Practice Economics

Value-based care poses new legal risks for doctors


The government’s push toward value-based care aims to fix a broken reimbursement system and improve quality of care for patients. But the new payment models also bring new legal risks for physicians, experts and anti-fraud officials warn.

“Novel payment methodologies may present new program integrity vulnerabilities,” Dr. Shantanu Agrawal, director of the Center for Program Integrity at the Centers for Medicare & Medicaid Services, said at a recent American Bar Association meeting. “As they assume financial risk, providers are also assuming program integrity risk. Without adequate controls, provider-run systems may be relatively vulnerable.”

Dr. Shantanu Agrawal, director for the CMS Center for Program Integrity, speaks at a recent American Bar Association conference. Alicia Gallegos/Frontline Medical News

Dr. Shantanu Agrawal, director for the CMS Center for Program Integrity, speaks at a recent American Bar Association conference.

The Department of Health and Human Services plans to have 30% of Medicare payments in value-based payment structures by the end of 2016, and 50% by the end of 2018. The transition will be driven through investments in alternative payment models such as Accountable Care Organizations (ACOs), advanced primary care medical home models, bundled payments models, and integrated care demonstrations for Medicare and Medicaid patients.

At the end of 2014, value-based payments represented 20% of Medicare fee-for-service payments to providers, according to CMS data. The rate was fueled by government programs such as the Medicare Shared Savings Program (MSSP), Pioneer ACOs, the Bundled Payments for Care Improvement Initiative, and the Comprehensive Primary Care Initiative. Meanwhile, HHS is encouraging private payers, marketplace plans, Medicare Advantage plans, and state Medicaid programs to move in the same value-based direction.

With so many new regulations, mandates, and programs coming down the pipeline, physicians are likely not thinking about the legal dangers that may arise with alternative payment structures, said Mark S. Kopson, a health law attorney in Bloomfield Hills, Mich., and chair of the American Health Lawyers Association’s Payers, Plans and Managed Care Practice Group.

Mark S. Kopson speaks at the 2015 ABA Physicians Legal Issues conference. Alicia Gallegos/Frontline Medical News

Mark S. Kopson speaks at the 2015 ABA Physicians Legal Issues conference.

Fee-for-service models can involve claims “about excess treatments and unnecessary services to drive up reimbursement,” Mr. Kopson said in an interview. “When you get into these [value-based] types of programs, it’s the exact opposite. The real threat is the withholding of necessary care in order to reduce expenses and therefore drive up those margins for the providers.”

To avoid such claims, physicians should ensure that their charts include the reasoning behind treatment decisions and a thorough record of why certain treatments were chosen and diagnoses were made, Mr. Kopson advised.

“Going forward, your charting better be completely accurate and detailed so that you don’t leave room for the government to make an argument that you should have provided this or that additional treatment,” he said.

Inaccurate reporting of enrollment data or financial information within new payment models could also land doctors in legal trouble, according to CMS officials.

Problematic reports, enrollee data, or other information physicians are required to submit to the government could be considered falsification and lead to False Claims Act violations.

“Providers are responsible for the information reported and should ensure that the appropriate checks and balances are in place that verify data is reported timely and accurately,” Tony A. Salters, a CMS spokesman, said in an interview. “For some models, providers must attest to the accuracy of this data. [To] report inaccurately could result in violations of federal laws.”

Physician-run payment models, such as doctor-led ACOs, may also draw legal scrutiny if physicians fail to prevent bad behavior by de facto partners. Physicians must ensure that all costs claimed by subcontractors, other providers, and suppliers who are paid from or authorized by the provider-run system, have been validated, Mr. Salters said.

“Doctors need to be aware that other entities who become new partners should hold themselves to the same high standards,” he said. “Providers should have basic financial mechanisms in place, with more sophisticated systems requiring more sophisticated methods,” to ensure validation.

CMS officials recommend doctors conduct independent audits of their accounts, manual validation of record system accuracy, and periodic verification of subcontractor claims to confirm the accuracy of claims and costs within new payment models.

These are “all routine steps that practitioners can take in their own offices but which are even more important when the doctor assumes responsibility for a larger scope of services,” Mr. Salters said.

Gaps in documentation surrounding bundled payments can be another legal land mine, Mr. Kopson noted. Adequate records of the care spectrum are essential to prevent accusations that care was not provided during a single episode of care, or over a specific period of time.


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