OIG Fraud Alert – Physician Compensation Arrangements May Result in Significant Liability

OIG crestThe HHS Office of Inspector General in a fraud alert released 6-9-15 is telling physicians to be cautious about entering into payment agreements that could violate the Anti-Kickback statute. In the alert, OIG tells physicians entering into such payment arrangements that their compensation must reflect the services’ market values. Further, OIG notes that such an arrangement could violate the Anti-kickback Statute if it seeks to increase the number of referrals the organization receives from those physicians.

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

Vascular Access Centers: A Complex Picture

bcbs lawsuitBy: Jeff Cohen

Vascular access centers are a common ancillary service offered by a variety of physicians, mostly nephrologists.  They provide a unique setting for patients requiring interventional vascular services in connection with things like oncology, dialysis, nutritional delivery, wound healing, pain management and more.  Unlike many surgical services, however, they are typically not provided via a surgery center, but rather as part of (and inside) the physician’s practices. Continue reading

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

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

OIG Blesses Medigap Discount Policy for In-Network Hospitals

OIG crestBy: Jackie Bain

On February 20, 2014, the Office of the Inspector General posted Advisory Opinion 14-02.  The Advisory Opinion reviews the following scenario for compliance with the Federal Anti-Kickback Statute, 42 USC § 1320a-7b.  Under the proposed scenario, a Medigap insurance provider participates with a preferred provider organization (“PPO”) which contracts with hospitals (“Network Hospitals”).  The Network Hospitals discount Medigap policy-holders’ inpatient deductibles up to 100%.  In exchange for each discount, the Medigap plan pays an administrative fee to the PPO.  The Medigap plan also pays a portion of the discounted savings directly to the policy-holder who stayed at the Network Hospital. Continue reading

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

Kill H.R. 2914

Background

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

Continue reading

Is The End of Stark (and IOAS) Near?

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Background

Since its passage in 1989, the now ubiquitous federal law known as the Stark Law has driven the business behavior of health care providers of many kinds.  Recent developments, however, make us wonder whether the end of Stark is near, and if so, whether that’s a good thing.

By way of background, the Stark law has two components:  part one, a self referral prohibition, generally forbids physicians from referring to a provider of any “designated health service” (DHS) (e.g. MRI, PT, clinical lab) if the physician or his/her immediate family member has a financial relationship (including ownership interest) with the provider of the service.  Part two mandates that certain compensation arrangements between healthcare providers meet certain requirements.  Things like medical director agreements, management agreements, employment and independent contractor arrangements have been regulated by the law since its inception.  Most notably, for purposes of this article, one provision (the “In Office Ancillary Services” exception or “IOAS”, also known as the “Group Practice Exception”) has allowed medical practices to provide all sorts of “ancillary services” to their own patients.  That is the key aspect of the law that is lately coming under serious attack. Continue reading

FY 2014 Budget Recommends Removing Therapy From In-office Ancillary Services

via apta.org – – – APTA is highly encouraged by the proposal within President Obama’s fiscal year 2014 budget, released yesterday, to exclude therapy services, including physical therapy, along with radiation therapy and advanced imaging from the in-office ancillary services (IOAS) exception of the Stark self-referral laws.

The Office of Management and Budget concluded that closing the loophole for these services would provide a savings of $6.1 billion over the standard 10-year budget window, providing further evidence that these self-referral arrangements lead to overutilization of Medicare services and should be addressed by Congress.

On its own for many years and more recently as part of the Alliance for Integrity in Medicare (AIM) coalition of medical specialty, laboratory, radiation oncology, and medical imaging groups, APTA has long advocated for exclusion of physical therapy from the IOAS exception. APTA agrees with the Administration’s proposal on physician self-referral and believes this issue should be addressed as part of any fundamental delivery system reform.

APTA and its AIM partners continue to be gravely concerned about the ongoing misapplication of the IOAS exception to the physician self-referral law, believing this loophole results in increased spending, unnecessary use of medical services, and potentially compromised patient choice and care. Studies published by the New England Journal of Medicine, Health Affairs, and the Government Accountability Office, among others, have highlighted abuses that result from physician self referral. These ongoing issues serve only to erode the integrity of the Medicare program and undermine patient care.

APTA and AIM now strongly urge the 113th Congress to follow the recommendations of the Administration budget and pass legislation to remove physical therapy, advanced diagnostic imaging, anatomic pathology, and radiation therapy from the IOAS exception.