Last week’s Alert brought a new Fraud Alert from the Office of the Inspector General (OIG) to readers’ attention.  The OIG is on the lookout for arrangements in which physicians receive compensation for medical director services that are intended to induce referrals of patients.  We wish the OIG were equally interested in the anti-kickback statute ramifications of the “company model,” in which anesthesiologists are asked to share their clinical revenues and thus compensate other physicians and/or facilities for referrals. We last wrote about company model-like behavior in our Alert dated November 18, 2013 (The OIG Rejects Another Attempt to Take a Franchise Fee from Anesthesiologists), and some of our readers have asked us to address the issue again. Third parties have continued to seek to enter into company model arrangements.  In February 2014, the American Society of Anesthesiologists (ASA) renewed its request that the OIG amend several of the anti-kickback statute safe...

In today’s anesthesiology environment, all groups are trying to size up their best option to survive and thrive into the future. Some try to go it alone and others sell out to practice management firms, while others seek or are forced into hospital employment. Another option that many groups are considering is merging with other anesthesiology groups. Why are anesthesiology groups considering mergers? Mergers: Allow them to maintain a higher level of autonomy than any other option, Prevent the groups from being played off against each other by hospitals or managed care companies, Build clout, Create the ability to hire needed management expertise, and Allow them to move towards economies of scale. In addition, today’s healthcare environment is influencing many hospitals to merge or join systems. When hospitals integrate they often want to work with a single anesthesiology group to cover all their facilities. When this happens, many anesthesiology groups consider...

The Office of the Inspector General (OIG) reported in May 2015 that Medicare made up to $33.4 million in overpayments for claims on which the place of service (POS) was coded incorrectly during the period from January 2010 through September 2012.  (Incorrect  Place-of-Service Claims Resulted in Potential Medicare Overpayment Costing Millions.)  Reports finding that Medicare has overpaid usually lead to heightened scrutiny of the conduct at issue.  Thus it is important that pain physicians, anesthesiologists and their billing staff understand POS coding. The Medicare Physician Fee Schedule provides for payment at a higher rate for services performed in doctors’ private offices (the “nonfacility” rate) than for the same services performed in a “facility” such as a hospital or ambulatory surgical center (ASC).  The difference accounts for the increased practice expense that physicians generally incur by providing care in their offices and other nonfacility locations, including private clinics.  When a physician provides...

The Comprehensive Error Rate Testing (CERT) Program is designed to measure improper payments in the Medicare Fee for Service Program (FFS), as required by the Improper Payments Information Act of 2002. The Program was initiated by Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS) to achieve the agency’s mission to emphasize accountability and to pay claims appropriately. The Program produces national, contractor-specific and service-specific paid claim error rates, as well as a provider compliance error rate. The improper paid claim error rate is a measure of the extent to which the Medicare program is paying claims correctly. The provider compliance improper error rate is a measure of the extent to which providers are submitting claims correctly. The fiscal year (FY) 2014 Medicare FFS program improper payment rate is 12.7 percent, representing $45.8 billion in improper payments, compared to the FY 2013 improper payment rate of 10.1 percent...

On June 30, CMS is going to release information on payments made to physicians during 2014 by pharmaceutical, device and other manufacturers.  This will be an update to the information made public for the first time in September, 2014.  The current database is available at https://openpaymentsdata.cms.gov/. Open Payments is a national program that promotes transparency by publishing data on the financial relationships between the health care industry (applicable manufacturers and group purchasing organizations, or GPOs) and health care providers (physicians and teaching hospitals).  In 2014, CMS published 4.45 million payment records, transfers of value, or instances of ownership/investment interest that occurred over the last five months of 2013. These financial transactions totaled nearly $3.7 billion.  (CMS, Annual Report to Congress on the Open Payments Program for Fiscal Year 2014.) The program requires “applicable” manufacturers and GPOs to report payments of $10 or more, or of $100 or more per year in...