Hospitals & Health Systems

In a recent advisory opinion, the OIG stated that it would not seek sanctions against a hospital-based hospice agency for providing certain volunteer services to terminally ill patients who did not qualify for the hospice benefit. The OIG recognized that the volunteer services may ultimately influence the recipients to select the hospice, which was a…

The Office of Inspector General (OIG) of the Department of Health and Human Services has concluded that a per diem payment structure between a not-for-profit hospital and specialist physicians would not result in administrative sanctions under OIG’s civil monetary penalties law that relates to prohibited remuneration by the anti-kickback statute. According to an OIG Advisory Opinion that was posted this week:

Each year, [the hospital] allocates an aggregate annual payment amount per specialty for on-call coverage payments to participating physicians based on: (1) the likely number of days per month the specialty would be called; (2) the likely number of patients a participating physician would see per call day; and (3) the likely number of patients requiring inpatient care and post-discharge follow-up care in a participating physician’s office (OIG Advisory Opinion 12-15)

Once the aggregate amount per specialty is determined, the hospital divides this amount by 365 days to create the on-call coverage per diem fee to be paid to the specialty physicians. Notably, these physicians receive the per diem fee for each day of coverage under the arrangement even if they are not contacted by the emergency department to treat a patient.

Numerous elements of the particular arrangement at issue were highlighted by OIG as minimizing the risk of fraud and abuse. First, the per diem payment was certified by an independent consultant as commercially reasonable and within the range of fair market value for actual and necessary services. It was also calculated without regard to referrals or other business generated by the participating physicians. The OIG highlighted that the per diem amount was calculated annually in advance and was uniformly administered without regard to the individual physician’s referrals.

The Government Accountability Office (GAO) issued an interesting report in September that analyzed civil and criminal healthcare fraud cases.  The report is based on 2010 data from the various agencies in the federal government charged with investigating and pursuing healthcare fraud.  For purposes of this blog entry, I’m going to focus on some key numbers on the civil side. 

In 2010, the government investigated a total of 10,187 “subjects.”  Subjects included entities such as hospitals, medical clinics, and pharmacies, as well as individuals that provide services at these entities.

  • Of the 10,187 subjects investigated, 2,339 of the subjects were related to civil investigations, rather than criminal investigations.
  • Of the 2,339 civil investigations, nearly 20% of these were hospitals.  Medical centers or clinics made up another almost 18% of the total 2,339 civil investigations.
  • Of the total 2,339 civil investigations, the government actually pursued cases against 1,087.
  • Of the 1,087 civil cases the government pursued, the government either settled with, or won a judgment against, 55% of these subjects.
  • Of the 55% civil cases that either settled or resulted in a judgment for the government, 44% of these subjects were hospitals or medical facilities (medical practices or clinics).

These numbers are interesting because it shows that hospital or medical facilities make up over one third of all civil investigations and almost half of all settlements.  It is also interesting to look at the number of investigations that were based on qui tam filings.  A qui tam is a civil False Claims Act case brought by a private citizen, “relator” or “whistleblower,” on behalf of the government.  Once a case is filed, the Department of Justice and the Office of Inspector General are charged with investigating and making a determination about whether the government should pursue the case by becoming a party to the litigation.  In many cases, if the government believes the allegations have merit, the government will attempt to settle before actually litigating.

On September 25, 2012, two members of the Husch Blackwell Healthcare team, Brian Bewley and David Pursell, presented a webinar discussing:

  • An overview of Stark
  • Stark overpayment reporting requirements
  • Steps to take after discovering a potential Stark violation

As former Senior Counsel in the Office of Inspector General for Health and Human Services and…

The heads of both the Department of Justice (DOJ) and Department of Health and Human Services (HHS) sent a joint letter on Monday, September 24, to five hospital industry groups, including the American Hospital Association, threatening to prosecute providers that use electronic health records (EHR) to “game” the system and improperly obtain federal monies for…

In less than two weeks, CMS will begin reducing a hospital’s Medicare reimbursements by as much as 1% if the hospital’s readmission rates are too high.  This reduction is part of a program authorized by the Affordable Care Act called the Hospital Readmissions Reduction Program.  You can read more about the program CMS’s website.

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Last week, Paul Ryan accepted the nomination for Vice President.  In his acceptance speech, he cited “Obamacare” as the greatest threat to Medicare, but many hospitals view the expansion of coverage for low-income individuals positively.  More and more community hospitals are urging their state governments to accept payments for expanded Medicaid programs under the…

The FTC recently provided yet another warning to healthcare organizations that they must take the time to analyze potential antitrust implications when considering an acquisition or consolidation.  On August 6, the FTC  and Nevada Attorney General announced the filing of a lawsuit and proposed consent decrees settling litigation filed against Renown Health, the largest hospital provider in…

On August 16, 2012, the U.S. Court of Appeals for the Fifth Circuit dismissed an appeal challenging the Patient Protection and Affordable Care Act’s (PPACA’s) restriction on expansion by physician-owned hospitals.  The lawsuit was initially filed in the Eastern District of Texas by the physician-owned hospital trade group (Physicians Hospitals of America) and a physician-owned

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