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Recent Developments
Changes to the Stark III Regulations
There is a provision in the Stark III Regulations, regarding compensation
arrangements, that specifies that a physician is deemed to have a direct compensation
arrangement with the DHS entity if the only intervening entity between the physician
and the DHS entity is his/her physician organization. The physician is deemed to
"stand in the shoes" of the physician organization.
The Centers for Medicare and Medicaid Services ("CMS") has announced that it
will delay the application of this so-called "stand-in-the-shoes" provision of the final
rule published in September 2007 as it applies to academic medical centers and
nonprofit integrated health systems?All other provisions of the final rule became
effective December 4,2007.
The Reporting Of Financial Relationships With Physicians
In September 2007, CMS issued a proposal2 that mandates the reporting of
financial relationship with physicians by certain hospitals. In the beginning 500
hospitals will be issued the collection instrument, but this may be expanded to the
entire field. Its intent is to obtain information to analyze each hospital's compliance with the physician self-referral laws. Under the Deficit Reduction Act of 2005, CMS is
required to consider the annual disclosure of information on physician ownership and
investment interest in "specialty hospitals." This regulation expands that review to all
hospitals and extends the reporting requirements to compensation arrangements.
OIG Clears On-Call Payments to Physicians
In an OIG Advisory Opinion, dated September 20,2007, while expressing
concern that "[Tlhere is a substantial risk that improperly structured payments for oncall
coverage could be used to disguise unlawful remuneration . . . the OIG will not
impose administrative sanctions on the [hospital] under [the anti-kickback statute]." In
addressing this issue, the OIG stated:
| We are aware that hospitals increasingly are compensating physicians for
on-call coverage for hospital emergency rooms. We are mindful that
legitimate reasons exist for such arrangements in many circumstances,
including: compliance with EMTALA obligations; scarcity of certain
physicians within a hospital's service area; or access to sufficient and
proximate trauma services for local patients. Simply put, depending on
market conditions, it may be difficult for hospitals to sustain necessary oncall
physician services without providing compensation for on-call
coverage.
Notwithstanding the legitimate reasons for such arrangements, on-call
coverage compensation potentially creates considerable risk that
physicians may demand such compensation as a condition of doing
business at a hospital, even when neither the services provided nor any
external market factor (-, a physician shortage) support such
compensation. Similarly, payments by hospitals for on-call coverage could
be misused to entice physicians to join or remain on the hospital's staff or
to generate additional business for the hospital.
* * *
For a combination of the following reasons, we believe the Arrangement
presents a low risk of fraud and abuse.
First, the Medical Center has certified that the payments are fair market
value for actual services needed and provided, without regard to referrals or
other business generated between the parties. We rely on this certification in issuing this opinion.
* * *
Second, the circumstances giving rise to the Arrangement suggest that the
Medical Center had a legitimate, unmet need for on-call coverage and
uncompensated care physician services.
* * *
Third, the Arrangement includes features that further minimize the risk of
fraud and abuse. The Arrangement is offered uniformly to all physicians
in the relevant specialties.
* * *
In short, as structured, the Arrangement appears to contain safeguards
sufficient to reduce the risk that the remuneration is intended to generate
referrals of Federal health care program business.
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Enforcement Activity
Ohio Physician Has Pleads Guilty To Conspiring To Defraud Medicare
Ohio cardiologist, Mohammed Aiti, of Canton, Ohio pled guilty to one count of
conspiracy. He was involved in a scheme to defraud Medicare, Medicaid, and other
health care benefit programs by providing cardiology tests that were not medically
necessary. According to the U.S. Attorney's press release, Aiti admitted that this scheme
lasted eight years and "included performing medically unnecessary nuclear stress tests
that involved injecting nuclear medicine into patients. Tests were also ordered based on
whether insurance would agree to pay for a test and not based on medical need or
symptoms."
Aiti will give up his medical license, forfeit $1.8 million, and will be permanently
excluded from participation in all federal health care programs. The maximum
sentence he faces if five years and a $250,000 fine.4
Federal Fifth Circuit Upholds Physician's Conviction for Accepting, Cash for
Fraudlent Prescriptions for Wheelchairs
The Federal Fifth Circuit Court of Appeals affirmed physician's conviction for
accepting cash for signing certificates of medical necessity and prescriptions for
motorized wheelchairs. Dr. Linda Kaye Morgan, 53, did not examine the Medicare and
Medicaid beneficiaries. The federal trial court sentenced her to the maximum statutory
penalty for each of twelve counts of health care fraud and conspiracy. Dr. Morgan, was
sentenced to 10 years in prison, without parole, for each of twelve counts of conviction
for healthcare fraud and five years for a conspiracy conviction. Each of the sentences
will be served concurrently. Dr. Morgan was convicted of all thirteen counts following a
jury trial in February 2006.
Southern Ohio Pain Clinics Owner Pleads Guilty
On December 6,2007, William H. Jewell, plead guilty to one count of money
laundering in connection his operation of "pain clinics" in several Southern Ohio cities.
According to the press release of the United States Attorney for the Southern District of
Ohio, Jewell leased a building and recruited two doctors to work as attending
physicians at the "clinic." Jewell told the doctors that the patients were there to get pain
medication. He also indicated that he did not want them to prescribe Oxycontin
because it would raise "red flags". The two doctors agreed that they would prescribe
Xanax (Alprazolam) and Lorcets (Hydrododone). The patients were charged $200 cash
for their prescriptions, which Jewell split with the physicans. Jewell laundered the
illegal pain clinic proceeds in order to conceal and hide his involvement in this activity.
Sentencing is set for March 6,2008.
Other Developments
House Approves Physician Payment Increase
On December 19,2007, the House of Representatives voted to approve
legislation, previously approved by the Senate, which provides a 0.5% increase in the
Medicare physician payment update for six months and extends funding for the State
Children's Health Insurance Program through March 31,2009.
OIG Solicits Proposals for Safe Harbors and Special Fraud Alerts
By notice in the Federal Register on December 19,2007 (72 Fed. Reg. 71868), the
Department of Health and Human Services Office of the Inspector General solicited proposals and recommendations for developing new and modifying existing safe
harbors under the anti-kickback statute, as well and topics for new Special Fraud Alerts.
I wish everyone a joyous holiday season and a very prosperous new year.
Copyright 2007 William Mack Copeland.
You can reprint any part
of this newsletter by providing the following acknowledgement: "Reprinted
with permission. William Mack Copeland, www.wmcopeland.com."
The information contained in this newsletter does not constitute
legal advice. No claims, promises or guarantees about the accuracy,
completeness, or adequacy of the information contained herein. As
legal advice must be tailored to the specific circumstances of each
case, and laws are constantly changing, nothing provided herein should
be used as a substitute for the advice of competent counsel. |
