Catholic Healthcare Stark Presentation


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Stark, physician contracting compliance

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Catholic Healthcare Stark Presentation

  2. 2. What is the same? <ul><li>The Stark Law is the same: </li></ul><ul><ul><li>A physician financial relationship w/ a hospital makes it illegal to refer designated health services to the hospital, unless the contract meets an exception. </li></ul></ul><ul><li>The Anti-Kickback Statute is the same: </li></ul><ul><ul><li>It is illegal to offer or give anything of value, directly or indirectly, to a physician, their immediate family or to any practice or group of the physician if one purpose of the offer or payment was to secure or direct referrals. </li></ul></ul>
  3. 3. Enforcement environment changing <ul><li>Recent Cases: </li></ul><ul><ul><li>U of Medicine/Dentistry (NJ) + cardiologists </li></ul></ul><ul><ul><li>Christ Hospital (OH) + cardiologists </li></ul></ul><ul><ul><li>City of Angels Hospital (CA) + physicians </li></ul></ul><ul><li>Increased Transparency: </li></ul><ul><ul><li>New IRS 990 (hospital tax return) – must identify all management agreement & joint venture partners </li></ul></ul><ul><ul><li>CMS’s Disclosure of Financial Relations Report (DFRR) new for 2009; 500 hospitals will provide copies of every physician contract and all supporting documentation to CMS. Future expansion to all? </li></ul></ul>
  4. 4. Source: MGMA website Serious business indeed…
  5. 5. MGMA letter on proposed Stark changes <ul><li>“ As the current proposal to define different “periods of disallowance” for different types of non-compliance highlights, the financial consequences of violating the Stark law can be severe. When Stark violations are prosecuted as False Claims Act violations, these consequences become even more severe. Given those consequences, physicians, groups, and the DHS entities (hospitals) with which they do business need understandable rules. Indeed, one of the original purposes of the Stark law was to provide “bright lines” in contrast to the uncertainties providers historically faced under the intent based Anti-Kickback law. After almost 20 years of Stark, that clarity remains elusive. Indeed, the whole regulatory scheme gets less understandable as it gets more and more refined. </li></ul><ul><li>“ MGMA urges you and your staff to undertake a comprehensive review of the current rules before making any other changes. The goal of this review should be administrative simplification. If the Agency is willing to embark on such a review, MGMA commits its resources and that of its members to cooperating with you.” </li></ul>MGMA letter to CMS 6-12-2008; Comments on Proposed 2009 Hospital IPPS Rule.
  6. 6. What’s new under Stark? <ul><li>CMS has defined a “Period of Disallowance” (POD) for physician-hospital contracts that do not comply with Stark. </li></ul><ul><li>The POD is a “ penalty box ” when the government will not pay for Medicare/Medicaid services because the contract is out of compliance. The penalty: </li></ul><ul><ul><li>Starts the day the contract falls out of compliance; and </li></ul></ul><ul><ul><li>Continues until the contract comes back into compliance </li></ul></ul>
  7. 7. So when does the new Stark POD / penalty take effect? <ul><li>The Period of Disallowance clarification takes effect at 12:01 a.m. October 1, 2008. </li></ul><ul><ul><li>The OIG can claim the POD penalties were always possible, but we would argue that the POD was published in the 2009 Medicare IPPS Final Rule, which becomes effective 10-1-2008. </li></ul></ul>
  8. 8. What causes a Stark POD /penalty? <ul><li>No contract </li></ul><ul><li>Physician not making required payments to the hospital – loans, leases, etc. </li></ul><ul><li>Physician services continue after the contract ends </li></ul><ul><li>Non-cash gifts/benefits over annual threshold ($338) </li></ul><ul><li>Hospitals paying physician outside contract limits </li></ul><ul><li>Hospitals paying without documentation to justify the payment to the physician, including: </li></ul><ul><ul><li>Improper expense documents (no pro rata expenses!) </li></ul></ul><ul><ul><li>Incomplete time sheets </li></ul></ul><ul><li>Invalid contracts </li></ul>
  9. 9. What happens during the Stark POD /penalty? <ul><li>When a period of disallowance occurs: </li></ul><ul><ul><li>Physician cannot refer any Medicare/ Medicaid patients to the hospital; </li></ul></ul><ul><ul><li>Hospital cannot bill Medicare/Medicaid for any services from that physician; </li></ul></ul><ul><ul><li>Hospital must refund any prior payments received from Medicare/Medicaid; and </li></ul></ul><ul><ul><li>Physician must repay all amounts owed to the hospital. </li></ul></ul>
  10. 10. What happens if we violate the Stark POD / penalty ? <ul><li>CMS can: </li></ul><ul><li>Impose CMP of $15,000 per claim on the physician for each Medicare/Medicaid (Med/Med) patient that was knowingly referred to the hospital during POD; </li></ul><ul><li>Impose $15,000 per claim penalty on the hospital for each Med/Med claim filed during POD for services from the affected physician; </li></ul><ul><li>Impose CMP of $110K per Med/Med claim on the physician for a “circumvention scheme” to assure continued referrals to the hospital; and </li></ul><ul><li>Exclude the physician and/or hospital from Medicare </li></ul>
  11. 11. How does the Stark POD/ penalty end? <ul><li>If the contract is unsigned/expired: sign it/ renew it. </li></ul><ul><li>If the hospital overpaid the physician (more than FMV, or for unallowable expenses, or in excess of the contract limit….) or if the physician underpaid the hospital (missed lease or loan payment): the physician must repay all money owed to the hospital, with interest. </li></ul>
  12. 12. How does the Stark POD/ penalty end? <ul><li>BUT, if the contract is invalid: the contract cannot be cured; the hospital must terminate the financial arrangement and refund all money to Medicare / Medicaid </li></ul>
  13. 13. How is [Region] working w/ physicians to cure current POD issues? <ul><li>Reviewing current contracts for compliance and documentation </li></ul><ul><li>Contacting physicians with documentation or related problems to improve contract-related documentation to support payments </li></ul><ul><li>Working to bring any over-payment by the hospital or under-payment by a physician current in full before October 1, 2008 </li></ul><ul><ul><li>Cannot accept payment plans beyond October 1 </li></ul></ul><ul><li>Contingency plans for after October 1 if POD ? </li></ul>
  14. 14. How is [Region] working w/ physicians to prevent future POD /penalties? <ul><li>Ensuring awareness about these changes </li></ul><ul><li>Working with physicians to improve contract-related documentation to support payments </li></ul><ul><li>Strengthening internal checks and balances to ensure every payments is proper </li></ul><ul><ul><li>Physician Arrangements Compliance Exec (PACE) </li></ul></ul><ul><li>Auditing contract compliance more often </li></ul>
  15. 15. How will we meet the Stark new day? <ul><li>Understanding clearly the risks to each of us of contract non-compliance with Stark </li></ul><ul><li>Communicating clearly contractual obligations to ensure Stark compliance before the contract starts </li></ul><ul><li>Cooperating early in contracts –and frequently during contracts –to ensure documentation compliance to assure proper payments </li></ul><ul><li>Cooperating to enable regular, transparent audits to prevent problems or detect them early </li></ul>
  16. 16. Questions and Points of Contact <ul><li>Counsel/PACE/CRO…contact info </li></ul>