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Physician Law

Current news, updates, & useful tips relating to legal issues affecting physicians & non-institutional providers in their personal & professional lives

Nursing Home Fraud Scam Results in Conviction for “King of Nursing Homes”

Posted in Billing & Reimbursement, Fraud and Abuse, Medicare, Practice Management

Called by some the “King of Nursing Homes” for his many low-income nursing home patients in northeast Illinois, Dr. Venkateswara Kuchipudi was recently convicted for referring patients to Sacred Heart Hospital in Chicago in exchange for kickbacks.  Kuchipudi became the fifth physician and tenth defendant to be convicted for a massive Medicare and Medicaid fraud scheme that led to the closure of Sacred Heart Hospital.

Kuchipudi’s arrangement was not overly complicated.  He struck a deal with the Owner and CEO of Sacred Heart Hospital (who was recently sentenced to 4.5 years in prison) to refer all of his Medicare patients requiring hospital care to Sacred Heart in exchange for the Hospital’s assignment of an exclusive team of health care practitioners to treat Kuchipudi’s patients both inside and outside the Hospital.  In some instances, Kuchipudi referred patients to Sacred Heart for admission, despite the fact that other hospitals were closer in distance to the patients’ nursing homes and had better staffing and access to routine procedures, such as x-rays and lab work.

The arrangement allowed Sacred Heart Hospital to greatly increase its collections, netting the hospital owner upwards of $29 million over three years, while Kuchipudi was able to bill Medicare approximately $1.6 million for services provided by his exclusive team of Sacred Heart professionals.

Kuchipudi argued that his goal was to improve patient care and that he had no idea the arrangement could be construed as involving kickbacks for referrals.  The government countered by arguing that the anti-kickback statute is violated as long as at least one of the purposes of the arrangement is to induce referrals.  The jury sided with the government on 10 of the 12 charges.

Kuchipudi was convicted of one count of conspiracy to defraud the United States and nine counts of illegally soliciting or receiving benefits in return for referrals of patients covered under a federal health care program.  He was acquitted of two counts involving mileage reimbursements paid by the Hospital to one of the physician assistants assigned to treat Kuchipudi’s patients at nursing homes.

This case is another example of the federal government’s crackdown on fraud, waste and abuse in federal health care programs, and shows that violations of the federal anti-kickback statute can involve kickbacks in a form other than direct payment for referrals.  It underscores the need for physicians to carefully review their hospital and other provider relationships to be sure such arrangements do not – even inadvertently – run afoul of these complicated statutes.

Time is Money: Study Reveals that U.S. Physicians Spend $15 Billion Yearly on Providing Data to Insurance Companies

Posted in Practice Management

Alexandra Sobol writes:

A recent Weill Cornell Medicine study is breathing new life into the expression, “time is money.” The study, which was published in the March issue of Health Affairs, reveals that physician practices in the United States in four specialties — orthopedics, cardiology, family care, and internal medicine — spend 15 hours a week, or an astounding $15 billion annually, reporting data to private insurance companies, Medicare, and Medicaid.

The data is being used by insurance providers as a metric for assessing physicians’ performances and as a basis for awarding those physicians who score well on the quality care measures.

Of the 15 total hours spent each week by physicians and their staff, physicians were independently found to have spent 2.6 hours providing data to insurers, which, as lead investigator Dr. Lawrence P. Casalino noted, could amount to each of these physicians seeing “about nine additional patients in that time, which is not trivial.”

Notably, 81 percent of the 394 practices surveyed indicated that they spend more time reporting quality metrics now than they did three years ago, which Dr. Casalino indicated is most likely attributable to the Affordable Care Act and its emphasis on quality measures. The bad news is that insurance providers have already begun to indicate that physician reimbursements will be even more closely correlated with their performance on these quality metrics in the future.

Time is precious, so what can be done to address this costly problem? The investigators suggest that streamlining the data that insurance providers are collecting would save a great deal of time, money, and inconvenience. Moreover, another potential solution would be to program electronic health records to routinely gather and send data to insurance companies.

Of course, the irony, as Dr. Casalino acknowledged, is that “while this data is meant to help physicians do a better job, the amount of time spent by medical practices collecting and reporting it costs time and money that could be used for treating patients.”

At the end of the day, for physicians, caring for patients is, and should always be, the priority.

Physician Convicted of Second Degree Murder in Drug Overdose Case

Posted in Fraud and Abuse

Alexandra L. Sobol writes:

Since as early as the fifth century, physicians have taken an oath to do no harm. But one California internist was sentenced to 30 years to life in prison on Friday after three of her patients overdosed and died while under her watch. Dr. Hsiu-Ying “Lisa” Tseng, 40, of Rowland Heights, California was convicted of second degree murder for prescribing exorbitant amounts of painkillers to her patients.

Dr. Tseng, alongside her husband, Dr. Gene Tu, operated a strip mall clinic where she wrote more than 27,000 prescriptions over a three-year period. Her patients were generally young and paid in cash.

Dr. Tseng ignored all of the red flags: she was notified by authorities on numerous occasions of her patients’ overdoses and received countless phone calls from her patients’ families, begging her to stop over-prescribing their loved ones.

Many physicians have faced similar charges. This case, however, is precedential, as Dr. Tseng is the first doctor to be convicted of murder in connection with a patient’s overdose. Just a few months ago, Dr. Gerald Klein of Palm Beach, Florida was acquitted after being charged with first degree murder for running what prosecutors termed a “pill mill.” In 2011, Dr. Conrad Murray was only convicted of involuntary manslaughter, not murder, in a widely-publicized trial after the death of Michael Jackson.

Many are concerned that Dr. Tseng’s verdict will cause physicians to drastically limit the number of painkillers they prescribe, even to those with a legitimate medical need, for fear of facing a similar fate. One thing is certain: state medical boards must better police their own to ensure that doctors like Tseng aren’t able fly under the radar for so long.

“The message this case sends is you can’t hide behind a white lab coat and commit crimes,” Deputy District Attorney John Niedermann remarked according to an article in the LA Times. “A lab coat and stethoscope are no shield.”

CMS Finally Makes Reasonable Changes to 60-Day Overpayment Rule

Posted in Billing & Reimbursement, Fraud and Abuse, Health Reform, Medicare, Physician Compensation, Practice Management, Reimbursement

The Affordable Care Act (ACA) requires Medicare providers to return overpayments within 60 days of the date they are identified in order to avoid liability under the False Claims Act.  Four years ago, CMS issued a proposed rule to implement this statutory requirement that would have placed a substantial burden on providers to identify and return overpayments within the 60-day period.  Last week, CMS issued its long-awaited “final rule” on the matter. The final rule is substantially less burdensome than the proposed rule would have been and offers providers a clearer view of their obligations to investigate and report overpayments.

Here are five key aspects of the final 60-Day Overpayment Rule that physicians and medical practices should keep in mind:

  1. What It Means to Identify an Overpayment

CMS clarifies that identifying an overpayment requires reasonable diligence and quantification of the overpayment.  Specifically, a provider has “identified” an overpayment when the provider “has or should have, through the exercise of reasonable diligence, determined that it has received an overpayment and can quantify the amount of the overpayment.”  In contrast, the proposed rule would have held providers to a “deliberate ignorance” or knowledge standard regarding the existence of an overpayment and would have included no leeway for quantification of the overpayment.

  1. The New Timeframe In Which Providers Must Identify Overpayments

One of the biggest questions that arose from the proposed rule was: “When does the 60-day clock to identify overpayments start ticking?”  The proposed rule called for providers to act with “all deliberate speed” to identify overpayments once they became aware of a possible billing error.  In its final rule, CMS provides a clearer answer to the question.  Providers will have up to 6 months to investigate a possible overpayment before the 60-day reporting period begins.

  1. The “Look-Back Period” Is Shortened

Part of a provider’s obligation with respect to overpayments under the ACA is to search through past records for overpayments after a provider identifies that it has received at least one overpayment.  CMS originally proposed a requirement that providers “look back” 10 years in their records for other overpayments in order to comply with this rule.  Acknowledging the unreasonable burden such a time period would impose on providers (both in effort and cost), in the final rule CMS has reduced the duration of the look-back period to 6 years.

  1. Documentation of Reasonable Diligence Is Advisable

In prefatory comments to the rule, CMS stated that it is “certainly advisable” for providers to document their diligence in investigating possible overpayments.  While documenting an investigation may not make a provider’s diligence “reasonable” per se, it may provide strong evidence of the provider’s efforts.

  1. Proactive Compliance

CMS emphasizes in the final rule that “reasonable diligence” requires not only reactive activities, such as a good faith investigation of potential overpayments by qualified individuals, but also “proactive compliance activities conducted in good faith by qualified individuals to monitor for the receipt of overpayments.”

The full text of the final rule may be accessed here:  https://www.federalregister.gov/articles/2016/02/12/2016-02789/medicare-program-reporting-and-returning-of-overpayments.

Be sure to consult experienced legal counsel if you would like further guidance on the Medicare 60-Day Overpayment Rule, including what steps your practice should take to proactively and reactively address potential overpayments.

Game Changing Legislation – Out-of-State Medical Staff Can Treat Their Own Players in Pennsylvania

Posted in Pennsylvania Legislation

As of February 4, 2016, out-of-state athletic team physicians are permitted to provide care to their own team’s players while in Pennsylvania.  Pennsylvania Senate Bill 685 and 686 amend the Medical Practice Act of 1985 and Osteopathic Medical Practice Act of 1978, to provide a limited exemption to physicians to practice without licensure in Pennsylvania.  In order to qualify for the exemption, the physician must be licensed in good standing in his/her home state, and have an agreement with the sports team to provide care while the team is in Pennsylvania.  The exemption lasts for up to ten (10) days per sporting event.  However, if physicians believe they need the exemption to last longer, they can request that the appropriate board provide an extension for up to twenty (20) additional days.

There are other limitations to the exemption.  Out-of-state physicians are not permitted to provide care at a health care clinic or health care facility, including an acute care facility.  Also, out-of-state physicians are not permitted to prescribe medications, under the exemption.

The legislation is based off of model legislation provided by the Big 10 Conference.  It is meant to afford teams the ability to have physicians that are already familiar with their players to actually provide consultation and care on the sidelines.  Pennsylvania becomes the 22nd state to enact such legislation.

Physicians and Practice Staff Are Not Required to Obtain Child Abuse Clearances in Pennsylvania

Posted in Articles, Employment Law, Pennsylvania Legislation, Practice Management

Previously on the Fox Rothschild Physician Law Blog, we reported on the July 2015 amendments to the PA Child Protective Services Law.  See our August 31, 2015 post here:  What You Need to Know about PA’s Child Protective Services Law.  In particular, we noted that the PA Medical Society interpreted the amendments to the Law as requiring all health care practitioners and practice staff having direct contact with children to obtain child abuse clearances.

After further review of the Law and consultation with the PA Department of Human Services (DHS), the PA Medical Society issued a retraction of its prior statement.  On December 1, 2015, the PA Medical Society reported that it had confirmed with the DHS that physicians and other employees of a medical practice or hospital (including administrative employees) are not required to obtain child abuse clearances under the Law.  See the PA Medical Society’s Clarification here:  PA Medical Society Child Abuse Clearances Clarification.

Although the Law used to require physicians (and other health care practitioners) to obtain child abuse clearances, the July amendments to the Law limited the clearance requirement to certain programs, activities and services.  As a result, a long-standing rule that physicians must obtain child abuse clearances appears to have been eliminated.

In our post, we also reported that the PA Department of Health (DOH), which licenses hospitals and other health care facilities, had continued to require such facilities to ensure that their health care practitioners obtained child abuse clearances, even after the amendments were passed.  The DOH has not yet confirmed its position on the Law after the recent clarification by the DHS.

While the Law appears not to require health care practitioners to obtain child abuse clearances in Pennsylvania, be sure to consult your legal counsel before making an administrative decision for your practice or health care facility.

Understanding Medicare Overpayments

Posted in Billing & Reimbursement, Fraud and Abuse, Medicare

Under the federal Affordable Care Act, physicians and other providers have only 60 days to refund overpayments to the Medicare program before they face potential liability under the False Claims Act.  In addition, if CMS or the Medicare Area Contractor (MAC) identifies an overpayment, physicians have a limited period of time to respond or reply to the overpayment demand before CMS begins to recoup the overpayment.  A useful tool for understanding this process is this recently revised Medicare Learning on Medicare Overpayments.

OIG Issues Favorable Advisory Opinion on Patient Assistance Charitable Foundation

Posted in Fraud and Abuse, Medicare

This week the Office of Inspector General (OIG) published Advisory Opinion 15-16 addressing a 501(c)(3) charitable foundation (the “Requestor”) that would seek donations from third parties (including drug manufacturers) and provide financial assistance with out-of-pocket patient expenses for outpatient prescription drugs.

Under the proposed arrangement, the Requestor would maintain two disease funds, one of which would provide assistance to patients with various types of cancer, and the other of which would provide assistance to patients with chronic kidney disease or iron deficiency anemia. donors could earmark their donations for either fund but would have no control over the specific types of diseases each fund would apply to.

The OIG concluded that the proposed arrangement would not violate the federal prohibition against inducements to patients in the Civil Money Penalties law and that it would not impose sanctions under the federal anti-kickback statute. In coming to these conclusions, the OIG cited the following characteristics of the arrangement:

  • No donor, affiliate of any donor, physician, or health care provider would exert direct or indirect control over Requestor or its program.
  • Before applying for assistance, each patient already would have selected his or her health care providers, practitioners, or suppliers, and already would have a treatment regimen in place so that the existence of the program would influence the selection of a provider.
  • donors would not receive any data that would facilitate a donor in correlating the amount or frequency of its donations with the amount or frequency of the use of its drugs or services.
  • No donor or affiliate of any donor would influence directly or indirectly the identification or delineation of the diseases covered by its two disease funds.
  • The determination of a patient’s qualification for assistance would be based solely on his or her financial need, without considering the identity of any of his or her health care providers, practitioners, suppliers, drugs, or insurance plans; the identity of any referring party; or the identity of any donor.
  • The Requestor would assist all eligible, financially needy patients on a first-come, first-served basis to the extent funding is available.

New Medicare Dashboard Highlights Drug Spending

Posted in Health Reform, Medicare

Earlier this month, the Centers for Medicare and Medicaid Services released a new tool designed to give providers and consumers insight into Medicare drug spending.  The Medicare Drug Spending Dashboard, which at present only includes 2014 data, summarizes information on 80 drugs, 40 of which are covered under Medicare Part B and 40 of which are covered under Medicare Part D.  Data on the dashboard (which is sortable) includes total drug spending, number of beneficiaries utilizing each drug, drug spending per user, beneficiary costs, and the annual change in average drug unit cost.

OIG Issues Advisory Opinion Regarding Radiology Transcription Feeds

Posted in Fraud and Abuse, Medicare

This week, the Office of Inspector General (OIG) issued OIG Advisory Opinion No. 15-15 regarding a proposed arrangement in which a hospital would bill a radiology group for transcription of the radiology group’s reports for patients who are not hospital patients, but rather patients of a third-party clinic that provides radiology studies and refers to the radiology group. Under the proposed arrangement, the clinic would perform the technical component of radiology studies and transmit the results of the studies to the radiology group for interpretation.  The hospital would transcribe the professional component interpretive reports and bill the radiology practice a fixed transcription fee on a per line basis.

The OIG noted that because the clinic is a referral source to the radiology group, if transcription costs were reimbursed as part of the Medicare payment for the technical component, these costs would be the responsibility of the clinic and the payment of the transcription fees by the radiology group could be viewed as an improper kickback to the clinic. However, according to the OIG, the Centers for Medicare and Medicaid Services takes the position that when the technical and professional components of a test are performed by different parties, the parties may determine who will pay the transcription costs.  Accordingly, the OIG concluded that payment of the transcription fees by the radiology group would not be an improper inducement and, therefore, that the arrangement would not violate the anti-kickback statute.