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On May 30, 2008, the Centers for Medicare & Medicaid Services (CMS) issued an Advisory Opinion regarding a proposed arrangement under which a hospital system would license a custom software interface for use by the physicians on its medical staffs. The specific question addressed by CMS was whether the provision of the custom software interface by the hospital system to its medical staff physicians would create a compensation arrangement for purposes of implicating the self-referral prohibition of the Stark Law.
Continue Reading CMS Issues Stark Law Advisory Opinion on Hospital Providing Software Interface to Physicians

The Louisiana Supreme Court recently held in Borel v. Young that La. R. S. 9:5826(A) provided for both a one year prescriptive period and a three year peremptive period to file a claim for medical malpractice. The decision in Borel made it clear that a plaintiff had to file suit against a health care provider…

On September 26, 2007, the Louisiana Second Circuit Court of Appeal upheld the judgment of the First Judicial District Court in Caddo Parish in finding that the noncompetition and nonsolicitation clauses in a contract between a urology clinic and a professional medical corporation (“PMC”) were enforceable as to the physician who had formed the PMC. Regional Urology, L.L.C., et al v. David T. Price, M.D. and David T. Price, M.D., A Professional Medical Corporation, 42-789 (La.App. 2ndrehearing denied 10/18/07.  Cir. 9/26/07), 966 So.2d 1087,

The clauses at issue were part of an independent contractor agreement between David Price, M.D., A Professional Medical Corporation (PMC) and Regional Urology, L.L.C. (Regional Urology). Dr. Price was not a named party to the contract in his individual capacity. The contract prevented competition and solicitation by David Price, M.D., PMC for a period of 2 years in Caddo and Bossier Parishes. In addition, the contract provided that it would “apply to any physician who is a Member, any corporation which is Member or any physician’s L.L.C. which is a Member of Regional Urology, L.L.C.”Continue Reading Physician Must Comply With Terms of Non-Competition Agreement

On December 4, 2007, Phase III of the Stark Law’s regulations became effective. They include some significant substantive changes, one of which is a change to the professional courtesy exception. This change is likely to have a significant effect on many designated health service (“DHS”) providers, as those entities are defined by the Stark Law. DHS providers that have a professional courtesy policy would be well-served to review it and take appropriate action in light of the new regulations.
Continue Reading Professional Courtesy Exception under Stark III: Significant Changes

On November 2, 2007, the Louisiana Court of Appeal for the First Circuit ruled that the Louisiana Medicaid Program may not recoup payments from a health care provider participating in Medicaid based solely on a billing record review when the basis for the alleged overpayment is that the services were not medically necessary. In Doc’s Clinic, APMC v. Louisiana Department of Health and Hospitals, No. 2007 CA 0480 (La.App. 1 Cir. 11/2/07), Doc’s Clinic appealed an Administrative Law Judge’s decision affirming an alleged overpayment of approximately $260,000.00. The Louisiana Department of Health and Hospitals (“DHH”) alleged that Doc’s Clinic had billed for medically unnecessary services, based on a billing record review by a nurse, with some assistance from a physician. DHH originally notified Doc’s Clinic of not only the alleged overpayment amount, but also of DHH’s intention to exclude the provider from the Medicaid Program participation.
Continue Reading Medicaid Recoupment Based on Lack of Medical Necessity Not Permitted If Based on Review of Billing Records Alone

The United States Court of Appeals for the Ninth Circuit recently upheld the health care fraud conviction of a mental health clinic owner in Idaho, ruling that proof of intent to defraud can be made by showing reckless indifference to the truth or falsity of statements in health care cases. The Ninth Circuit Court of Appeals case is entitled United States v. Dearing, No. 06-30606 (9th Cir. 9/25/07). The reckless indifference standard, which has long been a standard for civil liability in cases brought under the Federal Civil False Claims Act, 31 U.S.C. §3729, et seq., was cited as being sufficient to uphold a criminal conviction under 18 U.S.C. §1347, a federal criminal health care fraud statute.
Continue Reading Reckless Disregard Upheld as Standard in Criminal Conviction

On October 19, 2007, the Department of Health and Human Services Office of Inspector General (OIG) posted Advisory Opinion No. 07-13 concerning ownership in ophthalmology Ambulatory Surgical Centers (ASCs). The Advisory Opinion can be found at http://www.oig.hhs.gov/fraud/docs/advisoryopinions/2007/AdvOpn07-13.pdf

A group practice and a surgical center requested an opinion from the OIG regarding whether a Proposed Arrangement would violate the anti-kickback statute. The Proposed Arrangement called for the addition of optometrists as owners of three single-specialty ophthalmology ASCs.Continue Reading OIG Issues Advisory Opinion on Ambulatory Surgical Centers

The Kean Miller Healthcare Regulatory team will present an informative seminar on the new Stark III regulations on Wednesday, November 14th from 5:30 to 8:00 p.m. at Juban’s Restaurant in Baton Rouge.

Topics will include physician recruitment and compensation, non-monetary gifts, hospital ownership and investment by physicians, professional services agreements, radiology arrangements, and equipment and…

The Department of Health and Human Services Office of Inspector General (OIG) issued its Fiscal Year 2008 Work Plan on October 1, 2007. The OIG annual Work Plan gives an advance preview of what issues the OIG has on its radar for the upcoming year.

The OIG stated in its opening message of the Work Plan that it will continue to concentrate its efforts in evaluating and investigating Medicare and Medicare programs, representing 80% of its resources.  The remaining 20% of the OIG resources will be spent on public health and human services programs.

Target areas for the OIG in 2008 include: Long Term Care Hospitals (LTCHs), patient care and safety at physician-owed specialty hospitals, accreditation of hospitals, and “place of service” for physician coding.Continue Reading Department of Health and Human Services Office of Inspector General Issues Fiscal Year 2008 Work Plan

The Centers for Medicare & Medicaid Services (CMS) issued an advisory opinion on October 5, 2007 regarding the Physician Recruitment Exception to the federal physician self-referral prohibition, otherwise known as the Stark Law.  In this advisory opinion, CMS essentially concluded that a hospital could not amend an existing physician recruitment agreement to delete a provision requiring the physician to pay back monies under an income guarantee to the hospital during the financial guarantee period of the agreement.
Continue Reading CMS Issues Advisory Opinion on Physician Recruitment Exception to the Stark Law