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Lawyers and Health Care and Compliance, Oh, My!

Do you remember the scene in the movie “The Wizard of Oz,” when Dorothy, the Scarecrow, the Tin Man, and the Lion lock arms for the first time and set down the yellow brick road to find the Wizard? So much opportunity and wonder lay ahead for them. Well, as odd as it may sound, that’s kind of how I felt going into the American Health Lawyers Association (AHLA) Annual Meeting in San Antonio, Texas earlier this month. OK, full disclosure: I was watching that movie on my iPad during my flight out to San Antonio, so excuse my dramatics. But, honestly, the conference proved to be an educational wonder (and, no, the AHLA didn’t ask me to write this)!

I like this particular conference because hospital compliance is always top of mind for me, my team and our work at Ludi, which works with health systems and hospitals nationwide. So, what’s the best part about attending the AHLA Annual Meeting, aside from the breadth of great information you learn? You realize that attorneys are super, over-the top organized! Seriously. Every presentation topic was clearly stated with objective bullet points about the discussion, every presenter knew their role and every sub thought was clearly referenced in case law. It was impressive.

With that said though, boiling down everything I learned into five easy points is a difficult task since there was so much substantive information. But I’ll give it a shot, because I did feel smarter after these two days. I think, for me, first and foremost, this meeting is a good reminder that the relationships between physicians and hospitals are complex at best. Regardless of the physician being independent or employed by a hospital, there are a myriad of regulations to navigate in these relationships. Here is my (somewhat over-simplified) list of key takeaways from the AHLA show:

Takeaway #1:

Transformation is happening all around us. Embrace it!

We hear this word “transformation” tossed about in health care all the time. There are many people on a path to “transform” health care. Most of them are, in fact, not in health care. In fact, “The Year in Review” session at the AHLA Meeting (presented by Robert Homchick, Kristen Rosati and Jack Schroder) highlighted all the new entrants and models emerging. With pharmacies merging with health plans, and large employers like Amazon, JP Morgan and Berkshire Hathaway forging unlikely partnerships, change is on the horizon. And it may not look like the health care of today. In other words: we are being “Ubered.”

Takeaway #2:

Fraud is still a very real issue across the relationships between physicians and hospitals.

And the financial settlements can be devastating. There are more than a few whistleblowers trying to get in on the action and the number of cases being reviewed by the Office of Inspector General (OIG) continues to grow. Fraud overall is down in other industries, but health care makes up 90% of the OIG settlements (!), with kickbacks coming in as the leading cause of hospital violations.

Takeaway #3:

Stark Law is evolving.

For 20 years now, the government has been talking about the need to make sure physician contracts are at Fair Market Value (FMV), are commercially reasonable, have time records for payment and fit within all safe harbors. Apparently though, there are many who still have not gotten this memo. In fact, the top government enforcement related to settlements are: acquiring the physician practice above FMV; medical directorships that are outside the rules; productivity bonus that are too rich; and lease arrangements. There are also expected changes coming for Stark Law in 2019 and beyond, specifically associated with value based care. Fee for service is still the dominant payment mechanism and these changes will not relax the government’s attention to efforts to drive up the costs of Medicare and Medicaid.

Takeaway #4:

Speaking of FMV you cannot get around it.

An employer can pay an employee any salary and any amount of money they wish. Not so with physicians. Everything must be at FMV. This number is based on specialty, location in the country and productivity. Even if you stack a bunch of independently FMV contracts together for a physician, you still must make sure the total is at FMV. So, stop trying to find a loop hole, because they don’t exist. When purchasing physician practices, working on merger activities, acquiring assets, it all must be at FMV.

Takeaway #5:

The future is IT, but there are challenges ahead.

The evolving world of technology in health care – personal devices, apps, electronic health records, patient databases, emails to physicians, telehealth – all bring new challenges to the physicians and to the privacy of data. Security is no joke, and hospital departments continue to grow in sophistication to cover the risks facing the enterprise. This impacts all business partners as well. It is a challenge to balance this risk with highly exhausted physician partners who are still suffering PTSD from the EHR rollout.

While the legal and compliance challenges in our industry are many, the AHLA conference was a great place for in-house attorneys to interact with each other, learn best practices and hear from regulators themselves as to how to improve the care delivery for all. It’s made me a better source of information for my clients and employees, and that alone makes it worth it. Also, after so much discussion for two days about such brain-exhausting topics, along with long nights of travel to and from San Antonio, the whole experience certainly made me appreciate the simple things in our industry and the one thing Dorothy discovered: there’s no place like home.

Want to learn more about this topic? Watch how one of our clients tackled physician contract compliance with our DocTime automation.

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