Federal Regulations Identify and Discuss

¶ … 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. Applicable Case Law and Statutes that are Relevant The most relevant case that would affect Sundown Community Hospital is Feldstein vs. Nash Community Services Inc.

This is important, because a North Carolina hospital used a host of different financial incentives to lure Dr. Feldstein from Arizona. When the hospital was purchased by another company, they canceled the contract with Feldstein claiming that the actions that were taken were illegal. In the case, the court sided with Feldstein saying that a host of hospitals will use a variety of incentives to attract doctors.

Under the Stark Law (which prohibits doctors and hospitals from making self referrals) they found that the health care facility did not violate any provision. (Stark Law 2010) However, the transaction was considered to be questionable, because of the unique arrangement that Feldstein and the hospital had about the referrals of patients.

As a result, the decision would outline a number of different principals including: illegal activity arguments can be made by either party, recruiting arrangements based on referrals are in violation of federal law, hospitals need to carefully scrutinize recruiting agreements and they should develop strategies to protect themselves against possible litigation (from their recruiting program). When you put these different elements together, this means that Sundown Community Hospital must take a unique approach, when entering any kind of possible physician recruiting alliances.

(Recent Federal Court Ruling 1999) 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.