Florida physicians are being approached to become owners of pharmacies to which they may refer, often compounding pharmacies, but may be unaware of the regulatory issues involved. Physicians need to be aware of the core laws that apply, which include the Florida Patient Self Referral Act (FPSRA), the Florida Anti Kickback Statute, the Patient Brokering Act and the Federal Investment Interest Safe Harbor. Continue reading
In December, 2012, the OIG reviewed and frowned upon two proposed scenarios, each of which had the effect of shifting to ASC-owner/surgeons a portion of the fees earned from anesthesia services. The OIG has done it again!
In an era of tremendous stress in the healthcare marketplace, it’s not surprising that some surgeons were willing to push the envelope to capture anesthesia fees they otherwise would not receive. Traditionally, physician-owned surgery and endoscopy centers contract with anesthesia providers on an exclusive basis and let the anesthesiologists separately bill for anesthesia services. Anesthesiologists kept whatever was collected for anesthesia services; and surgeons kept whatever was paid for their services. Plus, if the surgeon was also an owner of the center, the surgeon received a portion of the profits left over from the facility or technical fee. In the past several years, however, center-owning surgeons are often looking for ways to share anesthesia fees. The latest OIG Advisory Opinion (13-15) may cause some surgeons to back down or to reevaluate the long-term viability of the so-called “Company Model.” Continue reading
A recent lawsuit by Horizon Blue Cross/Blue Shield of New Jersey has the potential to cripple point of care testing arrangements often employed by drug and alcohol treatment centers. At risk is not only the roughly $36 Million sought to be recouped by BC/BS, but also perhaps the many millions more which may be claimed by other payers as well.
H.R. 2914 is a bill filed by Congresswoman Speier that is intended (among other things) to prohibit medical practices providing the following sorts of medical services (“Non-ancillary Services”) to their own patients—
*The technical or professional component of (i) surgical pathology, (ii) cytopathology, (iii) hematology, (iv) blood banking, or (v) pathology consultation and clinical lab interpretation services
*Radiation therapy services and supplies
*Advanced diagnostic imaging studies (which include for instance MR and CT)
*Physical therapy services
In an effort to stay competitive, hospital physician recruitment deals are on the rise. These arrangements are permitted under applicable federal law (the Stark Law) and are a core tool in hospitals’ tool chest. These arrangements generally involve the hospital “loaning” to the physician or to a practice employing the doctor the costs associated with that doctor joining. Since the ramp up costs associated with hiring or a physician just relocating to a new community can be steep (especially as payer contracts can take many months to set in place), hospital financial assistance can be critical. How do they work? Simple—
1.The hospital guarantees, based in part on MGMA salary surveys and other cost data sources, that the physician will collect at least $X each month for a period of normally up to 12 months;
2.The doctor agrees to remain in the hospital’s service area for 2-3 years, during which time, the amount loaned by the hospital is forgiven.
Though it may sound too good to be true, there are drawbacks, including:
1.There are pretty severe limitations placed on noncompetes for hospital recruited physicians which can be daunting to practices hiring them;
2.Unless carefully worded and negotiated, recruited physicians may find themselves with high expectations and little delivered in terms of the marketing and other support required to create a successful practice. Not being financially successful is no defense to the requirement of staying in the hospital community for several years to write off the loan;
3. Some hospitals offset their business risk by taking any excess earnings (the collections exceeding the guaranteed amount) for months after the 12 month guarantee period, a period when collections should be substantially higher than during the early phases of the recruitment.
Practices entering into a hospital recruitment arrangement need to be careful in their physician contracts to pass as much financial risk as possible to the recruited doctor. A recruited doctor that decides he or she no longer likes the new community can leave the practice holding the bag for a huge amount of money which has not yet been forgiven.
Recruited physicians need to be careful about the risk passed off to them in their employment contracts if they are joining an existing practice, since the practices typically benefit by receiving enough money to cover all of the new physician’s salary, benefits and overhead.
Many business people involved in some aspect of the recovery business world (e.g. IOPs, PHPs, Detox) are not aware of the punishing laws that apply to their marketing arrangements. Simply paying someone a commission based sales compensation without fully appreciate the applicable laws is dangerous and costly.
The drug and alcohol rehab business is especially abundant in South Florida, yet few entrepreneurs are aware of the many laws that apply. The recovery business is a highly regulated one, with great intricacy in terms of the options and also the applicable laws.
Substance abuse services in Florida are broadly regulated by Chapter 397, Florida Statutes. The applicable regulations, however, drill down with remarkable granularity. For instance—
The broadly crafted Client Rights listed in Section 397.501, like the ones applied to nursing home residents, are very open ended (requiring things like the “Right to Individual Dignity”) and yet create the basis of a lawsuit! That said, people acting “in good faith, and without negligence” can rest assured they will not be found liable.
Though some may intuitively understand the specificity and seriousness of the regulations dealing with medical detox, residential treatment and Partial Hospitalization Programs (PHPs), including the staffing, service and supervision requirements, it may not be as readily apparent with the lower intensity of service options, like Intensive Outpatient Programs (IOPs).
Even PHP requirements can, however, be confusing. For instance, it is well known that PHPs are not for people who require 24/7 residential treatment. They stand somewhere between residential inpatient and intensive outpatient programs. What is less known is that the staffing requirements are particularly detailed. For instance, each PHP has to have a paid, awake employee on premises at all times when even one client is on the premises and also must have a paid employee on call when clients are at the community housing location.
Intensive inpatient programs are required to provide detailed services, to include 14 hours of counseling each week and 20 hours of “other structured activities.” Like IOPs, staff coverage is very specific. Nursing coverage must be available 24/7. More specifically, an RN must supervise all nursing staff and an RN or LPN has to be physically present on site. Finally, a physician has to be on call 24/7.
Outpatient programs have similarly detailed requirements, including the minimum counseling requirements and staffing client ratios. Intensive Outpatient Programs (IOPs) of course have far greater service requirements (at least nine hours of services each week) and yet share the same staffing ratio as regular outpatient (50 clients per counselor).
One of the more vexing issues the recovery industry faces deals with marketing. The industry is flush with commission based marketing professionals, and yet there are very detailed state and federal regulations that threaten that practice. At the federal level, the Anti Kickback Statute, a criminal statute that criminalizes remuneration for patient referral, threatens these percentage based arrangements. State laws also strike them hard. For instance, the Florida Patient Brokering Act (PBA) is a criminal statute with serious consequences for violations. While the PBA does have an exception for federal law compliance, many entrepreneurs may find themselves hard pressed to comply.
Though the term “recovery business” may seem like an oxymoron to some, it is an area of significant business opportunity that many have dug into. Knowing the regulatory minefields of the industry is, however, an important step forward in both a successful business and a stable platform of care.