Surgery center's fraud case win could have national implications

For a while, ambulatory surgical centers in New Jersey--and to some extent, across the U.S.--watched in concern as state courts worked through a dispute between one ASC and an area health plan. Health Net of New Jersey, which sought to recover $5 million in allegedly fraudulent overpayments, had contended that the physicians who owned an ASC committed fraud by billing for referrals improperly made to their out-of-network facility.

The case began in 2007, and at the time, the ASC was operating under a state medical board opinion that allowed for the referrals in question. The Appellate Division of the state court system upheld a 2007 trial court finding that despite there being a state law in place banning self-referrals, the doctors didn't knowingly violate self-referral laws or submit false claims that violated a state insurance fraud statute.

The appeals court also tossed out Health Net's claims that the Wayne (N.J.) Surgical Center committed fraud by waiving patients coinsurance payments to incentivize them to use their facility. The court found that state law and regs don't bar physicians from waiving co-payments.

The American Medical Association and Medical Society of New Jersey say that the case will have an impact nationwide, as it will make sure they feel free to refer patients out of network as needed. Health plans, for their part, say that such referral practices drive up costs needlessly.

Get more background on the case:
- read this American Medical News piece

Related Articles:
NJ bill allows for docs to refer patients to their own ASCs
ASC market continues to expand
Medicare sets 65 percent ambulatory surgery rate

Suggested Articles

The profit margins and management of Community Health Group raise questions about oversight of managed care insurers.

Financial experts are warning practices about the pitfalls of promoting medical credit cards to their patients.

A proposed rule issued by HHS on Tuesday would expand short-term coverage, a move Seema Verma said will have "virtually no impact" on ACA premiums.