Sutter Health LLC, a Medicare Advantage Provider, Pays $30 Million To Settle Alleged Overpayment Based on Beneficiaries' Health Status Risk Scores

It is not just fee-for-service providers that have audits and civil qui tam cases. Managed healthcare is facing review as well. Even providers who are paid capitation fees should be mindful of the codes submitted to managed care. A recent case illustrates why. 

On April 12, 2019, Sutter Health LLC, a California-based healthcare services provider, and affiliated entities (Sutter East Bay Medical Foundation, Sutter Pacific Medical Foundation, Sutter Gould Medical Foundation, and Sutter Medical Foundation) agreed to pay $30 million to resolve allegations that these affiliated entities submitted inaccurate information about the health status of beneficiaries enrolled in Medicare Advantage Plans known as "risk scores," which allegedly resulted in the plans and providers being overpaid. Sutter Health is headquartered in Sacramento, California.  

   

Under Medicare Advantage, also known as the Medicare Part C program, Medicare beneficiaries have the option of enrolling in managed healthcare insurance plans called Medicare Advantage Plans (“MA Plans”) that are owned and operated by private Medicare Advantage Organizations (“MAOs”).  MA Plans are paid a capitated, or per-person, amount to provide Medicare-covered benefits to beneficiaries who enroll in one of their plans. 

Connecticut Hospital Paid Fines for Stark Law Violations for Renting Space to Medical Practice at Less Than Fair Market Value

On April 24, 2018, after it self-disclosed conduct to OIG, Hartford Hospital in Connecticut, agreed to pay $423,017.45 for allegedly violating the Civil Monetary Penalties Law provisions applicable to physician self-referrals and kickbacks. 

The OIG alleged that Hartford Hospital provided remuneration to a medical practice in the form of office space, where Hartford Hospital charged the practice rent at less than fair market value. The remuneration created a financial relationship between Hartford Hospital and the practice that caused Hartford Hospital to present claims for health services that resulted from prohibited referrals in violation of the Stark law.

Rental arrangements where there are patient referrals need to be reviewed for compliance with Stark and Anti-Kickback statutes. This case is an example of the high fines that can result. Luckily, the self-disclosure likely prevented more severe sanctions such as exclusion or criminal referral. 

Posted by Tracy Green

Green and Associates

WakeMed Pays Penalties for Non-Employed Medical Director Fees. Learn From Their Experience.

Smaller hospitals and surgery centers often use medical director fees. One concern is that there is often not a great deal of effort into determining whether these medical director fees violate the bans on physician self referrals. Each case is different, howver, one case to review is a recent one involving WakeMed Health and Hospitals in North Carolina. OIG alleged that WakeMed paid remuneration to one non-employed medical director in the form of medical director fees.

After WakeMed disclosed conduct to OIG pursuant to its Corporate Integrity Agreement about payment of medical director fees, it agreed on October 26, 2016, to pay $146,235.38 for allegedly violating the Civil Monetary Penalties Law provisions applicable to physician self-referrals and kickbacks. 

Before your facility considers whether it should pay a directorship fee or whether as a physician or provider you should receive one, ensure that you have obtained a true legal opinion as to why that payment meets the safe harbor and is within federal and state laws and regulations.

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law

Email: tgreen@greenassoc.com

Office: 213-233-2261

California Hospital to Pay More Than $3.2 Million to Settle Allegations That It Violated the Physician Self-Referral Law Following Self-Reporting in 2011

Hospitals walk a narrow path when they contract with doctors to run departments, fill on-call panels and serve on committees. A federal anti-kickback statute prohibits exchanging anything of value for the referral of Medicare or Medicaid (called Medi-Cal in California) patients. 

Another set of complicated rules, often called the Stark law, bans doctors from referring federally insured patients to facilities where they have financial relationships. Yet another law, the False Claims Act, subjects hospitals to treble damages if they bill the government fraudulently.

A recent case shows how a hospital decides to bite the bullet, self report when new administration takes over, and avoid risk of whistleblower action. While ultimately there will be payment of a high financial fine, the benefit of final resolution is important.  

On January 15, 2016, Tri-City Medical Center, a hospital located in Oceanside, California, agreed to pay $3,278,464 to resolve allegations that it violated the Stark Law and the False Claims Act by maintaining financial arrangements (on-call agreements mainly) with community-based physicians and physician groups that violated the Medicare program’s prohibition on financial relationships between hospitals and referring physicians. 

The contracting lapses that led to Tri-City’s settlement do not involve patient steering, financial conflicts of interest or false claims. However, rates found in five of the nearly 100 documents, when taken in the aggregate, may have been above fair market value, according to a 2012 self-disclosure report the hospital filed with the Office of Inspector General.

Tri-City voluntarily disclosed the contracts to the federal government in 2011 and had been negotiating a settlement ever since. At issue were 97 physician contracts that were missing, unsigned, expired or otherwise not compliant with federal health laws.

The fine, one of the largest ever against a hospital in San Diego County, comes at a critical moment for Tri-City. In October, the hospital became affiliated with UC San Diego Medical Center in an effort to expand specialties such as neurology, cardiology and gynecologic oncology. 

Fired Mayo Radiology Technician With Drug Problem Indicted After He Diverted Drugs And Spread Hepatitis By Injecting Patients With Same Used Syringe He Used On Himself

An unusual health care related criminal case is pending in Jacksonville, Florida. This is not a fraud case but one where patients were allegedly harmed or killed by a hospital employee who was addicted to drugs, diverted drugs meant for patients and when he injected patients with a saline solution -- after having injected himself with the patients' drugs -- he ended up injecting and infecting patients with his own Hepatitis C virus.

On May 24, 2011, the U.S. Attorney's Office in the Middle District of Florida unsealed an indictment charging a radiology technician Steven Beumel, (48, Orange Park) with five counts of tampering with a consumer product, resulting in death or serious bodily injury, and five counts of obtaining a controlled substance by fraud. If convicted on all counts, Mr. Beumel faces a maximum penalty of life in federal prison.

According to the indictment, Mr. Beumel was a radiology technician at Memorial Hospital from May 1992 through October 2004. Mr. Beumel also worked as a radiology technician at Mayo Clinic from October 2004 through August 2010.

The indictment alleges that Mr. Beumel, before patients’ procedures, diverted syringes of Fentanyl (a synthetic opiad) meant for patients and injected himself with the Fentanyl. Mr. Beumel has allegedly admitted to been addicted to Fentanyl. He then allegedly refilled the empty syringes with saline, but these syringes were now contaminated with his own Hepatitis C Virus. Mr. Beumel has contended that he did not know he had Hepatitis C Virus.

According to the indictment, five different patients contracted Hepatitis C from Mr. Beumel. The indictment alleges that one patient died as a result from Mr. Beumel’s tampering.

An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.

This case was a joint federal and state investigation by the Federal Bureau of Investigation, the Food and Drug Administration, the Florida Department of Financial Services, and the Jacksonville Sheriff’s Office, Homicide Unit.

In a statement released by Mayo, the hospital said it continues to extend its deepest condolences to family and friends of those killed or injured by the hepatitis C transmission. Mayo has strengthened security changes to control narcotics, and expanded the hospital's drug-screening panel for potential new hires.

Commentary:  This case is a reminder that health care providers need to be careful in screening employees, monitoring employees for signs of drug or alcohol addictions, psychological problems, personality disorders and other issues employees might have that could cause them to act out and hurt other employees or patients (intentionally or inadvertently). The liability that these hospitals could face for the alleged actions of this radiology technician are significant. For smaller providers, a rogue or drug addict employee could cost them their business if there is not sufficient insurance to cover such liabilities. Moreover, an employee with a drug or alcohol problem could pose a danger to patient safety.

Health care providers need to monitor their employees and remember the great responsibility they have for patients' health. Diverting drugs is an all too common problem in hospitals and clinics.

Posted by Tracy Green, Esq. Please email Ms. Green at tgreen@greenassoc.com or call her at 213-233-2260 to schedule a complimentary 30-minute consultation.

Any questions or comments  should be directed to Tracy Green, a very experienced California health care fraud attorney  and California Medicare fraud attorney at tgreen@greenassoc.com.

The firm focuses its practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers and in health care fraud related matters in California and throughout the country. Their website is: http://www.greenassoc.com/

El Centro Regional Medical Center Settles Qui Tam Medicare Fraud Suit By Paying U.S. $2.2 Million and Entering Into A Corporate Integrity Agreement

On September 20, 2010, the El Centro Regional Medical Center in Imperial County, California (near the Mexico border) agreed to pay the United States $2.2 million, plus interest, to settle allegations that it defrauded Medicare. El Centro is a nonprofit community based hospital owned by the city of El Centro. It was formed in 1956.

The United States has agreed to dismiss the lawsuit as a result of the settlement announced today. In addition, as a condition of continued participation in federal health care programs, the Office of Inspector General of the U.S. Department of Health and Human Services (OIG-HHS) has required El Centro Regional Medical Center to enter into a Corporate Integrity Agreement. The agreement subjects the hospital to strict policies and procedures to ensure future compliance with applicable statutes and regulations that govern the use of federal health care funds.

Smaller providers often do not get the opportunity to enter into Corporate Integrity Agreements but given the nonprofit status of this hospital and the fact that it has been around for 40 years, that probably made a difference. Smaller providers when faced with overpayments and fraud allegations, however, should work on creating their own compliance plans and present them to Medicare or Medi-Cal in order to show their commitment to following the rules and regulations.

The government alleges that the 165-bed acute care hospital fraudulently inflated its charges to Medicare patients to obtain larger reimbursements from the federal health care program. The settlement covers claims submitted by the hospital for short inpatient admissions, usually of one day or less, when the services should have been billed on an outpatient “observation” basis or as emergency room visits.

The allegations arise from a lawsuit that was brought under the qui tam, or whistleblower, provisions of the False Claims Act (FCA), which permit private citizens with knowledge of fraud against the government to bring an action on behalf of the United States and to share in any recovery. The whistleblower in this case, Pietro Ingrande, a former employee of El Centro Regional Medical Center, will receive $375,000 as his share of the recovery.

Attorney Commentary:  The qui tam lawsuit shows the importance of having an operative compliance plan where employees are encouraged to report to the provider first before reporting to outside agencies. Exit interviews are also important to the process so former employees report any alleged wrongdoing that can be investigated by the provider to avoid qui tam lawsuits.  I encourage providers to adopt the saying "there is no such thing as a bad fact, only something I do not know." If an employee believes there is improper billing -- even if unfounded -- it is better for the provider to know it and address it internally before there is outside reporting.

Posted by Tracy Green, Esq. Please email Ms. Green at tgreen@greenassoc.com or call her at 213-233-2260 to schedule a complimentary 30-minute consultation.  

Any questions or comments  should be directed to Tracy Green, a very experienced California health care fraud attorney and qui tam defense attorney who understands fraud and the Medi-Cal Medicare programs at tgreen@greenassoc.com.

The firm focuses its practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers and in health care fraud related matters in California and throughout the country.
Their website is: http://www.greenassoc.com/

Olive View-UCLA Hospital Staffers Allegedly Accepted Gifts From Nursing Home Employees - L.A. Times Article

Healthcare: Olive View-UCLA staffers allegedly accepted gifts from nursing home employees - latimes.com

The Los Angeles Times reported on June 2, 2010 that Los Angeles County officials are investigating allegations that Olive View-UCLA Medical Center staff accepted gifts from nursing home employees in exchange for placing Medi-Cal and Medicare patients at their facilities, a possible violation of the county's code of ethics, as well as state and federal anti-kickback laws. Olive View is one of four hospitals that the Department of Health Services operates in Los Angeles County.

According to the article, three staff members at the county hospital in Sylmar — a clinical social worker and two medical case workers — have been accused of receiving gifts in exchange for referring Medi-Cal and Medicare patients to at least three local nursing homes.

Any allegations need to be investigated carefully and it cannot be assumed that the Los Angeles Times' sources are correct. Last month, the Los Angeles Times published several articles about Olive View that contained outrageous allegations about a beauty salon existing in the Neonatal Intensive Care Unit. Los Angeles County health officials investigated and in their written response they said they found "little about the allegations" to be correct.

In the last investigation, County health officials addressing an anonymous complaint to an accreditation agency said seven of 11 allegations made could not be substantiated. Officials found that hospital staff provided and received cosmetic services at Olive View, but said "the investigation has dispelled the claim that an organized cosmetic operation on the scale of a 'beauty salon' has existed in the NICU."


The new allegations will undoubtedly be investigated and they are serious allegations that could jeopardize the facility's Medi-Cal provider number and could result in significant audits and demands for overpayment if there is any truth to them. However, allegations are only allegations. Former or current employees could have their own agendas in reporting these "allegations" and a thorough investigation is needed before unsubstantiated allegations are assumed to have any validity.

Posted by Tracy Green, Esq. Any questions or comments should be directed to Tracy Green, a very experienced Los Angeles kickback attorney and Los Angeles hospital attorney at tgreen@greenassoc.com.

The firm focuses its practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers and facilities in California and throughout the country. Their website is: http://www.greenassoc.com/

L.A. County Slashes Doctors' Reimbursement Rate - L.A. Times Article

Here is a recent Los Angeles Times article regarding Los Angeles County Board of Supervisors' vote to reduce the amount that L.A. County reimburses fees for patients' first three days of care at private hospitals under the California Physician Services for Indigents Program from 29% to 18% effective July 1, 2010. This is a result of state funding cuts which flow downhill.

This Program is funded through surtax on cigarettes and tobacco products; and provides funding to hospitals, physicians and community clinics based on uncompensated care provided to individuals not eligible for Medical Services Initiative (Medi-Cal) or any other government-funded program.

This rate cut will adversely effect emergency room doctors and on-call specialists who treat poor, uninsured patients at private hospitals in Los Angeles County. It could also lead private hospitals to close emergency rooms and send more patients to crowded county hospitals:

L.A. County slashes doctors' reimbursement rate - latimes.com

Should you have any questions regarding your own situation or this post, you can email physician attorney Tracy Green at tgreen@greenassoc.com. Green & Associates is located in downtown Los Angeles, California and focuses their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. The lawfirm website is: http://www.greenassoc.com/
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13 California Hospitals Fined For Medical Errors - Article From Los Angeles Times

For those health care providers who think that everyone leaves hospitals alone, here is an article from the Los Angeles Times.

I would like to see more balanced reporting from the L.A. Times on healthcare rather than a simple regurgitation of the government's press release. Compare the press release and the article and see if you can find any actual reporting.

What happens to these hospitals now? These facilities are required to implement a plan of correction to prevent future incidents. In addition, the hospitals can appeal an administrative penalty by requesting a hearing within 10 calendar days of notification. If a hearing is requested, the penalties are to be paid if upheld following appeal. Thus, the fact that the hospitals were assessed fines does not mean that they were properly assessed.

To view the article, go to:

13 California hospitals fined for medical errors - latimes.com

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Posted by health care attorney Tracy Green.

California Law Against Corporate Practice Of Medicine: Bill Pending In Legislature to Allow Certain Hospitals To Hire Physicians

California has one of the strictest laws against the Corporate Practice of Medicine (CPM). Presently, there is a bill pending in the Legislature, SB 726 (Ashburn), that would allow certain hospitals to hire physicians.

Under current law, hospitals are generally barred from hiring physicians as employees. The CPM Act prohibits corporations and other artificial legal entities from having professional rights, privileges, or powers in relation to the practice of medicine. Further, under the CPM doctrine, the state prohibits hospitals and other entities from employing physicians to provide professional services. This law was created to prevent corporations, other entities or non-professionals from unduly influencing the professional judgment and practice of medicine by licensed physicians.

There is a large and heated debate about this bill. The bill is sponsored by the California Hospital Association and is supported by AFSCME, a labor union interested in unionizing doctors. The California Medical Association (CMA) is vigorously opposing this bill.

The text of the bill can be found at:
http://info.sen.ca.gov/pub/09-10/bill/sen/sb_0701-0750/sb_726_cfa_20090428_105632_sen_comm.html

The argument in favor of this bill is that California's rural areas face a critical shortage of doctors. People are having difficulty seeing physicians, especially since the inland regions of the state have far fewer doctors than other areas. In addition, there is problem with access to doctors in the inner cities. Why is this? Because many in these areas are uninsured and doctors are reluctant to move to communities where they cannot make a living. Republican Senator Ashburn, who introduced this legislation, believes that one of the reasons is that California is one of the last few remaining states that do not allow hospitals to directly hire physicians.

The CMA opposes this bill on 5 grounds:

(1) The ban on corporations practicing medicine is an important protection for patients in California hospitals. This protection ensures that those who make decisions that affect the provision of medical services (a) understand the quality of care implications of that medical service; (b) have a professional ethical obligation to place the patient’s interest first; and (c) are subject to the Medical Board of California.

(2) The CMA contends that SB 726 will erode the quality of care in California hospitals. It will grant control over treatment decisions to hospital CEOs and administrative staff who have different motivations and mandates than physicians. This will create conflicted loyalties in an institution that must remain true to the patient’s interests, and will erode the quality of care patients receive in California hospitals.

(3) CMA believes that placing doctors under the oversight of hospital administrators and CEOs who are under enormous pressures to cut costs or increase revenue will threaten the independent medical judgment necessary to ensure patients are protected.

(4) CMA also posits that hospitals are already interfering with medical staffs’ ability to ensure quality care through independent self-governance. For example, some hospitals have adopted medical management protocols which have resulted in inappropriate hospital tests, procedures, and stays, jeopardizing patients and increasing costs.

(5) Finally, CMA argues that allowing a hospital to directly employ a physician will NOT increase access to physician services. The hospital will push patients to their preferred provider thereby controlling the competitive market. Other non-employed physicians will not be able to compete and likely be forced out of town resulting in no increased access.

Attorney Commentary: We can expect to see shifts in the corporate practice of medicine doctrine in California over the next 10 years. There are exceptions for HMOs and the laws in other states are significantly different in allowing non-professionals to own medical practices and/or hire physicians. Regardless of whether this bill is passed or not, the debate about loosening the rules against the corporate practice of medicine in California will continue as there are proposals for significant changes to our health care system.

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers. Their website is: http://www.greenassoc.com/

Physician And Two Hospital Employees Plead Guilty To Misdemeanor Violations Of HIPAA In Arkansas Federal Court

HIPAA is becoming an increased basis for criminal prosecutions of licensed health care professionals and health care workers. In Arkansas, there was one of the first federal criminal prosecutions for accessing patient records out of curiosity -- where there was no identity theft or related criminal conduct.

On July 20, 2009, a physician and two former employees of St. Vincent Infirmary Medical Center (SVIMC) in Little Rock, Arkansas, pleaded guilty to misdemeanor violations of the health information privacy provisions of the Health Insurance Portability and Accountability Act.

Each admitted he or she had accessed patient records out of curiosity. All three acknowledged they had participated in HIPAA training provided by SVIMC, and understood the prohibition on accessing records without a legitimate reason for doing so.

The records accessed related to the treatment of Anne Pressly, a local television personality who was brutally beaten by a home intruder on October 20, 2008. Ms. Pressly died at SVIMC on October 25.

Dr. Jay Holland, medical director for Select Specialty Hospital located on one floor within SVIMC, admitted that he logged into the medical center's electronic medical record system from home seeking to determine the accuracy of a television news report concerning Ms. Pressly. The medical center suspended Dr. Holland for two weeks and ordered him to complete additional HIPAA training. Sarah Elizabeth Miller, an account representative for SVIMC, admitted viewing Ms. Pressley's medical records twelve times, and Candida Griffin, an emergency room unit coordinator, accessed the file on three occasions. SVIMC terminated Miller's and Griffin's employment.

Each of the individuals faces up to a year in jail and a $ 50,000 fine for the violation they admitted. Sentencing should take place within the next two months. In determining the actual sentence, the federal judge will consult the advisory U.S. Sentencing Guidelines, which provide appropriate sentencing ranges that take into account the severity and characteristics of the offense, the defendant's criminal history, if any, and other factors. The judge, however, is not bound by those guidelines in determining a sentence. A probation sentence given these individual's lack of prior criminal history seems likely here.

Attorney Commentary: The misdemeanor conviction will be just the beginning of the individuals' legal issues. There are employment issues, the misdemeanor conviction will need to be reported to the licensing boards, potential national reporting, and other collateral consequences.

To understand how a HIPAA violation is reported, you can review the US Department of Health and Human Services Office for Civil Rights website: www.hhs.gov/ocr/privacyhowtofile.htm

As part of compliance plans and a professional's pattern and practice, HIPAA will become more important. This particular case probably obtained the government's attention due to the fact that the patient was a local news celebrity. As records become increasingly electronic and accessible, there are greater risks of unauthorized access.

Any questions or comments should be directed to: tgreen@greenassoc.com or 213-233-2260.

Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers. Their website is: http://www.greenassoc.com/

California Hospital Pays $2.4 Million To Settle Qui Tam Lawsuit Alleging Unlawful Arrangements Between Hospital And Referring Physicians

On July 27, 2009, the United States Attorney's Office Central District of California, issued Press Release No. 09-087, announcing that Tulare Local Healthcare District, Tulare District Healthcare System and Tulare District Hospital (collectively, “Tulare Healthcare”) have agreed to pay more than $2.4 million to settle allegations that they submitted claims to the Medicare system as part of a scheme to illegally reimburse doctors who referred patients to Tulare Healthcare.

The settlement stemmed from an investigation by the Department of Health and Human Services, Office of Inspector General and the United States Attorney’s Office. Tulare Healthcare agreed to pay the settlement without admitting any wrongdoing. The alleged acts in the lawsuit occurred under prior Tulare Healthcare management, and the current management cooperated fully with the government’s investigation. The settlement, was announced when the United States Attorney’s Office learned that United States District Judge Christina Snyder had unsealed a “whistleblower” lawsuit filed last year by Maria Lucy Reimche, Tulare Healthcare’s former chief financial officer.

Reimche’s lawsuit alleged that Tulare Healthcare made prohibited remuneration to physicians who referred Medicare patients to Tulare Healthcare. The doctors who allegedly received prohibited remuneration from 2001 through 2007:

(1) were given rental arrangements at below-market rates,

(2) were able to purchase commercial real estate lots at below-market value, and

(3) had debts forgiven.

Reimche's lawsuit alleges that when Tulare Healthcare made claims to Medicare for reimbursement for services provided to the patients that had been referred, it violated the federal False Claims Act, as well as the federal Anti-Kickback Statute and an anti-referral law known as “the Stark law.”

The Anti-Kickback Statute prohibits anyone from offering, paying, soliciting or receiving anything of value to generate referrals for items or services payable by any federal health care program. The Stark law provides that, subject to certain exceptions, a physician may not refer patients for specified Medicare-covered health services to a hospital or other entity with which the physician or an immediate family member has a financial relationship. The law also prohibits hospitals from billing for any services provided as a result of a prohibited referral.

The Press Release can be read at: http://www.usdoj.gov/usao/cac/pressroom/pr2009/087.html

Attorney Commentary

Given the budgetary crises in Medicare and Medi-Cal and the emphasis on health care reform, we can expect to see an increase in scrutiny of hospital-physician business relationships. During tough economic times, enforcement actions serve not only to weed out those practitioners who intend to bilk the government, but also as a revenue source.

For physicians, it is important for you not to rely solely on the hospital's administrators (or other health care clinics) to assess the legality of these arrangements. We have had clients who said "well, if the hospital is proposing the idea it must be legal!" Hospitals face financial pressures too to build relationships and fill beds. Certainly, they may seek to comply with the law but in health care what was accepted one year ago or five years ago -- may be reviewed differently now.

Why is this important? If the government (or a whistleblower former employee) can prove that you have violated the Stark or Anti-Kickback statute, every claim you submit related to those referral relationships or arrangements is a "false" claim and must return 100% of the amount paid even if it was medically necessary. Look at the last page of your Medicare application where you specificially have signed that you understand this concept.

As this case illustrates, kickbacks do not always take the form of cash payments. Even something as seemingly innocuous as a discount on rent can be interpreted as a kickback. Given the current climate, it is a good idea for the practitioner wishing to avoid problems with Medicare and Medi-Cal to have their contracts reviewed by an attorney specializing in health care law.

Further, the practitioner would be wise to have an attorney visit the premises and observe the operations, talk to the office manager, observe the patient flow and understand your business relationships. Not only must practitioners ensure that their written contracts pass muster, they must also ensure that actual day-to-day business practices comply with the law. We would much rather prevent problems rather than assist a client defending a whistleblower lawsuit or health care fraud investigation.

For the physicians who entered into these arrangements, they are at significant risk of losing their Medicare provider numbers and having exclusions or negative reporting to the national database based on a qui tam lawsuit. There can be further fall-out from the state as well. These business relationships which do not comply with the law are never worth the risks in the long-term. Having objective legal advise by an attorney who represents you and thinks of your long-term career and practice is important.

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers. Their website is: http://www.greenassoc.com/