Physician Relationship Compliance Issues Charles Oppenheim Hooper, Lundy & Bookman, PC
Overview of Anti-Kickback Statute It is a federal crime to: Knowingly and willfully offer or pay/solicit or receive any remuneration to induce referring or recommending or arranging the purchase of items and services covered by a federal health care program.
Anti-Kickback Statute Contains numerous exemptions and safe harbors that immunize conduct from prosecution They are optional If you do not fit within a safe harbor you may be subject to scrutiny depending on facts and circumstances 3
New All Payor Drug Rehabilitation Anti-Kickback New All Payor anti-kickback law applies to: Clinical treatment facilities (for rehabilitation) Recovery homes (for rehabilitation) Laboratories (all) Includes remuneration to induce referrals and in exchange for an individual using the services of Exemptions are different from traditional anti-kickback Beware of remuneration to patients who will receive laboratory services!! 4
Overview of the Stark Law: General Prohibition The Stark law: (1) Prohibits a physician from referring a Medicare patient to an entity for any designated health services if the physician (or an immediate family member of the physician) has a financial relationship with the entity, unless an exception applies. (2) Prohibits the entity receiving the referral from billing Medicare (or any one else) for the designated health services. 5
Overview of the Stark Law: Stark Designated Health Services 1. Clinical laboratory services 2. Physical therapy services 3. Occupational therapy services 4. Radiology services, including MRI, CT and ultrasound 5. Radiation therapy services and supplies 6. Durable medical equipment and supplies 7. Parenteral and enteral nutrients, equipment and supplies 8. Home health services 9. Outpatient prescription drugs 10. Inpatient and outpatient hospital services 6
Overview of the Stark Law: Sanctions and Penalties Denial of payment for Designated Health Services referred in violation of the Stark Law Refund of amounts collected for Designated Health Services rendered pursuant to prohibited referrals Monetary penalties of up to $15,000 per service and assessment of up to twice the amount claimed Exclusion from the Medicare and Medicaid programs Mandatory Repayment and Disclosure of Known Overpayments Within 60 Days 7
Overview of the Stark Law: Exceptions 1. Categorical or service exceptions (e.g., HMO, ASC, in-office ancillary services) 2. Ownership exceptions (e.g., large companies, rural providers, hospitals) 3. Compensation exceptions (a) Indirect (b) Direct (e.g., lease, personal services, employment) (c) Generally require signed, written agreements 8
Typical Documentation Issues: Services and/or payments start before written agreement is signed Performance (accidentally) deviates from written agreement Services and/or payments change; written agreement doesn t Nothing in writing <Problem: Standard compensation exceptions require signed, written agreements> <New regulations offer some relief> 9
Understanding Fair Market Value FMV What is fair market value (without regard to referrals)? How can MGMA compensation survey be used? How are 50 th, 75 th and 100 th percentiles viewed? What factors can permissibly affect FMV? What factors cannot permissibly affect FMV? What s the difference between FMV and commercially reasonable? Trends in commercial reasonableness issues 10
Documentation Issues Time sheets (amounts, accuracy, descriptions, dates) Other documentation of time spent/services performed Documenting rationale for arrangements to support commercial reasonableness 11
Leases Offices and/or equipment Calculating fair market rent (beware of variable rent, e.g., per click or percentage of revenue!) Commercial reasonableness Market comparables Apples to apples (net v. gross, class A, B, etc.)? Subleases? 12
Nonmonetary Compensation Permitted if: It is in the form of items or services (not cash or cash equivalents) up to $416 (in 2019) adjusted annually: Not determined in a manner that takes account of referrals Not solicited by physicians Does not violate AKS Question: What does (or does not) count as nonmonetary compensation? 13
Medical Staff Incidental Benefits Offered to all on medical staff (or in specialty), without regard to referrals Provided at the hospital Related to provision of care at hospital Limited to $35 per benefit (in 2019, adjusted annually) Must not violate AKS 14
Joint Marketing by Hospital and Practice Split costs based on degree each is featured (50/50 between hospital and practice) Beware of hospital staff helping out on joint marketing without properly allocating as an expense to the practice Beware of hiring a third party marketer who is tied to physician (e.g., a family member or employee of physician) 15
Stark Law Self-Disclosure Protocol Used for Stark only self-disclosure Tolls the 60-day repayment obligation, but doesn t require or permit payment with the self-disclosure! Requires detailed submission, including: facts and circumstances of violation legal analysis of why it doesn t comply calculations of financial damage New: Formula for calculating pervasiveness of non-compliance New: Requires certification of non-compliance What types of compromise might be available? 16
Tips on SRDP What is the settlement timeline? What is the settlement process? Offer amount Negotiable? Timing? Financial Distress? 17
Alternatives to Stark SRDP Report and repay (in full) to Medicare Administrative Contractor (MAC) Use OIG Self-Disclosure (if colorable AKS violation) AUSA/DOJ (for FCA liability) 18
Keys to Compliance Contract management system, including database for tracking contracts, policies & procedures for entering into, renewing and monitoring contracts, etc. Maintain written agreements, signed by parties, and make sure they remain current Document the basis for determining FMV and commercial reasonableness at the start of the contract term Document services performed contemporaneously throughout the term Don t forget to check on physician ownership of vendors/suppliers! Don t forget that a physician s immediate family members financial relationships are attributed to the physician! 19
Questions?
Thank You Charles Oppenheim Hooper, Lundy & Bookman, PC coppenheim@health-law.com