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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

A Physician May Violate Anti-Kickback Laws Even Without Steering Patients To A Specific Provider.

Posted in Fraud and Abuse, Uncategorized

By J. Benjamin Nevius

The United States Court of Appeals for the Seventh Circuit recently issued an interesting decision concerning the definition of “referral” in the context of federal anti-kickback laws. See U.S. v. Patel, No. 14–2607, 2015 WL 527549 (7th Cir. 2015).  In the Patel matter, the United States charged a Chicago-area physician with violating and conspiring to violate the Anti–Kickback Statute, 42 U.S.C. § 1320a–7b (the “Statute”), alleging that the physician received undisclosed payments from a home health services provider for referring patients.

The referral process at issue is summarized below:

“First, [physicians] made the initial determination that the patient required home health care services. This initial decision is not at issue in this case – it is undisputed that all of Patel’s patients who were treated by [home health provider] needed home health care. After this initial determination was made, a provider needed to be chosen. [Physician] did not personally discuss the selection of providers with patients or their family members, either as an initial matter or as part of recertification. Rather, his patients discussed home health care options with [physician’s] medical assistant . . . [Physician] did not tell [medical assistant] which provider to recommend. [Medical assistant] gave patients an array of 10-20 brochures from various providers. The brochures were given to [physician’s] office by the providers, but it is unclear whether [medical assistant] and [physician] included every brochure that they were offered. One of the brochures provided by [medical assistant] was [home health provider], but the government does not contend that it was included in the array because [home health provider] had offered [physician] kick-backs. Each patient independently chose a provider from those in the array. After a provider was selected, [medical assistant] called or faxed the provider with the name of the patient, his diagnosis, and his Medicare number. The fax cover pages from [physician’s] office bore the subject line ‘new referral’ and the body of the faxes contained prescriptions for home health care signed by [physician] or by [medical assistant], with [physician’s] authorization.”

The physician received $400 from the home health provider for each new patient, and $300 for each recertification. The government did not allege that any patient received treatment when it was not needed. Further, the government did not allege that the physician actively steered any patients to the home health provider. In fact, many of the physician’s patients chose other providers when given the option. The government nevertheless argued that the exchange of money itself constituted a “referral” under the Statute and the District Court agreed. The physician appealed his conviction and eight-month sentence to the Seventh Circuit Court of Appeals.

In affirming the conviction, the Seventh Circuit focused on the definition of “referral” in the context of the Statute and other laws governing Medicare and Medicaid fraud, such as the Stark Act, 42 U.S.C. § 1395nn. The physician argued that the traditional definition of “referral” in the medical context is a doctor’s recommendation that a patient see a particular provider, and that this is the behavior that Congress targeted when it enacted the Statute. The physician argued, among other things, that because (a) he did not steer patients to the home health provider, and (b) the government could not demonstrate any harm, the physician did not violate the Statute.

The Court rejected the physician’s proposed definition of “referral,” opting for a more expansive interpretation, stating: “[o]ften, people use the word ‘referral’ to describe a doctor’s authorization to receive medical care, even when the doctor is not the one choosing the provider of that care.” The Court determined that the Statute was designed to prevent Medicare and Medicaid fraud, and that a narrow definition of the term would defeat the central purpose of the Statute. Further, the Court determined that it was irrelevant that the government could not demonstrate any harm arising from the alleged pay arrangement.

Under the Court’s interpretation, criminal liability may exist even if a physician takes no action to encourage his patients to select one provider over another and the Centers for Medicare & Medicaid Services (“CMS”) suffers no harm. Doctors should review their compensation arrangements to determine if these types of payments exist and, if so, seek competent counsel to navigate potential risk.

CMS Releases Physician Value Modifier Payment Data

Posted in Health Reform, Medicare, Uncategorized

Many physicians are aware of the push by the Medicare program to move away from a fee for service physician payment model to one which recognizes higher quality and lower cost care.  However, few physicians have a good understanding of how such payment models would work and how their practices would fair under them.  This week, the Centers for Medicare and Medicaid Services (CMS) released some important  data regarding one of these value-based payment programs: the Value Modifier program.

The Value Modifier program seeks to reward physicians who provide high quality and low cost care by increasing their reimbursement by a “value modifier”.  Physicians who do not score favorably under the program will, in turn, be subject to a downward payment adjustment.  This week, CMS published a summary of the results of the first year of the program which initially applied only to physician groups of 100 or more.

In the initial year of the program, groups subject to the Value Modifier had the option to participate in a tiering program (which will be mandatory starting in 2016).  Under this program, depending on their cost and quality scores, groups would either be subject to an upward payment adjustment, a neutral payment adjustment or a downward adjustment.  Of 691 group practices subject to the Value Modifier, only 127 initially elected to participate in the tiering program.  Of these 127 groups, only 106 submitted sufficient data to receive both cost and quality scores for tiering purposes.  According to the published results, 14 groups will receive an upward adjustment; 11 groups will receive a downward adjustment and 81 groups will have a neutral adjustment (i.e., no adjustment ).  None of the groups earned the highest modifier adjustment available for quality and low cost.

The Value Modifier program will apply to all physician groups and solo practitioners beginning in 2016.  Physicians need to be paying careful attention to this and other value-based payment programs as it is clear that CMS is serious about shifting payment arrangements in this direction.

Excluded Physician Not Precluded from Collecting Pre-Exclusion Receivables According to OIG Advisory Opinion

Posted in Fraud and Abuse, Medicare

A physician who was excluded from the Medicare program is not precluded from receiving payment for services rendered prior to the exclusion according to Advisory Opinion 15-02 published by the HHS Office of Inspector General (OIG) earlier this month.  The Advisory Opinion was requested by a physician who was excluded for 20 years from Medicare participation as part of a a criminal plea and settlement of a civil False Claims Act settlement.  The excluded physician was required as part of the settlement to sell his medical practice and as part of the proposed sale, the buyer would collect the pre-exclusion receivables and pay them to the excluded physician.

Under the federal Social Security Act, no payment may be made by Medicare, Medicaid, or any other Federal health care program for any item or service furnished by an excluded individual on or after the effective date of the exclusion.  Because the receivables in questions related only to services performed prior to the exclusion, the OIG concluded that the proposed arrangement would not be prohibited.

While this Advisory Opinion required only a straightforward reading of the statutory language, physicians and other providers should nevertheless be exceedingly careful when dealing with individuals and entities who are or have in the past been excluded from Medicare or other payor programs as even straightforward financial arrangements with such parties can result in severe sanctions under the federal civil money penalties law of the Social Security Act.  Practices and providers should, as part of their compliance activities, regularly check the Exclusions Database for existing employees and contractors as well as part of a pre-hire screening process.

Employers in Philadelphia Must Provide Paid Sick Leave

Posted in Employment Law, Practice Management

Beginning May 13, 2015, employers must provide paid sick leave to employees who work in Philadelphia, per the City of Brotherly Love’s newly enacted Promoting Healthy Families and Workplaces Ordinance. The ordinance will undoubtedly elicit feelings of frustration rather than love because it requires employers to provide employees who work in Philadelphia with one hour of paid sick leave for every 40 hours worked. Paid sick leave is capped at a maximum of 40 hours per year. – See more details regarding the ordinance HERE.

Physicians Go On Strike

Posted in Health Reform

According to various news outlets, physicians at the University of California student health centers (as many as 150 physicians in all) went on strike this week in protest of what they believe are unfair labor practices by the University.  These physicians are members of the Union of American Physicians and Dentists.  The protest stems from contract negotiations between the Union and the University which have been ongoing for many months.  While this is only the first time in more than 25 years that physicians in the United States have gone on strike, with more and more physicians becoming employees of large health systems and insurance companies, this strike could be a sign of things to come in the not too distant future.

CMS May Modify Meaningful Use Program Requirements in 2015

Posted in Uncategorized

The Centers for Medicare and Medicaid Services (CMS) announced today that it intends to adopt regulations modifying the Medicare Electronic Health Record (EH R) Meaningful Use Program requirements as early as the Spring of 2015.  According to the announcement, CMS is considering:

  • Realigning hospital EHR reporting periods to the calendar year to allow eligible hospitals more time to incorporate 2014 Edition software into their workflows and to better align with other CMS quality programs.
  • Modifying other aspects of the program to match long-term goals, reduce complexity, and lessen providers’ reporting burdens.
  • Shortening the EHR reporting period in 2015 to 90 days to accommodate these changes.

The announcement also clarifies that the proposed new rules are in addition to and would not replace the “Stage 3″ proposed rule expected to be adopted in final in March 2015.

Given the complexities of the Program and the difficulties providers have experienced in implementing and complying with the requirements to date, physicians and providers should carefully monitor these regulatory developments and ensure that their systems are capable of meeting the modified requirements.

 

 

HHS to Shift 90% of Fee-For Service Payments to Performance-Based Payments by 2018

Posted in Billing & Reimbursement, Health Reform, Medicare

Yesterday the Secretary of the Department of Health and Human Services (HHS) formally announced HHS’ intention to shift 90% of all traditional Medicare payments from fee-for-service (FFS) to quality or value-based payments by 2018. The secretary announced that HHS’ goal is to have 30% of traditional FFS payments tied to quality or value in 2016, increasing to 50% by 2018, through alternative payment models such as reimbursement through Accountable Care Organizations (ACOs) and bundled payment arrangements.

The Secretary also announced creation of a Health Care Payment Learning and Action Network through which HHS will work with private payers, employers, consumers, providers, and states to develop and expand alternative payment models. An HHS press release regarding the Secretary’s announcements can be viewed here.

While HHS’ desire to shift to outcomes-based reimbursement is nothing new, the Secretary’s announcements yesterday should signify to physicians and other healthcare providers that these payment models are likely to proliferate and as a result, pressure on providers to adapt to them can be expected to intensify. From a provider perspective, this is likely to mean that efforts to integrate through network formation, employment and the like will continue and networks may become more aggressive in their efforts to lock up eligible providers.

 

Study Finds That Many Hospitals Are Losing Money On Physician Networks

Posted in Health Reform, Practice Management

In news that may not come as a shock to those of us who have been through the cycle of hospitals purchasing physician practices before, a recent study has found that hospitals are losing considerable amounts of money on acquired physician practices.  According to the study, 92% of reporting hospital CEOs state that they are losing money on their physician networks and 58% of the survey respondents report losing more than $100,000 per employee physician in 2014.  For more information on the study, see “The Challenges of Integrating Physician Group Operations”, 2014 Kentucky Healthcare Industry Study, Dean Dorton Allen Ford, PLLC.  While many hospitals believe that acquisition of physician practices is necessary in order to integrate the delivery of care, the question remains whether many hospitals will be able to absorb these losses long enough to reap the potential benefits of this integration.   Payor models which would reward clinical integration have been slow to develop, and even once those models are established, there is no telling whether integrated provider networks will be able to make money under them.

Medicare to Hold Claims for First 14 Days of 2014

Posted in Medicare

Although unlikely to have a major impact on cash flow, physicians should keep in mind that under the CY 2015 Medicare Physician Fee Schedule (MPFS) which was published in November, the Centers for Medicare and Medicaid Services (CMS) indicated that it will hold claims for 14 days in order to implement the Fee Schedule changes.  This hold will only apply to services rendered in 2015.  Claims for services rendered in 2014 will be unaffected. Details regarding the claims hold can be found on the Medicare Learning Network website.

HHS Cost Data Transparency Perhaps Not So Transparent

Posted in Health Reform, Medicare

Despite the Department of Health and Human Services’ intent to make Medicare healthcare cost data more transparent for the healthcare consumer, according to a recent report by the U.S. Government Accountability Office, current Medicare cost data, and the manner in which it is being provided, are largely ineffective in enabling consumers to make informed healthcare decisions.  The GAO cites a variety of shortcomings with current HHS transparency websites and tools, including that they lack information on topics of considerable relevance to consumers, such as patient-reported outcome measures and patient out-of-pocket costs, and they do not organize cost and quality information in a way that enables consumers to readily understand and compare provider performance or customize how the information is presented to enable consumers to identify the best providers for aspects of care that they may find most relevant.  The GAO report substantiates one of the central concerns espoused by critics of the healthcare data transparency push: that consumers lack the understanding and/or training to understand complex healthcare related financial and outcomes data.  Ultimately, however, the report serves to demonstrate that much work is still yet to be done if this data is to be useful to the health care consumer.