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Summer 2009


Understanding Some of the Legal Risks Facing Anesthesia Practices

Like many of you, I am amazed at the still increasing volume of legal regulation affecting the practice of medicine. Medicare has launched major new enforcement initiatives. The Federal Trade

Commission has inserted itself into payment systems for professional services. Those are just two of the topics that I have asked a talented set of lawyers to address in this issue of the Communiqué.

While we are all embroiled in trying to influence or at least to understand the direction of Healthcare Reform and this summer’s hot topics of payment and coverage, let us not forget that “eliminating waste” has always been an objective of the Medicare and private payer programs. The federal Department of Health and Human Services’ Office of the Inspector General (OIG) first began publishing its “guidances” on compliance programs for hospitals, for physician group practices, and, yes, for billing companies in the late 1990s. There have been very few prosecutions of private anesthesia practices (academic departments have experienced a much higher relative hit rate through the teaching hospital PATH audits)—probably because so many of us have been so careful to satisfy the rules. We must acknowledge, of course, that anesthesia services account for only about 2 percent of Medicare spending on physician services (or about $2 billion on anesthesia), and that there are providers offering far greater potential returns to the watchdogs who uncover fraud and abuse. Nevertheless, it is a good idea for all medical practices, including anesthesia groups, to follow rigorous compliance programs, and those programs should reflect recent enforcement activities.

First among those is the Medicare Recovery Audit Contractor (RAC) program, the topic of the lead article in this issue. Abby Pendleton, Esq. and Jessica Gustafson, Esq. review the origins of the RAC program and its basic rules and also describe in detail what anesthesiology and pain practices can do to prepare for potential record requests from these new bounty hunters. Their advice goes beyond protecting oneself against a RAC audit; they also review the sound documentation procedures that will be helpful in any Medicare audit.

I mentioned the FTC. This federal agency is familiar to some members of the anesthesiology community in the context of antitrust enforcement. The 2003 “Red Flag” legislation that has caused—rightfully—uproar among physicians is intended to require financial institutions and creditors to implement processes to mitigate identity theft. So far so good. FTC staff, though, has been adamant that physicians who accept insurance automatically extend credit while waiting to determine and collect the patient copayment. The application of the Red Flag rules to physicians has now been postponed several times but we are now advised to plan for implementation on November 1, 2009. The article on Identity Theft Programs by Neda Mirafzali—I am very proud to announce that my daughter is entering her third year at Michigan State University Law School and spent the summer working in a health law firm—will help practices prepare to comply with the Red Flag rules.

Relationships with hospitals are another area in which the law sometimes plays a significant role. Elizabeth Snelson, Esq. calls our attention to the increasing efforts of hospital administration to control the members of its medical staff. Such efforts are understandable given the uncertainty about the direction of healthcare reform and the roles of today’s healthcare institutions. Anesthesiologists need to pay attention to the bylaws and especially to the external plans, manuals and codes of conduct that are being written so as to give the C-Suite a greater say in privileging requirements. I think that some readers will find Ms. Snelson’s article quite eye-opening.

Group dynamics and organization also require attention and an occasional refresher course. Mark Weiss, Esq. discusses the importance of a strategic vision and leadership in what is probably the most readable of the articles in this issue (one can think like a lawyer without always having to write like one!). Robert Iwrey, Esq. describes provisions in group employment contracts that may determine whether an anesthesiologist will be a successful, productive colleague or not. An overview of the advantages of Limited Liability Corporations by Aaron Sherbin, Esq. and Andrew Wachler, Esq., and a summary by Adrienne Dresevic, Esq. and Carey Kalmowitz, Esq. of a recent federal appellate decision on the application of the Stark self-referral rules to a hospital exclusive contract complete the collection of lawyers’ contributions to this issue.

As always, we have also been graced with an article by an officer of the MGMA’s Anesthesia Administration Assembly (AAA). Ms. Cynthia Roehr, AAA’s Legislative Liaison to ASA, deserves kudos for her imaginative cost-savings approach to collecting patient’s copayments and deductibles. I know that Ms. Roehr is eager to receive comments on her concept. We at ABC are equally eager to hear from our readers who have questions about the information we have presented in this and earlier issues of the Communiqué. With your ongoing support, we will be as relevant and informative as we possibly can.

Tony Mira
President and CEO, ABC