Quality, Experience, and Competence are No Longer Enough
Many have argued, including the AMA and other physician professional associations, that the only criteria that should affect whether a physician is allowed to become a member of a hospital’s medical staff are quality of care, experience, and competence. So-called “economic credentialing” has been labeled a thinly veiled attempt by a hospital to increase referrals and utilization. In fact, even the OIG weighed in, stating (idiotically, I think) that if medical staff membership and hospital privileges have an economic value, then a hospital’s adding any sort of quid pro quo on the granting of privileges could constitute an illegal kickback scheme. Of course, the antitrust laws get trotted out as the last offensive gesture by the denied physician when economics are considered in credentialing decisions.
The world of healthcare is different today, and getting more and more different daily. But the direction that healthcare is taking is clear: accountability, cost-effective care, incentives to provide better care at the same time as providing less care. Quality, experience, and competence are assumed. And they are no longer enough.
Interestingly, economic credentialing is no longer the exclusive province of hospitals. It has become a tool of medical staffs to protect themselves from a hospital that is trying to acquire practices, grant exclusive arrangements to certain physicians, and otherwise control physician provided healthcare.
Physicians and their associations should get out in front of the economic credentialing debate while they still have time to make a difference.
For each new physican applicant, medical executive committees and their credentialing committees need to focus on utilization and admission and discharge histories, conflicts of interest, the need for the particular specialty (or for another physician who practices it) and the availability of hospital resources the accommodate ithe applucant, the applicant’s economic dependence or independence from the hospital administration, and the overall impact of the applicant on the mission of the hospital and the medical staff.
There is no downside to physician members of a hospital’s medical insisting that new applicants and re-applicants, not only be well qualified, experienced, and competent practitioners, but that they also promote efficient and economical healthcare.
Physicians must be willing, and not embarrassed, to treat the delivery of healthcare services as a business. Medical executive committees need to review their staff bylaws and consider changes to improve their medical staffs and to increase sensitivity to the economics of healthcare in the hospital setting.
Different states will have different laws relating to economic credentialing issues, and so, while the task is simple, it will not be easy in all cases.
Three Things MGMA Urges You to do to Help Avert the 29.5% Medicare Payment Cut
In its Washington Connexion email a few minutes ago, MGMA is asking for your help to stop the 29.5% payment cut scheduled to go into effect on January 1, 2012 (less than 100 days from now).
Healthcare providers, and the rest of us who care about healthcare, need to keep pressure on Congress to address this issue. MGMA suggests doing the following three things:
- Understand the impact the payment cut will have on your practice.
- Sign a petition and ask others to do the same and make your opinion known.
- Urge your elected representative to repeal the sustainable growth rate requirements that are causing these cuts.
I will add two other things that you can do:
- Express yourself to your national and state professional associations. They have lobbyists and need your support.
- Enlist the assistance of your vendors and advisors and ask them to voice their support against this scheduled cut.
Do not wait for others to act.
Physician – Hospital Co-Management Arrangements
My partner, Marshall Burack, authored an Akerman Practice Update for our Healthcare Practice Group on physician-hospital co-management arrangements.
I have previously written that co-management arrangements are one important alternative for physicians to consider as they explore workable and financially viable opportunities in this new era of healthcare delivery. So, I think you will find Marshall’s Practice Update to be very timely. This is something that we are currently assisting physician and hospital clients on.
If you do not have time to read the entire article, here is a quick summary from Marshall’s concluding paragraphs:
A physician-hospital co-management arrangement permits a hospital to provide financial incentives for physician members of the medical staff to assist the hospital in improving the quality and reducing the cost of providing patient care. A co-management arrangement can be an attractive alternative to direct hospital employment of physicians, both for hospitals which do not want to assume the financial and administrative burden of owning and operating a large physician practice, and for physicians who wish to maintain their independence rather than becoming hospital employees.
Because a co-management arrangement involves the payment of compensation to physicians who refer patients to the hospital, the arrangement must be structured properly in order to avoid violation of applicable health care statutes and regulations. Hospitals which are considering entering into a co-management arrangement with members of the hospital’s medical staff should engage knowledgeable health care counsel, as well as experienced consultants who will help structure and monitor the arrangement and who will confirm that compensation amounts reflect the fair market value of the management services provided. If a hospital ensures that the co-management arrangement is structured properly, the arrangement should prove to be beneficial for the hospital, the physicians, and most significantly, for hospital patients who will receive higher quality care.
Medicare Fraud Enforcement Continues in Florida
You cannot overlook the seriousness of the government’s continuing efforts to root out healthcare fraud. Just last week, 10 Miami residents pleaded guilty to being part of a $25 million Medicare fraud conspiracy.
The fraud was in connection with home health care and physical therapy services — two frequent areas of fraudulent activity. The defendants included “patient recruiters” nurses, and facility administrators.
Providers must exercise caution in healthcare activities that are so competitive that aggressive and dishonest patient marketing activities are required. Home health, physical therapy, diagnostic services, and DME are several activities that are being seriously scrutinized.
Compliance plans should be put in place by all healthcare providers. Internal audits should be performed. Deficiencies should be addressed. Training is a must if an environment of compliance is desired.
MSOs — Important Again for Physician Practices
Management service organizations have been around for a while providing management to physician practices, ranging from billing and collection to complete turnkey operations. In this regard, they have always been important.
However, MSOs have become increasingly critical to help physicians navigate the unique problems and opportunities facing them in this era of healthcare reform — ACOs, practice acquisitions and consolidations, and reimbursement cuts. Physicians in solo or small practices cannot practice quality medicine, deal with compliance issues, handle employees, negotiate managed care contracts, control expenses, and maximize revenues. Maybe once they could, but no longer.
The goal of contracting with a quality MSO is to allow physicians to practice medicine again without being distracted by all the back office business details.
MSOs come in many shapes and sizes, and one size clearly does not fit all. The physician must decide what it is that he needs and wants. Does he want an MSO that will provide a limited range of services for a limited price or does he want something much more extensive and expensive? The physician should discuss the alternatives with his legal and financial advisors. They will need to assist him in selecting the prospective MSOs and doing due diligence on them.
There are many issues to consider. I will discuss those in subsequent posts.
Predictive Modeling Technology from HHS Could Enhance Payor Compliance Programs
My partner, Rob Slavkin, recently authored an Akerman Healthcare Practice Update about the Department of Health and Human Services’ “introduction of predictive modeling technology as part of the government’s fraud investigation arsenal, as well as a new collaborative tool that enables private payors to enhance their own monitoring and auditing programs.” The Practice Update can be found here.
This is part of the government’s ongoing efforts to root out healthcare fraud.
For a reminder at how serious the government is about this, look at what the OIG has been posting on its website.
The adoption and implementation of compliance programs continue to be one of the most valuable tools to protect healthcare providers, including medical billing companies and DME suppliers, from purposeful or accidental employee activities that may cause exposure to fines, penalties, or possible exclusion from the Medicare and Medicaid programs. Having and following a compliance can also mitigate criminal penalties.
There is much enforcement activity going on, and it too late to adopt a compliance program when the barbarians are at the gate.
Social Media and Physican Practices
As is so often the case, MGMA has provided some excellent information for physicians to consider when exploring the social media as a method to interact with their patients. Read this MGMA article for some good points: “Social media do’s and don’ts for your practice.”
It is very important to design (and implement) a social media policy for your office that clearly sets forth what is and is not permissible.
Health Care Fraud is Not a Viable Business Model
Among the 20 or more separate investigations that led to arrests for Medicare or Medicaid health care fraud during the first 18 days of August are the following:
- New York Men Convicted of Health Care Fraud in Wheelchair Scam (DME)
- Two Charged in Medicaid Fraud Schemes (Home Health)
- Miami Mother Sentenced To Jail In $12.3 Million Health Care Fraud Scheme (DME)
- Baptist Healthcare, Inc. And Hardin Memorial Hospital To Pay $8,900,000 To Settle Improper Billing Of Medicare (improper DRG codes)
- Los Angeles Jury Convicts Two Church Pastors and Their Employee of $14.2 Million Medicare Fraud Scheme (DME)
- Physician And Pharmacist Among Those Arrested In Drug Conspiracy And Health Care Fraud Case
- Miami Woman Is Tenth Person Arrested For Her Role In Leading $27 Million Health Care Fraud Conspiracy (DME)
- Miami Home Health Nurse Sentenced To Ten Years’ Imprisonment For Health Care Fraud (Home Health)
- Recruiter in Multi-Million Dollar Health Care Fraud Scheme Pleads Guilty to Conspiracy to Violate the Anti-Kickback Statute (DME, Anti-Kickback)
- Hogsett Announces Indianapolis Man Charged In Health Care Fraud Scheme (Ambulance Transportation Services; Medicaid)
- Orange County Medical Center And Doctor Who Bilked Medicare Agree To Pay $7.5 Million To Settle Fraud Case (False Claims)
- Nursing Home Administrator Arrested for Health Care Fraud and Taking Kickbacks (Ambulance Transportation Services)
More of the carnage can be found at the OIG’s Civil and Criminal Enforcement website.
Update – Constitutionality of the Patient Protection and Affordable Care Act
My law firm colleagues, Bruce D. Platt and Sheryl Rosen in Akerman’s Tallahassee office have prepared the following update on the constitutionality of the Patient Protection and Affordable Care Act —
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Multiple court challenges have resulted from passage of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (Mar. 23, 2010) (“PPACA”).
On June 29, 2011, the United States Court of Appeals for the Sixth Circuit upheld the individual mandate in PPACA as constitutional. The Court in Thomas More Law Center v. Obama, 10-2388 (6th Cir.), concluded that imposition of the individual mandate is within Congress’ power under the Commerce Clause to regulate activities that substantially affect interstate commerce. The Sixth Circuit’s decision affirmed the district court’s holding in Thomas More Law Center v. Obama, 720 F. Supp. 2d 882 (E.D. Mich. Oct. 7, 2010). Although Thomas More upholds PPACA, several other appeals are still pending in various circuits, with others still at the district court level. The cases currently on appeal over substantive issues are set forth below. Cases on appeal regarding plaintiffs’ standing to challenge PPACA are excluded because they do not reach substantive holdings:
Virginia v. Sebelius, 11-1057, 11-1058 (4th Cir.) and Liberty University, Inc. v. Geithner, 10-2347 (4th Cir.) – The lower court in Virginia v. Sebelius, 728 F.Supp.2d 768 (E.D.Virginia Dec. 13, 2010), concluded the individual mandate violated the Commerce Clause and severed the mandate from PPACA. Conversely, the lower court in Liberty University, Inc. v. Geithner, 753 F.Supp. 2d 611 (W.D. Virginia Nov. 30, 2010), concluded that the Commerce Clause provides sufficient authority for PPACA’s insurance mandate. The Virginia and Liberty appeals have been consolidated. Oral argument was held on May 10, 2011. No decision has been released.
Florida v. U.S. Dept. of Health and Human Services, 11-11021 and 11-11067 (11th Cir.) – The lower court in Florida v. U.S. Dept. of Health and Human Services, __ F.Supp. 2d __, 2011 WL 285683 (N.D. Fla. Jan. 31, 2011), struck down the entire PPACA, concluding that the decision to refrain from purchasing health insurance is not economic activity, so the individual mandate unconstitutionally regulates inactivity. Oral argument took place on June 8, 2011. No decision has been released.
Seven-Sky v. Holder, 11-5047 (D.C. Cir.) – This case appeals the lower court’s decision in Mead v. Holder, 766 F.Supp. 2d 16 (D.D.C. Feb. 22, 2011), which upheld PPACA. The appeal is scheduled for oral argument on Sept. 23, 2011.
U.S. Citizens Association v. Sebelius, 11-3327 (6th Cir.) – This case appeals the lower court’s decision in U.S. Citizens Association v. Sebelius, 10-1065 (N.D. Ohio July 1, 2011). In that case, the district court became bound by the Sixth Circuit’s holding in Thomas More and entered summary judgment for defendants. The appeal is still at the briefing stage. No oral argument has been scheduled.
A Look Ahead
Various commentators believe the Supreme Court will be the ultimate arbiter of whether PPAGA is constitutional (Alexander Bolton, Lawmakers Press Supreme Court for Verdict on Health Care Law, The Hill, Feb. 2, 2011; Editorial, 3 to 2 for Health Care Reform, N.Y. Times, Feb. 25, 2011). Even Judge Vinson of the Northern District of Florida stated in his March 3, 2011 order, “Almost everyone agrees that the Constitutionality of the Act is an issue that will ultimately have to be decided by the Supreme Court of the United States. It is very important to everyone in this country that this case moves forward as soon as practically possible.” Fla. v. U.S. Dept. of Health and Human Servs., No. 3:10-cv-00188-HEH, 2011 WL 285683 (N.D. Fla. Mar. 3, 2011) (order clarifying summary judgment order dated Jan. 31, 2011).
However, it doesn’t appear likely that any of the District Court rulings will be appealed directly to the Supreme Court. The Supreme Court most frequently grants direct appeals when so requested by the federal government (in a posting of Kevin Russell to SCOTUSblog). However, thus far, the only writ of certiorari submitted for the five cases above is a writ by Virginia in Virginia v. Sebelius, and the federal government has not joined the request for cert.
If or when the Supreme Court considers the issue, some scholars believe the court’s four liberal justices – Justices Ginsberg, Breyer, Sotomayor, and Kagan – will vote to uphold the law, but there’s no clear consensus on how the five more conservative justices will rule, especially Justices Kennedy, Alito, and Roberts (Robert Barnes, Supreme Court Watchers: Roberts, Alito No Sure Bets Against Health Care Mandate, Washington Post, Feb. 13, 2011; Ben Adler, Will the Supreme Court Rule on Health Care Reform?, Newsweek, Dec. 15, 2010).
Owner of Orlando Diagnostic Imaging Services Company Has Duty to “Understand Medicare and Medicaid Billing Requirements”
The HHS Office of Inspector General (OIG) announced yesterday that Administrative Law Judge Steven T. Kessel has upheld the OIG’s exclusion of Michael D. Dinkel from participation in all Federal health care programs for a period of 8 years.
According to the press release, the ALJ found that Dinkel was personally responsible for ensuring that his company, Drew Medical, billed and collected reimbursement appropriately and that he demonstrated reckless indifference to the propriety of the claims that his company presented. The ALJ also held that Dinkel had a duty to understand Medicare and Medicaid billing requirements and to apply them scrupulously to the claims that he caused to be presented.
This case revolved around false claims filed by Drew Medical to the Medicare and Medicaid programs for a radiological procedure known as venography. Drew Medical had not actually performed any such services.
The OIG did not consider that the payment of fines alone was sufficient and that exclusion from participating in government healthcare programs was appropriate.
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