Title: Stark, Safe Harbors, and Other Legal Hurdles: What You Need To Know Now
1Stark, 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
2The Primary Hurdles
- Stark
- Fraud and Abuse
- HIPAA
3STARK
4Stark
- 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. -
5General 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.
6A 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.
7Designated Health Services include
- Clinical laboratory
- Imaging
- Radiation therapy services and supplies
- Durable medical equipment
- Hospital services
8A 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.
9Ownership 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.
10Indirect 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.
11Compensation 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.
12Exceptions to both Ownership/Investment Interest
and Compensation
13In-Office Ancillary Services
- Furnished by referring physician, member of
group, person supervised - Location requirements
- Billing requirements
- Additional DME conditions
14Exceptions to Ownership/Investment Interest
15Exceptions to Compensation Arrangements
16Exception 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
17Recent Stark Changes
- Anti-Markup Rule
- Under Arrangements ventures
- Percentage leases
- Per Click leases
18Possible New Change
19Anti-Kickback Statute(also known as fraud and
abuse)
20General 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
21General 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.
22Safe Harbors
23Example 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
24Ambulatory Surgery Centers
- Requirements vary based on whether the ASC is
- Surgeon-owned
- Single-specialty
- Multi-specialty
- Hospital/Physician
25Health Insurance Portability and Accountability
Act
26Privacy Regulations inGeneral Cover
- Rules for the disclosure and use of protected
health information (PHI) - Individual rights regarding protected health
information - Administrative Safeguards
27Privacy Standards Documentation
- Notice of Privacy Practices
- Business Associate Agreements
- Minimum Necessary Rules
- Policies and Procedures
- Patient Authorizations
- Fundraising, Marketing
28Stimulus 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
29Other Legal Developments
- RAC Audits for physicians
- IDTFs
- Sleep Labs
30Stark, 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