Advancements in healthcare technology continue at an explosive pace and nowhere is this more evident than in the field of mobile healthcare applications. Technology giants such as Apple and Garmin are diving into the wearable healthcare device arena and healthcare app companies are rapidly developing technology to enable devices to transmit healthcare information directly to physicians from these devices. Not surprisingly, physicians are also being courted by technology companies to endorse, invest in, Beta test and enter into licensing agreements to utilize these technologies.

As evidenced, however, by three recent settlements between the New York State Attorney General and several healthcare app companies, the marriage between healthcare and technology is fraught with potential legal pitfalls. According to the NY Attorney General’s press release, the settlement involved the makers of Cardiio, Runtastic, My Baby’s Beat, three popular healthcare applications that, among other things, monitor user heart rates. In addition to requiring the companies to pay civil settlements, the settlement agreements require the companies to modify certain of their marketing claims which the Attorney General alleged were misleading, and to change their privacy practices regarding the use and disclosure of user information. In light of these settlements, physicians considering getting involved with app makers or other healthcare technology ventures should carefully vet those arrangements and the applications themselves for compliance with healthcare laws including, without limitation, federal and state kickback prohibitions and privacy and security considerations.

Earlier this month, the Office of Inspector General of the Department of Health and Human Services (“OIG”), the agency charged with enforcement of key federal fraud and abuse laws, published its annual Work Plan identifying the areas of compliance concern under the Medicare program on which it will focus its review efforts in the coming year.

While the Work Plan does not provide much detail in terms of why particular areas have been identified for review, it can serve as a useful tool for physicians and other providers to identify specific areas on which they should be focusing their compliance efforts. Among other areas of potential concern for physician practices, the 2017 Work Plan identifies the following as subjects of focus by the OIG:

-Outpatient Intensity Modulated Radiation Therapy;
-Billing for prosthetics and orthotics;
-Billing for personally performed anesthesia services;
-Chiropractic billing;
-Billing for Physical Therapy by Therapists in Independent Practice.

In addition, the OIG will be studying whether there is any correlation between physicians who receive payments from drug and device manufacturers and the ordering and prescribing activities of those physicians. The basis for this review will be data reported by drug and device manufacturers under the Physician Payments Sunshine Act contained in the Affordable Care Act.

The entire FY 2017 Work Plan can be viewed on the OIG’s website.

Many medical groups have difficulty developing a succession plan for practice leadership. Some practices do not even have a formal governance structure in place (though they should), but even those that do may find it challenging to identify and train new leaders to assume responsibility when senior physician leaders step down.

Having a leadership succession plan in place is critical for a number of reasons. In practices where leadership is handled by one physician or concentrated in a small group of physicians, it will inevitably take time for new leaders to learn the nuances of the practice. Introducing future practice leaders to key aspects of practice management early-on will enable them to gain institutional knowledge so that they are better prepared to step into the leadership roles if and when the need arises.

Changes in leadership can occur unexpectedly in the event of catastrophic events for example. Where this occurs, having knowledgeable and willing physicians to step into the leadership roles will help to minimize the disruption caused by such an event. Here are a few things to consider in developing a leadership succession plan:

–Develop job descriptions for existing leadership roles. These should identify the key functions and responsibilities of each position;
Identify physicians within the practice with leadership potential. Practice leaders should ideally demonstrate leadership skills and business acumen (or an ability to develop it) and should also be interested in and willing to participate in leadership;

–Develop opportunities to involve future leaders in practice management on a limited basis. For example, future leaders may be charged with exploring new practice initiatives or other “special projects” and reporting back to practice leadership;

–Finally, senior practice leaders should look for opportunities to actively teach leadership skills and practice management to potential future leaders. This can be done through regular meetings to discuss practice finances, human resources issues, new business opportunities and the like.

Under the federal Affordable Care Act, physicians and other providers have only 60 days to refund overpayments to the Medicare program before they face potential liability under the False Claims Act.  In addition, if CMS or the Medicare Area Contractor (MAC) identifies an overpayment, physicians have a limited period of time to respond or reply to the overpayment demand before CMS begins to recoup the overpayment.  A useful tool for understanding this process is this recently revised Medicare Learning on Medicare Overpayments.

This week the Office of Inspector General (OIG) published Advisory Opinion 15-16 addressing a 501(c)(3) charitable foundation (the “Requestor”) that would seek donations from third parties (including drug manufacturers) and provide financial assistance with out-of-pocket patient expenses for outpatient prescription drugs.

Under the proposed arrangement, the Requestor would maintain two disease funds, one of which would provide assistance to patients with various types of cancer, and the other of which would provide assistance to patients with chronic kidney disease or iron deficiency anemia. donors could earmark their donations for either fund but would have no control over the specific types of diseases each fund would apply to.

The OIG concluded that the proposed arrangement would not violate the federal prohibition against inducements to patients in the Civil Money Penalties law and that it would not impose sanctions under the federal anti-kickback statute. In coming to these conclusions, the OIG cited the following characteristics of the arrangement:

  • No donor, affiliate of any donor, physician, or health care provider would exert direct or indirect control over Requestor or its program.
  • Before applying for assistance, each patient already would have selected his or her health care providers, practitioners, or suppliers, and already would have a treatment regimen in place so that the existence of the program would influence the selection of a provider.
  • donors would not receive any data that would facilitate a donor in correlating the amount or frequency of its donations with the amount or frequency of the use of its drugs or services.
  • No donor or affiliate of any donor would influence directly or indirectly the identification or delineation of the diseases covered by its two disease funds.
  • The determination of a patient’s qualification for assistance would be based solely on his or her financial need, without considering the identity of any of his or her health care providers, practitioners, suppliers, drugs, or insurance plans; the identity of any referring party; or the identity of any donor.
  • The Requestor would assist all eligible, financially needy patients on a first-come, first-served basis to the extent funding is available.

Earlier this month, the Centers for Medicare and Medicaid Services released a new tool designed to give providers and consumers insight into Medicare drug spending.  The Medicare Drug Spending Dashboard, which at present only includes 2014 data, summarizes information on 80 drugs, 40 of which are covered under Medicare Part B and 40 of which are covered under Medicare Part D.  Data on the dashboard (which is sortable) includes total drug spending, number of beneficiaries utilizing each drug, drug spending per user, beneficiary costs, and the annual change in average drug unit cost.

This week, the Office of Inspector General (OIG) issued OIG Advisory Opinion No. 15-15 regarding a proposed arrangement in which a hospital would bill a radiology group for transcription of the radiology group’s reports for patients who are not hospital patients, but rather patients of a third-party clinic that provides radiology studies and refers to the radiology group. Under the proposed arrangement, the clinic would perform the technical component of radiology studies and transmit the results of the studies to the radiology group for interpretation.  The hospital would transcribe the professional component interpretive reports and bill the radiology practice a fixed transcription fee on a per line basis.

The OIG noted that because the clinic is a referral source to the radiology group, if transcription costs were reimbursed as part of the Medicare payment for the technical component, these costs would be the responsibility of the clinic and the payment of the transcription fees by the radiology group could be viewed as an improper kickback to the clinic. However, according to the OIG, the Centers for Medicare and Medicaid Services takes the position that when the technical and professional components of a test are performed by different parties, the parties may determine who will pay the transcription costs.  Accordingly, the OIG concluded that payment of the transcription fees by the radiology group would not be an improper inducement and, therefore, that the arrangement would not violate the anti-kickback statute.

The federal Affordable Care Act requires certain employers to provide employees with forms reporting offers of health coverage and coverage provided by the employer in 2015 by no later than February 1, 2016.  Employers then had to report that information to the IRS by February 29 (by paper) and March 31 (electronically).  According to a joint press release, the Treasury Department and the IRS have now extended these 2016 reporting deadlines.  Specifically, the February 1 is extended by two months and the February 29 and March 31 reporting deadlines are extended by three months.

The Centers for Medicare & Medicaid Services (CMS) has stated its intention to move at least 50% of Medicare payments from fee for service to alternative payment systems based on quality and/or value by 2018.  In furtherance of this goal, the Medicare Access and Children’s Health Insurance Program (CHIP) Reauthorization Act of 2015 (MACRA) passed earlier this year included a requirement that the Department of Health and Human Services publish a draft plan for developing quality measures to support these alternative payment models.  On December 18, 2015, CMS published its draft Quality Measure Development Plan: Supporting the Transition to the Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APMs) to create a framework for the development of these quality measures .  Although the plan is only in draft, it sheds important light on what Medicare payment systems are likely to look like commencing in 2019 and beyond.  Physicians and other providers who rely upon Medicare reimbursement for their livelihood should review the draft plan and keep a close eye on future developments in this area as changes will likely be sweeping.

 

 

After many years counseling physicians regarding Medicare fraud and abuse compliance, I’m still perplexed at the general lack of understanding in the physician community regarding the need to comply with complex healthcare fraud and abuse laws and the serious risks of noncompliance.  Unfortunately, it seems that many physicians still mistakenly believe that they are “below the radar” when it comes to compliance.

As evidence that even individual physicians can be held to account for improper conduct, Modern Healthcare reports this week about an Ohio cardiologist who has been sentenced to 20 years in prison for overbilling.  Of course, the vast majority of physicians do not engage in intentional fraudulent or abusive billing but even relatively simple billing mistakes can result in  large overpayments or expensive  and disruptive investigations.  For this reason, having an effective compliance program in your medical practice is critical to avoiding costly compliance mistakes.