In giving consideration to whether healthcare regulations apply to a proposed course of conduct it’s absolutely vital for a pharmacy to know its payor! This is especially so in the context of patient marketing and the various regulatory prohibitions on paying for healthcare referrals. Unfortunately, some pharmacy owners remain a bit mixed up about who the ultimate payor is for the medications they dispense, and, depending on that pharmacy’s billing operations, such mistakes can have devastating consequences.
A large part of this confusion might be attributed to the fact that in most instances, a pharmacy is not billing the ultimate payor directly (unlike a DMEPOS provider that may be directly submitting claims to Medicare Part B), but rather, the pharmacy is billing an intermediary entity called a Pharmacy Benefit Manager (“PBM”), which is usually a commercially run entity (non-government owned) that manages and adjudicates claims on behalf of health insurance plans that cover pharmacy benefits.
There are two criminal cases pending in Palm Beach County that threaten to put a bullet in the heart of healthcare professionals and businesses and also the law practices that advise them. Both State v. Simeone and State v. Kigar have a motion from the State pending before them to block any testimony that the defendants received legal advice concerning a contract entered into by an addiction treatment facility and a sober home. The State alleges that the contract violates the state Patient Brokering Act (PBA) because it was essentially a ruse whereby the addiction treatment facility was just paying for the sober home to refer patients. Now the State wants to make sure that the entire issue of the defendants being advised by counsel never sees the light of day.
How is this possible? How can it be that a client can seek legal counsel, get advise (and presumably follow it), and then be blocked from presenting that evidence? The State argues that the PBA has no wording that requires them to prove intent. And if intent isn’t an element to be proven, the argument goes, then evidence of the client intending not to violate the law by getting advice beforehand is inadmissible!
Federal law enforcement has traditionally prosecuted individuals utilizing healthcare fraud and abuse laws such as the Federal Anti-Kickback Statute, the False Claims Act, the Physician Self-Referral Law also known as the Stark Law as well as other administrative tools including exclusions and civil monetary penalties. In addition to these laws, federal law enforcement also has at their disposal other fraudulent act statutes such as mail and wire fraud. The facts of a case, however, may not provide for federal standing. For example, when individuals take out federal government payors out of the picture or from an arrangement as a way of avoiding federal jurisdiction. The new solution to this issue…a law enacted in 1961, the Travel Act.
By: Susan St. John
As many chiropractors are likely aware, they cannot “opt-out” of Medicare. Even if a chiropractor has not enrolled to be a Medicare provider, a Medicare beneficiary may require the chiropractor to submit a claim to or bill the Medicare program on his/her behalf for chiropractic services rendered. For chiropractic services to be covered by Medicare, the patient must have a condition necessitating treatment and manipulative services rendered must have a direct therapeutic relationship to the patient’s condition. The manipulative services must provide a reasonable expectation of recovery or improvement of function. Further, the Medicare patient’s condition must be acute and not a chronic subluxation without objective clinical improvement anticipated. Manipulative treatment beyond treating the acute phase, that is, a chronic condition, is considered maintenance therapy and is not covered. Thus, a chiropractor needs to carefully consider at what point a Medicare beneficiary’s treatment becomes palliative or maintenance therapy which would not be covered and thoroughly explain this to the patient. The chiropractor has a duty to let the patient know when treatment is no longer curative or therapeutic, but rather maintenance therapy.
Over the past several months, the Centers for Medicare & Medicaid Services (CMS) has taken a number of steps that show an awareness of the regulatory burden placed upon participants in the government’s health care programs, and even some willingness to consider reducing those burdens. While it remains to be seen whether the recent proposals will have measurable results, the following actions can still be viewed with guarded optimism.
Proposed Changes to Medicare
In July, 2018, CMS proposed significant changes to Medicare, to be included in rules that take effect in 2019. These changes cover physician fee schedules, streamlining Evaluation & Management (E&M) billing, advancing “virtual care,” decreasing drug costs, revising the MIPS program and establishing the MAQI demonstration project. The agency also asked for comments on price transparency issues.
As the provision of health care services continues to evolve, many practitioners are contemplating creating membership-based services for their patients through Direct Primary Care Agreements (“DPCA”). Although DPCAs are not necessarily a new concept, the Florida Legislature enacted a bill during the 2018 legislative session making DPCA’s exempt from the Florida Insurance Code. Thus, DPCAs are not a form of insurance subject to regulations of insurance products but are private contracts between practitioner and patient for specified health care services. Here is how the DPCA concept works.
DPCAs are private contracts between patients and primary care providers. Section 624.27, Florida Statutes, defines primary care provider as a provider licensed pursuant to Chapters 458, 459, 460, and 464, or a primary care group practice, who provides primary care services to patients. Included under this broad definition of providers are: allopathic doctors, osteopathic doctors, physician assistants, anesthesiologist assistants, chiropractors, RNs, LPNs and ARNPs.
Healthcare marketing arrangements that violate the Anti-Kickback Statute (AKS) can lead to serious financial and criminal consequences. Understanding the types of marketing arrangements that courts have found to be in violation of the statute and the potential implications are critical for marketers to know in order to operate in the healthcare industry.
Under the AKS, it is a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce referrals of items or services reimbursable by the Federal health care programs. Where remuneration is paid purposefully to induce referrals of items or services paid for by a Federal health care program, the AKS is violated. By its terms, the AKS ascribes criminal liability to parties on both sides of an impermissible transaction. An example of a highly scrutinized arrangement involves percentage compensation. For regulators, percentage compensation arrangements provide financial incentives that may encourage overutilization and increase program costs.
One healthcare employer’s compensation arrangement with its employees just got much needed support from the 11th Circuit Court of Appeals. The employer there, which provided AIDS patients certain healthcare related services, paid its employees a bonus of $100 per patient. The case was brought on the argument that the compensation arrangement constituted an illegal kickback under the federal Anti- Kickback Statute. The court, however, disagreed because the employees who received the bonuses were “bona fide employees.”
The court’s focus on the plain language of the safe harbor for bona fide employees was refreshingly clear, notably that “any amount paid by an employer to an employee (who has a bona fide employment relationship with such an employer) for employment in the furnishing or any item or service.” Essentially, any amount paid by an employer to a bona fide employee is not considered to be “remuneration” under the Anti-Kickback Statute.
At the end of July, the U.S. Food and Drug Administration (FDA) issued a press release to alert health care providers and patients regarding the use of energy-based medical devices that are used to perform vaginal “rejuvenation” procedures. Although these devices have been approved to treat certain conditions, such as pre-cancerous lesions in the cervix, they have not been approved for cosmetic rejuvenation. According to the FDA, these procedures have at times been associated with serious adverse events such as burns, scarring, and chronic pain.
Many “rejuvenation” procedures are intended to treat symptoms and/or conditions such as vaginal laxity; pain during sexual intercourse; decreased sexual sensation; and vaginal atrophy, dryness, or itching. The FDA warning noted that it is aware that multiple device manufacturers may be marketing energy-based devices to treat these symptoms and/or conditions even though to date, the agency has not cleared or approved for marketing any energy-based devices to treat theses symptoms and/or conditions.
Health law is the federal, state, and local law, rules, regulations and other jurisprudence among providers, payers and vendors to the healthcare industry and its patient and delivery of health care services; all with an emphasis on operations, regulatory and transactional legal issues.