Lawyer for Physicians, Medical
Corporations and Group Medical Practices
Regulatory Compliance for Medical Practices
In this suite of articles, I explain the basic
corporate, business and contract law issues for medical
corporations and group medical practices in California.
I explain things from both sides, that is, the perspectives
of both the individual physician and the group practice.
The articles in this suite are:
In this article, I give you a quick
overview of the major regulatory compliance areas for
physicians and medical practices, namely:
1. Referral Laws -- Anti-Kickback and
Stark Self-Referrals
2. Billing Medicare and Other Payers
3. HIPAA
4. Supervision of Staff
5. Test Case -- Sharing Offices with other Health Care
Providers
The regulatory schemes covering medical
practices are unbelievably complex, so this article only
gives a bird’s eye view. For an outline of legal issues
related to a medical corporation, read
Legal Compliance Checklist for a Medical Corporation on
my website. You should also read the related set of
articles that you’ll find linked in that article.
Without further adieu,
The Referral Laws: Anti-Kickback and Stark Self-Referral
Both the US and California have their own
versions of the anti-kickback and Stark self-referral laws.
To sum them up: Don’t make or take referrals for money.
○ Under the
CA and federal anti-kickback laws, a physician may not knowingly offer or
pay, or even receive, anything of value for a referral of
medical work.
○ Under the
CA and federal "Stark" self-referral laws, for certain
designated health services, a physician may not refer a
patient to a provider with which the physician (or a family
member) has a financial relationship.
Violation of these laws is punishable by
fines, exclusion from participation in Medicare and Medi-Cal
(see next), loss of license to practice, and even
imprisonment. The federal and state referral laws are
very broad and very complex. They touch on almost all
financial aspects of a practice, and it is very important
that you hire an attorney to run each of your transactions
through a referrals analysis.
For more on the referral laws as they
relate to your group's compensation plan, read
Stark and Anti-Kickback laws re the compensation structure of a group medical practice.
Billing Fraud and Exclusion from Medicare and Medi-Cal
You must be very careful when billing for
services, because you do not want to inadvertently commit
health care fraud. It is very easy for medical practices to
become sloppy in their billings as they try to maximize
reimbursement, for example, using a physician’s provider
number to cover the work of a non-physician.
The federal Office of Inspector General
(OIG) can exclude anyone who has engaged in billing abuse
from participation in Medicare. Exclusion is very serious
because you cannot get reimbursement from Medicare for your
medical work. The California Department of Health Services
has its own exclusion (suspension) provisions regarding Medi-Cal.
The OIG prohibits payment even to an
innocent health care provider (e.g. a hospital) who employs
an excluded individual. A provider can itself be excluded
if it submits claims for payment connected with an excluded
person. Hence a medical practice must be sure that all of
its employees and contractors are not excluded. Both OIG
and California maintain online lists of excluded health care
providers.
HIPAA
The Health Insurance Portability and
Accountability Act of 1996 (HIPAA) requires “covered
entities” to protect electronic health information from
unauthorized access, alteration, deletion, and transmission.
Covered entities include medical practices.
HIPAA is extensive and I’m sure you’ve had
about all you can stand of it already. One thing to keep in
mind about HIPAA is that, when working with third-party
contractors who handle patient data, a health care practice
must obtain contractual assurances of their HIPAA
compliance. Make sure your contracts with third parties
have language to this effect.
Supervision of Staff
California has a multitude of regulations
on your supervision of staff, including medical assistants,
nurse practitioners and more. The California Medical
Board’s website has many publications that address these
regulations. I will not belabor them in this short outline.
Test Case -- Sharing Offices with other Health Care
Providers
Sharing office space with other health
care practices brings up all of the above issues. The
primary problems are violation of the referral laws (above),
creation of a de-facto partnership, and opening access to
patient data in violation of HIPAA.
The various health care providers may make
referrals to one another, but they must comply with the
state and federal referral laws (Stark and Kickback).
In essence, they may not take or receive
any compensation (direct or indirect) for a referral. Be
extra careful of the office leases for the shared space.
The Stark and Kickback referral laws have specific requirements to prevent the
leases from acting as indirect conduits for financial
compensation.
The risk with a de-facto partnership is
that patients of another practice sue you based on the
argument that you and the other practice are partners. The
more resources you and the other practices share, and the
more integrated you look, the higher the risk. You must
keep your medical practice absolutely separate from the
other practices in the shared space. All health care
practices in the shared space should give written disclosure
of the space-sharing relationship to patients, including
disclosure that the various practices are not in a
partnership of any kind.
One final note: Never let another health
care practice bill under your provider number, no matter how
many rationales that other practice has for it being OK.
Most likely this would constitute billing abuse.
Call me to schedule a
legal consultation: 510-796-9144 | 