Home Health & Hospice Week

OIG gives thumbs down to widespread industry practice.

If you're one of the many home health agencies offering free visits to patients about to undergo orthopedic surgery, you could be inviting serious penalties from the feds.

Free pre-operative safety assessments implicate civil money penalty (CMP) sanctions and the anti-kickback statute, the HHS Office of Inspector General says in Advisory Opinion No. 06-01 posted March 27.

"There are thousands of HHAs who are doing this," notes attorney Liz Pearson with Pearson & Bernard in Covington, KY. They "need to know that they will have to cancel their services."

Although Medicare and Medicaid don't cover the free pre-op home safety assessments, they do cover many postoperative home care items and services, the OIG notes in the opinion. "Arrangements whereby a prospective provider or supplier of Federally payable items and services offers beneficiaries a non-covered item or service free of charge implicate the fraud and abuse laws and must be closely scrutinized."

Furthermore, the national chain that requested the opinion should know it's a problem, the OIG says. The arrangement, "including offering the service without charge, obtaining a recommendation from the patient's own health care professional, and using physical therapists to perform the services--appear calculated to generate postoperative business" for the company, the OIG adds.

Giving away free initial services to increase the chance that the client will choose the provider for later services is a common business tactic, notes attorney Robert Markette Jr. with Gilliland Markette & Milligan in Indianapolis. "OIG noted that the free assessment 'maximized' the agency's opportunity to initiate a relationship with a patient," Markette says. "Once again, what is simply good business in any other profession, is a crime for Medicare providers.

What they're doing: The unnamed home care company requested the opinion based on its practice of having PTs conduct a pre-op home safety assessment either in the home or over the phone. The assessment includes gathering basic patient information such as surgical history and falls history and basic residence information such as number of stories and steps and tripping hazards. The PTs might offer simple home improvement suggestions like removing throw rugs.

The pre-op visit program described in the advisory opinion is similar to most HHAs' pre-op programs, "so the impact is nationwide," Pearson warns.

The OIG's opinion shows "a lack of understanding about what is required for patients to be appropriate for home health services," protests Burtonsville, MD-based health care attorney Elizabeth Hogue. HHAs must make sure post-op patients have a caregiver to care for them between agency visits and a safe home environment to support home care services.

Checking on and securing those elements are "likely appropriate coordination activities, not 'free safety assessments' like those described in the Advisory Opinion," Hogue maintains.

Notices Not Much Help

The company's PTs specifically don't offer skilled care, "significant" patient education, exercises or other therapeutic instruction, the opinion notes. And the company issues a statement to patients saying they are free to pick the home care provider of their choice if post-op home care is needed after surgery. Finally, any post-op services aren't scheduled until after the surgery takes place.

No dice: The notices are helpful, but not enough to "safeguard against improper beneficiary inducements," the OIG says.

The company's argument that its phone assessments are worth less than $10, so therefore don't implicate OIG sanctions, doesn't fly either. The provider "delivers the free services in a manner that would lead a reasonable beneficiary to believe that he or she is receiving a valuable service," the OIG notes. "We cannot conclude that the telephonic assessments are of nominal value for purposes of the CMP."

"Although many people have argued that there is no kickback potential, the OIG senses that this service overall does influence" the patient's choice, Pearson observes. That's "even though there is no direct benefit passing to anyone but possibly the patient."

More kickback concerns: The opinion does not address potential kickback concerns involving the referring physician, the OIG points out. But "obviously, providing a free service to a physician's patient raises similar questions," Markette cautions.

"OIG's failure to comment on it in that letter means they were not asked," Markette adds. But based on the opinion, "it is probably safe to assume they would consider free visits to also create potential fraud and abuse violations as to the physician." 

Note: For a copy of the opinion, email editor Rebecca Johnson at rebeccaj@eliresearch.com with "Pre-op Advisory Opinion" in the subject line.