Laws & Regulations Domain: Key Concepts for the FACHE Exam

This domain requires a strong understanding of the major federal laws that shape healthcare delivery, payment, and compliance. The exam will focus on your ability as an executive to identify legal risks and make decisions that are compliant.
 

• Fraud, Abuse, and Compliance

  • This is the most heavily tested area within the domain. You must know the purpose and key differences between these three major laws.

  • Anti-Kickback Statute (AKS): A criminal law that prohibits the knowing and willful exchange of anything of value (remuneration) to induce or reward referrals for items or services payable by federal healthcare programs (e.g., Medicare, Medicaid).

    • Key Concept: It is intent-based. Both sides (the giver and the receiver of the kickback) can be held liable.

    • Safe Harbors: The law has specific exceptions, or "safe harbors," that protect certain payment arrangements (e.g., bona fide employment relationships, space rental at fair market value).

  • Physician Self-Referral Law (Stark Law): A civil law that prohibits physicians from referring Medicare or Medicaid patients for "designated health services" (DHS) to an entity with which the physician (or an immediate family member) has a financial relationship, unless an exception applies.

    • Key Concept: This is a "strict liability" statute, meaning no proof of intent to violate the law is required. If a referral happens and no exception fits, the law is violated.

  • False Claims Act (FCA): Prohibits submitting false or fraudulent claims for payment to the government. This includes billing for services not rendered or "upcoding" to receive higher reimbursement.

    • Key Concept: Includes "qui tam" provisions, which allow private citizens (whistleblowers) to file lawsuits on behalf of the government and share in any financial recovery.
       

• Patient Care, Rights, and Privacy

  • EMTALA (Emergency Medical Treatment and Active Labor Act): Requires Medicare-participating hospitals that offer emergency services to provide a medical screening examination (MSE) to any individual who comes to the emergency department requesting care, regardless of their ability to pay. If an emergency medical condition is found, the hospital must provide stabilizing treatment or an appropriate transfer.

  • HIPAA (Health Insurance Portability and Accountability Act):

    • Privacy Rule: Protects the privacy of individually identifiable health information, known as Protected Health Information (PHI). It sets limits on the use and disclosure of PHI.

    • Security Rule: Sets national standards for protecting the confidentiality, integrity, and availability of electronic PHI (e-PHI).

  • Patient Self-Determination Act (PSDA): Requires healthcare facilities to inform adult patients about their rights to make decisions regarding their medical care, including the right to accept or refuse treatment and the right to formulate advance directives (e.g., living wills, durable power of attorney for healthcare).
     

• Corporate and Business Law

  • Antitrust Laws (Sherman Act, Clayton Act): These laws are designed to protect competition. In healthcare, they apply to issues like price-fixing, boycotts, and mergers and acquisitions that could create a monopoly and harm consumers.

  • Corporate Compliance Programs: Understand the seven essential elements of an effective compliance program as outlined by the Office of Inspector General (OIG). These programs are crucial for preventing and detecting fraud and abuse. The elements include establishing standards, having a compliance officer, providing training, and conducting audits.
     

• Government Payor Regulations

  • Conditions of Participation (CoPs): These are the health and safety standards that healthcare organizations must meet to participate in the Medicare and Medicaid programs. They are set and enforced by the Centers for Medicare & Medicaid Services (CMS). Failure to meet CoPs can result in loss of Medicare/Medicaid funding.
     

• Licensure and Accreditation

  • State Licensure: Healthcare facilities must be licensed by their respective state to operate legally. This is a mandatory requirement.

  • Accreditation: A voluntary process through which an organization is recognized for meeting certain standards of quality and safety.

    • Key Body: The Joint Commission (TJC) is the most well-known accrediting body.

    • Deemed Status: Hospitals accredited by TJC are "deemed" to have met Medicare's Conditions of Participation, which is a major reason organizations seek accreditation.