Articles Posted in Compliance

The Office of the Inspector General issued a favorable opinion regarding an affiliation between an Air Force medical group and a community hospital. The arrangement involves an Air Force medical group (medical group) located on a military base and a community hospital located near the base. As a result of hurricane Katrina, the medical group no longer has the patient population to maintain certain residency and training programs. The community hospital has a need for certain physician specialists. Under the proposed arrangement, certain specialists from the medical group would treat the hospital’s patients; these patients would include Medicare/Medicaid beneficiaries. The medical group specialists would utilize hospital equipment and facilities to treat patients and be covered under the hospitals malpractice insurance.

The specialists will only provide services if the hospital has an identified need for a particular specialists’ services. The hospital has determined that the costs associated with this arrangement would be offset by the expenses that would be incurred by bringing in a physician specialist from a different source. The services provided by the medical group specialists will be free to the patients. The hospital will bill the appropriate party for any technical fees that are appropriate given the services provided.

The OIG noted that the arrangement’s risk of violating the Anti-Kickback statute is low for the following reasons: the medical group physicians do not bill for their services; the hospital rarely serves as a referral source for the medical group; this arrangement is in the best interest of the public; the referrals are not required to be to medical group physicians; and the arrangement’s costs are offset by expenses avoided by utilizing the arrangement. The OIG stated that since federal healthcare program beneficiaries were not improperly influenced under the arrangement, civil monetary penalties would not be applicable. Specifically, the OIG looked to the following factors: there is no advertisement that the medical groups physicians services are free of charge; the hospital bills patients for technical fees; and the patients come to the hospital fully expecting to pay for the services and it is unlikely that learning the services are free after the fact will induce patients to solicit these services.

Over $30 billion has been set aside by the government to use for incentive payments in an effort to get health care professionals to switch to electronic records. One reason for the push towards electronic records is the ability exchange patient information between systems. As a way to efficiently capture this benefit, government-funded regional health information organizations (RHIOs) were established. These organizations sign up doctors and hospitals in a specific area and coordinate the transfer of electronic patient records between health care providers. However, a recent survey published in Annals of Internal Medicine shows that RHIOs’ future looks to be uncertain as their financial viability appears to be a cause for concern.

The study surveyed 197 RHIOs, of which 165 returned the surveys. It was shown that only 75 of the RHIOs were currently operational, covering a mere 14% of hospitals and 3% of ambulatory practices in the United States. Moreover, only 13 of those RHIOs are able to conduct the necessary exchange of information that enable doctors to partake in receiving payments of the $30 billion that the government set aside in an effort to promote the electronic switch. Finally, only 67% of the currently operational RHIOs were found to be financially viable. The results of this study creates a concern of whether RHIOs can indeed be effective in assisting hospitals and physicians with the type of electronic information sharing that was intended to advance the quality of care for patients.

If you need help understanding the meaningful use requirements or assistance with negotiating EHR contracts, please contact a Wachler and Associates attorney at 248-544-0888.

The ONC announced last Wednesday that the Medicare electronic health record (EHR) incentive payments will begin disbursement this week. The payments will be made to providers who have met all of the program conditions, including the meaningful use requirements.

Eligible participants can expect to receive a payment based on 75% of their total Medicare allowed charges. These allowed charges must be submitted no later than two months after the end of 2011. The maximum allowed charges used for the 2011 program are $24,000, meaning that the incentive payment will not exceed $18,000. However, the eligible participant must meet the $24,000 in total Medicare charges before any payments will be made to that participant. Finally, payments can be expected to be paid in the same manner as that participant receives other Medicare services (electronic funds or paper check).

If you need help understanding the meaningful use requirements or assistance with negotiating EHR contracts, please contact a Wachler and Associates attorney at 248-544-0888.

On May 4, 2011, the Seventh Circuit Court was faced with the issue of whether a doctor’s actions violated the anti-kickback statute (United States of America v. Borrasi). Dr. Roland Borrasi was convicted of Medicare fraud after he accepted payments in the form of a salary from a psychiatric hospital in exchange for referring patients to the facility. Over a time period of three years, Borrasi and four other physicians were paid a sum of $647,204 for referring hundreds of patients to the hospital.

In an effort to conceal these bribes, the physicians were placed on the hospital’s payroll, given false titles and job descriptions, and asked to submit false time sheets. Through testimonial evidence, the court found that the physicians were not expected to perform any duties listed in their job description. Moreover, the bribed physicians attended very few meetings, were rarely seen at the facility, and were not expected to perform any of their administrative duties. The facts of the case led the jury to find Borrasi guilty of Medicare-related bribery in violation of 42 U.S.C. § 1320a-7(b)(1).

On appeal, the Seventh Circuit denied Borrasi’s argument for interpreting the statute. Borrasi argued the court to adopt a “primary motivation” rule, where a defendant shall be found not guilty if the primary motivation behind the payments was to compensate for bona fide services provided. Instead, the court held that if part of the payment compensated past referrals or induced future referrals, that portion of the payment violates the statute. Therefore, so long as some amount of the payments made to Borrasi and the other physicians were made not pursuant to a bona fide employment relationship, then the statute has been violated.