No Medicare = No Feds… Not!

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By: Jeff Cohen

In the “good old days” (in healthcare, that means more than a week ago), it was understood that if a client didn’t accept any state or federal healthcare program dollars (e.g. Medicare, Medicaid, CHAMPUS, TriCare, Supp Plans), they would not expect to get a “knock on the door” from any federal regulatory authority.  No federal or state healthcare program dollars used to mean the client would only tend to hear from state regulators or commercial payors.  Those days are done!

Federal law enforcement is increasingly pursuing alleged criminal wrongdoing in the “non-government” healthcare space.  One of their favorite weapons is 18 U.S.C. 1347, the Federal Healthcare Fraud Statute, which gives federal law enforcement broad enforcement authority with respect to suspected wrongdoing involving interactions between healthcare providers and commercial insurers. Continue reading

Breaking Down Legal Buzzwords: Fair Market Value & Commercial Reasonableness

book-stacks-colorful.jpgBy: Jackie Bain

Federal fraud and abuse laws often require that arrangements between health care providers are “fair market value” and “commercially reasonable.” And while these terms look like legalese and are easy to overlook, in fact, they are important. For example, the Federal Stark law requires strict compliance with its terms. A physician may enter into a prohibited arrangement with the intention that it falls within an exception to the law. If, however, the arrangement is not fair market value, the physician’s arrangement would violate the law, subject the physician to fines and risk the physician’s ability to participate in MedicareContinue reading

Recovery Business Industry Forced to Grow Up Fast

bcbs lawsuitBy: Jeff Cohen

When Horizon Blue Cross/Blue Shield of New Jersey blasted Avee Laboratories in connection with a variety of business practices, some of which included kickback violations (in connection with the provision of POCT cups), businesses in the drug and alcohol recovery space took notice.  With the recent FBI raid on a Palm Beach County sober house and the amped up attention of managed care payers to clinical lab testing, the industry is reeling!  The good news, however, is that these recent developments, along with increased payor scrutiny (and payment denial!), is a call to compliance that has long seemed inapplicable to an industry that has been able for many years to operate with simplicity not found in other segments of the healthcare business community.  Where facilities once viewed DCF as the only regulatory parent they had to please, they are now learning there is a far greater degree of regulatory complexity to be considered; and they are rushing towards compliance. Continue reading

Standing Orders in Drug Treatment Programs: How to Avoid Waving a Red Flag

so 2014By: Karina P. Gonzalez

Medical necessity is the driving force for the payment of any service, but is especially worth noting when discussing laboratory testing. Standing Orders for urine drug testing in residential treatment settings are not prohibited, per se, but this practice must be built upon detailed policies and procedures that are precisely followed and are directed to individual patient needs.

The following conditions may help to determine whether Standing Orders are appropriate in a residential treatment setting: Continue reading

Collect Now…or Pay Later

bonus calculationBy: Karina P. Gonzalez

Though it can be tempting to offer help to patients in this era of sky high healthcare costs, out-of-network physicians must remember that they should not only be collecting copayments and deductibles from their patients at the time of service and before they leave the office, but also that collecting these payments is their obligation. For physicians and other providers who engage in the practice of failing to collect payments there is a significant legal exposure under federal and state laws including civil litigation brought by commercial health plans, managed care organizations and medical benefit managers regarding routine waiver of these payments. Continue reading

Point of Care Test Cups Held to be a Prohibited Benefit to Physicians Who Could Not Otherwise Bill for Them

pee in a cupBy: Jackie Bain

When a physician cannot bill for test results, and a company offers to give that physician those test results for free, a Florida Federal Court has ruled that the company is offering the physician prohibited remuneration.  On May 5, 2014 the Middle District of Florida granted partial summary judgment on the latest motion in a contentious litigation between Ameritox Ltd. and Millennium Laboratories, Inc.  Ameritox and Millennium are competitors and clinical laboratories that screen urine specimens for the presence of drugs.

Millennium provided free point of care testing cups to physicians, who use the cups for initial testing and then return the cups back to Millennium for confirmation tests.  Physicians do not bill patients or insurance companies for the point of care tests. Continue reading

Toxicology Labs Owned by Referral Sources – Is it Really so Wrong?

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By: David Hirshfeld & Jeff Cohen

Lately we’ve noticed an uptick in criticism of toxicology labs that are owned by the substance abuse treatment programs and recovery residences that refer to them.  Sadly, this criticism seems to be coming from within the addiction and recovery industry itself.  In addition to being absolutely necessary for substance abuse treatment, toxicology screens have become a meaningful source of revenue that helps to fund treatment programs and scholarships for those who cannot afford to pay the full cost of treatment.  We cannot understand why the substance abuse treatment industry would want to help pull the rug out from under itself, but that seems to be what is occurring.  Under the current state of Florida law, toxicology labs can be owned by their referral sources without much risk if that arrangement is properly structured. 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.”

Continue reading

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.

District Judge Hits Halifax Hospital with $26M Fine in Qui Tam Suit

bonus calculationA November 13th order from U.S. District Judge Gregory A. Presnell hit Halifax Hospital in Daytona Beach hard and has implications for all physician bonus compensation arrangements.  The background of the whistleblower case involves: Continue reading