By: Christina A. Hughes, JD, MPH, Megan La Suer, JD, MHA, and Robert M. Portman, JD, MPP.

Every month, DermWorld covers legal issues in “Legally Speaking.” Healthcare attorneys from Powers, Christina A. Hughes, JD, MPH, Megan La Suer, JD, MHA, and Robert M. Portman, JD, MPP were selected in February and March. Rob Portman is also general counsel for the American Academy of Dermatology and the American Academy of Dermatology Association. Read part 1 of the article here and part 2 of the article here.

The federal government has enacted several laws to combat healthcare fraud and abuse, including the False Claims Act (FCA), the Anti-Kickback Statute (AKS), and the prohibition on physician self-referral (widely known as the Stark Law). The FCA applies to any party who knowingly (or with deliberate ignorance or reckless disregard) submits or causes to be submitted false claims for reimbursement or payment by a federal healthcare program. Generally, the most common way of triggering liability under the FCA for healthcare providers is to run afoul of the AKS or the Stark Law. The FCA can be combined with these anti-fraud statutes and allows private parties to bring whistleblower actions on behalf of the federal government, known as qui tam cases.

Part 1 of “Tips for Avoiding Fraud and Abuse Liability” discusses general federal fraud and abuse laws that dermatologists need to be aware of. Namely, the article defines and explains the Stark Law and the AKS, stating that the two are separate and distinct. Because of this, understanding both laws’ exceptions and safe harbor, which cover a wide range of topics, is critical to maintaining compliance.

The article then traces five of the usual areas of risk for dermatologists, which are related to (1) rental of space from another healthcare entity; (2) provision of services to hospitals; (3) the provision of in-office ancillary services (including pathology services); (4) ownership of clinical laboratories; and (5) financial relationships with drug manufacturers.

Part 2 discusses some of the new risk areas that dermatologists should be aware of as well as some of the general actions that can be taken to minimize compliance risk. It draws attention to the evolving telehealth regulations, warning that many federal waivers and flexibilities are set to expire at the end of the PHE. Additionally, the article warns that there are ways in which a dermatologist’s relationship with their patients may also create liability and offers ways to determine whether providing or participating in free screening services is permissible.

While many arrangements that carry risk for dermatologists are subject to the Stark Law, there are exceptions. Assessing the criteria for compliance can quickly become difficult because of this, which is why the best step a physician can take in ensuring compliance when entering into new arrangements is to enlist the assistance of legal counsel in reviewing proposals. For those dermatologists with less need for ongoing assistance, being aware of the potential pitfalls is the first step to avoiding them.

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