The Patient Brokering Act and Addiction Treatment

anti kickbackBy: Jeff CohenFlorida Board Certified Healthcare Lawyer 

Followers of the addiction treatment industry should be on high alert after the arrest of Christopher Hutson of Whole Life Recovery.  The arrest marks the first arrest of any industry provider utilizing the state Patient Brokering Act (PBA).  Relying solely on the allegations, the arrest is based on a business relationship between the provider and sober homes.  Discussion in the “case management agreement” referred to in the arrest affidavit circles around some key allegations that include or imply (1) payment for patient referral, and (2) services by sober homes paid for by Whole Life which were not actually performed.

Serious industry providers absolutely MUST be well educated by lawyers who have years’ experience dealing daily with issues that include the federal Anti-Kickback Statute (and safe harbors), the bona fide employee exception to the AKS, the PBA and how insurers and regulators (inside Florida and outside Florida) interpret and apply such laws.  Any contract (like the sort of agreement referred to in the arrest warrant affidavit) that isn’t preceded by careful client education about the laws, the options and risks of each option is just reckless.  Clients who are well educated will understand things like— Continue reading

Marketing in Healthcare: It Ain’t What It Used to Be

By: Jeff Cohen

Healthcare 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 key here is to realize that, while the laws haven’t changed, what regulators are doing with them has!  The environment of healthcare marketing has never been more treacherous than it is today.  So what’s changed?  How about:

  1. Commission based marketing and sales involving federal or state payers, even those that arguably comply with the personal services arrangement and management contract safe harbor, are detested by federal regulators;
  2. The regulators will look to pierce any enterprise, including those consisting of multiple tax ID entities, in hopes of making the case that commercial based marketing payments were in exchange for even one drop of federal/state payer money;
  3. Both health insurers and large providers (e.g. labs, pharmacies) work hand in hand with federal regulators to pursue suspicious activity, the result of which is to support the large provider; and
  4. Targets of enforcement activity who have obtained good legal advice often pay just to put an end to the enforcement because there’s a risk of losing and “winning” can feel like losing when one considers the enormous defense costs.

Continue reading

Physician Compensation Targeted by the Department of Justice

healthcare business change in ownershipBy: Jeff Cohen

The DOJ reported on August 5th a settlement with a South Carolina hospital concerning physician compensation.  Though certainly not the first or the biggest case of its kind (e.g. note the Halifax Hospital and North Broward Hospital District cases, which generated settlements of over $100M and $60M respectively), it’s attention grabbing nonetheless.

The SC case was brought by a whistleblower, a neurologist formerly employed by the hospital.  The doctor alleged that the seven year employment agreements violated Stark and the Anti Kickback Statute because the compensation was more than what was legally permissible and was also based in part on ancillary services ordered by the employed doctors.  Seasoned readers will understand that the concept of “fair market value” (FMV) is at the heart of regulatory compliance and also that compensation surveys of organizations like the Medical Group Management Association (MGMA) are important guides in term of what is/is not FMV.  In the SC hospital case, compensation met or exceeded the top 10% of similarly qualified physicians in the area, which is very interestingly noted by the DOJ (because some of the comp levels were still within the MGMA surveys).  In other words, the trend here is for the Feds to push back against comp levels on the high end of the FMV spectrum. Continue reading

Compounding Pharmacies and Alleged Tricare Abuses Back in the Spotlight

compounding pharmacyBy: Jacqueline Bain

On Thursday, February 11, 2016, the United States Attorneys’ Office from the Middle District of Florida announced a $10 million settlement with 4 physicians and 2 pharmacies regarding alleged abuses of Tricare program.  The case against these physicians and pharmacies was prosecuted as part of the United States government’s large-scale effort to combat questionable compounding practices.  Investigations revealed that patients were often prescribed compounded drugs that they never used, and that Tricare paid a mark-up cost of nearly 90% for compounded drugs over and above the pharmacy’s actual costs of making the drug.  Roughly 40% of the claims submitted by the pharmacies in question were written by 4 physicians with an ownership or financial interest in the pharmacies.

Tricare is a federal health care program designed to insure active duty military service members, reservists, members of the National Guard, retirees, survivors and their families.  Tricare outpatient costs have almost doubled in the last 5 years, and compound drugs have accounted for a large portion of that increase.  Continue reading

The Anti-Kickback Statute: What Constitutes a “Referral”?

anti kickbackBy: Jackie Bain

Providers of healthcare items or services are well-served to take note: a Federal Court of Appeals has recently held that “the Anti-Kickback Statute prohibits a doctor from receiving kickbacks that are made in return for a referral. It does not require that the referral be made in return for a kickback.”  Thus, receiving any unauthorized payment from a health care provider to whom you send patients is a very bad idea.

The Federal Anti-Kickback Statute, 42 USCS § 1320a-7b(b) states, in pertinent part, that a person may not knowingly or willfully solicit or receive any remuneration directly or indirectly, overtly or covertly, in cash or in kind, in return for referring an individual for the furnishing of a healthcare item or service that is payable in whole or in part by a Federal healthcare program. In laymen’s terms, a person cannot pay or receive anything of value in return for furnishing a Medicare patient to receive a healthcare item or service. (Note, however, that the law does set forth examples of permissible payments, or “safe harbors,” but we won’t address those in this article.) Continue reading

Tuomey Court Has A Lot to Say

bcbs lawsuit

 

By: Jeff Cohen

The Tuomey decision, U.S. Court of Appeals case out of South Carolina, contains important lessons for physicians, especially as it relates to (1) compensation arrangements with hospitals, (2) proper compensation arising in connection with the provision of designated health services (“DHS”), and (3) the advice of counsel defense.

The concept of DHS arises largely in the context of the federal Stark Law, which in pertinent part (1) forbids physicians from owning and referring to providers of DHS (e.g. PT, rehab, diagnostic imaging, home health, DME, clinical laboratory, inpatient and outpatient hospital services), (2) describes how medical practices can provide DHS to their own patients, and (3) forbids even physicians within a practice from allocating DHS profits on the basis of who ordered or referred to them.

The Tuomey case involves a whistleblower action filed against a not for profit hospital system.  The original jury in that case decided that the system didn’t violate the False Claims Act, but the appellate court set aside the verdict using facts and testimony that had be excluded from the jury trial, Tuomey Healthcare System was found to have knowingly submitted over 21,000 false claims to Medicare and the government was awarded over $237 Million (most of it in the form of punitive damages).  The government (which often advances the plaintiff’s—“relator” case in whistleblower cases) filed a motion for a new trial, which the trial court granted and the appellate court affirmed.

The case involves the following: Continue reading

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.