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Do we need the Stark and Anti-Kickback Laws? Yes, unfortunately. Here’s another reason why.

April 12, 2015 Leave a comment

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And while I advocate the repeal of these outdated self-referral and kickback laws which have unfairly burdened physicians in this country for decades, there is always another example of why the laws are still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

Ohio Cardiologist Indicted for Performing Unnecessay Medical Procedures

August 24, 2014 Leave a comment

“The charges in this case are deeply troubling,” U.S. Attorney Dettelbach said. “Inflating Medicare billings alone would be bad enough. Falsifying cardiac care records, making an unnecessary referral for open heart surgery and performing needless and sometimes invasive heart tests and procedures is inconsistent with not only federal law but a doctor’s basic duty to his patients.”

“This doctor violated the sacred trust between doctor and patient by ordering unnecessary tests, procedures and surgeries to line his pockets,” Special Agent Anthony said. “He ripped off taxpayers and put patients’ lives at risk.”

Just another case where greed coupled with disregard for his patients’ welfare led a physician to commit fraud on the government and commercial insurers and to forsake his Hippocratic oath to do no harm.  Here, the physician not only ordered unnecessary and more invasive procedures than the patient needed but also falsified nuclear test results to justify the unnecessary procedures.

While there is no way to prevent greed like this (other than locking the bastards up), I have predicted in other posts that the migration of medical reimbursement from procedure based to quality of care of the patient will reduce the incentive to perform unnecessary tests and hopefully reduce this kind of fraudulent activity.

New OIG Special Fraud Alert Aimed at Laboratory Payments to Referring Physicians

July 13, 2014 Leave a comment

Two of  my partners, Michael Gennett and Elizabeth Hodge, and I authored the following post for Akerman’s Healthcare Blog:


 

On June 25, 2014, the U.S. Department of Health and Human Services Office of Inspector General (OIG) issued a Special Fraud Alert entitled “Laboratory Payments to Referring Physicians.” While the Alert breaks no new ground (see, e.g., its 1994 Special Fraud Alert), it demonstrates the OIG’s continuing concerns about clinical laboratories’ offering inducements to referring physicians.

The Alert provides an in-depth discussion of laboratories’ paying referring physicians for collecting specimens and paying physicians for submitting patient data to a registry or database. The Alert explains that physicians who prepare specimens for transfer from the office to a laboratory have a CPT code (99000) to bill Medicare for a nominal charge. Where laboratories are separately paying the same physician for specimen collection, the double billing is evidence to the OIG of an obvious intent to induce referrals. Similarly, with respect to physicians submitting patient data for a database, even if the project has legitimate underpinnings, it may still be illegal if an intent is to induce referral. The Alert contains a detailed list of characteristics of specimen processing and data registry arrangements that it finds suspect.

The OIG ‘s concerns are not lessened in referral arrangements that “carve out” Medicare and other federal programs and focus only on commercial insurance. The OIG takes the position that, because physicians refer to a limited number of labs, inducements with respect to commercial insurance are likely intended to induce Medicare referrals also. Equally important, inducements for commercial insurance referrals may violate applicable state laws (for example, Florida’s Patient Brokering law).

Physicians should review their financial arrangements with outside clinical labs. The question to be asked always is whether one of the reasons for the arrangement is to induce referrals of patients for lab services. Although the Alert focuses on specimen processing and data registry arrangements, that does not mean that other arrangements are OK. The fraud and abuse concerns set forth in the Alert extend to any arrangement that provides some sort of financial benefit to physicians with the intent to induce referrals of patients for lab services.

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Following publication of the Alert, the OIG published a study entitled “Questionable Billing for Medicare Part B Clinical Laboratory Services.” In the Study, the OIG found that “[a]lmost half of the labs that exceeded the thresholds for five or more measures of questionable billing—compared to 13 percent of all labs—were located in California and Florida, areas known to be vulnerable to Medicare fraud.” The OIG’s recommended that it “[r]eview the labs identified as having questionable billing and take appropriate action” and also “[r]eview existing program integrity strategies to determine whether these strategies are effectively identifying program vulnerabilities associated with lab services.” As a result, clinical labs and physicians should exercise great vigilance in reviewing their financial and referral relationships with each other to insure that they comply with applicable federal (and state) fraud and abuse and other healthcare laws.

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