Stark Law Terms Often Misunderstood by Physicians

October 13, 2011 by · Leave a Comment 

By Adil Daudi, Esq.

Stark-GraphWith the government beginning to scrutinize a physician’s practice now more than ever, many physicians are starting to take a proactive role in understanding certain rules that have been implemented against them.

In January of 1992, Congress imposed and substantially changed the health care industry by introducing what is commonly referred to as the Stark law. Specifically, Stark law is comprised of Sections 1877 (42 U.S.C. §1395nn, applicable to Medicare) and 1903 (42 U.S.C. §1396b, applicable to Medicaid) of the Social Security Act.

Stark law governs physician self-referral for Medicare and Medicaid patients, and prohibits physicians from referring designated health services (DHS) to Medicare or Medicaid qualified patients to an entity where the physician, or an immediate family member of the physician, has a vested financial relationship.

Despite the unambiguous definitions, many physicians/hospitals have fallen prey to this law and have found themselves in substantial legal issues. For any physician, it is imperative for them to know and understand the basics of this law and what certain definitions mean; as the understanding of the simplest terms can help avoid potential litigation.

The following are the top three (3) definitions that many physicians often misunderstand: Please note, these definitions are not exclusive, and it is always strongly advised to consult with your attorney prior to any potential referrals that may fall under this rule.

1.  Financial Relationship: An ownership or investment interest (through equity, debt or other means) in an entity; or a compensation arrangement between a physician, or immediate family member of a physician, and an entity.

2. DHS: The following are the type of services that are restricted under Stark: (i) clinical laboratory services, (ii) physical therapy, occupational therapy, and speech-language pathology services, (iii) radiology and certain other imaging services, (iv) radiation therapy services and supplies, (v) durable medical equipment and supplies, (vi) parenteral and enteral nutrients, equipment and supplies, (vii) prosthetics, orthotics, and prosthetic devices and supplies, (viii) home health services, (ix) outpatient prescription drugs, and (x) inpatient and outpatient hospital services.

3. Referral:  Generally, a referral is considered a request by a physician for, or ordering of any DHS for which payment may can be made under Medicare Part B; in addition, it is a request by a physician to perform any DHS for which payment may be made under Medicare.

Despite these general terms, Stark law is a very complex rule that many physicians fail to take the interest in understanding. A physician who violates this rule is subject to the following penalties: denial of payment; required person would be required to refund amounts collected that were billed; and civil money penalty and being excluded from Medicare, Medicaid and other possible federal programs.

The above is simply an informative piece designed to help simplify certain terms under Stark law. Please consult with your own attorney to provide you with additional information that may be more specific to your situation and needs. Although the rule was implemented more than twenty-years ago, the government has recently begun to scrutinize the application of this rule.

Adil Daudi is an Attorney at Joseph, Kroll & Yagalla, P.C., focusing primarily on Asset Protection for Physicians, Physician Contracts, Estate Planning, Business Litigation, Corporate Formations, and Family Law. He can be contacted for any questions related to this article or other areas of law at adil@josephlaw.net or (517) 381-2663.

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Getting to Crazy

July 21, 2011 by · Leave a Comment 

By Paul Krugman

debtceilingThere aren’t many positive aspects to the looming possibility of a U.S. debt default. But there has been, I have to admit, an element of comic relief — of the black-humor variety — in the spectacle of so many people who have been in denial suddenly waking up and smelling the crazy.

A number of commentators seem shocked at how unreasonable Republicans are being. “Has the G.O.P. gone insane?” they ask.

Why, yes, it has. But this isn’t something that just happened, it’s the culmination of a process that has been going on for decades. Anyone surprised by the extremism and irresponsibility now on display either hasn’t been paying attention, or has been deliberately turning a blind eye.

And may I say to those suddenly agonizing over the mental health of one of our two major parties: People like you bear some responsibility for that party’s current state.

Let’s talk for a minute about what Republican leaders are rejecting.

President Obama has made it clear that he’s willing to sign on to a deficit-reduction deal that consists overwhelmingly of spending cuts, and includes draconian cuts in key social programs, up to and including a rise in the age of Medicare eligibility. These are extraordinary concessions. As The Times’s Nate Silver points out, the president has offered deals that are far to the right of what the average American voter prefers — in fact, if anything, they’re a bit to the right of what the average Republican voter prefers!

Yet Republicans are saying no. Indeed, they’re threatening to force a U.S. default, and create an economic crisis, unless they get a completely one-sided deal. And this was entirely predictable.

First of all, the modern G.O.P. fundamentally does not accept the legitimacy of a Democratic presidency — any Democratic presidency. We saw that under Bill Clinton, and we saw it again as soon as Mr. Obama took office.

As a result, Republicans are automatically against anything the president wants, even if they have supported similar proposals in the past. Mitt Romney’s health care plan became a tyrannical assault on American freedom when put in place by that man in the White House. And the same logic applies to the proposed debt deals.

Put it this way: If a Republican president had managed to extract the kind of concessions on Medicare and Social Security that Mr. Obama is offering, it would have been considered a conservative triumph. But when those concessions come attached to minor increases in revenue, and more important, when they come from a Democratic president, the proposals become unacceptable plans to tax the life out of the U.S. economy.

Beyond that, voodoo economics has taken over the G.O.P.

Supply-side voodoo — which claims that tax cuts pay for themselves and/or that any rise in taxes would lead to economic collapse — has been a powerful force within the G.O.P. ever since Ronald Reagan embraced the concept of the Laffer curve. But the voodoo used to be contained. Reagan himself enacted significant tax increases, offsetting to a considerable extent his initial cuts.

And even the administration of former President George W. Bush refrained from making extravagant claims about tax-cut magic, at least in part for fear that making such claims would raise questions about the administration’s seriousness.

Recently, however, all restraint has vanished — indeed, it has been driven out of the party. Last year Mitch McConnell, the Senate minority leader, asserted that the Bush tax cuts actually increased revenue — a claim completely at odds with the evidence — and also declared that this was “the view of virtually every Republican on that subject.” And it’s true: even Mr. Romney, widely regarded as the most sensible of the contenders for the 2012 presidential nomination, has endorsed the view that tax cuts can actually reduce the deficit.

Which brings me to the culpability of those who are only now facing up to the G.O.P.’s craziness.

Here’s the point: those within the G.O.P. who had misgivings about the embrace of tax-cut fanaticism might have made a stronger stand if there had been any indication that such fanaticism came with a price, if outsiders had been willing to condemn those who took irresponsible positions.

But there has been no such price. Mr. Bush squandered the surplus of the late Clinton years, yet prominent pundits pretend that the two parties share equal blame for our debt problems. Paul Ryan, the chairman of the House Budget Committee, proposed a supposed deficit-reduction plan that included huge tax cuts for corporations and the wealthy, then received an award for fiscal responsibility.

So there has been no pressure on the G.O.P. to show any kind of responsibility, or even rationality — and sure enough, it has gone off the deep end. If you’re surprised, that means that you were part of the problem.

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Debt Talks Reveal Republican Apocalyptic War on Government

July 14, 2011 by · Leave a Comment 

By Harold Meyerson

As Default-on-Our-Debt Day creeps ever closer, America’s two major political parties have embarked on a round of ideological redefinition.

Republicans have subordinated even the appearance of concern for many of their historic priorities — reducing deficits and the debt, maintaining a passable system of roads, even reducing Medicare and Social Security payouts — to the single goal of blocking any tax increase on anyone ever again. Taking the adage that “that government is best that governs least” to an extreme, at least some seem to view a government shutdown as a consummation devoutly to be wished. GOP presidential candidate and former Minnesota governor Tim Pawlenty is running ads hailing the shutdown of his state’s government, the result of the same kind of political impasse that threatens to shutter the feds’ doors.

If it was possible to give libertarianism a bad name, today’s Republicans would be doing just that.

On the Democratic side, President Obama has moved so far to the right that he has picked up many of the ideals the Republicans have jettisoned and embraced them as his own. It’s Obama who’s now the deficit-and-debt hawk and who has proposed cuts to Social Security and Medicare. Congressional Democrats oppose the president’s proposed entitlement cuts, but in fact they’ve already voted to reduce Medicare spending (though not benefits) by passing health-care reform, and, as part of the current budget negotiations, have agreed to major cuts in domestic as well as military spending.
In Obama’s defense, the Republicans he has to deal with have moved so far right that they make even the Gingrich-era GOP with which Bill Clinton grappled look like the Berkeley City Council. The fiscal constraints on his presidency far exceed those Clinton confronted, too.

But if the factors that have pushed Obama rightward are at least intelligible, those that have prompted the Republicans to winnow their agenda to one-note opposition to taxes and spending are nowhere so obvious.

For one thing, federal tax revenue as a percentage of the gross domestic product is at its lowest level since 1950. The correlation between low federal taxes and job creation looks more inverse than direct. The economy generated far more net new jobs during the ’90s (approximately 22 million during Clinton’s presidency alone), before the Bush tax cuts, than it has since (approximately zero). Yet in opposing any tax increases on the rich as part of a debt-reduction deal, House Speaker John Boehner vowed Monday that “the House cannot pass a bill that raises taxes on job creators.”

Job creators? What job creators? Over the past two months, according to employment statistics, we seem to have completely run out of job creators, though American multinational corporations are having no trouble creating jobs in the cheap-labor nations of Asia. Small businesses, however, cannot expand until American consumers start buying more, and American consumers can’t start buying more until they work their way out of the debt they incurred during the recent decades of pervasive income stagnation.

The Republicans, that is, have embraced market libertarianism at the very moment that America’s market capitalism is functioning worse than at any time since the Great Depression. Their timing is so perverse that we have to seek explanations for their radicalism that go beyond those of economic philosophy.

Republicans, to be sure, have long waged a war on government, but only now has it become an apocalyptic and total war. At its root, I suspect, is the fear and loathing that rank-and-file right-wingers feel toward what their government, and their nation, is inexorably becoming:

multiracial, multicultural, cosmopolitan and now headed by a president who personifies those qualities. That America is also downwardly mobile is a challenge for us all, but for the right, the anxiety our economy understandably evokes is augmented by the politics of racial resentment and the fury that the country is no longer only theirs. That’s not a country whose government they want to pay for — and if the apocalypse befalls us, they seem to have concluded, so much the better.

Most Americans, thankfully, don’t share the right’s romance with cataclysm — something then-Senate Republican leader Bob Dole realized when he called off the shutdown of 1996, something that current Senate GOP chief Mitch McConnell realized Tuesday when he unveiled a cynical and circuitous plan to back off from the impending smash-up. Dole persuaded his fellow Republicans to stand down. It’s not clear, given the furies that possess today’s Republicans, that McConnell can do the same.

meyersonh@washpost.com

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Who’s Serious Now?

April 21, 2011 by · Leave a Comment 

By Paul Krugman

2011-04-05T160723Z_1858491697_GM1E74600HJ01_RTRMADP_3_USA-BUDGET

House Budget Committee Chairman Paul Ryan (R-WI) speaks at a news conference held to unveil the House Republican budget blueprint in the Capitol in Washington April 5, 2011. The plan calls for sweeping changes to government health programs as it slashes taxes for corporations and individuals. 

REUTERS/Kevin Lamarque

Paul Ryan, the chairman of the House Budget Committee, sounds upset.

And you can see why: President Obama, to the great relief of progressives, has called his bluff.

Last week, Mr. Ryan unveiled his budget proposal, and the initial reaction of much of the punditocracy was best summed up (sarcastically) by the blogger John Cole: “The plan is bold! It is serious! It took courage! It re-frames the debate! The ball is in Obama’s court! Very wonky! It is a game-changer! Did I mention it is serious?”

Then people who actually understand budget numbers went to work, and it became clear that the proposal wasn’t serious at all. In fact, it was a sick joke. The only real things in it were savage cuts in aid to the needy and the uninsured, huge tax cuts for corporations and the rich, and Medicare privatization. All the alleged cost savings were pure fantasy.

On Wednesday, as I said, the president called Mr. Ryan’s bluff: after offering a spirited (and reassuring) defense of social insurance, he declared, “There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. And I don’t think there’s anything courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill.” Actually, the Ryan plan calls for $2.9 trillion in tax cuts, but who’s counting?

And then Mr. Obama laid out a budget plan that really is serious.

The president’s proposal isn’t perfect, by a long shot. My own view is that while the spending controls on Medicare he proposed are exactly the right way to go, he’s probably expecting too much payoff in the near term. And over the longer run, I believe that we’ll need modestly higher taxes on the middle class as well as the rich to pay for the kind of society we want. But the vision was right, and the numbers were far more credible than anything in the Ryan sales pitch.

And the hissy fit — I mean, criticism — the Obama plan provoked from Mr. Ryan was deeply revealing, as the man who proposes using budget deficits as an excuse to cut taxes on the rich accused the president of being “partisan.” Mr. Ryan also accused the president of being “dramatically inaccurate” — this from someone whose plan included a $200 billion error in its calculation of interest costs and appears to have made an even bigger error on Medicaid costs. He didn’t say what the inaccuracies were.

And now for something completely wonkish: Can we talk, briefly, about politicians talking about drugs?

For the contrast between Mr. Ryan last week and Mr. Obama on Wednesday wasn’t just about visions of society. There was also a difference in visions of how the world works. And nowhere was that clearer than in the issue of how Medicare should pay for drugs.

Mr. Obama declared, “We will cut spending on prescription drugs by using Medicare’s purchasing power to drive greater efficiency.”

Meanwhile, Mr. Ryan held up the existing Medicare drug benefit — a program run through private insurance companies, under legislation that specifically prohibits Medicare from using its bargaining power — as an example of the efficiencies that could be gained from privatizing the whole system.

Mr. Obama has it right. Medicare Part D has been less expensive than expected, at least so far, but that’s because overall prescription drug spending has fallen short of expectations, largely thanks to a dearth of new drugs and the growing use of generics. The right way to assess Part D is by comparing it with programs where the government is allowed to use its purchasing power. And such comparisons suggest that if there’s any magic in privatization, it’s the magical way it makes drug companies richer and taxpayers poorer. For example, the Department of Veterans Affairs pays about 40 percent less for drugs than the private plans in Part D.

Did I mention that Medicare Advantage, which closely resembles the privatized system that Republicans want to impose on all seniors, currently costs taxpayers 12 percent more per recipient than traditional Medicare?

But back to the president’s speech. His plan isn’t about to become law; neither is Mr. Ryan’s. And given the hysterical Republican reaction, it doesn’t look likely that we’ll see negotiations trying to narrow the difference. That’s a good thing because Mr. Obama’s plan already relies more on spending cuts than it should, and moving it significantly in the G.O.P.’s direction would produce something unworkable and unacceptable.

What happened over the past two weeks, then, was more about staking out positions than about enacting policies. On one side you had a combination of mean-spiritedness and fantasy; on the other you had a reaffirmation of American compassion and community, coupled with fairly realistic numbers. Which would you choose?

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