• Do You Have a Culture of Compliance?
  • April 1, 2014
  • Law Firm: McDonald Hopkins LLC - Cleveland Office
  • The increased scrutiny of physician financial relationships creates substantial risks for a broad range of hospitals, physicians and other healthcare providers, whether they refer patients or rely on referrals from others. Financial arrangements, including those entered into in good faith, face potential challenges by employees and competitors turned whistleblowers and government officials that can be costly to all parties involved. These include providers who submit claims generated by tainted referrals, as well as to those generating the referrals. Physicians, hospitals and other healthcare providers face exposure for false claims, Stark Law violations and charges of illegal kickbacks. Even if never viewed as criminal activities, these violations can result in civil monetary penalties, mandatory exclusion (including executives of hospitals and other providers) and discipline by a state medical board or other licensing authority. Moreover, once your name is listed as having violated one of these provisions, private insurance companies routinely follow through by terminating your coverage as well.

    Financial arrangements should be structured in a manner to best address potential attacks by prosecutors and regulators, who tend to view such arrangements with cynical eyes, as well as by whistleblowers and their attorneys. Each financial arrangement that potentially implicates the Stark Law, anti-kickback statute or similar state laws needs to be examined in light of the particular circumstances, keeping in mind that an arrangement may be acceptable in some practice settings but not others. For example, the incentive bonus formula that resulted in findings of Stark Law and FCA violations in the Halifax case could be structured to comply with the Stark Law if implemented appropriately within a group practice.

    Reexamination of existing financial relationships is appropriate in light of the aggressive positions recently taken by the government. It is crucial to maintain a culture of compliance through effective compliance programs and training, and to take internal complaints seriously. Of note, the whistleblower in the Halifax case filed her qui tam action only after she brought the issues to management's attention and felt her concerns were being ignored. Going forward—take it seriously.