Health Care Lawyer Blog

Last week the Centers for Medicare and Medicaid Services (CMS) released the new voluntary Self-Referral Disclosure Protocol (SRDP) for Stark violations. The SRDP is the counterpart to the OIG self-disclosure protocol, which allows providers to self-disclose violations of the Anti-Kickback Statute only, OR Stark violations that include a “colorable” AKS violation. The SRDP applies to Stark only violations.

The key take away-points are as follows:
- Pursuant to the SRDP, providers may self-report Stark violations resulting in overpayments via an electronic filing process. A disclosing party must provide a detailed description as to why the party believes a Stark violation has occurred, including a “complete legal analysis” of the application of the Stark law to the matter being disclosed.

- It is important for providers to realize that self-reporting under the SRDP does NOT guarantee them a "get out of jail free" card. While HHS is “authorized to reduce the amount due and owing for all violations under [Stark] to an amount less than that specified” if a provider self-reports, there is no requirement for HHS to do so. Whether such reduction will be made is based on a consideration of several factors, including:
(1) The nature and extent of the improper or illegal practice;
(2) The timeliness of the self-disclosure;
(3) The cooperation in providing additional information related to the disclosure;
(4) Other factors HHS may consider appropriate.
Additionally, CMS reserves the right to refer matters to “law enforcement for its consideration under its civil and/or criminal authorities.”

- It is also worth noting that the SRDP includes a provision requiring that CMS be granted access to all “supporting documents” and does NOT allow providers to assert privileges as to the same. This means that attorney/client privileged documents, if requested, must be turned over.

- What this all means that a provider may self-disclose, but still end up being hit with the same penalties as if he/she had not done so. Additionally, since there is no intent requirement for Stark, by admitting a violation a provider essentially proves the government’s case. Arguably, providers who self-disclose may protect themselves from being targeted by a qui tam whistleblower, but the SRDP as currently structured may cause some providers to think twice before self-disclosing.

This post is NOT meant to discourage providers from self-reporting, but only to provide a brief overview of the SRDP provisions. Providers who have specific questions relating to self-reporting, or any other Stark or Anti-Kickback issue, should contact an experienced health law attorney.

In a recent advisory opinion, the Health and Human Services Office for the Inspector General (“OIG”) evaluated a proposed arrangement whereby a hospital would compensate a sleep test provider on a “per click” basis for sleep testing equipment and services. The OIG concluded that while the arrangement could potentially generate prohibited remuneration under the anti-kickback statute (“AKS”) if the required intent was present, absent such a showing the OIG would not impose penalties.

In Advisory Opinion No. 10-14, the Requestor was a corporate entity (with no physician ownership) that provided sleep disorder diagnostic testing and related services in freestanding facilities and in hospital-owned facilities in multiple states. Under the proposed arrangement (“Arrangement”), the Requestor contracted with a hospital to provide the equipment, technicians, and staff necessary to operate a sleep-testing facility at the hospital. Patients are referral to the sleep-testing facility by physicians, and the hospital employees call patients to schedule overnight sleep studies, confirm insurance, and provide any pre-authorization that may be required.

The Requestor’s technicians perform the sleep studies for the hospital pursuant to a signed, written agreement that specifies all of the services to be provided and the material terms of the Arrangement. The Requestor then charges the hospital a set per-test fee, which Requestor and the Hospital negotiated through an arm’s-length bargaining process.

The Requestor sought an opinion from the OIG for the purpose of determining whether the arrangement would violate the AKS, which makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals or items or services reimbursable by a federal health care program. While there are exceptions and safe harbors to the AKS, the OIG noted that the proposed arrangement did not fit within any of the safe harbors because the Hospital pays the requestor on a per-test basis, and therefore the aggregate amount to be paid is not set in advance.

After the jump - OIG analysis on the Arrangement

Continue reading " OIG OKs “Per Click” Fee Arrangement Between Sleep Testing Provider and Hospital " »

The American Hospital Association (AHA) has issued a letter to the Department of Justice (DOJ) and Department of Health and Human Services (HHS) requesting a “policy review” of ongoing enforcement initiatives under the False Claims Act – in other words, requesting that the government “ease up” on its efforts to combat fraud and abuse.

In the September 7, 2010 letter, the AHA cites concerns that member hospitals are being subjected to “aggressive FCA actions” based on billing errors, mistakes or “non-culpable overutilization”. As one specific example, the letter cites to the recent investigations stemming from a May 2010 settlement wherein nine hospitals across the county agreed to pay more than $9.4 million to settle allegations involving kyphoplasty procedures. Kyphoplasty is a minimally-invasive procedure used to treat spinal fractures due to osteoporosis. In many cases, the procedure can be safely performed as an outpatient procedure; however, allegations surfaced that the hospitals performed the procedures on a (more costly) in-patient basis in order to increase Medicare billings.

According to the AHA, hospitals have complained that following the settlement, DOJ is sending hospitals “contact” letters establishing “a data-driven presumption that a hospital billing for an inpatient stay following a kyphoplasty ‘knowingly’ violated the FCA and will be liable for treble damages and penalties.” The AHA contends that such a position forces the hospital to undertake a “prescribed onerous, burdensome, and very costly self-audit” and that member hospitals are being threatened with FCA liability in the event they do not cooperate. In sum, “DOJ is using the threat of FCA liability as an audit tool.”

Continue reading " Hospitals Allege Overuse of False Claims Act by DOJ, HHS " »

Following a series of high-profile food and drug recalls (scrambled eggs, anyone?), officials from the Food and Drug Administration (“FDA”) have hinted that they are going to start targeting executives at the offending companies for violations of the Food, Drug and Cosmetic Act ("FDCA").

A legal provision known as the “Park Doctrine” (stemming from the United States Supreme Court’s 1975 decision in US v. Park, 421 U.S. 658) allows the FDA to seek misdemeanor convictions of executives. Under the Park Doctrine, executives can be convicted for violating the FDCA so long as they had the authority to stop or prevent the violations and failed to act – even if they were not aware of the violations.

For these reasons, the Doctrine is rarely, if ever, used. However, negative public perception of the FDA coupled with troublesome violations such as Johnson and Johnson’s recall of Tylenol and the recent "egg recall" have forced the FDA to re-evaluate the tools at their disposal. Additionally, FDA data shows that the number of recalls is on the rise – according to the Gold Sheet, a trade publication on drug quality, in 2006 there were more than 200 food recalls. This number has jumped to 684 in 2010 (which is not yet over).

In March of this year, FDA Commissioner Margaret Hamburg wrote to Senator Chuck Grassley (R-Iowa), stating that the FDA plans to consider “the appropriate use of misdemeanor prosecutions, a valuable enforcement tool, to hold corporate officials accountable.” Additionally, Eric Blumberg, the FDA’s deputy chief counsel for litigation, has also shared such sentiments with industry officials.

The FDA has not named any specific targets or individuals, but Blumberg warns executives to "[d]o what you can and do the right thing before we find out about it."

This week the Office of the National Coordinator for Health Information Technology (“ONC”) announced that the Certification Commission for Health Information Technology (“CCHIT”) and the Drummond Group, Inc. (“DGI”) were the first technology review bodies authorized to test and certify EHR systems for compliance with the "meaningful use" rules. This means that EHR vendors can begin to have their products certified.

This announcement is of special import to health care providers who intend to implement EHR systems in order to qualify for Medicare and Medicaid incentives – and avoid the eventual penalties for failing to do so that take effect in 2015. Specifically, it is not enough for a provider to implement an EHR system – the technology platform used must be “certified” in order to ensure accurate transfer and exchange of information from provider to provider.

With the initial two ONC-ATCBs now named, EHR vendors can apply to them for certification of their products. By purchasing certified products, providers can be assured that the products support achievement of meaningful use objectives.

CMS is also working to create an online system for providers to register and attest (i.e., demonstrate use of for the HER incentive programs. The first incentive payments are targeted to be made in May 2011. Meanwhile, ONC is also carrying out new programs of technical assistance and training for the use of EHRs, especially for smaller hospitals and physician practices.

For more information, visit the ONC website.