On September 11, 2017, the U.S. Attorneys’ Office for the District of South Carolina announced a settlement with the Family Medicine Centers of South Carolina based in part on allegations that the practice’s internal physician compensation approach violated the Stark Law, and resulted in the submission of false claims to the Medicare and Tricare programs. Family Medicine Centers are a physician-owned chain of family medicine clinics located in and around Columbia, South Carolina.
The allegations in this settlement arose from a lawsuit filed by a physician formerly employed by the Family Medicine Centers of South Carolina under the whistleblower provisions of the Federal False Claims Act. The allegations included the Stark Law was violated by the Family Medicine Center’s (FMC) incentive compensation plan that paid its physicians a percentage of the value of laboratory and other diagnostic tests that they personally ordered through FMC, and then FMC billed the Medicare program. According to the government’s press release, FMC’s physician ceo allegedly reminded FMC’s physicians that they needed to order tests and other services through FMC in order to increase FMC’s profits and to ensure that their take-home pay remained in the upper level nationwide for family practice doctors. Continue reading
An emerging health care compliance issue for hospitals and health systems is a potential liability under the Federal False Claims Act (FCA) based on billing for evaluation and management (“E & M”) services provided by employed physicians. Although potential liability for billing for E&M services (i.e., office visits) is not new, several recent FCA settlements should remind hospitals and health systems that the government may consider the submission of claims for E&M services under improper codes to result in a false claim. Continue reading
The waiver of coinsurance and deductibles owed by patients treated by physicians and other health care providers has come under increased scrutiny recently. Although there are no clear legal prohibitions, commercial health insurers have aggressively pursued out-of-network provides who fail to collect or waive amounts owed by their insureds under different statutory regulations.
On May 31, 2017, the U. S. Department of Justice (DOJ) announced that eClinicalWorks (ECW) agreed to pay a $155 million settlement and enter a corporate integrity agreement with the OIG to resolve allegations that ECW caused its health care provider customers to submit false Medicare and Medicaid claims for meaningful use payments in violation of the False Claims Act (FCA). Under the corporate integrity agreement, ECW agreed to strict compliance and reporting obligations and to provide the latest version of ECW’s EHR software to each of ECW’s current customers free of charge. Continue reading
On July 28, 2016, the U.S. Department of Justice announced, “The Lexington County Health Services District Inc. d/b/a Lexington Medical Center located in West Columbia, South Carolina, has agreed to pay $17 million to resolve allegations that it violated the Physician Self-Referral Law (the Stark Law) and the False Claims Act by maintaining improper financial arrangements with 28 physicians.”
According to the government press release, “The United States alleged that Lexington Medical Center entered into asset purchase agreements for the acquisition of physician practices or employment agreements with 28 physicians that violated the Stark Law because they took into account the volume or value of physician referrals, were not commercially reasonable or provided compensation in excess of fair market value.
Also as part of the settlement, Lexington Medical Center will enter into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services-Office of the Inspector General (HHS-OIG) that requires Lexington Medical Center to implement measures designed to avoid or promptly detect future conduct similar to that which gave rise to this settlement.
Written by: Clay J. Countryman
On April 19, 2016, the United States Supreme Court heard oral argument in Universal Health Services, Inc. vs. United States and Massachusetts ex. rel. Escobar. In Escobar, the Court will decide for the first time whether to embrace the theory of “implied certification” under the Federal False Claims Act (“FCA”), 31 U.S.C. §§3729-3733. Under that theory, a health services provider that requests payment from the Government for providing services while knowing, but not disclosing, that the services failed to meet requirements that were material to payment is deemed to have presented a false or fraudulent claim under the FCA. In other words, the theory states that the provider impliedly certifies that the billed for services meet the applicable requirements merely by submitting the claim for payment. Most Federal circuits which have considered the theory have adopted it in one form or another. Continue reading
During the fall of 2015, the Department of Justice (DOJ) issued several press releases announcing large False Claims Act settlements based on alleged Stark Law violations related to hospital-physician compensation arrangements. The following are three recent False Claims Act settlements involving allegations related to excessive and improper compensation arrangements between hospitals and physicians: Continue reading