The Business of Healthcare

Special Announcement on AB 72 for California Physicians or Anyone Afraid This Crazy Idea Will Spread

Would any payor pay a physician or medical group more than Medicare plus 25% if they didn’t have to?

Would any payor with the ability to control what its “average” contract rate is, reduce its “average” if that’s all it has to pay to an out-of-network physician or medical group?

California’s law known as “AB 72,” purportedly passed to stop the “evils” of “surprise” medical bills in the nonemergency setting (that’s the situation a patient encounters when he or she gets treatment at an in-network facility from an out-of-network physician or other health care professional) will have an (intended?) disastrous impact on both out-of-network and in-network physicians and medical groups.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

www.weisspc.com

Continue Reading...

Hospital-Centric Healthcare

Payor Agreements and Hidden False Claims Act and Criminal Traps

It was a neighborhood like many others.

Neat, but not too neat front yards. Newspapers brought in by 8:00 a.m. and maybe by 10:00 a.m. on weekends.

And, all was within the bounds of normal, giving, of course, wide birth to the meaning of the word, for this is nonfiction, not fiction. But with one outlier, of course.

They assembled just before daybreak, approximately a dozen SWAT-clothed FBI agents accompanied by the local police and, of course, a reporter with a camera. Then, they raided the gray house with a just as neat front yard but, to the well-eyed, just a tad too many security cameras.

Later that day, the reporter wrote that the man living in the house ran a 7 to 8 figure financial scam out of his, I suppose, just as neat den.

Ah, crime lurking in the “normal” neighborhood.

Unfortunately, crime and other misdeeds lurk in other neighborhoods, too. For example, inside of a provider agreement between a medical group and a payor.

Standard form provider agreements often closely and specifically define who, by classification, may be considered within the group for purposes of billing the payor. Many such define group physicians as the group’s employed physicians, thereby excluding subcontractors.

Yet, at the same time, it’s equally common for many medical groups to either regularly or from time to time staff using subcontracted physicians.

Although a set of concerns (breach of contract, fraud, and so on) is present in any such situation, the potential for trouble explodes when the provider agreement covers federal healthcare program patients. For example, many provider agreements cover both commercial and Medicare Advantage patients.

In that case, when the group submits a claim for a procedure on a covered Medicare patient performed by a subcontracted physician, the claim is potentially a false claim, triggering liability under the federal False Claims Act. And, although the FCA is a civil statute, it has a criminal cousin, 18 U.S.C. 287, commonly referred to as the criminal false claims act.

As if that weren’t enough, the same lurking billing violation can trigger liability under a host of federal criminal statutes, from mail and wire fraud, to the Travel Act, to federal health care fraud.

Criminal and, at least, serious civil, liability lurks in many neat neighborhoods. Create your own neighborhood watch to make sure that it’s not lurking behind your medical group’s otherwise metaphorical neat lawn.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

www.weisspc.com

Continue Reading...

Podcast

Aetna Obtains $37-plus Million Judgment Against ASC Manager – Podcast

Earlier this year, a Santa Clara County, California jury awarded the insurer Aetna a $37,452,199.00 judgment in a lawsuit against Bay Area Surgical Management, LLC, a surgery center management company, a number of its managed ASCs, and three of Bay Area’s executives.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

www.weisspc.com

Play

Continue Reading...

Negotiation

New Trigger of False Claims Act Liability

I know an attorney whose firm was subject to a disqualification motion by opposing counsel on the basis that one of their offices was in a suite that didn’t have a Certificate of Occupancy from the local building department. The motion was denied on the grounds, I believe, of being patently ridiculous.

Continue Reading...

Kickback

Aetna Obtains $37-plus Million Judgment Against ASC Manager

This past Friday, April 15, 2016, a Santa Clara County, California jury awarded the insurer Aetna a $37,452,199.00 judgment in a lawsuit against Bay Area Surgical Management, LLC, a surgery center management company, a number of its managed ASCs, and three of Bay Area’s executives.

The ASCs were out of network as to Aetna plans.

Aetna complained that Bay Area’s centers charged exorbitant prices for out of network procedures. Aetna argued that the oversized amounts paid by it to the ASCs resulted in higher than normal distributions to referring physicians, and were therefore kickbacks for their referrals. Interestingly, no physician was named as a defendant.

Aetna also alleged that Bay Area’s centers failed to disclose the referring physicians’ interests in the facilities and routinely waived co-pays thereby rendering claims to Aetna fraudulent.

For example, a $20,000 charge with a waived 30% co-pay resulted in a $17,000 claim to Aetna. Because the $17,000 was not net as to an actual co-pay, Aetna’s position was that the $17,000 was a fraudulent claim; the “real” claim should have been $17,000 less the 30% co-pay, or $11,900. The routine waiver of co-pays was also an inducement to the insureds to use the higher priced out of network facilities.

Note that although the case was tried in a California state court, does not set a precedent, and will almost certainly be appealed, it signals a number of issues for ASCs and other healthcare facilities and providers everywhere:

1. Out of network facilities and practices are under attack by payors.

2. The routine waiver of co-pays is a dangerous business practice.

Court filings indicate that the defendants will file motions to attack the judgment. If those motions are unsuccessful, it’s highly likely that they will file an appeal.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

www.weisspc.com

Continue Reading...