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Key Regulations Affecting a Physician's Practice

Welcome! This article is part of a Medscape Physician Business Academy course, . Visit the Course Page to take the full course and receive a certificate.

A Daunting Number of Regulations for Physicians

Healthcare is one of the most regulated industries in the United States, and a physician's office is no exception. The list of regulations and acts that affect the management of a physician's office is daunting. It is critical that a physician has a working relationship with an attorney who specializes in healthcare law and that all procedures implemented in the office are cleared with this attorney before they are finalized. In addition to the list below, there are also extensive drug regulations, hazardous waste removal requirements, and employment and labor regulations.

Each of the following acts may have hundreds or even thousands of regulations each, beyond what is noted here.

Fraud and Abuse Regulations

The Stark Law: self-referral regulations. The gist of the self-referral regulations is that this law prohibits referrals of "designated health services" from a physician to an entity where he or she has a financial relationship. This law relates only to referrals for these specific services for patients who are covered by Medicare. The definition of "designated health services" has been expanded but generally includes laboratory and radiology services, physical and occupational therapy, durable medical equipment, nutrients, supplies, and inpatient and outpatient hospital services.

The Antikickback Law. This law prohibits offering, paying, soliciting, or receiving anything of value to induce or reward referrals. It also cover compensation plans designed by group practices, such that it is prohibited to pay physicians for "volume or value of referrals" for any services not provided directly by the physician within the practice. This eliminated the common practice of including in an employed physician's compensation a bonus based on the number of radiographs or lab tests ordered during the period.

The False Claims Act. This act provides that a person is liable for penalties if he or she knowingly presents or causes to be presented a fraudulent claim for payment to any US government agency (such as Medicare). A false claim is any claim filed with Medicare that is not supported by the services documented in the patient's chart. It also includes billing for medically unnecessary services, ungrouping services or products billed (unbundling), duplicate billing, and billing a wrong date of service, among other missteps. In addition, billing below the correct level of service is considered "submitting a claim not supported by the patient's chart" and would also be considered Medicare fraud.

Billing below the correct level of service would also be considered Medicare fraud.

Thus, under this act, simple clerical errors can constitute Medicare fraud. Although a mistake is not intentional fraud, the federal government has asserted that a person can violate antifraud laws without having actual knowledge or specific intent to commit a violation.

Electronic Chart and Patient Information Regulations

Patient Protection and Affordable Care Act. This act created many of the alternative payment initiatives discussed earlier, in addition to increasing the number of patients who are now covered by insurance.

Health Information Technology for Economic and Clinical Health (HITECH) Act. The primary purpose of this legislation is to encourage physicians and hospitals to transition to electronic health records. This act also addressed the privacy and security concerns associated with the electronic transmission of health information that were subsequently expanded in the Health Insurance Portability and Accountability Act (HIPAA) regulations.

HIPAA. The primary intent of this law is to create regulations that will ensure privacy and security for patients' health information contained in electronic health records or paper medical records routinely exchanged among "covered entities." A covered entity is any healthcare provider, health plan, or clearinghouse that directly handles or has access to protected health information. The law also sets out security measures that physicians and other healthcare providers are required to implement in order to safeguard these data in electronic form.

Physician Payments Sunshine Act: open payments. This is a provision of the Affordable Care Act that requires that any payments made to physicians by applicable manufacturers and group purchasing organizations must be publicly reported. This rule is not something that a physician is required to do, but a physician must be aware what data are being reported about these payments.

Any payments made to physicians by applicable manufacturers and group purchasing organizations must be publicly reported.
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Welcome! This article is part of a Medscape Physician Business Academy course, . Visit the Course Page to take the full course and receive a certificate.


Judith N. Aburmishan, CPA, MBA, CHBC

| Disclosures | January 01, 2016

Authors and Disclosures


Judith N. Aburmishan, CPA, MBA, CHBC

Director, FGMK, LLC, Bannockburn, Illinois

Disclosure: Judith N. Aburmishan, MBA, CPA, CHBC, has disclosed no relevant financial relationships.