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This week the Office of Inspector General published an interesting Advisory Opinion (AO 12-22) dealing with a cardiology co-management agreement between a hospital and a private cardiology group practice.

Under the arrangement, the hospital would compensate the physicians for certain management, oversight, strategic planning and medical direction services in connection with the hospital’s four catheterization labs.

The Compensation payable to the physicians would consist of a fixed guaranteed amount and potential performance bonuses based on achieving specific patient satisfaction, quality and cost-saving targets.

Based on a number of safeguards within the arrangement, including that the bonus criteria were developed by a committee including providers outside the cardiology group and that the group's performance and compensation would be reviewed by an independent consultant, the OIG stated that it would not impose sanctions on the requesting parties.

Although the Advisory Opinion is fact specific, as one of the first opinions dealing with co-management arrangements, it offers providers significant insight into how the OIG is likely to view these types of arrangements going forward.
 

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Now that the new year is upon us, today’s post will look at the Department of Health and Human Services’ Office of Inspector General (OIG), in particular, OIG’s priorities for 2013.   According to OIG’s Fiscal Year 2013 Work Plan, it will be focusing upon a number of topics of interest – including some items not addressed last year.

OIG’s planned reviews of Medicare Part A and Part B will include:

● Billing patterns for nursing home stays.

● Accreditation of medical equipment suppliers, with a particular focus on quality standards.

● Claims submitted by medical equipment suppliers for lower limb prosthetics, power mobility devices and vacuum erection systems.

● Replacement of medical equipment, especially the frequency and necessity of that replacement.

● Independent physical therapists’ claims and whether the claims are reasonable, medically necessary and properly documented.

● Billing for electrodiagnostic testing.

● Ensuring that payments are not made for alien beneficiaries who were unlawfully present in the United States.

● Reviewing payments for Part A and Part B services to avoid claims starting after a beneficiary has died. 

Special attention should be paid to these areas in the coming year given OIG's additional scrutiny.

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This week the Office of Inspector General of the Department of Health and Human Services published Advisory Opinion 12-15 in which it blessed an on-call compensation arrangement between a hospital and specialist physicians on its staff.  In finding that it would not prosecute the arrangement, the OIG pointed to several "safeguards" which it felt would adequately protect against a violation of the anti-kickback statute.  Among others, these included the following protections:

1. Based on an independent valuation, the per diem payment amounts were stipulated to be commercially reasonable, within the range of fair market value for actual and necessary services provided without regard to referrals or other business generated between the parties;

2. The hospital allocates funds for call coverage for each participating specialty and calculates the per diem annually, in advance, without regard to the individual Participating Physician’s referrals to the hospital;

3. Participating Physicians provide actual and necessary services, for which they are not otherwise compensated, including that Participating Physicians must respond within 30 minutes to a request from the hospital’s emergency department and, in some cases, must provide follow-up care.

4. The hospital offers the opportunity to participate in the arrangement to all specialists on its staff who are required by its bylaws to take unrestricted call and the method of scheduling on-call coverage is governed by a uniform equitable policy that does not take referrals into account.
 

Although an OIG Advisory Opinion may only be relied upon by the parties requesting it, this Advisory Opinion may provide useful guidance to hospitals and physicians in ensuring that their on-call arrangements are compliant.

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Physicians who reassign their right to bill the Medicare program can still be liable for false claims submitted by the entities who obtained that reassignment, as discussed in a recent "Alert" issued by the Office of Inspector General (OIG). [PDF].

OIG also referenced settlements it reached with eight physicians who had reassigned their payments to physical medicine companies in exchange for Medical Directorship positions -- when those companies subsequently billed Medicare for services that the physicians had not actually performed.

This OIG Alert highlights the ability of physicians to monitor all services billed using their reassigned provider numbers, and strongly urges physicians to do so. If not, physicians face liability for false claims asserted under their provider numbers.

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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.

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Unfortunately, many physicians believe their activities are “under the radar” when it comes to fraud and abuse enforcement. A recent settlement announcement by the Office of Inspector General (OIG) of the Department of Health and Human Services illustrates that this is not the case. According to the press release, the OIG has entered into a $7.3 million settlement with three physician-owned entities, United Shockwave Services, United Prostate Centers, and United Urology Centers, for allegedly soliciting and receiving payments in violation of the federal anti-kickback statute.

Among other things, the OIG alleged that certain of the physician investors in the entities had suggested to hospital administrators that if the hospitals did not enter into contractual arrangements to utilize the entities’ services, the physicians would take their cases to other hospitals. In addition to the $7.3 million settlement, the entities also agreed to a five-year corporate integrity agreement under which an independent reviewer will monitor all of the contractual arrangements between the entities and any hospital in Illinois, Iowa and Indiana.

This recent settlement underscores the need for physicians and physician organizations to get serious about their compliance efforts.  All indications are that we will be seeing more and more enforcement actions against physicians in the months to come.

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In the recently released OIG Advisory Opinion No. 09-16, the OIG found that participation by chiropractors in a referral network would not run afoul of the federal antikickback statute.  In AO 09-16, the OIG reviewed a proposed arrangement whereby chiropractors who are members of an association would each pay $200 per month to participate in a "network" that would advertise chiropractic services through internet, print, radio, or television advertising and provide referrals for such services.  A prospective patient who contacts the network for a chiropractor referral would be asked to provide a zip code. The network would then provide contact information for a participating chiropractor who practices in that zip code or, if no participating chiropractor practices in that zip code, in a nearby zip code. If more than one participating chiropractor is in the particular zip code, a name would be provided in sequence from a rotating list.  The network would pay the chiropractic association $10 for each chiropractor that participated in the network.

Although the compensation paid by the network to the association would vary with the number of chiropractors who join the network, the OIG stated that it would not prosecute the arrangement because (1) the network itself would not provide any items or services payable by Federal health care programs, (2) the participation fee would not vary on the basis of referrals of Federally payable business, (3) referral of potential patients to participating chiropractors would be on a rotating basis, by geographic area, and (4) the referral service would be open to participation by any chiropractor licensed to practice in the state, and participating chiropractors would receive referrals on an equal basis, would not be influenced by the variation in fees paid by participants.

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It is apparent that preventive care will take on greater importance in the "reformed " health care system and while Medicare historically did not cover routine or preventive screening services, the list of preventive services now covered by Medicare has grown in recent years.  Physicians should familiarize themselves with the applicable coverage and billing rules so as not to miss an opportunity to capture revenue for these services where appropriate.  To help physicians in this regard, CMS has published a guide to preventive and screening services for physicians and other providers.  Also, for a good overview on the OIG's current thinking on offering free screening services, physicians and other providers should have a look at the recent OIG Advisory Opinion 09-11 addressing free blood pressure screenings to walk-in visitors at a hospital.

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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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