January 2012 Health Care Compliance Update
The Health Law Web Site & Blog
Be sure to check out the Health Law web site and blog: http://health.wolterskluwerlb.com/.
Updated daily, the content in the blog focuses attention on topics related to health care
compliance, reimbursement, and food and drugs.
Health Care Compliance & Reimbursement Daily Smart Chart
The Health Care Compliance and Reimbursement Daily Smart Chart provides access to the full
text of Federal Register issuances, case law, CMS Letters and Memorandums, and
administrative decisions at approximately 5:00 p.m. CST of the day they were published and
includes a brief summary of the document, the citation, issuing agency or court. Additionally,
recap news stories from CCH Editorial summarizing the most important documents of the week
and month are included. The Daily Smart Chart, which is available via the IntelliConnect mobile
app (IC Mobile), allows users to conduct research on the fly and save documents for six months.
The search function and navigation are simple. For further information, go to
http://health.wolterskluwerlb.com/.
Health Care Compliance Letter
Volume 15-1, January 12, 2012, Read the Letter
Trends
What will enforcement and compliance look like in 2012? Predictions and a wish list by
Frank Sheeder, J.D.
This has been an interesting year for the health care industry, and I believe the coming year
will be even more exhilarating. Here are my 12 enforcement and compliance predictions for
2012.

Regardless of what happens with the health care reform law, the current market
forces toward collaboration, integration, efficiency, and quality will continue.

At the same time, there will be much more Stark and Anti-kickback enforcement as
the government steps up its scrutiny of hospital-physician relationships.

Medicaid enforcement will increase dramatically as the federal government pressures
the states and the states endeavor to deal with funding pressures.

Health Insurance Portability and Accountability Act (HIPAA) enforcement will
increase, and there will be more unfortunate and costly breaches as we implement
more electronic records.

The Department of Justice/HHS Health Care Fraud Prevention and Enforcement
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Action Team (HEAT) initiative will ensnare some mainstream, institutional providers.

The HHS-Office of Inspector General (OIG) will more aggressively target hospitals
through its current intensive hospital audits.

Many of the Implantable Cardioverter Defibrillator investigations of hospitals across
the country will be resolved.

The government and whistleblowers will increasingly target long term care, home
health, and community care.

While there will be large hospital settlements, device and pharmaceutical companies
will write the biggest checks.

The HHS-OIG will seek to exclude more individuals who are associated with
organizations that had compliance lapses.

The Health Care Compliance Association (HCCA) will continue to grow steadily and to
serve its members’ needs assiduously.

There will be increased demand for strong compliance professionals as smart leaders
continue to recognize their value.
My wish list for 2012 includes: additional resources, clearer regulations, increased stakeholder
support for compliance activities, more predictable and quicker voluntary disclosure processes,
a better way to keep track of regulatory developments and new business arrangements,
acknowledgement by regulators and enforcers that mistakes happen and not everything is
fraud, more compliance involvement in proposed transactions and arrangements – before they
get done, and the ability to learn about potential compliance concerns before they turn into
more significant problems.
What are your 2012 predictions and wish list?
DLA Piper Blog, “Health Care Enforcement and Compliance Matters,” December 20, 2011, and
January 3, 2012
Physician Self-Referral Prohibition
Doctor-owned equipment providers avoid administrative review
An association of doctor-owned urologic laser equipment providers that challenged the
regulations preventing its members from obtaining Medicare reimbursement was allowed to
seek judicial review without first exhausting administrative review. Under 42 C.F.R. §411.351,
urologists who have a financial interest in a joint venture may not refer patients to the venture
for laser services, even if the services are provided under arrangement with a hospital.
The association filed suit, alleging that the regulations exceed HHS authority. HHS moved to
dismiss, arguing that claim must be channeled through the agency’s administrative procedures
prior to judicial review, as required by 42 U.S.C. §405(h). The association responded that it had
no choice but to seek immediate judicial review because only Medicare “providers” may seek
administrative review of the reimbursement decision at issue and neither the association nor
its members qualified as “providers.” The district court dismissed the suit finding that although
the association and its members lacked access to administrative review, the hospitals with
which the association members had contracted could serve as proxies to challenge the
regulations through the administrative process. On appeal, the court found that the hospitals
have little incentive to act as proxies and pursue the association’s challenge to the regulations
through the administrative process. In three years, not one of the 5,795 U.S. hospitals has
challenged these regulations. Additionally, the association members have no way of becoming
the assignee of a hospital’s claim nor do they possess some other relationship with the
hospitals that would assure that the hospitals share their interest. The district court’s dismissal
decision was reversed and the matter remanded. Council for Urological Interests v. Sebelius,
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D.C. Cir., December 23, 2011, ¶801,375
Tax-Exempt Organizations
IRS Fact Sheet provides guidance to charitable organizations participation in the
Medicare Shared Savings Program
The Internal Revenue Service (IRS) has released a fact sheet that provides additional
information for charitable organizations that may want to participate in the Medicare Shared
Savings Program (MSSP) and confirms that Notice 2011-20 continues to reflect IRS expectations
regarding the MSSP and accountable care organizations (ACOs) (FS-2011-11). The guidance may
apply to Code Sec. 501(c)(3) tax-exempt organizations, such as charitable hospitals,
participating in the MSSP through ACOs. Read the article.
Reprinted with permission from the CCH Tax-Exempt Advisor Newsletter, No. 449, December 19,
2011
On the Front Lines
The Impact of Quality and Clinical Integration by Lisa Frenkel, J.D. and Nancy C.
LeGros, J.D.
Hospitals now have even greater incentives to ensure that decisions by physicians about tests
and treatments yield optimal results in terms of quality and cost. Virtually all current Medicare
payment initiatives are geared towards controlling costs, while also promoting quality
performance. In some cases, such as in the Medicare Shared Savings and Bundled Payment
programs, hospitals will be permitted to share payments earned through cost reductions with
physicians. These programs may alleviate the unease physicians have had historically with use
of economic factors in hospital credentialing decisions. Some physician-owned hospitals have
embraced the use of economic factors in credentialing medical staff members, when physician
owners acquire first-hand knowledge of the financial losses associated with overutilization and
poor quality of care.
[This article] … provides a brief overview of the development of quality and resource use
metrics and examines how hospitals can use regulatory requirements and processes for quality
improvement and peer review activities to address poor performance by medical staff members
who adversely affect the quality and efficiency metrics by which hospital performance is
measured. Read the article
This article was reprinted with permission from Dennis Barry’s Reimbursement Advisor, Aspen
Publishers, Vol. 27, No. 5, December 21, 2011.
Journal of Health Care Compliance
The January/February 2012 issue of the Journal of Health Care Compliance mailed to
subscribers on January 9, 2012, and is available to electronic subscribers. The issue included
the following articles:
COLUMNS
From the Editor—Roy Snell
“Compliance Professional” Is a Growth Industry
Electronic Resources—Catherine M. Boerner
Office of Inspector General’s Medicare Compliance Reviews
Best Practice—Julene Brown
OIG Work Plan 101
Recovery Audit Contractors—James F. Collins
Beware of RACs Bearing Gifts
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Health Information Management—Angela K. Dinh
ICD-10: Not Just for Coders
Effectiveness—Catie Heindel
Auditing Emails: A Useful Method for Testing Compliance Program Effectiveness
Accountable Care—Sharita Jennings
Newest Task for Compliance Officers: Accountable Care — Are You Prepared?
Settlements—Michelle C. Gabriel McGovern
IDTFs — Closed to Patients, Open for Billing, and Ripe for Settlement Action
Health Information Technology—Tatiana Melnik
Need an App? Crowdsource!
Physician Compliance— Robert H. Ossoff / Christopher D. Thomason
The Role of the Physician in Patient Satisfaction
Stark—David B. Pursell
Fair Market Value and the “Volume or Value” Limitation: Impact on Hospital/Physician
Acquisition Transactions
Coding and Billing—Melinda S. Stegman
CMS Releases Medicare Quarterly Provider Compliance Newsletter — Guidance to
Address Billing Errors
FEATURES
Michael E. Clark
The Responsible Corporate Officer Doctrine
Lora Brown / Ron Wisor
Avoiding Legal Pitfalls in Physician Arrangements with Drug Testing Laboratories
Joanne B. Erde
Another Piece of the Puzzle — The OIG Initiates a New Hospital Audit Program to Focus
on Hospital “Risk Areas”
Cornelia M. Dorfschmid / Paulo B. Macedo
Statistics – Friend or Foe? The Compliance Officer’s Perspective
D. Scott Jones / Richard E. Moses
Insuring Health Care Compliance: Reducing RAC Audit and HIPAA Breach Risk Exposure
For the Record
Roy Snell
If You Could Choose Anyone in History You Believe Would Have Been a Good Compliance
Officer, Who Would You Pick?
Health Care Compliance Professional’s Manual
The Health Care Compliance Professional’s Manual quarterly update will mail to subscribers on
March 13, 2012. Report 32 will include two new chapters, one covering what compliance
professionals need to know about the implementation of ICD-10, including examples and
practical tips; and the second, covering the intersection between compliance and
credentialing, providing a detailed explanation of when, why, and how to ensure that the
credentialing process is accurate, complete and effective. In addition, the chapter discussing
the Charge Description Master has been updated to provide the most current information and
practical tips on keeping billing and processes related to the CDM compliant.
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