News and Insights
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The use of electronic health records (EHRs) by physicians, hospitals, and other providers has dramatically increased in recent years. The federal government reports that 78% of office-based physicians are now using some type of EHR, up from only 18% in 2001. Additionally, while only 9% of hospitals had adopted EHRs in 2008, more than 80% are now meaningfully using the technology.
 Hsiao CJ, Hing E. ”Use and characteristics of electronic health record systems among office-based practices: United States, 2001-2013.” NCHS data brief, no 143. Hyattsville, MD: National Center for Health Statistics. 2014.
 Press Release, United States Department of Health & Human Services, “Doctors and hospitals’ use of health IT more than doubles since 2012.” (May 22, 2013).
The entire medical community is under high scrutiny when it comes to coding and billing. All too often medical providers are subject to coding audits or civil enforcement actions regarding coding and billing, or even criminal actions for improper coding and billing.
By Steve Lawrence, Shareholder, Milligan Lawless, P.C. (2013).
The following is an abstract of Mr. Lawrence’s article, Regulatory Issues that Affect Funding of Physician-Backed Medical Enterprises: A Primer:
This paper provides a summary of key federal regulatory issues that affect funding of physician-based medical enterprises. Margins in medical practices continue to face pressure from all sides. As physician compensation from core medical practices declines, physicians seek new avenues to profit. Many physicians start or sponsor spin-off businesses related to their practice or their medical background. As angel investors, venture capitalists and private equity firms consider investing in such medical businesses, the regulatory constraints on such enterprises becomes an important concern. Beginning with a hypothetical scenario suggested by recent regulatory enforcement cases, this paper examines key federal laws that govern physician-backed medical enterprises that could affect funding of such enterprises – the Stark law, the anti-kickback law and the False Claims Act.
The final rule regarding the “Sunshine Act” was published by the Centers for Medicare and Medicaid Services (“CMS”) on February 1, 2013. This rule interprets the provisions of the physician payment provisions for the Affordable Care Act, and finalizes the creation of a database of the financial relationship between physicians and covered drug and device manufacturers.
This long-awaited rule is intended to increase transparency and “to reduce the potential for conflicts of interest that physicians or teaching hospitals could face as a result of their relationships with manufacturers,” according to the statement released by CMS.
The Sunshine Act establishes guidelines and requirements for certain entities referred to as “applicable manufacturers” to report their financial relationships with physicians. Specifically, manufacturers of drugs, devices, biologicals, and medical supplies covered by Medicare, Medicaid, or the Children’s Health Insurance Program must report to CMS payments or other transfers of value they make to physicians and teaching hospitals. Group purchasing organizations and applicable manufacturers must also disclose physician ownership or investment interests held on or after August 1, 2013.
The Sunshine Act excepts certain types of transfers of value from the reporting requirement, such as incidental items valued at less than $10 and educational materials intended for use with patients. Physicians will be provided an opportunity to review and, if necessary, dispute information reported to CMS.
The final rule implements reporting timelines, and also creates a venue for the public to view the information. Data collection is to begin on August 1, 2013; the first reports to CMS must be filed by March 31, 2014. The data is slated to be released to the public via a CMS website by September 30, 2014.
For information regarding reporting and reviewing information, see the CMS Open Payments website here.
By Ken Briggs, originally published by American Health Lawyers Association, Fraud and Abuse Practice Group (April 18, 2013)
On April 17, the U.S. Department of Health & Human Services, Office of Inspector General (OIG) issued an update of the Provider Self-Disclosure Protocol (SDP). This update is in response to OIG’s solicitation of comments issued in June 2012. It is intended to supersede and replace the SDP OIG originally issued in 1998, as well as the Open Letters OIG issued to provide additional guidance on the SDP to the healthcare community.
All individuals or entities subject to OIG’s civil monetary penalty (CMP) authority are eligible to use the SDP to resolve liability arising from the potential violation of federal criminal, civil, or administrative laws for which CMPs are authorized. Conduct for which CMPs are not authorized, e.g., simple overpayments or errors, are not eligible for resolution through the SDP. Importantly, matters involving only potential liability under the Physician Self-Referral (Stark) Law still are not eligible for resolution under the SDP, and should be disclosed to the Centers for Medicare & Medicaid Services under its Self-Referral Disclosure Protocol.
The update clarified the necessary elements of a disclosure:
- The identifying information of the disclosing party, including a description of the organization of the disclosing party;
- A concise statement of all details relevant to the conduct disclosed;
- A statement of the federal laws that are potentially violated by the disclosed conduct;
- The federal healthcare programs affected by the disclosed conduct;
- An estimate of the damages or a certification that the estimate will be completed and submitted to OIG within 90 days of the date of submission;
- A description of the disclosing party’s corrective action upon discovery of the conduct;
- A statement of whether the disclosing party has knowledge that the matter is under current inquiry by a government agency or contractor;
- The name of an individual authorized to enter into a settlement agreement on behalf of the disclosing party; and
- A certification statement.
For disclosures involving false billing, OIG stated that the disclosing party must conduct a review to estimate the improper amount paid by the federal healthcare programs. The damages estimate may be derived from the actual claims submitted or from a sample. Where the disclosing party uses a sample, the sample size must include at least 100 items. The damages report must describe the:
- Review objective;
- Population sources of data;
- Qualifications of personnel that conducted the review; and
- Characteristics measured.
Additional elements are required where the damage estimate was derived from a sample.
For disclosures involving excluded persons, OIG clarified that the disclosing party should describe:
- The identity, job of the excluded individual, and dates of employment;
- The disclosing party’s screening and background check procedures;
- How the conduct was discovered; and
- Any corrective action taken.
Before making the disclosure, the disclosing party must screen all current employees and contractors against OIG’s List of Excluded Individuals and Entities. The SDP provides guidance on how to estimate damages related to excluded individuals.
For disclosures relating to potential liability under both the Anti-Kickback Statute and the Stark Law, OIG reiterated the requirement that the disclosing party clearly acknowledges that the disclosed arrangements constitute potential violations of the laws, as applicable. OIG requests that the disclosing party describe the total amount of remuneration involved without regard to whether a lawful purpose existed for the arrangement. However, the disclosing party may explain why it believes OIG should not consider a portion of the remuneration in determining the settlement amount.
OIG clarified its general practice for calculating settlement amounts, stating it typically requires a minimum multiplier of 1.5 times the single damages, but will determine whether a higher multiplier is appropriate depending on the facts. OIG reiterated that a minimum $50,000 settlement is required for kickback-related disclosures. For other matters accepted into the SDP, OIG requires a minimum $10,000 settlement. In the “unusual instance” where OIG does not find potential liability, it will refer the matter to the appropriate payor for resolution. If a disclosing party is unable to pay the anticipated settlement amount, it should promptly notify OIG so that OIG can review the disclosing party’s financial information to determine an appropriate resolution.