Presentation Transcript

1. Anesthesia Arrangements in the Ophthalmic ASC: Keeping it Straight with the Feds

   Alan E. Reider Allison Shuren Arnold & Porter LLP Washington, DC 20004 OOSS Symposium @ AAO Chicago, IL November 10, 2012
2. Why are anesthesia services a hot topic? Advisory Opinion issued by the Office of the Inspector General in May essentially rejected two proposed financial arrangements whereby the physician-owners of an ASC would make money from the anesthesia services furnished by an independent entity to the patients on which they operated. Physician-owners control the referrals for anesthesia services, therefore money paid to the surgeons could be viewed as a kickback.
3. Advisory Opinions Three specific laws that aim to control the circumstances whereby physicians in a position to control the referral of patients or the ordering of services paid for by the federal health care programs can make money from the referrals. Anti-Kickback Statute, the Patient Anti-Inducement Provision, and the Stark Law, The OIG has primary responsibility for interpreting the first two, CMS deals with the Stark Law AOs are one mechanism by which the OIG provides insight into how it views the kickback risk of certain arrangements The guidance provided is specific only to the facts presented Enforcement discretion A request for an AO usually is a defensive strategy, though there are some, like the May 2012 AO, that appear to be more offensive
4. Proposed Arrangement A ASC bills for facility fee, which includes payment for administrative, non-physician human resources and supplies/space associated with performing a surgical service and providing anesthesia The ASC also may either provide and bill for the anesthesia professional services or arrange for such services to be provided by a separate entity which submits claims for the anesthesia professional fees AO Requestor fell into this category Physician-owners of the ASC retained no remuneration from the anesthesia services
5. Proposed Arrangement A Proposal was for the independent anesthesia group to pay the ASC for facility services (at FMV) related to the provision of anesthesia on a per patient basis, except for Medicare beneficiaries OIG said no pass – risk that the mgmfees are a disguised kickback for referrals The services anesthesia group would be paying for are paid for through ASC facility fees. Thus ASC would be getting paid twice for the same services. Carving out Medicare patients doesn’t solve the problem because payments strictly on commercial or self-pay provide the same incentive, just less in remuneration.
6. Proposed Arrangement B Anesthesia group would no longer perform services on behalf of itself A new entity would be created and owned either by the physician-owners of the ASC or by the ASC entity. The purpose of the entity would be to furnish anesthesia services to the ASC. The new entity wouldn’t actually become an anesthesia provider. It simply intended to contract with the existing anesthesia group to provide the services on behalf of the new entity. New entity would pay the anesthesia group some amount less than it was paid for the anesthesia services and the surgeons would pocket the difference as dividends from their investment in the new entity
7. Proposed Arrangement B OIG said “really” – no pass -- risk that the new entity is simply a conduit for the surgeons to do indirectly what they could not otherwise do directly, get paid for their referrals for anesthesia service. JVs between/among referral sources are an area of government scrutiny, particularly where one JV member already provides the services the JV intends to furnish and the other JV member controls the referrals for that service. The concern is underscored where the new entity is essentially a shell and the referring members have no financial risk
8. Lessons from OIG Advisory Opinion 12-06 Payment of fair market value alone is inadequate to withstand scrutiny. Any contractual relationship must reflect a reasonable business arrangement. Carving out federal program patients may not be a safety net Instead, it may be a red flag to suggest some form of swapping arrangement Creating a new service provider through a shell entity that assumes no risk in fact creates significant risk.
9. What the Advisory Opinion Did Not Say You may not enter into a contract with an anesthesia group to provide administrative services The critical question is whether the services you are providing are legitimate, and entered into at arm’s length You may not establish a separate anesthesia provider through the creation of an independent practice or subsidiary entity The OIG’s concern relates to shell entities created by referral sources where the shell entity contracts for services through independent third parties, and where those shell entities assume no risk
10. So, What Can You Do? Staff privilege model Anesthesiologist or CRNA has privileges at the ASC, but otherwise maintains a completely independent relationship, billing for their respective services. Employment model Anesthesiologist or CRNA employed by ASC(if allowed under state law) Employed by ASC subsidiary (per state law) Employed by physician group
11. So, What Can You Do? (cont’d) Contract model Contract for administrative services (e.g., billing) at fair market value; otherwise bill and operate independently Compensate on a per diem or per case basis, reflecting the fair market value based on industry standards Independent medical practice model Independent practice established for the purpose of providing anesthesia services Practice employs, or contracts with anesthesiologist or CRNA reflecting fixed, fair market value payment