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Precertification presents anti-kickback problems

Radiology Administrator's Compliance and Reimbursement Insider, July 1, 2007

More and more insurers require that physicians obtain precertification, or preauthorization, for costly imaging procedures.

This added requirement puts paperwork pressure on referring physicians and leaves the financial bite of noncompliance on radiology departments and imaging facilities that suffer from denied claims. Under this scenario, both sides lose.

To resolve the difficult situation and improve imaging reimbursement, many radiology administrators set out to ease referring physicians' burdens.

Some radiology practice managers have tried:

  • Placing their own front desk staff in the referring physician's office for a set amount of time each week
  • Creating a third entity solely responsible for obtaining precertifications on behalf of the referring physician
  • Hiring third-party billing companies to handle the preauthorization requirements on behalf of referring physicians

    Those contemplating such agreements, however, must consider potential anti-kickback violations.

    "The anti-kickback statute is strict," says Leora F. Ardizzone, Esq., an attorney with Ruskin Moscou Fal tischek, PC, in Uniondale, NY. "Any remuneration can be considered an inducement to refer" and a violation of the statute, she says.

    A no-win situation

    Ardizzone represents a variety of clients on all sides of the complex equation. On the one hand, she says, referring physicians and their office staff juggle enough responsibilities. However, insurers need to ensure medical necessity for expensive imaging exams.

    Under this logic, the referring physician understands his or her patients' medical needs best. Therefore, it seems to make the most sense for the referring physician to complete the appropriate paperwork-just not the most fiscal sense. "The referring physician doesn't benefit from this extra work, work which translates into employee time and practice money," says Ardizzone.

    On the other hand, when patients enter the radiology department/imaging center, they enter with the expec tation of obtaining an exam. If a patient arrives without a preauthorization, only three options remain for the radiology facility-turn the patient away, perform the exam and risk payment denial, or obtain the precertification for the patient in the imaging facility.

    The first two options offer less than opportune business practice. Turning patients away won't earn your department or facility any more business. And performing an expensive exam that may or may not be reimbursed could cost big bucks. So, says Ardizzone, many facilities accept the anti-kickback risk and offer to obtain precertifications for referring physicians.

    "From their perspective they're trying to do the best thing for referral sources and for the patients who need these exams," she says.

    Creative, but inappropriate, solutions

    Ardizzone relates the parameters of the Stark Law and federal anti-kickback statute to her clients, but some persevere with creative solutions to the precertification problem. For example, one radiology facility considered placing one of its own staff members in the referring physician's office. For a set time each week that person would help the physician's office fill out the needed precertification forms. Even this, says Ardizzone, represents a breach of the anti-kickback law.

    "The location of the individual doesn't matter," she says. "If you trained them, and if your facility pays their salary, then this could be considered remuneration, or an incentive for that referring physician to send you his or her clients."

    Further, if one radiology department/imaging center offers such services, it creates an unfair business advantage, forcing others to offer such services, too.

    So some radiology managers "take the calculated risk," Ardizzone says. "They think, 'I don't see the anti-kickback police walking around here.' Well, maybe not, but insurance investigators, claims auditors, and whistle-blowers are everywhere."

    Calculated, but expensive, risk

    Those offering precertification assistance don't think they're doing anything wrong, and they believe they're helping everyone out, says Ardizzone. "They don't think this is such a big nut," she says. But under the anti-kickback statute, any remuneration counts as a violation.

    And violations of the law come with steep penalties. An insurer may threaten to terminate a provider agreement with a facility or practice that attempts to thwart precertification protocols. Additional penalties include:

  • Denials of payment
  • Refunds of payments resulting from an impermissible referral
  • Possible criminal prosecutions under the anti-kickback statute, punishable by a maximum fine of $25,000, imprisonment of up to five years, or both, and potential civil prosecution, carrying monetary penalties of up to $10,000 for each item or service
  • Possible exclusion from the Medicare and Medicaid programs

    Some believe anti-kickback violations don't carry as much weight as the current precertification burden. But don't fall prey to such thinking, says Ardizzone.

    "The pressure to get patients in is so great that some risk potential violations to anti-kickback," she says. "Beware: If you get terminated by a major payer or prosecuted for violating federal law, you may lose more than you stood to lose if you just said 'no.' "

    Insider source

    Leora F. Ardizzone, Esq., Ruskin Moscou Faltischek, PC, 15th Floor, East Tower, 1425 RexCorp Plaza, Uniondale, NY 11556-1425, 516/663-6520; Lardizzone@rmfpc.com.

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