Hospital Compliance: Roles, Stark Law, Anti-Kickback Statute

The assignment content discusses the Physician fee schedule, Medicare self-referral disclosure protocol, and Corporate Integrity Agreement (CIA) as an enforcement tool used by the Office of Inspector General (OIG). It also covers the Anti-Kickback statute's violation and penalties. Additionally, the content highlights the responsibility of a Board of Directors in ensuring compliance with laws and regulations.

Running Head: Memo
MEMo

Memo 1
Memo
To: Chairman
From: Compliance Officers
CC: Board of Director
Date: 19th June 2017
Re: Roles and responsibility of Compliance Office for the hospital system.
1. The following are the roles and responsibilities of Compliance Officer:
The role of a compliance officer, sometimes known as Compliance manager, is to make sure that
the company is conducting the business in full compliance with all national and international
laws and regulation which pertain to a specific industry, as well as professional standards,
accepted business practices and internal standards.
DUTIES
The duty of compliance officers are as follows:
 To link the number of relevant authorities, laboratories, companies as per the description
mention.
 To develop, initiate, maintain and revise the policies and procedures for the general
operation of a compliance program as well as its related activities.
 To consult with the corporate attorney that help them to resolve the problems related to
compliance issues.

Memo 2
 To act as an independent review as well as the evaluation body by which to ensure that
the compliance issues were being appropriately resolved.
 To provide the report on a regular basis so that it will keep in touch with the Corporate
Compliance of the board as well as senior management for the operation and the progress
of the efforts.
 To establish and provide direction of the compliance hotline.
 To ensure proper reporting of the violation that is authorized by the enforcement
agencies.
 To work with the HR Department so that to develop an effective training program for the
new employees in the organizations as well as the ongoing training for rest of the
employees and the manager.
 Monitoring compliance program performance and relates it to a continuing basis that will
take an appropriate step to increase its efficiency.
Report to Board of Director
The Compliance Officer is an independent officer so it report to the Board of Director and the
structure that would be in compliance with the purpose of sentencing guidelines. A report was
made in 2010 in the US where a panel that consists of representatives from the U.S. told that the
compliance officer should directly report to the Board of Director and not directly to the General
officer. Also at the same time, in conference of the DOJ Assistant Attorney General Lanny
Breuer said that they should directly access the board of directors, telling that the compliance
officer should not report directly to the General Manager it should directly report to the Board of
Director.

Memo 3
2. The Stark law was enacted in 1989 and it was effectively started in 1st January 1992. The
ultimate purpose of this law was to ban the self-referral for the services of clinic
laboratory. Similarly, the Stark law prohibits the entities for making a claim for the
payment in the Medicare program for the clinical laboratory services that furnishes under
that prohibits referral. Later, in 1993 the expansion of Stark Law I was enacted and on 1st
January 1995 the Stark Law II was started. The purpose of this law was to extend the
services of additional health care.
Stark Law is a set of US federal laws that prohibits the physician self-referral, more
importantly for the physician of the Medicare patient of that entity which provide
designated health services (DHS) if the physician has a financial relationship with its
entity.
The term "referral" define as the request by a physician for the medical services as well
as for the request of establishment plan care by a physician that include the provisions
related to health services for other services. DHS includes the client laboratory services,
physical therapy services, occupational therapy services, services related to radiology,
radiation therapy services, and home care health services and in and out patient hospital
services. These includes the relationship between the ownership, investment interest, and
the arrangements related to compensation.
The purpose of the Stark law talk about the consulting and the professional relationship
between the doctors, hospitals, and companies.

Memo 4
This law pertain only to the physicians who refer as a Medicare patients for a specific
service to the entity by which they have a financial relationship. The list which
designated the health services and the financial relationship, had been addressed by the
statue of the extraordinarily board.
The difference between the Stark law and Anti-kickback statue is given below

Memo 5
3. The exceptions to Stark law apply on the physicians that refer to the Medicare and
Medicaid patient for a particular service known as DHS from which they have a financial
relationship (Adashi, E. Y., 2015). This law involves several exceptions that prohibits in
BASIS STARK LAW ANTI-KICK BACK STATUE
PROHIBITS The Stark law prohibits the physicians
from referring the Medicare patients
for the designated health services for
the entity that shows a financial
relationship if in the case of exceptions
applies.
As per Anti-Kickback statue, it prohibits
in anything in the value that includes the
offering, paying, receiving that induce
the Federal health care business
programs.
REFERRALS In the stark law, referrals are from the
physician.
In anti-kickback statue, referrals are
from anyone.
ITEMS OR
SERVICES
In the stark law the services related to
health care.
In the Anti-Kickback statue the item or
services of anything.
INTENT Here there is no purpose or standard
for the overpayment.
Here, there is intent that should be
proven i.e. it should be knowing and
wilful.

Memo 6
the Stark II Regs and based on the fact of specific analysis and its application on certain
terms which are as follows:
a. Physical services: The physical services includes those services that are furnished and
are personally by another physician who is the member of referred physician group.
b. In-office Ancillary Services: These services are furnished by referring the physician
who is the member of the same physical group.
c. Organization services: These services are furnished if the organization provide
services related to health plans.
d. Services related to client laboratories: These are exempted from the Stark law
probation as in case if the charges for DHS that include at ASC Rate (Ambulatory
surgical Center).
The other exceptions that includes the financial relationship are as:
 Payment of office space and equipment.
 Relationships of real employment.
 Recruitment of the Physician.
 Arrangement of the personal services.
Compensation agreement in stark law recommends that it prohibits from referring the
Medicare Beneficiaries to the entity for the selected health services in case of financial
relationship of the physician with the entity. This law prohibits the entity from presenting
the claims to the Medicare that prohibits the referral of DHS. Physicians have the
financial relationship with its entity only when the person has an ownership interest in

Memo 7
that entity or direct compensation agreement with individual. Then a physician, and its
entity held strictly that is liable under the Stark and in case if there is a prohibited referral
for DHS is made a claim has been presented to the Medicare, irrespective of the intent,
and it can be further ordered for paying the financial penalty and the damages.
Rationale of Stark Law
The rationale of the Stark law suggest that physicians should perform as per the best
interest of the patient and not for the financial interest of surgeons and these financial
arrangements might encourage the extremely use of the services which drives up cost of
the health care. (Sloss, D. L. 2013)
4. The section of Social Security Act of 1877 commonly known as physician self-referral
law also refers to the Stark law. When the enacted was passed in 1989 of social security
act 1877 it applies only to the physician referrals for the services of the clinical
laboratory. After that, in 1993 and 1994, Congress expanded the ban to additional DHS
which applies to certain aspects of the physician's self-referral law to the Medicaid
program. Then in 1997, Congress adds a provision which permits Secretary to issue the
written advisory opinion that concerns whether a referral relating to DHS is prohibited or
not under the section of 1877 of the social security act. After that in 2003, Congress
authorized the Secretary to spread an exception to the physician self-referral prohibitions
for certain arrangements where they receive the non-financial remuneration that is
necessary and it can be used merely to accept and transmit the electronic prescription
information that could established a provisional moratorium on physician referrals to the
specific specialty hospitals where it refer as physician that has the investment interest.

Memo 8
The proposed rule had been finalized into three phases as the phase I comment was 2001,
the Issue Period of phase II was 2004, and in 2007 phase III was issued. Then they
publish other projected and final rules that affect the physician self-referral.
Example
The example of proposed and final rules consist of the nuclear medicine inside existing in
the DHS groups, planned and final rule which relates electronic prescribing technology
and electronic health records technology. After long time Phase III in 2007 publishes the
amendments that relates to physician self-referral regulation in 2008, and at the same
time, it publishes revisions for next year i.e. 2009 for the Hospital Inpatient Prospective
Payment System final rule.
Furthermore, as the regulations define certain DHS, it will published annually in schedule
of the Physician fee and update the most relevant code for relevance of DHS. Then in
2010, it publishes the Medicare self-referral disclosure protocol which was pursuant
under section 6409(a) of the Patient Protection Act. It that enables the service providers
and supplier to disclose the actual violation of physician self-referral statue. Also, the
Section 6409(b) gives Secretary of the authority to decline the amount that is due and
violation of the social security act 1977.
5. Corporate Integrity Agreement is an enforcement tool that is used by the office of
Inspector General within the department of Health and Human Services. The OIG within
the department of health and human service can improve the quality of health care and try
to promote the compliance of health care regulations.

Memo 9
The violation of the Anti-kickback statue is a general prohibition which prohibits the
significant and wilful solicitation, proposal, and payment of several remunerations either
directly or indirectly, or in the form of cash or in kind:
(1) To refer an individual for services which has been covered under federal health care
program or,
(2) To recommend the purchase, rent, or order the goods or services under the federal health
care program. These can be broken into different forms:
1. No remuneration in the form of cash or kind.
2. It may be solicited, accepted or received either by directly or indirectly.
3. Knowingly and willfully
4. The payment had made either fully or partially to the benefit of federal health care
program that includes Medicare and Medicaid. (Centers for Medicare and Medicaid Services.
2013).
Penalties
The violation of Anti-kickback law is a criminal and punishable offense and this might
lead to the imprisonment of five years and/or a fine of $25,000. Furthermore, the
violation might result in eliminating the federal health care programs that include both
Medicare and Medicaid as well as parallel loss of the State licensure, which eliminates
from the participation in managing the health care contracts.

Memo 10
6. The Board of the director is liable for Stark and/or Anti-Trust Violation which describes
the corporate obligation to the public and it may violate the law, also they are liable for it.
Though the board of directors is governing body of various types which comprises of the
association that is responsible for an ultimate direction of the management of affairs in
the organization. It is responsible for making the policy, while the employees are
responsible for the execution of day-to-day management that help them to implement the
policy that the board has made. Also, there is a crucial legal responsibility for the actions
of the association and with the rest of the board.
The board acts legally when there is a majority of the vote and when it is duly constituted
the proper conduction of the meeting. The board may delegate the authority on behalf of
itself to the others, which includes the committees but in some other cases, it is still
responsible for taking any action by the committee to whom it delegates the authority.
The member of the board has no authority by virtue of being the member of the board in
the case of an individual. Though, the board may give additional responsibility to the
board members, as it appoints the members of the committee. In such a way the board has
only the authority to the specifically delegated to the laws or the board, as it can be
general or in the abroad.
7. The list of sources for the future use which includes:
CFR Section

Memo 11
Centers for Medicare and Medicaid Services. (2013). CMS Manual System. Pub 100-07
State Operations Provider Certification. Appendix A. 42 CFR. Section 482.52. Revised
hospital anesthesia services interpretive guidelines, 14 Jan 2011.
Law related article
Lake, M. (2014). Organizing hypocrisy: providing legal accountability for human rights
violations in areas of limited statehood. International Studies Quarterly, 58(3), 515-526.
Links to federal website
Anthopoulos, L., Reddick, C. G., Giannakidou, I., & Mavridis, N. (2016). Why e-
government projects fail? An analysis of the Healthcare. gov website. Government
Information Quarterly, 33(1), 161-173.
Stakeholder Association for the hospitals
Pennel, C. L., McLeroy, K. R., Burdine, J. N., & Matarrita-Cascante, D. (2015). Nonprofit
hospitals’ approach to community health needs assessment. American journal of public
health, 105(3), e103-e113.
Hospital website that describes compliance program
Pearsall, E. A., Meghji, Z., Pitzul, K. B., Aarts, M. A., McKenzie, M., McLeod, R. S., &
Okrainec, A. (2015). A qualitative study to understand the barriers and enablers in
implementing an enhanced recovery after surgery program. Annals of surgery, 261(1), 92-96.
Journal Article

Memo 12
Anthopoulos, L., Reddick, C. G., Giannakidou, I., & Mavridis, N. (2016). Why e-
government projects fail? An analysis of the Healthcare. gov website. Government
Information Quarterly, 33(1), 161-173.
References
Adashi, E. Y., & Kocher, R. P. (2015). Physician self-referral: Regulation by
exceptions. Jama, 13(5), 457-458.
Sloss, D. L. (2013). Kiobel and Extraterritoriality: A Rule without a Rationale.
Centers for Medicare and Medicaid Services. (2013). CMS Manual System. Pub 100-07 State
Operations Provider Certification. Appendix A. 42 CFR. Section 482.52. Revised hospital
anesthesia services interpretive guidelines, 14 Jan 2011.

Memo 13
Furrow, B., Greaney, T., Johnson, S., Jost, T., & Schwartz, R. (2014). Health law. West
Academic.
Anthopoulos, L., Reddick, C. G., Giannakidou, I., & Mavridis, N. (2016). Why e-government
projects fail? An analysis of the Healthcare. gov website. Government Information Quarterly,
33(1), 161-173.
http://www.hcca-info.org/
https://oig.hhs.gov/compliance/provider-compliance-training/files/StarkandAKSChart Handout
508.pdf
http://www.ache.org/newclub/career/comploff.cfm
https://www.healthlawyers.org/hlresources/Health%20Law%20Wiki/Corporate%20Integrity
%20Agreements%20(CIAs).aspx
https://en.wikipedia.org/wiki/Stark_Law