Joseph Rugg's Health Law Blog

Thank goodness that most of us do not have to scrutinize every business deal we do to make sure that it is fully compliant with self-referral and kickback prohibitions.  In the healthcare arena, compliance with these counter-intuitive and overly punitive restrictions adds much unreimbursable administrative costs to the delivery of healthcare. Hopefully, shifting payment from procedures to quality of care will reduce the artificial inducements to violate these restrictions.

And while I advocate the repeal of these outdated self-referral and kickback laws which have unfairly burdened physicians in this country for decades, there is always another example of why the laws are still needed.

Benchmark Reporter has this story today:

2 U.S. organizations have been fined with a whopping $48.5 million in charges of conducting unnecessary medical tests linked with doctors who are responsible for referring patients to them for commission. These scamming corporations are Health Diagnostics Laboratory (HDL) and Singulex, both are well-known cardiovascular disease screening labs.

The Benchmark story is based on the Thursday announcement from the Department of Justice.  According to the DOJ  announcement, this is what the Labs did:

As alleged in the lawsuits, HDL, Singulex and Berkeley induced physicians to refer patients to them for blood tests by paying them processing and handling fees of between $10 and $17 per referral and by routinely waiving patient co-pays and deductibles. In addition, HDL and Singulex allegedly conspired with BlueWave to offer these inducements on behalf of HDL and Singulex. As a result, physicians allegedly referred patients to HDL, Singulex and Berkeley for medically unnecessary tests, which were then billed to federal health care programs, including Medicare.

And a reminder of why kickbacks are bad (some people apparently need to be reminded):

“When health care companies pursue profits by paying kickbacks to doctors, they undermine a patient’s ability to trust that medical decisions are being made for scientific reasons, not financial ones,” said Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia. “Those kickbacks also harm the taxpayer because they drive up the cost of federal health care programs with medically unnecessary tests. This significant settlement shows our determination to work with whistleblowers and our federal partners to defend the integrity of the health care system from illegal agreements that hurt patients and taxpayers.”

If this were a blog about the Seven Deadly Sins, the key words might be Greed, Pride, Envy, and Sloth.

There is no easy way for physicians to make more money.  Working hard is not enough.  And the current state of financial health of  physicians in this country is appalling.

Nevertheless, there are  physicians who are good providers, who are devoted to their patients, and who follow the law.  I know this because I represent many of them. They resist the temptation from these Labs and others like them.  They spend a lot of money on attorneys and consultants to do things the right way.   When they see their colleagues benefit through illegal behavior, it is good that they also see them caught and punished.