A Complete Guide for Medical Practice Start-Ups (Part 4)

Government policies and compliances

Healthcare is one of the most highly regulated industries in the US, and the regulations just keep on increasing with the passage of time. Moreover, the series of regulations that affect a provider’s office are no exclusion. Keeping that in mind, physicians usually have a healthy professional relationship with an attorney who is focused on the relevant law, and is responsible for clearing all procedures before they are implemented, so that the risk of future complications is lowered.

According to a Health IT source, “Federal and state healthcare laws and regulations change constantly and the interpretation of those laws and regulations changes just as frequently. Effective healthcare compliance must be an ongoing process of continually reviewing and updating the processes, policies, and procedures of the organization. The organization also must continually update the training provided to its employees based upon changes in the regulations.”

This validates the fact that health organizations need to be caught up with the latest changes in compliances, in order to stay on top of the challenges that they would face otherwise. A sizeable healthcare organization would have many people working under its Chief Compliance Officer, who specializes in keeping the organization aligned with the state compliance programs.

Why do you need Healthcare Compliance?

The eventual goal of all healthcare compliances is to improve the quality of patient care. This can only be done if the decisions are based on appropriate clinical standards. Moreover, it aids the providers by helping them stay on board with the government authorities, and reduces the risk of financial fines or imposition of unforeseen sanctions.  The liability of malpractice is also reduced if the healthcare organizations have an effective compliance program in action.

Following are some of the regulations that directly affect a practice, and should be in place to deliver optimum patient care.

Fraud Regulations

 The Stark Law

The essence of this law is that it disallows physician referrals of Medicare or Medicaid patients for “designated health services”, particularly If the physician has any sort of financial association with that body. Designated Health Services is a broad term which covers a number of services, such as durable medical equipment, supplies, labs, and therapy whether occupational or physical.  The underlying purpose Is to prevent Medicare and Medicaid abuse, which was becoming a common practice in healthcare organizations.

The False Claims Act

This act refers to a federal statute, that forms liability for intentionally presenting a fraudulent claim against any federal health care program. This encompasses any program that offers health benefits, whether directly or through insurance, which is financed by the US government or any state healthcare system. Examples of this act being intentionally violated include, billing for services that are not rendered or giving a kickback for a referral.

The Anti-Kickback Law

This is a healthcare fraud bill which forbids the exchange of compensation, in return for anything of value, in order to influence a healthcare provider to make choices that may directly or indirectly benefit the body offering the compensation. The fines can range up to $25,000 for each violation, or in severe cases, imprisonment for up to five years as well.

Patient Information Regulations

Patient Protection and Affordable Care Act

This act is fairly broad, and covers individuals, employers, hospitals and companies. It talks about a number of payment alternatives, with addition to growing the count of patients that are covered by insurance.

Health Information Technology for Economic and Clinical Health (HITECH) Act

It is a trifurcation of the American Recovery and Reinvestment Act (ARRA) of 2009, which creates benefits associated with the use of EHR systems amongst the providers. In addition to that, the act follows up on the security and privacy concerns that were linked to the transmission of health information electronically.


The primary intention of this law is to create boundaries on the usage and release of health records. Also, it defines the precautions that should be taken in order to protect confidential patient information and the penalization framework for violations. It Is a broad law, which is not restricted to practices only, and even covers dentists, nursing homes, psychologists and pharmacies.

Physician Payments Sunshine Act

This is another law branched out from the affordable care act, it requires group purchasing organizations and applicable manufacturers to publicly report any payments made to providers.

What you can do?

Before opening a medical practice, it is crucial for a physician to take out the time and go through these regulations (preferably with a legal advisor), so that the key concerns of shareholders are addressed. Moreover, when the organization would open its doors to the world, it would be immediately accountable to the local, state and federal government, and that can be troublesome if the practice doesn’t have an effective regulatory and compliance program in place.

About Author:

Alex Tate is a Health IT writer for various platforms. He provides perceptive, engaging and informative consultancy on industry wide topics. He knows that no single approach is the right one for every practice, and so shall advice according to the requirements. The consultancy is based around EMR Systems, Practice Management and Billing Solutions. MACRA/MIPS consultancy is also available to achieve the highest returns and revenue for your practice.

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