OIG Frowns Again on Proposed Company Model Arrangements with Anesthesiologists

anesthIn December, 2012, the OIG reviewed and frowned upon two proposed scenarios, each of which had the effect of shifting to ASC-owner/surgeons a portion of the fees earned from anesthesia services.  The OIG has done it again!

In an era of tremendous stress in the healthcare marketplace, it’s not surprising that some surgeons were willing to push the envelope to capture anesthesia fees they otherwise would not receive.  Traditionally, physician-owned surgery and endoscopy centers contract with anesthesia providers on an exclusive basis and let the anesthesiologists separately bill for anesthesia services.  Anesthesiologists kept whatever was collected for anesthesia services; and surgeons kept whatever was paid for their services.  Plus, if the surgeon was also an owner of the center, the surgeon received a portion of the profits left over from the facility or technical fee.  In the past several years, however, center-owning surgeons are often looking for ways to share anesthesia fees.  The latest OIG Advisory Opinion (13-15) may cause some surgeons to back down or to reevaluate the long-term viability of the so-called “Company Model.” Continue reading

The Florida Healthcare Law Firm Goes National

Followers & Friends – BIG Announcement coming out today! If you haven’t seen our new NATIONAL platform, check it out here at www.nationalhealthcarelawfirm.com and stay tuned for our #healthcare #legal news at 2pm EST !!!

The Use of an “Inventory” With ASC Rental Arrangements in Bodily Injury Cases

By: David W. Hirshfeld

As reimbursement from third-party payors shrunk, the uninsured accident victim emerged as a financially attractive patient.  Surgeons, surgery centers, and therapists became armchair personal injury attorneys.  They learned to identify and sign-up uninsured patients who had been injured as the result of negligence, and who were likely to be successful in the lawsuits arising from their accidents.

A popular model evolved in which a surgery practice leases an ambulatory surgery center for a very competitive rate, performs the surgery, charges the patient a reasonable and customary fee for the technical and professional component of the surgery, and agrees not to seek payment from the patient if his attorney and he agree, through a “Letter of Protection,” that the surgery practice will be paid from the proceeds of the negligence lawsuit.  These days, ASCs are leasing themselves out for very competitive rates because the surgery practice guarantees payment immediately upon completing the surgery, or even in advance of the surgery, and because many ASCs currently have excess capacity.  The surgery practice often has to wait twelve to thirty-six months to be paid for its services; but when the lawsuit is resolved and they are paid, there is a healthy margin between the surgery practice’s cost for the ASC and the amount the practice is paid as technical component.  Remember, other than reasonable and customary, there is no fee schedule applicable in this context.  The model is currently so lucrative, that it has attracted lenders who help finance the surgery practices while they await payment on the Letters of Protection.  Not incidentally, this model may become less lucrative as more and more people are covered by health insurance as a result of the Patient Protection and Affordable Care Act.

The proceeds of negligence lawsuits are paid by property and casualty insurance companies, who employ professional claim adjusters, some of whom are very savvy.  Surgery practices in this model may face the argument that the insurer will only pay the surgery practice what the surgery practice paid the ASC, without mark-up.  In order to help avoid this sort of inquiry, we suggest that the surgery practice, as part of its arrangement with the ASC, receive a detailed inventory of every aspect of space, equipment, supplies and services provided by the ASC with respect to each procedure performed on each patient of the surgery practice.  Beside each item on the inventory, the ASC should list its reasonable and customary charges for that item.  This inventory can be used to support the payment secured through the Letter of Protection, and can be used by the plaintiff’s attorney when (s)he is proving damages in the negligence lawsuit.

It is very important that nobody refer to the inventory as a “bill” that was or will actually be paid to the ASC; those sorts of references may lead to an accusation of fraud since the ASC has already accepted a lesser amount as payment in full.  If and when asked, the surgery practice could justify its markup over what it actually paid the ASC as reimbursement for having to finance the surgery for many months, and as reimbursement for the risk of nonpayment.

This model can be lucrative, but it is fraught with potential problems.  The ASC inventory described above is just one noteworthy aspect of how to work the model.  Any surgery practice seeking to focus on treating negligence victims and taking Letters of Protection, should get advice from a trusted personal injury attorney and from a bona fide health care attorney.

 

The Florida Healthcare Law Firm Announces National Expansion

(Delray Beach, FL) June 21st, 2012 – The Florida Healthcare Law Firm, one of Florida’s leading healthcare law firms, today announced a major increase in their legal practice capabilities with the official launch of the National Healthcare Law Firm, a d/b/a and new portal of the firm. The expansion to a national platform providing healthcare legal services to physicians and healthcare businesses is one that significantly increases resources for clients who lack qualified local healthcare counsel. While the Florida Healthcare Law Firm has for years assisted clients outside the state of Florida*, this new development further cements the firm’s commitment to providing ethical legal counsel in the healthcare industry.

“We are very excited about it. The fact that we serve clients all over the country has been a small secret for a while but we realized there’s a huge demand and decided to just go for it,” said Jeffrey L. Cohen, Esq. Founder and President of Florida Healthcare Law Firm.

According to Cohen, “It’s just a strange area of the law.  Nearly everything in healthcare business is regulated; leases, employment agreements, compensation.  Things you wouldn’t think are regulated are strongly regulated.  And there are large fines and criminal penalties for getting it wrong!  Our clients understand that healthcare business of any kind has serious legal risks and that they need uniquely qualified help.”

To request a service list or for any other firm information, call Autumn Piccolo at 888-455-7702 or visit the firm’s website at www.nationalhealthcarelawfirm.com or www.floridahealthcarelawfirm.com

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Acknowledged throughout the country for its service and excellence, Florida Healthcare Law Firm is one of the nation’s leading providers of healthcare legal services. Founded by Jeffrey L. Cohen, Esq and headquartered in South Florida, FHLF provides legal services to physicians and healthcare businesses with the right pricing responsiveness and ethics. From healthcare clinic regulation, home health agency representation and physician contracting to medical practice formation/representation and federal and state compliance matters, the Florida Healthcare Law Firm is committed to bringing knowledge and experience to a diverse group of clients.

OIG SLAMS COMPANY MODEL ANESTHESIA ARRANGEMENTS WITH SURGERY AND ENDO CENTERS

A long awaited opinion from the OIG on relationships between surgery, endoscopy (and other) centers (“Centers”) will doom many arrangements with anesthesiologists.  At the very least, they will have to significantly restructure.

Such “Company Model” arrangements basically involve a way for surgeon investors in Centers to share in the anesthesia services revenue.  These arrangements have always been suspect, but the OIG has been clear that they run afoul of applicable federal law.  In the June 1st OIG Opinion (12-06), two models were proposed, and both were essentially shot down.  The first involved requiring the anesthesiologists who provide services at the Center to engage a management company owned by surgeon owners of the Center to provide management services on a per patient fee basis.  The second, which is far more commonplace, involved establishing a company owned by the surgeons who also own the Center.  The new company would provide the anesthesia services and contract with the anesthesiologists in a way the leaves some of the anesthesia services income to be distributed to the surgeon in the Center, who also happen to generate all the cases for the Center, and hence all of the anesthesia revenue.

Such arrangements are not only “inherently suspect,” as described by the OIG, they have never made much common sense.  How is it not a kickback for the anesthesiologists to make 100% of the anesthesia related profit on Monday, but then have to “share” it with the surgeon owners on Tuesday, once a new management company or separate anesthesia services company (owned by the surgeons) is formed?

At the very least, surgeons looking for a share of anesthesia revenue will have to dig deep into the opinion and into prior opinions to see if there is any legitimate basis available.

10 Lesser Known Effects of Healthcare Reform Law

This is a great article published by CNN this morning.

View it in it’s entirety Here

(CNN) — On Monday, the U.S. Supreme Court takes on a political, social, economic and medical hot potato: the health care reform law that was signed into law two years ago.

For six hours during each of the next three days, attorneys will argue and justices will consider legal questions about the constitutionality of the Affordable Care Act’s individual mandate and issues surrounding federal versus state powers.

Read a transcript of Monday’s Supreme Court arguments

Many of the law’s major aspects have been the topic of much discussion. But are you aware that deep within the sweeping law’s 2,700 pages are many lesser known changes that could affect your life in unexpected ways?

CNN Explains: Health care reform

1. How many goodies your doctors get

Is your doctor prescribing you certain drugs because those are the best for your condition or because of a pharmaceutical company’s influence? Here’s one way you can find out.

The Physician Payment Sunshine Act under health care reform requires drug, device or medical supply companies to report annually certain payments or things of value that they’ve given physicians and teaching hospitals. This could be speaking fees, consulting fees, meals and travel. So, you can find out which and how much companies pay doctors or health care workers. The companies are obligated to report annually about physician ownership and their financial investments.

Continue Reading Here

CMS Clarifies Place of Service (POS) Coding Requirements

Billing Medicare for services requires the correct POS code on the claim form. Improper use of the POS code has been a problem, especially when services are provided in out-patient hospitals and surgery centers. The OIG has found many circumstances where such services were provided in those facilities were billed as though services were provided in the physician office. The POS code is intended to identify where the physician is physically present and has a face to face encounter with a Medicare patient when covered services are provided.

CMS has issues revised and clarified POS coding instructions. They give multiple examples, including one where a Medicare patient receives MRI services at a hospital. The hospital bills the technical component . The physician is to submit a claim showing the professional component POS as his/her office (code 22), since that is where the physician performed the covered service, not the MRI center at the hospital. The Instructions describe the proper use of POS modifiers and are invaluable in avoiding liability to Medicare.


Representative Corcoran's HB 1329 Signage and Balanced Billing

Imagine this: the Florida Legislature believes that consumers need to be protected from unscrupulous business practices by physicians and facilities (including physicians, hospitals and surgery centers) and will require things like (1) publishing charges with huge signage, and (2) informing consumers how charges compare to hospital imaging center charges. Failure to do so will subject the physicians and the centers to civil fines of $1,000/day is grounds for professional discipline. The Bill also holds insurers responsible for paying for medical services, but not where the provider doesn’t have a contract with the insurer. This leaves out of network providers out in the cold and will mean significant notice requirements being imposed on all providers.

View the bill in it’s entirety HERE


Senate OKs Two-Month Freeze on Doc Pay

Wrapping up legislative business before the Christmas recess, the Senate on Saturday approved legislation that freezes Medicare payments to physicians until Feb. 29.

In a vote of 89-10, the Senate passed an amended version of the House payroll tax bill that the lower chamber approved earlier this week. The legislation from Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) (PDF)—which extends a payroll tax holiday for two months—provides no payment update in Medicare reimbursement levels for the nation’s doctors in January and February 2012, which prevents a 27.4% cut that was scheduled to tax effect on Jan. 1.

Meanwhile, the bill also extends for two months a host of Medicare and health-related provisions that would otherwise have expired by year’s end. These measures include reimbursement raises for ambulance services, mental health reimbursements, the Qualifying Individual (QI) program, the outpatient “hold harmless” provision, and transitional medical assistance, which provides Medicaid benefits for low-income families who are transitioning from welfare to work.

In a statement, American Medical Association President Dr. Peter Carmel said waiting until the final week of the legislative session to address an issue Congress knew about all year is no way to conduct business for the country.

Read more: Senate OKs two-month freeze on doc pay – Healthcare business news and research | Modern Healthcare http://www.modernhealthcare.com/article/20111217/NEWS/312179947#ixzz1gzkQmEcy
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Physician Owned Distributorships (PODS) Make Waves

doctor

Physician owned distributorships (PODs) have been the source of considerable controversy for years, but now they’ve caught the attention of Congress!

PODs distribute various things, most commonly surgical implants and devices, that are reimbursed by insurers. A patient needs a spinal rod, a surgical implant/device company makes it and a distributor rep distributed it. Device/implant companies usually contract with distributorships to sell their products. Distributorships contract with reps who are paid commissions for sales. Surgeons who actually order the devices sometimes think “Since I’m the one doing the surgery and ordering all this stuff, why don’t I make something from the selling it?” PODs are one way for physicians to financially benefit from the sales of devices and items their patients need, but they have never been more controversial than now.

Conceptually speaking, PODs are controversial because government regulators think physicians who have an economic stake in health care items or services will tend to over utilize them. Moreover, there is a specific concern that allowing physicians to profit from the devices their patients need violates federal anti kickback laws or the Stark prohibition on compensation arrangements.

In 2006, the Office of the Inspector General of HHS and CMS expressed major concerns about PODs, and cited concerns about “improper inducements.” At that time, the OIG stopped short of prohibiting them, but called for heightened scrutiny. CMS itself has stated that PODs “serve little purpose other than providing physicians the opportunity to earn economic benefits in exchange for nothing more than ordering medical devices or other products that the physician-investors use on their own patients.”

Implantable medical devices are unusual in the way they come into use. Unlike DMEPOS, for instance, medical devices are not sold to distributors. They’re sold from the manufacture to the medical facility where the surgery will take place. So, the argument goes, physicians are not actually in a position to drive the sales volume of the implants. The counter: physicians invested in a POD can leverage their hospital admissions to influence the device choice of hospitals and surgery centers.

The biggest legal hurdle for PODs is the federal Anti Kickback Statute, which carries both criminal and civil penalties. Simply put, if even one purpose of an arrangement is to pay for patient referrals, the law is violated. So, the law is arguably violated if one purpose of the POD is to induce physicians to order implants for their patients. Looked at another way, the law is violated if one purpose of a hospital doing business with a POD is to ensure patient referrals by the physician POD investors.

A 1989 OIG Special Fraud Alert on fraudulent physician joint ventures is especially interesting on the fraud and abuse issues in pointing out that the following would indicate unlawful intent to induce patient referrals—

Investor choice. If the only investors chosen are surgeons with an opportunity to refer and if they lack any business or management expertise, the arrangement appears to be a cloaked way to incentivize unlawful referrals (i.e. ordering implants). The key question is whether the business, in selecting investors, is looking to raise capital or to lock in referral sources.

Risk. If the POD investment involves little or no financial risk, the OIG would likely take issue with it.

The bottom line seems to be that if there isn’t a real business, with real financial risk and qualified investors, a POD will likely be viewed as a suspicious arrangement based on locking in patient referrals or physician admitting pressure by physician investors.

In its June, 2011 Inquiry “Physician Owned Distributors (PODs): Overview of Key Issues and Potential Areas for Congressional Oversight,” the U.S. Senate Finance Committee Minority Staff, the Committee reports “A number of legal and ethical concerns have been identified as a result of this initial inquiry into the POD Models.” The Committee reviewed over 1,000 pages of documents and spoke with over 50 people in preparing its report. The Committee cited long-held concerns regarding PODs, and leaned heavily on the 2006 Hogan Lovells (previously Hogan & Hartson) law firm’s anti-POD analysis.

With the Committee’s call for greater OIG and CMS involvement, one thing seems clear: the future of PODs is uncertain. In this era of cost-cutting, it seems clear that PODs are gonna get a haircut and may even lose their head.