Reverse Referral Fees
Reverse Referral Fees
HA4070D – Regulatory Environment in Health Care
Assignment 11: Reverse Referral Fees
Assignment Task: Submit to complete this assignment
Directions
Complete the Problem on page 573 “Reverse Referral Fees” as a two to three-page paper. A general description of the Marcus Welby Hospital is located here.
You are outside counsel to the Marcus Welby Healthcare Corporation (MWHC), which is concerned that expenses in some of its ancillary departments are causing it to lose money under Medicare and HMO insurance. It would like to start charging its hospital-based physicians for some of the costs of running their departments.
Its current relationship with these physicians is one in which they have exclusive contracts to work in these departments, but no money changes hands between them. The hospital handles all billing, staffing, and overhead, but it bills separately for facility charges versus professional fees, and the physicians keep all the professional fees the hospital collects on their behalf. This is the standard practice in the industry.
MWHC has the following suggestions for changing this arrangement:
• Have the radiology group pay for services, supplies, personnel, utilities, maintenance, and billing services furnished by the hospital. In a non-hospital, office-based setting, this package would normally cost about $100,000 to $150,000 per year. The hospital will charge the radiology group only $25,000 at first, but increase the charges to $100,000 over four years. Payments are due only if the hospital’s gross revenue derived from radiology services exceeds $1,000,000 in the previous year.
• The hospital’s clinical laboratory, under the direction of the pathology group, would pay the hospital a 20 percent fee for “specimen collection and handling services” when a physician on the MWHC medical staff orders a test from the clinical lab.
What advice would you give?
The Law of Health Care Finance & Regulation—Vitalsource
References
Rosenbaum, S., Cartwright-Smith, L., & Mehlman, M. (2020). Law and the American Health Care System (2nd ed.). Foundation Press.
This book provides a comprehensive analysis of health care finance laws and regulations in the U.S. It would be helpful to understand the implications of charging physicians for the use of hospital services and the associated legal considerations.
https://www.westacademic.com/Law-And-The-American-Health-Care-System-2d-9781684678481
Furrow, B. R., Greaney, T. L., Johnson, S. H., Jost, T. S., & Schwartz, R. L. (2019). Health Law: Cases, Materials and Problems (8th ed.). West Academic Publishing.
This resource offers insights into how health care organizations like MWHC can navigate the financial and regulatory challenges related to physician contracting and ancillary department costs.
https://www.westacademic.com/Health-Law-Cases-Materials-and-Problems-8th-9781684670492
Centers for Medicare & Medicaid Services (CMS). (2021). Medicare Provider Reimbursement Manual – Part 1.
This manual outlines Medicare billing and reimbursement policies and would provide necessary context for MWHC’s concerns about expenses and the hospital’s Medicare standing.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021929
American Health Lawyers Association (AHLA). (2020). Healthcare Compliance Legal Issues Manual (4th ed.).
This manual includes detailed discussions on compliance with federal regulations such as the Stark Law and Anti-Kickback Statute, which may be relevant to MWHC’s proposed fee changes.
https://www.americanhealthlaw.org/publications/bookstore/healthcare-compliance-legal-issues-manual
