Common Healthcare Compliance Mistakes

The first and most serious mistake medical companies, medical practices, doctors, nurses, and others make is – failing to make an appointment with an experienced healthcare lawyer – to discuss the federal and state regulations that govern their business or practice.

There are many different federal agencies such as the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) that regulate the manufacture, marketing, prescription, and use of drugs, medical devices, dietary supplements, cosmetics, vaccines, and other medical-related products and services. The FDA generally regulates foods, drugs, and cosmetics through the Food, Drug, and Cosmetic Act (FD&C Act). The agency also regulates public health based on other laws. The FTC, among other duties, regulates the marketing and advertising of medical products and services to ensure the claims and representations don’t mislead the public.

There are many different laws that medical companies and providers need to understand depending on the type of product, the type of service, the qualifications or lack of qualifications of the healthcare provider, the business relationships that are involved, referral arrangements, privacy concerns, security concerns, and many other issues.

Some of these laws include:

• The FD & C Act.
• Stark Law and the Anti-Kickback Statute (AKS) which regulate how referrals are made so the that medical care of the patient is prioritized over any financial concerns of medical practices and medical companies
• The Health Insurance Portability and Accountability Act (HIPAA) which regulates the privacy and security of patient health information
• The False Claims Act which was enacted to ensure that bills submitted to the government for payment of healthcare and other services are true, accurate, and necessary
• The consumer privacy laws of the US states
• State False Claims Act laws and anti-referral laws
• Corporate practice of medicine laws that are designed to ensure medical corporations serve the patients first before serving the physicians
• Laws regarding who can perform medical services, whether services can be performed remotely, when supervision is required, when certain drugs may be prescribed and when the drugs cannot be prescribed, and many other daily operations of a medical practice
• Many other healthcare laws

The consequences for violating these laws can include warning letters, civil complaints and civil fines, criminal complaints that could result in imprisonment and substantial fines, disciplinary action by state and local medical boards, cessation of the right to practice medicine, the denial of the right to submit bills to the government for payment, and many other consequences.

Skilled healthcare lawyers help medical providers and businesses understand the applicable laws, explain these laws to their clients, and help clients prepare plans and strategies to meet their obligations and reduce the risk of civil, criminal, or ethical actions. Seasoned healthcare lawyers also help medical providers and medical businesses respond to any complaints or actions that are filed.

Some of the many issues that medical providers and medical businesses may fail to address or understand that can lead to formal complaints include the following:

1. Not having the correct documentation. In the event of a review, audit, or complaint; doctors and others in the medical industry benefit by providing supporting documentation that shows why the providers/businesses were in compliance or reasonably believed the terms of compliance were met. We help physicians and medical practices understand what written or computerized documents are necessary to show that there was a doctor/patient relationship, that the medical records of the patient were properly kept and properly stored, that patients consented to or authorized necessary transactions, what medical services were provided, and why the services were necessary. Proper documentation can mean the difference between being paid, not paid, or being accused of fraudulent billing. Often, medical practitioners need more documentation than the practitioners are already using.
2. Unlawful marketing. Medical practitioners and businesses need to understand that every statement and claim made about their products or services is subject to review by the FDA, the FTC, and other federal and state agencies – to determine if the statements/claims are honest and whether the statements/claims would reasonably mislead a consumer or a patient. These statements and claims include labels on drugs and products, marketing brochures and other offline marketing materials, and online marketing materials including websites and social media posts.
3. Illegal referrals. When a doctor refers a patient to another healthcare provider, a diagnostic lab, a pharmacy or any other healthcare entity; then, generally, the referral must be based on the patient’s best interests alone. Referrals based on financial incentives or other forms of remuneration such as directorships or vacations may violate the AKS. Referrals to any designated healthcare entity in which the referrer (or a family member) has a financial interest may violate Stark Law. Our healthcare lawyers will review your business relations to determine if you might not be following the federal or state anti-referral laws. We will review whether any Stark Law exceptions or AKS safe harbors apply. There are many ways to help your practice lease equipment and conduct many other activities and arrangements that may otherwise violate Stark Law or the AKS. For example, a managed service organization(MSO) can help address Stark Law, the AKS, and many other aspects of the business side of your medical practice.
4. Lack of medical necessity. Every request for payment, whether the request is to Medicare, Medicaid, TRICARE, other federal agencies, or private insurance companies must be based on medical necessity. Physicians, dentists, psychologists, pharmacists, and all other healthcare providers must be able to medically support their position that the medical services and treatments provided are medically necessary. The medical necessity requirement helps ensure that the patient receives the proper care and that the entity that is paying the bill is paying a fair and proper amount. Establishing proper protocols and procedures for each type of service can help support a claim of medical necessity.
5. Not putting the patient first. At every level and every degree, healthcare companies need to ensure that the patient’s health comes first. Violations may include improper referrals, failure to inform the patient of the possible risks of any treatment or medication, misleading the patient about the value of different treatments and medical products, noncompliance with HIPAA, failure to notify the patient about changes in which provider will provide his/her care due to a sale of a practice or other ownership transactions, and many other types of medical misconduct.
6. Failing to review all contracts with legal counsel. These contracts include employment contracts, contracts with suppliers and vendors, contracts with hospitals and other healthcare providers, insurance contracts, and many other contracts that affect patient care and business operations.
7. Privacy violations. There are laws, starting with HIPAA, that regulate how the medical records and electronic health information of clients should be handled, when and how clients should be notified of breaches, when and how consent from the patient should be obtained, and what exceptions may apply. Our lawyers will explain your compliance duties, help you create compliance policies, and help you respond to claims of privacy violations.
8. Telemedicine. Healthcare providers need to understand when online conversations are possible and when in-person conversations are required, the need for an existing doctor-patient relationship, where the doctor and patient must reside or be when the conversations take place, who can participate in the conversation (for example, a nurse or a doctor), and many other requirements. The federal and state telemedicine requirements are evolving. We’ll help keep you informed.

Experienced healthcare lawyers help medical professionals and companies understand their compliance requirements, develop compliance strategies, document the efforts to comply, and address complaints of noncompliance. Compliance issues apply to both healthcare providers and healthcare companies.  The old adage – an ounce of prevention is worth a pound of cure – applies. It’s better to develop documentation and billing strategies, work with MSOs, review Stark exceptions and AKS safe harbors, review contracts, and take other preventive measures before complaints are filed and before conducting business – than to risk or respond to complaints of noncompliance violations.

Doctors, nurses, and other medical providers and businesses should contact Cohen Healthcare Law Group to discuss their legal and healthcare compliance requirements. Our experienced healthcare attorneys advise medical practices and medical businesses about healthcare compliance laws and regulations.