“The general purpose of the Stark and anti-kickback laws is to insure that physicians do not make health care decisions for patients based upon their prohibited financial interests in other entities,” says Timothy W. Boyd, partner with Gambrell & Stolz.
Smart Business asked Boyd how a doctor can make sure a financial interest does not become a legal problem down the road.
What are some of the common mistakes physicians make that could lead to legal trouble?
With respect to health care compliance, the biggest issues for most physicians continue to be the federal Stark and anti-kick-back statutes. These laws generally have to do with Medicare and Medicaid billing. Doctors have an obligation not to let outside financial interests influence how they might treat a patient or where they might send that patient for treatment. Hospitals and physicians need to be very aware and concerned that they do not run afoul of the Stark and anti-kickback provisions when it comes to billing through Medicare and Medicaid.
Obviously the private insurance carriers must also be aware of the provisions. While Stark and anti-kickback doesn’t specifically apply to private insurers, the insurers are very careful to be cognizant of the issues raised.
What kind of penalties could physicians face if they don’t comply with the provisions?
Generally they are financial, but there could be criminal penalties involved. Obviously the criminal issue occurs in very egregious situations.
Could that include jail time?
Possibly, because it could ultimately lead into some sort of Medicare or Medicaid billing fraud. Simply a pure violation of Stark wouldn’t lead to that but if it elevates into Medicare or Medicaid billing fraud it certainly could.
How can legal trouble be avoided?
If a physician has an interest in any type of entity that the physician is referring patients to, any kind of financial interest at all, the situation must be reviewed, probably by an attorney or health care specialist. You need to make sure you are in compliance with the Stark and anti-kickback laws, among others.
These laws can be fairly Byzantine and there are all kinds of traps for the unwary. Physicians can be caught in certain types of situations where there really is no bad intent but the laws are designed to occassionally catch physicians.
How can businesses be certain a health provider complies with all the rules?
If they have situations on a somewhat regular basis, whether they be annual or whatever, they should have their billing procedures reviewed. There’s more than just Stark and anti-kickback issues. There can be issues with respect to coding, of physician charges and things like that. These are things that should be monitored on a fairly regular basis.
What type of due diligence should be conducted?
Any time physicians have changed their ownership interests in various entities that have other health care consequences, those interests should be reviewed.
Let me give you a common example of when this may happen. Let’s say you have a radiologist and he has an interest in some kind of imaging center where they do CAT scans and things of that sort. Then that radiologist refers a patient from his practice to the imaging center in which he has a financial interest. That’s when you start getting into the issues of Stark and anti-kickback. You’ll get in a situation where you could have real issues when you’re making a decision on someone’s health care diagnosis based on what is perceived to be the financial interests of the physician.
What kinds of regulations are in place to keep interests from overlapping?
There are many different federal and state regulations that address these issues, but at the end of the day it is more likely to be a federal issue.
It’s important to remember this is just one area that we’re talking about. In addition to Medicare and Medicaid issues there’s a whole separate subset of requirements involving private insurers that may need to be addressed. Each one has its own procedures that physicians must follow.
TIMOTHY W. BOYD is a partner with Gambrell & Stolz. Contact him at (404) 221-6536 or firstname.lastname@example.org.