Assignment 4th November.docx - Williams Community Hospital An Internal Auditing Case 1 Review the Stark Law requirements(a Identify and list the risks

Assignment 4th November.docx - Williams Community Hospital...

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Williams Community Hospital: An Internal Auditing Case 1. Review the Stark Law requirements. (a) Identify and list the risks Williams Hospital faces for noncompliance with the Stark Law regarding the Establishment of physician group agreements. (b) Include in your discussion the possible violations for the hospital. (c) For each risk, list specific compliance measures and procedures that the hospital should employ to protect itself And its physicians from the risk of noncompliance with the Stark Law. For example, the hospital should develop Procedures to ensure that all agreements with physician groups are in writing and for a period of at least one Year. - In the doctors agreement service area definition from where the hospital draws 75% of its patient is not defined. - Credit line is for 2 years. For physicians within one year out of training are not required to meet the 25 mile geographic service area, but in the second year, this may apply. Defining the 75% draw area for patients and making sure service area is within 25 miles would solve these potential violations. - In some cases agreements are not signed by one or both parties - Fair market value is not defined for physician compensation - No mention of agreements requiring physicians to become a member of the hospital’s medical staff or receive staff privileges - The agreement does not provide patient referral guidelines. It should be provide exceptions to stark law where the physician can refer to the hospital Violations: Violations of the Stark Law can result insignificant financial implications for the hospital, including the repayment of all Medicare reimbursements received during the period of noncompliance, as well as the payment of substantial fines and penalties for noncompliance. Civil penalties may be imposed that include:
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(1) refunds of amounts collected in violation of the law (2) up to $15,000 in civil monetary penalties for each claim submitted in violation of the law (3) up to $100,000 in civil monetary penalties for each arrangement or ‘‘scheme’’ that violates the law (4) exclusion from participation in the Medicare program or other government health programs. 2. Review the Internal Control policies and procedures for processing physician group requests for payment under the line-of-credit agreement, which are referred to as draw requests. List risks associated with the processing of dra requests that may lead to inappropriate payments being made to physicians. - Grace Harper, presidents secretary reviews documents, prepares checks, forwards to accounts payable and maintains total. Ms Harper has little oversight and is involved in all steps, which is poor quality control - Williams hospital in in their internal control for draw request asks for listing of receipts and expenses, but do not ask for actual receipts itself. This may open itself for withdrawal of inappropriate amounts.
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  • Fall '13
  • JeanCooper

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