Home Health & Hospice Week

Medical director overhaul is centerpiece of new law targeting kickbacks.

If home health agencies don't clean up their own referral act, the authorities will step in and do it for them.

That's what's happened in Florida, where Gov. Charlie Crist (R) has signed into law provisions limiting HHAs' interactions with medical directors, hospital discharge planners, assisted living facilities and others.

The legislation, supported by trade group Associated Home Health Industries of Florida, aims to curb the referral abuse that has flourished in Florida's competitive market. The law that took effect July 1 requires HHAs to:

• retain only one medical director in most situations;
• not furnish any remuneration to referring physicians' office staff or immediate family;
• not furnish any remuneration to case managers, discharge planners and other hospital staff or discharge planning contractors;
• not furnish staffing or services to assisted living facilities and their patients without fair market value payment for them.

The law also requires accreditation for new agencies or those changing ownership.

The new rules have left HHAs with lots of questions, notes AHHIF's Gene Tischer. For example, can an HHA have a physician's wife work part-time for the agency?The answer is no, AHHIF says in a set of questions and answers it has issued about the law. "HHAs will need to choose," the Q&As say. "Stop accepting referrals from the related physician or discharge the physician's immediate family member."

Agencies also want to know if they can furnish free wellness clinics to ALFs. That's another no, AHHIF maintains. "HHAs cannot provide any home health services (SN, therapy, MSW, personal care) to residents without being paid [fair market value]," the Q&As state. "No more wellness clinics and the like."

It may take some time to nail down specific interpretations of these prohibitions, points out attorney Lester Perling with Broad & Cassel in Ft. Lauderdale, FL.

But some issues are pretty clear. Even if agencies have legitimate reasons for having more than one medical director, they'll have to terminate all but one of the directors, Perling advises. This could strain relationships with valued referral sources, agencies fear.

Motivation: State officials appear to be taking action in response to widespread fraud perpetrated in the state, especially in Southern Florida. Medicare has set up a fraud task force for the area, but it targets only the most egregious offenders.

Honest HHAs have complained that they can't get authorities to take seriously their charges of competitors' kickback and other compliance violations. "The state is clearly trying to plug the holes" left by lack of federal enforcement, Perling tells Eli.

Violators of this law will face losing their HHA licenses and thousands of dollars in fines.

Watch your back: Expect whistleblower activity to be high in the early days of the law, Perling says. "Agencies will be ratting out other agencies," he predicts.

That means you'll have to have squeaky clean referral operations or risk big-time penalties.

Sellers Punished By Accreditation Rules

Another major change is the accreditation requirement, Perling adds. While it won't apply to existing agencies, it will affect new ones and ones changing ownership. It could be a significant burden for HHAs already in the selling process that haven't filed their paperwork yet, he expects.

Barriers to entry: The Florida legislature originally considered putting a number limit on HHA licenses, Perling relates. But it then decided to require accreditation. "Clearly the state agency wanted to put up a barrier to licensure," he says.