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Health Law Alert
Summer 2009
From the Chair
As many of us are dealing with the heat of summer, we at Ober|Kaler are taking steps that we hope will contribute to the effort to reduce the greenhouse effect. After 20 years in print, the Health Law Alert is being delivered to our readers in electronic-format only. The electronic format also streamlines production time, which will permit us to produce more frequent issues covering fewer, yet more timely, topics.
While our delivery method is changing, the range of topics covered in the Health Law Alert remains as varied as ever. In this issue, we address the OIG's most recent changes to its self-disclosure protocol and the DOJ's changes to its corporate charging guidelines. The OIG also garnered the largest settlement under its CMP authority recently, which is discussed in this issue. Also in the enforcement arena, we discuss a recent federal appeals court decision allowing a False Claims Act case to proceed based on alleged violations of the Stark and Antikickback laws.
Click to continue...OIG Announces Self-disclosure Changes
In an Open Letter dated March 24, 2009, the OIG announced two fairly significant changes to its long-standing provider self-disclosure protocol. First, the OIG will no longer accept self-disclosures that involve only a Stark violation. There must also be a "colorable" antikickback violation for the OIG to consider a Stark violation. Second, the OIG is establishing a $50,000 minimum for all self-disclosure settlements. The OIG noted that $50,000 is the minimum civil monetary penalty that may be imposed for an antikickback violation.
Click to continue...Imaging Center Settlement Among Largest Under OIG's CMP Authority
On March 13, 2009, West Valley Imaging Limited Partnership and its principals, William L. Boren, M.D., and Luke S. Cesaretti, M.D., all of Las Vegas, Nevada, agreed to pay the OIG $2 million to resolve allegations that the radiologists submitted false or fraudulent claims to Medicare. Neither the radiologists nor their partnership admitted to any wrongdoing, but the size of the settlement makes it one of the largest CMP cases to settle.
Click to continue...The Future of Physician In-office Diagnostic Testing
By: Julie E. Kass
CMS has been taking steps to regulate the provision of diagnostic tests performed in physician offices for several years. In the 2008 Medicare Physician Fee Schedule (MPFS), CMS proposed, but never finalized, a limitation on the scope of certain in-office ancillary services, including advanced diagnostic imaging tests such as magnetic resonance imaging (MRI) and computed tomography (CT) scans. CMS also proposed to broaden the scope of the purchased diagnostic testing rule to include the technical component (TC) of diagnostic tests that were not performed in the same office as the billing physician, as well as the professional component (PC) of such tests. Though finalized in the 2008 final MPFS, the antimarkup provision was delayed until January 1, 2009, due to ambiguities in the rule and concerns regarding the availability of diagnostic services. In the 2009 proposed MPFS, CMS proposed a revised antimarkup provision. In addition, CMS proposed to require all physician practices to dually enroll as Independent Diagnostic Testing Facilities (IDTFs) and meet IDTF standards, and proposed that all mobile IDTFs bill directly for their services. The 2009 final MPFS finalized some, but not all of the proposals related to diagnostic testing.
Click to continue...Payment for Medicare Bad Debts at Collection Agency Still Uncertain
By: Carel T. Hedlund
Medicare bad debts relating to deductibles and coinsurance continue to be a primary focus of audit activity by Fiscal Intermediaries (FIs) and Medicare Administrative Contractors (MACs), and providers have been appealing the resulting disallowances to the Provider Reimbursement Review Board (PRRB). While CMS has recently reiterated its alleged long-standing policies governing allowability of Medicare bad debts, the PRRB and the courts often disagree. Recent administrative and judicial decisions leave unresolved one of these questions: whether accounts can be claimed as bad debt while they are at an outside collection agency.
Click to continue...New AdvaMed Code in Effect as of July 1
In December 2008, AdvaMed released a comprehensive update to its Code of Ethics on Interactions with Health Care Professionals (the new Code). As expected, the new Code is far more detailed than its predecessor, and contains significant enhancements which formalize ethical guidance regarding interactions with Health Care Professionals (HCPs), create formal reporting and certification avenues, and more clearly define the Code’s scope, intention, and guiding principles. Taken together, these changes represent a significant shift away from the more general approach that characterized the old AdvaMed Code, and likely require changes to most Member Company (MC) compliance practices and written procedures.
Click to continue...FCA Case May Proceed Based on Stark, Anti-kickback Allegations
A recent decision by a federal appeals court highlights the fact that the impact of violating the Stark law and the anti-kickback statute may be magnified when those violations become the basis for a lawsuit under the False Claims Act. In U.S. ex rel. Kosenske v. Carlisle HMA, Inc., 554 F.3d 88 (3d Cir. 2009), the Third Circuit ruled that a lawsuit under the False Claims Act may be based on alleged violations of the Stark and anti-kickback laws.
Click to continue...Avoiding False Advertising Hassles for Health-related Businesses
What could a nursing home possibly have in common with a pizza chain? Well, when their advertising is considered misleading enough to trigger legal challenges by competitors, consumers and government agencies, they may both face the prospect of liability for false advertising messages. Advertisers can be forced to halt advertising, pay damages, and correct deceptive messages. Some statements are not actionable despite being misleading, but just countering allegations and negative publicity about deceptive advertising is expensive. Allegations of consumer deception can seriously tarnish a company’s reputation. Follow some basic guidelines to detect and avoid health-related communications that could cause costly advertising hassles.
Click to continue...FTC's Positive Clinical Integration Advisory Opinion is Encouraging to Providers
By: Christi J. Braun*
On April 13, 2009, the Federal Trade Commission staff (FTC) issued an advisory opinion to TriState Health Partners, an Ober|Kaler client, regarding TriState’s proposed clinical integration. A physician-hospital organization located in Hagerstown, Maryland, TriState will implement a program with elements similar to those discussed in the preceding two favorable FTC advisory opinions on clinical integration, MedSouth and Greater Rochester Independent Practice Association (GRIPA). As such, the FTC’s analysis of TriState’s program follows a familiar pattern. Because of its rural location, large percentage of participating providers, and hospital participation, TriState did, however, raise some unique issues. Overall, the letter’s tone is positive and should encourage physicians and hospitals interested in implementing a clinical integration program.
Click to continue...Justice Department Revises Charging Guidelines for Prosecuting Corporations
By: Paul S. Weidenfeld
On August 28, 2008, after legislative debate and litigation generated by several controversial provisions contained in its Principles for Federal Prosecution of Business Organizations, the Justice Department announced substantial changes to those guidelines. The longstanding controversy surrounded several policy pronouncements originally set out in the 2003 Thompson Memorandum and the 2006 McNulty Memorandum discussing corporate charging decisions. The most controversial portions of these memoranda allowed prosecutors to weigh a corporation’s willingness to waive its attorney-client and work product privileges, as well as its decisions about whether to advance attorneys fees to its employees or to enter into a joint defense agreement, when assessing whether the corporation was cooperating with the government’s investigation.
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