Compliance Perspective – Kickbacks:
The Compliance Officer should review the facility’s policies and procedures with the Compliance Committee regarding the facility’s employment and/or business interaction with physicians to ensure that physicians practicing in relationship with the facility adhere to the highest ethical standards and are not in violation of the anti-kickback law, the IRS rules on employee and independent contractor status, the False Claims Act and the Stark II self-referral law. Training will be provided to staff, related physicians and vendors regarding the expectation of compliance with all applicable laws. The Compliance Officer will request that appropriate staff be assigned to verify on an annual basis that physicians working in relationship with the facility have not violated any state or federal kickback, physician self-referral, false claims act laws or ethical standards.
A Pennsylvania-based operator of long‑term care and rehabilitation hospitals across the country, and certain affiliated entities (referred to collectively as PAM) used by the company to operate its facilities, have agreed to pay the United States, Texas, and Louisiana a total of $13,168,000 to resolve claims that they violated the False Claims Act (FCA), and the Texas and Louisiana false claims statutes, by knowingly submitting claims to the Medicare and Medicaid programs that resulted from violations of the Anti‑Kickback Statute (AKS) and the Physician Self‑Referral Law (PSRL), the Justice Department announced recently.
Beginning in 2006, PAM entered into numerous physician-services contracts on behalf of its hospitals. Although the purpose of these contracts was ostensibly to retain physicians as medical directors or in other administrative or medical roles, the U.S. alleged that the company’s payments under these contracts were intended to induce the physicians to refer patients to PAM’s facilities. The company allegedly violated the AKS further through so- called “reciprocal referral relationships” with unaffiliated healthcare providers such as home health companies. Through those arrangements, PAM allegedly referred patients to those other providers with the und
erstanding that those providers would refer other patients to PAM’s facilities.
PAM’s conduct allegedly resulted in false claims to Medicare as well as certain Medicaid programs. The latter are jointly funded by both the federal and state governments. Under the settlement, PAM will pay $13,031,502 to the United States, $114,016 to Texas, and $22,482 to Louisiana.
The settlement resolves allegations originally filed in a lawsuit under the whistleblower provisions of the False Claims Act.
In addition to resolving its False Claims Act liability, PAM has entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General which includes, among other compliance obligations, an arrangements’ review to be conducted by an Independent Review Organization.
