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.
I am a successful physician who works for a thriving practice that is affiliated with a local hospital or Ambulatory Surgical Center (“ASC”). The hospital/ASC was so impressed with my professionalism and skills that they retained me to perform certain additional duties and services for them. Of course, they are paying me for my time and services. This is great, I love my work, I am generating two sources of respectable income – all is good.
Not so fast!
As can sometimes be the case, all is good while there is smooth sailing and while the money is coming in. However, once there is a bump in the road, a hiccup in a procedure, or a third party employee files a complaint with the Equal Employment Opportunity Commission (“EEOC”); the Florida Commission on Human Relations (“FCHR”); Department of Labor (“DOL”) or any federal or state agency complaining about some alleged incident in their workplace. Their filing of a lawsuit can be against you individually, against your practice or against the hospital/ASC. Not to mention, a lawsuit can be filed by a patient or third party against the practice or the hospital/ASC. Then what? read more
Providers licensed or regulated by the Agency for Health Care Administration must make certain that their employees and/or contracted personnel have had Level 2 Background Screening (criminal history background check) pursuant to Florida Statutes and Administrative Code within 10 business days of being hired. Also, if a potential employee or contractor has not been employed within the previous 90 days, even if that individual previously had level 2 background screening, the individual will need to go through submitting fingerprints again. Further, each employee or contracted individual that is subject to Level 2 Background Screening must renew the background screening every 5 years to be eligible for employment or continued employment with an AHCA licensed or regulated provider.
Fingerprint Retention Period
The 5 year expiration from the date of retention of fingerprints is the date that the Florida Department of Law Enforcement (“FDLE”) will purge fingerprints from storage, meaning if fingerprint retention renewal has not occurred prior to this date, the whole screening process, that is fingerprinting, etc., starts over. There is no “grace period” if fingerprints have been purged, which means the individual is no longer “technically” eligible for employment with an AHCA licensed provider (and perhaps other providers licensed and regulated by other state agencies such as Department of Health, Department of Children and Families, or Department of Elder Affairs). Further if the provider is in the process of an AHCA survey, accreditation survey, or renewal licensure application, not having a current Level 2 Background Screening for an employee or contractor might subject the provider to a statement of deficiency, assessment of administrative fines or fees, or denial of a licensure renewal application. read more
The concept of gainsharing in the health care industry has been around for decades. Under a typical gainsharing program, a hospital and participating physicians will develop a cost-savings plan in relation to a specific procedure or service line. As the savings are realized, the hospital will then share a portion of the measurable savings with those physicians. The goal of gainsharing has always been to align physician and hospital interests, in order to improve the quality and efficiency of clinical care.
Gainsharing has not always been viewed favorably by the government. In fact, in a 1999 Special Advisory Bulletin, the Office of Inspector General (OIG) took the position that gainsharing arrangements violated the law, and that the payments could even constitute kickbacks to the participating physicians. Since then, the government has not backed off its position that gainsharing programs might violate the law. However, the OIG has also determined that it would not seek sanctions in a growing number of gainsharing arrangements. read more
As healthcare professionals, we take pride and care in the detail in maintaining our employee files. Certain items must be separated from the others, files securely locked and out of reach from co-workers hands. Personnel’s personal information must be protected. We all know these things and probably already have a procedure in place for compliance.
Whether your facility has been deemed accredited (Joint Commission, for example) or just starting up, employee files must be maintained, reviewed, audited, and kept according to retention requirements. Knowing which laws apply aids in keeping your business compliant. For example, pursuant to ERISA laws, there is no specific time period to maintain records that reflect age, marital status and/or service records. The Social Security Acts states that employees’ social security numbers must be kept four years from the tax due date or payment of tax, whichever is later. So, there’s a lot of tracking going on. read more
The DOJ reported on August 5th a settlement with a South Carolina hospital concerning physician compensation. Though certainly not the first or the biggest case of its kind (e.g. note the Halifax Hospital and North Broward Hospital District cases, which generated settlements of over $100M and $60M respectively), it’s attention grabbing nonetheless.
The SC case was brought by a whistleblower, a neurologist formerly employed by the hospital. The doctor alleged that the seven year employment agreements violated Stark and the Anti Kickback Statute because the compensation was more than what was legally permissible and was also based in part on ancillary services ordered by the employed doctors. Seasoned readers will understand that the concept of “fair market value” (FMV) is at the heart of regulatory compliance and also that compensation surveys of organizations like the Medical Group Management Association (MGMA) are important guides in term of what is/is not FMV. In the SC hospital case, compensation met or exceeded the top 10% of similarly qualified physicians in the area, which is very interestingly noted by the DOJ (because some of the comp levels were still within the MGMA surveys). In other words, the trend here is for the Feds to push back against comp levels on the high end of the FMV spectrum. read more
Stepping into 2016, physicians and medical practices must continue to be vigilant about the changing landscape in healthcare. Those who adapt quickly and smartly will thrive, while those who don’t will lose. What can they do?
Stability for medical practices requires two things: clear analytics and fixes. Smart medical practices will examine threats outside the practice and within it. As far as external threats go, the key area to focus on is competition. Do you know what competitors are doing and how they’re different than you?
Internal threats are general revealed in the form of (a) employees that need better training and communication, (b) employees that just need to go, and (c) creating a succession plan for the practice. If the practice is top heavy with older physicians, what plan is in place to ensure that “new blood” is brought in? What recruitment strategies are in place? Can the practice go it alone or does it need a recruitment arrangement with a hospital that can demonstrate a community need? How will the older physicians phase out? Is there a plan in the corporate documents to make sure phase out is slow and planned? What do departing physicians get? What about billing and collection? When was the last time that was analyzed? And finally, coding analysis. Is money being left on the table? Far too many practices actually undercode visits and services out of fear of payer audit. Apart from constituting a False Claims Act violation (though regulators are not fast to indict providers who are underpaid), the differential can mean the difference between a good year and a bad one.
Finally, in light of the fact that regulatory and recoupment activity has never been higher, practices would do well to ensure compliance via a self-audit and compliance plan. This is a different animal than a coding audit. This one looks at all contractual relationships to ensure compliance and augments coding compliance. read more
The Tuomey decision, U.S. Court of Appeals case out of South Carolina, contains important lessons for physicians, especially as it relates to (1) compensation arrangements with hospitals, (2) proper compensation arising in connection with the provision of designated health services (“DHS”), and (3) the advice of counsel defense.
The concept of DHS arises largely in the context of the federal Stark Law, which in pertinent part (1) forbids physicians from owning and referring to providers of DHS (e.g. PT, rehab, diagnostic imaging, home health, DME, clinical laboratory, inpatient and outpatient hospital services), (2) describes how medical practices can provide DHS to their own patients, and (3) forbids even physicians within a practice from allocating DHS profits on the basis of who ordered or referred to them.
The Tuomey case involves a whistleblower action filed against a not for profit hospital system. The original jury in that case decided that the system didn’t violate the False Claims Act, but the appellate court set aside the verdict using facts and testimony that had be excluded from the jury trial, Tuomey Healthcare System was found to have knowingly submitted over 21,000 false claims to Medicare and the government was awarded over $237 Million (most of it in the form of punitive damages). The government (which often advances the plaintiff’s—“relator” case in whistleblower cases) filed a motion for a new trial, which the trial court granted and the appellate court affirmed.
The HHS Office of Inspector General in a fraud alert released 6-9-15 is telling physicians to be cautious about entering into payment agreements that could violate the Anti-Kickback statute. In the alert, OIG tells physicians entering into such payment arrangements that their compensation must reflect the services’ market values. Further, OIG notes that such an arrangement could violate the Anti-kickback Statute if it seeks to increase the number of referrals the organization receives from those physicians.
The beginning of a new year is a great time to evaluate your medical practice and determine ways to protect its healthy growth for the future. The time, effort and dedication that it may take to build a successful practice may be quickly undermined without certain contractual protections in place. As you seek to establish or expand your practice, it is essential to protect your hard earned efforts from employees and consultants taking a portion of your patient base, employees and valuable proprietary business processes to compete against you.
One of the ways physicians seek to protect the investment that they have made in their practice is through the use of restrictive covenants. Restrictive covenant is an all-inclusive term used to refer to all contractual restrictions upon competitive practices; nonsolicitation; confidential information and use of trade practices. Restrictive covenants may be found in a number of documents related to your practice. A restrictive covenant may be found in your practice governing documents, such as the shareholder agreement, the partnership agreement of a partnership or the operating agreement of a limited liability company. A restrictive covenant is often included in an employment contract where it prevents an employee from engaging in certain competitive practices while they are an employee and for a period of time after their employment ends. There may be a restrictive covenant provision in a contract for the sale of a party’s interest in the practice. read more
Many lawyers have written extensively on the legal issues surrounding recruitment agreements, but there is an information gap out there between the discourse over the legal issues and how those issues make an impact on the actual business, the practice. When a practice decides to employ a new physician with the help of a hospital, the practice is essentially a business making a business decision. With that in mind, the practice must fully inform itself of the implications that a Recruitment Agreement will have on their bottom line. read more