It’s more important than ever to create your physician contracts to the letter of the law. A brand-new OIG ruling released in November could muddy the waters if you aren’t on top of the rules, and penalties could be huge if you are in violation of the Stark and anti-kickback laws.
Check out a few tips to ensure your physician contracts are created compliantly.
1. Know What’s Forbidden
The government restricts you from offering, paying, soliciting or receiving anything of value to induce or reward referrals. This doesn’t just describe referrals to and from other physicians. It can be for lab tests, X-rays, blood draws, drug testing or even billing services.
You’re also restricted from referring patients to an entity where the physician or an immediate family member has an ownership stake.
Your physician contracts should therefore avoid offering bonuses for referring to specific providers or entities where you’ll get something in return or where you or your family members have an ownership stake.
2. Grasp When Productivity Bonuses Are Allowed
There are, however, situations when you can offer productivity bonuses to your providers.
The Stark regulations indicate that a physician in a group practice “may be paid a share of overall profits of the group or a productivity bonus based on services personally performed or incident to such personally performed series, so long as the share or bonus is not determined in any manner which is directly related to the volume of value of referrals by such physician.”
In other words, you must confirm that any productivity bonuses the physician receives are tied to services that provider personally performed or billed as incident to. In addition, the doctor cannot have profited from referrals related to those services.
3. Understand How “Pools” Work for Bonuses
CMS knows that many practices allocate all of a particular service line’s revenue to a particular pool of physicians, but CMS said it never intended that. Instead, a group must take all of the profits from the designated health service (DHS) referred by physicians in a pool and use that amount as the dollars to be split among that pool of physicians.
In other words, instead of taking all of the X-ray profits and splitting them among a pool of orthopedic doctors, the group must take only the DHS profits resulting from that pool of doctors’ referrals as the profits available to split among that pool. It is still permissible to create pools based on physician specialty or practice locations, but the money to be divided among the members of that pool should include the profits arising from all DHS’ referred by the physicians in that pool.
CMS clarified that one pool of physicians can have their DHS referral profits split and paid in one manner, whereas the group can split another pool of physicians’ DHS referral profits using a different methodology, as long as neither methodology directly rewards referrals.
4. Get an Attorney Involved in Your Contract Creation
If you’re creating physician contracts for new providers at your office, make sure you have an attorney help you write the language in them. If you’ve already got contracts for your providers, it’s a good idea to have an attorney review them now that the rules have changed, just to confirm you are using the most updated guidance. This will help you ensure that you aren’t violating any provisions and that your physician contracts are compliant.
Get more information about how to keep your physician contracts and pay in line with federal regulations. Attorney Rachel V. Rose, JD, MBA, shares all the details during her online training, Stop Your Physician Contracts from Violating New OIG Ruling. Sign up today!
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