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.
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
On February 20, 2014, the Office of the Inspector General posted Advisory Opinion 14-02. The Advisory Opinion reviews the following scenario for compliance with the Federal Anti-Kickback Statute, 42 USC § 1320a-7b. Under the proposed scenario, a Medigap insurance provider participates with a preferred provider organization (“PPO”) which contracts with hospitals (“Network Hospitals”). The Network Hospitals discount Medigap policy-holders’ inpatient deductibles up to 100%. In exchange for each discount, the Medigap plan pays an administrative fee to the PPO. The Medigap plan also pays a portion of the discounted savings directly to the policy-holder who stayed at the Network Hospital. read more
By now we are all too familiar with the commandment “Thou shaltneither pay nor receive, nor solicit the payment or receipt, of anything of value in exchange for referring an individual to a person for the furnishing of an item or service for which payment may be made by a Federal health care program.” Many of us have restructured, redefined, contorted and construed our arrangements so that they fit neatly within a statutory Safe Harbor to the anti-kickback legislation. Then, in the name of “Patient Protection,” comes the Open Payments Program (also known as the “Physician Payment Sunshine Act”).