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August 1996
Volume 60 |
Number 8
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PRACTICE MANAGEMENT
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| Ophthalmologist
Convicted of Fraudulent Billing, Sentenced to Prison Time |
Karin Bierstein
Practice Management Coordinator
Many anesthesiologists have registered their concerns over a
recent article on the op/ed page in The Wall Street Journal
suggesting that innocent billing errors could land a physician
in prison under proposed revisions to the Medicare fraud and abuse
laws. Last January's conviction of a Montana ophthalmologist for
inflating nurse anesthetist time was based on facts showing willful
and intentional fraud. Contrasting the behavior that resulted
in an actual prison sentence with the hypothetical violations
in the op/ed article -- rendering services of equivocal medical
necessity, single instances of incorrect coding -- should provide
a reasonable perspective on the enforcement of the fraud and abuse
laws.
In United States v. Erickson, which the U.S. Supreme Court
declined to review on May 28, Bruce L. Erickson, M.D., and co-defendant
Great Falls Eye Surgery Center were convicted by a jury of knowingly
and willfully overbilling Medicare and Medicaid patients. Dr.
Erickson, who had lost privileges at a local hospital, was a 50-percent
owner of the eye surgery center. The center had started operations
in 1989 and had first come to the attention of the Health Care
Financing Administration (HCFA) in 1990. The HCFA agent who investigated
the center's billing practices in 1991 found that the center routinely
charged Medicare for overlapping nurse anesthetist services, billing
as many as 27 hours for the services of a single nurse anesthetist
in a 10-hour workday.
In 1992, the center had changed the way it billed Medicare after
consulting with another eye surgery institution in Utah. The new
system recorded continuous back-to-back blocks of nurse anesthetist
services, with the anesthesia time for one patient beginning immediately
after the anesthesia time for another patient had ended. This
suggested to the HCFA agent that the billing periods must include
pre- and/or postoperative stretches of time when the nurse anesthetist
was away from the patient. Apparently, the defendants acknowledged
that the patients were not continually attended, since they chose
to challenge the Medicare regulation stating that "time units
involve the continuous actual presence of the physician..."
as being unconstitutionally vague. The Court of Appeals disagreed,
however. It found that both on its face and as commonly understood
by other providers:
"the regulation clearly limits CRNA [certified registered
nurse anesthetist] reimbursement to periods when the CRNA is actually
with and looking after the patient. The regulation requires 'personal
attendance' that is said to cease when the patient is placed in
the care of another."
The court also rejected arguments regarding jury selection, various
evidentiary rulings and the jury instructions. Accordingly, it
upheld the convictions of both Dr. Erickson and the center but
remanded to the district court for an explanation of why the district
court had sentenced Dr. Erickson to just two months of prison
time, instead of the 21 to 27 months stipulated in the federal
sentencing guidelines.
It is clear that the conviction turned on the defendants' knowledge
and intent to obtain Medicare reimbursement exceeding the value
of the services actually provided. It is both fortunate and unfortunate
that there are enough instances of intentional fraud that the
government is unlikely to pursue improper billing arising from
genuine confusion or ambiguities in the rules.
As this column is written, Congress still has not taken final
action on health insurance reform legislation, one portion of
which clarifies the requirement that both knowledge and intent
be present to establish Medicare fraud. The provision as drafted
by the Republican leadership appears generally satisfactory, especially
in that it permits physicians, for the first time, to seek advisory
opinions on ambiguities in the Medicare rules.
Financial Arrangements With Hospitals: Are You Being Asked for
Illegal Kickbacks?
Hospitals are increasingly viewing anesthesiologists and other
hospital-based specialists as a source of potential revenue. Stipends
and other payments to anesthesiologists for management and coverage
or for on-call services provided to the hospital have been reduced
or eliminated. Radiologists have been asked to buy high-priced
and duplicative practice management services from the hospital.
The ASA Washington Office has heard a report of at least one hospital
requiring the anesthesiologist to pay a large annual "rental"
fee in exchange for an exclusive contract.
All of these forms of payment to hospitals violate the federal
anti-kickback statute, section 1112B(b) of the Social Security
Act. The anti-kickback law makes it illegal to offer, pay, solicit
or receive remuneration for referring patients or for arranging
for or recommending the ordering of any service payable under
Medicare or Medicaid. This broad language covers indirect as well
as direct forms of remuneration and places both the recipient
and the payer (i.e., the physician) in violation.
In 1991, the Inspector General of the Department of Health and
Human Services issued a Management Advisory Report, "Financial
Arrangements Between Hospitals and Hospital-Based Physicians,"
which listed examples of questionable arrangements, such as:
* A radiologist group pays 25 percent of the profits exceeding
$120,000 to the hospital for capital improvements. Fifty percent
of the profits exceeding $180,000 go toward this purpose.
* A hospital provides no, or token, reimbursement to pathologists
for Medicare Part A services in return for the opportunity to
perform and bill for Part B services at that hospital.
The report concluded: "All of these examples appear to violate
the statute because they provide compensation to the hospitals
that exceeds the fair market value of the services the hospitals
provide under the contracts." Analysis of all the circumstances
surrounding the agreements would be necessary to establish actual
violations.
If you are asked to forgo fair market value payment for your services
to the hospital or for monetary contributions to a hospital fund
as a condition of being allowed to provide anesthesia services
to Medicare/Medicaid patients, you may want to ask that the hospital
give you a formal legal opinion, in writing, on the lawfulness
of the arrangement.
Copies of the Inspector General's Management Advisory Report can
be obtained from Joan Heffernan in the ASA Washington Office at
(202) 289-2222.
Do Exclusive Contracts for 'Anesthesia' Services Encompass Pain
Medicine?
The ASA Washington Office occasionally receives calls from members
who want to know whether the existence of a contract giving one
anesthesiology group the exclusive right to provide anesthesia
services for the hospital's patients can legitimately preclude
other anesthesiologists from practicing pain medicine at that
hospital.
In most states, courts have upheld hospital exclusive contracts
and the consequent denial of privileges to anesthesiologists not
affiliated with the group that has the contract. Some of our callers
are hoping to make the argument that the exclusive contract does
not affect privileges for anything other than "anesthesia
services" narrowly defined. Others contend that "anesthesia
services" should be broadly defined so as to prevent newcomers
from performing any medical services provided (actually or potentially)
by the incumbent group.
As far as we know, there are no statutory or regulatory provisions
that would favor one view or the other, and therefore, general
rules of contract interpretation govern. The inclusion of pain
codes in the ASA Relative Value Guide, which has the subtitle
"A Guide for Anesthesia Values," provides at least some
indirect evidence of a consensus on a broad definition of anesthesiology.
It would seem difficult, though not necessarily impossible, to
establish that the hospital and the group with the exclusive contract
intended to exclude pain management, critical care or any other
services that anesthesiologists might commonly provide unless
the parties said so.
The moral here appears to be that anesthesiologists negotiating
and drafting exclusive contracts might wish to circumscribe any
future disputes over the extent of the exclusivity by spelling
out all of the services they mean to cover. Lawyers are regularly
criticized for the length of their documents; perhaps here we
have an example of why a few more words in the contract would
sometimes be helpful to all concerned.
Calculating Anesthesia Capitation Rates
Manual Now Available
ASA's new Practice Management manual, Calculating Anesthesia
Capitation Rates, is now available for purchase. This manual
describes one method for calculating profit, loss and per-member-per-month
fees for a capitation proposal in an anesthesia practice. The
reader is guided step by step through numerous examples. The manual
provides an extensive discussion of data (and adjustments) required
for a capitation proposal.
Calculating Anesthesia Capitation Rates is available for
$40 per copy, which includes shipping and handling (Illinois residents
add 7.75 percent sales tax). All publication orders must be prepaid
and should be forwarded to the ASA Publications Department, 520
N. Northwest Highway, Park Ridge, IL 60068-2573.
1997 Practice Management Conference Scheduled
The third annual Practice Management Conference will take place
in Orlando, Florida, on Friday through Sunday, February 21-23,
1997. Plan to register early -- the Phoenix (1995) and New Orleans
(1996) conferences were sellouts. Among the new topics that will
be addressed are Medicare fraud and abuse law and its enforcement.
The importance of this topic is borne out by the $42 million-plus
netted by the government in the first year of its new health fraud
enforcement program, Operation Restore Trust.
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