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Physicians and private practice: 3 key federal regulations

Physicians generally enter the medical field to help patients. For many, this means starting, joining, or buying a private practice. When this happens, a physician becomes more than just a medical provider — they become a business owner. As such, our government expects these professionals to follow certain rules. These can range from local ordinances to federal regulations.

The easiest way to protect your practice against allegations of violations is to know how to protect your organization. The first step is having a basic understanding of how these laws work. Compliance will reduce the risk of allegations of a violation. Three of the most important federal regulations to follow include the following.

#1: The False Claims Act (FCA)

This law makes it a violation to knowingly submit or cause the submission of a false or fraudulent claim to the federal government. In these cases, the federal government is generally Medicare or Medicaid. A knowing submission includes both actual knowledge as well as reckless disregard. The United States Centers for Medicare and Medicaid Services (CMS) notes that one of the more common examples of an FCA violation involves a physician intentionally billing Medicare for a higher level of medical service than what the practice actually provided for the patient. Another common example includes billing for medically unnecessary services.

A violation can result in monetary fines of up to three times the damages as well as additional fees. There is also the possibility of criminal charges which can lead to even more financial penalties and, depending on the severity of the allegations, imprisonment.

#2: The Anti-Kickback Statute (AKS)

This regulation makes it illegal for a physician to knowingly and willfully pay or receive remuneration for patient referrals or other business generating tactics for services that are reimbursed by the federal government. Again, the federal government refers to patients who use Medicare or Medicaid. Remuneration can mean anything of value, from trips to actual cash payments. The government recently cracked down on lavish meals and entertainment as forms of remuneration in these cases.

A violation can result in fines, imprisonment, and the exclusion from participation in federal government programs in the future.

#3: The Self-Referral Law, also known as the Stark Law

This regulation makes it illegal to refer patients to another health provider where the physician or an immediate family member has a financial interest. This includes lab and radiology services, both inpatient and outpatient services and even nutrients and supplies. Penalties can include required repayment, additional fines, and exclusion from federal programs.

What if the government accuses my practice of a violation?

A violation of any of these regulations can result in allegations of Medicare fraud. Lawmakers intend these laws to help better ensure physicians and other medical providers are motivated by patient care and not financial gain, but the government makes mistakes when it applies these regulations. False allegations of a violation are not uncommon. Those who find themselves in this situation are wise to take the matter seriously.

There are defenses to allegations of Medicare fraud. When it comes to AKS violations, for example, the physician’s actions may fall within a safe harbor. Safe harbors are essentially exceptions to the rule. The physician or practice must meet various requirements in order to fall within a safe harbor exception. This is just one of many options to explore when building a defense against allegations of a violation.