Former Hearing Aid Center Owner Sentenced in Health Care Fraud
NEW HAVEN, Conn. (AP) _ The owner of two Connecticut hearing aid centers has been sentenced to a year and a day in prison on a federal health care fraud charge.
Walter Rochefort of Avon is the former owner of one hearing center in Bristol and another in Plainville. The 52-year-old pleaded guilty in September.
He was also ordered to pay more than $150,000 to United Healthcare and Blue Cross/Blue Shield.
Rochefort also has state charges pending in New Britain Superior Court. Last December he and an office manager were arrested by state officials for alleged fraud.
Rochefort is accused of billing the state's Medicaid program for hearing aids for dead people, creating fictitious invoices for services never provided, and attempting to avoid a government audit by staging and reporting a fake burglary.
(Copyright 2007 by The Associated Press. All Rights Reserved.)
Thursday, December 6, 2007
Wednesday, December 5, 2007
solutions to the $60 billion health-care fraud crisis.
Yes that is correct...
Solutions to the $60 billion health-care fraud crisis.
And best of all, Tennessee doctor is the FIRST RECIPIENT,,,,,,,,PLEASE!!!!!
Daniel R. Barnett, M.D., J.D., Of BlueCross BlueShield Of Tennessee, First Recipient Of NHCAA Medical Director Award - PRNewswire, The National Health Care Anti-Fraud AssociationDecember 04, 2007
The National Health Care Anti-Fraud Association (NHCAA) is pleased to announce that Daniel R. Barnett, M.D., J.D., Senior Medical Director, BlueCross BlueShield of Tennessee, is the first recipient of the NHCAA Medical Director Award for his innovative approach to quality patient care and monitoring of provider practices through the creation of BCBS of Tennessee's Clinical Risk Management Program (CRMP). The award is being presented Thursday, December 6, 2007 at the NHCAA Annual Training Conference in Anaheim, California. Over 1,000 fraud investigators have joined together at the conference to hear public-private solutions to the $60 billion health-care fraud crisis.
Dr. Barnett is widely recognized as a national figure in the area of anti-fraud through his participation on NHCAA's Medical Directors Advisory Group as well as from his work with the BlueCross and BlueShield Association (BCBSA) and as a Medical Advisor to BCBS of Tennessee's Special Investigation Unit.
"NHCAA is pleased to award Daniel R. Barnett, M.D., J.D. the association's first-ever Medical Director Award for his unwavering service to the advancement of new, innovative approaches to combating health care fraud nationwide," said NHCAA Executive Director Louis Saccoccio. "As a true champion in the field, Dr. Barnett has distinguished himself not only as a leader at NHCAA, but also as a resource and advisor to BCBS of Tennessee, BCBSA and in the U.S. District Courts in Tennessee where he regularly serves as an expert witness for the U.S. Assistant Attorneys as well as state and federal agencies. We are proud to name Dr. Barnett as the first recipient of this award and look forward to continuing to work with him as an active member of NHCAA."
Solutions to the $60 billion health-care fraud crisis.
And best of all, Tennessee doctor is the FIRST RECIPIENT,,,,,,,,PLEASE!!!!!
Daniel R. Barnett, M.D., J.D., Of BlueCross BlueShield Of Tennessee, First Recipient Of NHCAA Medical Director Award - PRNewswire, The National Health Care Anti-Fraud AssociationDecember 04, 2007
The National Health Care Anti-Fraud Association (NHCAA) is pleased to announce that Daniel R. Barnett, M.D., J.D., Senior Medical Director, BlueCross BlueShield of Tennessee, is the first recipient of the NHCAA Medical Director Award for his innovative approach to quality patient care and monitoring of provider practices through the creation of BCBS of Tennessee's Clinical Risk Management Program (CRMP). The award is being presented Thursday, December 6, 2007 at the NHCAA Annual Training Conference in Anaheim, California. Over 1,000 fraud investigators have joined together at the conference to hear public-private solutions to the $60 billion health-care fraud crisis.
Dr. Barnett is widely recognized as a national figure in the area of anti-fraud through his participation on NHCAA's Medical Directors Advisory Group as well as from his work with the BlueCross and BlueShield Association (BCBSA) and as a Medical Advisor to BCBS of Tennessee's Special Investigation Unit.
"NHCAA is pleased to award Daniel R. Barnett, M.D., J.D. the association's first-ever Medical Director Award for his unwavering service to the advancement of new, innovative approaches to combating health care fraud nationwide," said NHCAA Executive Director Louis Saccoccio. "As a true champion in the field, Dr. Barnett has distinguished himself not only as a leader at NHCAA, but also as a resource and advisor to BCBS of Tennessee, BCBSA and in the U.S. District Courts in Tennessee where he regularly serves as an expert witness for the U.S. Assistant Attorneys as well as state and federal agencies. We are proud to name Dr. Barnett as the first recipient of this award and look forward to continuing to work with him as an active member of NHCAA."
ESL Investments 1988 Ruchard Rainwater invests
A bit of backgroundAfter breezing through Yale University, Lampert began his career at Goldman Sachs (NYSE: GS) where he was mentored under future Secretary of the Treasury and current Citigroup (NYSE: C) Chairman Robert Rubin. Never one to follow the crowd, a 25-year-old Lampert decided to strike out on his own -- against Rubin's advice -- and start his own hedge fund.
Lampert then gained the respect of billionaire Richard Rainwater, who funded Lampert's hedge fund, ESL Investments, with $28 million in seed money. Not a bad first day at the office.
Since forming ESL in 1988, Lampert has produced purported returns of 29% per year, turning an original $1 million investment into $230 million today. With results like these, it isn't hard to see why so many people have already deemed Lampert "The next Warren Buffett."
Lampert then gained the respect of billionaire Richard Rainwater, who funded Lampert's hedge fund, ESL Investments, with $28 million in seed money. Not a bad first day at the office.
Since forming ESL in 1988, Lampert has produced purported returns of 29% per year, turning an original $1 million investment into $230 million today. With results like these, it isn't hard to see why so many people have already deemed Lampert "The next Warren Buffett."
Rainwater, has been involved in Texas Rangers,health care, real estate and energy.
Leaving Mesa, Pickens helps in hunt for successor
Journal Record, The (Oklahoma City), Aug 12, 1996 by Katie Fairbank Associated Press
IRVING, Texas -- Boone Pickens, who used Mesa Inc. to lead some of the most notorious
Rainwater, who owns a stake in the Texas Rangers baseball team and has amassed a fortune estimated at more than $700 million, has been involved in health care, real estate and energy.
Batchelder's takeover attempt was rebuffed when Texas financier and Pickens ally Richard Rainwater stepped in and recapitalized the company with more than $1 billion in lower-cost financing.
Rainwater got a 32.5 percent stake in Mesa for his investment, making him the company's biggest shareholder, and he may eventually end up with 64 percent. He also won the right to name three out of Mesa's seven board seats.
Pickens scoffs at any suggestions that Batchelder's attempt helped force him out as Mesa's chairman.
"Hell, I'm 68 years old. Time bagged me, not Batchelder," he said. "We worked our way out of the problem, I feel good about that. The company is well."
Rainwater said he was interested in the recapitalization because he likes the company, which saw a profit in the first and second quarters for the first time in seven years.
Rainwater, who owns a stake in the Texas Rangers baseball team and has amassed a fortune estimated at more than $700 million, has been involved in health care, real estate and energy.
"Mesa is just one of a long list of good investments for me where I found great companies and great people suffering temporary setbacks," Rainwater said. "I felt he had built a great company that simply needed to be recapitalized."
Pickens was forced to seek Rainwater's help because of Mesa's huge debts, run up when the company made overly generous payments to shareholders and -- contrary to Pickens' expectations -- natural gas prices plunged.
"We just distributed too much to the shareholders," Pickens said. "I didn't squander the money. I've just had my stock and hung onto it all the way through. I took the same hits everybody did."
Pickens said those people he angered in his takeover days haven't gloated about his own trouble with takeover threats.
"They're all gone," he said. "All those folks aren't around anymore."
Pickens' targets did hate him, Rainwater said, "but Wall Street loved him and his investors loved him. As I recall, his stock prices were very high at that time." Rainwater also noted that companies attempt takeovers all the time today, but the chief executives are not referred to as raiders.
Besides his takeover attempts, Pickens was also known for the shareholder rights movement of the late 1980s, which prompted big corporations to become more responsive to the needs and demands of their stockholders.
He founded the United Shareholders Association, a group that lobbied for changes in corporate governance.
In the future, Pickens sees himself possibly picking energy futures, which he did successfully most of the time to keep Mesa going during trying times. Or he may go to work elsewhere.
"I've had opportunities already," he said about an offer from an old friend to head to Calgary, Canada. "But, I'll stay in the Dallas area. I've got too many grandkids here." Pickens has 16 grandchildren primarily in the Texas-Oklahoma region.
The geologist says he won't be retiring and he won't be writing his autobiography -- he wrote one nearly 10 years ago. It became a best-seller. Whatever work he decides to do, he'll stay tied to Mesa.
"I'll be on the board and will have continuing involvement," he said. Pickens is the second-largest shareholder with 7 million shares worth around $30 million to $35 million.
Journal Record, The (Oklahoma City), Aug 12, 1996 by Katie Fairbank Associated Press
IRVING, Texas -- Boone Pickens, who used Mesa Inc. to lead some of the most notorious
Rainwater, who owns a stake in the Texas Rangers baseball team and has amassed a fortune estimated at more than $700 million, has been involved in health care, real estate and energy.
Batchelder's takeover attempt was rebuffed when Texas financier and Pickens ally Richard Rainwater stepped in and recapitalized the company with more than $1 billion in lower-cost financing.
Rainwater got a 32.5 percent stake in Mesa for his investment, making him the company's biggest shareholder, and he may eventually end up with 64 percent. He also won the right to name three out of Mesa's seven board seats.
Pickens scoffs at any suggestions that Batchelder's attempt helped force him out as Mesa's chairman.
"Hell, I'm 68 years old. Time bagged me, not Batchelder," he said. "We worked our way out of the problem, I feel good about that. The company is well."
Rainwater said he was interested in the recapitalization because he likes the company, which saw a profit in the first and second quarters for the first time in seven years.
Rainwater, who owns a stake in the Texas Rangers baseball team and has amassed a fortune estimated at more than $700 million, has been involved in health care, real estate and energy.
"Mesa is just one of a long list of good investments for me where I found great companies and great people suffering temporary setbacks," Rainwater said. "I felt he had built a great company that simply needed to be recapitalized."
Pickens was forced to seek Rainwater's help because of Mesa's huge debts, run up when the company made overly generous payments to shareholders and -- contrary to Pickens' expectations -- natural gas prices plunged.
"We just distributed too much to the shareholders," Pickens said. "I didn't squander the money. I've just had my stock and hung onto it all the way through. I took the same hits everybody did."
Pickens said those people he angered in his takeover days haven't gloated about his own trouble with takeover threats.
"They're all gone," he said. "All those folks aren't around anymore."
Pickens' targets did hate him, Rainwater said, "but Wall Street loved him and his investors loved him. As I recall, his stock prices were very high at that time." Rainwater also noted that companies attempt takeovers all the time today, but the chief executives are not referred to as raiders.
Besides his takeover attempts, Pickens was also known for the shareholder rights movement of the late 1980s, which prompted big corporations to become more responsive to the needs and demands of their stockholders.
He founded the United Shareholders Association, a group that lobbied for changes in corporate governance.
In the future, Pickens sees himself possibly picking energy futures, which he did successfully most of the time to keep Mesa going during trying times. Or he may go to work elsewhere.
"I've had opportunities already," he said about an offer from an old friend to head to Calgary, Canada. "But, I'll stay in the Dallas area. I've got too many grandkids here." Pickens has 16 grandchildren primarily in the Texas-Oklahoma region.
The geologist says he won't be retiring and he won't be writing his autobiography -- he wrote one nearly 10 years ago. It became a best-seller. Whatever work he decides to do, he'll stay tied to Mesa.
"I'll be on the board and will have continuing involvement," he said. Pickens is the second-largest shareholder with 7 million shares worth around $30 million to $35 million.
Sunday, December 2, 2007
6.4 million healthcare fraud and money-laundering scheme
BY JOHN DORSCHNER
jdorschner@MiamiHerald.com
Raul Rodriguez, 34, Miramar, has been sentenced to nine years in prison for helping to orchestrate a $6.4 million healthcare fraud and money-laundering scheme involving both of the prime Medicare fraud schemes in South Florida -- durable medical equipment companies and AIDS/HIV clinics, the U.S. Attorney's Office announced Friday afternoon.
Claiming he had special abilities from a Higher Power, Rodriguez told FBI agents they ''would die'' as a result of his religious powers, according to the prosecutor's press release.
In August 2007, Rodriguez pleaded guilty to four counts involving fraud, money laundering and a conspiracy to obstruct the investigations.
U. S. District Court Judge Jose E. Martinez also ordered to pay $6.5 million in restitution to the Medicare program, pay a $5.7 million money judgement, plus forfeit $100,000 in cash and a 2007 Land Rover.
Co-defendants Armando Arias, Carlos Enrique Monteagudo, Alain Rhaf Vega, Marisol Gonzalez-Torres were sentenced earlier this month. Another three are scheduled to be sentenced this month in connection with their actions at Coral Way Professional Health Services.
The case is being prosecuted by William J. Parente Jr., a lawyer with the Federal Bureau of Investigation.
jdorschner@MiamiHerald.com
Raul Rodriguez, 34, Miramar, has been sentenced to nine years in prison for helping to orchestrate a $6.4 million healthcare fraud and money-laundering scheme involving both of the prime Medicare fraud schemes in South Florida -- durable medical equipment companies and AIDS/HIV clinics, the U.S. Attorney's Office announced Friday afternoon.
Claiming he had special abilities from a Higher Power, Rodriguez told FBI agents they ''would die'' as a result of his religious powers, according to the prosecutor's press release.
In August 2007, Rodriguez pleaded guilty to four counts involving fraud, money laundering and a conspiracy to obstruct the investigations.
U. S. District Court Judge Jose E. Martinez also ordered to pay $6.5 million in restitution to the Medicare program, pay a $5.7 million money judgement, plus forfeit $100,000 in cash and a 2007 Land Rover.
Co-defendants Armando Arias, Carlos Enrique Monteagudo, Alain Rhaf Vega, Marisol Gonzalez-Torres were sentenced earlier this month. Another three are scheduled to be sentenced this month in connection with their actions at Coral Way Professional Health Services.
The case is being prosecuted by William J. Parente Jr., a lawyer with the Federal Bureau of Investigation.
Federal investigators have targeted these types of vendors for a variety of practices designed to generate illegal referrals for their products and se
Physician-Vendor Arrangements: Legal Compliance Challenges
Posted by Jennifer Miller
November 30, 2007
Arrangements between vendors of healthcare products and services, such as pharmaceutical manufacturers, medical device makers and hospitals, and physicians are increasingly becoming the subject of intense scrutiny by the federal government. Recently, federal investigators have targeted these types of vendors for a variety of practices designed to generate illegal referrals for their products and services, including providing physicians with all expense paid trips to Europe and resort destinations and other types of “freebies” and making payments under sham medical director and consulting arrangements and speaking engagements.
Very often, these actions result in settlements of tens and even hundreds of millions of dollars. In light of the potential for heightened government scrutiny and costly litigations and settlements, vendors need to be extremely cautious in their dealings with physicians (or other providers or entities which are in a position to generate referrals of items and services that are reimbursed by federal health care programs such as Medicare).
This article provides a brief overview of some of the legal issues that impact vendor-physician arrangements and offers some examples of “do’s” and “don’ts” when structuring an arrangement.
Legal Issues
The recent federal enforcement actions have focused on two main federal laws governing the payment of illegal kickbacks (the Anti-Kickback Statute or “AKS”) and the physician prohibition on making self-referrals (the Stark law). (Note, in addition, each state may have its own version of these laws, the discussion of which is outside the scope of this article).
The Anti-Kickback Statute . The AKS makes it a crime for any person to knowingly and willfully solicit, receive, offer or pay remuneration: (i) to induce or reward referrals; or (ii) in return for purchasing, leasing, ordering or arranging for any item or service, which is reimbursable by a federal healthcare program. Violations of the AKS can result in criminal prosecution, substantial civil penalties and exclusion from participation in federal healthcare programs. Several regulatory “safe harbors” exist under the AKS - if an arrangement meets all of the criteria of a safe harbor it will be considered compliant with the AKS. However, failure to meet a safe harbor does not necessarily make an arrangement illegal; ultimately, liability under the AKS depends on the parties’ intent.
The Office of the Inspector General (”OIG”), which is charged with ensuring compliance with the AKS, has issued some guidance on the types of permissible vendor-physician arrangements. In general, the OIG’s guidance suggests that vendors should consider the following: (i) whether the incentive to the physician may interfere with clinical decision-making; (ii) whether the physician receives accurate, complete and truthful information; (iii) whether there is a potential to increase costs to federal healthcare programs or beneficiaries; (iv) whether the arrangement poses a risk of overutilization or inappropriate utilization; and (v) whether there are any patient safety or quality concerns.
The Stark Law . The Stark law prohibits a physician from referring certain types of items and services to an entity in which the physician has a financial relationship if such items and services will be paid for by the Medicare/Medicaid programs. As with the AKS, there are several exceptions to this general prohibition. However, unlike the AKS, the Stark law is a strict liability statute, which means that a financial relationship must satisfy all of the requirements of an exception in order to be compliant. A financial relationship includes both an ownership and a compensation interest.
Industry Guidance
In addition to the OIG, several industry organizations have promulgated codes of ethics or codes of conduct which provide valuable guidance on structuring arrangements with physicians. Some of the more comprehensive examples of such guidance include the Advanced Medical Technology Association (AdvaMed) Code of Ethics on Interactions with Health Care Professionals and the Pharmaceutical Research and Manufacturers of America (PhRMA) Code on Interactions with Healthcare Professionals. Compliance with industry codes is voluntary and does not necessarily mean that an arrangement is legal. However, adherence to industry codes of ethics will likely be viewed as a good faith compliance effort by enforcement authorities. For instance, the OIG’s Compliance Guidance for Pharmaceutical Manufacturers expressly recommends that pharmaceutical vendors, at a minimum, comply with the PhRMA Code.
“Do’s” and “Don’ts” - Structuring Compliant Arrangements
Whether a vendor-physician arrangement passes muster under the above described federal laws must be considered on a case-by-case basis. No “magic formula” exists. Set forth below is a list of “do’s” and “don’ts” based on guidance from the OIG and the AdvaMed and PhRMA codes of ethics, which may help reduce the risk of an impermissible arrangement:
Certain types of arrangements should be avoided altogether. For example:
* “tying” arrangements (providing cash, gifts or other benefits contingent upon physician referrals of the vendor’s products),
* “switching” arrangements (offering cash or other benefits for changing a patient’s prescription to the manufacturer’s product from a competing one), and
* “detailing” (compensating for time spent listening to marketing information).
Gifts of cash or cash equivalents (i.e. gift certificates) are highly suspect and should be avoided.
Other types of gifts should be of minimal value (e.g., less than $100) and should primarily benefit the patients or serve an educational function, such as, for example, anatomical models and text books. Promotional products are acceptable if they relate to the physician’s practice - pens and notepads are acceptable; golf balls are not.
If the arrangement is subject to the Stark law, it must comply with one of the applicable exceptions for gifts - for example, a vendor may provide non-cash gifts with an aggregate annual value of up to $329 (adjusted annually) if such gifts are not solicited by the physician and do not take into account referrals generated by the physician. Additionally, a hospital may provide certain incidental benefits to all members of its medical staff if such benefits are of nominal value (less than $28 dollars, adjusted annually), do not take into account referrals generated, and are utilized at the hospital in connection with the provision of medical services.
Product support services (e.g. basic training on product utilization, reimbursement consultation, and billing assistance) are generally not suspect because such services are not considered to have substantial independent value. However, note that if product support services are accompanied by a service which confers an independent benefit on a referring provider, the arrangement will raise red flags. For example, offering a reimbursement guarantee which eliminates a provider’s financial risk in conjunction with reimbursement support services is suspect.
Vendors may give informational presentations regarding their products if such presentations are “modest,” informational and provide scientific and educational value.
Manufacturers may pay a direct subsidy to a Continuing Medical Education (CME) conference organizer provided that the subsidy is used to reduce conference fees for all attendees. The PhRMA Code prohibits a vendor from directly paying for a physician’s travel, lodging, meals, or other personal expenses. By contrast, AdvaMed’s Code allows a manufacturer to compensate the physician for reasonable travel and modest lodging - a conservative approach would be to avoid payments for these items altogether.
Vendors should ensure that they are not using CME programs or other educational/promotional presentations to pay improper remuneration to physicians in a position to generate business. Vendors should not influence or control the content of any educational programs and should follow FDA guidelines with respect to their involvement.
Research whose only purpose is to generate business or promote a product should be avoided.
When engaging physicians to provide research services, vendors must ensure that any such program: (i) is not initiated or directed by marketing personnel; (ii) includes genuine scientific oversight; (iii) avoids unnecessary or duplicative research; and (iv) is not a post-marketing pretense to promote a product.
All consulting and medical director agreements should attempt to meet the AKS safe harbor for personal services and, if applicable, the Stark law exception for personal services. At a minimum, the parties should ensure that: (i) a signed written agreement is in place; (ii) there is a legitimate need for the physician’s services; (iii) the required services are actually provided; and (iv) the compensation is fair market value. These facts should be documented prior to paying the physician, and the arrangement should be monitored on an on-going basis to ensure that the parties’ written agreement reflects their actual practice.
Generally, fair market value payments to a small number of physicians are unlikely to raise fraud and abuse concerns by the OIG, provided that such payments are for bona fide and reasonable consulting and advisory services. Entering into arrangements with a large number of physicians may raise concerns that some or all of the physicians are not providing legitimate and necessary services and instead are being compensated for referrals.
Paying physicians for consulting or advisory services where the physicians are expected to attend conferences and meetings in a passive capacity is suspect.
Entering into consulting arrangements with physicians for marketing services such as “ghost-writing” and speech-making implicates the AKS and other laws. Such arrangements must be carefully structured to ensure that the marketing practices in general and the physician’s involvement, in particular, is compliant.
In conclusion, many types of vendor-physician arrangements are common business arrangements in the health care industry that are necessary to promote advancements in medicine, science and technology. In recent years, however, the proliferation of a variety of these arrangements has resulted in increased federal government scrutiny, much of which is often initially triggered by “whistleblower” actions by former employees of vendors. Thus, in light of this enforcement environment, vendors should review their inventory of arrangements and conduct an in-depth legal compliance analysis. The various industry codes of ethics, while not carrying the force of law, can provide meaningful, practical guidance for structuring compliant arrangements and serve as a good educational resource for employee training. By: Anjana D. Patel and Alexandra Miller Khorover http://www.metrocorpcounsel.com/current.php?
Posted by Jennifer Miller
November 30, 2007
Arrangements between vendors of healthcare products and services, such as pharmaceutical manufacturers, medical device makers and hospitals, and physicians are increasingly becoming the subject of intense scrutiny by the federal government. Recently, federal investigators have targeted these types of vendors for a variety of practices designed to generate illegal referrals for their products and services, including providing physicians with all expense paid trips to Europe and resort destinations and other types of “freebies” and making payments under sham medical director and consulting arrangements and speaking engagements.
Very often, these actions result in settlements of tens and even hundreds of millions of dollars. In light of the potential for heightened government scrutiny and costly litigations and settlements, vendors need to be extremely cautious in their dealings with physicians (or other providers or entities which are in a position to generate referrals of items and services that are reimbursed by federal health care programs such as Medicare).
This article provides a brief overview of some of the legal issues that impact vendor-physician arrangements and offers some examples of “do’s” and “don’ts” when structuring an arrangement.
Legal Issues
The recent federal enforcement actions have focused on two main federal laws governing the payment of illegal kickbacks (the Anti-Kickback Statute or “AKS”) and the physician prohibition on making self-referrals (the Stark law). (Note, in addition, each state may have its own version of these laws, the discussion of which is outside the scope of this article).
The Anti-Kickback Statute . The AKS makes it a crime for any person to knowingly and willfully solicit, receive, offer or pay remuneration: (i) to induce or reward referrals; or (ii) in return for purchasing, leasing, ordering or arranging for any item or service, which is reimbursable by a federal healthcare program. Violations of the AKS can result in criminal prosecution, substantial civil penalties and exclusion from participation in federal healthcare programs. Several regulatory “safe harbors” exist under the AKS - if an arrangement meets all of the criteria of a safe harbor it will be considered compliant with the AKS. However, failure to meet a safe harbor does not necessarily make an arrangement illegal; ultimately, liability under the AKS depends on the parties’ intent.
The Office of the Inspector General (”OIG”), which is charged with ensuring compliance with the AKS, has issued some guidance on the types of permissible vendor-physician arrangements. In general, the OIG’s guidance suggests that vendors should consider the following: (i) whether the incentive to the physician may interfere with clinical decision-making; (ii) whether the physician receives accurate, complete and truthful information; (iii) whether there is a potential to increase costs to federal healthcare programs or beneficiaries; (iv) whether the arrangement poses a risk of overutilization or inappropriate utilization; and (v) whether there are any patient safety or quality concerns.
The Stark Law . The Stark law prohibits a physician from referring certain types of items and services to an entity in which the physician has a financial relationship if such items and services will be paid for by the Medicare/Medicaid programs. As with the AKS, there are several exceptions to this general prohibition. However, unlike the AKS, the Stark law is a strict liability statute, which means that a financial relationship must satisfy all of the requirements of an exception in order to be compliant. A financial relationship includes both an ownership and a compensation interest.
Industry Guidance
In addition to the OIG, several industry organizations have promulgated codes of ethics or codes of conduct which provide valuable guidance on structuring arrangements with physicians. Some of the more comprehensive examples of such guidance include the Advanced Medical Technology Association (AdvaMed) Code of Ethics on Interactions with Health Care Professionals and the Pharmaceutical Research and Manufacturers of America (PhRMA) Code on Interactions with Healthcare Professionals. Compliance with industry codes is voluntary and does not necessarily mean that an arrangement is legal. However, adherence to industry codes of ethics will likely be viewed as a good faith compliance effort by enforcement authorities. For instance, the OIG’s Compliance Guidance for Pharmaceutical Manufacturers expressly recommends that pharmaceutical vendors, at a minimum, comply with the PhRMA Code.
“Do’s” and “Don’ts” - Structuring Compliant Arrangements
Whether a vendor-physician arrangement passes muster under the above described federal laws must be considered on a case-by-case basis. No “magic formula” exists. Set forth below is a list of “do’s” and “don’ts” based on guidance from the OIG and the AdvaMed and PhRMA codes of ethics, which may help reduce the risk of an impermissible arrangement:
Certain types of arrangements should be avoided altogether. For example:
* “tying” arrangements (providing cash, gifts or other benefits contingent upon physician referrals of the vendor’s products),
* “switching” arrangements (offering cash or other benefits for changing a patient’s prescription to the manufacturer’s product from a competing one), and
* “detailing” (compensating for time spent listening to marketing information).
Gifts of cash or cash equivalents (i.e. gift certificates) are highly suspect and should be avoided.
Other types of gifts should be of minimal value (e.g., less than $100) and should primarily benefit the patients or serve an educational function, such as, for example, anatomical models and text books. Promotional products are acceptable if they relate to the physician’s practice - pens and notepads are acceptable; golf balls are not.
If the arrangement is subject to the Stark law, it must comply with one of the applicable exceptions for gifts - for example, a vendor may provide non-cash gifts with an aggregate annual value of up to $329 (adjusted annually) if such gifts are not solicited by the physician and do not take into account referrals generated by the physician. Additionally, a hospital may provide certain incidental benefits to all members of its medical staff if such benefits are of nominal value (less than $28 dollars, adjusted annually), do not take into account referrals generated, and are utilized at the hospital in connection with the provision of medical services.
Product support services (e.g. basic training on product utilization, reimbursement consultation, and billing assistance) are generally not suspect because such services are not considered to have substantial independent value. However, note that if product support services are accompanied by a service which confers an independent benefit on a referring provider, the arrangement will raise red flags. For example, offering a reimbursement guarantee which eliminates a provider’s financial risk in conjunction with reimbursement support services is suspect.
Vendors may give informational presentations regarding their products if such presentations are “modest,” informational and provide scientific and educational value.
Manufacturers may pay a direct subsidy to a Continuing Medical Education (CME) conference organizer provided that the subsidy is used to reduce conference fees for all attendees. The PhRMA Code prohibits a vendor from directly paying for a physician’s travel, lodging, meals, or other personal expenses. By contrast, AdvaMed’s Code allows a manufacturer to compensate the physician for reasonable travel and modest lodging - a conservative approach would be to avoid payments for these items altogether.
Vendors should ensure that they are not using CME programs or other educational/promotional presentations to pay improper remuneration to physicians in a position to generate business. Vendors should not influence or control the content of any educational programs and should follow FDA guidelines with respect to their involvement.
Research whose only purpose is to generate business or promote a product should be avoided.
When engaging physicians to provide research services, vendors must ensure that any such program: (i) is not initiated or directed by marketing personnel; (ii) includes genuine scientific oversight; (iii) avoids unnecessary or duplicative research; and (iv) is not a post-marketing pretense to promote a product.
All consulting and medical director agreements should attempt to meet the AKS safe harbor for personal services and, if applicable, the Stark law exception for personal services. At a minimum, the parties should ensure that: (i) a signed written agreement is in place; (ii) there is a legitimate need for the physician’s services; (iii) the required services are actually provided; and (iv) the compensation is fair market value. These facts should be documented prior to paying the physician, and the arrangement should be monitored on an on-going basis to ensure that the parties’ written agreement reflects their actual practice.
Generally, fair market value payments to a small number of physicians are unlikely to raise fraud and abuse concerns by the OIG, provided that such payments are for bona fide and reasonable consulting and advisory services. Entering into arrangements with a large number of physicians may raise concerns that some or all of the physicians are not providing legitimate and necessary services and instead are being compensated for referrals.
Paying physicians for consulting or advisory services where the physicians are expected to attend conferences and meetings in a passive capacity is suspect.
Entering into consulting arrangements with physicians for marketing services such as “ghost-writing” and speech-making implicates the AKS and other laws. Such arrangements must be carefully structured to ensure that the marketing practices in general and the physician’s involvement, in particular, is compliant.
In conclusion, many types of vendor-physician arrangements are common business arrangements in the health care industry that are necessary to promote advancements in medicine, science and technology. In recent years, however, the proliferation of a variety of these arrangements has resulted in increased federal government scrutiny, much of which is often initially triggered by “whistleblower” actions by former employees of vendors. Thus, in light of this enforcement environment, vendors should review their inventory of arrangements and conduct an in-depth legal compliance analysis. The various industry codes of ethics, while not carrying the force of law, can provide meaningful, practical guidance for structuring compliant arrangements and serve as a good educational resource for employee training. By: Anjana D. Patel and Alexandra Miller Khorover http://www.metrocorpcounsel.com/current.php?
Millions of dollars in Medicaid funding, now they file for BANKRUPTCY......
Another one bites the dust.......or did they ? Where is that money?
Federal Agents Search Middletown Offices of Haven Health Care
HARTFORD, Conn. (AP) _ Federal task force agents have searched the Middletown offices of a troubled nursing home company that has filed for bankruptcy and is facing allegations that it misused millions of dollars in Medicaid funding.
U.S. attorney's office spokesman Tom Carson says members of the multi-agency Health Care Fraud Task Force executed search warrants at Haven Healthcare's headquarters beginning Thursday.
Carson would not comment on what agents were looking for or what they have found. The task force includes agents from the FBI, the inspector general's Health and Human Services Office and the IRS. State authorities are also investigating the company.
Haven Healthcare operates 35 nursing homes in New England, including 15 in Connecticut. The company filed for Chapter 11 bankruptcy in federal court last week, and is facing allegations that it diverted Medicaid funds to business deals unrelated to health care, including the Nashville country music label Category 5 Records.
Federal Agents Search Middletown Offices of Haven Health Care
HARTFORD, Conn. (AP) _ Federal task force agents have searched the Middletown offices of a troubled nursing home company that has filed for bankruptcy and is facing allegations that it misused millions of dollars in Medicaid funding.
U.S. attorney's office spokesman Tom Carson says members of the multi-agency Health Care Fraud Task Force executed search warrants at Haven Healthcare's headquarters beginning Thursday.
Carson would not comment on what agents were looking for or what they have found. The task force includes agents from the FBI, the inspector general's Health and Human Services Office and the IRS. State authorities are also investigating the company.
Haven Healthcare operates 35 nursing homes in New England, including 15 in Connecticut. The company filed for Chapter 11 bankruptcy in federal court last week, and is facing allegations that it diverted Medicaid funds to business deals unrelated to health care, including the Nashville country music label Category 5 Records.
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