SEPTEMBER 23^RD IS COMING

New HIPAA and HITECH Security Rules are effective September 23^rd.   By that date you must comply with Security Rules, and also must have obtained new business associate agreements which comply with the new rules.  Also, for the first time it is clear that business associate agreements are required of all of your PHI receiving vendors, whether they are law firms, accountants, IT companies or billing firms – if they receive PHI.

STARK AND MEDICAID?

Since 1993, the Stark Law has applied to the Medicaid program.  Until recently, there simply were no cases or evidence that HHS ever utilized 42 U.S.C § 1396b.

There still are no promulgated regulations which indicate how HHS will apply this section.  In many cases, definitional matters are very important, and important differences exist between definitions in Medicaid and the Medicare program, where Stark is commonly applied.  Two recent cases indicate that HHS will utilize the false claims act, even with Medicaid.  In a recent Florida case, HHS, through DOJ, claimed that “false claims” were not the claims submitted by the provider to Medicaid.  The false claims were the false claims submitted by Medicaid to CMS which required Federal Financial Participation (FFP).  In other words, it did not become a false claim through Medicaid until the State sought reimbursement from the Federal Government.

The second case, another Florida case, involved a qui tam claim that a hospital accepted patient referrals from doctors who leased space at rates below fair market value.  In that case, the defendants conceded that if the court found below FMV lease rates, it was a Stark violation.

Perhaps most importantly is how to deal with Stark/Medicaid claims.  The current self referral disclosure protocol does not allow that program to be used for Medicaid self referrals.  This creates a serious dilemma, or a technical issue, which may trigger a Stark violation through the Medicaid program, but without any existing programs for disclosure and resolution.

ANCILLARY SERVICES – STARK

A California Congressional representative has introduced a bill eliminating advance diagnostic imaging, anatomic pathology, radiation therapy and physical therapy services from the Stark laws in office, ancillary exception.  This legislation would not apply to Stark law exceptions for rural providers or participants in ACO programs.  It would have a strong impact on many existing providers in non-rural markets.

PHYSICIAN MERGERS

As physicians face large EMR expenses, increased pressure on billing, collection functions and competition from hospital based physician groups, we are advising more and more physicians with regard to questions on merger.

Why Merge?

• Resource pooling for EHR and equipment;
• Ability to recruit new or lateral physicians;
• More heads available for staffing and call;
• Increasing available services to patients; and
• Leverage – with hospitals, payors, suppliers and with other physician groups.

Risks?

• The initial efforts related to the establishment of a “new” practice entity, and dealing with planning for cash flow and administrative obligations;
• Dissenting physicians – these unhappy doctors can create tensions or disruptions not only in the planning, but in existing practices; and
• Possible anti-trust scrutiny – although practically nonexistent in the tri-state area, in some larger cities this has become a concern.

Successful Mergers

• Involve skilled professional advisors early;
• Honest consideration of the personalities involved, the culture of the practice and what is to be accomplished;
• Appropriate due diligence to reduce the risks of a merger; and
• Clear and direct communication with your staff, other physicians and hospitals to keep potentially affected individuals aware of what your actual plans are, not the rumor mill.

IUSM-E-COOL

This is the first year of third year classes at the Indiana University School of Medicine – Evansville.  This expansion of IUSM-E is vital for our region’s future.

This newsletter is edited by Paul Wallace of Jones • Wallace, LLC, a member of the American Bar Association Healthcare Law Section and the American Health Lawyers Association who has been representing physicians and healthcare practices for over 25 years.  Mr. Wallace assists physicians in health practices in contract items, federal legal compliance, creation of practice entities, estate and wealth planning and similar issues.  Please feel free to call if you have any questions about this newsletter or any other matter at (812) 402-1600 or pwallace@joneswallace.com.