We live in a turbulent world where everything is scrutinized and it is sometimes difficult to differentiate the "good guys" from the "bad guys."

More likely than not, your physician is one of the "good guys," possessing great skills and a passion for the profession but feeling somewhat overwhelmed by an expanding regulatory burden. Physicians today must be conversant with a mottled sea of compliance issues for which there is no clear safe harbor, and they spend too much time on after-hours paperwork for which there is no compensation.

Notwithstanding this, your physician is expected to comply with all applicable laws governing the profession and demonstrate a commitment to professional standards and ethics. Otherwise, even the well-intentioned physician may become ensnared in a net of civil, administrative and criminal proceedings, some of which are highlighted below.

Stark Law. The federal rules (and their state law counterparts) constrain selected physician referrals to entities providing "designated health services" in which the physician (or an immediate family member) has a financial interest unless a statutory or regulatory exception applies. These rules penalize physicians who are said to be acting out of "financial self-interest" from the very act of making a prohibited referral (or submitting a claim for reimbursement). No bad intent or guilty state of mind must be established, as this law is essentially a strict liability provision. Penalties include civil monetary penalties and a possible exclusion from Medicare and Medicaid.

False Claims Act (FCA). Violation of one statute easily implicates other laws and affects a physician's managed care panel memberships and licensure. For example, Stark Law violations can expose a physician to liability under the FCA, a federal statute enacted during the Civil War to hinder war profiteering. Nowadays, the law challenges physicians to be transparent and clean in their billing and reimbursement practices. Your physician not only needs to worry about governmental action but must fear private citizens (whistleblowers) who take delight in fighting wrongdoing for the government by filing FCA lawsuits (qui tam suits) and sharing in any settlement. For liability to attach, there is no need to document any specific intent to defraud the government; merely that the physician "knew" about the false claim(s), something that is inferred from the universality and magnitude of the problem.

Professional Conduct. Any misstep can result in allegations of professional misconduct being lodged against a physician, and each claim reported to the Office of Professional Medical Conduct must be investigated. There are too many acts or omissions to enumerate, but practicing fraudulently, exploiting patients for financial gain, improper patient referrals, poorly maintained patient records and improper disclosures of patient information are among the common problems.

Impermissible Disclosures of Patient Protected Health Information. An increasing reliance on computers and the computerization of health-care information led to compromises of patient privacy and new legislation, most notably HIPAA. Today, patient health information must be stored securely and sanctions apply if a physician or medical practice impermissibly discloses (even inadvertently) protected health information without proper authorization. A cottage industry has arisen to handle HIPAA complaints, administered by the Office for Civil Rights.

Billing Practices. Physician billing practices should be, but frequently are not, consistent with third-party payer (HMO) policies and procedures. Unless medical services are properly documented and the associated claims for reimbursement reflective of the services provided, physician payments are subject to potential audit and/or disallowance. A genuine commitment by physicians to continuous improvement in this area means continuing professional education, periodic and random audits (the so-called "self-audits") and regularly monitoring of billing procedures. This is a high standard to achieve and many smaller practices and solo practitioners are vulnerable to HMO initiatives intent on uncovering suspected wrongdoing. Post-pay audits seek recoupment of payments made up to six years earlier, and these harsh audit techniques can have a deleterious impact, particularly on the financial health of primary care practices that are among the lowest paid in New York State and can therefore least afford an overpayment claim.

Internal Investigations. Many practices lack the capability and wherewithal to investigate suspected wrongdoing "in-house" and must rely on costly outside specialists and legal counsel. A general uneasiness about compliance matters, however, demands a comprehensive and timely review of relevant documentation and records, staff interviews and legal analysis. A record of the investigation is recommended, with corrective measures taken promptly upon completion of the investigation, including the possible reporting of misconduct to outside agencies and payer programs.

Under current law, there is an obligation to refund overpayments to Medicare, Medicaid and private insurers. Nonpayment may be a crime. Moreover, different agencies have dissimilar self-reporting disclosure protocols, and the failure to self-report on a timely basis may be penalized.

The physician's world these days is brimming with examples of formal standards for compliance that are unforgiving and carry a disciplinary wallop. No longer can a physician get by with simply practicing good medicine. Medicine in the 21st Century, like many other professions, has become a full-time business.

LARRY ROSS: lmr@hurwitzfine.com