Stark Law And Hospice: What You Need To Know

does the stark law apply to hospice

The Stark Law, or the Physician Self-Referral Law, prohibits physicians from referring patients to providers of designated health services covered by Medicare or Medicaid if the physician or their family has a financial relationship with the provider. While referrals to hospice are currently exempt from the Stark Law, the law does apply to referrals for palliative care, which most hospice companies also provide. Hospice centers have faced scrutiny for potential Stark Law violations, particularly with the rise of hospices offering upstream services like palliative care and home health services.

Characteristics Values
What is the Stark Law? A long-standing piece of legislation designed to address conflicts of interest in physician referrals.
What does it aim to do? Prevent any kind of kickback, or payment for referrals of patients from one provider to another.
What is it officially known as? The Physician Self-Referral Law.
When was it introduced? 1989, as part of the Omnibus Budget Reconciliation Act.
What is it made up of? The Anti-Kickback Statute, The False Claims Act, and The Federal Civil Monetary Penalties Law.
Who does it apply to? Any healthcare service provider (physicians, hospitals, nursing homes, etc.) that receives reimbursement from a Medicare or Medicaid program.
What else does it apply to? Any organization that provides services related to these programs, e.g. laboratory and imaging facilities.
What does it prohibit? Physicians referring patients to providers of designated health services covered by Medicare or Medicaid if the physician or a family member has a financial relationship with the provider of the service.
What happens if a provider has a financial relationship with the referring physician? The organization cannot bill Medicaid, Medicare, third-party payers, or individuals for those services.
What are Designated Health Services (DHS)? Radiology and imaging, inpatient and outpatient hospital, occupational therapy, outpatient speech-language pathology, home health services, outpatient prescription drugs, durable medical equipment, prosthetics, orthotics, and prosthetic devices, parenteral and enteral nutrients and equipment, and related supplies.
What is an example of an illegal kickback? A tenant has a payment arrangement involving a service that can be covered by Medicaid that is part of the rental agreement.
What are the consequences of a violation? Steep financial penalties and potential imprisonment.

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Hospice fraud and abuse

One of the most common forms of hospice fraud is billing fraud, which includes improper billing practices and accepting or retaining ineligible patients. In one example, a provider billed for 17 days of general inpatient care for a 70-year-old Medicare beneficiary who was never visited by a caregiver. Another case involved a hospice owner using recruiters to enroll beneficiaries who were not eligible for hospice care in the first place. These schemes not only defraud the government out of hundreds of millions of dollars annually but also deprive eligible patients of the care they need.

Predatory recruiting is a significant concern for investigators. This involves hospice providers targeting vulnerable individuals, including those who cannot read or write, and enrolling them in hospice care without their full understanding or consent. Deceitful tactics, such as offering free house cleaning, drugs, or trips to the doctor, are used to solicit these individuals. In some cases, recruiters avoid using the word "hospice" to avoid raising concerns. This predatory behaviour not only takes advantage of vulnerable individuals but also undermines the trust and integrity of the hospice industry.

Physician kickbacks in exchange for patient referrals are another prevalent issue. In certain instances, hospices have been found to have agreements with doctors, offering them monetary incentives for each patient referred. This creates a conflict of interest and can lead to unnecessary or inappropriate referrals. Additionally, hospices have been known to provide excessive dosages of drugs, such as morphine, to justify receiving higher hospice payments, resulting in significant patient injury or even death.

To combat hospice fraud and abuse, the U.S. Department of Health and Human Services' Office of Inspector General (OIG) has made hospice investigations a significant part of its active work plan. OIG special agents are on the lookout for illicit marketing maneuvers and unlawful physician kickback arrangements. They are also pushing for stricter rules and regulations to address the vulnerabilities in the system. The Centers for Medicare and Medicaid Services (CMS) have a crucial role in implementing these changes and holding hospices accountable for their practices.

While the exact extent of hospice fraud is challenging to determine due to its deceptive nature, it is clear that it results in significant economic and human tolls. Increased oversight, stricter regulations, and collaboration between government agencies and hospice providers are essential to addressing this pressing issue and ensuring that patients and their families receive the high-quality end-of-life care they deserve.

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Hospice physician arrangements

The Stark Law is designed to address conflicts of interest in physician referrals and protect patients from unethical or unnecessary referrals. It applies to any healthcare service provider that receives reimbursement from a Medicare or Medicaid program, including physicians, hospitals, and nursing homes. The law also applies to any organization that provides services related to these programs, such as laboratory and imaging facilities.

Hospices should be particularly careful when providing upstream care, such as palliative care or home health services, as these services may trigger the application of the Stark Law. Regulators may pay closer attention to hospice physician arrangements as they diversify their services in this area. To prevent incidents of non-compliance, hospices must establish referral relationships carefully and avoid tying compensation directly to admitting or certifying patients.

It is important for hospices to understand the specifics of the Stark Law and its exceptions to ensure compliance. While there are safe harbors and exceptions to the law, navigating these legal loopholes can be challenging and it is recommended to seek guidance from a legal professional experienced in healthcare law. Non-compliance with the Stark Law can result in significant financial penalties and potential imprisonment.

In summary, hospice physician arrangements must be structured with caution to ensure compliance with the Stark Law. By understanding the law and its exceptions, hospices can avoid legal repercussions and protect the interests of their patients.

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Hospice safe harbors

While referrals to hospice are currently exempt from the Stark Law, the law does apply to referrals for palliative care, which most hospice companies also provide. The Stark Law, or the Physician Self-Referral Law, prohibits physicians from referring patients to providers of designated health services covered by Medicare or Medicaid if the physician or a family member has a financial relationship with the service provider. The law is designed to address conflicts of interest in physician referrals and protect patients from unethical or unnecessary referrals. It also ensures that healthcare providers are paid fairly for their work.

To navigate the complex nature of the Stark Law and its exemptions, hospice providers can seek legal advice. Certain ownership and investment interests, compensation arrangements, and employee roles may be considered exempt under specific circumstances. For example, employees at a medical practice can be exempt from the Stark Law if their actions are supervised by a physician, the services are provided in the same building as non-designated services, and the billing is handled by the physician.

It is important to note that updates to the Stark Law are ongoing, and revisions are made to address changing healthcare landscapes, such as the inclusion of palliative care and technological advancements. These revisions aim to improve care coordination, remove barriers to innovation, and maintain safeguards within the healthcare system.

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Hospice compliance

The Stark Law prohibits physicians from referring patients covered by Medicare or Medicaid to other providers with whom they have a financial relationship. This includes any healthcare service provider, such as physicians, hospitals, and nursing homes, that receive reimbursement from Medicare or Medicaid programs. The law is designed to protect patients from unethical or unnecessary medical referrals and ensure fair compensation for healthcare providers. It also helps prevent fraud and abuse by prohibiting financial incentives for referrals or unnecessary medical procedures.

To ensure compliance with the Stark Law, hospices must be cautious when structuring referral arrangements. They should avoid tying compensation directly to admitting or certifying patients and instead focus on paying for assessments or specific services at a flat or hourly rate. This helps prevent the appearance of kickback schemes, which are among the most common forms of hospice fraud and abuse.

In addition to the Stark Law, hospice centers must also comply with the Anti-Kickback Statute (AKS). The AKS prohibits offering, paying, or receiving anything of value in exchange for referrals, recommendations, or arrangements for services reimbursable by Medicare, Medicaid, or other federal healthcare programs. Violation of the AKS is a felony punishable by steep financial penalties and potential imprisonment.

To summarize, hospice compliance entails adhering to laws like the Stark Law and AKS, which aim to protect patients and ensure ethical practices in the healthcare industry. By carefully structuring referral arrangements and avoiding kickback schemes, hospice centers can maintain compliance and provide quality care to their patients.

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Hospice fraud settlements

Hospice fraud is a serious issue that can take multiple forms, including false claims, improper care, patient abuse, and kickbacks. Hospice fraud not only results in financial losses but also potentially compromises the care and well-being of vulnerable terminally ill patients.

One common form of hospice fraud is false claims, which can involve billing for services that were not provided, billing for a higher level of care than what was actually delivered, or enrolling patients who are not eligible for hospice care. Improper billing practices can also extend to double-billing, where both Medicare and the patient's insurance are charged for the same services.

Another form of hospice fraud is kickbacks, where physicians are offered illegal incentives to refer patients to hospice or certify them as terminally ill. This violates the Stark Law, which prohibits physicians from referring patients to providers of designated health services if they have a financial relationship with the provider.

Improper care and patient abuse are also significant concerns in hospice fraud cases. This can include providing care by unqualified staff, withholding necessary treatments, or falsifying medical records to make non-terminal patients appear terminally ill.

To combat hospice fraud, whistleblowers play a crucial role in exposing misconduct and abuse. The False Claims Act empowers individuals with knowledge of fraud to report it and provides financial incentives for whistleblowers, with a portion of the recovered funds going to those who come forward.

Frequently asked questions

The Stark Law, or the Physician Self-Referral Law, was first introduced in 1989 as part of the Omnibus Budget Reconciliation Act. It prohibits physicians from referring patients to providers of designated health services covered by Medicare or Medicaid if the physician or a family member has a financial relationship with the provider of the service.

Currently, referrals to hospice are exempt from the Stark Law. However, the law does apply to referrals for palliative care, which most hospice companies also provide. If hospices have financial relationships with physicians, they need to be aware of the Stark Law and ensure compliance.

Violating the Stark Law can result in steep financial penalties and potential imprisonment. In addition, non-compliance can lead to negative repercussions for the organization's reputation and operations. It is important to seek legal guidance to navigate the complexities of the law and ensure compliance.

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