National Healthcare Staffing Shortfall Raises Traditional Fraud, Abuse Risk Concerns

There has been a lot of news coverage of late about nurse staffing shortages and staff departures from the healthcare industry generally. Such shortages raise substantial compliance and malpractice risks associated with medical mistakes and other care lapses that inevitably occur when healthcare providers are understaffed and overworked.

A recent report by commercial intelligence company Definitive Healthcare outlined some of those healthcare shortages, as reported by Law360.

However, providers need to understand that these shortages also raise a number of traditional fraud and abuse compliance risks and could pose other business challenges. As the number of providers shrinks, the need for physician recruitment and retention becomes paramount. This strategic priority puts a great deal of emphasis on creating value for physicians to both bring them into and keep them in understaffed and often underserved markets.

Compliance and Physician Relationships

Providers, and in particular hospitals and health systems, need to ensure that their compliance culture and infrastructure play an appropriate role in structuring these physician relationships in a way that complies with applicable laws, most notably the Anti-Kickback Statute and the Stark Law.  

Some of the most easily identifiable and likely risks include:

• Salaries and benefits exceeding fair market value
• Provision of fringe benefits at no cost, such as use of hospital personnel for personal or private practice use by physicians
• Bogus or overpaid medical directorships
• Increased institutional pressure on physicians to admit patients or provide higher cost care than is needed
• Facilitation of referrals among and between referral sources in return for referrals to the health system or for relocating to a particular geographic area

Also, as noted in the report, the shortage of medical professionals is driving greater usage of telehealth technologies. Telehealth is a high priority enforcement area for the Department of Justice and the Department of Health and Human Services. As technologies evolve and demand for telehealth services increases, health systems and hospitals need to ensure they have well developed and consistently enforced policies and procedures around the appropriate use and scope of telehealth in the treatment of their patients. This includes a requirement that employed physicians report all third-party relationships for  telehealth services, and a review of those agreements for compliance risks.  

Ultimately, the shortage of talent in the healthcare industry drives a greater need to compete for limited talent, and this type of competitive market often pushes organizations to the precipice of compliance risks. As everyone knows, physician relationships and management of a healthcare workforce are hard. When the market shifts so dramatically and the supply of medical professionals becomes scarce, the opportunity for and likelihood of non-compliant relationships raises substantially. Hospitals and health systems need to make sure they stay committed to their culture of compliance and continue to apply their compliance requirements to physician relationships in this competitive market for talent.