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CMS launches database of manufacturer and GPO payments to physicians
The following post will also be published today on the Akerman Health Rx blog.
The Affordable Care Act contains a provision known as the Physician Payments Sunshine Act, which requires the Centers for Medicare and Medicaid Services (“CMS”) to establish a national databank containing information on the financial relationships between physicians (which includes dentists, chiropractors, and other physician specialties) and teaching hospitals, applicable manufacturers, and group purchasing organizations (“GPOs”). CMS launched its Open Payments website on September 30, 2014 , making its database available to the public.
The database is populated by information reported to CMS by applicable manufacturers and GPOs regarding their payments or other transfers of value to physicians and teaching hospitals. It is important to note that this reported information specifically includes any ownership or investment interest that physicians (and their immediate family members) have in the manufacturers and GPOs.
CMS encourages physicians and teaching hospitals to register with the Open Payments website. While registration is voluntary, the reported information is made available to registrants before being made public, and registrants are given an opportunity to dispute any reported information. In fact, there is a mobile app (and other resources) that allows physicians, teaching hospitals, manufacturers, and GPOs to track provider and industry contact details, share information, and track payments and other transfers of value.
According to CMS and as reported, 4.4 Million payments valued at nearly $3.5 billion were made to 546,000 individual physicians and 1,360 teaching hospitals in the last five months of 2013. The website will provide future reports on an annual basis. Beginning in June 2015, it is expected to report twelve full months of data.
We know that the public, and in particular the press, will access the Open Payments database, and there will likely be a high level of misunderstanding and misinformation. One cannot forget the feeding frenzy that arose when CMS released physician Medicare billing data earlier this year. Any physician who receives payments from a manufacturer or GPO would presumably want advance notice of any disclosure regarding payments to that physician. Accordingly, any physician who does receive such payments should register on the Open Payments website and check the accuracy of all information reported about them, and be prepared to answer questions they may be asked.
New OIG Special Fraud Alert Aimed at Laboratory Payments to Referring Physicians
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.
Florida Cares About Healthcare … Not
I have been very remiss about posting for the last several weeks.
Being a Floridian is very depressing. Florida’s elected and administrative leaders have done everything they can to misinform Floridians about Obamacare, to keep the needy from accessing care, to prevent the uninsured from being able to purchase affordable health insurance, and to force healthcare providers to provide unreimbursed care.
Earlier today, Health News Florida reported on how politics over healthcare reform has become more important than either healthcare or meaningful reform.
- The New York Times reported on Tuesday that “Gov. Rick Scott and the Republican-dominated [Florida] Legislature have made it more difficult for Floridians to obtain the cheapest insurance rates under the exchange and to get help from specially trained outreach counselors.”
- The Miami Herald reported also on Tuesday that HHS Secretary Kathleen Sebelius, stated that Florida officials are “keeping information from people” in a political effort to foil the effort to enroll Floridians for health insurance.
- Florida AG Pam Bondi and CFO Jeff Atwater have also joined in the campaign of misinformation and deceit.
The list of wasted Florida tax dollars and loss of Federal funding in trying to impede Obamacare was reported by Health News Florida earlier this week. Florida’s list of shame includes the following:
- Leading the court challenge on the constitutionality of Obamacare in 2010 soon after it was signed into law. Attorney General Pam Bondi made it one of her high-profile issues, becoming a regular guest on Fox News to attack it.
- After the Supreme Court ruled the law was constitutional, the Florida Legislature told state agencies not to implement it because lawmakers felt sure the Republican party Presidential candidate, Mitt Romney, would win the election in 2012 and repeal the law.
- After Romney lost the election, governor and legislature pressured the agencies not to apply for grants related to the law; some agencies had to give back grants they had already been awarded.
- The Legislature this year voted against Florida having its own electronic marketplace for health-plan shopping, even though the state had already spent five years and several million dollars building an online shopping site, Florida Health Choices, that has yet to be used.
- After months of hearings and negotiations, the Florida Senate came up with a compromise plan on Medicaid expansion that would accomplish several things — reduce the number of uninsured Floridians by about 1 million by using federal funds, save millions of state dollars now being spent on the uninsured, and continue privatization of the Medicaid program, already well under way. But the House said no.
- The Legislature voted to strip the Insurance Commissioner’s authority to regulate health premiums for two years.
- Insurance Commissioner Kevin McCarty issued a report that predicted health premiums in Florida’s individual market would soar 30 to 40 percent, thereby producing scandalous headlines. Later, others would note that the figure failed to make adjustments for the tax credits most of those shopping in that market would qualify for. He also failed to mention that the sector he was describing accounts for only 5 percent of policies.
It’s all really quite pathetic and disgusting. It’s time to vote the bastards out.
Hospitals Offer Better Food As Patient Satisfaction Becomes More Important Under Federal Health Law – Kaiser Health News
Administrators say the focus on food has taken on extra importance since Medicare last year began paying them based partly on their patient satisfaction scores, a change that is part of the federal health care law known as Obamacare.
“Food service helps the overall experience,” said Jim McGrody, director of food and nutrition at Rex, as he inspected his kitchen cold room used for brining pickles, curing turkey pastrami and fermenting cabbage into sauerkraut. Several letters of praise from former patients hang in the kitchen.
— Good healthcare, not good food, should be the focus, but sloppy unappetizing food preparation doesn’t say much about the quality of the facility’s healthcare.
See on www.kaiserhealthnews.org
“Physician-owned hospitals seize their moment” – amednews.com
Physician owned and operated facilities are not necessarily bad places to go for healthcare.
American Medical News, amednews.com, reported in April 29, 2013:
When the federal government sorted through the first round of clinical information it was using to reward hospitals for providing higher-quality care in December 2012, the No. 1 hospital on the list was physician-owned Treasure Valley Hospital in Boise, Idaho. Nine of the top 10 performing hospitals were physician-owned, as were 48 of the top 100.
Yet, physicians can no longer own hospitals to which they refer their patients and are severely restricted from expanding those hospitals whose physician ownership was grandfathered.
The continued distrust of physicians and their vilification by Congress and most every state legislature hurts healthcare. It’s time to unburden physicians from lawyer mandated restrictions that never made any sense — repeal the Stark Law and every other restriction on physicians’ referring their patients to entities that they have an ownership in. The laws and the regulations that have been put into place are beyond comprehension and require physicians who are trying to be compliant to spend unnecessary dollars on lawyers. There are many appropriate tools for dealing with fraud and abuse by physicians who over utilize, or bill for services not performed, or who perform sub-par medicine — they can be professionally disciplined, lose their license, go to jail, fined. On the private side, they can be sued. Congress adopts these strict liability patient referral restrictions because they are easy to enforce. That should not be the basis for interfering with an entire industry.
Court Determines Whether Marketing Rep Was Really a Bona Fide Employee
From Akerman’s Health Law Rx Blog:
POSTED BY MICHAEL GENNETT ON FEBRUARY 14, 2013
In January, a Federal District Court in Oklahoma issued a ruling in favor of a former marketing representative of a medical equipment distributor. The Court determined that Gary Weaver was, in fact, engaged on an independent contractor basis, not as an employee, and therefore his employment agreement with Joint Technology, Inc. was an unenforceable illegal contract under the Federal Anti-Kickback Statute. Mr. Weaver was being sued by the company in order to enforce the terms on a non-compete provision in his employment agreement.
Health care providers often take advantage of the “bona fide employee” exception to the Federal Anti-Kickback Statute in order to engage marketing representatives and incentivize them to create business by paying bonuses and commissions. In addition, many states also have similar “mini” anti-kickback statutes that apply whether or not reimbursement is from Medicare or Medicaid. These exceptions allow employers to incentivize employees by paying them a portion of the business generated – something employers could not do legally with persons engaged as independent contractors.
In Weaver’s case, this was not a particularly difficult conclusion to make. His “employment agreement” had a provision which specifically said that he would not be deemed an “employee”. He was also treated as an independent contractor for tax purposes.
Whether or not someone is an independent contractor or an employee is determined by statutory and common law rules. The common law analysis is set out on the IRS’ website here. The test turns largely on control. Employers have the right to control where, when and how their employees work, whereas independent contractors control themselves. The issue is important for tax purposes (withholding, eligibility for retirement benefits, etc.), for enforcing the terms of engagement, as well as for making sure that payments to representatives are legal under the Anti-Kickback Statute.
In 1996, a Florida court came to a similar conclusion in the case of Medical Development Network, Inc. v. Professional Respiratory Care/Home Medical Equipment Services, Inc. In that case, it was the marketing company suing for non-payment, and the medical equipment company defending under the theory that the agreement was illegal and unenforceable. The Court agreed with the defendant, and disagreed with the plaintiff’s argument that the Anti-Kickback Statute only applies to health care providers. The Medical Development Network case remains good law and is a warning to healthcare providers in Florida not to pay their independent contractor marketers on a commission basis.
Akerman’s Health Law Rx Blog
I am pleased to announce my firm’s new health law blog, Health Law Rx Blog.
Akerman’s Health Law Rx Blog provides timely updates on the latest health law issues, keeping the firm’s clients, friends, and readers up to date on pertinent legal developments. Akerman attorneys regularly update the blog with changes in the law and other relevant news. As this is meant to be an interactive site, your comments and contributions are appreciated. I am one of the contributors, so I hope you will visit the blog often and participate in any discussions that interest you. I plan to shadow post articles from the blog that I think you will find interesting.
Content on Akerman’s Health Law Rx Blog is intended to inform you about legal developments, including recent decisions of various courts and administrative bodies. It should not be construed as legal advice or a legal opinion, and you should not act upon the information without seeking the advice of legal counsel.
With more than 550 lawyers and government affairs professionals and a network of 19 offices, Akerman is ranked among the top 100 law firms in the U.S. by The National Law Journal NLJ 250 (2012). The firm’s Healthcare Practice Group includes over twenty attorneys and professionals representing health systems, physicians, health insurers, and other clients in all aspects of healthcare law across Florida and throughout the United States.
Is Concierge Medicine Finally Ready for Takeoff? – HealthLeaders Media
For years observers have been predicting the impending migration of physicians into direct pay or concierge medicine, where no longer will they have to accept low Medicare and Medicaid reimbursements or haggle with private payers.
Has that time finally arrived?
A recent survey of more than 13,500 physicians found that 6.8% of them would “embrace” direct pay or concierge medicine within the next three years. That includes 9.6% of practice owners, 7.7% of primary care physicians, and 6.4% of specialists, according to the survey conducted by physician recruiters Merritt Hawkins for The Physicians Foundation.
See on www.healthleadersmedia.com
Physicians have limited choices in front of them for how they will provide care in the future (and the future is now) — (1) maintain the status quo, (2) combine, merge, or consolidate with, or sell to, with other physicians, (3) sell to, or affiliate with, hospital systems or managed care companies, or (4) become independent of other physicians, of hospitals, and of managed care companies by doing concierge medicine.
Federal health care law is just one part of changes in medical care
Now that the election is over, healthcare experts are focusing on how to make healthcare reform work for patients and providers. It was never supposed to be easy. Obamacare presents a paradigm shift in how healthcare is being thought about in this country. Unfortunately, this process of intelligently implementing the law is three years late, but finally it’s starting.
One example of how people are beginning to think was reported in LiveWell Nebraska (Omaha World Herald):
American medical care is changing for a variety of reasons, and the results in many cases are unpredictable, University of Nebraska Medical Center experts said Thursday at a forum.
The changes are occurring because of the federal health care law, which is now secure with President Barack Obama’s re-election, federal budget constraints and a general acceptance that the American health care system is inefficient.
The experts’ comments ranged from optimism that care will improve with teamwork to concern that there will be too few doctors and nurses in an underfunded system.
CMS Issues Outpatient Policy and Payment Changes
CMS finalized the Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center rule on Thursday, November 1, 2012.
The final rule (which is over 1,200 pages and will be published in the Fed. Reg. on 11/15/12) updates the Medicare payment policies and rates for hospital outpatient and ASC services beginning January 1, 2013.
Rates and policies set in the calendar year (CY) 2013 final rule with comment period will increase payment rates for hospital outpatient departments by 1.8 percent. The increase is based on the projected hospital market basket—an inflation rate for goods and services used by hospitals—of 2.6 percent, minus 0.8 percent in statutory reductions, including a 0.7 percent adjustment for economy-wide productivity and a 0.1 percentage point adjustment required by statute.
The OPPS rule also contains a significant change from prior policy: as proposed, it bases relative payment weights on geometric mean costs rather than median costs. Basing the OPPS payments on mean costs better reflects average costs of services and aligns the metric used in rate-setting for the OPPS with the IPPS.
For CY 2013, ASC payment rates will increase by 0.6 percent—the projected rate of inflation of 1.4 percent minus a 0.8 percent productivity adjustment required by law. Medicare uses changes in the consumer price index for urban consumers (CPI-U) as the measure of inflation for ASCs.
The rule also makes changes to the quality-reporting program for hospital outpatient departments and for ASCs.
Joseph Rugg's Health Law Blog 