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Archive for the ‘Safe Harbor Regulations’ Category

Government Intervenes In Physician Compensation Case Alleging Compensation For Referrals

Wednesday, July 10th, 2013

Physician Compensation Stark LawThe Department of Justice has announced that it will intervene in a  False Claims Act lawsuit against a Mobile, Alabama based health system and diagnostic facility.  The lawsuit alleges that the provider billed Medicare for services referred by a group of physicians, in violation of the Stark Law and Anti-Kickback Statute.

The Stark Law forbids a clinic or hospital from billing Medicare for certain services referred by physicians who have a financial relationship with the entity.  The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of services or items covered by federal health care programs, including Medicare.  The lawsuit alleges that the physician group was improperly paid  compensation that included a percentage of the money collected from Medicare for tests and procedures the doctors referred to the clinic.

The original lawsuit was filed in  2011 by a former physician in the group under the qui tam, or whistleblower, provisions of the False Claims Act.  Those provisions authorize private parties to sue on behalf of the U.S. and receive a portion of any recovery.  The act also permits the government to intervene and take over a lawsuit.   In this case, the government has decided to intervene in the case.

The government’s investigation has been a coordinated effort by the Department of Justice, Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Southern District of Alabama; the Department of Health and Human Services Office of Inspector General; and the FBI.

This case illustrates the risk of providers of designated health services compensating physicians based on the value of referrals.  The Stark Law permits physicians to be compensated based on their personal production in most cases.  However, when payments cross the line to include the fruits of referrals for the technical component of their services, the Stark Law is implicated.  It appears that in this case, the compensation arrangement is alleged to have crossed the line to include the value of referrals.

Physician Practice Compliance Programs – Practical Approach

Wednesday, May 22nd, 2013

Physician Practice Compliance Programs – A Practical Approach

physician group compliance programsThere is currently a lot of hype out there about the need for physicians to establish compliance programs. I agree that each practice should have a compliance program in place. However, I do not agree that the compliance program necessarily needs to be lengthy or complicated. In fact, I believe that it is most important to be focused in on the key elements that are applicable to your practice and that can be followed given the resources that are available. Simply adopting precanned policies will do little more than create a roadmap of items that you cannot possibly achieve.

So what should be included in your compliance program? Your program should certainly include reference to the seven basic elements that are commonly identified as being required in a compliance program. You should describe the steps that you will take to assure that each of the seven elements are achieved. You will also want to prepare a basic code of conduct that reflects your commitment to creating a culture of compliance.

The Office of Inspector General published guidance for physician practice compliance programs in October of 2000. You should read those guidelines and integrate the aspects of the guidance that applies to your practice. The OIG guidance also includes a description of the seven basic compliance program elements. The seven basic elements of a compliance program include:

1. Internal auditing and monitoring,
2. Compliance processes and standards,
3. Appointing a compliance officer or compliance responsible individual,
4. Providing education and training to your staff,
5. Responding to compliance issues in an appropriate fashion and taking corrective action,
6. Creating an open system of communication of compliance issues, and
7. Taking appropriate disciplinary action with respect to compliance infractions.

You will also want to adopt policies to implement some of these general areas. For example, it is crucial that your compliance program include a strong anti-retaliation policy and a system that permits employees to register anonymous complaints. Your compliance policies should also be integrated into your employment and disciplinary procedures so that employees are made aware that non-compliant behavior will not be tolerated. Your policies need to be uniformly applied, from the top to the bottom of your organization.

Applicable guidelines recognize that your compliance program may be scaled to the size of your organization. However, scalability does not permit you to ignore or overlook specific areas that present risk to your business. Your program, regardless of its size or the number of words that are used to convey your standards, must be uniformly and consistently followed and can under no circumstances be left on the shelf collecting dust.

In Office Ancillary Service Exception to Stark – 2014 Budget Proposal

Friday, May 17th, 2013

Budget Would Limit “In-Office” Ancillary Service Exception to Stark Law 

radiology in office ancillary servicesPresident Obama’s 2014 proposed budget proposes to limit the types of ancillary services that physicians can provide in their offices.  Physician practices rely on the “in-office ancillary service” exception to the Stark Law to permit certain designated health services that are performed in their offices to be billed to governmental health programs.  The Obama budget proposes the possible elimination of certain types of services from protection under that exception, including physical therapy, radiation therapy, and advanced imaging services, from the list of services that can be provided in a physician’s office and billed without violating Stark Law.

The budget proposal suggests that physicians may be permitted to continue to provide these services in their offices if certain “accountability criteria” are met.  The contents of the accountability standards are not well defined.  Presumably, the standards would dictate standards for medical necessity or appropriateness.  Whatever the standards require, it appears that the judgment of physicians would be further regulated by these requirements if they are passed into law.

Physicians who provide these types of services in their offices should monitor the course of budget legislation as they plan the future of this line of their business.

HCCA Compliance Institute Presentation On Compliance Role In Mergers and Acquisitions

Friday, May 3rd, 2013

John Fisher Presents at National Health Care Compliance Institute in Washington, D.C.

John Fisher, JD, CHC

John Fisher, JD, CHC, CCEP

Ruder Ware health care and compliance attorney John Fisher was a featured speaker at the Health Care Compliance Association’s 2013 Compliance Institute.  The Institute was attended by nearly 3,000 compliance officers, attorneys, and vendors from across the country.  Mr. Fisher spoke on the topic “Compliance Issues in Mergers and Acquisitions.”

Mr. Fisher is certified in Health Care Compliance by the Health Care Compliance Association and in Corporate Compliance and Ethics by the Society for Corporate Compliance and Ethics.

Mr. Fisher’s presentation covered some of the following issues:

  • The role of the compliance officer in mergers and acquisitions.
  • Compliance related due diligence requests.
  • The scope of compliance due diligence.
  • Successor liability and assumption of liabilities by purchasers.
  • Compliance impact of deal structure and agreement terms.
  • Compliance effectiveness reviews in mergers and acquisitions.
  • Common due diligence compliance risk areas.

 

For more information on compliance and health law issues, visit our health care law blog at www.healthlaw-blog.com.

Self Disclosure Protocols Revised By OIG

Saturday, April 20th, 2013

Self Disclosure Protocols Revised By OIG

oig self disclosureThe Health and Human Services Office of Inspector General released revised Provider Self-Disclosure Protocol (SDP). The new protocols were released on April 16, 2013. We have not reviewed the protocols in detail at this point and will likely have further information once we review them in depth and compare to previous protocols.  It appears from an initial reading that there were changes in the scope of coverage when there is a violation of the Stark Law. There is also a minimum settlement amount.  More detailed guidelines governing what is applcable in initial submissions are also included.

Stay tuned for more information on the new self-disclosure protocols that were released by the OIG last week.

Electronic Health Information System Proposed Regulations Ancillary Providers

Monday, April 15th, 2013

Proposed CMS Rules Suggest Possible Future Changes To E.H.R. Donation Rules

ehr donation agreement proposed regulationsThe proposed regulations that were recently released by CMS and the OIG relating to electronic health record donations, provides a glimpse of what may be expected in the future.  Both agencies refer to concerns over “data lock” situations and donation agreements entered with clinical laboratories, DME companies, and other ancillary providers.  Although neither agency placed limitations on these arrangements in the current proposed rules, they both make it clear that they are looking closely at who should be a qualified donor under the donation regulations.

As they currently stand, the only effect of the proposed regulations would be (i) to extend the donation agreement sunshine deadline from December 31, 2013 to December 31, 2016, and (ii) to remove the requirement that software include electronic prescribing.  However, comment was solicited in other areas that make it pretty clear that we should expect the final rules to include other changes.

CMS appears to be considering what approach to take to address reports of clinical laboratories, DME providers and other ancillary providers using the Stark Law exception to enter into abusive arrangements.  CMS suggests that they may exclude certain classes of providers from being qualified donors.  They also allude to the possibility of adding an additional set of requirements to prohibit “data lock” situations.  They appear to be considering taking one or both approaches when final regulations are released.

For now, comments can be made to the proposed regulations.  Providers who have an interest in this issue might want to consider submitting comments in response to the OIG and/or CMS proposed regulations.  In the meantime, the discussions coming from the regulatory agencies cast a shadow over donation arrangements with many ancillary providers.  Even though the arrangements meet Stark Law and safe harbor provisions at the present time, it is not clear whether arrangements that are entered before the issuance of final regulations will qualify to permit extension of donation benefits beyond the first Sunset date of December 31, 2013.

Anesthesia Company Model Advisory Opinion 12-06

Monday, February 11th, 2013

Anesthesia Company Models and Advisory Opinion 12-06

Anesthesia Advisory OpinionAs previously reported on this blog, the Department of Health and Human Services issued advisory opinion 12-06 in June 2012.  This advisory opinion has an impact on many relationships between physician groups, ambulatory surgery centers and providers of anesthesia services.

Generally, the advisory opinion addressed the permissibility of the “company model.”  Under the company model, a physician group who provides surgical services will establish a separate company and provide ownership interest to an anesthesia group.  This structure is created in order for the surgery group to take advantage of some of the revenues from anesthesia services.  The jointly held entity is the billing provider for the anesthesia component of the care.

Advisory opinion 12-06 addressed the company model and found that such a model was potentially a violation of the Medicare Anti-Kickback Statute.  However, the advisory opinion did not go so far as to say that all anesthesia models were impermissible.  Each circumstance must be looked at under its specific facts.  It is often possible to structure these arrangements to take advantage of an Anti-Kickback Statute Safe Harbor or to otherwise minimize the risk to an acceptable level.

There has been a lot of talk in the industry following the release of advisory opinion 12-06.  Many sources are saying that this advisory opinion completely abolished the ability of a surgery group to be involved in anesthesia service revenues.  It is important that providers have a clear understanding of the true implications of advisory opinion 12-06 and the structures that are still permissible without creating unacceptable risk under the Anti-Kickback Statute.

Ruder Ware health care has advised physician practices and anesthesia groups regarding the structuring of permissible arrangements.  We have also represented providers and payors with respect to other types of anesthesia billing and contract matters.  If you have questions regarding advisory opinion 12-06, or any other legal issue pertaining to health care law, please contact us through the contact information on this blog.

OIG Advisory Opinion Approves Free Audiometric Testing

Wednesday, October 24th, 2012

The Office of Inspector General has issued a new Advisory Opinion regarding free tests that are provided by a hearing aid supplier. OIG Advisory Opinion 12-13 was requested by a hearing aid supply and service chain which provided a free hearing exam as part of an effort to promote its sales of hearing aids. Free exams encompassed certain portions of tests that were precursors to Medicare reimbursable services. However, the patient was not charge for the pre-initial testing.

The OIG found that the provision of the free test would be unlikely to influence a beneficiary’s decision to select the provider and did not violate the Medicare Anti-kickback Statute. In many cases, the provision of free services can be considered to be remuneration that is intended at least partially to influence referrals for Medicare reimbursable services. Free services can violate the federal Anti-kickback statute which imposes civil monetary penalties and in some cases even criminal penalties when remuneration is intended to induce referrals.

The OIG considered a number of factors in reading the conclusion that the performance of pretesting did not violate the Anti-kickback statute:

1. Free hearing exams were offered to customers without regard to their form of payment or whether the customers agreed to purchase any goods or services from the company.

2. Free tests were not billed to the Medicare program and the free exam did not automatically qualify a patient for Medicare coverages.

3. The provider did not recommend that customers receiving the free hearing exam also undergo Medicare reimbursable audiometric testing.

4. The provider did not attempt to obtain a prescription or order for Medicare reimbursable audiometric testing on behalf of the customer.

No physicians or other employee or other providers were employed to prescribe or order items or services for which a governmental healthcare program could be billed.

The advisory opinion did not go into an in-depth analysis under the Anti-kickback statute but merely focused on whether the arrangement could lead to the imposition of civil monetary penalties. This opinion is an example of a case where free services are offered to Medicare beneficiaries but the arrangement is properly structured and approved by the office of Inspector General. Unfortunately, the advisory opinion process limits enforceability to only the party requests the opinion. It is not binding to protect any other party. However, the Advisory Opinion does provide insight to how the OIG may analyze similar scenarios and is useful in assessing the risk to other providers who may be contemplating similar arrangements.

OIG Posts 2013 Annual Work Plan

Wednesday, October 3rd, 2012

2013 Work Plan Published By The Office of Inspector General 

Yesterday (October 2, 2012), the  HHS Office of Inspector General (OIG) published its Work Plan for Fiscal Year 2013.  The work Plan is published annually by the OIG and contains brief descriptions of activities that OIG plans to initiate or continue for fiscal year 2013.  The Work Plan has become a source for health care providers to identify potential risk areas within their organization so that thay can tailor their compliance efforts to address the issues that the OIG believes are important.

We are in the process of reviewing the OIG 2013 Work Plan and will post a summary or a series of articles over the upcoming days.

Physician Compensation – Stark Law – Covenant Healthcare Settlement

Wednesday, February 15th, 2012

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.

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

Ruder Ware is a member of Meritas Law Firms Worldwide

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