AHLA. O. Stark and Reimbursement: A Deeper Dive to Debunk the Myths. Alice G. Gosfield Alice G. Gosfield & Associates PC Philadelphia, PA
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1 AHLA O. Stark and Reimbursement: A Deeper Dive to Debunk the Myths Alice G. Gosfield Alice G. Gosfield & Associates PC Philadelphia, PA Fraud and Compliance Forum October 6-7, 2014
2 Alice G. Gosfield American Health Lawyers Association October 6-7, , Alice G. Gosfield and Associates, PC Alice G. Gosfield, J.D. Alice G. Gosfield and Associates, PC 2309 Delancey Place Philadelphia, PA (215)
3 Scope of Stark Exceptions that implicate reimbursement rules Profit sharing Productivity bonuses Incident to vs shared visits Assignment and reassignment Anti-markup and Stark DHS only by virtue of definition of a referral There are no regulations addressing Medicaid For a state to qualify for federal financial participation for Medicaid, the federal law says the state has to impose Stark restrictions At least two courts have held that it applies to Medicaid 4 2
4 In the case of a physician s services (as defined in Section 1861(q)) provided personally by (or under the personal supervision of) another physician in the same group practice as the referring physician Includes members : shareholders, employees, partners Includes independent contractors during the time they are providing patient care services for the group under a contractual arrangement directly with the group, but only in the group s offices Must meet the reassignment rules under Medicare 5 Rendered by a physician or paid for on the physician fee schedule MDs, DOs, podiatrists, optometrists, dentists, chiropractors Interns and residents outside the scope of their residency program A physician service is generally defined in Medicare Diagnosis, therapy, surgery and consultation Physicians must examine the patient in person or be able to visualize some aspect of the patient s condition without interposition of a third party (e.g., EKGs, EEGs, X-rays, etc.) Performed in a home, office, institution, or at the scene of an accident Using the premises of the group 6 3
5 (Excluding durable medical equipment (excluding infusion pumps) and parenteral and enteral nutrients, equipment and supplies) Who can render?: that are furnished personally by the referring physician, by a physician who is a member of the same group practice or personally by individuals who are directly supervised by the physician or by another physician in the group Independent contractors can supervise 7 The level of physician supervision is that which generally applies in Medicare General no on site supervision Direct in the office suite Personal in the room with the patient Under Medicare, physical therapy is paid at 100% of the MPFS whether incident to or not, but if billed incident to, a physician has to be in the office suite, which is not measured by the post office address Under Medicare, NPs, PAs, CNSs can bill on their own numbers and are paid (to the group) at 85% of the MPFS, including for visits and diagnostic services which they can render but not supervise Their visits are not DHS 8 4
6 Where can they be rendered?: in a building in which the referring physician (or another physician who is a member of the same group practice) furnishes physicians services unrelated to the furnishing of DHS or in a centralized building Shared facilities: on site 8-35 hours a week In a centralized building where it does testing (or any of the DHS services) but has no additional offices. Have to control the space 24/7 to be centralized 9 Who can bill?: the physician performing or supervising the services, a group practice of which such physician is a member under a billing number assigned to the group practice, or by an entity that is wholly owned by such physician or such group practice Supervision in accordance with Medicare rules If wholly owned entity bills, it must be owned by the group as a whole; not by a shadow group of the same owners as the practice Reassignment in accordance with the reimbursement rules 10 5
7 A physician in a group practice may be paid a share of overall profits of the group or a productivity bonus based on services personally performed or incident to such personally performed services, so long as the share or bonus is not determined in any manner which is directly related to the volume or value of referrals by such physician Profit sharing is the fruits of others labors from DHS, e.g., sharing the diagnostic testing revenues with the ordering practitioners according to a formula Must be a pod of at least five physicians A single group of fewer than five, all must be paid in accordance with the same formula Cannot include current DHS ordering patterns, but can use surrogates, e.g., E/M services, wrvus excluding DHS unless personally performed, numbers of patients 11 Productivity is the fruits of the physician s own labors Personally performed includes shared visits at the hospital with an NPP NPP visits are not DHS and can be handled any way you want including allocated directly to the treating physician or in profit sharing or some of each Productivity can be a percentage of revenues They do permit location based allocation of expenses Independent contractors can be paid productivity 12 6
8 Must be rendered under the direct supervision of the physician on premises and in the office suite Need not be employees or leased employees There must be a physician professional service to which ancillary services are incident Supervision itself is not a physician service Diagnostic services can never be incident to Services must be of a kind commonly furnished in a physician s office or clinic Can be allocated dollar for dollar to the treating physician who may not be the supervising physician Includes infusions and the drugs themselves, as well as physical therapy (See 72 FR , September 5, 2007) 13 Services must be commonly rendered without charge or included in the physician s bill If 4 categories of advance practice personnel (physician assistants, nurse midwives, nurse practitioners, and clinical nurse specialists) perform, can bill applicable E/M code; otherwise only In no event can ancillary personnel bill for counseling or coordination of care without physician involvement only for time with the physician counts 14 7
9 Physician and NPP in the same group, working together in hospital inpatient/outpatient/ed NPP can see patient first Physician can follow and perform any part of an E/M visit In an encounter with the patient face to face Total service may be billed at 100% under physician s number It is personally performed for Stark purposes 15 Physician agrees to accept Medicare s payment in full Voluntary for each incident of service e.g., by patient or by type of service, incident-by-incident or over time Rescission must be mutual Participating physician agrees to accept assignment 100% of the time A pattern of breach of assignment (billing for difference between carrier payment and actual charge) punishable under fraud and abuse statutes 16 8
10 Reassignment where physician has a contract with an entity or person which says the entity may submit regardless of where the services are provided as long as there is a contractual relationship Joint and several liability for overpayments The practitioner has access to claims submitted on his behalf Extended to employees in the 2007 PFS This is the most useful reassignment provision 17 Employer-employee relationship To an inpatient facility If relationship qualifies under one category, it is sufficient even if other physicians in same setting qualify on a different basis (e.g., W-2 physicians and 1099 physicians work for same clinic) Stark III requires direct relationship between independent contractor physician and the entity billing for his services not through a staffing company; but all reassignment is personal and individual (855R) 18 9
11 Where professional component is purchased (e.g., imaging center buys interpretation of radiologist) Claiming entity must have performed technical component Test must have been initiated by someone unrelated to either the component provider or the interpreter The interpreter does not see the patient Physician coverage arrangements Patient is first physician s He is unavailable Name and UPIN of performing physician included Not for more than 60 continuous days Locum tenens physician -locum tenens physician must be paid on a per diem or similar fee-for-time basis -can be used for a physician who has left the practice 19 Applies to all Medicare Diagnostic Testing But only to diagnostic testing When the TC or PC component is ordered by the billing physician or other supplier (or by a related party AND The physician supervising the TC or performing the PC does not share a practice with the billing physician Billing amount if markup is prohibited Actual charge where payment is per transaction Fee schedule amount Net charge 20 10
12 Performing physician can bill PC directly The rule does not affect coverage but payment amount; Stark is about coverage a Stark violating service is non-covered It applies not only to DHS diagnostic testing, but to all diagnostic testing billed by a practice in which a physician orders the test IDTFs can still buy PCs It applies to both professional components and technical components This trumps the centralized building for diagnostic services under Stark unless the physicians performing the services meet the substantially all test 21 Purchased has never been defined. Is not in the statute. Outside supplier Group Practice definition under Stark Physician organization with no owners who may get a profit (e.g., faculty practice plans, academic centers) Centralized building 22 11
13 Always analyze under Alternative 1 first Prohibition on markup does not apply where the performing physician Supervised TC; or Performs PC And performs at least 75% of his professional services for the billing entity Presumably this count is based on time as it is under Stark but they do not say 23 The billing entity must have a reasonable belief at the time it submits a claim that The performing physician has furnished substantially all of the services with them for 12 months, including the month in which the claim is submitted; or The performing physician is expected to perform in the next 12 months substantially all of his services with the group, including in the month the claim is submitted If the performing physician (supervising and/or interpreting) meets the substantially all test, the site of service doesn t matter 24 12
14 Technical component is conducted and supervised in the site Professional components are performed in the site The site must be the office of the billing entity which is the location in which the ordering physician regularly furnishes services and the ordering physician provides the full range of services More stringent than Stark which allows the group practice to have an office normally open to patients For this, the ordering physician must regularly furnish services Must provide the full range of services not some physician services unrelated to the furnishing of DHS 25 Some go beyond Stark to share a practice Implied reassignment to share a practice Site of Service test requires on-premises physician supervision even if the Medicare standard is otherwise general; but what about sleep studies? No vans may be used, even 24/7 The physician supervising the technical component must be an owner, employee, or independent contractor of the billing entity 26 13
15 The interpreting physician must be an employee or independent contractor of the billing entity No centralized building without co-located offices unless the performing physician does substantially all of his services with the group Block leases that meet in-office ancillary services requirements are fine Shared facilities (e.g., two practices in the same building share CT) are fine 27 Stark says that today he'd go back and strip down the original fuzzy language so the law simply forbids kickbacks. "I think we would have stopped more of the shenanigans that way," he says. He concedes that he created a whole cottage industry of entrepreneurs and Stark law firms that create and sign off on convoluted legal arrangements between doctors and their vendors. "I get little thanks for it," he says. -- David Whelan, Stark Regrets:I Shouldn t Have Written That Law, Forbes, Nov
16 Stark is more liberal (e.g., profit sharing) than many people think But it imposes additional conditions Medicare reimbursement rules don t Have to meet Medicare reimbursement rules first Then apply Stark conditions 1 Gosfield, Getting the Team Paid: How Medicare Physician Payment Policies Impede Quality Health Law Handbook (2009 ed) he%20team%20paid.pdf Gosfield, Ten Myths About the Stark Statute Debunked, Journal of Medical Practice Management, Jan/Feb, 2004, pp
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