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1. “Hot Topics in Health Care” UAB Medicine Residents’ Luncheon Presentation January 29, 2008
2. Changes to the Federal Stark Law On September 5, 2007, CMS issued the “Phase III” regulations to the Stark Law. The Phase III regulations clarify several Stark Law definitions and provide additional guidance on various exceptions to the Stark Law restrictions. Among the key changes are:
3. Physician Recruitment The Phase III final rules make a number of changes that relax the existing rules on physician recruitment. More specifically, the new rules:
4. Physician Recruitment (Cont’d) Permit rural hospitals to determine their “geographic service area” using an alternative test that encompasses the lowest number of contiguous (or in some cases, noncontiguous) ZIP codes from which the hospital draws at least 90 percent of its inpatients
5. Physician Recruitment (Cont’d) Permit a more generous allocation of costs to a recruited physician joining an existing practice when replacing a deceased, retiring or relocating physician in a rural area or Health Professional Shortage Area (HPSA)
6. Permit group practices to impose practice restrictions so long as they do not “unreasonably restrict the recruited physician's ability to practice medicine” in the hospital's service area
Permit rural hospitals to recruit physicians into an area outside of the hospital's geographic service area if it is determined through a CMS advisory opinion that the area has a demonstrated need for the recruited physician
7. Exempt from the “relocation” requirement physicians employed full time by a federal or state bureau of prisons (or similar correctional agency), the U.S. Departments of Defense or Veterans Affairs, or facilities of the Indian Health Service, provided that the physician did not maintain a separate private practice in addition to such full-time employment (or any other physician whom the Secretary deems in an advisory opinion did not have an established medical practice with a significant number of patients who are or could become patients of the recruiting hospital).
8. Physician Recruitment (Cont’d) Clarify that the additional rules that apply when a recruited physician “joins” an existing practice do not apply when the recruit merely co-locates with an existing practice, but does not join the existing group (i.e., in a “side-by-side” space and expense-sharing arrangement)
9. Final Recruitment Exception Requirements Remuneration paid by a hospital to recruit a physician that is paid directly to a physician and that is intended to induce the physician to relocate his/her medical practice to the geographic area served by the hospital in order to join the hospital’s medical staff is permissible if:
Writing signed by both parties (Group practice if applicable);
Physician referrals not required;
The amount of remuneration paid to physician is not based on value or volume of referrals;
Physician is allowed to establish staff privileges at any other hospital and refer to any other hospitals except to the extent referrals are restricted under an employment agreement;
Physician “relocates” to hospital’s “geographic service area” (there are specific requirements for “relocation” and “geographic service area.” The relocation requirement does not apply in certain situation).
10. Physician Recruitment Exception (Cont’d) If physician joins an existing practice, the following additional requirements apply:
Written agreement is signed by group practice;
The remuneration is paid directly to physician except for actual costs incurred by the group practice in recruiting physician;
In the case of an income guarantee, the costs allocated by the physician practice to the recruited physician do not exceed the actual additional incremental costs;
Records of the cost and passed-through amounts are maintained for 5 years;
Remuneration does not take into account the value or volume of referrals;
The group practice may not impose practice restrictions that unreasonably restrict the recruited physician’s ability to practice medicine in the hospital’s geographic service area; and
The arrangement does not violate the anti-kickback statute.
11. In the Phase II regulations, CMS had created a “safe harbor,” within the definition of “fair market value,” for hourly payments to physicians for their personal services that met certain benchmarks. CMS has decided to eliminate the option altogether, noting that it was voluntary, and that there are many ways to demonstrate that compensation is fair market value.
12. Stand in the Shoes For purposes of determining whether a physician has a direct or indirect compensation arrangement with an entity to which the physician refers DHSs, the physician will now be viewed as “standing in the shoes” of his or her physician organization. In other words, a hospital that contracts with a large medical group will now be viewed as having a direct compensation arrangement with all of the physicians in the group. The new rules define a “physician organization” to mean a physician, including a professional corporation of which the physician is the sole owner, a physician practice, or a group practice.
13. Personal Services Arrangements - Holdovers CMS has established a six-month “holdover” provision for personal service arrangements that otherwise meet the requirements of the personal services exception. This allows arrangements that continue for up to six months beyond the agreement's stated expiration date, if they otherwise meet the exception and continue on the same terms and conditions as the immediately preceding agreement.
14. Curing Excess Non-Monetary Compensation
CMS now will make allowances when an entity inadvertently provides non-monetary compensation to a physician in excess of the annual limit (currently $329 per year), if (1) the value of the excess compensation is no more than 50 percent of the annual limit; and (2) the physician returns the excess amount to the entity by the end of the calendar year in which it was received or within 180 days after received, whichever is earlier.
15. Recent Amendments to the Alabama Medical Practice Act The Alabama Medical Practice Act, Alabama Code § 34-24-50, was recently amended by Alabama Act 2007-402. The amendments became effective on September 1, 2007. The following slides contain a brief summary of some of the more significant changes made to the Alabama Medical Practice Act:
16. Ala. Code § 34-24-51: The penalty for practicing medicine or osteopathy without a license is now a Class C felony, rather than a misdemeanor.
Ala. Code § 34-24-340: A fee not to exceed $200 is now required for those physicians participating in a collaborative practice with a certified registered nurse practitioner or a certified nurse midwife.
17. Recent Amendments To the Alabama Medical Practice Act (Cont’d) Ala. Code § 34-24-360: A provision has been added stating that the Commission shall have the power and duty to suspend, revoke, or restrict any license or place on probation or fine any licensee when the licensee is found guilty on the basis of substantial evidence for failure to comply with any rule of the Board or the Commission.
18. Ala. Code § 34-24-361: Applications requesting a reinstatement of a certificate of qualification filed with the Board may now be dismissed as prematurely filed if filed within 24 months of the effective date of the applicant's voluntary surrender of his or her certificate of qualification. An application filed after the 24 month period can be granted or set for a hearing with the Board in accordance with the Alabama Administrative Procedure Act. If the application is received more than five (5) years after the effective date of the voluntary surrender, the Board is without jurisdiction to reinstate the certificate of qualification.
19. Ala. Code §§ 34-24-380 and 34-24-381: The Board may now require a physician found guilty of a violation specified in Ala. Code § 20-2-54 and Ala. Code § 34-24-360 to pay the costs, fees, and expenses of the Board incurred in connection with any proceedings before the Board, including costs of medical review and expert testimony, fees to outside counsel, deposition costs, travel expenses, and expenses in obtaining documentary evidence.
20. Physician Employment Contracts Anti-Kickback Statute Employer Safe Harbor
Employment Services. "Remuneration" does not include any amount paid by an employer to an employee, who has a bona fide employment relationship with the employer.
21. Stark Law Employee Exception Identifiable services.
The remuneration must be:
(i) Consistent with the fair market value; and
(ii) does not take into account (directly or indirectly) the volume or value of any referrals by the referring physician.
Commercially reasonable
Productivity Bonuses are permissible if personally performed by physician.
22. Stark Law Personal Services Exception Personal Service Arrangements Is in writing, signed by the parties, and specifies the services covered by the arrangement.
It covers all of the services to be furnished by the physician.
Must have legitimate business purposes.
23. The term of the arrangement is for at least 1 year.
The compensation is set in advance, does not exceed fair market value, and does not take into account the volume or value of any referrals or other business generated between the parties.
The arrangement does not violate any State or Federal law.
Stark Law Personal Services Exception (Cont’d)
24. Employment Contract Terms Duties and Responsibilities. Carefully review your employment agreement regarding your job description, i.e., hours on call, administrative responsibilities, etc.
Billing Medical Claims. Billing is the responsibility of the physician.
Indemnity Agreement
Patient Records
Tail Coverage
25. Responsibility of Employed Physician Monitor billing practices of employer
Verify that billings are performed such that coding matches records of treatment
Determine that medical records are sufficiently detailed and comprehensive to withstand audit scrutiny
26. Billing (Cont’d) Physician should be required to prepare legible, accurate and comprehensive medical records on all his/her patients
On a monthly basis, the physician should be given a report of everything that has been billed in his or her name, everything collected, and the coding process used
27. Non-Competition / Non-Solicitation Provisions Non-competition provisions for professional services are void in Alabama. However, non-solicitation provisions are generally enforceable.
Non-competition provisions are generally enforceable in surrounding states such as Georgia and now Tennessee.
28. Ownership and Access to Medical Records Generally considered to be property of employer
Physician has continuing responsibility
HIPAA – provides physician with right to obtain a copy upon authorization from patient.
29. Termination “With Cause”
“Without Cause”
"Immediate Termination”
Compensation upon termination
30. “Boutique Medicine” and Access Fees
31. What is “Boutique Medicine”? Under the “boutique medicine” model (sometimes referred to as “concierge care”) physicians ask patient to pay an annual retainer fee
In exchange, patients receive services such as:
32. What is “Boutique Medicine”? (Cont’d)
Priority/guaranteed appointments
Telephone/E-mail access and consultations with physicians
House calls and out-of-office care
Longer appointment times with physicians
Specialty care/spa services
33. “Boutique Medicine” and Access Fees Retainer fees can range from $900 to $20,000 per year; patients usually asked to sign contract agreeing to terms of the arrangement
Physicians who have decided to utilize this model report better pay, a reduced patient pool, less paperwork, fewer work hours
Sources: American College of Physicians, “Fed up, some doctors turn to ‘boutique medicine’” 2001; Physician’s News Digest, “Should you consider concierge medicine?” 2004
34. “Boutique Medicine” and Access Fees (Cont’d) Major selling point: Patients are able to receive better access and more undivided attention from their physicians; physicians not overwhelmed by administrative activities/paperwork – have more time to practice medicine and treat patients
Sources: American College of Physicians, “Fed up, some doctors turn to ‘boutique medicine’” 2001; Physician’s News Digest, “Should you consider concierge medicine?” 2004
35. “Boutique Medicine” and Access Fees Impact of new “boutique medicine” model – seeing more practices charging for services traditionally provided at no cost:
Completion of paperwork (e.g., insurance paperwork, school forms)
After hours or weekend phone consultations
Coordinating care services
Medical record requests
Missed payments
Missed appointments
Source: Medical Economics, “Access fees: Worth the risk? What to charge?” July 2004
36. “Boutique Medicine” and Access Fees Questions have been raised about ethics and legality of these practices
Centers for Medicare and Medicaid prohibits physicians from billing Medicare for “covered services”
Recent report that CMS Office of Inspector General (“OIG”) investigated a physician in Minneapolis for violating Medicare rules because he had charged $600 a year to his senior patients in exchange for comprehensive physicals, coordination of care and other services
Source: Medical Economics, “Access fees: Worth the risk? What to charge?” July 2004; Shands HealthCare, “Concierge Medicine Physicians Weigh Financial, Ethical Issues” 2002
37. “Boutique Medicine” and Access Fees (Cont’d) Questions about creating tiered/elitist based health care
Some states have challenged model/fees as discriminating against patients who can not afford to pay the retainers/costs
Source: Medical Economics, “Access fees: Worth the risk? What to charge?” July 2004; Shands HealthCare, “Concierge Medicine Physicians Weigh Financial, Ethical Issues” 2002
