Many financial arrangements between referring physicians and ancillary service providers are structured to involve "commercial-only" payers. This is (half-jokingly) reputed to be because commercial payers "don't have badges and guns." A key distinguishing feature between commercial insurance fraud units and the [Office of the Inspector General] and the FBI. In other words, because Stark Law and the federal Anti-Kickback Statutes (AKS) only apply to government payers, the HHS OIG would not have jurisdiction over commercial-only cases. State laws (and certain federal laws), however, continue to apply.
Under the various state versions of patient solicitation, anti-kickback and/or self-referral laws, it may permissible for a referring physician to possess an investment interest in, or maintain financial arrangement, with a provider of ancillary services. These statutes may permit, for example, partial ownership by a physician in a Clinical Laboratory Improvement Amendments (CLIA) laboratory, or a medical directorship of nursing facility to which the physician refers, if properly structured to conform to state law.
Often under state law, reliance upon AKS safe harbors are expressly permitted by statute, such as Tex. Occ. Code 102.003, which states "[The Texas Patient Solicitation Statute] permits any payment, business arrangement, or payment practice permitted by [the federal AKS] 42 U.S.C. Section 1320a-7b(b) or any regulation adopted under that law."
In most states, commercial plans not only lack "badges and guns," but cannot sue for violations of these laws because the statutes themselves do not create a private cause of action on the part of insurance companies. It is often difficult for insurance entities to convince law enforcement to prosecute complex business arrangements. Therefore, insurance companies must often find fault on a more granular, or "devil's in the details" basis.
As such, a steady rise is occurring in insurance recoupment and "claw-back" lawsuits, which fault anything from the failure to collect copayments/ coinsurance, to attacking "block leases" (where the technical component is leased to a physician for a block of time, then returned to the license holder), on the grounds that the license was not transferable under state law.
One case which bears watching was filed September 29, 2017, in Aetna, Inc vs. The People's Choice Hospital, et al., filed in federal court in the Pennsylvania Eastern District. Aetna has alleged that an Oklahoma hospital-based laboratory toxicology lab/ management arrangement, PCH Labs, was in fact, a sham arrangement, designed to allow other San Antonio, Texas based CLIA labs to defraud Aetna and its members out of $21 million in payments over a 16-month period. The suit , which also names a number of referring doctors as defendants, alleges that the out-of-network labs caused over 10,000 false claim forms to be filed, which fraudulently represented the services were performed at an in-network hospital, when in fact, none of the services were ever performed at the hospital.
The problem seems to be in the claim forms, also known as “HCFA 1500.” This form contains data entry sections or “blocks,” where the lab is supposed to list identity of the "rendering provider" and "location" of the service. Aetna alleges that these blocks were falsely reported, for three reasons. First, the in-network contract would pay the hospital about $2,250 per test, while reimbursement for a stand-alone toxicology lab is about $120. Second, not all plans have out-of-network benefits, depending upon the employer or member's preference. Thus, the out-of-network claims should not have been paid at all, in many cases. Third, the patient responsible portion is much higher in out-of-network plans. This would have both reduced the payments from Aetna and caused the patient to consider carefully whether an out of network lab would be preferable at all.
Aetna also alleges that the disclosure given to the patient was misleading. The patient was informed services would be performed at an in-network hospital, when in fact they were performed at an out-of-network lab.
The Aetna suit implies that the financial arrangement between the physicians and the other defendants, motivated the physicians to refer to the out of network CLIA labs, rather than a lower-cost, in-network labs. Thus, although commercial payers lack the enforcement tools available in government cases, and the arrangement may very well comply with state versions of kickback laws, the method by which companies operate can still be a source of concern. Which is probably the message Aetna intends to send to commercial-only providers.