HC Compliance Essentials

One lesson learned: A central tracking system can flag multiple gifts.

Your hospital can learn a lot from the mistakes of others, especially when it comes to the slippery Stark rules.

On June 26, 2009, the OIG announced a settlement with Memorial Hospital of Union County (MHUC) in Ohio for $31,202 for allegedly violating the Civil Monetary Penalties Law provisions on kickbacks and physician self-referrals. The facility self-disclosed a situation that the OIG said involved the provision of excess non-monetary compensation to physicians and the immediate family member of a physician who referred patients to MHUC.

According to one report the hospital discovered that it had given ten physicians $3,100 in excess Stark-violating gifts between 2007 and 2008. The gifts, according to the report, included weather clocks and seminars.

Stark, of course, has an exception for non-monetary compensation that allows you to give up to $355 worth of stuff to a doctor annually. In MHUC’s case, the value of the gifts given to the docs that went over the $355/each annual limit totaled over $3,000, and it ended up with a penalty that was ten times the amount of that excess. The OIG could have demanded much more, says Wayne J. Miller, an attorney with the Compliance Law Group in Thousand Oaks, CA.

Miller points out that the government could have required MHUC to pay back the entire reimbursement for the doctors for the period of violation — plus other penalties, possibly. “But it’s still an expensive hit for a minor violation, particularly taking into account the staff and attorney time involved in resolving the matter,” he says. “The hospital decided to go this route in order to avoid a possible qui tam claim that could have ultimately cost it much more.”

The gift exception needs to be taken seriously, Miller insists, and the good news is that it’s relatively easy to know if you’re treading on thin ice. “It’s one of the few exceptions that is cut-and-dried because it has a dollar amount that is either met or not,” he says.

What’s one way to avoid such a hit when you have multiple departments vying to lure doctors with gifts? “Hospitals should have a central electronic system to keep track of gift values over the course of the year, require that all departments report to that system, and alert departments when the maximum is reached,” Miller suggests. “Likewise, although this can be difficult, a system to recoup excess gift value should be in place as well.”

AUDIO TRAINING EVENT: Prepare for Unseen Liabilities: FCA, FERA & Their Impact on Health Care. With attorney Robert Markette.

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