Home Health & Hospice Week

Hospice donation wins stamp of approval from OIG.

If you accept or give charitable donations, you'd better take a look at a new HHS Office of In-spector General Advisory Opinion on the matter.
 
In Advisory Opinion No. 418 posted Dec. 29, a health system asks if a donation from its affiliated charitable foundation to the only inpatient hospice in town will break anti-kickback rules. The new hospice, which will furnish inpatient and outpatient care to the homeless, among other patients, may refer some patients to the health system's hospital - also the only one in town - for items or services.
 
Three elements are likely to keep this arrangement from violating anti-kickback statutes, the OIG says:

 1. Referrals. "Referrals of patients from the Hospice to the Health System will necessarily be limited, because patients electing Medicare hospice services are required to relinquish their rights to curative care for their terminal illnesses," the OIG notes in the opinion.
 
The fact that "the donor Health System is not in a position to receive significant referrals from the hospice ... is likely the most important element to the OIG," says attorney Jeff Schneider with Hogan & Hartson in New York City.
 
Beware: Most business partners won't be in the same position of having little referral potential, Schneider warns. Be sure to examine arrangements where referrals are a factor very carefully.

 2. Influence. Neither the health system nor the foundation will exert any influence over the hospice's use of the donated funds, the OIG notes. And the donation is part of a "broad solicitation" to the community by the hospice; the federal government and hundreds of businesses and citizens also will donate.

 3. Fixed amount and time. The donations will have a fixed annual cap and will last five years, the OIG notes. The donation amount won't take into account any referrals or other business the hospice might generate for the health system. And the hospice won't be required to purchase items or services from the health system.

Rest easy: "A business relationship between a donor and a donee does not make a tax-deductible donation automatically suspect under the anti-kickback sta-tute," the OIG reassures in the opinion.
 
"The majority of donors who make contributions to tax-exempt organizations and the majority of tax-exempt donees who solicit or accept donations - including donors and donees with ongoing business relationships with one another - are motivated by bona fide charitable purposes and a desire to benefit their communities," the OIG acknowledges. The watchdog agency has espoused this belief for years, Schneider notes.
 
Good advice: "If the entity making the donation (and/or its affiliates) is not in a position to receive significant business or referrals from the hospice, then it probably is OK for the hospice to make a targeted solicitation," as long as the arrangement complies with points #2 and #3 above, Schneider recommends.
 
But there are more hoops to jump through if the donors do receive significant business from you. Schneider points to a 2001 OIG Advisory Opinion that spells out rules for donations from business partners who benefit from your referrals or business.
 
In Opinion No. 01-2, the OIG gives its blessing to solicited donations from vendors as part of a golf fundraising event because: the event was a bona fide charitable project; the solicitation was part of a broad community solicitation of donations; and the donee didn't take into account business partners' participation when making business decisions like awarding contracts.
 
Bottom line: "If the entity making the donation (and/or its affiliates) is in a position to receive significant business or referrals from the hospice, then a targeted solicitation or stand-alone donation carries some substantial risk," Schneider cautions. "But soliciting such entities as part of a broad fund-raising campaign is probably OK," as long as the donations meet the elements set forth in the OIG's 2001 opinion, Schneider advises. 
 
Editor's Note: The Dec. 29, 2004 opinion (04-18) and the March 27, 2001 opinion (01-2) are at http://oig.hhs.gov/fraud/advisoryopinions/opinions.html.