MRA Alerts and Updates: 10/23/13

Wednesday, October 23, 2013

Physician Self Referrals May Be Cut By Bill To Narrow Stark

Submitted by brad@physiciansnews.com on October 22, 2013 – 2:16 pm

By Neil W. Hoffman and H. Carol Saul

The federal physician self-referral statute, known as the Stark law,[1] prohibits a physician from referring to an entity for the furnishing of a designated health service if the physician (or immediate family member) has a financial relationship with the entity, unless the referral complies with a Stark exception. Physicians have long relied on the In-Office Ancillary Services Exception[2]when structuring ancillary service models as part of their medical practices.

However, the proposed “Promoting Integrity in Medicare Act of 2013,” being referred to as “PIMA,” (H.R. 2914) would eliminate this exception for advanced imaging (which includes MR and CT), anatomic pathology, radiation therapy, and physical therapy. PIMA would also increase the penalties under Stark for the newly prohibited self-referrals. If passed into law, H.R. 2914 will require physician practices that currently provide these ancillary services to restructure or unwind these service models completely.

H.R. 2914

H.R. 2914 was introduced in the U.S. House of Representatives on August 1, 2013 by Jackie Speier (D-CA), Jim McDermott (D-WA), and Diana Titus (D-NV). The bill cites recent reports by the U.S. Government Accountability Office (GAO) and the Medicare Payment Advisory Commission (MedPac) finding that physician self-referrals in the areas of advanced imaging, anatomical pathology, radiation therapy, and physical therapy drive up Medicare costs and negatively impact patient care.

According to Congresswoman Speier, “[n]ot only is Medicare wasting hundreds of millions each year on unnecessary or inappropriate care, in some cases it is downright harmful, such as when patients receive unnecessary CT scans, which involve the use of ionizing radiation that has been linked to an increased risk of developing cancer.”[3] Supporters of the bill include the American Clinical Laboratory Association, the American College of Radiology, and the American Physical Therapy Association, among other industry organizations.[4]

Opponents of H.R. 2914—which include the American Medical Association, the American College of Surgeons, and the American Urology Association, among other physician organizations[5]—argue that it would create barriers to care and drive up costs by forcing patients to obtain services at higher cost centers, such as hospitals and free-standing centers.[6]

According to the Coalition for Patient Centered Imaging, which represents various physician organizations, “H.R. 2914 would . . . force patients to receive services in a new and unfamiliar setting, increase costs, present significant barriers to appropriate screenings and treatments, and make health care less accessible.”[7] Others argue that the studies cited in the bill are flawed and that, if passed, independent physicians will lose the ability to compete in the market.[8]

Conclusion

The business implications of H.R. 2914 obviously are significant for both supporters and opponents of the bill. But if passed, its impact will be particularly felt by those physicians who have invested in these ancillary service lines in reliance on this Stark exception as it has existed up to now. The bill would go into effect one year after passage, requiring physicians to discontinue self-referrals for the targeted health services.

http://www.physiciansnews.com/2013/10/22/physician-self-referrals-may-be-cut-by-bill-to-narrow-stark/

Sugar Land physician sentenced to federal prison for diagnostic testing scam

Submitted
U.S. Attorney’s Office, Southern District of Texas | Posted: Tuesday, October 22, 2013 1:57 pm

Donald Gibson, II, 57, of Sugar Land, is headed to prison following his conviction of conspiracy to commit health care fraud relating to medically unnecessary diagnostic testing and physical therapy, United States Attorney Kenneth Magidson announced today. Gibson entered a plea of guilty to conspiracy to commit health care fraud on April 1, 2013.

Today, U.S. District Judge Lynn H. Hughes, who accepted the guilty plea, took into consideration Gibson’s cooperation with federal authorities and handed him a sentence of 52 months in federal prison. Judge Hughes also ordered restitution in the amount of $6,943,478.87. The United States previously seized approximately $2.62 million in Gibson’s assets and froze another $505,455 Medicare was to pay to Gibson. As a result, these two amounts totaling $3,129,175 will be applied to Gibson’s restitution and subsequently returned to Medicare program.

As part of the scheme to defraud, Gibson ordered, prescribed, and authorized medically unnecessary diagnostic tests and other procedures, which included allergy tests, pulmonary function tests, vestibular tests, urodynamic tests, and physical therapy, among others. These services were then billed to Medicare and Medicaid for payment under Gibson’s billing number. Gibson worked in conjunction with the owners and operators of medical clinics and diagnostic testing centers in the Houston area. As part of the scheme, Medicare patients were paid to show up at the clinics for testing. Patient recruiters were also paid for recruiting and bringing patients to the clinics for the unneeded testing.

From January 2007 through January 2012, Gibson caused more than $19.4 million in medical claims to the Medicare and Texas Medicaid Programs. As a result, Medicare deposited approximately $8.5 million into a bank account owned and controlled by Gibson.

Gibson’s co-defendant, Sunday Joseph Edem, is scheduled to be sentenced by Judge Hughes on November 18, 2013.

This case is the result of a joint investigation involving multiple federal and state agencies, including agents and investigators of the U.S. Department of Health and Human Services-Office of Inspector General, Railroad Retirement Board, Secret Service, Drug Enforcement Administration, FBI, and the Texas Attorney General’s Medicaid Fraud Control Unit. Special Assistant U.S. Attorney Justin Blan and Assistant U.S. Attorney Andrew Leuchtmann are prosecuting this case with Assistant U.S. Attorney Kristine Rollinson overseeing the asset forfeiture.

Omnicare agrees to settle kickback case for $120M

CINCINNATI (AP) — Omnicare Inc., the nation's biggest dispenser of prescription drugs in nursing homes, said Wednesday it will pay $120 million to settle a whistle-blower lawsuit accusing the Cincinnati-based company of giving kickbacks to facilities in return for more patient referrals.

Under the settlement agreement, reached Tuesday, Omnicare does not admit liability. The agreement still needs to be approved by the Department of Justice and federal court, Omnicare said in a Securities and Exchange Commission filing Wednesday.

"Omnicare continues to deny that there was any wrongdoing," Patrick Lee, vice president of investor relations at Omnicare, said in a statement to The Associated Press.

"The company agreed to settle the matter in order to avoid continued litigation and to focus on its mission of helping to ensure the health of seniors and other patient populations in a cost-effective manner," Lee said. "Omnicare is committed to ensuring that it remains in strict compliance with all applicable laws, regulations and standards in each of the markets and jurisdictions in which it operates."

The settlement is the result of a lawsuit filed in federal court in Cleveland in 2010 by an Ohio pharmacist named Donald Gale who worked for Omnicare from 1993 until 2010, his attorneys say.

Gale, who stands to get between 25 and 30 percent of the settlement — or up to $36 million — accused Omnicare of violating the federal anti-kickback statute, which prohibits anyone from lying in applications for benefits under a federal health care program, such as Medicare.

The lawsuit accused Omnicare of giving steep discounts for prescription drugs to nursing homes for some Medicare patients in exchange for the referrals of other patients at higher prices paid for by the federal government.

"What Omnicare would do some of the time, when it wanted to keep the business of a nursing home, it would say, 'Well, we'll give you rock-bottom or below-cost prices on the drugs of your Medicare Part A patients' ... to get the rest of the patients to pay higher," said Virginia Davidson, one of Gale's attorneys.

She called the settlement a "pretty significant figure" and praised Gale, a 45-year-old resident of Wadsworth in northeastern Ohio, for filing the lawsuit.

"Not too many people sitting at work getting a paycheck are going to stand up and risk their livelihood by pointing out illegal conduct," she said.

The federal government would get between 65 and 70 percent of the settlement, or up to $84 million.

Omnicare settled another major lawsuit in 2009, when it agreed to pay $98 million stemming from allegations that it paid kickbacks to nursing homes to gain their business, and received kickbacks for buying and recommending drugs.

Omnicare's stock fell 5.7 percent to $54.16 in afternoon trading.

http://www.mysanantonio.com/news/article/Omnicare-agrees-to-settle-kickback-case-for-120M-4919948.php

Pennsylvania Doctors Allowed to Say “I’m Sorry”

Submitted by brad@physiciansnews.com on October 22, 2013 – 8:11 pm

By Brad Broker

“I’m sorry.”

Those are very powerful words, particularly when used by a doctor. They can provide the slightest bit of comfort to a patient — or the family of a patient — and also allow the health care provider to express sincere compassion in a time when treatment did not meet expectations or worse, a loss occurred.

Doctors in Pennsylvania may finally be allowed to utter that phrase out loud. Not exactly groundbreaking legislation as 36 other states already have similar laws in place. However, for a state with an historically aggressive malpractice climate, the news is a giant leap forward.

Pennsylvania’s House of Representatives today passed the Benevolent Gesture Medical Professional Liability Act (SB 379) by a unanimous vote of 202-0. Earlier in the year, the state’s Senate passed the measure 50-0. This bill allows doctors to make benevolent gestures and not have those statements used against them as long as such statements are not an admission of negligence or fault.

“As physicians, it is part of our job – part of our moral and ethical responsibility – to respond to patients and families when there are less than favorable outcomes,” said C. Richard Schott, MD, president of the Pennsylvania Medical Society and a practicing cardiologist. “Medicine is not an exact science, and outcomes may be unpredictable. Benevolent gestures are always appropriate and physicians should not have to fear giving them.”

However, physicians should be aware that there are still restrictions as to what they should say and what can still be used against them in a malpractice suit. Mary Kate McGrath, an attorney with Marshall Dennehey Warner Coleman & Goggin in Pennsylvania, recently wrote:

Attempts to explain what happened during the course of treatment will remain admissible, even if the statements are made in the context of an apology. Words can be misinterpreted, therefore, it would be beneficial for health care providers to have communications be brief and witnessed by a third party. In order to enjoy the protections of the Apology Act at trial, it is essential for health care providers to know the difference between “I’m sorry” and “I was wrong.”

While some of the details will become clearer in time, docs can take a breath and know that, at minimum, they are allowed to say “I’m sorry” without worrying if it may later haunt them.

“This bill will help improve patient-doctor communications, while also helping trial lawyers who often have people call them thinking they have malpractice cases when the physicians didn’t say they were sorry,” said Dr. Schott.

The bill now moves to the governor’s desk for his signature.

http://www.physiciansnews.com/2013/10/22/pennsylvania-doctors-allowed-to-say-im-sorry/

Justice Department announces $12 million health-care fraud settlement with mail-order diabetic supply company, owners

The Justice Department on Tuesday announced a $12 million settlement with a mail-order diabetic supply company and its owners who have agreed to pay the fines to resolve civil and criminal health-care fraud charges stemming from an investigation into a kickback scheme involving Medicare and Tricare.

Owners of Kansas-based Global Medical and parent company Global Medical Direct, Robert Shea and Mark Franz, agreed to pay $7 million to settle charges that they submitted false claims to the government health care programs.

The companies also agreed to pay $5 million in proceeds to resolve a civil enforcement action.

The announcement came from New Orleans U.S. Attorney Kenneth Polite, whose office worked with federal prosecutors in Kansas, where the companies are based. The Office of Inspector General for the U.S. Department of Health and Human Services and the FBI worked on the investigation.

Shea and Franz are barred from participating in any federal healthcare program for 20 years as part of the deal, the Justice Department said.

Authorities said the investigation found that between April 2008 and January 2012, the owners engaged in a kickback scheme by entering contracts with marketing and insurance brokerage companies with a high percentage of diabetes patients that were referred for diabetic supplies. The federal anti-kickback statute makes it illegal to pay or get payment for patient referrals because of the potential for billing abuse of programs such as Medicare, the Justice Department said.

http://www.bayoubuzz.com/louisiana-news/new-orleans-news/item/541500-justice-department-announces-12-million-health-care-fraud-s

States' Refusal To Expand Medicaid May Leave Millions Uninsured

Originally published on Wed October 23, 2013 3:47 am

By Julie Rovner

Credit Joe Raedle / Getty Images

Protesters fill the Miami office of Florida state Rep. Manny Diaz Jr. on Sept. 20 to protest his stance against expansion of health coverage in the state.

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4:48

President Obama Tuesday appointed one of his top management gurus, Jeffrey Zeints, to head the team working to fix what ails Healthcare.gov, the troubled website that's supposed to allow residents of 36 states enroll in coverage under the Affordable Care Act.

But even if the team gets the website working as it should, millions of Americans may still log on to discover that they aren't eligible for any health coverage at all. And that won't be due to any technical glitch. It's because their state has decided not to expand its Medicaid program.

This is not the way the health law was designed and enacted, says Bruce Siegel.

"Originally the idea was that millions and millions of Americans would get health insurance," says Siegel, president and CEO of America's Essential Hospitals, a group that represents safety net institutions around the country. "They'd get coverage through Medicaid or through private insurance on the exchanges."

Currently in most states you have to be a child, be pregnant or disabled to get Medicaid. The health law was supposed to change all that — expanding the program to include nearly everyone with incomes up to about 133 percent of the federal poverty level, or about $15,000 a year for an individual.

But in the summer of 2012, when the Supreme Court upheld the health law as constitutional, it did something unexpected, Siegel says. "They said states had the option of expanding their Medicaid program or not expanding it. And that led to a very, very different landscape than what we expected."

Even with Ohio's decision earlier this week to opt in, still only half the states have said they will expand their Medicaid programs, even though the federal government is paying the entire cost of the additional people for the first three years, and 90 percent going forward.

As a result, according to the Urban Institute, between 6 and 7 million low-income uninsured adults live in states that are so far not expanding their programs.

And some of those states have among the largest populations of low income uninsured people.

"Over 3 million of them live in just four states," says Genevieve Kenney, senior fellow and co-director of the Urban Institute's Health Policy Center. Those states are Florida, Texas, Georgia and North Carolina.

The problem, says Kenney, is that for many of those people the law offers them nothing. Because they were supposed to get Medicaid, they're not eligible to buy private insurance at the exchanges unless their incomes are above the poverty line. That's about $11,000 a year for an individual.

"I think it's going to be confusing for individuals who are applying for coverage," says Kenney. "It certainly makes the message about the new affordable coverage that's available a lot more complicated to target."

Among the people who could get left behind is Ellen Wall. She's a nanny and sometime music teacher from Atlanta. She says her income fluctuates, but most years it's right around the poverty line. She says as long as she can pay her bills, she doesn't mind earning that amount.

"I love doing what I do because I'm very good at what I do, that's why I've chosen this profession," she says. "But there are those years when it's quite lean and then I'm just barely making it. And what am I gonna do if something comes up and I'm really sick and I need some help?"

Wall doesn't have and hasn't had health insurance. She says that was a real problem a few years back when she was in the hospital after an asthma attack.

"It was kind of a very embarrassing situation to be in, not to have the health insurance that could have covered that few days that I was in the hospital," she said.

If Wall lived in a state expanding Medicaid she would clearly qualify. But so far, Georgia isn't. And her income may or may not be high enough to let her qualify for help buying private coverage on the state's exchange. So she'll likely remain working, poor and uninsured.

Most advocates say people like Wall should turn to community clinics and public hospitals if they can't get insurance. But there's a problem there, too, says public hospital advocate Siegel. The health law cut funding for public hospitals because it assumed so many more people would have insurance. But in those states that aren't expanding Medicaid, the need for free care is likely to go up instead of down.

"Many of these hospitals will be overwhelmed," Siegel says. "Some of them are already overwhelmed; many of them are already losing money, providing a high level of service to people in need. And this will simply not be a tenable position."

Public and other hospitals are among those lobbying hard for Medicaid expansion in the states that so far have opted not to expand their Medicaid programs. Some states are still considering opting in. But in others, patients left behind may have to scramble even harder to find care if they get sick.

http://kalw.org/post/states-refusal-expand-medicaid-may-leave-millions-uninsured

Sugar Land Doctor Gets Prison for $6.9M Medicare Fraud

A Houston-area physician has been sentenced to more than four years in prison and must repay $6.9 million in a medical scam related to unnecessary care.

A federal judge in Houston on Monday sentenced 57-year-old Dr. Donald Gibson II of Sugar Land.

Gibson in April pleaded guilty to conspiracy to commit health care fraud. Prosecutors say the scheme started in 2007 and Gibson submitted bogus claims to the Medicare and Texas Medicaid programs.

Investigators say Gibson, who was sentenced to 52 months in prison, ordered medically unnecessary testing and physical therapy for Medicare and other patients.

Gibson worked with operators of medical clinics and diagnostic testing centers. Recruiters were paid for getting patients to clinics for unneeded examinations.

http://www.nbcdfw.com/news/local/Sugar-Land-Doctor-Gets-Prison-for-69M-Medicare-Fraud-228770301.html