Medicare Compliance & Reimbursement

3 risk areas to watch for.           

If hospitals and physicians don't carefully pore over their financial arrangements for potential compliance problems, they could pay a steep price. Metropolitan Hospital in Grand Rapids, MI, along with a number of related organizations, agreed to shell out $6.25 million to settle allegations that they ran afoul of the Stark physician self-referral law.  In particular, the Department of Justice alleged that Metropolitan:             paid compensation to vascular physicians that exceeded fair market value;             leased office space to two primary care physicians at less than the going rate; and             paid too much for a primary care physician practice it purchased in 1996. The Stark law is designed to weed out fraud and abuse by preventing physicians from referring Medicare or Medicaid patients to health care organizations with which they have financial interests. The settlement also resolves DOJ contentions that Metropolitan billed for services that weren't adequately documented. "This settlement reflects the importance the [DOJ] places on compliance by all health care providers with the law, including those statutes governing financial relationships between hospitals and physicians," says Peter Keisler, assistant attorney general for DOJ's civil division. "We don't like it. We don't think it's fair," Metropolitan President and CEO Michael Fass told the Associated Press. "But for practical business reasons, we wanted to avoid a two-to-three-year legal battle at tremendous expense." The allegations arose from a whistleblower suit filed in 2002 by Mary Scott, former vice president of a Metropolitan affiliate. She'll collect $1.125 million as her bounty in the case. Lesson Learned: Financial arrangements between hospitals and physicians need careful review for potential Stark law problems.