Recently in Stark and Anti-Kickback Category

April 6, 2016

Adrienne Dresevic and Clinton Mikel Earn the "Pulitzer Prize" of Legal Writing

Please join The Health Law Partners, P.C., in congratulating Adrienne Dresevic (a Founding Shareholder), and Clinton Mikel (a Partner), for earning what has been described as the "Pulitzer Prize of Legal Writing".

The Burton Award for Distinguished Legal Writing, which is run in association with the Library of Congress and co-sponsored by the American Bar Association, is earned each year by 35 exceptional authors nationwide.

Submissions for the Distinguished Legal Writing Award are extremely competitive. The award is generally selected by professors from Harvard Law School, Yale Law School, Stanford Law School, and Columbia Law School, among others.

This year, Adrienne Dresevic and Clinton Mikel join this distinguished group of authors for their journal article titled "Final CY 2016 Stark Law Changes--Welcomed Revisions to Stark". Their article was published in the December issue of the American Bar Association's peer-reviewed Health Lawyer publication (the flagship publication of the ABA's Health Law Section) - it meticulously dissects major revisions to the Physician Self-Referral Law (Stark Law).

The Burton Awards will be held in Washington D.C. on May 23, 2016. U.S. Supreme Court Justice Stephen Breyer will be the featured guest speaker and U.S. Supreme Court Justice Ruth Bader Ginsburg will memorialize Justice Scalia during the program.

March 14, 2016

6th Circuit Court Ruling May Significantly Reduce Recoverable FCA Damages by Feds

In U.S. ex rel. Wall v. Circle C. Construction, Case #14-6150, 2016 WL 423750 (6th Cir. Feb. 4, 2016), the 6th Circuit Court held that damages in false certification cases should be based on the difference between the value of the items or services the government should have received and the value of the items or services the government actually received. The holding, which arose in the non-healthcare context of a construction contract, arguably applies in healthcare matters where medically necessary items or services were furnished pursuant to referrals that violated AKS or Stark laws and thus the government did not sustain any actual damages. A court could then find that the treble damage provision under the False Claims Act is not applicable and the government's damage recovery is limited to the $5,500-11,000 per claim penalty.

Continue reading "6th Circuit Court Ruling May Significantly Reduce Recoverable FCA Damages by Feds" »

November 23, 2015

Providers Likely To Face Higher Penalties For Fraud and Regulatory Violations

On November 2, 2015 the President signed The Bipartisan Budget Act of 2015, requiring that civil monetary penalties must be raised to account for inflation, followed by an annual review for further increases. Providers accused of False Claims Act (FCA) violations are likely to see an increase as high as 40% over the current penalty ranging from $5,500 to $11,000. Higher penalties may add up quickly in FCA cases, which generally involve hundreds of alleged tainted claims.

This could potentially have a negative impact on providers that have earmarked monies for quality of care improvement efforts who must now spend the money on paying higher penalties. The threat of higher penalties might also influence a provider's decision to settle FCA cases due to the risk of astronomical penalties that may be imposed.

Budget Deal Raises Stakes for False Claims, Civil Monetary Penalties [link]

Continue reading "Providers Likely To Face Higher Penalties For Fraud and Regulatory Violations" »

November 2, 2015

Significant Changes to Stark Regulations Finalized in 2016 Medicare Physician Fee Schedule

In July, we blogged about the major Stark Law provisions in the 2016 Proposed Medicare Physician Fee Schedule (the "Proposed Rule"). On October 29, 2015, the Centers for Medicare & Medicaid Services ("CMS") released the final 2016 Medicare Physician Fee Schedule (the "Final Rule") (available here), with few changes between the proposed rule and final rule as it related to the Stark provisions. The Final Rule will be published in the Federal Register on November 5, 2015. These are the first major changes to the Physician Self-Referral Rule (Stark Law) since 2009.

CMS stated that the Stark Law updates are meant to accommodate health care delivery/payment system reform, reduce burdens, facilitate compliance, clarify certain applications of the Stark Law, and issue new Stark exceptions. Below is a brief summary of the provisions adopted in the Final Rule:

(a) CMS adopted the proposed Stark exception for recruitment assistance and retention payments from hospitals, federally-qualified health centers (FQHCs), and rural hospital clinics (RHCs) to physicians to assist with employing non-physician practitioners (NPPs) in their geographical area. The only change from the Proposed Rule is the addition of a definition for the geographical area serviced by the FQHCs and RHCs, which is:

The "geographic area served" by a federally qualified health center or a rural health clinic is the area composed of the lowest number of contiguous or noncontiguous zip codes from which the federally qualified health center or rural health clinic draws at least 90 percent of its patients, as determined on an encounter basis. The geographic area served by the federally qualified health center or rural health clinic may include one or more zip codes from which the federally qualified health center or rural health clinic draws no patients, provided that such zip codes are entirely surrounded by zip codes in the geographic area described above from which the federally qualified health center or rural health clinic draws at least 90 percent of its patients.

(b) CMS standardized the various terms used for the principle of "takes into account" referrals (e.g., variations include "based on" or "without regard to"). CMS settled on standardizing the language to "takes into account" the volume or value of referrals.

(c) CMS clarified that the regulations in 42 CFR 411.357(t) regarding retention payments in underserved areas is correct. The Final Rule clarifies that the retention payment must not exceed the lesser of an amount equal to 25 percent of the physician's current annual income averaged over the previous 24 months.

(d) CMS clarified that the Stark exception requiring that a lease arrangement be set out in writing does not require a single formal contract, but a collection of documents may satisfy the "writing" requirement. CMS did so by replacing the term "agreement" with the term "lease arrangement" throughout the regulation.

(e) CMS extended the "holdover" lease arrangement provision from six months to indefinitely (as opposed to a definite, but longer than six-month period as contemplated in the Proposed Rule). The new holdover lease language is applicable so long as the lease arrangement met the conditions of the exception prior to its expiration, the holdover is on the same terms and conditions as the immediately preceding arrangement, and that the holdover continues to satisfy the requirements of the exception.

(f) CMS revised the language of the exception to the definition of "remuneration" for items/devices/supplies that are used solely for one or more of the six purposes (i.e., collection, transportation, processing, storing, ordering, or communicating the specimen/results). The revision clarifies that the item can be used for more than one of the six purposes, so long as it is used solely for one or more of those purposes.

(g) CMS adopted the language in the Proposed Rule with regard to the clarification that employees or independent contractors do not "stand in the shoes" of their physician organization's arrangements "unless they voluntarily stand in the shoes of the physician organization as permitted under 42 CFR 411.354(c)(1)(iii) or (c)(2)(iv)(B).

(h) CMS expanded the exception for ownership of publicly traded securities with the language from the Proposed Rule to include protection for "trading on an electronic stock market or over-the-counter quotation system in which quotations are published on a daily basis and trades are standardized and publicly transparent."

(i) CMS added a new exception for timeshare lease arrangements between a physician and a hospital or unrelated physician organization for the use of premises, equipment, personnel, items, supplies, or services if certain conditions are met. The exception does not apply to advanced imaging, radiation therapy, or clinical/pathology laboratory equipment (other than equipment used to perform CLIA-waived laboratory testing).

(j) CMS added language to clarify that the physician-owned hospital disclosure requirements are not met by posting the ownership interest disclosure on a social media website, electronic patient payment portal, electronic patient care portal, or an electronic health information exchange.

Continue reading "Significant Changes to Stark Regulations Finalized in 2016 Medicare Physician Fee Schedule" »

August 17, 2015

OIG Issues New Advisory Opinion on Free Introductory Visits Offered to Patients by Home Health Providers

On August 6, 2015, the Office of Inspector General ("OIG") issued Advisory Opinion No. 15-12 (available here) regarding a home health provider (the "Requester") offering free introductory visits to patients who have chosen it for home health care. The OIG concluded that this arrangement does not violate the federal Anti-Kickback Statute ("AKS").
Under the proposed arrangement, the Requester does not have any involvement in the patient's home health selection process. Instead, a physician, another health care professional, or discharge planner/case manager presents the patient with a list of home health providers from which to choose. If the patient selects the Requester as its home health provider, then the Requester contacts the patient to schedule a free introductory visit with one of its liaisons. The purpose of the introductory visit is to provide the patient with: (1) an overview of the home health experience; (2) contact lists for the Requester's administrative and clinical staff; and (3) pictures of the patient's care team.
In reaching the conclusion that the arrangement does not generate prohibited remuneration under the AKS, the OIG considered the following facts:
• The Requester does not pay or offer any remuneration to the physicians or other individuals involved in the patient's provider selection process;
• The introductory visit does not involve any diagnostic or therapeutic services reimbursed by federal health care programs or by third-party payors, and the services provided by the liaison during the introductory visit do not require clinical training;
• The liaison does not contact the patient until after receiving notice that the patient has chosen the Requester as his or her home health provider; and
• The Requestor does not submit claims for or claim costs associated with the introductory visit.
The OIG reasoned that any benefits received by the patient during the introductory visit were for the primary purpose of facilitating the patient's transition to home health care, and the intangible worth to patients does not implicate the AKS. The OIG emphasized that when analyzing whether a service has economic value to patients, "the absence of a paying market for such service is not dispositive." According to the OIG, such an absence may be the result of factors other than the service having little or no value, including because: (1) the service is still new and emerging in the marketplace; or (2) the market has been distorted by the availability of free services. The key takeaway here is that AKS liability is not avoided simply because the service is not reimbursable.

Continue reading "OIG Issues New Advisory Opinion on Free Introductory Visits Offered to Patients by Home Health Providers" »

July 9, 2015

Major Stark Provisions in 2016 Proposed Medicare Physician Fee Schedule

On July 8, 2015, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule containing major provisions relating to the Physician Self-Referral Law (i.e., the Stark Law) and its exceptions. CMS states that the purpose of the Stark proposals is: "to accommodate delivery and payment system reform, to reduce burden, and to facilitate compliance," as well as to "expand access to needed health care services." CMS also states that it realizes that "additional clarification" of Stark would help.

Below is a brief summary of the proposals affecting the Stark Law:

a) Proposes new Stark exception for recruitment assistance and retention payments from hospitals, federally-qualified health centers (FQHCs), and rural hospital clinics (RHCs to physicians to assist them in employing non-physician practitioners (NPPs) in the geographical area served by the hospital, FQHC, or RHC providing the remuneration.
• The exception would not apply to remuneration flowing to a group practice or other type of physician practice (i.e., physician organizations). But, the exception would protect physicians from being considered to be "standing in the shoes of the physician organization" when determining a direct compensation arrangement.
• The exception would only apply where the NPP is a bona fide employee of the physician (or physician's practice).
• The exception would only apply to NPP services that are primary care services (i.e., family practice, internal medicine, pediatrics, geriatrics, and OB-GYN).
• Additional proposals seek to limit or "cap" the remuneration allowed under this exception.

b) Proposes adding a definition of the geographical area served by FQHs and RHCs under 42 CFR 411.357(e).

c) Proposes to standardize the various terms (e.g., "based on" or "without regard to") used for the principle of "takes into account" referrals to clarify that there are not different volume or value of referral standards in the Stark exceptions.

d) Proposes revisions to clarify that the policy stated in the Stark Phase III regulations regarding retention payments in underserved areas (42 CFR 411.357(t)) is correct and remains CMS's policy.

e) Proposes revisions to clarify that the Stark exceptions requiring that a lease or arrangement be set out in writing do not require a single formal contract. Rather, "a collection of documents, including contemporaneous documents evidencing the course of conduct between the parties, may satisfy the writing requirement." Additionally, the proposed rule clarifies that the one-year term requirement is satisfied "as long as the arrangement clearly establishes a business relationship that will last for at least 1 year."

f) Proposes to extend the "holdover" arrangements permitted by 42 CFR 411.357(a), (b) and (d) from six months to indefinitely (or, alternatively, a longer but definite period), provided that the holdover continues on the same terms and conditions and that it meets the fair market value requirements. Additionally, CMS proposes to revise the fair market value compensation exception "to permit renewals of arrangements of any length of time, including arrangements for 1 year or greater."

g) Proposes to revise the definition of remuneration to clarify that if one of the six statutory exceptions to remuneration applies, then the term "used solely" does not mean that the exception does not apply if the item, device or supply is used for more than one of the six statutorily allowed purposes.

h) CMS clarifies that employees or independent contractors do not "stand in the shoes" of their physician organization's arrangements "unless they voluntarily stand in the shoes of the physician organization as permitted under 42 CFR 411.354(c)(1)(iii) or (c)(2)(iv)(B). Additionally, CMS proposes to remove the phrase "stands in the shoes" from the definition of "locum tenens physician."

i) Proposes to expand the exception for ownership of publicly traded securities to include protection for "trading on an electronic stock market or OTC quotation system in which quotations are published on a daily basis and trades are standardized and publicly transparent."

j) Proposes a new exception for timeshare leasing "that would protect timeshare arrangements that meet certain criteria," including, but not limited to, that "the arrangement is between a hospital or physician organization (licensor) and a physician (licensee) for the use of the licensor's premises, equipment, personnel, items, supplies, or services...used predominantly to furnish evaluation and management services." This exception would not apply to independent diagnostic testing facilities or clinical laboratories.

k) CMS provides further guidance to physician-owned hospitals on the disclosure of its ownership interests, including that social media websites are not considered to be public websites for the hospital.

l) CMS also solicits comments on the affect that the Stark Law may have on Accountable Care Organizations.

In addition to the above-noted Stark provisions, the proposed rule contains a number of other proposals, including provisions on appropriate use criteria for advanced imaging services, telehealth, self-referral disclosure protocol, and more. More information on these provisions will be coming soon.

Continue reading "Major Stark Provisions in 2016 Proposed Medicare Physician Fee Schedule" »

August 6, 2013

Congressional Bill Introduced to Close the In-Office Ancillary Services Exception under the Stark Law

On Thursday, August 1, 2013, Congresswoman Jackie Speier (D-CA-14) introduced the "Promoting Integrity in Medicare Act of 2013 (PIMA) in the United States House of Representatives. As the law stands, Stark Law prohibits physicians from referring Medicare patients for certain health care services in which they have a financial interest. However, there is an in-office ancillary service exception included in the Stark Law, which according to two recent reports issued by the United States Government Accountability Office (GAO), has led to the overutilization of self-referrals. The reports estimate that in 2010 alone, Medicare could have saved $109 million on advanced imaging and $69 million on anatomic pathology if self-referring physicians had referred the same number of procedures as non-self-referring physicians.

According to Congresswoman Speier's press release, the proposed bill would eliminate diagnostic MRI, CT, PET, and other advanced diagnostic imaging services, anatomic pathology, radiation oncology, and physical therapy from the in-office exception because they are services that are rarely provided on the same day as the initial office visit. According to the release, "the goal of PIMA is to cut spending in Medicare by hundreds of millions annually without reducing the essential care that seniors rely on."

On the same day that the bill was introduced in Congress, the Alliance for Integrity in Medicare (AIM) issued a joint statement that applauded the strong leadership of Congresswoman Speier and showed its support for PIMA. The statement explained that if PIMA is enacted, the ability of collaborative group practices to operate as they do today will be preserved and physicians will continue to be allowed to order x-rays and other routine clinical laboratory tests in order to diagnose and treat patients during office visits. The AIM reiterated that reforming the in-office exception through the passing of PIMA will ensure that Medicare patients will "receive the highest quality and safest health care most appropriate to their needs, and Medicare policy incentives are properly aligned saving billions of dollars, which is in the best interests of beneficiaries, providers, and our nation's health system overall."

To see the full text of the Promoting Integrity in Medicare Act of 2013, click here.

To see the full text of the two GAO reports analyzing the in-office exception, click here and here.

To see the full text of the AIM's statement in support of the bill, click here.

Continue reading "Congressional Bill Introduced to Close the In-Office Ancillary Services Exception under the Stark Law" »

April 12, 2013

Obama Administration Budget Request for Fiscal Year 2014 Proposal Would Exclude Certain Services from the In-Office Ancillary Services Exception to Stark and Require Prior Authorization for Advanced Imaging Services

On Thursday, April 11, 2013, the Obama Administration released its Budget Request for Fiscal Year 2014 ("FY 2014") that begins at the beginning of October. If implemented, the Budget Proposal would include approximately $1.8 trillion in savings over the next ten years, enough to replace the automatic sequestration that took effect last month and was imposed as part of the Budget Control Act of 2011.

To achieve these savings, the Administration's Budget Request includes nearly $401 billion in Healthcare reductions that would likely affect all providers. While it is nearly impossible that the budget will pass Congress, some of the proposals are likely to make it into law in one form or another.

One of the numerous proposals from the Centers for Medicare and Medicaid Services ("CMS") is beginning in 2015, to exclude radiation therapy, outpatient therapy, and advanced imaging services from the Stark Law's exception for In-Office Ancillary Services ("IOAS") except in cases where a practice meets certain accountability standards, as defined by the Secretary. The IOAS exception to the Stark Law's prohibition on physician self-referrals was intended to allow physicians to provide beneficiaries with certain services that were a natural extension of their core practices and to lawfully bill for such services; however, CMS takes the position that radiation therapy, outpatient therapy, and advanced imaging services, in a significant number of cases, do not fit within the rationale underlying the IOAS exception insofar as they are "rarely performed on the same day as the related office visit." In addition, CMS cites evidence suggesting that allowing these services to fit the IOAS exception has led to overutilization and rapid growth of these services. By excluding the services from the exception, CMS believes that the government will save nearly $6.1 billion over the next 10 years.

CMS has also proposed to begin requiring prior authorization for advanced imaging services on the theory that the rapid growth in the number and intensity of services in the last decade is the result of inappropriate use of the services. In its summary of the proposal, CMS notes that this proposal would bring the program in line with private payers, which typically require prior authorization. Furthermore, the proposal satisfies a request from the Government Accountability Office ("GAO") that CMS implement prior authorizations or attempt other methods to limit growth in spending for advanced imaging services. However, at this time, CMS does not believe this will have an effect on the budget.

Continue reading "Obama Administration Budget Request for Fiscal Year 2014 Proposal Would Exclude Certain Services from the In-Office Ancillary Services Exception to Stark and Require Prior Authorization for Advanced Imaging Services" »

March 27, 2013

HHS Office of Inspector General Issues Special Fraud Alert Regarding Physician Owned Distributorships

On March 26, 2013, the Office of Inspector General ("OIG") of the United States Department of Health and Human Services ("HHS") issued a Special Fraud Alert ("SFA") regarding the potential for Physician-Owned Distributorships ("PODs") to violate the federal Anti-Kickback Statute ("AKS"). While the OIG has provided guidance previously on the potential for physician-owned entities to create AKS and other fraud and abuse issues, this SFA focuses on the "specific attributes of PODs" that the OIG believes makes these entities "inherently suspect under the anti-kickback statute. With the increase in prevalence of these types of entities, this is an important development that has even piqued the interest of the Wall Street Journal.

At the heart of the OIG's new SFA is the agency's belief that any "opportunity for a referring physician to earn a profit" could be unlawful remuneration under the AKS. Previously, the OIG's has highlighted a number of questionable features for physician-owned entities, such as:

1. Selecting investors for their potential to generate business;
2. Requiring investors that retire or move from the service area to divest their ownership; and
3. Distributing outsized returns compared to the level of risk in the investment.

In particular, the OIG believes that physician-owned entities, particularly PODs, with these features may lead to issues including:

• Corruption of medical judgment;
• Overutilization;
• Increased costs to Federal and State Medical Programs; and
• Unfair competition.

In this new SFA, the OIG, recognizing that whether an entity is lawful under the AKS is dependent on the intent of the parties involved, includes a number of features that the agency believes provide evidence of the intent to induce illegal remuneration.

• The size of the investment offered to each physician varies with the expected or actual volume or value of devices used by the physician.
• Distributions are not made in proportion to ownership interest, or physician-owners pay different prices for their ownership interests, because of the expected or actual volume or value of devices used by the physicians.
• Physician-owners condition their referrals to hospitals or ASCs on their purchase of the POD's devices through coercion or promises, for example, by stating or implying they will perform surgeries or refer patients elsewhere if a hospital or an ASC does not purchase devices from the POD, by promising or implying they will move surgeries to the hospital or ASC if it purchases devices from the POD, or by requiring a hospital or an ASC to enter into an exclusive purchase arrangement with the POD.
• Physician-owners are required, pressured, or actively encouraged to refer, recommend, or arrange for the purchase of the devices sold by the POD or, conversely, are threatened with, or experience, negative repercussions (e.g., decreased distributions, required divestiture) for failing to use the POD's devices for their patients.
• The POD retains the right to repurchase a physician-owner's interest for the physician's failure or inability (through relocation, retirement, or otherwise) to refer, recommend, or arrange for the purchase of the POD's devices.
• The POD is a shell entity that does not conduct appropriate product evaluations, maintain or manage sufficient inventory in its own facility, or employ or otherwise contract with personnel necessary for operations.
• The POD does not maintain continuous oversight of all distribution functions.
• When a hospital or an ASC requires physicians to disclose conflicts of interest, the POD's physician-owners either fail to inform the hospital or ASC of, or actively conceal through misrepresentations, their ownership interest in the POD.

While the OIG considers the factors above evidence of intent, the agency does not consider the list a "blueprint for how to structure a lawful POD" and other PODs without these characteristics may violate the AKS. In particular, the OIG mentions concerns with PODs that:

• Exclusively serve its physician-owners rather than a POD that also sells to Ambulatory Surgical Centers ("ASCs") and Hospitals and
• Purport to designs and sell their own devices, particularly when the physician-owners are the sole users of the device.
Because both sides of a transaction are liable for violations of the AKS, the SFA indicates Hospitals and ASCs that have arrangements with PODs to provide devices are also at risk if one purpose of the arrangement is to secure physician referrals to the facilities.

Following OIG's release of this SFA, the Physician-owners, managers, and partners of existing PODs, as well as individuals and/or entities considering forming a new POD, should contact their legal counsel to begin to examine the structure of their entities in order to, at minimum, ensure the entities do not include any of the features the OIG highlight above. Likewise, hospitals and ASCs should examine agreements with PODs to ensure they are not structured to generate referrals from the physician-owners.

Continue reading "HHS Office of Inspector General Issues Special Fraud Alert Regarding Physician Owned Distributorships" »

February 1, 2013

New Jersey Hospital Settles Anti-Kickback Qui Tam Case for $12.5 Million; Case Alleged Cardiologists Were Compensated $18,000 Per Year to Serve on Advisory Board That Was Actually Tied to Patient Referrals

On January 24, 2013, the U.S. Attorney's Office for the State of New Jersey unsealed a $12.5 Million Dollar settlement with Cooper Health System, headquartered in the Camden, New Jersey area, but serving regions of New Jersey, Pennsylvania and Delaware. The settlement was the result of cardiologist Nicholas DePace's whistleblower qui tam lawsuit, which alleged that the government had been defrauded.
The case arose out of an arrangement where cardiologists were paid $18,000 per year to sit on an advisory board. The physicians were paid to sit on the board from 2004 until 2010. Under the participating physicians' "consulting" and "compensation" agreements, they were required to attend at least four board meetings per year to receive the $18,000 payment. The complaint alleged that these physicians did little "advising" on the advisory board, and simply listened to lectures at the meetings.
In his qui tam complaint, DePace alleged that the hospital violated the Federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), Federal "Stark Law" (42 U.S.C. § 1395nn), the New Jersey Anti-Kickback Statute (N.J.S.A. 30:4D-14(c)), and New Jersey's physician self-referral law (N.J.S.A. 45:9-22.4, et seq., or the "Codey Law"). The U.S. Attorney's office alleged that Cooper's payments to physicians sitting on the board were at least in part to compensate them for their referrals of patients to the hospital, and that some of those patients were Medicare or Medicaid recipients. Dr. DePace was paid $2.39 Million from the United States and New Jersey for reporting the claims.
The $12.6 Million Dollar settlement will have a significant financial impact on the Camden-based healthcare system, which posted a 2012 11-month operating income of $13 Million, according to financial disclosures.

Continue reading "New Jersey Hospital Settles Anti-Kickback Qui Tam Case for $12.5 Million; Case Alleged Cardiologists Were Compensated $18,000 Per Year to Serve on Advisory Board That Was Actually Tied to Patient Referrals" »

September 6, 2012

THE HEALTH LAW PARTNERS' ADRIENNE DRESEVIC AND JESSICA GUSTAFSON PRESENT AT THE ASSOCIATION FOR MEDICAL IMAGING MANAGEMENT NATIONAL MEETING

Adrienne Dresevic and Jessica Gustafson, founding partners of Southfield, Mich.-based The Health Law Partners, recently presented at The Association for Medical Imaging Management's (AHRA) 40th Annual Meeting and Expo in Orlando, Fla. Founding partner, Abby Pendleton made the announcement.
Dresevic and Gustafson spoke on key legal issues impacting radiology providers and suppliers, including new Medicare initiatives, Stark and Anti-Kickback Law, updates from the Office of the Inspector General, and practical tips on compliance issues. Nearly 1,000 imaging leaders attended the expo that took place over a three-day period.
An avid writer and speaker, Dresevic has published more than 60 articles on healthcare law and presents at national conferences throughout the year. Dresevic's practice encompasses the full spectrum of healthcare law and has specialized her practice in Stark and fraud abuse. She received her juris doctorate from Wayne State University Law School, finishing second in her class magna cum laude, and was a member of the Order of the Coif.
Gustafson specializes her practice in Recovery Audit Contracts and Medicare audit appeals, and she routinely publishes articles and speaks on the subject across the country. Gustafson graduated cum laude from Miami University, and earned her juris doctorate from Wayne State University Law School. She is a member of the American Health Lawyers Association, American Bar Association - Health Law Section and the Michigan Bar Association - Health Law Section.

Southfield, Mich.-based The Health Law Partners is a law firm dedicated to the practice of healthcare law. The firm takes pride in delivering progressive results for their clients and exceeding their high standards for service. Established in 2009 by Adrienne Dresevic, Jessica Gustafson, Robert Iwrey, Carey Kalmowitz, and Abby Pendleton, the firm has built a national network, with additional offices in New York and Atlanta. Clients include solo practitioners, group practices, hospitals, hospice organizations and health systems.
The firm has extensive knowledge and experience in Stark and Anti-Kickback law compliance, healthcare billing and reimbursement issues, healthcare transactional work, and Medicare and Medicaid appeals, as well as licensing issues, physician and staff privileging, and participation with third-party payers. HLP attorneys are adept at providing post-audit defense and appeals, a specialty that also provides them with valuable insight and experience into the compliance side of the legal equation--identifying and addressing avoidable vulnerabilities and exposures.

Continue reading "THE HEALTH LAW PARTNERS' ADRIENNE DRESEVIC AND JESSICA GUSTAFSON PRESENT AT THE ASSOCIATION FOR MEDICAL IMAGING MANAGEMENT NATIONAL MEETING" »

September 6, 2012

THE HEALTH LAW PARTNERS' CLAUDIA HINRICHSEN TO PRESENT WEBINAR ON MANAGED CARE CONTRACTS Hinrichsen will serve as panelist and will provide roadmap to successful contract negotiations

Claudia Hinrichsen, partner at Lake Success, N.Y.-based The Greenberg, Dresevic, Hinrichsen, Iwrey, Kalmowitz, La Salle, Lebow & Pendleton Law Group, a division of The Health Law Partners, P.C., will present at a Continued Legal Education webinar entitled "Drafting Managed Care Contracts: Considerations for Providers" on Sept. 6 at 1:00 p.m. Founding Partner Adrienne Dresevic made the announcement.
The 90-minute webinar will provide best practices for providers negotiating managed care contracts, review current trends in negotiations, discuss key provisions and solutions to common areas of dispute. In addition to the presentations, there will be a question and answer session for attendees to gain insight on their own key issues.
Hinrichsen practices in all areas of healthcare law and has specialized in managed care. She has robust experience in independent practice association network formation and corporate governance, negotiation and dispute, payor audits and underpayments. Hinrichsen has received numerous accolades during her career, including being named a Top Healthcare Attorney in 2009 by the Chambers Association. Hinrichsen graduated from Hofstra Law School with distinction, and she earned her bachelor's degree from SUNY Geneseo where she graduated magna cum laude.
For more information on the webinar please visit www.straffordpub.com
Southfield, Mich.-based The Health Law Partners is a law firm dedicated to the practice of healthcare law. The firm takes pride in delivering progressive results for their clients and exceeding their high standards for service. Established in 2009 by Adrienne Dresevic, Jessica Gustafson, Robert Iwrey, Carey Kalmowitz, and Abby Pendleton, the firm has built a national network, with additional offices in New York and Atlanta. Clients include solo practitioners, group practices, hospitals, hospice organizations and health systems.

The firm has extensive knowledge and experience in Stark and Anti-Kickback law compliance, managed care, healthcare billing and reimbursement issues, healthcare transactional work, and Medicare and Medicaid appeals, as well as licensing issues, physician and staff privileging, and participation with third-party payers. HLP attorneys are adept at providing post-audit defense and appeals, a specialty that also provides them with valuable insight and experience into the compliance side of the legal equation--identifying and addressing avoidable vulnerabilities and exposures. Please visit www.thehealthlawpartners.com for more information.

Continue reading "THE HEALTH LAW PARTNERS' CLAUDIA HINRICHSEN TO PRESENT WEBINAR ON MANAGED CARE CONTRACTS Hinrichsen will serve as panelist and will provide roadmap to successful contract negotiations" »

August 30, 2012

THE HEALTH LAW PARTNERS' ADRIENNE DRESEVIC APPOINTED TO AMERICAN BAR ASSOCIATION EDITORIAL BOARDS AND PUBLICATIONS COMMITTEE

Adrienne Dresevic, founding partner of Southfield, Mich.-based The Health Law Partners, has been appointed chair of the American Bar Association (ABA) Publications Committee, liaison from the publications committee to The Health Lawyer Editorial Board and chair of the Stark & Anti-Kickback Toolkit Editorial Board. Founding partner, Carey Kalmowitz made the announcement.
As chair of the Publications Committee, Dresevic will work with section project managers to actively increase the number of publications produced by cultivating an encouraging atmosphere with the ABA Interest Groups and strong support from the Publications Committee.
Dresevic will serve as a facilitator and ensure open communication in her role as liaison between The Health Lawyer Editorial Board and the Publications Committee.
Serving as chair of the Stark & Anti-Kickback Toolkit Editorial Board, Dresevic will work toward increasing subscriptions by improving and updating the toolkit from prior years.
An avid writer and speaker, Dresevic has published over 60 articles on healthcare law and presents at national conferences throughout the year. Dresevic's practice encompasses the full spectrum of healthcare law and has specialized her practice in Stark and fraud abuse. She received her juris doctorate from Wayne State University Law School, finishing second in her class magna cum laude, and was a member of the Order of the Coif.

Southfield, Mich.-based The Health Law Partners is a law firm dedicated to the practice of healthcare law. The firm takes pride in delivering progressive results for their clients and exceeding their high standards for service. Established in 2009 by Adrienne Dresevic, Jessica Gustafson, Robert Iwrey, Carey Kalmowitz, and Abby Pendleton, the firm has built a national network, with additional offices in New York and Atlanta. Clients include solo practitioners, group practices, hospitals, hospice organizations and health systems.

The firm has extensive knowledge and experience in Stark and Anti-Kickback law compliance, healthcare billing and reimbursement issues, healthcare transactional work, and Medicare and Medicaid appeals, as well as licensing issues, physician and staff privileging, and participation with third-party payers. HLP attorneys are adept at providing post-audit defense and appeals, a specialty that also provides them with valuable insight and experience into the compliance side of the legal equation--identifying and addressing avoidable vulnerabilities and exposures.

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June 5, 2012

Viewing the Recent OIG Company Model Advisory Opinion for What It Truly Is: Meaningful Guidance That Must Be Incorporated Into These Arrangements (But Certainly Not the Death Knell to All Company Models Across the Country)

On June 1, 2012, the Department of Health and Human Services Office of Inspector General (the "OIG") issued its Advisory Opinion No. 12-06, which provides long-awaited guidance to the health care industry regarding the legal permissibility of an anesthesia delivery service model commonly referred to as the "company model." Insofar as Advisory Opinion No. 12-06 is the initial OIG guidance that specifically focuses on such an arrangement and determines that the factual paradigms presented implicate risks under the Medicare and Medicaid Antikickback Statute (the "AKS"), this Advisory Opinion understandably is capturing broad attention within the medical and legal communities. While OIG Advisory Opinion 12-06 clarifies the almost-axiomatic observation that company model arrangements, especially those that contain the indicia that the OIG historically has identified as problematic under the AKS, certainly have the potential to violate the AKS, the legal permissibility of each company model arrangement should continue to be analyzed based upon each arrangement's unique facts and circumstances. Stated otherwise, OIG Advisory Opinion 12-06 should not be interpreted to mean that all company model frameworks necessarily are violative of the AKS; rather, the Advisory Opinion reinforces the consistent guidance provided by The Health Law Partners that these arrangements need to incorporate the requisite structural safeguards.

Broad Overview of Company Model Arrangements and Related Controversy

A significant percentage of ASC procedures involve anesthesia services provided by an anesthesiologist or a certified registered nurse anesthetist ("CRNA"). Due to changes within the health care environment, including, in particular, contraction to reimbursement and an increased emphasis on quality and efficiency of patient care, an increasing number of ASCs around the country have transformed their relationships with the anesthesia providers from the normative arrangement (under which an independent anesthesia group bills fee-for-service for the anesthesia services that it furnishes at the ASC) to "company model" arrangement. Although there are a number of permutations of the structure, the company model generally involves the ASC or some or all of its physician owners (hereafter, in either case, the "ASC Physician Members") establishing a separate legal entity that will provide anesthesia services to the ASC by employing or contracting with anesthesia providers (the "New Company"). The New Company separately bills for the anesthesia services and then pays the anesthesia providers an agreed-upon rate (or contractual compensation in the case of employed anesthesiologists). As a result, the ASC Physician Members capture a portion of the anesthesia revenue generated from procedures furnished at the ASC (which, under the traditional paradigm, had been exclusively realized by the anesthesiologists).

The company model debate has prompted vigorous discussion within the health care bar. The legal dialogue, in particular, focuses upon the application of the AKS to the company model structure. In pertinent part, the AKS prohibits anyone from knowingly and willfully soliciting, receiving, offering or paying remuneration, in cash or in kind, to induce or in return for referrals of items or services payable by any federal health care program. Liability is imposed upon both parties to an impermissible transaction. The AKS has been interpreted to cover any arrangement where one purpose of the remuneration is to obtain money for referral of services or to induce further referrals, even if other salutary purposes exist. Violation of the AKS constitutes a felony punishable by a maximum fine of $25,000, imprisonment up to five years or both. Conviction will also lead to automatic exclusion from federal health care programs, including Medicare and Medicaid and may result in the imposition of civil monetary penalties.

In the company model context, the profit that the ASC Physician Members derive from the anesthesia revenue at the ASC, in an improperly structured arrangement, potentially represents impermissible remuneration in the AKS context. In its most basic terms, the issue is whether, in substance, the ASC Physician Members are "converting their referral stream into a revenue stream." The theory is that the anesthesiologists would essentially be required to forego the anesthesia profit (in favor of the New Company) in exchange for the ability to provide (or, in the case of a then-current anesthesia provider, continue providing) anesthesia services at the ASC, and the ASC Physician Members would earn such profit, based in part, upon their referrals of such services to the anesthesiologists. As discussed below, the fact that the company model affords the ASC Physician Members the ability to capture anesthesia revenue, by itself, does not violate AKS insofar as the determinative element of any AKS violation is impermissible intent. Further, the Federal government is particularly concerned with arrangements that have the ability to negatively affect patient care and/or to result in overutilization. OIG Advisory Opinion No. 12-06 states "[t]he anti-kickback statute seeks to ensure that referrals will be based on sound medical judgment, and that health care professionals will compete for business based on quality and convenience, instead of paying for referrals." Any AKS analysis requires consideration of the aggregate facts and circumstances in light of available Federal guidance.

In our view, OIG Advisory Opinion No. 12-06 should be seen as corroborative of the AKS principles that the OIG has articulated in prior guidance. Thus, there is no unique company model jurisprudence. Rather, to the extent that a company model arrangement contains the suspect indicia that the OIG has consistently identified, then such an arrangement will assume a higher level on the risk spectrum, whereas, by contrast, company models that both demonstrate a clearer nexus between the ASC Physician Members and New Company's business (especially in the form of active participation, particularly focused towards the elevation of clinical care), and which avoid correlations between distributions to the ASC Physician Members and their referrals, the risks will be comparatively lower.

Recent OIG Advisory Opinion No. 12-06 and HLP Comments

In OIG Advisory Opinion No. 12-06, the OIG reviewed two proposals (i.e., Proposal A and B) (the "Proposed Arrangements") for modifying the relationship between certain ASCs and their exclusive provider of anesthesia services (the "Requestor") and determined that both of the Proposed Arrangements could potentially violate AKS and result in administrative sanctions.

At the outset, we note that Proposal A itself is not truly a "company model" arrangement. Proposal A involved the Requestor continuing to serve as the exclusive provider of anesthesia services and to bill and retain collections for its services, subject, however, to the requirement that it would pay the ASCs a per-patient fee for certain "management services" with respect to non-federal health care program patients. The OIG clarified that the proposed "carve out" of federal health care program patients is does not insulate the otherwise-defective structure from AKS scrutiny. The Federal government would view the relationship between the Requestor and the ASCs (which also included the provision of services to federal health care program patients) as a whole. The OIG noted that the ASCs were already essentially paid for such management services through the facility fee that the ASCs receive from Medicare and therefore, under Proposal A, the ASCs would be paid twice for the same services. Further, such management fee would have the potential to inappropriately dictate which anesthesia provider was selected by the ASC. The OIG's disapproval of Proposal A reaffirms the position that HLP has consistently taken that conditioning a provider's (e.g., an anesthesiologist's) right to perform services upon entry into a contractual arrangement with a group of physicians who potentially control the referrals to such provider (e.g., ASC Physician Members) can implicate substantial regulatory risks.

In contrast to Proposal A described above, Proposal B represents a more normative variant of company model arrangement (albeit one against which we have counseled). Under Proposal B, the ASC Physician Members would indirectly (through their professional entities or the ASC itself) own a new subsidiary entity (the "Subsidiary"). The Subsidiary would engage the Requestor as an independent contractor to provide a broad (i.e., substantially the full spectrum of required) anesthesia-related administrative services through the new Subsidiary entity in return for a negotiated fee. Further, the Subsidiary would employ anesthesia providers (some or all of whom would be affiliated with Requestor) or contract with the Requestor's anesthesia providers on a contractor basis. The Subsidiary would furnish and bill for all anesthesia services provided at the ASC and pay the anesthesia providers agreed-upon compensation. Simply stated, insofar as the ASC Physician Members would indirectly own the Subsidiary, there would be a correlation between the number of procedures performed at the ASC that require anesthesia and the profit distributions to the ASC Physician Members from the Subsidiary. (It should be noted, in the context of this discussion, that such correlation between referrals and profit distributions exists in legally permissible in-office ancillary service arrangements, even among single specialty group practices.) Among other factors, the OIG also found it significant that the ASC physicians would not be involved in the operations of the Subsidiary and that substantially all of the operations would be contracted out to Requestor. Further, it is noteworthy that the anesthesia services would be provided by the same provider that historically furnished the anesthesia services before entry into the company model arrangement. Relying heavily upon its previously issued joint venture guidance, the OIG concluded that Proposal B would pose "more than a minimal risk of fraud and abuse."

The OIG's conclusions with respect to Proposal B are consistent with the advice that HLP has previously provided: if a company model arrangement (such as Proposal B) is implemented (or appears to be implemented) to convert referrals (by ASC physicians to anesthesiologists) to a revenue stream and to incentivize overutilization and undue influence over choice of anesthesia provider, such company model involves a high level of risk and is likely impermissible. Factors that increase the risk of inappropriate utilization through the ordering of unnecessary procedures and anesthesiology services to generate revenue have the ability to increase costs to the federal health care programs, interfere with clinical decision-making and raise patient safety or quality of care concerns. By contrast, if a company model arrangement is organized and operated for legally permissible goals (i.e., improving quality and efficiency of care), the ASC Physician Members participate actively in the business' conduct, and the profit distribution mechanism does not bear a connection between distributions and the ability to generate procedures, its legal risk is significantly mitigated and the arrangement is in a far better position to be defensible, especially if all the requisite structural safeguards are included.

Conclusion

OIG Advisory Opinion No. 12-06 reminds us that company model arrangements must include meaningful safeguards to mitigate legal risk and to be defensible from an AKS perspective. That being said, the value of such safeguards depends upon the manner in which they are implemented and the actual intent that underlies their inclusion.

Any company model arrangement must be structured, and most importantly, actually implemented, in a good faith manner and involve circumstances that reflect good intent, such as improving quality, efficiency and coordination of care or other permissible purposes. Meaningful efforts to coordinate care through increased integration and alignment among providers is a favorable factor. Employment of the anesthesiologists and CRNA's by the new ASC or physician owned anesthesia entity would promote such a nexus. Further, if the objective of the new entity is genuinely to improve quality and efficiency, all the physician owners should be meaningfully engaged in the operations of the Company, especially with regard to the development and continuous refinement to policies and protocols (e.g., "best practices") designed to enhance the quality and efficiency of services furnished at the ASC.

We also take the opportunity to emphasize that distributions from the new company under a company model arrangement to the physician owners (directly or indirectly) should be made in accordance with such physicians' respective ownership interests (or some other factor unrelated to referrals) and certainly not based upon the number of procedures they perform at the ASC. Accordingly, it is imperative that such new company not determine the ownership interests of the physicians based upon their anticipated referrals or business generated, not encourage physician investors to divest their ownership interest if they fail to generate a certain level of referrals or business generated, and not track the source of referrals to or business generated for the company.

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June 5, 2012

In Office DME Arrangements Should be Carefully Reviewed by Legal Counsel

In their June newsletter, The Record, Blue Cross Blue Shield of Michigan (BCBSM) recommended that physicians "consult with their legal counsel periodically." The problem that BCBSM identified is the situation where physicians prescribe and dispense durable medical equipment and prosthetics and orthotics items in order to provide a means for their patients to be ambulatory prior to leaving the physician's office. BCBSM has encouraged this practice; however, they warn physicians that certain practices may run afoul to local, state and federal laws. In particular, physicians should worry about the Stark and anti-kickback laws that prohibit self-referrals. Therefore, as BCBSM concludes, it is important for physicians to consult with their legal counsel to ensure compliance with the law. This is especially important when physicians provide durable medical equipment to patients directly from their office. Legal counsel should carefully review such practices to ensure compliance with the Stark law.

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