An Overview of Legal, Ethical, and Compliance Issues Governing Physician Relationships Doctors Should Know

Doctors need to understand the laws and regulations that apply to the way they bill for services, work with insurance companies, submit claims to the government, enter into business relationships with other doctors and vendors, provide documentation, and other parts of their medical practice. Failure to properly comply with the applicable laws can result in criminal penalties, civil fines, nonpayment of claims, and the possible suspension of the ability to represent and bill for Medicare and Medicaid patients and other healthcare services.

Physicians and Federal Payers of Healthcare Services Such as Medicare and Medicaid

Some of the applicable federal healthcare laws your healthcare regulation attorney will explain about physician relationship issues are:

  • Federal False Claims Act (FCA). The law, which dates back to the Abraham Lincoln administration, is designed to punish anyone who overcharges, bills for services that were unnecessary, commits fraud, or otherwise tries to cheat the government. The law even rewards whistleblowers for disclosing dishonest dealings with the government. Civil penalties include being denied the billing claim and treble damages.
  • Anti-Kickback Statute (AKS). This law controls the impropriety of receiving something of value in return for making a referral of services or items if the services or items can be reimbursed by a federal healthcare program. Our experienced federal healthcare attorneys can explain what forms of remuneration are illegal; such as cash, excessive compensation for medical jobs, or even free meals. The lawyer can also can explain the safe harbor provisions and regulations of the AKS which allow for certain types of remuneration and referrals. Violators of the AKS face civil and criminal penalties.
  • The Stark Law also known as the physician self-referral law. Under Stark, physicians can’t bill Medicare or Medicaid if they make referrals to specific designated health entities in which they (or an immediate family member) has a financial interest. There are some exceptions. Penalties include civil fines, denial of the bill, and possibly being denied the right to further bill Medicare or Medicaid.
  • Criminal Health Care Fraud Statute. This law makes illegal – schemes to deliver healthcare services if the scheme is aimed at defrauding a healthcare program, or obtaining funds from the healthcare program through misrepresentations or false promises. Imprisonment and civil fines are possible.
  • Exclusion Statute. This law authorizes the OIG (Office of Inspector General) to exclude from participation in federal healthcare programs anyone or any entity that engages in Medicare fraud or Medicaid fraud or abuses or neglects patients. The OIG can also exclude people or entities that have felony convictions for health-related misconduct, financial misconduct, or for offenses involving controlled substances. Your federal healthcare lawyer can also explain what other actions can disqualify a physician from obtaining federal health care funds.
  • Civil Monetary Penalties Law (CMPL). This law imposes fines and penalties for different types of health care fraud including violating the AKS, presenting false or fraudulent claims for services or items that weren’t provided or that the doctor knows or should know Medicare won’t pay.

Federal Open Payments Program

Open Payments is a federal program, mandated by the Affordable Care Act. It requires that information about gifts, speaking fees, travel, meals, and other benefits made by vendors (drug makers, device manufacturers, and group purchasing organizations called GPOs) to doctors and teaching hospitals be collected and stored in a database. Any financial interest a doctor has in a medical business should also be stored.

Physicians should check the CMS database to make sure the information is correct. Doctors should understand that patients, the public, and researchers have the right to view the database too. Vendors are required to supply accurate information. The data that is entered includes:

  • Speaking fees
  • Text books and journals
  • Gifts
  • Entertainment expenses
  • Meals
  • Travel costs
  • Fees for serving on advisory boards

CMS encourages doctors to register with Open Payments Program and to regularly review their records.

Physician Disclosure of Conflict-of-Interest Disclosure

Many entities require that physicians disclose if they have a potential or actual conflict of interest. Even if the relationship is legal, the entity needs to decide if the conflict means that benefits to the physician should change or cease or if an explanation of the conflict is required. Some of the entities that need to know about any type of conflict are

  • The National Institutes of Health
  • The Food and Drug Administration
  • Grant-givers
  • Universities
  • States

Medical Compliance Programs

A good way to minimize risk of noncompliance with Stark Law, Anti-Kickback Statute, and other health lawyers is to be pro-active. This means doctors should consider creating their own compliance program to identify what actions might constitute fraud and when medical bills may violate the laws. Part and parcel of a good compliance program should be:

  • Assigning someone to be responsible for compliance
  • Training the compliance director and your medical team about compliance issues and requirements
  • Creating a set of standards that must be met
  • Reviewing your current billing and referral practices
  • Establishing a system for detecting, reporting, and responding to violations
  • Encouraging employees to speak with you or the director about compliance issues
  • Having a disciplinary plan in place for when violations of the policies occur

We understand effective compliance program policies and procedures.


Health care governing boards can look to “Practical Guidance for Health Care Governing Boards on Compliance Oversight” for advice in designing a compliance program.

Continuing Medical Education (CME)

Physicians must know their state licensure requirements. This includes the duty to comply with your state’s Continuing Medical Education (CME) obligation to take course to keep current with your medical practice and specialty. Physicians must also understand the requirements to keep up their hospital privileges and board certifications.

Of particular concern are CME courses offered by vendors such as drug or device manufacturers. These courses should be available to all doctors and should generally be approved by the local or state medical societies that monitor CME instructions.

 Physician relationship resources

Physicians should consult with experienced healthcare attorneys before they conduct business with any vendor. The attorney will inquire about the nature of the medical practice and the scope of the desired business relationship. The attorney will then advise the client about the relevant laws, the legal risks, and legal strategies for minimizing the risks.

Other medical resources include the doctor’s local or state medical society, medical societies for your particular specialty, and the Centers for Medicare and Medicaid Services.

The physician, after consulting with a respected federal healthcare regulation lawyer, may also contact the Office of Inspector General. The OIG has information on compliance education and many other Medicare and Medicaid issues.

Physicians Should Understand What Medical and Financial Practices Are Legal and Which Ones May Result in Civil and Criminal Penalties.

Our healthcare regulatory firm helps doctors should appreciate how all aspects of their medical practice may give rise to fines, penalties, denials of claims, possible loss of business, and even imprisonment. At Cohen Healthcare Law Group, our healthcare and FDA lawyers help physicians navigate these choppy and uncertain waters. To review any and all legal aspects of your medical practice’s legal issues, Contact us today to review your legal requirements.

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