2. For Providers who bill Government Funded Programs 2

3. Q: What is the goal of all regulation?
A: Avoid fraud & abuse
Q: How do I safely avoid violations?
A: Use a safe harbor (a provision that specifies that certain conduct will be deemed not to violate a given rule)
3

4. Limits certain physician referrals. It prohibits physician referrals of designated
health services ("DHS") for Medicare and Medicaid patients if the physician (or
an immediate family member) has a financial relationship with that entity.
4

5. Defined
Prohibits a physician from referring
patients to an entity for a health service,
if the physician (or a member of his or
her immediate family) has a financial
relationship with the entity.
Compliance Tips
1. Meet a Stark Law exception
2. Document financial relationships
with referring physicians
3. Have systems to ensure properly
structured payments
4. Watch out for “lease creep”
problems
5. Review productivity bonuses
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Penalties
 Refund of payment
 $15,000 civil monetary penalty
 Civil assessment up to 3X the claim
 False claims act liability
 Exclusion from Federal Healthcare
Programs
3 Question Test
1. Is there a referral from a physician
for a designated health service?
2. Does the physician (or immediate
family member) have a financial
relationship with the entity providing
the health service?
3. Does the financial relationship fit in
an exception?
An immediate family member is defined as a spouse or a child,
sibling, parent, grandparent, step-child, step-parent, step-sibling.

6.  Gifts
 Radiology
 Outpatient Prescription Drugs
 Hospital (inpatient or outpatient) services
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7. Found in Section 1128B(b) of the Social Security Act, AKS prohibits the
knowing and willful paying of “remuneration” to induce or reward patient
referrals or the generation of business involving any item or service payable by
the Federal health care programs.
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8. Defined
Knowingly and willfully paying of
remuneration to induce or reward patient
referrals or the generation of business
involving any item or service payable by
the Federal health care programs.
Compliance Tips
1. Use a safe harbor
2. It’s a “one purpose” test
3. FMV for actual/necessary services
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Penalties
NOTE:
Remuneration Includes anything of value.
 Criminal fines up to $25K/violation
 Felony conviction with up to a 5 year prison
term
 CMP up to $50K/violation
 False Claims Act liability
 Civil assessment up to 3X the kickback
 Exclusion from Federal Healthcare
Programs

9. Violations
 Cash
 Free rent
 Expensive hotel stays/meals
 Excessive compensation for medical
directorships or consultancies
 Kickbacks
 Bribes
 Rebates
 Waivers of payments due
 Gifts
 Taking gifts is not justified by the argument
that you would have otherwise prescribed
even without a kickback
 Above/below market rent/lease
 Discounts
 advertising or routinely waving copays
 Furnishing supplies, services or equipment
free, above/below market
 Above or below market credit
arrangements
Real Life Examples
 Hospital paying staff physicians to attend conferences in their
areas of specialty
 Contract between DME company and marketing company paid
marketing company percentage of business it developed for
DME company through its marketing program
 Physician or other supplier routinely waives coinsurance and
Physician or other supplier routinely waives coinsurance and
deductible amounts for Medicare and Medicaid beneficiaries
 Hospital offers free training for physician’s office staff in CPT
coding or laboratory techniques
 Company provides free surgical packs (sutures, gloves, etc.)
with purchase of company’s intraocular lens
 Physician investors are offered shares in joint venture
laboratory based on volume of referrals they could make
 Pharmaceutical company offers 1,000 frequent flier miles every
time physician starts patient on certain drug and completes a
marketing questionnaire
 Ambulance service seeking exclusive contract with city hires
city employee who is part of bid committee to be a “consultant”
reimbursing him with cash, cars, and trips
 Struggling hospital pays 2 physicians $70 for each patient they
admit--payments are designated as “consulting fees
 Pacemaker Manufacturer offers doctor $250 for each of it’s
Pacemaker the doctor implants
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10. 1. The agreed time or circumstances for referring the patient must clinically
appropriate;
2. The physician to whom the patient is referred has special expertise required by the
patient;
3. The parties receive no payment for the referral and do not split the fees paid; and
4. The only compensation received by the parties is for services actually rendered by
the parties.
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11.  Investment Interests
 Large publicly traded entities, with certain criteria
 Small entities, with certain criteria
 Sale of a medical practice
 Warranty
 Joint ventures in underserved areas
 Cooperative hospital services organization (CHSO)
 Investments in group practices
 Sales of physician practices to hospitals in underserved areas
 Practitioner recruitment in underserved areas
 Hospital/Physician ASC’s; surgeon-0wned ASC, single specialty ASC, multi-specialty ASC
 Personal services and management contracts
 Space and equipment rental
 Employees
 Discounts
 Price reductions to health plans
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Failure to Meet Safe Harbor means
• The arrangement is NOT covered by the
Statute (i.e., not intended to induce a
referral)
OR
• The arrangement may be a criminal
violation subject to prosecution!

12.  Our office managers taking gifts to our referring physicians
 Paid speaking engagements for drug manufacturers of which you prescribe their drug
 Office rents
 Expensive dinners paid by drug manufacturers
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13. Establishes civil liability for offenses related to certain acts, including knowingly presenting a false or
fraudulent claim to the government for payment, and making a false record or statement that is
material to the false or fraudulent claim.
13

14. Defined
 “Knowingly” includes actual knowledge OR
deliberate ignorance or reckless disregard
for the truth or falsity of the information.
 No specific intent to defraud the
government is required.
 Examples: upcoding, billing for
unnecessary services, billing for services
or items that were not rendered, and billing
for services performed by an excluded
individual.
Compliance Tips
1. Use a safe harbor
2. It’s a “one purpose” test
3. FMV for actual/necessary services
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Penalties
NOTE
Civil legal action can be brought by private
persons on behalf of the govt.
 Criminal fines of up to $250,000 per violation
 $11K + 3X the damages per claim
 Imprisonment of up to 5 years
 Exclusion from Federal Healthcare Programs

15.  Failure to return overpayments within 60 days
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16. Section 1128A of the Social Security Act, HHS-OIG may impose civil monetary
penalties of up to $50,000 per item or service claimed plus an assessment of
up to three times the amount claimed.
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17. Defined
Additional fines for violating CMS
directives regarding fraud and abuse.
Compliance Tips
1. Use a safe harbor
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Penalties
This is the insult to injury penalty.
 Fines of up to $50,000 per violation
 Felony conviction with up to a 5 year
prison term
 False Claims Act liability
 Civil assessment up to 3X the kickback
 Exclusion from Federal Healthcare
Programs

18.  Claims that violate the False Claims Act
 Violating the AKS
 Providing false/misleading information expected to influence a decision to discharge a pt.
 Failing to provide an adequate medical screening examination for patients who present to a
hospital emergency department with an emergency medical condition or in labor
 Making false statements or misrepresentations on applications or contracts to participate in
the Federal health care programs
 Violating Medicare assignment provisions
 Violating the Medicare physician agreement
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20. How will it help me?
 It tells you the values the organization
desires & defines expected behavior
 Serves as a day-to-day reference for
making decisions
 Empowers you to handle ethical
dilemmas you may see during your
workday
Highlights
 We are in it together: success replies
on reports by us all!
 Hotline (phone call), in person, or
email
 Anonymously via form
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An internal guideline and an external statement of corporate values and
commitments.

21. YOU are the first stepping stone for proper self disclosure – the PRIMARY weapon to
avoid becoming a CMS statistic for not doing the right thing. Always report the following
to ensure compliance will not be a risk:
 Coding modifications
 Documentation modifications
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