The regulatory environment is deep with rules governing how healthcare organizations (HCO) behave. One particularly strict law is the Stark Law, governing how HCOs interact with referring physicians. The law prevents HCOs from paying physicians unless a safe harbor is met. Assuming the HCO takes proper care in setting up this agreement, problems can still arise in how the agreement is operationally managed over time. If not followed exactly as written, the organization may fall outside the safe harbor rendering the organization in violation. Because the law is non-intent based, the OIG will not be swayed if the HCO inadvertently violates the law. Meaning, even if there is a technical violation of the law, the full wrath of the law applies.
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As we have seen in recent industry news, the Stark Law settlements stretch quickly into the millions of dollars. Additionally, we are seeing physicians being held personally accountable, also facing large fines and potential criminal punishment since the Fraud Alert released by DOJ in June of 2015. Soon after, the Yates Memo has made it abundantly clear that executives in offending HCOs will also be personally held accountable. The compliance risk is extremely high without the proper knowledge in your organization's tool belt. We have put together five pitfalls that can cost the HCO big money. These instances apply to physician logging errors when they are turning in time logs to be reimbursed for primarily administrative time:
1.) Time and process related - This type of error might relate to the timing of the submission by the physician. For example, the agreement states the physician should submit their time within 60 days following the end of the billing cycle. Should the physician forget or get behind and walk in with 12 months of submissions this can present a rather large problem. Another common process error might be the time log is illegible or even submitted twice for the same period.
2.) Not a compensable duty - This error applies to the content written by the physician on the time log. For example, the physician agreement specifies a list of compensable duties. The most common error is the organization pays the physician for things that are not part of the agreement. It may be a clear violation, for example, the physician submits that she performed one hour of peer review yet the contract does not specify peer review is covered. It may fit into a gray area, like when a physician submits time for attending a community event and includes her travel time when the travel time specifically is not specified. It's of utmost importance to be detail-oriented and writing and following your physician agreements to avoid any error.
3.) Fair market value - FMV presents an interesting potential pitfall in two ways. It is set at the start of the agreement and if not deemed fair, it is a clear violation. The other pitfall is that the agreement is not followed as written thus is outside of FMV. As an example, there is an annual maximum in the agreement of 50 hours yet the physician is paid for all 75 submitted. These are technical violations, ie: a monthly maximum is overlooked. Something this small an unintentional can come back to cost your organization big money.
4.) Mathematical errors - Errors can occur when calculations are done manually and/or when the math doesn’t make sense. For example, a physician will be paid $500 for 24 hours of cardiac call and $750 hours of 24-hour vascular call. If shifts are counted incorrectly and an over payment or underpayment occurs, it is a technical violation. In other instances the math doesn’t make sense and therefore is not followed as written. A common error is when physicians will be paid up to 10 hours per week, with time logs being submitted monthly. Because weeks don’t fit nicely into months, the math works out that monthly the physician should not be paid more than 43.33 hours.
5.) Agreement setup is unclear - This error is when the agreement is silent on important variables. For example, a physician will be paid $5,000 per quarter without reference to a number of required hours or an hourly rate. Physician agreements should be very clear in identifying the number of hours and the hourly rate used in establishing the agreement. Details and specificities in the agreement can help your organization avoid these pitfalls later.
Avoid all these common errors by using the right software to assist in operationally managing agreements. The complexities of today’s agreements require machines to do the calculations and to support HCO operators in managing these complexities.
Learn more about how Ludi can help your HCO avoid pitfalls and optimize your workflow by scheduling a demo today!