WHAT EVERY NEW PRACTITIONER SHOULD CONSIDER
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1 WHAT EVERY NEW PRACTITIONER SHOULD CONSIDER January 24, 2017
2 Andrew N. Meyercord Gray Reed & McGraw 1601 Elm Street Suite 4600 Dallas, Texas
3 129 attorneys Full-service, commercial law firm Offices in Dallas & Houston Nationally-ranked healthcare practice Five Board Certified Health Law attorneys
4 Employment options Terms of recruitment Fraud & abuse regulatory issues Government enforcement Questions
5 Employment options Hospital/health system Independent practices
6 Security Payor contracts 9 5 position Bonus for performance Other relationships Medical directorships Service line co-management Accountable care organizations
7 Rising overhead costs Increased administrative time Diminishing reimbursement
8 Signed written agreement Not conditioned on referral of patients to the hospital Income subsidy and incremental expenses Not determined on volume or value of referrals If leaving established practice, at least 75% of revenue must be from new patients Moves practice at least 25 miles into geographic area served by the hospital
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10 Compensation Salary + bonus Productivity based salary Participation in ancillary revenues If system, wrvu based
11 Contract with two year term and 90 day termination without [mutual] cause is a 90 day term For cause terminating, provisions are important Lose medical staff privileges Failure to follow practice s policies
12 Practices typically pay malpractice, telephone, professional dues, CME, licensing fees and benefits Some provide marketing expenses Tail coverage group vs physician
13 Mediation/arbitration Who pays legal fees? Trial by jury
14 Generally enforceable if reasonable Texas statute Access to patient list Access to patient s medical record Right to continuing care of patients Reasonable buy-out
15 Outside activities Exclusive service Moon lighting Teaching Who is entitled to the fees?
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17 Anti-kickback statute Stark law State law Travel act
18 Prohibits knowingly and willfully soliciting or receiving, offering or paying: Any remuneration (including any kickback, bribe or rebate) directly or indirectly, overtly or covertly, in cash or in kind To induce or reward the referral, purchase, order, lease or recommendation of Any item or service that may be paid for under a federal healthcare program
19 Broad application Key Points Physicians, hospitals, vendors, consultants, group purchasing organizations, medical device/pharmaceutical companies Intent & one purchase rule Voluntary safe harbors Facts & circumstances analysis
20 Penalties Severe penalties/criminal offense (felony) $25,000 per violation Civil money penalties may be assessed Up to 5 years imprisonment Exclusion (conviction results in mandatory exclusion from participation in federal health care programs. Absent a conviction, individuals who violate the Anti-Kickback Statute may still face exclusion from federal health care programs at the discretion of the Secretary DHSS) No private right of action Predicate for False Claims Act
21 Remuneration Items and services OIG has concluded may constitute remuneration, depending on the facts and circumstances: Free computers Free biopsy needles Chart review and infection control services for nursing homes Pharmacy employees Hospice services in a nursing home Compliance program guidance to pharmaceutical manufacturers Reimbursement consulting services Labeling of test tubes and collection containers Vaccine reminders (to physicians) Lodging and transportation assistance
22 Investments in publicly traded and small entities Referral services Discounts Employees Warranties Space Rentals Equipment Rentals Personal services/ management agreements Group purchasing Regulatory Safe Harbors Co insurance waivers Sale of professional practices E-prescribing, EHRs Increased coverage, reduced costsharing, or reduced premiums offered by health plans Price reductions offered to health plans, eligible managed care organizations Practitioner recruitment Obstetrical malpractice insurance subsidies Investments in group practices Cooperative hospital service organizations Ambulatory surgical centers Ambulance replenishing
23 If a physician (or an immediate family member of such physician) has a financial relationship with an entity..., then the physician may not make a referral to the entity for the furnishing of designated health services for which payment otherwise may be made under Medicare. The entity may not present or cause to be presented a claim to Medicare or bill to any individual, third party payor, or other entity for designated health services furnished pursuant to a prohibited referral. If a person collects amounts billed in violation of this prohibition, that person must refund those amounts on a timely basis. UNLESS an exception applies...
24 Key Points No intent requirement Strict liability All elements of an exception must be met
25 Stark Law exceptions require strict compliance with every element of an exception...very little wiggle room Commonly used exceptions to the Stark Law involving contracts with referring physicians include: Fair Market Value Compensation Exception Personal Service Arrangements Exception Whole Hospital Exception Rental of Equipment Exception Space Leases Physician Recruitment Employment Non-Monetary Compensation
26 Penalties Automatic overpayment or disallowance Strict liability DHS entity, not referring physician Knowing violation can result in CMP liability of up to $15,000 per violation plus treble damages and/or $100,000 per circumvention scheme Potential exclusion from Federal Programs Potential predicate for False Claims Act
27 Clinical laboratory services Physical therapy services, occupational therapy services and speech pathology services Radiology services, including MRI, CT scan, PET, and ultrasounds Includes nuclear medicine Radiation therapy services and supplies Designated Health Services Durable medical equipment and supplies Parenteral and enteral nutrients, equipment and supplies Prosthetics, orthotics, prosthetic devices and supplies Home health services Outpatient prescription drugs Inpatient and outpatient hospital services
28 STARK LAW Regulated by CMS Prohibits referrals where a financial relationship exists Civil penalties only Strict liability Applies only to physicians (and immediate family members) Mandatory exceptions ANTI-KICKBACK STATUTE Regulated by the OIG Prohibits payments intended to induce referrals Criminal + civil penalties Intent element Applies to anyone who attempts, accepts, or gives kickbacks Voluntary safe harbors
29 Must also consider mini-stark state self-referral laws and state anti-kickback statutes Every state is different and has nuances requiring state-specific research (e.g., what entities are covered, what activities are covered, and which payors are covered)
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