Home Health & Hospice Week

Fair market value is key to staying on the feds' good side.

If your physician compensation arrangements aren't pristine, you could be courting disaster.

"All it takes is one greedy or disgruntled employee to become a whistleblower," warns attorney Charles Oppenheim with Foley & Lardner in Los Angeles. If your physician payment agreements don't pass muster under the Anti-Kickback Statute, the Stark law and Medicare rules, you could end up in a business threatening court battle.

Home health agencies should check over their arrangements to make sure they comply, urges attorney Patricia Hofstra with Bell Boyd & Lloyd in Chicago. Hofstra and Oppenheim offer these tips, drawn from the Stark law personal services safe harbor, to keep your physician payments kosher:

1. Put the arrangement in writing. It's important to have a written contract with the physicians you are paying, Hofstra advises. Don't forget that in addition to being written out, the contract must be signed by both parties, Oppenheim adds.

2. Take your time. The contract should cover a period of at least one year. Having a one-year term insures against providers cutting off physician payments if they don't furnish enough referrals.

3. Be specific. The written contract should spell out exactly what services are covered by the arrangement, the attorneys say.

4. Be reasonable. But the arrangement can't cover any services you feel like. The services must be reasonable and necessary to avoid kickback violations. And you should never pay docs for services Medicare already pays them for, such as care plan oversight, Oppenheim counsels.

5. Provide the proof. To show you are paying the physicians for legitimate services, you must offer up proof that the services actually took place. If you didn't accurately document the service delivery at the time, go back now and collect as much documentation as you can showing the physician performed the duties, Hofstra recommends.

6. Don't overpay. To comply with kickback rules, payments to physicians must be set at fair market value.

7. Set payments in advance. Specify in advance how much you will pay the physician for the whole year. Make sure the payments aren't in any way related to referrals, Oppenheim cautions.

Important: Home care providers must take the time to make sure their physician payment agreements fall in line with all of these rules, Oppenheim advises. "Agencies may think because they are small or are located in a small town that they aren't on anyone's radar screen," he tells Eli. But that's simply not the case - all providers face these risks, Oppenheim emphasizes.