Top Takeaways | 2023 Physician Practice Management & ASC Symposium 2023 | Fraud & Abuse Risk Mitigation And Enforcement Trends

In this session, McDermott Will & Emery partners Denise Burke, Tony Maida and Monica Wallace discussed top issues and enforcement trends that physician practice management companies (PPMs) and ambulatory surgery centers (ASCs) should watch to mitigate their fraud and abuse risk.
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In this session, McDermott Will & Emery partners Denise Burke, Tony Maida and Monica Wallace discussed top issues and enforcement trends that physician practice management companies (PPMs) and ambulatory surgery centers (ASCs) should watch to mitigate their fraud and abuse risk. The panel also discussed the potential impact of recent regulatory changes on future enforcement priorities.

Session panelists included:

  • Denise Burke | Partner
  • Tony Maida | Partner
  • Monica Wallace | Partner

In Depth

Top takeaways included:

  1. The federal government recently released False Claims Act recovery data for 2022. While the recovery amounts went down, the number of reported cases actually went up. We anticipate seeing more COVID-19-related enforcement actions. We are also seeing continued government focus on financial arrangements with physicians, including transactions involving physicians receiving preferential investment terms, such as below-fair-market-value purchase prices.
  2. In the most recent revision to the Stark rules, there is a new ability to cure compensation errors. Specifically, if a designated health services (DHS) entity has a compliant written compensation arrangement with a physician and discovers a payment error during the term of the arrangement or within 90 days of termination, the entity can correct or reconcile the compensation error and there is no need to submit a self-disclosure. The US Centers for Medicare & Medicaid Services (CMS) recently said that errors could even be fixed after 90 days from termination, but this requires a close analysis of the facts.
  3. The federal government has started to take steps to settle Stark Self-Referral Disclosure Protocol matters more quickly. Many clients have been waiting six to seven years to resolve disclosures. Last fall, CMS started to implement a first-in, first-out / last-in, last-out approach and we are seeing settlements of disclosures submitted as recently as six months ago. Unfortunately, we are also seeing higher settlement dollar values for more technical issues, up to as high as 10% (as opposed to the 2-3% range we have become accustomed to seeing).
  4. In a recent CMS frequently asked questions (FAQ), the agency stated that physicians that have been mailing prescriptions to patients' homes do not qualify for the location requirement of the in-office ancillary services exception (meaning, according to CMS, that once the federal public health emergency ends on May 11, 2023, and the COVID-19 waiver-on-location requirement ends with it, this practice will need to cease). There is a fair amount of controversy surrounding whether this FAQ is consistent with the regulation. Practices should evaluate their drug-mailing practices and consider whether there are alternative arrangements while this issue remains in flux.
  5. CMS has recently issued a Stark Self-Referral Disclosure Protocol form change to streamline the process. In connection with group practice issues, CMS added a requirement to include the definition of the date of discovery of the violation. This used to be tied to the definition of identifying the overpayment according to the overpayment regulation; now, it is a more nebulous "how did you find it?" exercise.
  6. The Department of Health and Human Services (HHS) Office of Inspector General (OIG) has also changed its FAQ process and created a pathway for obtaining a quicker response whereby questions are submitted for an FAQ response (as compared to submitting a formal advisory opinion request). We note that it remains to be seen how this plays out-it is easier and faster to say "No" or "This poses risk," than to say "Yes."
  7. OIG recently issued an advisory opinion on patient inducement questions that has been generating discussion. In the advisory opinion, OIG approved the practice of giving patients a Visa gift card of up to $75 to encourage them to submit a sample for their at-home colorectal cancer screening test. This is notable because cash and cash equivalents have historically been unprotected. OIG weighed numerous factors in the opinion when it decided that the practice was ultimately low risk. (Reasons for determining low risk include the following: the test is prescribed by a doctor; it is a screening that is intended to be performed very three years and aimed at catching early indications of a large public health issue; and the gift card enticement is not offered until patients have been delinquent in submitting their samples after multiple follow-ups, among other rationale.) The opinion is helpful in demonstrating that the government can be more flexible in its thinking when presented with compelling facts.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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