Sarbanes-Oxley was passed in
response to pension pillaging at
Enron, World.com and other large corporations. Stark was passed in 1993 to
make sure doctors didn’t mix their practices with outside financial interests. While
these laws are not new, in makes sense to
revisit them from time to time.
“The general purpose of the Stark and
anti-kickback laws is to insure that physicians do not make health care decisions for
patients based upon their prohibited financial interests in other entities,” says
Timothy W. Boyd, partner with Gambrell &
Stolz.
Smart Business asked Boyd how a doctor can make sure a financial interest does
not become a legal problem down the
road.
What are some of the common mistakes
physicians make that could lead to legal
trouble?
With respect to health care compliance,
the biggest issues for most physicians continue to be the federal Stark and anti-kick-back statutes. These laws generally have to
do with Medicare and Medicaid billing.
Doctors have an obligation not to let outside financial interests influence how they
might treat a patient or where they might
send that patient for treatment. Hospitals
and physicians need to be very aware and
concerned that they do not run afoul of the
Stark and anti-kickback provisions when it
comes to billing through Medicare and
Medicaid.
Obviously the private insurance carriers
must also be aware of the provisions.
While Stark and anti-kickback doesn’t
specifically apply to private insurers, the
insurers are very careful to be cognizant of
the issues raised.
What kind of penalties could physicians face
if they don’t comply with the provisions?
Generally they are financial, but there
could be criminal penalties involved.
Obviously the criminal issue occurs in very
egregious situations.
Could that include jail time?
Possibly, because it could ultimately lead
into some sort of Medicare or Medicaid
billing fraud. Simply a pure violation of
Stark wouldn’t lead to that but if it elevates
into Medicare or Medicaid billing fraud it
certainly could.
How can legal trouble be avoided?
If a physician has an interest in any type
of entity that the physician is referring
patients to, any kind of financial interest at
all, the situation must be reviewed, probably by an attorney or health care specialist.
You need to make sure you are in compliance with the Stark and anti-kickback
laws, among others.
These laws can be fairly Byzantine and
there are all kinds of traps for the unwary.
Physicians can be caught in certain types
of situations where there really is no bad
intent but the laws are designed to occassionally catch physicians.
How can businesses be certain a health
provider complies with all the rules?
If they have situations on a somewhat
regular basis, whether they be annual or whatever, they should have their billing
procedures reviewed. There’s more than
just Stark and anti-kickback issues. There
can be issues with respect to coding, of
physician charges and things like that.
These are things that should be monitored
on a fairly regular basis.
What type of due diligence should be conducted?
Any time physicians have changed their
ownership interests in various entities that
have other health care consequences,
those interests should be reviewed.
Let me give you a common example of
when this may happen. Let’s say you have
a radiologist and he has an interest in some
kind of imaging center where they do CAT
scans and things of that sort. Then that
radiologist refers a patient from his practice to the imaging center in which he has
a financial interest. That’s when you start
getting into the issues of Stark and anti-kickback. You’ll get in a situation where
you could have real issues when you’re
making a decision on someone’s health
care diagnosis based on what is perceived
to be the financial interests of the physician.
What kinds of regulations are in place to
keep interests from overlapping?
There are many different federal and
state regulations that address these issues,
but at the end of the day it is more likely to
be a federal issue.
It’s important to remember this is just one
area that we’re talking about. In addition to
Medicare and Medicaid issues there’s a
whole separate subset of requirements
involving private insurers that may need to
be addressed. Each one has its own procedures that physicians must follow.
TIMOTHY W. BOYD is a partner with Gambrell & Stolz.
Contact him at (404) 221-6536 or [email protected].