to an arrangement with one physician for the provision of emergency room call coverage services at adjacent walk-in clinics that failed to satisfy any applicable exception. Settlement Amount – $12,724

A Tennessee acute care hospital settled a Stark violation involving an arrangement with one physician for the supervision of cardiac stress tests that failed to satisfy the requirements of any applicable exception. Settlement Amount – $72,270

An acute care hospital in Pennsylvania resolved several Stark violations related to arrangements for Medical Director services with certain physicians and a physician practice that did not satisfy the personal services exception. Settlement Amount $24,740

A general acute care hospital in Ohio used the SRDP to settle violations of the Stark law that involved arrangements with certain physicians for EKG interpretation, medical director services, Vice-Chief of Staff services, and hospital services that did not satisfy the requirements of any applicable exception. Additional violations stemmed from arrangements with certain physicians and a physician group practice for the donation of EHR items and services that failed to satisfy the applicable exception. Settlement Amount $235,565

A Texas acute care hospital settled a Stark violation involving an arrangement for case management physician advisor services with a physician that did not satisfy the requirements of any applicable exception. Settlement Amount – $54,108

A physician group practice in Louisiana resolved a Stark violation relating to arrangements with two physicians that failed to satisfy the requirements of the in-office ancillary services exception. Settlement Amount – $13,572

A non-profit community hospital in Minnesota settled a violation of the Stark law that involved an arrangement with a physician group practice for the rental of office space and provision of support services that failed to satisfy the requirements of any applicable exception. Settlement Amount – $9,570

A California acute-psychiatric hospital resolved two Stark violations relating to arrangements with two physicians for the provision of psychiatric services that did not satisfy the requirements of any applicable exception. Settlement Amount – $67,750

A North Carolina acute care hospital used the SRDP to settle several violations of the Stark law relating to arrangements with a physician to provide Medical Director Services, a physician group practice to provide medical coding and consulting services, and a physician and a physician group practice for the lease of office space, that failed to satisfy the requirements of any applicable exception. Settlement Amount – $87,110.00 19.

A general acute care hospital in Texas resolved a Stark violation involving an arrangement with a physician to provide utilization review services that did not satisfy any applicable exception. Settlement Amount – $82,055 20.

A California acute care hospital resolved several violations of the Stark law involving arrangements with three physicians for the provision of on-call services to the Hospital’s emergency department that did not satisfy the requirements of any applicable exception. Settlement Amount – $42,630 21.

An acute care hospital in Oklahoma used the SRDP to settle several Stark violations relating to arrangements with four physicians for the provision of electrocardiogram interpretation services that failed to satisfy the requirements of the personal services exception. Settlement Amount – $124,008

Health Care Compliance Attorney – Certified CHC Lawyer

Tuesday, January 10th, 2017

Health Care Compliance Attorney

Compliance Representation – Certified Health Care Compliance

The Ruder Ware Compliance Team provides a variety of compliance-related services across a number of industry sectors.  Our compliance practice in the health care industry is lead by Attorney John Fisher.  John is a practicing health care attorney who has substantial expertise in the compliance area.  He is certified in both Health Care Compliance and Corporate Compliance and Ethics.

Aggressive Governmental Fraud and Abuse Investigations

Government enforcement practices and ever changing regulatory requirements require health care providers of all types and specialties to function in a highly complex environment.  Government enforcement operates under a “return on investment” mentality which leads to extremely aggressive and sometimes unfairly overbroad enforcement actions.  This leaves even the most well intentioned health care provider feeling targeted and overburdened with regulatory requirements.

Ruder Ware Provides a Full Range of Compliance Services

The Ruder Ware compliance team has provided a broad range of compliance related legal services to a wide range of health care providers such as hospitals, mental health programs, skilled nursing facilities, ambulatory surgery centers, a variety of medical groups, diagnostic facilities, home health care providers, personal care agencies, clinically integrated provider groups, accountable care organizations and other providers.  Each provider that we represent has unique features and characteristics that require creative approaches to mitigate the impact of overzealous governmental enforcement and private whistleblowers.

We Help You Prepare for an Eventual External Examination of Your Compliance Process

Our compliance practice functions under the philosophy that all providers will eventually be called upon to defend their compliance programs.  This may come through a self-disclosure after an infraction that is discovered through self assessment or audit.  Less ideally, it could come from a money hungry whistleblower who will not let go of a case until there is a payday.  It could also come at the hands of a government criminal or civil prosecutor.  Regardless of the source of challenge, at some point in the future, a compliance program will be put to the test.  When this happens, it must be effective to detect and correct potential compliance problems.  This requires both a well designed plan.  It also requires a showing that the plan is actively operating to identify risk areas, audit for anomalies in areas where risk may be present, and comes full circle to take appropriate action to correct potential problems that are identified.  If this is happening when your time comes; when your compliance program is put to the test, you will have gone a long ways toward mitigation of potential negative consequences.

Penalties Are Increasing and the Scope Activity Considered Abusive Continues to Expand

Some may wonder how the government plans to pay for changes in the health care system.  One of the primary sources of payment in the future will be through enforcement of actual or perceived fraud and abuse.  Currently, the Federal government received an 800% return on every dollar that it invests on pursuing health care fraud and abuse.  With increased penalties and more draconian enforcement systems in place, the government is poised to turn the enforcement business into an even more lucrative proposition.  The stage is set with laws that increase penalties to such an astronomical level that even a much less than certain case will be settled rather that risk being dragged through a proceeding that a provider is likely to lose in the end.

The Danger of Whistleblower Claimants

Whistleblowers also are incentivized to file cases as they seek to benefit personally from provider activity that may not fully conform to regulatory expectations. No provider is immune, no matter how effective its corporate responsibility program. For these reasons, all providers need experienced Compliance Counsel to assist them in trying to prevent regulatory violations, to determine the scope of and assist with correcting identified compliance issues and to defend them in the event they do become a target of government investigative activities.

Whistleblowers can come from a number of different places.  Disgruntled employees are a prime candidate to bring a whistleblower complaint.  How these complaints are handled is extremely important to minimizing their potential negative impact on you operations.  Once a Whistleblower attorney becomes financially committed to a case, they tend not to let go easily.  Settlement can be very difficult to attain on reasonable terms.  It is fair to say that in many cases the government gives more latitude to settle cases if the provider cooperates.

There are some reasonable government enforcement individuals who appropriately utilize their discretion when a provider cooperates and has not intentionally bilked the system.  Whistleblowers on the other hand, have their sites set on the full maximum amount of calculated False Claims Act damages.  They are looking for a pay day.  We can help you avoid this type of situation altogether by helping establish an effective compliance program that takes appropriate action to mitigate exposure if infractions are discovered.

General Compliance Counsel Services

We act as general compliance counsel to numerous health care providers and companies as well as business in other industries such as transportation, finance, manufacturing, securities, and other industry areas.  Ruder Ware represents businesses with worldwide operations who we routinely counsel regarding the impact of anti-bribery laws and other laws that impact international operations.  Our multidisciplinary approach enables us to apply our expertise in compliance process and investigations to various industry sectors that are represented by other attorneys in our firm who have extensive knowledge of the regulatory requirements that impact their business or industry sector.  For example, we have applied our compliance knowledge with our significant clientele in the transportation industry, paper manufacturing industry, financial sector, and heavy manufacturing for international distribution.

Roots in the Highly Regulated and Ever Changing Health Care Industry

Our compliance practice got its start primarily in the health care industry and has flourished into other areas building on our experience and success in health care.  The health care industry has historically been out in front of many other industries which enabled our firm to get into the compliance service industry early and gained significant experience that has served our team well. Our compliance team has gained substantial experience handling compliance that impact the Federal False Claims Act, Civil Monetary Penalties Law, Stark Law and Anti-Kickback Statute. We routinely counsel our clients on how to apply systems to proactively comply with a multitude of regulations that apply to their regulations.  We recommend processes that apply to all types of health care providers and across all industry sectors.

Proactive and Aggressive Risk Identification Process

Our recommended process creates a “living and breathing” process that is continually at work within an organization to identify potential risk areas.  Those identified areas where risk is likely to be present can then be further analyzed to ascertain the types of potential risks and a behaviors that create those risks.  A process can then be applied to mitigate risk through establishment of policies and procedures, checklists, and process flow that are intended to reduce risk.  Employees are trained on these processes and monitoring and auditing occurs to assure that processes are being regularly followed.  The entire process must be documented to the detail.  If incidents occur in spite of the risk reduction process, proof of the proactive activities that were taken to prevent these occurrences will be of great assistance in mitigating the negative consequences of the discovered infraction.  Generally, self disclosure, with confidence that you are backed up by a continually operating compliance system are your best defensing most cases to the negative consequences of the discovered non-compliance.

Compliance Program Development and Assessment

Our compliance attorneys have experience creating and implementing compliance programs to fit the specific needs of our business and health care clients.  Compliance programs are not “one size fits all.”  A program must be tailored to address the specific risks that are presented by the type and scope of business.   We are adept at creating solutions that leverage compliance resources to achieve the most efficient and effective compliance operation.  We have developed compliance programs for national and multinational business in a variety of industries.  We have also helped small businesses develop compliance programs that are scaled to the size of their businesses and the resources that are necessary to mitigate compliance risk.  Contrary to some professional, legal forms sites, and novice compliance professionals, there is no single set of forms that can be used to craft a proper compliance program.  Some elements are common in most plans, but the failure to customize a compliance program to the specific business is perhaps the most common mistake that can be made and results in a major threat to the effectiveness of the program and the ability to use the program to mitigate potential legal exposure.

In additions to creating compliance program structures, Ruder Ware’s compliance team has developed a series of comprehensive compliance program assessment and effectiveness tools that we use to identify gaps in compliance program operations.  We use a systematic approach to evaluating compliance programs to assure that they are operated effectively to identify and mitigate compliance risk.  A compliance program is of little value if it cannot be demonstrated to be effective.  We can provide an independent, detailed and systematic evaluation of any compliance program.  The results of this assessment can be integrated into the compliance cycle to enhance effectiveness and improve efficiencies.  We also use variations on this process to assist clients in creating compliance work plans that identify and prioritize compliance operations, audit and monitoring areas, and achievement of specific compliance goals.

Our compliance attorneys are active in national compliance organizations.  We are also committed to maintaining active certifications in compliance and ethics as a means to assure that we are up to date on legal and regulatory requirements as well as the standards that must be met to achieve effective compliance operations.

Internal Compliance Audits Under the Attorney-Client Privilege/Work Product Doctrine

We regularly work through the attorney-client privilege and work product doctrine, as necessary, to internally investigate compliance issues with the provider. We are familiar with the intricacies of various state and federal laws that relate to privilege.  We are also attuned to enforcement policies relating to waiver of privilege and the relationship of privilege to the ability to secure cooperation credit from investigative agencies.

Privilege issues are intricately involved with internal investigations and we take great pains to assure that the process that we use to conduct investigation maintain privilege to the greatest extent possible.  In order to maintain privilege, it is generally necessary to retain outside counsel to direct and control the investigation including securing necessary consultants, experts, and support personnel.  We have relationships with external support consultants and experts in several industries and technical areas.

Educating Clients and Their Employees On Compliance Related Issues

Education of staff is a critical element of an effective compliance program.  Without training individuals within the organization, a compliance plan is little more than a set of policies gathering dust on a shelf.

Our compliance team can assist clients in creating training systems, preparing training material, and performing training programs.  Out compliance attorneys will often provide training sessions on compliance oversight responsibilities to the Board of Directors of a company or to key committee members, officers, and upper management staff.  It is critical for the success of a compliance program that there be acceptance from the top of the organization.  This is where the environment of compliance is created.

We have assisted clients conducting in person compliance training and have conducted web based compliance training modules in basic and special compliance subject areas.  We have also been called in to provide training as part of a corrective action program after compliance risks are detected.  We are also involved in specialized training on issues such as Stark Law compliance, physician compensation, and other issues that are unique to the provider but present unusually complex regulatory requirements.

Extension to Provider Certification and Deficient Surveys

In addition to providing proactive compliance advice, our team provides legal representation in connection with deficiency reports and survey findings.  We can assist providers through the informal dispute resolution process in connection with state and federal surveys.  In cases of serious deficiencies we can represent providers in the appeal process and related proceedings.  Where Civil Monetary Penalties are assessed, we can often negotiate as part of the appeal process for a reduction in penalties, severity or scope of findings.   In extreme cases, deficiencies can also involve overpayments and self-disclosure.  We have can assist providers in the assessment of whether a self-disclosure may be necessary and in appropriate cases, we can conduct the necessary investigations and prepare self disclosure submissions.

Other  Areas Handled By Compliance Team

Although our compliance practice grew originally out of our health care practice, it now extends beyond the health care industry into manufacturing, global transportation, relocation services, financial institutions, and other industry segments.  Our systematic approach to compliance can be applied to virtually any industry together with regulatory experts in that area.

Our health care compliance attorney has also received certification in Corporate Compliance and Ethics which includes global compliance issues.  We are routinely called upon to apply our industry and compliance knowledge to develop compliance operations across a variety of industries.

Beyond the false claim and fraud and abuse inquiries, our compliance team also routinely handles a number of other regulatory compliance matters such as provider certification, provider specific requirements, Sarbanes-Oxley and international compliance areas such as the Foreign Corrupt Practices Act, the UK Anti-Bribery Act, and a variety of other laws that require  effective compliance efforts application to identify and systematically address mitigation of risk.

Government Investigations and Defense

Federal and state governmental regulatory agencies have become very aggressive in investigating and prosecuting compliance failures.  Our compliance investigation team can conduct internal investigations and can often work with governmental agencies to coordinate investigative functions.   We can assist providers who are under scrutiny of the governmental in formulating a proper response to governmental audits, formal and informal investigations, subpoenas and other information requests. We can work with provider clients to shape appropriate response depending on the issues involved and the positions and approach being taken by governmental authorities.  We are also able to coordinate internal investigations to assure that privilege is retained where necessary and to preserve the ability to obtain cooperation credit from the government.

Compliance With Voluntary Self Disclosure Protocols and Process

We have experience with the self disclosure protocol and processes established by the Office of Inspector General and Center for Medicare and Medicaid Services.  We have assisted clients in the assessment of potential compliance risks to determine whether self-disclosure is necessary or appropriate.   We have also conducted investigations of various issues to assess the nature and extent of potential risk.  When it is determined that self disclosure is prudent, we assist clients in preparing necessary disclosure documents and support.  We also interact with governmental agencies to resolve issues through self-disclosure.

Compliance Team Subject Areas

  • Compliance Plan Structure and Operation
  • Compliance Auditing and Monitoring Programs
  • Compliance Work Plan and Task Prioritization
  • Risk Area identification, Scoring and Prioritization
  • Compliance Process Trainings
  • Compliance Risk Area Specific Training
  • Regulatory Interpretation and Guidance
  • Structuring Policies and Procedures
  • Governmental Investigations
  • Internal Investigations
  • Cooperation and Coordination With Governmental Investigators
  • Joint Defense Agreements and Cooperation With Joint Defendants
  • Civil Monetary Defense and Appeal
  • Foreign Corrupt Practices Act
  • International Anti-Bribery Law Compliance
  • Compliance Coordination with Subcontractors and Downstream Entities
  • Health Care Compliance Issues
  • Transportation and Global Relocation Compliance
  • Privacy Act and Health Information Compliance
  • False Claims Act Investigations and Enforcement Actions
  • Survey, Certification and Deficiency Citations
  • Breach Disclosure Assessment and Notification


John H. Fisher, CHC, CCEP is a health care attorney at the Ruder Ware law firm.  John is actively involved representing clients on legal and compliance issues.  He has represented clients in creating compliance programs and in a variety of operational issues.  He also assists providers in addressing risk areas and potential compliance issues including preparing self-disclosure and working with the government to resolve disclosed compliance issues and overpayment.  John consults as a subject matter expert and provider legal backup to other attorneys and law firms from around the country on specialized compliance, regulatory and health care issues.  John has followed legal issues impacting health care provider for over 25 years.  As such, he is knowledgeable on the current legal standards as well as the historic perspective that is often relevant to an appropriate analysis. 

New Federal Prosecution Standards Require Revisions to Investigation Policies

Tuesday, September 27th, 2016

Impact of the Yates Memorandum on Civil Enforcement Liability

Yate Investigation Policy RevisionThe infamous Yates Memorandum revised Federal prosecutorial policy to place more of a focus on individual wrongdoing. Federal prosecutors now have clear directions from the top of the DOJ to consider individual liability prior to resolving any investigation or reaching settlement with respect to corporate wrongdoing. The Yates memorandum extends beyond federal agents who are considering criminal charges against companys or individuals. The Memorandum specifically states that the concept of consideration of individual liability should extend to governmental subdivisions that are responsible for assessing potential civil liability, monetary penalties, program exclusion and other remedies short of criminal prosecution. Government actors are compelled to consider individual monetary responsibility regardless of whether or not the individual has the ability to satisfy the potential award.

Clearly the stakes have gone up for individuals who are involved in companies that commit wrongdoing. In order to receive benefits of having cooperated with governmental investigators, a company must provide all information relevant to individual liability. This requires the company to conduct a robust internal investigation of all potential subjects and to bring the investigation to resolution with respect to each such individual. As a practical matter, when allegations of wrondoing are made, a company investigation will need to broadly consider potential wrongdoing of any employee for which there is any reasonable basis to believe may have been involved in wrongdoing. The incentive of the company will be to be overly broad in its consideration of potential investigatory subjects. This means that corporate employees are exposed to a much higher risk of coming onto the radar of a possible internal investigation. If the individual raises to the level of being a possible “subject,” the investigation will go even further.

In effect, Federal policy regarding prosecution and civil remedies has placed the company’s compliance program in the position of having to broadly consider potential wrongdoing of its employees whenever issues are identified. This is not only to avoid potential criminal exposure, but also to mitigate potential claims for civil liability under the False Claims Act, monetary penalty regulations and other possible civil exposure. This change in Federal policy has a number of impacts on the compliance and ethics program of the company. Of primary importance is the process that is used by the company to investigate employees and contractors who are potential individual wrongdoers. In the past, corporate employees could normally rely on not being the target of criminal or civil liability because the focus was largely on corporate liability. Investigation policies were naturally geared toward gathering information from employees who were more or less alligned with the interests of the company. This dynamic has now changed. A company will much more frequently be in a position of having to hunt for individual wrongdoing and disclosing that wrongdoing to governmental investigators as a condition of receiving cooperation benefits.

This makes it significantly more important for the compliance program to include detailed and standardized processes for conducting internal investigations and reporting the results. Frankly, most compliance investigation policies are not adequately robust to mitigate risk under the new Federal enforcement regimen. Company compliance officers should be reviewing their investigation policies now to bring them up to the standards that are required under the new Federal policy. The standardized investigation process should be defined in detail. There should be detailed requirements for providing corporate “Upjohn” warnings to employees who are questioned. Guidelines for maintaining privilege should also be considered among other items.

Perhaps most importantly, companies should not be lulled into thinking that nothing has changed. The change in federal enforcement policy is an issue that must be brought to corporate management, compliance committees, and the board of directors. In short, this is a “board-worthy” issue that requires action to be taken to at least review, and in most cases make significant revisions, to investigation policies and perhaps other aspects of the corporation’s compliance program.

John Fisher, CHC, CCEP

Ambulatory Surgery Centers – Federal Settlement Highlights Safe Harbor Requirements

Monday, September 29th, 2014

ASC Investments Safe HarborsA Tennessee based ambulatory surgery center company has agreed to pay damages to a former employee who filed a suit alleging that physician investments in local surgery center entities violated the Anti-kickback Statute.  The case highlights some of the unique kickback issues that are present in ambulatory surgery center structure.  Specifically, the case demonstrates how investment terms that are intended to assure compliance with the safe harbor regulations under the Medicare Anti‑Kickback Statute (42 U.S.C. § 1320a-7b(a)-(b)) can create evidence of non-compliance if the initial terms of the offering relate, in whole or in part, to the volume or value of expected referrals from the investor in the ASC venture.

In order to comply with safe harbor requirements, ASCs must generally require investing physicians to use the facility as an extension of their medical practices.  However, if the terms of the investment are based on the volume or value of referrals, those same requirements become evidence that referrals are being required in exchange for remuneration.  In the Tennessee case, the ASC management company purchased controlling interests in local surgery center entities at a high multiple of earnings.  Physicians who were referral sources were offered investments at less than 1/3 of the value that was applicable to the non-referring management company.  That differential in value was evidence of “remuneration” under the Anti-kickback Statute and also indicated that investment terms were more advantageous based on expected referrals.

Structuring ambulatory surgery center investments to comply with Anti-kickback requirements is an extremely complex task.  Indications of compliance can become evidence of non-compliance depending on initial investment terms.  Cases such as the Tennessee case illustrate the problems that can occur when safe harbor requirements are not complied with and when decisions on investment or exclusion are made based on past or anticipated referrals.  The Tennessee case also illustrates how these issues come to light.  The Tennessee case was filed as a whistleblower case by a former administrator of one of the local surgery centers who walked away with a settlement in the millions of dollars.

We have published a more complete analysis of the Tennessee case which you can access through the following link   ASC-Investment-Federal-Case

Is your EHR Donation Agreement in Compliance?

Friday, May 23rd, 2014

The EHR donation regulations allow certain qualified entities to provide nonmonetary remuneration to physicians and other health care providers to obtain electronic health information systems without violating the Anti-Kickback Statute or the physician self referral laws.  Hospitals and other organizations have structured EHR donation programs around the existing exception.  The regulations that permitted hospitals to make payments on behalf of physicians for EHR technology was set to expire on December 31, 2013.

The Center for Medicare and Medicaid Services released final regulations on December 27, 2013, which extended the protections of the EHR donation regulations through December 31, 2021.  However, it is important that providers examine their EHR donation agreements to determine whether continued payments under the agreement comply with federal law.  Many EHR donation contracts contain automatic expiration clauses that terminated the agreement on December 31, 2013.  If those agreements have not been properly extended, payments that may have occurred under those agreements following expiration may raise compliance issues.

Providers should not assume the continued payments are protected under the extended EHR donation expiration date.  In many instances, entering a new agreement or amendment of existing agreements will be required in order to continue to qualify donation amounts under the application exceptions.

OIG Self Disclosure Protocol Revisions Explained

Tuesday, April 8th, 2014

OIG Self Disclosure Protocol – OIG Explains at HCCA Conference

self disclosure protocols 2013 update oigAn OIG representative spoke about the new revised self disclosure protocols at a recent HCCA seminar that I attended.  The OIG felt it was appropriate to be more transparent regarding the process for self disclosure.  A few points were highlighted in this session:

  1. The OIG held its own feet to the fire by acknowledging the 1.5 damage multiplier when the self disclosure protocol is used.  They will need to justify if they are going to ask for more.
  2. Self disclosure is not an admission of liability.  However, you will be required to make a settlement and payment if you make a self disclosure.
  3. Self disclosure is not to be used to get an interpretation of whether your activity was wrongful or whether a law was violated.
  4. A decision not to self disclose leaves you open to potential whistle-blower complaints.  False Claims Act potential remains for the ten-year False Claims Act statute of limitation.
  5. Repayment can go to the fiscal intermediary if there is no wrongdoing but there is still an overpayment.
  6. Self disclosure requires disclosure of how your investigation was conducted.  If the investigation was conducted under privilege, you will need to disclose privileged information on investigation under privilege.
  7. The only party that can give you a False Claims Act release is the Department of Justice.


Referral Fee Fine Despite Kickback Concerns – OIG Advisory Opinion 14-01

Friday, January 24th, 2014

Independent Placement Agency Fee By Senior House Approved By OIG

senior housing kickback oig opinionThe Office of Inspector General posted its first advisory opinion of the year this past Tuesday.  OIG Advisory Opinion No. 14-01 responds to a nonprofit senior housing and geriatric care provider’s question of whether it may pay an independent placement agency a fee for referring new residents to its facilities.  Despite concerns that the arrangement could potentially generate prohibited remuneration under the anti-kickback statute, the OIG opinion states it would not impose sanctions in connection with the arrangement.

Here’s the facts:

  • The senior care provider operates 11 senior residential communities, two skilled nursing facilities, and a management company.
  • The residential communities offer to their residents various services – including skilled nursing services (e.g. wound care) and help with daily living activities (e.g. housekeeping).
  • A Medicaid program pays for services provided to residents in three of the residential communities.  Other than this, the skilled nursing facilities are the only entities that provide federally reimbursed health care services to residents.
  • Two of the residential communities pay an independent placement agency for referring new residents.  The placement agency receives a fee for every referral – a percentage of the new resident’s charges for his or her initial month or two.
  • The placement agency is prohibited from referring, and the residential communities are prohibited from accepting, residents who are known to rely on Medicaid, Medicare, or other state or federal funding.
  • Neither of the residential communities provide services reimbursed by Medicare.

Although the two residential communities pay a placement fee for a resident who may in the future receive federally reimbursed services from one of the senior care provider entities (which would potentially be illegal remuneration under anti-kickback laws), the OIG advisory opinion indicates that this referral arrangement is fine because:

  1. The placement fee is calculated only considering initial rent and services.
  2. The contracts underlying the arrangement prohibit both placement and acceptance of potential residents who are known to rely on government funding for their health care.
  3. Neither of the residential communities using the referral arrangement provide services reimbursed by Medicare.
  4. The senior care provider does not track referrals or common residents or patients nor do they limit their residents’ choice of providers.

Please feel free to contact John Fisher, CHC, CCEP, in the Ruder Ware Health Care Industry Focus Group for more information.

Anesthesia Service Profit Centers – OIG Advisory Opinion 13-14

Monday, November 25th, 2013

Anesthesia Billing Arrangements – New OIG Advisory Opinion 13-14

anesthesia billing advisory opinionThe Office of Inspector General has released a new advisory opinion addressing the implications of a contract for anesthesia services between an anesthesiology group and a psychiatry group.  OIG Advisory Opinion No. 13-15 was published on November 15, 2013.  The opinion illustrates the OIG’s difficulty with arrangements between existing anesthesiology groups who are forced to forego the right to bill for their professional fees in order to provide anesthesia services for patients of a provider who is not historically in the business of providing anesthesia services.  This type of arrangement seems to be arising more frequently as provider groups search for ways to capitalize on additional revenue streams from their existing patient base.

Opinion 13-15 involved a psychiatry group who proposed a  contract with an anesthesiology group to provide additional anesthesia coverage for patients of the psychiatry group who were undergoing electroconclusive therapy procedures.  Under the contract, the anesthesiology group reassigned its rights to bill and collect for its anesthesia services to the psychiatry group.  The anesthesia group agreed to accept a fixed per diem rate for providing anesthesia services for the psychiatry group’s patients.  The arrangement permitted the psychiatry group to profit from the difference between anesthesia billings and the per diem fee paid to the anesthesia group.

The OIG found that this arrangement created a risk of violating the Anti-Kickback Statute.  The OIG noted that the per diem amounts the psychiatry group would pay to the anesthesia group would not qualify for protection under the safe harbor for personal services and management contracts for a number of reasons, including the aggregate compensation to be paid over the term of the agreement would be neither set in advance nor consistent with fair market value.  Additionally, the safe harbor protects only payments made by a principal (here, the psychiatry group) to an agent (here, the anesthesia group).  The safe harbor does not protect the remuneration from the anesthesia group to the psychiatry group that is of issue in this case.

After determining that there was no safe harbor available to protect the arrangement, the OIG went on to analyze the risk that the arrangement would present under the Anti-Kickback Statute.  The OIG concluded that the arrangement appears to be designed to permit the psychiatry group to indirectly receive compensation, in the form of a portion of requestor’s anesthesia services revenues, in return for the psychiatry group’s referrals of patients to the anesthesia group.  The OIG concluded that the arrangement presents a significant risk that the opportunity to generate profit on anesthesia services would be in return for referrals.

Advisory Opinion 13-15 is just the latest in a long line of releases that casts a shadow on attempts of one provider group to profit from captive referrals for services that it does not ordinarily provide.  The OIG seems to permit the legitimate extension of services by groups like the psychiatry group at issue in 13-15.  The OIG had no difficulty with the psychiatry providing anesthesia services by a psychiatrist member of the psychiatry group who was also qualified to provide anesthesia services.  To contrast, the OIG is obviously suspicious of arrangements that permit the non-anesthesia group to profit from the services of the anesthesia group.  The consequences of a violation under the Anti-Kickback Statute can include both criminal and civil damages.  As a result, providers need to be extremely cautious about entering into the type of arrangement that appears contrived to permit a profit to be made from services that are normally billed by an anesthesia provider.

Please feel free to contact John Fisher, CHC, CCEP, in the Ruder Ware Health Care Industry Focus Group for more information.

Block Leasing of Group Practice Facilities – Anti-Kickback Statute Risks

Friday, October 18th, 2013

Block Leasing of Ancillary Services – Risks Under The Anti-Kickback Statute

Block Lease Anti-kickback StatutePhysician groups will often look for ways to share the expenses of excess capacity of high cost center ancillary services.  One approach that is sometimes considered is leasing the ancillary center to another physician group. 2009 changes to the Stark Regulations established new requirements for part-time leasing arrangements.  “Per use” arrangements are now prohibited under the Stark Law which applies when the ancillary service is categorized as a designated health service under the Stark Law.  Comments to the 2009 Stark Regulations maintained an opening to permit some  “block leasing” or “time sharing” arrangements.  CMS left open the parameters that must be met making compliance a bit tricky.  But block leasing arrangements are at least possible in theory under the Stark Law.  Until a few years back, block leasing arrangements were a relatively common way to permit separate physician groups to, in effect, share an ancillary service line. An OIG Advisory Opinion that was issued in 2010 cast a significant shadow on block leasing arrangements; including those arrangements that previously appeared to be legitimated under the Stark Law.  The 2010 Advisory Opinion refused to endorse a block leasing arrangement between two physician groups.

OIG Advisory Opinion 08-10, an oncology group asked the OIG to approve a block lease of  a radiation therapy facility to various different urology groups.  The block lease included all equipment, facility, and staff necessary for the urology group to provide radiation therapy services for their own patients.  The block leasing arrangements were structured in a manner suggested by CMS comments to be legitimate under the Stark Law.   Even though the arrangement likely complied with the Stark Law, the OIG raised concern and refused to endorse the arrangement under the Anti-Kickback Statute.  The OIG expressed concern that the block lease was nothing more than a  vehicle to permit the urology groups to profit from their referrals for radiation therapy services.  The OIG seemed to focus on many of the same factors that it had previously identified in joint venture arrangements.  For example, the OIG pointed to the fact that the oncology group was an existing provider of radiation therapy services and that the urology group was a natural referral source for those services.  Viewed from this angle, the OIG considered the block leasing arrangement to be nothing more than a cleaver way to compensate the urology group for its referrals.

The OIG noted that the opportunity for the urology groups to profit from radiation services amounted to “remuneration” under the anti-Kickback Statute.  The OIG looked past the fact that at least part of the arrangement complied with a safe harbor and instead focused on the overall “big picture” of the arrangement.

Advisory Opinion 08-10 related to a radiation therapy center.  The reasoning in 08-10 applies equally to all types of ancillary services.  Because the OIG’s concerns arise from the Anti-Kickback Statute, the concept is not limited to “designated health services” under the Stark Law.  Leasing any ancillary service and providing the opportunity for a physician group to profit from billings for that service are called into question by the opinion.

John H. Fisher

Health Care Counsel
Ruder Ware, L.L.S.C.
500 First Street, Suite 8000
P.O. Box 8050
Wausau, WI 54402-8050

Tel 715.845.4336
Fax 715.845.2718

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