Becker's ASC Review

6 13th Annual Spine, Orthopedic and Pain Management-Driven ASC Conference + The Future of Spine – Call (800) 417-2035 L ooking at lawsuits and settlements as well as different agencies' com- mitment to Stark Law enforcement, industry experts identified four trends in the Stark Law enforcement climate. 1. Enforcement is more aggressive. "The proliferation of private whistle-blower suits alleging knowing Stark violations has greatly increased both the risk of discovery and enforcement and the potential financial li- ability associated with a violation," says Tony Burba, who is of counsel at Barnes & Thornburg in Washington, D.C., and a former federal healthcare fraud prosecutor. Under the False Claims Act, healthcare providers can be liable for up to three times the amount of a fraudulent claim billed to the government, plus a sub- stantial civil penalty for each individual claim submitted in violation of the law. "That means that for claims submitted by a hospital that knows or that is reckless in not knowing that they have a Stark violation — even a technical violation — could be forced to pay astronomical penalties under a settle- ment or judgment under the FCA," says Mr. Burba. The case involving Tuomey Healthcare System in Sumter, S.C., is a good ex- ample of this. Although that case was unique in some respects, Mr. Burba says "it was fundamentally an FCA judgment in a Stark case." The 2013 judg- ment in that case was more than $200 million. Stark Law enforcement has also increased over the last five years due to false claims liability through the Fraud Enforcement Recovery Act expanding to include the knowing retention of overpayments even when the overpay- ment did not result from the submission of a false record or statement. That change along with the Patient Protection and Affordable Care Act's require- ments regarding obligations to return known overpayments within 60 days of "identification," has led to the increase in enforcement, according to Jana Kolarik Anderson, partner with Foley & Lardner in Milwaukee. Under the 60-day repayment rule, any entity that receives an overpayment from the state or federal government must report the overpayment within 60 days. Although the 60-day repayment rule went into effect about three years ago, cases based on violations of the rule — called reverse false claims cases — began working their way through the system in 2014. 2. Stark Law is a growing area of interest for the DOJ. "The en- forcement environment around the Stark Law is being primarily driven by False Claims Act cases brought by qui tam relators and/or by the U.S. Department of Justice," says Ms. Anderson. The government has dedicated substantial resources to fraud and abuse enforcement. For example, the government has invested substantial amounts into the Health Care Fraud Prevention and Enforcement Action Team — an interagency task force run by HHS and the DOJ that is focused on criminal and civil enforcement of healthcare fraud cases. "We have seen the ramp up in enforcement on Stark Law issues and multi- million dollar settlements/verdicts, and there is no reason to expect that en- forcement related to the Stark Law will not continue," says Ms. Anderson. 3. Stark Law enforcement isn't at the top of CMS' priority list. Al- though Stark Law enforcement is a growing area of interest for the DOJ, it remains lower on the priority list for CMS, according to Mr. Burba. Hospi- tals wanting to self-disclose Stark Law violations through CMS' Self-Referral Disclosure Protocol should be prepared to wait. "Even several years into the program, hospitals are seeing extended wait times and are waiting for months to see their disclosures resolved and settled," says Mr. Burba. With rapid consolidation in the healthcare industry, sellers are feeling pres- sure to resolve Stark Law violations as liability can be transferred to buyers in hospital transactions. However, even when sellers do a thorough internal review and self-disclose problems they uncover, "both parties need to realize that it's unlikely the self-disclosure will be resolved prior to closing unless they are prepared for a significant delay," says Michelle Marsh, partner with Waller Lansden Dortch & Davis in Nashville, Tenn. However, Ms. Marsh says she is optimistic "that CMS will propose a more streamlined self-disclosure process for Stark violations that don't appear to result in program harm (e.g., missing signatures) that will provide providers with more certainty regarding penalty levels and also help both providers and the agency with the volume of information required for the self-disclo- sure process." 4. Stark Law is at a crossroads. During the last session of Congress, two incredibly different bills, both of which could have significant effects on Stark Law, were introduced. The first, called the Stark Administrative Simplification Act, seeks to correct the excessive penalties healthcare pro- viders currently face for minor technical violations. The act is sponsored by Rep. Charles W. Boustany Jr., MD, (R-Louisiana), who is a cardiovascular surgeon with more than 30 years of clinical experience. Under the act, if a hospital violates Stark Law on purely technical grounds, the hospital would pay a preset fine. Mr. Burba says to think of this as a "speeding ticket ap- proach." 4 Trends in the Current Stark Law Enforcement Climate By Ayla Ellison 1st Outpatient Total Hip Replacement Performed in Illinois By Carrie Pallardy V alley Ambulatory Surgery in St. Charles, Ill., hosted the first outpatient total hip replacement in the state earlier this month. Here are three things to know about the ASC and the recently introduced service line. 1. Shawn Palmer, DO, of Midwest Bone and Joint Institute performed the anterior total hip replacement at the surgery center. 2. Betsy Evett, a patient from Santa Rosa Beach, Fla., traveled to the surgery center to undergo the total hip replacement. "I was walking within three hours of surgery and off my pain medication after two days. The cost difference was substantial. I saved more than half the cost of having the procedure done at my local hospital, yet received first-class care," said Ms. Evett. 3. "Patients not only experience less pain and recover better at home, but also appreciate the dramatic reduction in cost as many begin to bear more responsibility for their own healthcare expenses," said Dr. Palmer. n

• Cover