Physician Law : Pennsylvania Health Law Lawyer & Attorney : Fox Rothschild LLP : serving Philadelphia, Pittsburgh, Allentown, Erie, Upper Darby Twp

The United States Attorney’s Office for the District of Maryland has announced that St. Joseph Medical Center in Towson Maryland will pay $22 million to settle allegations that it violated the federal False Claims Act, the federal anti-kickback statute and Stark by entering into several improper professional services contracts with a cardiology group, MidAtlantic Cardiovascular Associates that involved the payment of illegal remuneration.

The DOJ alleged that St. Joseph paid kickbacks to the cardiology group through sham professional services agreements between 1996 and 2006. Specifically, the parties had entered into 11 professional services agreements which involved payments above fair market value, and/or payments for services that were either not rendered or not commercially reasonable.

Importantly, the settlement was the result of a qui tam whistleblower lawsuit brought by a group of cardiac surgeons who alleged that the service agreements were in violation of federal law. 

This settlement underscores the importance of ensuring that all financial relationships between physicians and hospitals to which they refer, including medical directorships, call coverage arrangements, rental arrangements and the like are for legitimate and necessary items/services and that payments are consistent with fair market value. 

• Print
• Comments
• Trackbacks
• Share Link

The health reform law (PPACA) requires referring physicians who provide in-office MRI, CT or PET services to inform a patient in writing at the time of the referral that the patient may obtain the service from an alternative source and provide a list of suppliers who furnish the service in the area in which the patient resides. In the 2011 Medicare Fee Schedule, CMS has clarified what a physician must do to meet this requirement, which will begin on January 1, 2011. Some highlights: 

• The rule will only apply to MRI, CT and PET services. Some commenters wanted it to apply to all imaging or all designated health services, but CMS declined to expand it.

• The notice should be written in a manner sufficient to be reasonably understood by all patients and be given to the patient at the time of the referral.

• The list must include 5 alternative suppliers (reduced from 10 in the proposed rule). These alternative sources must be within a 25-mile radius of the physician's office location at the time of the referral. Any reasonable method for measuring distance will be acceptable.

• The information about these suppliers must include name, address, and phone number, but there is no need to include the distance from the referring physician’s office;

• As long as the requisite number of "suppliers"  (as technically defined in the Medicare law) are included in the alternate list, the physician may also list "providers", (i.e. hospitals), on the notice, but is not required to do so -- CMS concluded that Congress did not authorize them to broaden the list of substitute sources to include hospitals;

• CMS removed the proposed requirement that the physician obtain the patient's signature on the notice and retain a copy of the disclosure in the patient's medical record.
• CMS declined to prescribe standard disclosure language. 
• The disclosure requirement does not apply to any service that is integral to the performance of a nonradiological medical procedure and is performed either during the nonradiological procedure or immediately after the procedure to confirm placement of an item.
• A physician may include a statement that the list is not intended as an endorsement or recommendation of those suppliers.
• If there are fewer than 5 other suppliers located within a 25-mile radius of the physician’s office location at the time of the referral, the physician must list all of the other suppliers of the imaging service that are present within a 25-mile radius of the referring physician’s office location. Provision of the written list of alternate suppliers will not be required if no other suppliers provide the services for which the individual is being referred within the 25-mile radius.  

Note that Pennsylvania's Act 66 already includes a similar disclosure requirement, although it does not require a list of alternative sources. Act 66 states:

Any practitioner of the healing arts shall, prior to referral of a patient to any facility or entity engaged in providing health-related services, tests, pharmaceuticals, appliances or devices, disclose to the patient any financial interest of the practitioner or ownership by the practitioner in the facility or entity. In making any referral, the practitioner of the healing arts may render any recommendations he considers appropriate, but shall advise the patient of his freedom of choice in the selection of a facility or entity.

• Print
• Comments
• Trackbacks
• Share Link

The final Medicare Physician Fee Schedule for 2011 was placed on display at the Federal Register on November 2 , 2010.  Unwelcome to many physicians is the news that under the sustainable growth rate (SGR) formula, CMS is projecting a -24.9% decrease in physician fees unless Congress overrides the projected cuts as it has done each year since 2003.  With a host of hot issues (think Bush era tax cuts) already on the table for the lame duck Congress, it's anyone's guess as to whether or when Congress will revisit the SGR cuts for 2011.

• Print
• Comments
• Trackbacks
• Share Link

HHS Secretary Kathleen Sebelius addressed the New York Health Care Fraud Prevention Summit on November 5 in Brooklyn and updated attendees on the government’s efforts to rein in health care fraud. Significantly, she also indicated that CMS intends to squeeze out some of the excessive profit that is currently available to certain suppliers under Medicare. Her remarks are available here.

Appearing with Attorney General Eric Holder, Sec. Sebelius described the efforts to launch the Health Care Fraud Prevention and Enforcement Action Team, (HEAT), a joint effort between HHS and and the Justice Department to share information, spot trends, coordinate strategy, and develop new fraud prevention tools. In the past year, the two departments have hosted a National Health Care Fraud Summit  in DC and regional summits in South Florida and Los Angeles, with another planned for Detroit and more on the horizon.

She noted the creation of the a new center for Program Integrity at the Centers for Medicare and Medicaid Services and described the  Affordable Care Act, as “secretly one of the strongest fraud prevention laws in American history “ due to its provisions creating a single searchable database for all Medicare-paid claims.

She also noted the feds’ efforts to control the costs of certain DME, citing the fact that Medicare currently pays three to four times the amount paid by commercial insurers for certain medical supplies.

“As a consequence of outdated government fee schedules, Medicare spends $3,600 for a power wheelchair that costs the supplier about $1,000. We pay $6,200 in rent over 36 months for an oxygen concentrator that costs the supplier less than $600.

So the Centers for Medicare and Medicaid Services is aggressively moving forward with a program that establishes competitive bidding among medical equipment suppliers. In the first round, businesses in nine areas around the country that want to work with Medicare beneficiaries must submit bids that  Medicare will use to set the amounts it pays for certain durable medical equipment, prosthetics, orthotics and supplies.”

Finally, she noted television outreach efforts asking everyone to stay wary and watchful, ask questions, and keep track of their medical bills and payments, and highlighted a $9 million grant recently announced to fund  expansion of the Senior Medicare Patrol.

• Print
• Comments
• Trackbacks
• Share Link

Two recent Advisory Opinions by the Office of Inspector General (OIG) shed some much needed light of the OIG's view of marketing by health care providers.  Last week the OIG published Advisory Opinions 10-23 and 10-24, both concerning a proposed arrangement between a sleep testing provider and a hospital.  The facts in both Opinions were very similar: the hospital contracted with a sleep testing company to provide certain sleep testing equipment and services.  Among other things, the sleep testing company would provide marketing services for the hospital's sleep center.  

In Opinion 10-23 the OIG concluded that the arrangement could potentially generate prohibited remuneration under the anti-kickback statute and that the OIG could potentially impose administrative sanctions if the parties proceeded with the arrangement.  In opinion 10-24, however, the OIG concluded that while the proposed arrangement could potentially generate prohibited remuneration under the anti-kickback statute if the requisite intent to induce or reward referrals of Federal health care program business were present, the OIG would not impose sanctions on the parties because the arrangement included sufficient safeguards against the risks if improper inducement.

In both proposed arrangements, the parties stipulated that the compensation to be paid to the sleep testing company was consistent with fair market value.  However, in Opinion 10-23, the compensation was on a per test basis (sleep company was paid each time a patient was tested) and in Opinion 10-24, the sleep company was paid a fixed amount regardless of the number of patients seen or tested.  Although Advisory Opinions may generally only be relied upon by the parties requesting them, these two contrasting opinions suggest that marketing as an element of an independent service agreement is not fatal to the arrangement under the kickback statute as long as the compensation is fixed in advance, does not fluctuate with the volume or value of services and is consistent with fair market value.

• Print
• Comments
• Trackbacks
• Share Link

Responding to input from medical school deans and residency program directors in a recent survey, the OIG has published a plain-English compliance summary for new physicians entitled Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse.  This 31-page document covers the following topics in a manner designed to educate new physicians in the basics of compliance and to sensitize them to the potential risks they will encounter in practice settings:

• Fraud & Abuse Laws (False Claims Act, Anti-Kickback statute, Stark physician self-referral statute, Medicare/Medicaid exclusion authority, Civil Monetary Penalties statute)
  • I. Physician Relationships with Payers
  • II. Physisican Relationships with Fellow Providers
  • III. Physician Relationships with Vendors
• Compliance Programs for Physicians
• Where To Go for Help
• What To Do If You Think You Have a Problem

The online version of the publication includes links to the various primary resources on the OIG web site, including the safe harbor regulations, advisory bulletins, compliance guidance, advisory opinions, and other useful links.

This document, which is downloadable for free at http://oig.hhs.gov/fraud/PhysicianEducation, can be used as the framework for compliance education for new and veteran physicians, and is a good starting point for the "newbie" to understand the legal landscape in the area of fraud and abuse.

• Print
• Comments
• Trackbacks
• Share Link