Fall 2014 HIPAA Audits: Is Your Business Ready?



How will audited businesses be selected?


Path Lab Proposal Shot Down by OIG

The Office of Inspector General of the Department of Health and Human Services recently (October 11, 2011) shook its head at a proposal involving a pathology lab management services business that was to be owned by physicians. The proposed arrangement had the following features:

1. A path lab management business (“Manager”) would be formed and the business would be owned by doctors;
2. The Manager would provide a list of management services to a path lab;
3. The path lab (“Lab”) would not be owned by the doctors that own the Manager;
4. The Manager would provide a fixed amount of hours of services each year and would receive a percentage of the Lab’s income (fixed percentage in advance) and that fee would approximate the Lab’s use of the Manager’s services for the year;
5. The physician Manager investors would be in a position to refer to the Lab;
6. The ownership interests of the physician investors in the Manager would exceed forty percent (40%);
7. More than forty percent (40%) of the Lab’s revenues would come from the physician investors.

The OIG decided that the proposed arrangement posed more than a minimal risk of violating the Anti Kickback statute. The OIG also said the manager cannot refer its own patients or generate business in connection with the proposed arrangement. The OIG focused on the following points in its advisory opinion:

1. The Manager’s “usage fees” to the Lab are percentage based and not flat and set in advance;
2. The ownership interests of the doctor investors in the Manager would exceed what is specified in the so called “small entity” Safe Harbor;
3. The physician owners of the Manager have no experience in managing a lab, but are in a position to generate referrals to it.

Though the regulatory Safe Harbors (to the Anti Kickback Statute) are illustrative of permissible arrangements, the OIG is clearly sticking very close to them. where federal or state healthcare program dollars are involved, physician investors would do well to make sure they are Safe Harbor compliant.

Florida Lifts Prescription Drug State of Emergency

via Florida Tribune 8-29-11

Just days before a new drug database is set to start operation, the state of Florida announced that it was lifting the statewide public health emergency it declared due to Florida’s prescription drug crisis.

State officials first declared the emergency back in early July and then swept through clinics across the state for inspections that yielded in the seizure of hundreds of thousands of prescription drugs.

“While the statewide public health declaration may no longer be in effect, the efforts of the Florida Department of Health, law enforcement partners and other state agencies remain strong,” said Gov. Rick Scott in a statement.

Scott had set up a task force to go after pain clinics back in March. Scott initially was opposed to keeping intact the proposed drug database – which is meant to track prescriptions issued by doctors for drugs such as OxyContin, Valium and Xanax.

But Scott, lawmakers and Attorney General Pam Bondi reached a compromise that kept the database which is scheduled to become operational this Thursday. A bill passed this past session also requires physicians to submit their prescription information within seven days.

Dr. Frank Farmer, the Department of Health secretary, also announced along with lifting the state of emergency he was also lifting a moratorium on a part of HB 7095 that had been put on hold.

Two months ago Farmer put on hold a requirement that as many as 50,000 Florida-licensed physicians use counterfeit-resistant prescription pads. The move was taken in the wake of phone calls from patients and doctors saying that pharmacies around the state had begun to refuse to fill prescriptions for controlled substances because the prescriptions were not written on the approved pads.

“Allowing the practitioners who are approved to prescribe controlled substances more time to order the prescription pads was necessary to ensure public safety over the long term,” Farmer said. “Now is the time to start using them.”