The Joplin Globe, Joplin, MO

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November 6, 2009

Freeman contract changes stem from internal audit

By Andy Ostmeyer

aostmeyer@joplinglobe.com

Freeman Health System is requiring some of its office-based physician employees to sign new contracts because of “compliance issues” stemming from the old contracts.

Gary Duncan, president and chief executive officer of Freeman, said Friday that patients should not see any change in services or relationships with their physicians as a result of the new agreements.

The change arose out of an internal audit earlier this year in which a couple of physician contracts were reviewed and auditors told Freeman: “You potentially have a compliance issue,” Duncan said.

Attorneys who are outside experts in the matter were brought in for a more comprehensive review of the contracts and Duncan said that when they were through, the hospital acknowledged it had a problem and took the step of reporting what Duncan said is a civil matter to the U.S. Attorney’s Office for the Western District of Missouri.

“After completing our review, we contacted the appropriate regulatory agency to voluntarily disclose that our compensation system did not meet all of the technical requirements of a federal regulation that sets forth requirements for hospital-physician relationships,” Duncan said in a statement.

He said on Friday he could not get into the details of what was “non-compliant” about the original contract or what is different about the new contracts, in part because the hospital does not disclose the terms of contracts with its employees, but also because the hospital is still working with the U.S. Attorney’s Office.

“We have a solution and we’re working through it,” was all Duncan would say when asked for details about the contractual change.

He did acknowledge that the issue stems from the Stark Law.

Among other things, that law, which was revised within the last year, prohibits physicians from making patient referrals to a health care provider for some health services that are eligible for Medicare reimbursement as long as those doctors also have a “financial relationship” with the provider. Some of those services include lab work, physical and occupational therapy, radiology and more.

“There was no billing for procedures that weren’t performed,” Duncan added.

Duncan also said that the contractual question does not affect Freeman physicians who are hospital-based, those who are in private practice in the area with the privileges at Freeman, and it affects only some of Freeman’s office-based physician employees.

Asked about the number of doctors who are affected, Duncan said contracts are still being reviewed: “To give you the number is going to be difficult. We don’t know yet.”

The hospital has more than 300 physicians on its medical staff.

He said he also expected most of the hospital’s office-based physician employees to sign the new contract, but acknowledged that some may opt not to, and if so, whether they continue to accept the same insurance providers, or charge the same rates, would then be up to the physicians.

“We will work with the federal government as we continue to address the issue. We certainly can’t say how long the process may take,” Duncan said in his statement.

Don Ledford, spokesman for the U.S. Attorney’s Office for the Western District of Missouri, said he was not in a position to reveal any negotiations, conversations or discussions that Department of Justice officials may have had with Freeman Health System since nothing has been filed publicly.

Andy Ostmeyer is the metro editor for The Joplin Globe.



Quality of care

In a statement, Gary Duncan, president and chief executive officer of Freeman Health System, said: “The issue is not about the quality or cost of care provided. In fact, extensive reviews raised no concerns about the quality of care delivered.”

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