By: Aaron Rubin, Esq.

 

Nursing home administrators beware! You may often be approached by healthcare professionals who will pitch what seem to be harmless business proposals. Please keep in mind that oftentimes these "deals" can violate both federal and state healthcare statutes and regulations.

 

Consider the following example. You are the administrator at a local skilled nursing facility (SNF). One day the office manager of a high patient volume internal medicine physician practice approaches you and offers you a deal that appears to be too good to be true. The manager promises that the physician will exclusively refer ALL of his patients to your SNF in exchange for an annual base salary plus a productivity bonus equal to 20% of the net collections plus an incentive bonus that could total up to 10% of the productivity bonus.

 

Is this deal tempting? Absolutely! Depending upon the potential patients' payor sources, this could be a monetary bonanza for your SNF.

 

Keep in mind, however, that such an arrangement can violate the federal Stark Law. In fact, a recent lawsuit has some uncomfortable similarities with the above case. The lawsuit involved a hospital that incentivized surgeons to perform their surgeries exclusively at the hospital in exchange for a similar productivity bonus and incentive bonus. The federal government sued the hospital, and a jury found that the hospital violated the federal Stark Law which prohibits a healthcare provider from contracting with outside physicians to provide certain designated healthcare services, reimbursed by Medicare and / or Medicaid, in the healthcare provider's facility and for the healthcare provider to pay the physicians a productivity bonus. Moreover, the jury found that the hospital also violated the federal False Claims Act by employing this illegal compensatory arrangement. As things stand now, the government is seeking treble damages plus as much as $11,000 per submitted claim.

 

Perhaps the old adage is alive and well: if the deal is too good to be true - it is probably not true!

 

For more information relating to the risks of physician productivity and incentive bonuses and the federal Stark Law, please contact Aaron Rubin, Esq. at 609-454-5351 or arubin@barmak.com.

  

 By: Jennifer Cohen, Esq.   

 

When residents make requests - or sometimes, demands - regarding racial preference in caretakers, what are the provider's obligations?  To the resident? To the employee?

 

Consider recent news stories in which nursing staff allege discrimination, after having assignments adjusted so that certain caucasian residents are cared for only by caucasian caretakers.  In these cases, facilities oftentimes allege that they are observing residents' rights while also protecting staff members from potential allegations by disgruntled residents.

 

Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on race, color, religion, sex and national origin.  Meanwhile, the Federal Nursing Home Reform Act, enacted as part of the Omnibus Budget Reconciliation Act of 1987 (OBRA 87), gives residents' rights, one of which is the right to choose a care provider.  How can the two be reconciled?  While OBRA 87 preserves the right of residents to choose their physicians, it does not allow for residents to  make decisions based on the race or ethnicity of a caretaker.

 

The Equal Employment Opportunity Commission (EEOC) takes a very clear stance on this, residents' rights aside.  It is their position that resident preference is no excuse for racial discrimination in the workplace.  The EEOC maintains its goal of eradicating race and color discrimination from the workplace by seeking enforcement efforts to address overt, subtle, or implicit bias.

 

Considering the racial and ethnic diversity of both residents and caretakers in most facilities, it is essential that caretakers have a thorough understanding and sensitivity of multicultural diversity in order to effectively communicate with residents. Healthcare providers should provide training for their caretakers and ensure that unlawful discriminatory behavior is not tolerated in the facility.

 

For additional information and dealing with these issues, please contact Jennifer Cohen at 609-454-5351 or jcohen@barmak.com.

  

  

 

Our law firm provides integrated regulatory, transactional, employment and litigation/advocacy services to healthcare organizations.

   

Representative Clients: 

Entities:  Skilled nursing facilities; Home health agencies; Hospice agencies; Hospitals.

 

Providers: Physicians; Therapists; Orthotists and Prosthetists; Non-profit providers.

 

Suppliers:  Durable medical equipment; Long-term care pharmacies; Retail pharmacies.

 

Businesses: Billing; Management service organizations; Independent provider associations; Vendors for healthcare providers.

 

Regulatory Issues: Corporate Compliance Programs (Fraud, waste & abuse; Privacy & Data Security; Employment); Healthcare facility; Professional provider; Medicare & Medicaid (certification, survey and reimbursement); Auditing (legal; clinical; administrative; and reimbursement).

 

Transaction Issues: General Counsel Services; Contracts.
          
Employment Issues: Wage and hour; Equal employment opportunity; Discrimination; Whistle-blowing; Employment agreements; Severance packages; Employee release agreements, Non-compete agreements; Non-solicitation agreements; Confidentiality agreements, Employee leave issues, Electronic monitoring and employee privacy, Employee separation (suspensions, terminations and reductions in force); Documentation.

  

Litigation/Advocacy: Contracts; Employment; Fiduciary issues; Commercial leases; Payment (Managed Care Organizations; Medicare; Medicaid); Guardianship; Professional and facility licensing; Healthcare regulatory; Fraud and privacy issues.
  
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This newsletter has been prepared by the Law Offices Of David S. Barmak, LLC for informational purposes only and is not intended to provide legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

  

For more information, please contact:

David S. Barmak, Esq.

Telephone (609) 454-5351
Fax (609) 454-5361

www.barmak.com