NAVIGATING THE HEALTHCARE
MINEFIELD
John C. Peick, J.D.
PEICK | BOYER LAW GROUP, P.S.
Bellevue, Washington
www.peicklaw.com
425-462-0660
INTERFACES
REGULATORS
PAYERS
YOU
Co-PROVIDERS
PATIENTS
AVOIDING MISSTEPS
Avoiding Contract Mistakes
 Group Practices
 Escalating Regulatory Compliance Demands
 Billing
 False Advertising
 Sexual Misconduct
 Rewarding Referral Sources

COMMON PROVIDER CONTRACT
MISTAKES
Billing for non-credentialed providers
 Billing for unbundled services
 Billing wrong codes for services
 Billing higher time codes without
supporting documentation
 Collecting discount balances from
patients for covered services (P.I.)

COMMON PROVIDER CONTRACT
MISTAKES(cont)
Billing services under inappropriate
provider
 No or little documentation of services
 No or little documentation of medical
necessity
 No or little documentation of
reasonableness

GROUP PRACTICES
Misery Loves Company
OR
The More the Merrier
What is Group Practice
“Group Practice” is generally defined as
three or more providers who deliver
patient care, make joint use of
equipment and personnel, and divide
income by a prearranged formula.
 Group Practice may be single discipline
or multidisciplinary.

Legal Structure of Group
Practices
Sole Proprietor with Associates
 Partners (with or without Associates)
 Shareholders in Professional Service
Corporation (with or without Associates)
 Members in Professional Limited
Liability Company (with or without
Associates)
 Combination of Above Entities

PROFESSIONAL COMBINATIONS
GROUP I
Acupuncturist, Mental Health,
Podiatrist, DC, Dental Hygienist,
Opticians, Hearing Aid,
Naturopathic, Midwifery, Optometry,
Ocularist, Osteopathy, D.O.
Assistant, Pharmacist, M.D., P.A.,
Nurses, Psychologist, Respiratory,
LMP, Dieticians, Nutritionists
GROUP II
Physical Therapists
Occupational
Therapists
Advantages of Group Practice
Increased Economies of Scale in Use of
Equipment & Technology
 Reduces Per Provider Staff Overhead
 Increased Marketing Capabilities &
Resources
 Generates Stable Income Stream
 Enables Practice to Maximize Utilization
of Associates

Disadvantages of Group
Practice
Requires Uniformity in Staff Procedures
& Billing
 Individual Practice Variations Will Come
Under Scrutiny for E&O Exposure
 Increased Financial Accountability
 A General Sense of Loss of Control
 Requires Team Player Skills

MultiDisciplinary Group
Practice Advantages
Same economies of scale as single
discipline groups.
 Breadth of healthcare expertise is a
marketing strength to consumers - One
Stop Shopping
 Marketing advantage to MCOs
 Opportunity to deliver more
comprehensive health care solutions
with better patient outcomes

Traps for the Unwary
Failure to incorporate as professional
services corporation or PLLC
 Failure to understand scope of practice
limitations
 Failure to delineate services provided
 Failure to bill separately
 Failure to document reasons for
intercompany referrals

REGULATORY COMPLIANCE
WHERE THE BIG STICK CAN
SMASH THE *%*$&$ OUT OF
YOUR LIFE
REGULATORY COMPLIANCE
WHY SHOULD I CARE?
LOMPOC
CAMP SHERIDAN
SOURCES OF RISK
EMPLOYEES
PATIENTS
COMPETITORS
CME/IME REVIEWERS
ATTORNEYS
REGULATORS
PAYERS
YOU
WHAT CAN HAPPEN
Professional Discipline
 Criminal Investigation
 Insurance Company Audits
 Civil Claims by Patients

FEDERAL HEALTHCARE
CRIMINAL LAWS


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Healthcare Fraud
under HIPAA
False Statements
relating to
Healthcare
Medicare Patient
Protection Act
Anti-Kickback & SelfReferral (Stark I & II)


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False Claims Act
Mail & Wire Fraud
Obstruction of
Justice
STATE HEALTHCARE
RELATED LAWS
Anti-Rebating (Ch. 19.68 RCW)
 Healthcare Insurance Claim Trafficking
(Ch. 48.30A RCW )
 False Insurance Claims (RCW
48.30.230)
 Healthcare Fraud (Ch. 48.80 RCW)
 Criminal Profiteering (RCW 9A.82.010)

STATE LAWS (cont.)
Healthcare Disciplinary Act (RCW
18.130.180)
 Self-Referral Prohibitions (DSHS)
 Medical Records Privacy (Ch. 70.02
RCW)

REBATING - State
RCW 19.68.010(1): It shall be unlawful for any person… to pay, or offer to
pay or allow, directly or indirectly, to any person licensed by the state of
Washington to engage in the practice of medicine and surgery, drugless
treatment in any form, dentistry, or pharmacy and it shall be unlawful for
such person to request, receive or allow, directly or indirectly, a rebate,
refund, commission, unearned discount or profit by means of a credit or other
valuable consideration in connection with the referral of patients to any
person, firm, corporation or association, or in connection with the furnishings
of medical, surgical or dental care, diagnosis, treatment or service, on the
sale, rental, furnishing or supplying of clinical laboratory supplies or services
of any kind, drugs, medication, or medical supplies, or any other goods,
services or supplies prescribed for medical diagnosis, care or treatment.
FALSE CLAIMS - State
48.80.030. Making false claims, concealing information--Penalty--Exclusions
(1) A person shall not make or present or cause to be made or presented to a
health care payer a claim for a health care payment knowing the claim to be false.
(2) No person shall knowingly present to a health care payer a claim for a health
care payment that falsely represents that the goods or services were medically
necessary in accordance with professionally accepted standards. Each claim that
violates this subsection shall constitute a separate offense.
(3) No person shall knowingly make a false statement or false representation of a
material fact to a health care payer for use in determining rights to a health care
payment. Each claim that violates this subsection shall constitute a separate
violation.
FALSE CLAIMS – cont.
4) No person shall conceal the occurrence of any event affecting his or her initial or
continued right under a contract, certificate, or policy of insurance to have a payment made
by a health care payer for a specified health care service. A person shall not conceal or fail to
disclose any information with intent to obtain a health care payment to which the person or
any other person is not entitled, or to obtain a health care payment in an amount greater than
that which the person or any other person is entitled.
(5) No provider shall willfully collect or attempt to collect an amount from an insured
knowing that to be in violation of an agreement or contract with a health care payor to which
the provider is a party.
(6) A person who violates this section is guilty of a class C felony punishable under chapter
9A.20 RCW.
(7) This section does not apply to statements made on an application for coverage under a
contract or certificate of health care coverage issued by an insurer, health care service
contractor, health maintenance organization, or other legal entity which is self-insured and
providing health care benefits to its employees.
PRIVACY, SECURITY & ACCESS
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HIPAA covered entity status governs HIPAA
vs. UHCIA
UHCIA has parallel features but less complex
HIPAA has both privacy aspects and
electronic security
HITECH amendments to HIPAA increase
security breach sanctions but also place direct
HIPAA responsibility on Business Associates
HIPAA-HITECH COMPLIANCE






Encrypt your computers & email containing
PHI
Conduct a HIPAA risk assessment review
Create training for staff on HIPAA
Review data safeguards for your PHI
Create and distribute your Notice of Privacy
Practices
Have you made provisions for reporting any
breach of HIPAA?
SEXUAL MISCONDUCT
A healthcare provider shall not
engage, or attempt to engage, in
sexual misconduct with a current
patient, client, or key party, inside or
outside the health care setting.
KEY PARTY
'Key party' means immediate family
members and others who would be
reasonably expected to play a significant
role in the health care decisions of the
patient or client and includes, but is not
limited to, the spouse, domestic partner,
sibling, parent, child, guardian and person
authorized to make health care decisions
of the patient or client.
DEFINITIONS
Twenty one separate offenses which
constitute sexual misconduct (WAC 24616-100(1)
» Suggesting or discussing the possibility of a
dating, sexual or romantic relationship after
the professional relationship ends.
» Terminating a professional relationship for
the purpose of pursuing a relationship.
» Any behavior, gestures, or expressions that
may reasonably be interpreted a seductive
or sexual.
TERMINATION
The healthcare provider shall not engage,
or attempt to engage, in the activities
listed in (1) of this section with a former
patient, client or key party within two years
after the provider-patient/client relationship
ends.
POST TWO YEARS?
After the two year period, a health care
provider shall not engage in the (1)
activities, IF
» There is a significant likelihood that the
patient, client or key party will seek or
require additional services from the
provider.
» There is an imbalance of power, influence,
opportunity and/or special knowledge of the
professional relationship.
DEFENSE
'Legitimate health care purpose' means
activities for examination, diagnosis,
treatment, and personal care of patients or
clients, including palliative care, as
consistent with community standards of
practice for the profession. The activity
must be within the scope of practice of the
health care provider.
MANDATORY REPORTING
There has always been some reporting
requirements, particularly courts and
insurance companies.
 In May 2008, the reporting requirements
were broadened to require licensees to
report on other licensees and to self
report their own defined acts or
omissions.

EMPLOYMENT CHALLENGES
Employee vs. Independent Contractor
Whether the staff person is an employee
or an independent contractor is
determined in large part as a matter of
employer control of work, finances and
behaviors. What your employer
designates you is not the determining
factor – it is control.
CONSEQUENCES OF
MISCHARACTERIZATION


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Employer tax penalties and fines from IRS,
ESD & DOLI
Labor & Industries imposition of liability upon
employer for not insuring workers
Worker vulnerability to unfunded tax liabilities
and injury
Employer liability to employee for insufficient
payment of minimum wage, if any.
QUESTIONS
John C. Peick
Peick|Boyer Law Group, P.S.
3633 136th Pl. SE #205
Bellevue, Washington 98006
425-462-0660
Visit www.peicklaw.com