stark law and physician contracting
TRANSCRIPT
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Stark Law and Physician Contracting A MD Ranger On-Demand Webinar
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Objectives
• Stark Law basics • Review penalties for non-compliance • Strategic and tactical best practices for building Stark
compliance into physician contracting
First thing’s first: call your attorney
• MD Ranger doesn’t give legal advice • Stark Law is complicated • All matters regarding potential Stark violations (or
questions) should go to your counsel under privilege • Intent is irrelevant
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Twenty-some years ago…
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The government needs to protect itself from fraud and abuse
• Physician Self Referral Law, commonly referred to as “Stark Law” enacted
• Section 1877 of the Social Security Act, 42 U.S.C. 1395.nn • Consists of original statute (Phase I, 1989) • Phase II into effect in 1996 • Phase III throughout the 2000’s
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Stark Law in a “nutshell”
• Restricts physician referrals • A physician (or a physician’s immediate family
member) who has a direct or indirect financial relationship with an entity that provides “Designated Health Services” (DHS), cannot refer patients (Medicare/Medicaid) to that entity for DHS, and the entity cannot submit a claim for services unless the financial relationship is within a Stark exception.
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There’s a lot going on there!
• What’s immediate family? • What’s a direct financial relationship? What’s an
indirect financial relationship? • What qualifies as DHS? • What are Stark Law exceptions?
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All in the family (literally)
• Defined as immediate, which is: • Spouse • Parent • Child • Sibling • Stepparent • Stepchild • Stepsiblings • In-laws (parents and siblings) • Grandparents • Grandchildren • Spouse of grandparents and grandchildren
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Defining financial relationships
• Any type of investment, ownership, or compensation arrangement between the referring physician and the DHS entity is a financial relationship under Stark
• Includes stock ownership, partnership interest, rentals, personal services contract, salary, etc.
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More examples of financial relationships
• Professional services agreements • Call coverage arrangements • Medical directorships • Medical staff officers payments • GME programs • Uncompensated care • Leases • Risk-sharing • ACO’s
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What’s DHS?
• Inpatient services • Lab • Physical therapy • Occupational therapy • Radiology and imaging • Medical equipment • Medical supplies • Prosthetics • Home health and other outpatient services • Prescription drugs
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Surely there’s an exception….
• Personal services arrangements • AMC arrangements • Medical staff incidental benefits (must be provided to
all) • Physician recruitment • Non-monetary compensation up to $372 ($390 in ‘15) • Employment (legitimate) • Office spaces leases • Hospital ownership (must be greater than 50%) • Compliance training
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Remember
• Not an exhaustive list • Work with your attorney • Each exception has very specific elements that must
be met and documented. Play safe.
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And, don’t forget
• Strict liability statute • Intent to violate the law doesn’t have to be proven • Technical violations of the law are still violations
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How much are we talking?
• No payment for claims • Civil monetary penalties for each service ($15,000)
plus an assessment of up to three times the claim • Penalties up to $100,000 for “circumvention
schemes” • Physicians and entities could be excluded from
participating in CMS programs
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How is it different from AKS?
• AKS prohibits the exchange or offer to exchange anything of value in an effort to induce the referral of health care services (any items) from any person or provider
• Much more broad than Stark • Applies to all federal health care programs • Intent must be proven
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Stark Law and the False Claims Act
• Enacted during the Civil War, the law imposes liability on people/organizations who defraud government programs
• Payments to a hospital for services that violate Stark could be subject to penalties because they defraud the government
• Allows whistle-blowers to bring qui tam lawsuits and sue on behalf of federal government for Stark violations
• Yikes! 17
Challenge: maintain key physician relationships
• Strong physician relationships key to a successful organization and to promote clinical excellence
• Compensation decisions impact physicians immensely: be deliberate, thoughtful and consistent
• Remember that all physician financial relationships, even non-monetary compensation, should have a contract and FMV documentation
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Best practices for protecting your organization and physicians
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Check out MD Ranger resources
• Compliance checklists • Structuring physician contracting programs • How to identify risky contracts • And more
www.mdranger.com/resources
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Have a written and signed contract
• Stark requires written contracts for physician services with payment terms set in advance!
• Both the hospital and the physician must sign the agreement
• Though this step is obvious, sometimes it can be quite challenging to determine if a contract exists.
• No money exchanged for the service? STILL CREATE A CONTRACT
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Document non-monetary compensation
• Are you providing non-monetary payments to independent physicians (that you aren’t providing to the entire medical staff) that exceed the cap? • Parking spaces? • Meals? • Electronic health records? • Overhead from charity events involving doctors? • Joint marketing? • Office artwork? • Technology? • Infrastructure? • ….?
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Be specific about the service
• The services to be provided must be described in detail in the contract.
• Don’t forget important details, like number of hours in administrative agreements
• Record keeping for time and performance of duties • Periodic ‘audits’ of time cards to see if they are
accurate, meetings attended, reports filed, etc.
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Set rates at fair market value • Check the fair market value documentation with the agreement
to ensure that methods/data are sufficient • If documentation or methods are questionable, look up market
data for the service • If no documentation exists and payment rates were determined
by something other than fair market value, flag the contract for follow up
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Don’t pay for referrals! Period.
• Paying for referrals or bribing physicians in any way is illegal
• Due diligence is required when reviewing contracts to ensure that the payments are not for referrals; lack of documentation leaves you vulnerable to technical Stark violations
• Remember: the government doesn’t have to prove intent for Stark violations
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Compliance is mandatory
• Ensure that the hospital is paying the appropriate rates as per the agreement (AP is great for this)
• Check physician documentation is up to standard, medical directorship hours especially
• Read through the description of the service and ensure it is not only being adhered to, but also if the service is still needed
• Check up on ‘special deals’ that didn’t follow standard procedures or legacy contracts that haven’t changed in years
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Audit your contracts
• Review the entire auditing process and document this discussion or meeting in full
• Create a file or document to capture your internal process. Include: • Memos written by responsible executive or leader • Minutes from meetings • Flags and notes • List of follow up items in one place, as collected from above
documents, notes, memos, and emails
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