Home Health & Hospice Week

Could your contract therapists be a compliance landmine in disquise?

To stay competitive, home health agencies are seeking any ethical marketing advantage they can--but don't let that be an invitation for hefty fines and penalties.

One Midwestern HHA maximizes referrals from nursing facilities by employing some of the same contract therapists from an independent therapy provider. "This is a definite marketing advantage for us" since the facilities' discharge planners know about the therapy group relationship, says the HHA's administrator, who requested anonymity.

Question: But could sharing therapists run the agency afoul of the Anti-Kickback Statute?

Answer: Not if the HHA is careful to fit the relationship with the therapists into the Statute's personal services safe harbor, advises attorney Bob Ramsey with Buchanan Ingersoll in Pittsburgh. HHAs must follow these five requirements to fit relationships into the personal services safe harbor:

1. Set out the agreement with the contract therapists in writing and have it signed by the parties.

2. Specify in the agreement the services to be provided by the agent.

3. If the agreement covers services that are expected to be "periodic, sporadic or part-time" rather than full-time, the agreement must specify "exactly the schedule of such intervals, their precise length, and the exact charge for such intervals," the Anti-Kickback Statute specifies.

4. Set the term of the agreement for not less than one year.

5. The aggregate compensation paid to the therapists over the term of the agreement must be set in advance, be consistent with fair market value, and not take into account the volume or value of any referrals.

Agencies should be especially careful that "the compensation to the therapy company should be set in advance, be consistent with fair market value, and not be determined based on the volume or value of referrals or other business between the parties," Ramsey urges.

Don't Sink Your Safe Harbor

But HHAs might have a hard time fitting their contract therapist agreements into this safe harbor, warns attorney John Wester with Sidley Austin in Washington, DC. The main stumbling blocks are that the aggregate compensation must be set in advance (#5) and that any non-full-time intervals of work must be specified ahead of time (#2).

"I have not encountered a situation where a therapy provider is compensated on a fixed basis, nor is it generally possible to set a fixed schedule for the services to be provided," Wester tells Eli. "I don't see much hope of safe harboring the HHA's relationship with the therapy providers."

Another out: However, because the therapists in question are not employees of the nursing facilities, but only contractors, they probably wouldn't be viewed as controlling the referrals from the facilities, Wester allows. That means the Anti-Kickback Statute wouldn't be implicated by the relationship.

Play it safe: If your contract therapists work directly for your referral sources and you can't fit their relationship with you strictly into the safe harbor, Wester urges you to decline the referrals or find other therapists. At the very least, be sure to "diligently document that [the] arrangements provide nothing more than fair market value for services that are needed and provided," he says.