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Stark, Safe Harbors, and Other Legal Hurdles: What You Need To Know Now

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Title: Stark, Safe Harbors, and Other Legal Hurdles: What You Need To Know Now


1
Stark, Safe Harbors, and Other Legal
HurdlesWhat You Need To Know Now
  • Jeffery P. Drummond
  • Jackson Walker L.L.P.
  • 901 Main Street, Suite 6000
  • Dallas, Texas 75202
  • (214) 953-5781
  • jdrummond_at_jw.com
  • www.hipaablog.blogspot.com

2
The Primary Hurdles
  • Stark
  • Fraud and Abuse
  • HIPAA

3
STARK
4
Stark
  • H.R. 5198 introduced on August 10, 1988 by
    Representative Fortney Pete Stark (D-Cal.)
    Eventually Stark I and the 1993 amendments, known
    as Stark II, were born.
  • Initially created to
  • Limit impermissible physician self-referrals by
    providing a bright line rules as to the types
    of arrangements that are permissible and
    prohibited.
  • Impose penalties severe enough to provide
    incentive for self-enforcement in the industry.

5
General Prohibition
  • A physician who has a financial relationship
    with an entity may not make a referral to that
    entity for the furnishing of Designated Health
    Services (DHS) for which payment otherwise may
    be made under Medicare or Medicaid.
  • An entity that furnishes DHS pursuant to a
    prohibited referral is prohibited from billing
    for the DHS performed pursuant to the referral.

6
A Physician is
  • a doctor of medicine or osteopathy, a doctor of
    dental surgery or dental medicine, a doctor of
    podiatric medicine, a doctor of optometry, or a
    chiropractor.
  • Stark prohibitions extend to immediate family
    members of physicians.

7
Designated Health Services include
  • Clinical laboratory
  • Imaging
  • Radiation therapy services and supplies
  • Durable medical equipment
  • Hospital services

8
A Financial Relationship is
  • a direct or indirect ownership or investment
    interest in any entity that furnishes DHS or
  • a direct or indirect compensation arrangement
    with an entity that furnishes DHS.

9
Ownership or Investment Interests
  • May be through equity, debt or other means,
    including an interest in an entity holding an
    ownership interest in another entity that
    furnishes DHS.
  • Includes stock, partnership interests, LLC
    memberships, loans, bonds or other financial
    instruments that are secured with at least a
    portion of an entitys property or revenue.

10
Indirect Ownership or Investment Interests
  • Exists if
  • between the referring physician and the entity
    furnishing DHS there exists an unbroken chain of
    any number of persons or entities having an
    ownership or investment interests between them
    and
  • the entity furnishing DHS has actual knowledge
    of, or acts in reckless disregard of, the fact
    that the referring physician has some ownership
    interest in the entity.

11
Compensation Arrangements
  • Compensation arrangement means arrangements
    involving any remuneration between a physician
    and an entity.
  • Remuneration generally includes any
    remuneration, directly or indirectly, overtly or
    covertly, in cash or in kind.

12
Exceptions to both Ownership/Investment Interest
and Compensation
13
In-Office Ancillary Services
  • Furnished by referring physician, member of
    group, person supervised
  • Location requirements
  • Billing requirements
  • Additional DME conditions

14
Exceptions to Ownership/Investment Interest
15
Exceptions to Compensation Arrangements
16
Exception Example Equipment or Office Space
Rental
  • In writing
  • Does not exceed what is reasonable for business
  • Term at least 1 year
  • Payment set in advance, consistent with fair
    market value
  • Does not take into account volume or value of
    referrals
  • Would be commercially reasonable without referrals

17
Recent Stark Changes
  • Anti-Markup Rule
  • Under Arrangements ventures
  • Percentage leases
  • Per Click leases

18
Possible New Change
  • Whole Hospital Exception

19
Anti-Kickback Statute(also known as fraud and
abuse)
20
General Prohibition
  • Whoever knowingly and willfully solicits or
    receives any remuneration directly or indirectly,
    overtly or covertly, in cash or in kind
  • (i) in return for referring an individual to a
    person for the furnishing or arranging for the
    furnishing of any item or service for which
    payment may be made in whole or in part under a
    Federal health care program, or (ii) in return
    for purchasing, leasing, ordering any good,
    facility, service, or item for which payment may
    be made in whole or in part under a Federal
    health care program
  • shall be guilty of a felony, and upon conviction
    shall be fined not more than 25K or imprisoned
    maximum 5 years

21
General Prohibition (continued)
  • Also applies to anyone who offers or pays any
    remuneration to induce a person to make a
    referral or to purchase, lease or order any good
    or service.

22
Safe Harbors
23
Example Safe Harbor Space and Equipment Rental
  • In writing
  • Term at least 1 year
  • Specifies entire premises, all equipment covered
    by lease
  • If not full-time lease, specifies intervals,
    length and charge
  • Payments set in advance, consistent with fair
    market value
  • Aggregate space and equipment rented does not
    exceed what is necessary for business purpose

24
Ambulatory Surgery Centers
  • Requirements vary based on whether the ASC is
  • Surgeon-owned
  • Single-specialty
  • Multi-specialty
  • Hospital/Physician

25
Health Insurance Portability and Accountability
Act
26
Privacy Regulations inGeneral Cover
  • Rules for the disclosure and use of protected
    health information (PHI)
  • Individual rights regarding protected health
    information
  • Administrative Safeguards

27
Privacy Standards Documentation
  • Notice of Privacy Practices
  • Business Associate Agreements
  • Minimum Necessary Rules
  • Policies and Procedures
  • Patient Authorizations
  • Fundraising, Marketing

28
Stimulus Bill Provisions
  • EHR provisions (beyond the scope)
  • New Data Breach Rules
  • unsecured PHI is the key
  • Business associates are now treated like covered
    entities
  • Hide rule
  • Marketing/fundraising
  • Accounting for disclosures if you use an EMR
  • Increased enforcement, penalties
  • State AGs can prosecute

29
Other Legal Developments
  • RAC Audits for physicians
  • IDTFs
  • Sleep Labs

30
Stark, Safe Harbors, and Other Legal
HurdlesWhat You Need To Know Now
  • Jeffery P. Drummond
  • Jackson Walker L.L.P.
  • 901 Main Street, Suite 6000
  • Dallas, Texas 75202
  • (214) 953-5781
  • jdrummond_at_jw.com
  • www.hipaablog.blogspot.com
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