When is Marketing An Illegal Kickback?

kickbackHealthcare professionals and businesses are routinely barraged with people who claim to be able to generate business for them.  The business of healthcare is like none other in its abhorrence of anything that even smells like payment for patient referrals, so professionals and businesses alike have to be extremely cautious and well advised in crafting marketing and related business-enhancing relationships.

The federal Anti Kickback Statute (“AKS”) is a criminal law that arises in the context of individuals and entities that pay or receive anything of value in exchange for referring a patient whose care is compensated in any way by a state or federal healthcare program.  Violations of the statute are punishable by a maximum fine of $25,000 and/or imprisonment up to five years.  Federal courts have applied the statute to any arrangement where even one purpose of the arrangement was to obtain money for the referral of services or an attempt to induce additional referrals. Its exceptions (“Safe Harbors”) include permissible arrangements for independent contractors and employees, both of which are elusive because of the common requirement that the arrangement not vary based on the value or volume of business between the parties.  The “value or volume” aspect of the regulations flies in the face of percentage based compensation arrangements (which seem to be the rule in marketing relationships). Continue reading

Justice Department Hits Physician Owned Distributorships (PODS)

money doctorFor the first time, the Department of Justice (DOJ) has fired a shot at a physician owned distributorship (POD).  In the case, the DOJ suit claims that the ownership interest of a neurosurgeon in a spinal surgery device distributorship has caused him to perform unnecessary surgeries.

PODs have been the source of considerable controversy for years.  A couple years ago, they caught the attention of Congress.  The Office of Inspector General of the Department of Health and Human Services (“OIG”) has even issued a Fraud Alert making clear their dislike of PODs and sending a clear shot across the bow of those who are in that industry.  In 2006, the Office of the Inspector General of HHS and CMS expressed major concerns about PODs, and cited concerns about “improper inducements.”  At that time, the OIG stopped short of prohibiting them, but called for heightened scrutiny.  CMS itself has stated that PODs “serve little purpose other than providing physicians the opportunity to earn economic benefits in exchange for nothing more than ordering medical devices or other products that the physician-investors use on their own patients.”

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Montana Hospital Fined for Payments to Doctors

300x300_alertThe Justice Department settled a case against a Montana hospital for nearly $4 Million based on allegations that the hospital improperly paid physicians who referred to the hospital.  The allegations arise out of a medical office building project in which the hospital and referring physicians were co-owners.  The particular areas of wrongdoing targeted by the DOJ included below market lease rates.  The case is odd in that (1) it is not the usual “pay for referral” sort of case traditionally pursued against parties, and (2) ensuring fair market value and commercial reasonableness in rental arrangements of healthcare providers is a key element in terms of compliance.

Major Criminal Case in Palm Beach County Directed at Hormone Business

Telemedicine hormoneA trial underway in West Palm Beach will have serious impact on hormone replacement therapy (HRT) businesses around the state.  HRT businesses are exploding around the state and country.  The underbelly of the business exists where business owners do not approach it as a medical service deserving of the same seriousness (clinically and legally) as any other healthcare service.  Four of the doctors involved have already pled guilty to conspiracy charges and were placed on five years probation.  One of the doctors relinquished his license.

The allegations involved in the case shed light on some of the more nefarious aspects of HRT business, which in this instance include— Continue reading

The Cost of Inaccurate Medical Records

0607-for-the-record-1690On July 8, 2013 the United States Attorney’s Office for the Southern District of Florida issued a Press Release with the headline “Supervisor of $63 Million Health Care Fraud Scheme Sentenced in Florida To 10 Years in Prison”. The Defendant, a 51 year old employee of the Healthcare Provider was the director of medical records. The employee was a certified medical records technician and was found to have overseen the alteration, fabrication and forgery of documents that were used to support claims submitted to Medicare and Medicaid. In addition, the employee was found to have directed therapists to fabricate documents and forged signatures on documents. The defective medical records were used to support claims to Medicare and Medicaid in excess of 63 million dollars. Continue reading

The Effect of being excluded from Participation in Federal Healthcare Programs

blacklist

The Government recently clarified six areas related the effect of exclusion from participation in Federal Healthcare Programs.

  1. Switching professions during a period of exclusion does not change the exclusion and payment prohibitions.
  2. You can accept a referral from an excluded provider as long as the excluded provider does not provide any services to the referred patient.
  3. Being excluded along with the payment prohibitions extends beyond just direct patient care.
  4. If you are excluded you cannot provide either administrative or management services to non excluded provider.
  5. Excluded providers cannot even provide volunteer services, and
  6. Excluded providers can work for non excluded providers as long as the services they provide are furnished to non-federal healthcare program patients.

Providers need to screen every professional, employee and contractor they do business with to insure they are not on the Exclusion list. It is always best to check the list of Excluded Individuals/Entities (LEIE) for anybody you work with.

What’s Hot on the OIG’s Workplan for 2013

 It’s that time again, when the OIG publishes its annual Work Plan for the coming year, providing insight and a proverbial “heads up” on the areas where potential concern and program integrity efforts are being focused.  Many of the focus areas are ongoing or have been the subject of previous Work Plans, and come as no surprise.  Nevertheless, it is important for practitioners to familiarize or reacquaint themselves with the 2013 Work Plan projects in order to recognize and prioritize compliance areas currently on the OIG’s radar.

Of particular interest for practitioners are the various OIG review projects involving ancillary services.  For example, the OIG is looking at outpatient therapy services by independent therapists, and will focus on high utilization of physical therapy to determine if claims were reasonable, medically necessary and properly documented.  Similarly, high-cost diagnostic radiological tests ordered by primary care and specialty physicians are being reviewed to determine whether utilization rates match industry practices.  The OIG also will review Part B payments for imaging services with an eye towards determining if utilization rates reflect industry practices and if practice expenses components within payment rates are commensurate with costs incurred.  Electrodiagnostic testing (needle electromyogram and never conduction) is a new area under review, particularly with respect to utilization rates by specialty, the concern being that such services are vulnerable to abuse and inappropriate financial gain.

Errors in billing and claims administration are also the subject of OIG review, with perennially recurring projects directed at incident-to services, place of service coding and E/M services.  A 2009 OIG review of prior claims found that non-physician practitioners often were not properly supervised or that unqualified non-physician practitioners performed services, in each case, resulting in payments that were not compensable.  Since Medicare payment for services in a non-facility setting, like a physician’s office, is often higher than in the rate that applies in other service locations, there is also concern over whether claims for Part B services performed in ASCs and Hospital outpatient departments were coded with the proper place of service.  Another, more recent area of focus involves the documentation supporting E/M services and questions whether Electronic Medical Record documentation processes may result in “cloned” entries (and potentially improper claims) rather than a deliberate process of selecting proper codes based on content of actual service.   Part B payment for chiropractic services are also being reviewed, with this area being the subject of ongoing OIG concern since chiropractic maintenance therapy being considered not medically necessary.

Apparently echoing a series of fairly recent OIG Advisory opinions, the 2013 Work Plan also identifies Polysomnography and Sleep Disorder Clinics as areas of potentially questionable billing patterns and possible overutilization.  High utilization rates have also raised questions regarding whether services are duplicative of diagnostic testing performed previously by attending physicians.  Another ongoing and increasing focus of OIG scrutiny is physician-owned distributors (POD) of high utilization orthopedic implant devices.  The Work Plan for 2013 specifically identifies PODs which provide hospitals with spinal fusion implant devices as being under OIG review to determine if such arrangements are associated with high utilization.

These are just some of the many areas of OIG review with which practitioners and facilities alike should become familiar in order to remain current with the health care regulatory compliance curve.