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

In its recent Advisory Opinion No. 09-05, the OIG reviewed a proposed arrangement whereby a hospital would compensate physicians for on-call services performed on behalf of the hospital’s uninsured patients. 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 Office of Inspector General (“OIG”) would not impose administrative sanctions on the arrangement.

Under the proposed arrangement, the hospital would pay physicians for services provided during on-call periods to indigent patients. The proposal included four discount payment amounts/categories: (1) Emergency consultations: $100 flat fee; (2) Care of patients admitted as inpatients from the Emergency Department: $300 per admission. (3) Surgical procedure or procedures performed on a patient admitted from the Emergency Department: $350 flat fee; and (4) Endoscopy procedure or procedures performed on a patient admitted from the Emergency Department: $150 flat fee.

The OIG noted that while there is “substantial risk that improperly structured payments for on-call coverage could be used to disguise unlawful remuneration” under the anti-kickback statute, the proposed arrangement included adequate safeguards against such abuse including:

(1) The payment amounts were represented to be within the range of fair market value for services rendered;

(2) The hospital had a legitimate rationale for revising its on-call coverage policy (physicians were refusing to provide on-call services);

(3) The proposed arrangement would be offered uniformly to all physicians on staff, the method of scheduling on-call coverage would be governed by the hospital’s medical staff by-laws, would be uniform within each department or specialty, and would not be used to selectively reward the highest referrers; and

(4) The proposed arrangement would appear to create an equitable mechanism for the hospital to compensate physicians who actually provide care that the Hospital must furnish.

While the Advisory Opinion does not contain any surprises, it provides a very useful analysis at a time when on-call compensation arrangements are proliferating. Physician who have on-call compensation arrangements or who are considering entering into one are well-advised to review their arrangements in light of the OIG’s analysis.
 

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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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A recent whistleblower case out of the federal 3rd Circuit in Pennsylvania highlights some of the dangers in not properly documenting financial relationships between physicians and hospitals. Specifically, in US ex. rel. Kosenske v. Carlisle HMA, Inc., a Qui Tam lawsuit brought by the former member of an anesthesia group, the 3rd Circuit Court of Appeals reversed a US District Court’s summary judgment in favor of the defendant hospital and anesthesia group.

The anesthesia group in question had a written exclusive contract with the hospital for anesthesia services but, subsequent to entering into the exclusive agreement, began providing pain management services at the hospital’s freestanding pain center. The hospital did not charge the anesthesia group rent for use of the space in the pain center and the qui tam relator claimed that the arrangements failed to meet the Stark exception for personal service arrangements (and therefore that claims for services referred by the anesthesia group’s physicians to the hospital were in violation of the federal False Claim Act).

The Appeals Court found that the arrangement between the hospital and the anesthesia group implicated the Stark prohibitions because the anesthesia group received remuneration from the hospital in the form of, among other things, free rent and administrative services, and because the pain physicians referred patients to the hospital for diagnostic testing and other Stark services. The Court further found that the arrangement did not satisfy the Stark personal service exception because, among other things, the exclusive contract did not contemplate the pain management services when it was originally signed and it was not subsequently amended to address the pain management services. The case was remanded to the District Court for further proceedings.

What should physicians take away from this case?

(1) If you have a financial relationship of any kind with your hospital, it should be reflected in a signed written agreement;

(2) Make sure your agreements with your hospital meet an applicable Stark exception; and

(3) Regularly review and update your agreements to be sure they are in effect and accurately reflect the terms of the relationship.
 

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For those of you who have not been watching your Stark radar screen closely, be aware that CMS recently made a number of substantial changes to the Stark self-referral regulations that may affect your practice arrangements. Some of these changes will not take effect until October 1, 2009, but others changes will take effect on October 1, 2008. Key changes include (but are not limited to the following:

1.  “Stand-in-the shoes” Relationships – Under current regulations, physicians who refer to a Stark entity with which they have a financial relationship will be deemed to “stand in the shoes” (i.e., be treated as if they had the same compensation arrangements) of their physician organizations (e.g., their medical practice entity). CMS has clarified that, Effective October 1, 2008, this rule only applies to physicians who have an ownership interest in the physician organization – not physicians who are only employees, independent contractors or whose ownership interest is only titular.

2.  Services Furnished “Under Arrangements” -- CMS has in the past expressed concern over “under arrangements” ventures where a physician supplies items and services to a hospital for which the hospital bills the Medicare program and pays the physician fee. To address this concern, CMS has revised the definition of the term “entity” for purposes of the Stark prohibitions to the person or entity that actually performs a Stark services as well as the entity that causes a claim for the Stark service to be submitted to the Medicare program. This change will take effect on October 1, 2009.

 

3.  Per Click and Percentage-Based Compensation – The Stark regulations now expressly prohibit the use of “per service/per click” and percentage-based rent arrangements under space and equipment leases between physicians and entities to which they refer for Stark services. Percentage compensation arrangements are still permissible under Stark for personal services arrangements however. This change will take effect on October 1, 2009.

The Stark regulations continue to grow increasingly complex.  Because Stark is a strict liability statute (which means even inadvertant violations can result in substantial liability), physicians are encouraged to examine their existing financial relationships (ownership and compensation relationships) for compliance with these rules.  If you would like assistance in doing such an analysis or for assistance with any of your Stark questions, please contact Todd Rodriguez.

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Document, document, document! is the cry of health care attorneys and consultants across the Country when asked what physicians can do to protect their practices from fraud and abuse liability.  But what happens if you receive a Medicare audit request and you find out that your documentation isn't so good or even non-existent?  Many physicians when faced with this prospect are tempted to recreate or alter medical record documentation.  Beware, this is probably the worst thing you can do in this situation. 

Poor or even non-existent medical record documentation is not necessarily an indicator of fraud or abuse.  In many cases it is simply an indication of the need for documentation and coding education or better record keeping protocols.  In these circumstances, a physician may have to return some money to Medicare or other payors but will generally not be looking at civil or criminal penalties.  Recreating, altering or falsifying records, however can quickly turn a simple overpayment situation into a criminal case.  That's what has apparently happened to a podiatrist in New Jersey according to a recent article in the New Brunswick Home News Journal.  According to the article, in response to a request by a Medicare contractor for 25 medical records, the podiatrist re-wrote the records to enhance the Medicare claims under review and was charged with obstructing a federal audit.  The potential penalty for this: a maximum of five years in prison and as much as a $250,000 fine.

 So what can you do if your documentation falls short in the face  of an audit submission?  If the documentation exists but is simply illegible, you might include a typed transcription along with the original records.  If pieces of information are missing from a note, you can include an annotation explaining why the information is missing, but any such annotation should be signed and dated when made.  Back-dating is major a no-no.  Finally, when records are missing altogether, a letter to the auditor explaining the situation and offering to refund the amounts received may make sense.  In any of these circumstances, however, it is highly advisable to immediately consult with a knowledgeable health care attorney before doing anything.

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