Showing posts with label Law & Malpractice. Show all posts
Showing posts with label Law & Malpractice. Show all posts

Friday, January 17, 2020

Guidelines for gift-giving in 2020

At the end of the year I always receive questions from many of my clients regarding how they can reward employees and contractors for their hard work. Depending on the type of worker to which they are referring, the answer is different. Also, depending on the state in which the client is located, the answer may be different.


1. In many states, there is a doctrine related to the corporate practice of medicine. This doctrine requires that only physicians be the owner of a medical practice. In those states, non-physicians may not be owners of a medical or professional practice. I have had several instances where physicians have indicated to valuable staff that, should the practice perform well, they would be given an “interest” in the practice. While well meaning, these types of “gifts” are not appropriate based on certain state’s law.

2. Instead of an ownership percentage, sometimes physician-owners offer the opportunity to earn a percentage of the “profit” or “collections” of the practice for reaching certain targets. This is often written into the employee/contractor’s agreement using language such as: “At the end of each year, you will be provided with 5% of the revenue of the practice.” Sometimes these amounts are tied to year-over-year profit of the practice as a whole or a certain division of the practice. Again, depending on the state in which the practice is located, such an arrangement could constitute fee-splitting, which is a prohibition on physicians sharing profits of the practice with non-physicians.


3. The most common inquiry I receive from practice clients is whether a bonus can be paid to somebody based on the volume of business they generated in the prior year. Although some employees may be safe from healthcare laws if they are “bonified employees” as defined under federal law, and therefore can be compensated in any manner the employer desires, I still recommend physicians avoid compensation that rewards employees for generating business so specifically, particularly related to federal patient volume (and even state law may impact payments related to non-federal payors). For example, if you have an employee who is paid a base salary and handles marketing for the practice, resulting in 250 new patients coming to the practice, I would not recommend a per patient bonus amount. Instead, it is typically recommended that a discretionary bonus be paid (not tied exactly to those numbers) or we come up with a flat bonus for meeting certain targets. The risk of any bonus payments to non-employees based on value or volume of business generated is something that should not ever be taken unless specifically reviewed by health law counsel.

4. Providing discretionary bonuses, gift cards and other gifts to employees and contractors should generally be acceptable. Keep in mind, particularly when it comes to independent contractors, gifts that are actually intended to induce or reward individuals for referrals of business or patients to the business always will be questionable. It is not unreasonable for small gifts, gift cards, and discretionary thank you bonuses to be paid, but keep in mind that there are state and federal laws that limit the value of gifts given to referral sources and beneficiaries to “de minimus” value, so be careful. Cash and expensive gifts always should be avoided.

There are many rules to think about when rewarding employees and contractors who have contributed to the success of your medical practice. I really think the best time to think about this is at the beginning of the year and not at the end, or at the time an employee is hired, so that you can run the proposed bonus approach by legal counsel to be sure you are handling everything in a compliant manner.

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Thursday, January 16, 2020

HHS’s revisions could add value and reduce burden

The Department of Health and Human Services (the “Department”) has proposed long-awaited revisions and updates to the Stark and Anti-Kickback Laws (the “Laws”). These changes would address concerns that the Laws as they currently exist (1) prevent participation in value-based arrangements and (2) are overly burdensome to non-abusive arrangements. For example, arrangements such as a hospital’s provision of care coordinators to physicians, which could currently violate the Laws, may become acceptable under the rules proposed by the Office of Inspector General and the Centers for Medicare and Medicaid Services (the “Proposed Rules”).


A significant portion of the Proposed Rules is dedicated to participation in value-based and coordinated care arrangements. These sections propose a complex framework of new exceptions and safe harbors that must be met before a value-based arrangement (“VBA”) could qualify. The new exceptions and safe harbors are tied to multiple newly defined terms and focus heavily on the existence of financial risk within the VBA including the new concept of a “value-based enterprise” (VBE). Overall, 4 new exceptions were proposed within the Stark Law and 4 new safe harbors were proposed within the Anti-Kickback Law for VBAs.


Careful attention to all value-based factors and definitions would be necessary in order to be confident that an arrangement falls within these exceptions and/or safe harbors. However, when finalized, they will offer parties greater flexibility to participate in these innovative arrangements. For example, a specialist could share its data analytic services with a primary care physician to improve care coordination without violating the Laws. A hospital could offer new technology to remotely monitor patients for possible healthcare intervention needs. Although these arrangements could violate the Laws currently, they are within the scope of the government’s intent to promote care based on value rather than volume.

The Proposed Rules revise various other aspects of the Laws to promote VBAs. For example, Stark Law group practice rules would allow distribution of profits to physicians in a manner directly attributable to their participation in a VBE. Proposed changes to the personal services safe harbor to the Anti-Kickback Statute would remove limiting language surrounding part-time arrangements and allow parties to set in advance a methodology for calculating compensation rather than a specified compensation number, in order to meet the safe harbor. Part-time arrangements could now fall within this safe harbor even without setting in advance the exact schedule of the part-time intervals.

Another significant portion of the Proposed Rules addresses the unnecessary burdens created by the Laws including responses to the Department’s request for information issued over a year ago. One such proposal would clarify the definition of “commercially reasonable” clarifying that an arrangement does not have to be profitable to make it commercially reasonable. For example, a hospital service line that operates at a loss may still be commercially reasonable if it fills a vital need in the community.


Additionally, the Proposed Rules would set forth a bright line test to the Stark Law’s “volume or value of referrals” standard and separate it from the definition of “fair market value”. The new volume or value standard would prohibit any linkage between referrals and compensation. For example, physician compensation based on personally performed wRVUs would be considered based on the volume or value of referrals if the wRVU multiplier is tiered based on the number of referrals made by the physician. The definition of fair market value would incorporate the concept of “general market value” and be re-organized for clarity into 3 definitions—one for general application, another for rental of equipment, and a third for rental of office space, due to the heightened risk involved in equipment and space leases. For example, a hospital proposing to employ a specialist who is the top specialist in the entire country might be permitted to pay this top specialist a salary that is significantly higher than what independent salary surveys would otherwise indicate appropriate if the general market value of the specialist is higher, and still fall within fair market value.

The Proposed Rules would help ease the transition to value based care while addressing many undue burdens of the Laws. Although we await the final version of these rules, we can be sure adding value and reducing burdens will remain a common theme.

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Sunday, August 4, 2019

Want to be fined? Follow CMS’ opioid guidelines

Recent federal guidelines on opioid prescribing have forced physicians to become extremely cautious in their prescribing habits and documentation as well as their handling of patients with opioid addictions.


With all the attention on opioid overprescribing, little attention has been paid to patients with chronic pain and a true need for high doses of pain medication. Even less attention has been paid to physicians trying to balance the government’s prescribing guidelines with the needs of these chronic pain patients.

In a recent case, the New Hampshire Board of Medicine investigated a physician who is board certified in pain management and anesthesiology after cutting back a chronic pain patient’s prescription opioid painkillers. The patient had been on a dosage of 80 mg of OxyContin twice daily and 30 mg of oxycodone four times a day for many years. After apparently reviewing the guidelines put out by CMS, which the physician read as allowing doctors to prescribe only up to 90 morphine milligram equivalents a day (MME), the doctor informed the patient he was reducing his dosage to comply with those guidelines. This reduction was less than one-quarter of what the patient had been taking (equivalent of 420 MME).

The patient subsequently complained that his pain was not being controlled by the lower dosage, and he was having a tough emotional time. The patient also failed a pill count and was later admitted to a hospital for threatening suicide. The physician informed the patient he was no longer comfortable prescribing opioids for the patient and would no longer treat him. The physician reported his concerns about the patient’s well-being to the local police department and the man’s primary care physician. The doctor also issued a prescription for an opioid withdrawal drug.

A complaint was filed against the physician, and the New Hampshire Board of Medicine found his handling of the case violated ethical standards of professional conduct. The physician was reprimanded, fined and required to participate in at least 12 hours of education in prescribing opioids for pain management. The physician was found to be at fault for not recognizing that the prescribing guidelines did not actually set an upper limit for opioid prescribing. Rather, the guidelines simply required pharmacists to discuss the cases with physicians who were prescribing higher doses. This physician is, however, certainly not alone in reading the CMS “guidelines” as rules that should be strictly enforced.

The physician in this case appears to have otherwise been in compliance with recommended protocols for pain management. He followed CMS “guidelines,” terminated a patient who did not comply with pill counts and alerted authorities when he felt the patient was in danger. He also checked the drug monitoring database and required urine tests.

But the rules related to prescribing pain medications and treating chronic pain patients are not so black and white. Physicians who believe that meeting the above requirements will keep them safe from enforcement action need to be cautious.

The prescribing guidelines set by CMS, CDC and other agencies are just that…guidelines. While physicians need to be cautious if they are not following those parameters, it’s important to actually understand the standards for prescribing and to use their professional judgment. Documenting all decision-making and seeking a second opinion (or consulting with the pharmacist) are also recommended.



For physician practices that prescribe opioids, my advice remains the same:


  1. Have a clearly defined prescribing policy to follow both within the practice and with the patient. Establish strict documentation requirements and mandate continuing education for physicians in the area of pain management.
  2. Have a plan of action for a patient who is noncompliant despite the physician’s exercise of his or her professional opinion when prescribing. This may mean referral to another pain physician for a second opinion or referral to an addiction specialist. Sometimes, patients do need to be terminated from the practice for noncompliance and/or activity that puts both the patient and the physician at risk. Being able to identify these different types of patient situations, and documenting all decisions appropriately, is key.

It’s a complicated time to prescribe opioids to patients. But there are many patients truly suffering from chronic pain who need the attention and empathy of their physicians. Being educated about the law — and the continuously changing national guidelines — as well as planning in advance for possible scenarios, can help protect both physicians and patients.

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