Policyholder Services

OMIC Coverage Benefit for Other Regulatory Exposures (DEA, Stark Act, EMTALA Investigations)

What is a DEA proceeding?

A DEA proceeding is one instituted against the Insured by the federal Drug Enforcement Agency for the purpose of adversely affecting the Insured’s ability to prescribe drugs pursuant to a license issued by the DEA. DEA actions are often based on the over-prescription of pain management medication. Investigations can be triggered by reports to the DEA from pharmaceutical manufacturers and distributors about pharmacies, clinics, or physicians that order an abnormally large amount of narcotics. Investigations are also opened based on complaints received from patients or their next of kin, competitors, local surrounding businesses, or local law enforcement authorities.

What is a STARK proceeding?

A STARK proceeding is one instituted against the Insured by a government entity alleging violation of any federal, state, or local anti-kickback or self-referral laws.

The Stark statute requires that if a physician, or a member of his or her immediate family, has a financial relationship with an entity, then he or she may not refer a Medicare or Medicaid patient to that entity and that entity may not submit a bill for any item or service defined as a designated health service (DHS), unless one of the Stark exceptions is met.

An ophthalmologist may run afoul of Stark laws if he or she is a subspecialist and enters into an independent contractor agreement (a “personal service arrangement”) with a general ophthalmology practice to treat its subspecialty patients, if there are referrals for DHS, whether intentional or not (recall that this is a no-intent statute). There is a “personal service arrangement” STARK exception that will protect an ophthalmologist if the arrangement is in writing and signed by the parties; it specifies the covered services; the aggregate services contracted for do not exceed those that are reasonable and necessary for the legitimate business purposes of the arrangement; the term of the agreement is for at least one year and provides for non-renewal within the initial year period if the agreement is terminated within the first year from the effective date; and the compensation is set in advance, does not exceed fair market value and is not determined in a manner that takes into account the volume of referrals or other business generated between the parties.

For more information and examples, please see the article “Avoiding Illegal Service Referrals: The Stark Statute Explained” by Sandra E. D. McGraw, Esq., MBA, and Michael J. Sileski, Esq., MHA on the website of the American Academy of Ophthalmology, http://www.aao.org/yo/newsletter/200812/article02.cfm.

What is an EMTALA proceeding?

An EMTALA proceeding is one instituted against the Insured by a government entity alleging violation of the Emergency Medical Treatment and Active Labor Act. EMTALA requires Medicare-participating hospitals that offer emergency services to provide a medical screening examination or treatment for an emergency medical condition, including active labor, regardless of an individual’s ability to pay. Hospitals are then required to provide stabilizing treatment or transfer patients with emergency medical conditions.

A few EMTALA provisions apply directly to physicians. For example, a penalty may be imposed on a physician who fails to respond to an emergency situation when he or she is on-call. A physician who signs a certification in support of an appropriate transfer may be liable for a civil monetary penalty if he or she knew or should have known that the benefits of transfer did not outweigh the risks of transfer, or if he or she misrepresented  the patient’s condition. Physicians can be excluded from the Medicare program because of repeated cases or a “gross and flagrant” violation.

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