Home Health & Hospice Week

Beware triggering unexpected dangers when compensating your medical directors.

Does the OIG have you in their sights? Read on to see how you can avoid being their next target.

What the Law Says: The Anti-Kickback Statute (AKS) is a criminal law that prohibits the knowing and willful payment of any “remuneration” to induce or reward patient referrals or the generation of business involving any item or service payable by federal health care programs. Remuneration includes anything of value, such as cash and free rent. But it also can include excessive compensation for medical directorships. Think this doesn’t happen today? Guess again.

Check Out These Recent Trophies

Recent investigations have found companies and physicians guilty of paying (and receiving) compensation for patient referrals and other infractions.

Last month, Dr. Scott Nelson, who was the medical director for multiple Mississippi hospices, was sentenced to five years in prison and ordered to pay $15 million in restitution for kickbacks and other violations. Four associated hospice owners were also convicted of fraud (see related story, p. 71).

In a Michigan case, Walid and Jalal Jamil, the owners of multiple home health agencies in the Detroit area, allegedly paid bribes to other co-conspirators to recruit patients in violation of the AKS. Another conspirator, Radwan Malas, operated Infinity Visiting Physician Services as a home visiting physician company and allegedly ordered the physicians he employed to certify patients referred by the Jamils for medically unnecessary home health services beginning in at least February 2015.

Also, Integra Lab Management processed high-reimbursing and allegedly medically unnecessary urine tests submitted by Infinity. Integra owner Michael Molloy and his co-owners also allegedly paid the salary of Infinity employees and made monthly payments to Malas in exchange for the physician orders for the medically unnecessary urine drug testing.

In December 2022, the Department of Justice reported that Michigan physician Victor Savinov agreed to pay $50,000 to resolve allegations that in 2009 he received remuneration in exchange for referring Medicare patients to third-party-owned home health agencies. And, yes that’s not a typo; you read it right, 2009. The investigation began in 2016 and settlements were just announced. The original complaint named 30+ defendants, and the DOJ settled with or obtained judgments against almost all of them.

In October 2022, the DOJ reported that Carter Healthcare, an Oklahoma company that provides home care in multiple states, as well as CEO Stanley Carter and COO Brad Carter, agreed to pay $22.9 million to resolve allegations that they wrongfully paid physicians to induce referrals of patients under the guise of medical directorships, resulting in false claims to Medicare.

August 2022 saw 13 hospice defendants sentenced to a combined 84 years. In this $27 million case, patients were recruited regardless of their eligibility and medical directors signed off on care plans without reviewing files, even certifying they saw patients when they did not; among other more egregious behaviors.

Deploy These Best Practices

With cases like these front and center, the HHS Office of Inspector General is on high alert and watching providers closely. To safeguard the integrity of your agreements, you must put protections in place to assure appropriate review and approval of all compensation arrangements.

It is wise to never offer (or accept) payments or other kinds of compensation for referrals. Even at the state level, compensation relationships are closely scrutinized. If you do enter this type of arrangement, there are things you can do to lower your compliance risk. Best practices include:

• Aligning agreements with federal safe harbors, such as, “Personal services and management contracts...” [CFR 1001.952(d)]. Incorporate local and state laws and safe harbors, too.
• Evaluating agreements; retaining experienced legal counsel and avoiding arrangements for admissions.
  • Consider task-based and/or hourly rates (plus stipend); use independent facts like benchmarking data to set reasonable rates based on fair market value.
  • Clearly describe why services are needed and define administrative vs professional services, and physician roles (e.g., medical director, physician designee, team physician, etc.).
  • Develop detailed job descriptions; include the scope of the work (i.e., location(s), how many clinicians, time required, any qualifications needed, etc.).
• Maintaining and regularly reviewing documentation; ensuring details are accurate and thorough.
• Conducting proactive risk assessments to ensure expectations are being met.
• Maintaining an effective compliance program that:
  • * Operates according to OIG recommendations to help avoid fraudulent activities and support accurate claims.
  • * Helps the Justice Department to favorably consider your compliance program in making criminal misconduct determinations. [Title 9, Section 9-28.300 and 9-28.800]
• Avoiding any appearance of irregularity. Never offer (or accept) a gift of more than nominal value; unlawful examples include lavish and extravagant meals, all-expense paid trips — Super Bowl weekend or island/ski getaways, expensive personal gifts — cash, checks, jewelry, designer clothing, season tickets, etc.

Know this: Modest unsolicited gifts and benefits are generally OK, such as a meal or refreshments during educational inservices or training programs, or an annual appreciation event held locally. Other gifts such as the occasional consumable gift (food basket on a special occasion), small plants, calendars, or mugs may be acceptable to give or receive but check company policies first as state statutes may apply.

Pointer: Currently the OIG defines nominal or inexpensive value to mean: less than $15 per item and less than $75 annually.

Another way to prevent AKS violations is to be aware of other safe harbors. They include: space and equipment rental; referral services; waiver of beneficiary required payments; price reductions offered to health plans; and practitioner recruitment; and many others.

Compliance with a safe harbor is voluntary. They can insulate you from liability under the statute, but you are still responsible for complying with all other laws, regulations, and guidance that apply. (For federal safe harbors and their terms and conditions go to www.ecfr.gov/current/title-42/chapter-V/ subchapter-B/part-1001/subpart-C/section-1001.952.)

Any time you are unsure about an arrangement, it is wise to step back and adjust your sight. Your compliance officer or team can reach out to available resources to help you evaluate the endeavor and decide whether to proceed. Legal counsel and state and local professional organizations can offer insights.

CMS, the OIG, Medicare Administrative Contractors, and other payers can offer generalized information.

If you identify a questionable relationship or venture:

1. Immediately seek knowledgeable legal counsel
2. Step away from the suspicious relationship
3. Determine funds collected in error to report and return overpayments, if any; and
4. Consider using OIG’s or CMS’ self-disclosure protocols, as applicable.

Remember, you can avoid violations of the AKS and other federal and state laws by following their written guidelines, abiding by the OIG’s guidance, and seeking help when uncertain.

Patricia Zubritzky, Contributing Writer, Coraopolis, Penn.