Corporate SupercitizenPrivately owned physician practices have become specialized in the area of separating quality care and expensive fees in a patients needs when it comes to treatment and providing surgical services for heart disease, orthopedic, surgical, and spinal care. These collective actions over the past thirty-years has led to operating outside of the guided scope of quality care for patients. Doctors had become fed up with receiving low fee-for-service reimbursement and felt they were entitled to higher fees in return for the expertise and self-cost of obtaining a professionalism status. The low reimbursement rates set for treating Social Security patients who were insured by Medicare or Medicaid dealing with major surgery and their outcomes was not enough. In association to provided continual routine care no reward in incentives to physicians for patients receiving the best care was available. To get around the stipulations of certain regulatory laws, physicians sought to partner with peers and private investors as health care delivery businesses, instead of operating under a low reimbursement fee-for-service hospital payment system. Thus resulting in the forbidden creation of roles of formed sole proprietorship in practical medicine. These impartial efforts to evade regulation by the government resulted in Stark Laws. A set of rules used to prohibit physician self-referrals to facilities offering additional services for inpatients and outpatients.

Fee-For-Services Reimbursement

MethodologyCMS Medicare Set Fee

ScheduleBilling practices of fraud:

100% reimbursement fees for Medicare Services

80% is paid by Medicare

20% is regulated to be paid by patient with legal consequences if not received in full

115% can be charged for a service rendered under Medicare’s set fee schedule

Specialized Professional

Surgical Fees

Private Practicing Physicians

can receive:

80% from Medicare

35% from the Patient

Legalized Efforts

Advance Beneficiary Notices:

If Medicare does not cover the elective services physicians can legally bind patients to paying the full 115% of care out of pocket

Not to seem harsh some medical practices only require 70% to high cost or 95% for low cost fee-for-services to be paid out of pocket on a reasonable payment plan option for fixed income patients through the duration of extended care

Private insurers often have to pay 70% upfront in order to receive care they schedule out on a future date while making arrangements to set up a payment plan prior to their service date

Specialty Care is often Routine Care

Heart surgery requires monitoring and updating of equipment if you

do not service your equipment at a rendered fee-for-service your

equipment will fail and diminishing the quality of life

Accountable Care is a plan to work with providing patients the

opportunity of utilizing preventive medicine in hopes of improving

ones health before a major illness becomes an acute or chronic

condition

Regulatory Agencies

1899 and 115A give the Secretary of Health and Human Services

authority to waive certain fraud and abuse laws and add Safe

Harbors as necessary to achieve the goals of each section,

respectively. In conjunction with the issuance by CMS of the proposed rule that would establish ACOs, CMS and the Health and

Human Services Office of Inspector General (OIG) issued a joint

notice with comment period outlining proposals for waivers of

certain Federal Laws – the physician self-referral law, the anti-

kickback statue, and the civil monetary penalty law – for Shard

Savings Program. CMS and OIG have also solicited comments on

further waiver design consideration for the Shared Savings Program and Innovation Center.

Regulations

The Physician Self-Referral Law (Section 1877(a) of the Social

Security Act ((the Act)), which prohibits physicians from making

referrals for Medicare “designated health services,” including hospital services, to entities with which they or their immediate

family members have a financial relationship, unless an exception

applies.

The Federal Anti-Kickback Statue (Section 1128B(b) of the Act),

which provides criminal penalties for individuals or entities that

knowingly and willfully offer, pay, solicit, or receive remuneration to

induce or reward the referral of business reimbursable under any

Federal Health Care Program, as defined in section 1128B of the

Act.

Waivers

The Civil Monetary Penalties law (Section 1128A(b)(1) and (2) of the

Act) that prohibits a hospital form making a payment, directly or

indirectly, to induce a physician to reduce or limit services to

Medicare and Medicaid beneficiaries under the physician’s direct care the (CMP).

Waivers only for Anti-Kickback statue and CMP, certain financial

relationships that are necessary for and directly related to the ACOs

participation in the Shared Savings Program and fully comply with

an exception to the physician self-referral law.

Monopolizations, Anyone…. Anyone!

Antitrust concerns focus on whether Providers will exercise Market Power to raise prices above competitive levels. Typically targets Medical Doctors negotiations with Health Plans, joint negotiations of Physicians under the Sherman Act in three steps.

I. Economic Integration among Physicians: Joint negotiations by completely independent practices are condemned as “Naked,” price fixing.

II. Whether they are reasonably necessary to achieve efficiencies.

III. “Rule of Reason,” to assess its effect on competition collaborating that gives Physicians Market Power to raise rates above competitive levels are unlawful. Entities that market below 30 –40% are unlikely to have such power. Rule of Reason places heavy burdens on Antitrust enforcers, who must define relevant geographic markets that render Market-shares too high or prove that prices (after adjustments for quality improvements) have increased as a result joint negotiations.

Fortney H. (Pete) Stark 1989 the

Revisions & Now

These waivers would cover shared savings earned during the

agreement period with CMS and, as applicable, financial

relationships existing during the agreement period. The notice and

solicitation of public comment explains the conditions that would apply to the waivers in more detail. There are five fraud and abuse

waivers…! These waivers protect providers against the application

of certain civil monetary policy law provisions, the Federal Anti-

Kickback Statue, and the Physician Self-Referral law (known as the

Stark Law). These waivers include:

Ethics in Patient Referral Act

I. an “ACO pre-participation” waiver that is available for a limited duration to cover startup arrangements between providers in anticipation of participation in the Shared Savings Program;

II. an “ACO participation waiver that extends for the term of participation in the Shared Savings Program as well as a six month period after expiration of termination.

III. an “Shared – Savings distribution” waiver that applies to distributions of Shared – Savings payments and their uses;

IV. a “Compliance w Physician Self-Referral Law” waiver that is applicable to ACO arrangements implicating the Physician Self-Referral Law meeting an existing Stark Exemption; and

V. a “Patient Incentive” waiver that will allow ACOs to offer incentives to beneficiaries to encourage preventive care and compliance w treatment regimens. Examples: DME blood pressure machines for self management…

Proposed Antitrust Policy Statement

The DOJ and FTC have worked together to facilitate the creation of

ACOs by giving providers the clear and practical guidance they

need to form innovative, integrated health care delivery systems

without running afoul of the antitrust laws.

Antitrust Agency review of ACOs: DOJ and FTC will provide rule of

reason treatment to an ACO if, in the commercial market, the ACO

uses the same governance and leadership structure and the same

clinical and administrative processes as it uses to qualify for and

participate in the Program.

Regarding ACO Participation in the

Medicare Shared Savings Program:

Safety Zone: The Antitrust Policy Statement describes a Safety Zone

for certain ACOs that participate in the Shared Savings Program.

ACOs that fall within the Safety Zone are highly unlikely to raise

significant competitive concerns and the Antitrust Agencies will not challenge ACOs that fall within the Safety Zone, absent

extraordinary circumstances. To fall within the Safety Zone,

independent ACO participants that provide a common service

must have a combined share of 30 percent or less for each

common service in each participant’s Primary Service Area (“PSA”),

wherever two or more ACO participants provide that service to

patients from that PSA.

Scope of Jurisdiction

Mandatory Antitrust Review: An ACO applicant that has a share above 50 percent for any common service that two or more independent ACO participants provide to patients in the same PSA is required to obtain a letter from one of the Antitrust Agencies advising that the reviewing Agency has no present intent to challenge or recommend challenging the ACO.

If DOJ or FTC advises it is likely to challenge or recommend challenging an ACO if it proceeds, the ACO as proposed will be ineligible to participate in the Shared Savings Program.

DOJ and FTC have committed to provide a 90 day expedited review of ACOs that exceed the 50 percent PSA shared threshold. All required documents must be received at least 90 days before the last day on which CMS has stated that it will accept applications to participate in the Shared Savings Program for the relevant calendar year.

Mandatory Exemption Zones

Additional Antitrust Guidance: ACOs that are outside the Safety

Zone and below the 50 percent mandatory review threshold that do

not impede the functioning of a competitive market and that

engage in pro-competitive activities will not raise competitive concerns and may participate in the Shared Savings Program w/o

Antitrust Agency review.

If an entity believes that an ACO is engaging in anticompetitive

conduct, it can pursue an appropriate private action or bring the

conduct to the attention of Antitrust Agencies. ACOs should seek

guidance regarding their antitrust risks in an expedited fashion, while

also providing appropriate safeguards so that potential or actual anticompetitive harm can be identified and remedied.

Medical Professionalism Qualifies as

911

Abuse

Established areas of concern in private owned physician facilities is the adequacy of being able to provide appropriate care under all operative situations. Findings in erroneous care showed that specialty physician-owned practices were not equipped to provide other stabilizing medical care outside of their own area of expertise.

Neglect

Issues of ethics and efficacy arose with no emergency centers onsite, lack of other stabilizing equipment, and resulting to calling 911 to provide care to treated patients because no available physicians or qualified staff were at the location of these highly dangerous operating facilities when adverse reactions took place.

Business Law Legal Concepts and

Practices

The source of information is valid because it gives a detailed history of how we have ended up at the point of implementing a form of government controlled Health Care in the United States today. A form of deductive reasoning is used throughout the article, providing the detailed history, as an overview ½ to 2/3rds of each page in the article are footnotes. Even though we are at a benchmark of receiving taxed healthcare services heavily regulated by the government and operating agencies, clarified business ethics learned throughout the course explains how we have arrived here. The guidance and interconnected legal business knowledge obtained has given an added appreciation in the efforts used to control fraudulent activities being practiced by physicians and newly invented corporate supercitizens who have made a practice of being above the law and outside of quality.

Perry, J. E. (2012). Physician-Owned Specialty Hospitals and the Patient Protection

and Affordable Care Act: Health Care Reform at the Intersection of Law and Ethics. American Business Law Journal 49 369-417. Retrieved from

http://web.a.ebscohost.com.offcampus.lib.washington.edu/ehost/pdfviewer/pdfvi

ewer?sid=427b5fcb-fb3a-4c13-aef2-

1ec207cae27b%40sessionmgr4005&vid=4&hid=4112

QUESTIONS?