This era may turn out to be the heyday of healthcare law enforcement.
Yes, that is a big statement, but the evidence in its favor is mounting: a new 516-page set of Stark self-referral rules; an ambitious, 111-page outline enforcement plan for 2008 from HHS inspector generals office; an advisory opinion on emergency room coverage arrangements; the never-say-never prosecution of a former Tenet Healthcare Corp. lawyer; a huge kickback settlement by medical-device makers; renewed interest from antitrust regulators; and a crackdown by the Internal Revenue Service on a range of practices by not-for-profit hospitals.
(Last week, the Justice Department said healthcare false claims recoveries fell by $650 million in fiscal 2007, but the comparison was skewed by Tenets whopping $920 million settlement in 2006.)
Now we can add to the pile on the fact that two for-profit chains that have largely flown under the radar of fraud and abuse enforcement may not be immune after all (Nov. 5, p. 12). Universal Health Services says the feds have widened a probe of its physician contracts in Texas. And Community Health Systems says the Justice Department is alleging that three of its hospitals in New Mexico were involved in a false claims scam.
A huge share of the legal activity continues to center on hospitals increasingly desperate efforts to rein in their rainmakersthe physicians.
This is clearly not a good time for shenanigans in physician recruitment and retention, even though the rulesno matter how mind-numbingly detailed they becomealways seem to leave more than a little wiggle room for, shall we say, creative financing arrangements.
In fact, this whole arena could become another spinoff of a popular TV show. Call it Law & Order: Physician Hospital Relations Unit.
If you can boil down Stark II, Phase III to a simple plot, it is that HHS is frustrated over all those loopholes you clever healthcare people have spotted and flown through. Many of the schemes result in overutilization for a wide array of items, many of them related to buildings and equipment in which doctors have an ownership stake. Docs are also tacking on services unrelated to the conditions with which patients present during a visit.
A lot of the new scrutiny is being directed at physician-owned imaging centers and how patients wind up in them.
Beyond Stark, a recent HHS inspector generals office opinion warns again that unless properly structured, hospital payments to physicians for providing emergency department coverage are potential violations of anti-kickback statutes.
Physicians are also at the center of the case against Christi Sulzbach, who left Tenets counsel job four years ago. Even though Tenet has put the case in its rear-view mirror, Justice is now suing Sulzbach for allegedly certifying to HHS back in the mid-90s that Tenet was complying with federal laws even though she was aware of a dozen physician contracts at a Florida hospital that violated prohibitions against self-referral.
Even nonhospital cases involve relationships with doctors. The feds forced a $311 million settlement with five medical-device makers that goes to the heart of using phony consulting gigs and direct payments to doctors to influence their choice of things such as implants. An even larger settlement, for $515 million from Bristol-Myers Squibb, included charges of illegal marketing to doctors.
The lessons in all of this activity arent crystal clear, but perhaps they should be. Getting physicians to do what you want them to do should be based on the quality of care and reputation, not how clever your lawyers or marketing staffs seem to be. And, whatever you do, the feds may be paying closer attention than ever before.