The proliferation of laws and regulations related to Medicare, Medicaid, and physician licensing make many physicians unsure about what business decisions they may make or arrangements they may enter without taking risks too large to justify the business advantages. With the advent of more aggressive regulation, physicians are also concerned about the difficulty involved in billing accurately. This post addresses some common physician questions.

1. Can I/we have an in-house MRI?

Three laws which have a significant impact upon what arrangements are permissible and how they should be structured are the Stark Law, the federal anti-kickback law, and the Louisiana anti-kickback law. If certain requirements are met, then the answer is yes. Physician practices, both individuals and groups, can provide and bill for in-house diagnostic services their patients need. Similarly, certain requirements govern the permissible structure of joint ventures (ownership in various types of providers) physicians may wish to enter.

2. My spouse is an owner of a physical therapy agency. Can I refer Medicare patients there?

No. A physician whose spouse owns a physical therapy agency is prohibited by the Stark law from referring Medicare and Medicaid patients there, except, perhaps, in some very limited rural situations. This is because “physical therapy and occupational therapy service” is one category of “designated health services” affected by the Stark Law (there are 11 such categories of “designated health services” under Stark).

Additionally, whether or not the physician may refer private pay and insured patients there without violating the Louisiana statute will depend on, among other things, how the ownership and profit distributions are structured. As one can see, each situation has to be analyzed on its own facts.

3. What do we do if our practice mistakenly overcharged Medicare?

The question of how to deal with mistaken Medicare overcharges is the subject of much discussion. These charges and corresponding refunds are quite common. The Medicare Program currently has procedures in place to deal with them and providers are encouraged by Medicare to correct billing mistakes and refund overcharges.

Many providers have instituted voluntary compliance programs that follow the Office of Inspector General (OIG) Compliance Program Guidance for Individual and Small Physician Group Practices. Part of a compliance program should include self-review and corrective action when errors are found. When an overpayment resulting from a mistake occurs, the provider is expected to make a refund, the provider’s billing company or health law counsel can be instrumental in providing assistance. Due to the serious potential consequences with the government if the overcharge results from some other event or reason, the provider might want to consider seeking the assistance of health law counsel before acting. In any event, the government views the failure or refusal to refund an overpayment, once the provider is aware that an overpayment exists, as criminal behavior. Whether a court will agree remains to be seen.

Although a compliance program is not required, you might want to check the OIG Compliance Program Guidance to find out if this is right for your office. It can be found in Volume 65 of the Federal Register (10/5/2000) – For questions or comments about this post, please contact Linda Rodrigue .

Linda Rodrigue is an attorney with Kean Miller Hawthorne D’Armond McCowan & Jarman, LLP. She represents physicians, physician groups, physical therapists, pharmacy providers, associations, and other health care providers in health care administrative, regulatory and litigation matters, health law-related business transactions, fraud and abuse, patient confidentiality and medical records issues, defense of Medicare and Medicaid audits, compliance and compliance investigations, reimbursements, HIPAA compliance and medical malpractice defense. She earned her law degree from Memphis State University School of Law, with highest honors, in 1989.