Certain physician recruitment and retention activities found to be suspect.A new "Fraud Alert" from the Office of Inspector General Noun 1. Office of Inspector General - the investigative arm of the Federal Trade Commission
independent agency - an agency of the United States government that is created by an act of Congress and is independent of the executive departments of the Department of Health and Human Services Noun 1. Department of Health and Human Services - the United States federal department that administers all federal programs dealing with health and welfare; created in 1979
Health and Human Services, HHS will cause hospitals to be especially circumspect cir·cum·spect
Heedful of circumstances and potential consequences; prudent.
[Middle English, from Latin circumspectus, past participle of circumspicere, to take heed : in their dealings with actual and potential members of the medical staff. The authors analyze the alert and its potential impact on hospitals and physicians. "Health Law" is a regular feature of Physician Executive contributed by Epstein Becker & Green. Mark Lutes of the firm's Washington, D.C., office serves as editor for the column.
On May 7, 1992, the Department of Health and Human Services (HHS HHS Department of Health and Human Services. ) Office of Inspector General (OIG Noun 1. OIG - the investigative arm of the Federal Trade Commission
Office of Inspector General
independent agency - an agency of the United States government that is created by an act of Congress and is independent of the executive departments ) released a Special Fraud Alert addressing financial incentives offered by hospitals and other health care facilities to recruit and retain physicians. The Fraud Alert enumerates current recruitment and retention practices that OIG finds to be suspect under the Medicare/Medicaid antikickback statute and warns that such practices may be subject to prosecution. Although the Fraud Alert appears to be directed at hospitals that offer recruitment incentives, exposure to liability under the antikickback statute extends to both hospitals and physicians who benefit from recruitment or retention incentives.
The list of suspect activities ranges widely, from those long considered to be flagrant violations of the statute, such as payments to physicians for each patient referred to a hospital, to fairly typical physician "perks," such as payment for continuing medical education continuing medical education See CME. courses and travel to conferences, as well as training for physician office staff in medical coding. Other suspect arrangements listed include free or significantly discounted office space or equipment, free or significantly discounted billing services, income guarantees, low-interest loans, and inappropriately low-cost physician low-cost physician Medical practice A popular term for a generalist or primary care physician. Cf High-cost physician. coverage in hospital group insurance plans.
This "broad brush" treatment provides no distinction as to which activities are considered more egregious than others. Such a lack of distinction is likely to confuse and alarm many hospitals and physicians and also fails to provide useful guidance to the health care industry.
Moreover, the Fraud Alert fails to make clear that some of the enumerated This term is often used in law as equivalent to mentioned specifically, designated, or expressly named or granted; as in speaking of enumerated governmental powers, items of property, or articles in a tariff schedule. activities may qualify for protection if offered to physician employees. In particular, the employee exception under the antikickback statute protects payments made by an employer to an employee who has a bona fide [Latin, In good faith.] Honest; genuine; actual; authentic; acting without the intention of defrauding.
A bona fide purchaser is one who purchases property for a valuable consideration that is inducement for entering into a contract and without suspicion of being employment relationship with the employer for the provision of Medicare- or Medicaid-covered items or services. Presumably pre·sum·a·ble
That can be presumed or taken for granted; reasonable as a supposition: presumable causes of the disaster. , incentives offered to physician employees should be immune from prosecution, but the Fraud Alert does not so state.
The Fraud Alert also fails to recognize that many socalled "incentives" identified in the Fraud Alert benefit not only the physician, but also the offering hospital. For instance, physician training in CPT CPT
See: Carriage Paid To coding procedures may enable hospitals to bill Medicare properly for patients who receive outpatient services outpatient services Hospital-based services Managed care Medical and other services provided, to a nonadmitted Pt, by a hospital or other qualified facility–eg, mental health clinic, rural health clinic, mobile X-ray unit, free-standing dialysis unit Examples at the hospital. Similarly, payment to physicians for continuing medical education ensures that physicians on the medical staff maintain appropriate skills, and thus may be a significant risk management tool for hospitals.
Even more troubling is that the Fraud Alert does not distinguish between benefits offered to retain existing medical staff members on the one hand and to recruit new medical graduates and physicians from different geographic areas on the other hand. Benefits aimed at the latter group of physicians, who are not sought for their existing patient base but, rather, for their medical expertise, have long been viewed as a necessary and proper component of hospital activities and have been expected to receive eventual safe harbor Safe Harbor
1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated.
2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. treatment. Indeed, hospitals and physicians generally have come to rely on the OIG's informal recognition of a significant distinction between the recruitment of physicians who are new to a geographical area, to an area of specialty practice, or to practice in general, in contrast to the retention of existing practitioners in the community.
Such a distinction was drawn in the language of a proposed safe harbor draft addressing physician recruitment that was informally released by the OIG to the health care industry several years ago. This proposed safe harbor would permit an entity to provide benefits to a physician to induce that physician to establish staff privileges staff privileges Admitting privileges The rights that a health professional has as a member of a hospital's medical staff, which includes hospitalization of private Pts, participation in committees, and in decisions relevant to the hospital's future. at a health care facility. Protection from antikickback liability would be limited to a physician who is relocating and starting a new practice or who has been practicing within his or her current specialty for less than one year. In the preamble to the final safe harbor regulations, published July 29, 1991, HHS specifically stated that It was considering a new safe harbor provision for practitioner recruitment because of the need to protect some recruitment activities for physicians. Thus, it is clear that such a safe harbor has been contemplated.
The Fraud Alert does include a footnote that states that HHS is considering a new safe harbor that would grant protection for certain hospital incentives for physicians starting a new practice. However, the Fraud Alert states definitively that "such a concept would have no legal effect whatsoever until promulgation PROMULGATION. The order given to cause a law to be executed, and to make it public it differs from publication. (q.v.) 1 Bl. Com. 45; Stat. 6 H. VI., c. 4.
2. as a final regulation." Thus, until this safe harbor is published in final form, hospitals will not have any formal guidelines from the OIG regarding the scope of legitimate physician recruitment activities and will have only the Fraud Alert to rely on for guidance.
The broad language of the Fraud Alert also raises concerns about how the Internal Revenue Service, which has provided past guidance on physician recruitment activities that is not necessarily consistent with the Fraud Alert, will henceforth view physician recruitment and retention by hospitals. In recent months, through a variety of pronouncements and publications, the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. has been moving closer to OIG's positions on fraud and abuse in connection with the IRS' analysis of private inurement/private benefit concerns in hospital-physician relations. It is anticipated that a General Counsel Memorandum will be published soon that addresses physician recruitment and retention from the IRS standpoint. This new IRS statement could prove to be very important for many hospitals and physicians as the IRS implements its new audit guidelines for exempt organizations. The IRS also is expected to examine hospital/physician agreements that provide incentives to determine if there is proper reporting of physicians' income tax liability.
Given the Fraud Alert's extremely broad approach, and until further clarification is obtained through the promulgation of additional safe harbor regulations, physicians can expect hospitals to be engaging in careful scrutiny of their recruitment and retention programs.
Carrie Valiant, Esq., and Rebecca Roberts Rebecca Roberts is an American journalist. She serves as a substitute host for Morning Edition, Talk of the Nation, and Weekend Edition Sunday on National Public Radio. Biography
Born to reporters Cokie and Steve Roberts, Roberts earned a B.A. , Esq., are health care attorneys at the law firm of Epstein Becker & Green, P. C.