Physicians Regulatory
Insurance Program
Presenter:
Jay Lynch
President
Misconception in the marketplace
The government has moved on to more
important concerns (homeland security,
war on terror, Iran, Iraq, etc…….
Recoveries total over $20 billions since 1986
= 19 mile high stack of $100
$3.2 billion in 2007 = all time record for one yr
ROI = $15 recovered for every $1 spent
OIG reports that
nearly $1 billion in
recoveries were
reported for the first
quarter of 2007
Today’s Agenda
 Liability
Exposure
 Limiting Exposure

Agenda
 Liability
 Limiting

Exposure
Exposure
Liability Exposure
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A contractor falsifies test results or other information
regarding the quality or cost of products it sells to the
Government;
A health care provider bills Medicare for services that
were not performed or were unnecessary, or;
Performing inappropriate or unnecessary medical
procedures in order to increase Medicare reimbursement.
Unbundling - Using multiple billing codes instead of one
billing code for a drug panel test in order to increase
remuneration.
Bundling -- Billing more for a panel of tests when a single
test was asked for.
Upcoding - Inflating bills by using diagnosis billing codes
that suggest a more expensive illness or treatment.
Billing for brand -- Billing for brand-named drugs when
generic drugs are actually provided.
Liability Exposure
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Upcoding employee work: Billing at doctor rates for work
that was actually conducted by a nurse or resident intern.
Billing for research that was never conducted; falsifying
research data that was paid for by the U.S. government.
Prescribing a medicine or recommending a type of
treatment or diagnosis regimen in order to win kickbacks
from hospitals, labs or pharmaceutical companies.
Billing for unlicensed or unapproved drugs.
Forging physician signatures when such signatures are
required for reimbursement from Medicare or Medicaid.
Liability Exposure
False Claims Act
 Application to Healthcare
 $1 Billion Budget
 Expanding Investigations
Liability Exposure
Complex Regulations
 Medicare/Medicaid
 Commercial Payor
 Stark Law
 HIPAA
 EMTALA
The government
Medicare
reimbursement
manual includes
100,000 + pages
The number of
commercial Payor
audits has increased
as a result of
successful
government
investigations
A New York
cardiologist paid
$300,000 to resolve
OIG’s case against
him for payment of
patient referral
incentives
New rules governing
the restricted use of
patient information
create a new liability
exposure for
healthcare providers
IOG survey results
indicate that most
emergency staff
members were
unfamiliar with
recent EMTALA
policy changes
Liability Exposure
Government’s ROI
 23:1
 Over $2.1 Billion Returned
Since 1997
 Save Medicare
Liability Exposure
Determining Who to Audit:
 Risk Assessment Software
 Random Selection
 Qui Tam (Whistle-Blower)
– Employee
– Patient
– Competitor
Liability Exposure
Initiatives
 Hospitals
– Physicians at Teaching Hospitals
– Lab Un-Bundling
– 72 Hour Window
– DRG’s
– Qui Tam
Liability Exposure
Initiatives
 Physicians
– Billing for Services Not Rendered
– Upcoding
– Quality of Care
– Qui Tam
– Kickbacks
Liability Exposure
Costly
 Fines: $11,000 per False Claim
 Penalties: Treble Damages
Liability Exposure
Sample Claim
Over a three year period Sample Physician over bills
Medicare $20,000 in 20 separate billings and settles
civil case for reckless conduct.
$ 20,000
$ 60,000
$220,000
$300,000
- $20,000
$280,000
Over billing
Treble Damages: 3 x over billing amount
FCA Penalty: 20 false claims @ $11,000 each
Total
No coverage for the actual amount of over billing
Total Financial Exposure
Agenda
 Liability
Exposure
 Limiting

Exposure
Limiting Exposure
Managing Risk
 Compliance Program
 Software
– Billing
– Compliance
 Training/Credentials
for Coders
Limiting Exposure
Transferring Risk
 E&O Insurance
Protects against allegations of fraud
and abuse
Limiting Exposure
 Defense
Only Programs
 Restrictive Wording in Policies
 Low Limit Options
 Limited Retrospective Coverage
Agenda
 Liability
Exposure
 Limiting Exposure

Policy form addresses specific
exposures not clearly defined
or specifically excluded in
other policies
 Indemnification
 Expanded
Regulatory Coverage
 Higher Liability Limits
 Prior Acts
Scaleable Coverage
 Hospitals
 Physicians
 Other
Hospitals
 Application & Risk Assessment
 Coinsurance/Retentions
 $50 Million Limit
 Risk Management Options
Physicians
 Application & Risk Assessment
 $1 - 5 Million
 Risk Management Options
Features
 Cost Efficiencies in Defense
– Experienced Law Firms
– Audit team
Fines and Penalties
 Risk Management/Engineering Tools
 Due Diligence for Mergers and
Acquisitions

Summary
 Healthcare
providers are at risk
 E&O insurance transfers risk

provides flexible and
affordable coverage
THE PHYSICIANS ADVOCATE, LLC
866-765-1058
Christopher Prestera, JD
chris@phyadv.com