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

Today I am focusing on the self-referral ban under the federal Stark laws. In particular, a recent case – Fresenius Medical Care Holdings, Inc. v. Tucker (Dkt. No. 4:03-cv-00411-SPM-GRJ (Jan. 10, 2013, 11^th Cir.)) – discussed the interplay between those laws and a State’s attempt to impose more stringent requirements. 

The court first focused on two exceptions to the Stark laws’ ban on physician self-referrals. These exemptions concern clinical lab services for end-stage renal disease (ESRD), as well as certain lab services performed by a company with stockholder equity in excess of $75 million. 

A Florida statute subsequently narrowed these exemptions, and that statutory change impacted a Florida business’ ability to make referrals. 

The plaintiff argued that Congress had crafted the Stark laws’ exemptions in order to benefit Medicare and Medicaid recipients and, as such, intended to provided explicit benefits. That argument was rejected. 

The circuit court found that federal law permitted State laws to be more stringent, and that this was such a situation. Moreover, the court was not convinced that the plaintiff’s business was stifled by the State rules and, instead, found that the impact to the business was marginal. 

It remains to be seen whether or not this ruling will encourage States to enact more stringent restrictions and make it even more difficult for businesses to comply with a non-uniform set of rules.

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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.

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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.

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Major Medicare fraud and false claims settlements against large providers and pharmaceutical and device companies are reported in the news on a regular basis these days.  Unfortunately this trend may lead many physicians to believe that their billing and collection activities are under the radar of federal and state enforcement authorities.  According to an article in the Scranton Times-Tribune, when it comes to Medicare fraud, size doesn't matter. 

According to the article, a Scranton podiatrist was sentenced this week to two years of probation and ordered to pay $23,266 in restitution for submitting false claims to Medicare.  What is significant about this case is that the podiatrist reportedly only received between $10,000 and $30,000 in improper payments from the Medicare program.  So, if you still think your practice is too small to get noticed, think again. 

The prospect of developing a full-blown fraud and abuse compliance plan may seem overwhelming for many physicians but a compliance plan is really the only "insurance" you can put in place to help minimize legal exposure from improper billing.  Consider starting small.  An annual coding and documentation audit with the help of a health care attorney and billing consultant is hands-down one of the best things you can do from a compliance standpoint and it need not be expensive.  Most importantly, however, when if comes to compliance, doing something is far better than doing nothing.  For more information on developing a cost effective compliance plan, see the article "Compliance Planning on a Shoestring Budget"www.physiciansnews.com/law/1107rodriguez.html.

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