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
Over the past few years, it seems like physician employment agreements are getting shorter and shorter. While I applaud all efforts towards efficiency and economy, you should not always take those documents at face value. For example, I recently reviewed a one page employment contract for a client. That single page basically said, “We are hiring you as our employee for a term of one year, with an annual salary of $$$.”
At first glance, the simplicity of that document might seem refreshing. That’s especially true if you’re worried about how much time it’s going to take for your lawyer to get through it! My client’s second glance revealed a multitude of unanswered (and essential) questions. There was no mention of expected duties, schedules, standards, renewals, terminations, insurance, benefits, vacation time, sick leave, CME, etc. in the employment contract However, when we reviewed the contract together, we discovered that although those points were not even referenced on that single page, they were still legally, “in there.” 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
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
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