Referrals:
DON'T LET DOC RELATIONSHIPS LAND YOU IN HOT WATER
Published on Thu Feb 01, 2007
HHA owners to appeal federal court's unfavorable ruling in Stark case.
Right this minute, you could have a potential whistleblower in your employee ranks--and if your relationships with physicians have any problems, the government could shut you down in the blink of an eye.
That's what happened to Monroe, LA-based Aging Care Home Health Inc. The U.S. District Court for the Western District of Louisiana ruled against the home health agency in a decision handed down Feb. 16. The whistleblower who initiated the case is eligible for a big chunk of the related recoveries.
Background: Former Aging Care nurse and marketing rep Becky Roberts and an employee of one of Aging Care's referring physicians filed a whistleblower complaint in October 2002, accusing the HHA of a laundry list of bad deeds. When the government partially intervened in the case in June 2004, it picked up on the physician kickback issue Roberts alleged.
In a November 2004 complaint, the government spelled out its charges against the agency, CEO and owner Janice Davis and CFO Otis Davis from 1999 to 2002 (see Eli's HCW, Vol. XIV, No. 6). Aging Care violated the Anti-Kickback Statute and Stark law by entering into "sham" compensation arrangements with 11 referring physicians, the complaint accused.
The allegations: The HHA paid docs up to $800 a month for being on its Advisory Board and entering into physician service agreements that included tasks such as conducting in-services, evaluating staff and evaluating records. But the physicians weren't actually required to perform those duties and instead were paid varying amounts based on their referral volume, the government alleged.
Aging Care also paid some of the physicians up to $1,000 a month to be a medical director or compliance officer, although they also weren't required to perform any duties, the government charges. The agency would drop docs from the Board or these positions if they didn't refer enough patients, the complaint said.
The defense: In part, Aging Care claimed it didn't have to comply with Stark II provisions limiting physician compensation because the regulations implementing them weren't final until after the period the lawsuit covers. The government countered that the agency should have complied with the law, regardless of whether final regulations were promulgated.
HHA victory: In October 2006, a magistrate judge sided with Aging Care (see Eli's HCW, Vol. XV, No. 40). "The extent of government overreaching in this case is astounding and frightening," Magi-strate Judge James D. Kirk said in his recommendation to the district court. "The evidence ... shows that [Aging Care and the Davises] may well have complied with the only substantive regulations then in place and thus with the Stark Act."
"The magistrate judge really understood what happened in this case," praises attorney Liz Pearson, who represents Aging [...]
