In many northeastern states, including New York, as well as many other states across the country, the theory behind the Corporate Practice of Medicine Doctrine is the belief that a medical practice not owned by a physician or medical professional, is not going to function and provide the same quality of care as a physician-owned practice or similar health care provider. This belief is due to the fact that the practice would become beholden to non-doctor shareholders who would dictate treatment based upon economics rather than quality of care.
Very often physicians who wish to accommodate patients, either out of a desire to be helpful due to poor economic conditions or just to be friendly, might decide to waive the co-payment of the patient and just bill the insurance company, whether it is an HMO or Federal Government provider (Medicare, Medicaid), for the balance of the payment. This can raise various concerns during an audit by an insurance company or government payor, and could have very large, unforeseen ramifications for the provider. Depending upon the aggressiveness of the carrier and the conduct of the provider, the waiver of co-payments could be categorized as a form of fraud or kickback.
The theory behind this is that the co-payment, if waived, can either be seen as an incentive to encourage the patient to come back (i.e., money reimbursed to the patient since they did not have to lay out their copay) or it can be seen as a discount given to the patient. The problem arises as this discount is not taken off the entire bill, but only the patient’s portion. Legally it should be applied to the entire amount of the bill before it is submitted to the HMO, government payer, or other third party payor in such a way that would entitle the insurance company to reimburse based on the reduced amount as well.
The Corporate Compliance Plan, which is traditionally operated and well known in Medicare and Medicaid areas of practice, can have benefits in the area of no-fault billings and protections against no-fault insurance company lawsuits. The Plan can be set up to monitor fraud and abuse, patient privacy issues, and billing collection issues. However, since the no-fault carriers are not of themselves government entities, the protections of a Corporate Compliance Plan are not as clear at first. There is also less of an incentive to attempt to enforce criminal penalties as opposed to pursue civil lawsuits for fraud or for RICO actions against providers in the no-fault field.
The Compliance Plan in Medicare and Medicaid areas serves best to demonstrate a provider’s attempt at compliance with regulations and thus negate any potential criminal liability or civil penalties associated with an intentional act.
In an attempt to go after No-Fault Insurance Fraud, New York State and Gov. Andrew Cuomo are seeking to expand current regulations regarding the information that physicians and clinics are required to provide. The expansion would include provisions that will bar suspected providers from participating in, and billing for, services under the No-Fault regulations of New York State.
According to a non-public “list” of suspected providers held by the office of Governor Cuomo, over 100 providers have been initially targeted. Letters are being sent to providers demanding certain information in connection with the investigation. The State has made it clear that such information can be turned over to the Department of Health (OPMC – Office of Professional Medical Conduct) and the Education Department (OPD – Office of Professional Discipline) for the purpose of bringing potential professional misconduct allegations against any physicians and other providers, whom they consider to be engaged in fraudulent activities for action to be taken against their license. Such information might also be shared with other government enforcement agencies.
Providers need to be aware of their rights, and what they are required to do and provide in light of the regulations, should they receive such letters. In many cases, proper planning to make sure that a practice complies with relevant laws and regulations is important prior to any investigation.
These days with the state of the economy as it is, it should come as no surprise that insurance companies and HMOs are being even more aggressive at auditing than they have traditionally been in the past and attempting to take back payments for services rendered from physicians and health care entities.
While the health care industry as a whole might be growing, the providers reimbursement that the provider gets to keep is shrinking. There are some tactics and approaches that can be used by a health care provider that can not only protect them from improper allegations of fraud and abuse made by an insurance company during an audit, but even help the provider increase revenues in their practice if there is no audit, since it can serve as a means to supervise their own practice policies and find any shortfalls in billing and coding that could be costing them money.