Addiction Treatment is a Story in Search of a Villain

healthcare business

Hastiness and superficiality are the psychic diseases of the twentieth century, and more than anywhere else this disease is reflected in the press— Alexander Solzhenitsyn

By: Jeff Cohen

I read an article in a local paper the other day.  It was about (a) a guy who owned a treatment center (who has not been charged with committing a crime), (b) a lawsuit filed by a large insurance company against a toxicology lab that the insurer owes millions, and (c) the fact that insurance companies pay a lot for toxicology lab testing.  I scratched my head, wondering how there was anything newsworthy there.  The “story” being sold by the paper, however, created a story with a villain (the providers of services to people in recovery from drug and alcohol addiction) and a “victim” (people receiving care for addiction).  I can’t resist responding.

There’s a difference between something that’s interesting and worthy of comment vs. a journalistic attempt to concoct controversy and intrigue that people might buy.  There’s not much of the former, but a lot of the latter.  People in recovery being victimized by horrible, greedy people is an interesting story.  Unfortunately, it’s off the mark and really not helpful to anyone.

There are three pretty safe assumptions we can almost all agree on:  first, there are a lot of people who want to live life without active addiction.  Second, many of them think they need help to create a better life.  Third, some providers of help to people in recovery make a bunch of money providing that service. Continue reading

Houston Court Brings the Heat in Payer Provider Case

bcbs lawsuitBy: Jeff Cohen 

A recent Texas District Court case took the usually frustrating ERISA dynamics applicable in payer provider disputes and upended them in a way that helped the provider.  There (Cigna v. Humble Surgical Hospital, Civ. Action No. 4:13-CV-3291, U.S. Dist. Ct., S.D. Tex., Houston Division), the court was faced with an out of network hospital sued by CIGNA to recover payments made.  In particular, the case involved—

  • An out of network hospital (HSH);
  • HSH set its prices higher than neighboring in network hospitals;
  • HSH billed Cigna members for deductibles and coinsurance at in network rates, but billed Cigna on an out of network basis;
  • Cigna alleged that the billing practices of HSH caused Cigna to pay more than its required share under applicable plans, even though plan members paid little or nothing at all;
  • Cigna also alleged HSH paid owner physicians referral fees to induce patient referrals; and
  • Cigna sought to recover payments made to HSH.

The case is a departure from the usual scenario, which involves (a) providers suing payers for payment and relying on state laws to do so, and (b) provides side stepping those state laws by successfully arguing that the federal ERISA law applies (which usually offers provides less favorable remedies). Continue reading

Tough Trend for Payers = Fairness for Providers

payer fairness for providersBy: Jeff Cohen

The past year has shown a trend towards empowering providers (and even patients) in their claims against payers.  And these developments should serve to bolster the position of many patients and providers, especially behavioral health providers as they raise claims against payers.

Spinedex Case

This 2014 Arizona case addressed the issue of whether a provider had the legal ability (“standing”) to sue United to receive payment for services provided to insureds.  United’s role was to process claims for certain plans.  Spinedex was a physical therapy provider whose patients signed a patient responsibility form and also assigned to Spindex the right to receive payment.  There were different levels of benefits based on whether the patient was insured by United.  Spinedex treated patients, then submitted claims to United.  When claims for payment were denied, Spindex sued.

At the heart of the case was the long-standing issue of whether a provider has standing to sue for services provided to insureds of so called ERISA plans.  “We are aware,” the court wrote, “of no circuit court that has accepted defendant’s argument” [that because Spinedex didn’t seek payment from a patient, the patients don’t have an “injury,” which is required for the providers to sue the payer].    Nevertheless, the court said “yes,” which opened the door to potentially a slew of such lawsuits.

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

OIG Special Fraud Alert: Laboratory Payments to Referring Physicians

OIG crestThe Office of Inspector General of the Department of Health and Human Services today issued a Special Fraud Alert pertaining to relationships between laboratories and referring physicians.  Payments from labs to physicians who refer were targeted in the Alert.  The Alert also reiterates their suspicion of so-called “carve out” compensation relationships where state and federal healthcare program dollars are removed from the payment formula (which was previously addressed last year in Advisory Opinion 13-03).  While the Alert does not add anything new to the government’s view of such relationships, it does underscore the very suspect view the OIG has of payment relationships between labs and the physicians who refer to them.  Careful compliance with the Personal Services and Management Contracts Safe Harbor continues to be a core concern.

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

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