In a presentation at the 18th Annual Ambulatory Surgery Centers Conference, Scott Becker, JD, and Melissa Szabad, JD, partners with McGuireWoods LLP, discussed key compliance risks for surgery centers. According to the presenters, these issues are all the more important now that fraud and abuse investigations have increased.
State of physician recruitment for ASCs
Mr. Becker and Ms. Szabad started the presentation by explaining that surgery centers and hospitals are both chasing a decreasing number of eligible physicians, particularly in the key specialties that drive ASC case volume (orthopedics, ophthalmology, pain management, GI and ENT). There are approximately 5,300 surgery centers in the United States, and each ASC averages around 12 investors. This adds up to around 75,000 ASC physician investors in the country, meaning a tremendous number of existing surgeons are already invested in a surgery center.
Mr. Becker said five years ago, about 50 percent of physicians were in a financial relationship with a hospital; today, that number has increased to 80 percent. While a surgery center with 10 non-affiliated physicians was considered "healthy" 5-10 years ago, Mr. Becker said that same situation increases ASC vulnerability today.
"Non-affiliated physicians doing cases means those physicians are a 'gift', but you might also view them as the physicians who are vulnerable to investing in other centers or hospital employment," he said.
Mr. Becker said ASCs can count themselves lucky that the biggest surgery center specialties — orthopedics, gastroenterology and ophthalmology — have not seen a huge wave in hospital employment like specialties such as cardiology. Despite this, physician shortages prompt tremendous competition for a limited number of physicians.
Increase in fraud and abuse investigations
According to Mr. Becker, fraud and abuse investigations have changed in recent years. "It used to be that investigated physicians were obviously bad actors — doing it on purpose, making up names and billing for services, getting headlines," he said.
These days, fraud and abuse investigations are more focused on "the criminalization of ordinary conduct," he said. "You can be running a completely appropriate practice, but there's a much better chance you'll have an investigation than 5-10 years ago," he said. "It used to be that the government following up on an [employee call] was about 1 in 1,000. Today, the employee calls the Department of Health, and in two days, the surgery center has inspectors there."
While 95 percent of investigations used to center on improper billing and collecting, investigations increasingly focus on improper physician/hospital relationships.
He said the industry has also seen a huge increase in the number of qui tam cases and false claims activity. Qui tam cases can either stem from an employee learning of bad conduct and bringing a suit against the facility for a percentage of the reward — or from businesses that focus on bringing qui tam cases against healthcare facilities.
Forming a compliance plan
Mr. Becker and Ms. Szabad outlined several steps to forming an effective compliance plan, including:
• Holding regular staff and physician education meetings
• Appointing a key compliance officer who heads up physician and staff education and compliance issues specific to the center
• Meeting at least once a year
• Making sure key leaders in the facility are attending compliance seminars and keeping up with current events
• Including compliance topics on the agenda at every board/owner meeting
• Auditing and monitoring internal compliance efforts
• Using external consultants to conduct regular audits
• Updating policies to comply with regulatory changes and new areas of focus from the federal government
Related Articles on Fraud and Abuse:
5 Key ASC Medical Staff Issues
CMS Governing Body Documentation Requirements: Getting It Right
Senators Say CMS Hasn't Issued One Moratorium to Stop Medicare Fraud
State of physician recruitment for ASCs
Mr. Becker and Ms. Szabad started the presentation by explaining that surgery centers and hospitals are both chasing a decreasing number of eligible physicians, particularly in the key specialties that drive ASC case volume (orthopedics, ophthalmology, pain management, GI and ENT). There are approximately 5,300 surgery centers in the United States, and each ASC averages around 12 investors. This adds up to around 75,000 ASC physician investors in the country, meaning a tremendous number of existing surgeons are already invested in a surgery center.
Mr. Becker said five years ago, about 50 percent of physicians were in a financial relationship with a hospital; today, that number has increased to 80 percent. While a surgery center with 10 non-affiliated physicians was considered "healthy" 5-10 years ago, Mr. Becker said that same situation increases ASC vulnerability today.
"Non-affiliated physicians doing cases means those physicians are a 'gift', but you might also view them as the physicians who are vulnerable to investing in other centers or hospital employment," he said.
Mr. Becker said ASCs can count themselves lucky that the biggest surgery center specialties — orthopedics, gastroenterology and ophthalmology — have not seen a huge wave in hospital employment like specialties such as cardiology. Despite this, physician shortages prompt tremendous competition for a limited number of physicians.
Increase in fraud and abuse investigations
According to Mr. Becker, fraud and abuse investigations have changed in recent years. "It used to be that investigated physicians were obviously bad actors — doing it on purpose, making up names and billing for services, getting headlines," he said.
These days, fraud and abuse investigations are more focused on "the criminalization of ordinary conduct," he said. "You can be running a completely appropriate practice, but there's a much better chance you'll have an investigation than 5-10 years ago," he said. "It used to be that the government following up on an [employee call] was about 1 in 1,000. Today, the employee calls the Department of Health, and in two days, the surgery center has inspectors there."
While 95 percent of investigations used to center on improper billing and collecting, investigations increasingly focus on improper physician/hospital relationships.
He said the industry has also seen a huge increase in the number of qui tam cases and false claims activity. Qui tam cases can either stem from an employee learning of bad conduct and bringing a suit against the facility for a percentage of the reward — or from businesses that focus on bringing qui tam cases against healthcare facilities.
Forming a compliance plan
Mr. Becker and Ms. Szabad outlined several steps to forming an effective compliance plan, including:
• Holding regular staff and physician education meetings
• Appointing a key compliance officer who heads up physician and staff education and compliance issues specific to the center
• Meeting at least once a year
• Making sure key leaders in the facility are attending compliance seminars and keeping up with current events
• Including compliance topics on the agenda at every board/owner meeting
• Auditing and monitoring internal compliance efforts
• Using external consultants to conduct regular audits
• Updating policies to comply with regulatory changes and new areas of focus from the federal government
Related Articles on Fraud and Abuse:
5 Key ASC Medical Staff Issues
CMS Governing Body Documentation Requirements: Getting It Right
Senators Say CMS Hasn't Issued One Moratorium to Stop Medicare Fraud