Home Health & Hospice Week

Kickback risks could lurk in your physician relationships.

If you're worried about referral no-no's when your home health agency administrator is married to a referring physician, look no further than the Stark II Law for help.

The Stark Law prohibits physician referrals to designated health services when the physician or a member of the physician's immediate family has a financial relationship with the DHS provider. Under the law, home health is a DHS.

But that doesn't mean all referrals from managers' family members are off limits, notes attorney Bob Ramsey with Buchanan Ingersoll in Pittsburgh. Home health agencies can fit the referrals of related physicians into the bona fide employment exception of the Stark II Law, Ramsey advises.

Under the employment exception, the administrator must:

• have a written employment agreement with the agency, and

• spell out in the agreement that the manager's compensation can't vary, directly or indirectly, with the volume or value of referrals from the physician spouse.

Watch out: This exception works for management who are married to referral spouses, but not owners who are, Ramsey warns. "If the operator was also the owner of the agency, that exception would not be enough and the analysis would be much more complicated." 

Note: The Stark II Interim Final Rule is at www.access.gpo.gov/su_docs/fedreg/a040326c.html scroll down to the Centers for Medicare & Medicaid Services section.