Understanding How Legal Advice Oftentimes Pays for Itself

It’s a rather bleak time in healthcare.

Morale is low, staffing is short, supply-chain expenses are high, and in clinics, hospitals, and skilled nursing facilities (SNFs), margins are low.

The result can be a need to impose cuts. In this sort of environment, it can be appealing to think “Let’s cut back on our legal and compliance spending.”

While I understand the appeal, I want to offer a counter perspective. Really good legal advice can save you money in a variety of ways. I think I mentioned in a previous article that we have a program through which we review every proposed refund for a flat fee.

Not that long ago, a client sent a proposed refund of $9 million. For a flat fee of $1,000, we explained why that refund was unnecessary. Obviously, that sort of return on investment won’t occur in many other service lines. In fact, that savings exceeded their total legal spending for many years. 

Of course, you might say “Well, we don’t need to review our refunds, because one way we save money is by never making them.” If you’re a regular reader, it’s safe to assume you know the flaw in that thinking: if you fail to refund an overpaid Medicare claim within 60 days of knowing it’s overpaid, that claim becomes false.

After a jury trial, a minimum penalty for a false claim is over $13,000, plus three times the amount of the claim. To be clear, penalties in a settlement are usually “only” two times the amount of the claim, but that’s still hardly a way to improve the bottom line – and it ignores the hundreds of thousands of dollars of legal expenses, (or, if you use the wrong law firm, millions of dollars you’ll incur defending yourself).

Simply choosing not to refund is not a practical option. 

In addition, there are lots of other ways competent counsel can help. Let’s say you’re considering offering offsite physical therapy. I’ve heard many people say that the Stark Law prohibits this. But anyone who understands Stark’s exceptions recognizes that as long as the site is controlled by you, 24/7, offsite physical therapy is totally acceptable.

Good lawyers will help you find options you may have mistakenly deemed not viable. 

Let’s say you are worried that you need to refund to Medicare every time documentation fails to support an evaluation and management (E&M) service. The fact that your team doesn’t realize that documentation isn’t a requirement for most Medicare services will hurt the bottom line – and good counsel can help.

I know that most law firms charge by the hour, and at times, the cost of asking a basic question can feel prohibitive. But what if you had a deal with your lawyer through which you didn’t pay by the hour, so that the lawyer was incentivized to keep costs down? Those deals exist. We certainly offer them to clients.

My point is that there are ways to improve legal performance while at the same time helping your organization’s bottom line.