Physician recruitment and federal anti-kickback safe harbor regulations

¶ … Federal Regulations

Identify and discuss applicable federal regulations relating to kick-backs and safe-harbor regulations. Using the applicable statutes, the Feldstein case and other relevant cases from your individual research discuss the proposed scenario. Make recommendations in light of the applicable statutory and case law.

Over the last several years, the issue of physician recruitment has been increasingly brought to the forefront. Part of the reason for this, is because health care providers across the country, are struggling to locate trained doctors that can address the increasing demand they are facing. A good example of this can be seen by looking no further than a study that was conducted by the American Medical Association, which found that there will be shortage of 150 thousand doctors by 2030. (Sataline 2010) This is important, because it shows the overall strain that health care providers are facing. As a result, many have been turning to creative recruiting strategies (in an effort to attract the best physicians). However, these kinds of practices are in ambiguous areas of the law, as there is balance between: offering incentives and violating various federal kickback / safe harbor regulations. In the case of Sundown Community Hospital, the arrangement that they made with Central Park Community Medical Group is in area that is questionable (relating to these different laws). To fully understand the various concerns requires: examining federal regulations relating to kick backs / safe harbors, discussing applicable case law / statutes that would be relevant and making recommendations that could address these issues. Together, these different elements will provide the greatest insights. As to how Sundown Community Hospital can legally engage in such business arrangements.

Federal Regulations Relating to Kick Backs and Safe Harbors

In 1972, federal kick back laws were implemented to prevent the fraud that was occurring in the programs of: Medicare and Medicaid. The idea was that issuing strict guidelines would hold hospitals and doctors accountable for obvious manipulations that were occurring. A good example of this can be seen by looking at the Anti-Kickback Statute. This law prohibited the exchange of anything of value for receiving added financial benefits. Where, it would limit the overall option heath care providers had available in recruiting doctors (as it was too broad). (Anti Kickback Statute 2011) This would lead to the establishment of 13 different safe harbors (during the 1990's). In this case, the idea was to address various conflicts of interest that were occurring, in the way hospitals are recruiting doctors. As they need to offer some kind of financial incentives, yet the various laws were confusing. Since that time, ligation has created even more ambiguity surrounding the issue. A good example of this can be seen with the different exemptions that were published by the Inspector General's Office in the Federal Register. (Federal Anti-Kick Back Laws and Safe Harbors 1999) This is important, because it shows how careful consideration and planning must occur, to be within the different provisions of the law.

Recommendations for Addressing these Issues

The current arrangement that Sundown Community Hospital has with the Central Park Medical group could be considered to be questionable. The reason why is because 60% of the patients are from Medicare and there is a push to offer additional incentives to the doctors. This is problematic, as regulators could claim that this is a referral induced program with kickbacks. As a result, there must be a series of checks and balances to determine the rewards that are being offered. Once way to accomplish this objective, is to create a review committee that will consist of: staff members, former regulators and individuals from the community. In this case they will examine the law and seek to find a balance in offering incentives with the different regulations. At the same time, legal council would need to review the different recruitment policies and establish mechanisms for limiting the hospital's liability. This is important, because it will ensure that Sundown Community Hospital is following the law, while protecting their interests. These two elements must be taken into account when recruiting doctors for their facility.

Clearly, Sundown Community Hospital can engage in physician referral programs that will address the challenges they are facing. However, a strategy of limiting legal liability and ensuring that all contracts are following the law are essential (in protecting the facility). If these two elements can be included in the doctor referral program, it would create the desired benefits, while limiting legal liabilities.