Elizabeth E. Hogue, Esq.
Office: 877-871-4062
Fax: 877-871-9739
E-mail: ElizabethHogue@ElizabethHogue.net
Effective April 1, 2011, providers may not be paid for services rendered if patients have not had appropriate face-to-face encounters with physicians during required time periods. In order for home health agencies and hospices to be paid for services provided, documentation of these
encounters must also meet applicable requirements. Many staff members of agencies and hospices have read communications from CMS, fiscal intermediaries, and other sources that seem to state that Medical Directors
cannot provide face-to-face encounters and documentation of them in order to meet applicable requirements. This conclusion is stress-provoking for staff members because Medical Directors often refer a number of patients to them. If it is true that Medical Directors cannot complete face-to-face encounters and documentation of them, the new requirements aremore likely to be problematic to implement.
On the contrary, Medical Directors and other referring physicians who receive payments from providers for their services may complete face-to-face encounters and documentation so long as the requirements of both
the personal services and management contract safe harbor and the contractual exception are met, as described below.
It is important to note that the above requirements do not apply only to socalled "Medical Directors." This requirement applies whether referring physicians who provide paid consulting services are called "Medical Directors," "Medical Advisors," "consulting physicians" or another title. In
other words, the prohibition applies to all physicians who make referrals and are paid for services, regardless of their title.
In order to meet the requirements referenced above, Agreements between agencies and hospices and physicians who make referrals and receive payments for consulting services must generally comply with the following:
• Enter into a written agreement with physicians, that is signed by providers and physicians, which specifies the services covered by the arrangement.
• The arrangement must cover all of the services to be furnished by referring physicians to providers.
• Aggregate services provided do not exceed those that are reasonable and necessary for the legitimate business purposes of providers.
• The term of each arrangement is for at least one year. To meet this requirement, if an arrangement is terminated during the term with or without cause, the parties may not enter into the same or substantially the
same arrangement during the remainder of the first year of the original term of the agreement. This latter requirement applies only to home health
agencies; not hospices.
• Compensation paid over the term of the agreement is set in advance, does not exceed fair market value, and is not determined in a manner that takes into account the volume or value of any referrals or other business
generated between the parties.
The implications of failure to comply are very serious. Prior to the effective date, if the above requirements are not met, then providers risk renforcement action under the Stark Law and/or the federal anti-kickback statute. If the above requirements are not met beginning on April 1, 2011,
providers risk non-payment for services provided. They also risk violations of the federal False Claims Act, since all requirements for payment have not been met when claims are submitted.
As a practical matter, this means that providers must:
1. Develop standardized or "form" agreements and use them
consistently with all referring physicians who receive consulting fees from them. These Agreements should provide that physicians are paid on an hourly basis in order to meet applicable requirements. Providers cannot
afford utilization of a variety of different agreements that may not meet the requirements described above. Staff must understand that they can use only the standard approved agreement and cannot modify it without advance written approval from a designated, knowledgeable individual.
2. Documentation of services rendered and the amount of time
spent in these activities is crucial. Providers should develop and implement policies and procedures that permit payments to physicians only after appropriate documentation to support payments has been received and reviewed.
3. Providers should not have agreements for consulting services with physicians whose services they do not actually use, even if they make no payments to them. Providers should terminate the agreements if they do not need the services covered by the agreements. Otherwise, it may
appear that the only purpose for the agreements is to induce referrals, as opposed to a documented need for services.
4. Although there are technically no limits on the number of
consulting physicians/medical directors that providers can have at any given time, a large number is likely to invite scrutiny by regulators and should be avoided. How many is too many? The number should certainly bear some relationship to the size of the provider organization and the
geographic area served. Beyond this general guideline, common sense must prevail. The "bottom line" is: Does the Agency have legitimate work for every consulting physician?
5. The commercially reasonable services consulting physicians are asked by providers to perform cannot be related to the volume and value of referrals made. Providers cannot, for example, ask referring physicians to assist with quality assurance activities that entail review by consulting physicians of the charts of patients they referred to the provider so that the more referrals made, the more money consulting physicians make.
Providers cannot use "sample" or "template" agreements to meet the above requirements because they must also meet applicable state requirements which, of course, vary from state to state. Providers who are unsure that their Agreements meet all federal requirements and requirements of the state(s) in which they do business must seek legal
assistance to ensure compliance.
©Copyright 2011 Elizabeth E. Hogue, Esq. All rights reserved. No portion of this
material may be reproduced in any form without the advance written permission of the author. |
