compliance

December 21, 2023

Posted on by jwilbert

QUESTION:
I have always found the OIG’s past “Compliance Guidance” to be vague and not particularly helpful.  Is there anything more recent that will provide an analytical framework to comply with the Anti-kickback statute?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY HENRY CASALE:
The Anti-kickback statute is an intent-based statute.  So, the OIG can be forgiven to a certain extent for their “it depends” guidance on compliance with this law.  However, given the fact the Anti‑kickback statute is a criminal statute and that federal health care program claims resulting from a violation of this law will also constitute a violation of the False Claims Act, even the OIG has realized that more definitive guidance is required.

The OIG seems to have heard your plea for help, and has provided the following analytical framework for compliance with the Anti-kickback statute on Pages 12-14 of the November 6, 2023, OIG General Compliance Program Guidance (“GCPG”).

When attempting to identify problematic arrangements under the federal Anti-kickback statute, some relevant inquiries to explore and consider can include the following.  This list of questions is illustrative, not exhaustive, and the answers to these questions alone are not determinative as to whether an arrangement violates the federal Anti-kickback statute.

Key Questions:

(1)        Nature of the relationship between the parties –

        • What degree of influence do the parties have, directly or indirectly, on the generation of federal health care program business for each other?

(2)        Manner in which participants were selected –

        • Were parties selected to participate in an arrangement in whole or in part because of their past or anticipated referrals?

(3)        Manner in which the remuneration is determined –

        • Does the remuneration take into account, either directly or indirectly, the volume or value of business generated?
        • Is the remuneration conditioned in whole or in part on referrals or other business generated between the parties? Is the arrangement itself conditioned, either directly or indirectly, on the volume or value of federal health care program business?  Is there any service provided other than referrals?

(4)        Value of the remuneration.

        • Is the remuneration fair market value in an arm’s-length transaction for legitimate, reasonable, and necessary services that are actually rendered?
        • Is the entity paying an inflated rate to a potential referral source? Is the entity receiving free or below-market-rate items or services from a provider, supplier, or other entity involved in health care business?
        • Is compensation tied, either directly or indirectly, to federal health care program reimbursement?
        • Is the determination of fair market value based upon a reasonable methodology that is uniformly applied and properly documented?

(5)        Nature of items or services provided.

        • Are the items and services actually needed and rendered, commercially reasonable, and necessary to achieve a legitimate business purpose?

(6)        Federal program impact.

        • Does the remuneration have the potential to affect costs to any of the federal health care programs or their beneficiaries?
        • Could the remuneration lead to overutilization or inappropriate utilization?

(7)        Clinical decision making.

        • Does the arrangement or practice have the potential to interfere with, or skew, clinical decision making?
        • Does the arrangement or practice raise patient safety or quality of care concerns?
        • Could the payment structure lead to cherry-picking healthy patients or lemon-dropping patients with chronic or other potentially costly conditions to save on costs?

(8)        Steering.

        • Does the arrangement or practice raise concerns related to steering patients or health care entities to a particular item or service, or steering to a particular health care entity to provide, supply, or furnish items or services?

(9)        Potential conflicts of interest.

        • Would acceptance of the remuneration diminish, or appear to diminish, the objectivity of professional judgment?
        • If the remuneration relates to the dissemination of information, is the information complete, accurate, and not misleading?

(10)      Manner in which the arrangement is documented.

        • Is the arrangement properly and fully documented in writing?
        • Are the parties documenting the items and services they provide? Are the entities monitoring items and services provided?
        • Are arrangements actually conducted according to the terms of the written agreements (when written to comply with the law)?

Is this perfect guidance – No.  But it is a significant improvement over any compliance guidance that the OIG has provided in the past.  In fact, we find the OIG’s New General Compliance Guidance to provide an excellent framework for compliance with the Anti-kickback statute, and a number of other federal laws that affect health care providers.

If you have a quick question about this, e-mail Henry Casale at hcasale@hortyspringer.com.

For an in-depth discussion of the OIG’s November 6, 2023, OIG General Compliance Program Guidance, please check out the Horty Springer Health Law Expressions Podcast  “New OIG General Compliance Program Guidance by Dan Mulholland and Henry Casale.”

 

February 11, 2021

Posted on by jwilbert

QUESTION:        I hear that the new Stark regulations have a way that Stark violations can be corrected without penalty.  Is that so?

ANSWER:           Yes, within limits.  CMS has now given hospitals and doctors a new way to correct noncompliance with the Stark law without having to make a self-disclosure.  The regulations, which became effective on January 19, 2021, contain a new regulation at 42 CFR §411.357(h) that allows parties to a compensation arrangement to reconcile all discrepancies while a contract is in effect or up to 90 days after it terminates so long as after the reconciliation the arrangement fully complies with all elements of the applicable exception.

For example:  say a hospital contract with a medical director calls for payment at $140 per hour but the doctor is paid $150 per hour.  If $150 still is within FMV range, all that is necessary is to reflect that in amendment going forward.  If the amount actually paid exceeds fair market value, the contract can be amended to recoup payments in excess of FMV via an offset against amounts due in the future (e.g., a payroll deduction) while the relationship is in effect, but the entire amount of the excess must be recouped within 90 days after the contract ends.

CMS also said that not every error will cause a financial relationship to be out of compliance with Stark nor must every mistake or error be corrected in order to maintain compliance.  Administrative and operational errors that are identified and rectified in a timely manner will not cause a relationship to be out of compliance.  In addition, CMS said that not all transfers of remuneration create compensation arrangements.  Examples include mistaken payments that are never identified, theft, use of office space not in lease, use of equipment beyond the expiration of the lease term or slight deviation from written agreement such as a one-time incorrect rental payment.

This new option is a great alternative to resorting to the Stark self-disclosure protocol.  To learn more about it, stay tuned for an upcoming Health Law Expressions podcast, where Horty Springer attorneys Josh Hodges and Dan Mulholland will discuss this new rule, or e-mail them at jhodges@hortyspringer.com or dmulholland@hortyspringer.com.

 

February 20, 2020

Posted on by hortyspringer

QUESTION:        We’re thinking of a joint venture with a company who we don’t know that well.  What should we watch out for?

ANSWER:           Any time you are thinking of a joint venture with anyone who you have not dealt with before, you should do your homework and conduct due diligence in much the same way you would in a merger, although not quite as intense.  Among other things, make sure you know who all the owners of your potential joint venture partner are.  Run a background check on them and also check the OIG exclusion list to see if they are on it.  Check with others who have done business with them before.  And make sure they have the financial wherewithal to bear their share of start-up costs.

These are only a few questions.  There are a lot of other things you should look into from a tax, antitrust and fraud and abuse perspective.

For more on what you should look for when considering a joint venture, check out Horty Springer’s recent podcast “Thinking of a Joint Venture?  Look Before You Leap!” by  Dan Mulholland  and  Henry Casale at our Health Law Expressions page; or even better, join Henry and Dan in Chicago on April 23 – 25 for the Physician-Hospital Contracts Clinic where they will discuss this and other hot compliance topics in detail.

April 7, 2016

Posted on by hortyspringer

QUESTION:        Our physician practice is a separate entity that employs both physicians and non-physician practitioners (“NPPs”).  Many of the physicians bill the NPPs’ services as “incident-to” services.  Our compliance officer wants to audit the “incident-to” billing and wants to know if there is a simple, straightforward way to conduct such an audit.

ANSWER:            Unfortunately, the answer is no.

Medicare does not require that a physician use any type of identifier or modifier in order to identify “incident-to” services.  This became an issue for the OIG in its report entitled “Prevalence and Qualifications of Non-Physicians Who Performed Medicare Physician Services,” OEI-09-06-00430 (August 2009).

The OIG began this report by conceding that “little is known about Medicare services that are performed ‘incident-to’ the professional services of a physician.”  The OIG noted in several places that it has no simple means to determine what services NPPs are providing to Medicare beneficiaries or the qualifications of those NPPs when the services are billed under the “incident-to” rule.

The OIG also recognized that there are a number of limitations to its study and cautioned against extrapolating the conclusions reached in this Report to the Medicare program as a whole.  Nonetheless, it is clear that the Report’s description of what NPPs do, their credentials and how they provide services is instructive to both the OIG and to practices that utilize NPPs.

But before we discuss the OIG Report, let us examine the Medicare “incident-to” rule.  This rule permits a physician to bill Medicare Part B at the full physician fee schedule amount for the services that are performed by an NPP, if the services are:   (i) furnished to beneficiaries who are not inpatients of a hospital or SNF; (ii) commonly provided in a physician’s office; (iii) an integral though incidental part of the services provided by the physician; (iv) included in a treatment plan for an injury or illness where the physician performs an initial service and is involved actively in the course of treatment; (v) commonly furnished without charge or included in the physician’s bill; and (vi) provided under the “direct supervision” of the physician (i.e., the physician must be present in the office suite while the services are being provided and immediately available to provide assistance).

In this report, the OIG wanted to audit exactly what Medicare was paying for when the program reimbursed claims for services that were billed under the Medicare “incident-to” rules.  However, because “incident-to” claims cannot be identified on the face of the claim, the OIG had no simple or direct means to identify “incident-to” claims.

As a result, the OIG had to formulate a means to identify “incident-to” billing.  In order to do so, the OIG looked at all the physician claims submitted to the program during the first quarter of 2007 and converted the E and M codes billed to a period of time using the Medicare Fee Schedule average time associated with each service.  The OIG then identified physicians who billed more than 24 hours in a single day, reasoning that the only ways to do so were either fraud or using NPPs.

Using this methodology, the OIG identified over 200 physicians who had billed more than 24 hours of services in a single day.  The OIG excluded a few physicians who were being investigated for billing fraud.  However, the OIG then determined that billing more than 24 hours in a day was not a concern to the OIG so long as the physicians complied with the “incident-to” rule.

The OIG then sent an audit request to the physicians who were part of the study, requesting that they identify the services that were being provided by the non-physician practitioners and the qualifications of those non-physician practitioners.

While the OIG found that most services billed using the “incident-to” rules were appropriate and most non-physicians involved in the care of those services were authorized to provide the service under state law, the OIG expressed the concern that a significant percentage of “incident-to” services may be performed by unqualified non-physician practitioners, concluding:

Unqualified non-physicians performed 21 percent of the services that physicians did not perform personally.  In the first 3 months of 2007, Medicare allowed $12.6 million for approximately 210,000 services performed by unqualified non-physicians.  These non-physicians did not possess the necessary licenses or certifications, had no verifiable credentials, or lacked the training to perform the services.  Non-physicians with inappropriate qualifications performed 7 percent of the invasive services that physicians did not perform.

The OIG study shows that “incident-to” billing is an area that your compliance program should review.  However, the study also shows the difficulty involved in conducting such an audit.

While you could use the OIG’s methodology, it is probably easier to visit each practice to observe whether the physicians who bill under the “incident-to” rules are following the requirements of the rules and to make sure that the services provided by the NPPs are within the scope of their state license.

October 8, 2015

Posted on by hortyspringer

Question:        When do we have to be in compliance with the new requirements for financial assistance policies and emergency care policies?

Answer:         The Patient Protection and Affordable Care Act (“ACA”) added §501(r) to the Internal Revenue Code, imposing new requirements, financial assistance policies, and emergency care policies, on 501(c)(3), “nonprofit” organizations. Last December, the IRS published the final regulations, giving some hospitals just one year to comply with the final regulations.

The date on which a hospital must be in compliance depends on when its tax year begins. A hospital must be in compliance with the Section 501(r) final regulations beginning on the first day of its first tax year after December 29, 2015.

So, if a hospital’s year ends on December 31, 2015, it must be in compliance by January 1, 2016. If it ends on June 30, 2016, it must be in compliance by July 1, 2016. If it ends on September 30, 2016, it must be in compliance by October 1, 2016.