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Compounding Pharmacies Remain at the Tip of the Enforcement Spear

November 8th, 2021 by

Compounding pharmacies are subjected to special licensing and permitting rules because of the heightened risk of the very nature of what they do- customizing a prescription by combining, mixing or altering ingredients to create a sterile or non-sterile medication for a given patient.  Pharmacies may only compound drugs where a commercially available drug/dose/formulation is not available.  Because of the heightened risk coupled with the high cost of compounded drugs and the increased prescribing of these expensive drugs, compounding pharmacies continue to be at the tip of the enforcement spear and a target for investigations.   This and the fact that the number of compounding pharmacies is only a fraction of the number of licensed pharmacies in the U.S., contributes to the increasing visibility when the U.S. Department of Justice prosecutes violators.

Growth of Compounding

From 2006 to 2015, the U.S. experienced a sevenfold increase in the prescribing of compounded drugs.  Recently, the compounding pharmacies market was valued at more than $9 billion and is projected to grow by another $5 billion over the next 30 years. read more

Genetic Testing: Be Hopeful but Wary

July 26th, 2021 by

Genetic tests are valuable because they can provide important information to patients and their medical providers regarding diagnoses, treatment, and disease prevention. However, the rapid growth in the number of tests ordered, especially in light of the telemedicine expansion during the pandemic, has invited well-earned scrutiny to the industry.

Make no mistake: genetic testing is heavily regulated (and enforced). The Federal Anti-Kickback Statute, Eliminating Kickbacks in Recovery Act, and Commercial Insurance Fraud Law have all been used to prosecute unscrupulous marketers, call centers, and telemedicine providers in the last few months. Kickbacks in exchange for genetic specimens are just as illegal as kickbacks for patients. Three months ago, a Florida man was sentenced to 10 years in prison for conspiracy to commit health care fraud. His actions resulted in the submission of approximately $3.3 million in fraudulent claims to Medicare for genetic testing. read more

Permissible Payments For Referrals Under The Federal Anti Kickback Statute

April 28th, 2021 by

anti kickbackBy: Karen Davila

The term “payment for referral” strikes fear in the hearts of health care providers throughout the country because of the significant prohibitions under the federal Anti-Kickback Statute (AKS).  And, Florida’s Patient Brokering Act (PBA) casts an even bigger shadow over arrangements involving payment in exchange for referrals.  There are other statutory restrictions as well, which may apply depending upon the services for which a referral is being made.  Those include but are not limited to statutes prohibiting physician fee-splitting and the federal Eliminating Kickbacks in Recovery Act (EKRA) (applicable to referrals to recovery homes, clinical treatment facilities, or laboratories in an effort to stave off growing opioid-related fraud), and the potential collateral damage of a false claim under the federal False Claims Act (FCA) if any of the above statutes are violated.

So, is there any scenario where a payment may be made by a health care provider in exchange for referrals?  The answer is yes- there is a safe harbor under the AKS (42 U.S. C. §1320a-7b(b)) specifically for such arrangements.  This safe harbor is not commonly used and likely means revision to existing arrangements to come into compliance with its specific requirements.  But it may be worth considering if the referral (and payment for that referral) is not otherwise prohibited as noted above. read more

A DME Fraud of Epic Proportions

February 8th, 2021 by

dme telemedicine fraudBy: Michael Silverman

Almost two years after “Operation Brace Yourself” regarding purported telemedicine and orthotic bracing fraud made national headlines, on February 4, 2021 the Department of Justice Announced that a major player in that fraud – Florida businesswoman Kelly Wolfe – recently pled guilty to criminal health care and tax fraud charges.

Operation Brace Yourself was a 2019 crackdown on the illegal use of telemarketing and telemedicine to generate fraudulent claims for DME orders, whose reach spanned continents and ultimate implications defrauded taxpayers out of billions of dollars.

According to the Department of Justice Press Release and Settlement Agreement, Mr. Wolfe was seemingly a significant mastermind in establishing hundreds of DME companies that went on to defraud US taxpayers and Medicare beneficiaries.

Here are some highlights of the recently signed Settlement Agreement between the United States DOJ, Kelly Wolfe and her company Regency, Inc. read more

Company Model Scrutiny For Physicians After Daitch Case

December 11th, 2020 by

fhlf daitch caseBy: Jeff Cohen

A 2018 Department of Justice civil settlement involving a Florida interventional pain physician was a cliff hanger when it surfaced, especially vis a vis the issue of the so-called Company Model, where anesthesiologists and referring physicians jointly owned an anesthesia provider.  The Daitch settlement involved interventional pain specialists who settled the case for $2.8 Million.  There, the government claimed that a mass of urine drug tests weren’t reasonable or medically necessary.  But the issue buried in the settlement call the issue of intertwined medical businesses and the Company Model into question.

The so-called Company Model involves the formation of a company that provides anesthesia services.  It’s jointly owned by anesthesiologists and referring physicians.  Theoretically, on a Monday, the anesthesiologists own the anesthesia practice and bill for all anesthesia services performed at a GI lab or ASC.  On a Tuesday, however, the new company (jointly owned by the same anesthesiologists and the referring physicians) steps in and starts billing for the anesthesia services, thus indirectly sharing a part of the profits with the physicians who are generating the anesthesia referrals.

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When Does a Gift Become a Kickback?

October 30th, 2020 by

gift or kickbackBy: Zach Simpson

Since the beginning of the COVID pandemic many healthcare businesses are exploring various ways to increase their referrals, and although exchanging fees and gifts in return for referrals may sound like an easy way to obtain additional business, there are state and federal laws that strictly prohibit such activities that are discussed in greater detail below.

Two of the most important laws that all physical therapists should be aware of are the Anti-Kickback Statute and the Stark Law which are used to ensure that medical decisions are not made based on financial incentives. However, each of the laws do have distinctions that you need to be aware of. read more

Groupon Fees and Marketing for Chiropractic Services

September 29th, 2020 by

fhlf groupon and chiropractic servicesBy: Zach Simpson

As the country reopens in light of COVID-19 many patients are beginning to feel safe to return to practices for services. In an effort to generate additional business to make up for lost revenue many practices have turned to internet-based marketing programs, such as Groupon to help attract new patients. Such sites provide a platform for discounted services, in exchange for a fee to refer patients to those businesses. While every state and business is different, chiropractors need to be aware of the implications of working with such sites while accepting federal health care insurance reimbursements, and the marketing requirements that still must be adhered to that often go overlooked.

When a discount is offered, Groupon customers (in this case, chiropractic patients) pay fees directly to Groupon. The chiropractor is then paid a percentage of the fees collected. Such marketing might affect Federal laws, for patients covered by federal insurance programs. The federal anti-kickback statute (AKS) prohibits any person from knowingly and willfully offering or paying cash to any person to induce the person to refer a patient for services for which payment may be made under a federal healthcare program. While some safe harbors exist, none specifically fit in a case like this. read more

The Debate Over Physician Owned Hospitals

June 8th, 2020 by

florida healthcare law firm physician owned hospitalsBy: Dave Davidson

The debate over the pro’s and con’s of physician-owned hospitals has been raging for decades. Physician-owners say their hospitals are more patient-focused, provide higher quality care, obtain better outcomes and therefore receive higher patient satisfaction scores. They also point out their convenience and efficiency.

Opponents argue that physician-ownership leads to overutilization and cherry-picking of only the best patients. The less-desirable patients (both clinically and financially) are then left to be taken care of by the community hospitals. For those reasons, both the American Hospital Association and the Federation of American Hospitals remain strongly opposed to physician-owned hospitals.

Federally, the Stark Law includes an exception which allows a physician to refer patients to a hospital in which the physician has an ownership interest, so long as the ownership interest is in the entire hospital, and not just a subdivision of the hospital. However, in 2010, the federal government weighed in again on the issue, and passed the Affordable Care Act (ACA), which includes provisions which (i) restrict physician referrals to hospitals in which they hold an ownership interest; (ii) restrict any increases in physician-ownership of a hospital; and (iii) restrict expansion of physician-owned hospital facilities. CMS has granted exceptions to these restrictions, but those have been limited to rural hospitals and high Medicaid hospitals, and attempts to amend the law have failed. read more