Showing posts with label clinics. Show all posts
Showing posts with label clinics. Show all posts

Saturday, August 15, 2020

Approaching the government with an antitrust complaint

When a hospital has significant market power, the hospital can use that market power to harm competing independent physicians. This can violate the federal antitrust laws.


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Physicians face significant challenges in modern healthcare markets. The electronic medical records revolution, complex federal and state healthcare payment programs, and compliance with regulatory programs and requirements all eat up time and money that could be better spent on patient care.

In today’s market, these issues are compounded by an even bigger threat: the consolidation of healthcare markets and the squeezing out of local private practices.


Antitrust: Squeezing Out Independent Physician Practices


The consolidation of hospital markets and the integration by locally dominant hospitals into physician services has made operating a private physician practice difficult. The older paradigm— in which a hospital granted independent physician’s privileges and independent physicians then managed the hospital’s medical staff—has largely been replaced with hospitals employing a broad range of medical specialties who answer to hospital administrators. As a result, employed physicians have become profit and loss centers for hospitals, making hospitals warry of independent physician practices and the competition they bring. As a result, relationships between hospitals and independent physicians have become strained, and in some cases, dominant hospitals are actively working to drive independent practices out of the market or force them into employment relationships.

In competitive markets, competition between hospital-employed physicians and independent physicians can benefit consumers, giving patients more options. But when a hospital has significant market power, the hospital can use that market power to harm competing independent physicians. This can violate the federal antitrust laws.

The federal antitrust laws are designed to protect the competitive process, and thereby protect consumers, by prohibiting the misuse of market power by dominant firms. These laws are critical because a hospital with market power can harm independent physicians in different ways. For example, a dominant hospital can:
  1. Enter into contracts with health insurers that prevent those health insurers from doing business with independent physicians
  2. Engage in predatory hiring, e.g., stealing physicians from independent practices in order to harm those groups
  3. Deny or cancel physician admitting privileges to a hospital, refusing to give appropriate operating room time to independent surgeons, or putting unreasonable call coverage obligations on independent physicians.


What Independent Physician Groups Can Do


Suing a hospital under the antitrust laws for anticompetitive conduct is an option, but such lawsuits are expensive and can take a long time to work their way through the court system.

An alternative is to file a complaint with one of the two relevant federal antitrust enforcement agencies: the Antitrust Division of the United States Department of Justice or the Federal Trade Commission (FTC).

However, filing a complaint with one of these agencies is not as easy as filling out a form. These agencies enforce the antitrust laws in many different industries, which makes getting their attention its own challenge.


Elements of a Strong Compliant


A physician group filing a complaint must carefully prepare a position paper that contains the type of information the Antitrust Division and FTC would need to evaluate whether the identified improper conduct violates the antitrust laws.

Key to this is understanding that the Antitrust Division and FTC employ both attorneys and economists. Because the underlying theory of the case will be that a particular hospital has market power and has used that power to harm competition, hiring an economist is a crucial step. This person provides the research and analysis needed to build a consumer harm narrative. A strong theory of consumer harm is the backbone of a healthcare antitrust case, as the Antitrust Division and FTC are concerned about how a hospital’s role in the local market may be negatively impacting everyday patients.

Preparation of the claim must also include interviewing members of the physician practice and other related parties on topics including the:
  • Structure of the physician practice
  • Practice’s size and role in the market
  • How competition works in the market
  • Relationship between the practice and the hospital
  • Nature of the hospital’s misconduct

The facts uncovered by the investigation and the analysis prepared by the economist are then integrated into a position paper that is sent to the relevant enforcement agency.

The antitrust enforcement agencies receive many complaints and must prioritize their limited resources when determining what to investigate. Developing a strong position paper with a solid economic analysis increases the chance that the Antitrust Division or the FTC will consider your case.

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Friday, August 14, 2020

How extended families present asset protection risk

Asset protection issues for physicians aren’t contained by the walls of your practice. Today we examine a recurring risk I regularly deal with and answer questions on from doctors; the affect of extended families and old-world cultural norms on asset protection plans.


Lost In Translation — When Old World Values Create Current Legal Risks


An issue I have dealt with for many years, including at least three times in the last two months alone, is the tendency for some physicians to hold jointly owned assets informally with other family members in some kind of “constructive trust”. While far from a scientific study, nearly two decades of practice in this area of law with a diverse national client base has clearly shown me that physicians from cultures that emphasize extended families (most commonly, Asian, South Asian, Middle Eastern, LatinX and Eastern European) and sharing of assets and labor tend to engage in investing as a familymore often and with less formality (if any) than they should. These arrangements fall into several predictable fact patterns, including the following.


“I don’t own anything, my brother owns it”.


In some cases this is done as a poorly-conceived asset protection strategy, where the family assumes that keeping assets in the name of another family member who is not a physician keeps them safer from the physician family member’s professional liability.


“I own an apartment building and two rentals, in my brother’s name”.


Another common scenario is that the (often higher earning and more creditworthy) physician family member simply funds the businesses and real estate investments of other family members, including assuming onerous debt obligations, simply because they are able to do so, with an informal understanding that the doctor is a silent partner with an equity interest and/or who is owed some capital or profit share back at a future date.


“I own part of several businesses and real estate investments, with my family member”.


In other cases the physician themselves holds the assets in their own name and one or more family members have operational control and contribute labor. There is often a division of profits that the non-owner family member relies upon as a primary income source to support their own family and they have no formal claim or title to the business. This may be done for a variety of reasons including differences in the creditworthiness, financial sophistication and the existing creditors and financial difficulties of the other family member.

So What’s The Problem?


All of these strategies present predictable and recurring legal and financial risks; here are the biggest ones.


Personal Liability. Regardless of who holds title, any property held personally by an individual is subject to all that person’s personal and professional liabilities including lawsuits, divorces, and bankruptcies. While holding the asset in a legal entity like an LLC may help protect it from some unrelated external liabilities, if the person in harm’s way is the sole owner of that entity, the income distributions that come out (including your share) are still fully exposed to their liability. The person holding the asset cannot assert.“ I only own this on paper for my sister the doctor and she really owns all or most of it,” as a defense.


Relationships and People Change. Doing business on a handshake, if executed by a lawyer, is called “malpractice”. Don’t be a victim of your own poor planning or risk assets you and your family have a right to based on the hope that the person you are trusting won’t ever be estranged, dishonest, develop a substance abuse issues or simply decide that they are “owed” some or all of the business for the work they put in. Regardless of your informal understanding the, owner of a business or other asset is who the paperwork says it is. Having to unravel a business, trace capital contributions and prove and agreement on terms of some sort of verbal contract is expensive, time consuming and comes down to a legally un-predictable “liars contest”.


Estate Planning. In many cases the person holding the asset may not have an estate plan in place or their estate plan may not specify that you are an owner or are holding a debt obligation related to the business. This means that the $200K you lent your sister-in law to open her business goes to her family, along with the business and the rest of her assets.

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Thursday, August 13, 2020

COVID Testing: What’s appropriate and what’s not

As the COVID-19 landscape becomes more familiar, patients, practitioners, and insurance companies should be vigilant about schemes and the submission of false claims for payment. Two areas in particular which come to mind are offering free COVID-19 antibody testing and coding. The scheme is, a patient contacts his/her doctor thinking they may have COVID-19. The patient wants a COVID-19 test. The doctor tests them for COVID-19, but adds on the COVID-19 antibody test and various allergy tests. Instead of charging $100-$150 test, the physician bills around $500 for this test bundle. What are the implications for the physician’s actions?

First, the offering of free goods or services in exchange for the referral of patients or increased utilization should always be checked for compliance with the Federal Anti-Kickback Statute, Stark Law, and related state laws, such as the California Insurance Fraud Prevention Act. Despite the Centers for Medicare and Medicaid Services (CMS) issuing several “1135 Waivers” during the COVID-19 pandemic, which impact the AKS and Stark Law, “[p]roviders must meet specific requirements to take advantage of the waivers.”

For example, the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG) issued responses to various questions, with the caveat that the facts and circumstances may change the response and the liability. One question (and the answer) is particularly relevant to this article.

Q: Can clinical laboratories offer free COVID-19 antibody testing to Federal health care program beneficiaries who are contemporaneously receiving other medically necessary blood tests during the COVID-19 public health emergency?


A: (Posted August 4, 2020) - According to the facts presented, a clinical laboratory would provide free COVID-19 antibody testing to patients, including Federal health care program beneficiaries, who contemporaneously undergo other medically necessary blood tests performed by the laboratory. The laboratory's stated purpose for the arrangement is to increase patient awareness of antibodies to promote donations of COVID-19 blood plasma, which could be used for certain experimental convalescent plasma therapy treatments for COVID-19. The laboratory would not charge any patient or other payor for the COVID-19 antibody tests. Patients and physicians would be able to access COVID-19 antibody testing results through the laboratory's patient portal, and the results from the antibody testing program also would be reported to the Centers for Disease Control and Prevention and State public health agencies to further support COVID-19 surveillance and response efforts.
Providing free laboratory testing to Federal health care program beneficiaries implicates the Federal anti-kickback statute because the clinical laboratory would be providing something of value for free to beneficiaries who could self-refer to the laboratory for items and services reimbursable by a Federal health care program. The proposed arrangement also implicates the Beneficiary Inducements CMP because the free COVID-19 antibody testing could reasonably influence a Medicare or State health care program beneficiary to select—or to cause his or her physician to select—the clinical laboratory for other medically necessary blood testing that is reimbursable by Medicare or a State health care program, in order to qualify for the free COVID-19 antibody testing.

We believe the proposed arrangement offers the possibility of substantial public health benefits through the identification of additional potential convalescent plasma donors and valuable public health information and data and would pose a sufficiently low risk of fraud and abuse, provided the proposed arrangement includes the following safeguards: (1) the physicians ordering the laboratory tests, including the free COVID-19 antibody tests, would not receive any payments or anything else of value from the clinical laboratory in connection with the free antibody testing program; (2) the patients receiving the laboratory tests would not receive any payments or anything of value, other than the free COVID-19 antibody test, from the clinical laboratory in connection with the free antibody testing program; (3) the tests would be offered only to patients receiving other medically necessary blood tests as part of a medically necessary exam or treatment; (4) no payor, including the patient, a commercial insurance company, or a Federal health care program, would be billed for or pay any costs in connection with the COVID-19 antibody tests; and (5) the antibody tests are cleared or approved by the U.S. Food and Drug Administration (FDA) or are subject to an FDA-issued Emergency Use Authorization.

In other words, the five (5) conditions must be met in order to make this scenario unlikely to be prosecuted for violating the AKS.

The question still remains, what coding is appropriate? In April 2020, CMS-Ruling 2020-1-R was issued by CMS. Notably, the codes that need to be utilized, as well as the payment rate of $100 were expressly stated.

With regard to CDLTs that make use of high throughput technologies (as defined in this Ruling), are administered during the ongoing emergency period defined in paragraph (1)(B) of section 1135(g) of the Act beginning on or after March 18, 2020, for the detection of SARS–CoV–2 or the diagnosis of the virus that causes COVID–19, and are a type of CDLT currently paid for under Medicare Part B using CPT code 87635 or U0002, such tests, as identified using U0003 or U0004 as appropriate, shall be paid for at the rate of $100. Payment for all other CDLTs remains at the current level.

CMS intends to promptly evaluate payment for relevant CDLTs for COVID-19 testing that make use of high throughput technologies developed after this issuance upon request for payment at an appropriate rate.

Neither code CPT U0003 nor CPT U0004 is permissible for tests detecting COVID-19 antibodies. “It is noted that U003 should identify tests that would otherwise be identified by CPT code 87635 but for being performed with these high throughput technologies.”

To answer the initial question regarding the implications for the physician - bundling these various tests in order to maximize reimbursement and add on unnecessary tests (e.g., allergy tests) that are not related to COVID-19 could be considered upcoding by providers and result in civil and/or criminal penalties under the False Claims Act or a similar state statute, such as the California IFPA.

Medical Practice Supplies


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