Doctors, Enforcement Risks And Compliance Programs

by Michael Volkov

drcomplianceDoctors better get used to government regulation.  The Affordable Healthcare Act contains a lengthy complement of new laws and regulations.  Physicians are under greater government scrutiny.  As Medicare expands and inevitably grows, physicians face a growing number of risks.

Some doctors have sworn off Medicare and Medicaid patients because of government regulation.  Not all doctors can afford to do that.  As a result, physicians are becoming more familiar with compliance and ethics programs.

The five most important Federal fraud and abuse laws that apply to physicians are the False Claims Act (FCA), the Anti-Kickback Statute, the Physician Self-Referral Law (Stark Law), the Social Security Act, and the U S Criminal Code.  Doctors face a variety of civil and criminal enforcement risks, including civil monetary penalties, exclusion from the Medicare program and criminal and civil liability.

When the federal government pays for items or services to Medicare beneficiaries, the federal fraud and abuse laws kick in.  The federal government’s payments are based on claims submitted by physicians which implicitly and explicitly require certification by the physician that the documents are true and accurate.  Trouble arises when a doctor submits claims for:  services which were not actually rendered; services which were not medically necessary; services performed by an improperly supervised or unqualified employee; services that were performed by an employee who has been excluded from Federal healthcare programs; services that are low quality and virtually worthless; and services already included in a global fee.

Physicians have to pay attention to keeping accurate and complete medical records in order to document the services they have provided.  Claims have to be supported by adequate documentation.  Medicare audits focus on this issue and whether the documentation justifies the claim.  Applying best practices in this area is important to ensure that patients receive appropriate care and there is adequate support for services compliance

Aside from these significant risks, physicians need to focus on additional areas of concern:

Investments in Healthcare Business Ventures: Doctors like to leverage their incomes and participation in the health industry by investing in related services (e.g. imaging centers, laboratories, equipment vendors, or physical therapy clinics).  While these are lucrative ventures, doctors have to be careful that they do not refer more patients for the services provided by those parties than physicians who do not invest in the venture.  These business relationships can sometimes distort physician decision-making, resulting in violations of the Anti-Kickback Statute and the Physician Self-Referral Law (Stark Law).

Physician Recruitment: Hospitals often recruit and lure physicians to relocate to a hosppitl’s service area, or become a member of its medical staff, and establish a practice that helps serve that community’s medical needs.  Some hospitals may offer illegal inducements to seek a greater number of physician referrals to the hospital.  Hospitals and doctors have been subject to enforcement for improper financial arrangements involving free or low-cost rent or other benefits in order to induce the physician to refer more patients to the hospital.

doctorsPhysician Relationship with Vendors:

(i) Free Samples – Doctors receive a lot of free samples from drug and biologic companies.  Doctors can give the free samples to patients.  They just cannot charge for them.  Doctors have been prosecuted for billing Medicare for free samples.

(ii) Pharmaceutical and Medical Device companies — Pharmaceutical and device companies have been prosecuted along with physicians for entering into sham consulting agreements and other arrangements to buy physician loyalty to their products.  Doctors have to ensure that the consulting arrangement is for legitimate services which the physician can provide and is not motivated by an implicit requirement that the physician prescribe the specific drug or device.

(iii)  Sunshine Act Disclosures – Physicians will soon be listed in public disclosures by pharmaceutical and medical device companies under the Sunshine Payments Act which is effective later this year.  Under the Act, drug, device, and biologic companies have to publicly report nearly all gifts or payments they make to physicians.

In the face of all of these risks, physicians need to establish and follow a compliance program.  This is new territory for a number of physicians.  HHS has provided guidance in this area, suggesting that physicians design and implement a program with seven components: (1) Conduct internal monitoring and auditing; (2) Implement compliance and practice standards; (3) Designate a compliance officer or contact; (4) Conduct appropriate training and education; (5) Respond appropriately to detected offenses and develop corrective action; (6) Develop open lines of communication with employees and (7) Enforce disciplinary standards through well-publicized guidelines.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Michael Volkov, The Volkov Law Group | Attorney Advertising

Written by:

Michael Volkov

The Volkov Law Group on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.