Have Docs Fill Out Conflict of Interest Questionnaires

June 1, 2016

Your practice's physicians may hate filling out those conflict of interest questionnaires, but they are important in complying with the federal Stark Law.

Many physicians employed by institutional employers, such as hospitals and health systems, are asked on an annual basis to execute conflict of interest questionnaires and/or statements, generally representing that neither they nor their family members maintain an ownership interest in any healthcare businesses.  There are multiple reasons why these types of non-disclosure forms/questionnaires are important to an employer.  Most physicians assume the information is intended to protect the employer from competition and, while this may be partially correct, collection of this information also is essential for regulatory purposes. 

Recently, I was working with a medical group that had modified their practice policies and asked each physician in the practice to complete a conflict of interest questionnaire.  In collecting the questionnaires, the employer found out that one of the physician's spouses, a non-physician, was the owner of a local home healthcare agency to which many physicians in the practice referred their patients, including federal patients.  In talking with the physician who completed the questionnaire, he was shocked to find out the arrangement could pose any concerns since he himself was not an owner in the agency.  Additionally, he said he believed that since neither he nor anyone in the practice was being compensated for referrals to the agency, there was no legal issue at all.

Many physicians forget that under the federal law known as "Stark," a physician is generally prohibited from referring a federal patient for a designated health service ("DHS") to an entity with which the physician or an immediate family member has a financial relationship (whether ownership or by compensation) unless an exception applies.  Home healthcare is considered a DHS under Stark, and therefore, referrals by a physician to an entity owned by his spouse violated Stark.  There is no exception into which this ownership arrangement can fall.  And although the referrals to the home health agency by other physicians in the practice do not constitute a violation of Stark law, issues can be created when employees of a practice are directed or expected to make such referrals.  In this instance, that did not appear to be the case.

I have had similar issues arise where physicians own or work for (or have spouses that own or work for) laboratories, DME companies, MRI facilities, physical therapy companies, and other types of businesses to which the physicians regularly refer.  All of these types of services are considered DHS under Stark. While there may be an exception to Stark that applies under some circumstances, without an exception, Stark is violated and the consequences can be severe.  

Violations of Stark are punishable by civil monetary penalties of up to $15,000 per service billed and potential exclusion from Medicare participation.  Unlike other healthcare laws, Stark is a strict liability statute.  A Stark violation does not require that the parties intended for their actions to violate the law.

Other federal laws (Anti-Kickback Statute) may also be implicated by the same arrangements that violate Stark with respect to federal patients, and many states also have state versions of both the Anti-Kickback Statute and the Stark law which need to be reviewed to ensure the compliance of any arrangement involving the referral of non-federal patients to an entity owned (directly or indirectly) by a physician or his or her spouse or other immediate family member.  If you are unsure whether these laws could apply to an arrangement in which you or a family member are involved, I highly recommend you seek legal counsel.

While physicians are often frustrated when forced to share personal information and complete conflict of interest questionnaires, there is a valid reason for a health care employer requiring disclosure of such information.  The questions may feel intrusive, but collecting such data protects not only the practice/employer, but the physician (and family members) as well.  If your medical practice does not collect this information currently, it's highly recommended that you start to do so.  Take the time to explain to your physician employees the importance of such information so they are not threatened or upset by the requirement. Collaboration between employers and physicians can only serve to assure everyone's full compliance with the myriad of health care laws that impact every physician practice.