New bill to give ‘fair warning’ about vague regs
New bill to give fair warning’ about vague regs
Physician groups say Fair Warning Act could eliminate deliberate ambiguity of Stark II
A new bill introduced in Congress just days ago would prevent federal investigators from capitalizing on the confusion created by vaguely written laws like the Stark self-referral laws. The Regulatory Fair Warning Act of 1999, introduced by representative George Gekas (R-PA), would prohibit all federal agencies from imposing sanctions on anyone "for violating a rule if the agency finds that the rule failed to give the person fair warning of the conduct that the rule prohibits or requires." In other words, agencies like the Health Care Financing Administration would have to say what they mean in language a "reasonable person" could understand, says Jim Harper, JD, Gekas’ general counsel and the author of the bill.
What’s more, the bill would prevent courts from imposing civil or criminal penalties for the violation of any rule that failed to clearly state ("give fair warning of") the conduct it either prohibits or requires.
The problem, Harper says, is that the current legal structure of the nation’s administrative laws "actually incentivizes vague regulations. The agencies actually preserve power by writing such regulations. They’re simply following Supreme Court cases that give them the most credit if they don’t come up with clear regulations at the outset."
Although the bill isn’t specific to health care, a number of physician groups and other health care organizations have mobilized in support of it. That isn’t surprising, Harper says, considering that HCFA is among the worst offenders. "A lot of HCFA’s so-called regulations aren’t actually written down anywhere," he says. "So some members of the industry have been subject to suit for violating regulations that never actually existed on paper. The bill would protect providers in those kinds of situations."
Most important for physicians, however, is that the bill also would force HCFA to come clean about its Stark II self-referral regulations, says a spokesman for the Englewood, CO-based Medical Group Management Association, which is formally supporting the bill. "The ambiguous and complex nature of the [self-referral] regulations creates an unfair environment in which individuals do not understand the type of conduct that’s prohibited under Stark," says the spokesman.
Because the Stark regulations are civil rather than criminal laws, prosecutors don’t have to prove criminal intent to win a judgement against you. They only have to prove you made mistakes: "If you go through the hoops and don’t meet one of the exceptions, then you are dead," says Sally Barber, JD, an attorney with Parker, Poe, Adams & Bernstein in Charlotte, NC.
The basic gist of the law is that physicians cannot refer patients to any entity in which they or their immediate family members have a financial interest for a designated health service for which Medicare or Medicaid may pay. Immediate family members include not just spouses and children but parents, grandparents, step-family, and in-laws. While the law’s intent may seem straightforward, its specific provisions are anything but, critics complain.
Indeed, although the 100-plus pages of Stark II regulations were first published in the Federal Register more than a year ago (Jan. 9, 1998), HCFA still has not clarified some of the issues they raise. For example, one issue yet to be decided that could affect group practices is how "unified" the businesses have to be. Stark II has introduced a concept that you must have centralized decision making, pooling of expenses and revenues, and a distribution system that doesn’t treat each office as its own entity, Barber says.
"If you have three offices that are all their own cost centers, then you may not qualify as a group practice," she says. "You would probably have to centralize and create a board for making decisions. If you have all three sites leased, then all the docs at all the offices should pay an equal share of the total of all the rents." (For more help on Stark II, see "Understanding the maze of Stark II regulations," Physician’s Compliance Hotline, Feb. 1, 1999, p. 1.)
The regulations meant to clarify some of these issues were supposed to be ready in 1998, but the comment period was extended. Barber says the optimists predict they’ll be ready this year, while the pessimists are betting on 2001.
Those regulations will include a reporting requirement for practices. "They don’t have a form completed yet, but eventually, physicians will have to report all their financial arrangements," Barber says.
Those who still have questions can write or call HCFA eventually, Barber says. "But they aren’t answering a whole lot of questions right now."
Meanwhile, the Gekas bill, though only just introduced, has already garnered the support of 42 different industry groups, and Harper contends that its prospects for passage in the 106th Congress are "very good."
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