Disclaimer
This publication is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal or financial advice nor do they necessarily reflect the views of Holland & Hart LLP or any of its attorneys other than the author. This publication is not intended to create an attorney-client relationship between you and Holland & Hart LLP. Substantive changes in the law subsequent to the date of this publication might affect the analysis or commentary. Similarly, the analysis may differ depending on the jurisdiction or circumstances. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.
Privacy Policy
View our privacy policy.
Referral Reward Programs
/in Fraud and Abuseby Kim C. Stanger, Holland & Hart LLP
I often see programs in which health care providers offer rewards to persons who refer new business to the practice. Such programs are risky.
Anti-Kickback Statute. The federal Anti-Kickback Statute prohibits offering or paying any remuneration to induce referrals for items or services payable by federal healthcare programs, including Medicare or Medicaid. (42 USC 1320a-7b(b)). Violation of the Anti-Kickback Statute is a felony. It is also an automatic violation of the federal False Claims Act. Accordingly, providers should never reward referrals for Medicare or Medicaid business. In addition, the OIG has suggested that carving out federal program business from reward programs may not insulate the provider from Anti-Kickback Statute liability because a person who receives rewards for referring non-federal program business is likely to refer federal program business as well. (OIG Advisory Opinion No. 12-06).
State Laws. Referral reward programs might also violate state laws. For example, the Idaho Medical Practices Act prohibits “[d]ivision of fees or gifts or agreement to split or divide fees or gifts received for professional services with any person, institution or corporation in exchange for referral.” (Idaho Code 54-1814(8)). Idaho’s insurance code also prohibits rewarding referrals that result in “treatment of physical or mental illness or injury arising in whole or substantial part from trauma.” (Idaho Code 41-348). I am not aware of any cases in which these statutes have been applied to referral reward programs, but there is a risk. Read more
Stark Requirements for Physician Contracts
/in Contracts & Transactions, Fraud and Abuseby Kim C. Stanger, Holland & Hart LLP
Entities that employ or contract with physicians must ensure their agreements are structured to comply with the federal Ethics in Patient Referrals Act (“Stark”)1 if they intend to bill Medicare for services rendered or referred by the physicians. Under Stark, if a physician (or a member of the physician’s family) has a financial relationship with an entity, the physician may not refer patients to the entity for certain designated health services (“DHS”)2 payable by Medicare unless the financial relationship is structured to fit within a regulatory safe harbor.3 Entities may not bill Medicare for services improperly referred and, if they have done so, the entity must repay amounts improperly received. Failure to report and repay within 60 days may result in additional civil penalties of $15,000 per claim as well as False Claims Act liability.4 Repayments can easily run into the hundreds of thousands if not millions of dollars. Given the potential liability, it is critical that physician arrangements be structured to fit within the regulatory safe harbors.
Read more
Physicians Should Beware Illegal Conspiracies when Dealing with Hospitals
/in Antitrustby Melissa Starry, Holland & Hart LLP
Physicians and other providers must beware illegal conspiracies when taking coordinated action to obtain payment from hospitals. On December 1, 2014, the State of Idaho Office of the Attorney General reached settlements with four physicians who were investigated for their actions during on-call pay negotiations with Madison Memorial Hospital in Rexburg, Idaho.
According to the Attorney General’s press release, the hospital’s on-call policy required physicians to provide unpaid on-call coverage for the emergency department as a condition of receiving privileges. Several doctors jointly sought to negotiate changes to the policy and notified hospital administrators that they would no longer provide on-call coverage until the hospital agreed to pay them. The Attorney General asserted that the physicians’ coordinated response violated the Idaho Competition Act.
Both federal and state laws prohibit agreements between competitors that restrain trade. At issue in Rexburg was the Idaho Competition Act which prohibits conspiracies “between two or more persons in unreasonable restraint of Idaho commerce.” See Idaho Code § 48-104. Examples of unreasonable restraint include price fixing, allocating or dividing markets, and boycotting or refusing to deal. Attorney General Lawrence Wasden said, “[a]t issue for my office in this investigation is using anticompetitive tactics to bring about change in the marketplace.” The investigation did not consider the merits of paying physicians for on-call services. According to the Attorney General’s press release, the investigation into the matter is ongoing. Read more
Valid HIPAA Authorizations: A Checklist
/in HIPAAby Kim C. Stanger, Holland & Hart LLP
The HIPAA privacy rules generally prohibit healthcare providers and their business associates from using or disclosing protected health information (“PHI”) unless (1) they have a valid written HIPAA authorization signed by the patient or the patient’s personal representative, or (2) a specific regulatory exception applies.1 Many if not most authorizations received by providers are invalid. To be valid, a HIPAA authorization must satisfy the following2: Read more
Colorado DME
/in Uncategorizedby Chris Esseltine, Holland & Hart LLP
Colorado recently enacted a bill that will significantly affect Durable Medical Equipment (DME) suppliers in the state. The bill requires a DME supplier that currently bills or plans to bill the Medicare program for services or products to have a license with the Secretary of State. The licensee must be physically located within the state or within 50 miles of the state, have sufficient inventory and staff to do business, and be accredited by an organization recognized and accepted by the centers for Medicare and Medicaid services.
According to a representative at the Secretary of State’s office, the law will go into effect January 1, 2015. However the office is still working out details about how to procure the license, enforcement and penalties for non-compliance, and a possible grace period past the January 1 deadline.
For more information on this or any other legal issues relating to DME, please contact Chris Esseltine at Holland & Hart.
This publication is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal or financial advice nor do they necessarily reflect the views of Holland & Hart LLP or any of its attorneys other than the author. This publication is not intended to create an attorney-client relationship between you and Holland & Hart LLP. Substantive changes in the law subsequent to the date of this publication might affect the analysis or commentary. Similarly, the analysis may differ depending on the jurisdiction or circumstances. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.