Medicare Compliance & Reimbursement

Doctors' deals with hospitals could be under the lens soon.

The HHS Office of Inspector General is looking into physicians' relationships with hospitals, but it's offering doctors a chance to come forward with potential violations before the hammer comes down.

In an "Open Letter" to providers the OIG displayed on its Web site (www.oig.hhs.gov) the OIG hints that if physicians self-disclose problems, they'll end up owing less money. Physicians may also escape having a rigorous Corporate Integrity Agreement (CIA). Instead, the OIG will just certify that their compliance plan is adequate.

The OIG and other federal bloodhounds are investigating more and more suspect relationships between doctors and hospitals or other providers, notes attorney David Glaser with Frederickson & Byron in Minneapolis.
 
If a physician is renting office space from a hospital and isn't paying the market rate, then he or she could have a legal nightmare waiting to happen, the OIG warns.

Another pitfall is a deal where the facility pays the doctor a salary to serve as its medical director, says Glaser. Any recruiting bonuses the hospital pays the doctor may also attract scrutiny.
 
For example, one of Glaser's clients, a physician  group, had a relationship with a device manufacturer that seemed to be on the up-and-up. But later, the physicians started questioning the manufacturer's intentions, so they ended the partnership and repaid to Medicare a third of the payments they'd received. They kept the other two-thirds because the arrangement had been expensive to enter into.

Things seemed to be settled--until a disgruntled former colleague turned them in, says Glaser. The government decided that refunding the money wasn't enough. The physicians should have gone through self-disclosure. Now the government wants the physicians to enter into a CIA, which would cost more than $100,000 to put in place.

Because the physicians' intentions were pure when they originally received the money, they didn't violate the anti-kickback statute, which depends on intent, Glaser argues.

Physicians should only report problems to the OIG if they believe someone intentionally violated the law, Glaser argues. Figuring out whether a deal was downright illegal, instead of just "looking bad," requires a detailed analysis of the parties' intent and the transaction's value, he adds.