Medicare Compliance & Reimbursement

The holidays can present one of the biggest compliance hazards to healthcare providers, thanks to gift-giving for physician referral sources. Gift-giving "is an intersection where the very rigid nature of the Stark Law collides head-on with common American business practices," warns attorney Robert Ramsey III with Buchanan Ingersoll & Rooney in Pittsburgh.

"Holiday gifts are, of course, something many nonhealthcare businesses have given to their business acquaintances for years," Ramsey tells Eli. "However, in the healthcare arena, such gifts can run afoul of the law depending on the circumstances."

Look To Stark Law For Guidance Providers should consult the Stark law when they are deciding on gifts for physician referral sources, says attorney Rick Rifenbark with Foley & Lardner in Los Angeles. Stark law limits gifts to physicians to an amount totaling $355 in 2009 -- the exact amount is adjusted yearly for inflation.

Up next: Why A Coffee Card Can Land You In Hot Water Think it over: Or better yet, healthcare providers should refrain from giving gifts to referral sources at all, urges homecare and compliance attorney Robert Markette Jr. with Gilliland & Markette in Indianapolis.

"The simplest, and safest, rule is, don't give gifts." "Of course, that is not easy to do," Markette admits. "Providers, like any good business people, want to acknowledge good referral sources and good patients." If you find foregoing gifts impractical, consider these rules set out in the Stark law:

• Adhere strictly to the limit. The $355 rule isn't just a suggestion, it's a hard and fast limit. And it applies to the value of the gift, not what it actually cost you, Rifenbark points out.

• Track your gift spending throughout the year. The $355 limit applies to all gifts given for the entire year. "If gifts have been furnished to physicians during the year, the value of previous gifts should be subtracted from the value of any remaining gifts," counsels attorney Marie Berliner with Lambeth & Berliner in Austin, Texas.

• Don't give cash or cash equivalents. A Starbucks gift card might seem like just the thing for your coffeeloving referral source, but it violates Stark law. "Providers can give only non-cash items of nominal value," warns Washington, D.C.-based attorney Elizabeth Hogue. "Gift cards and gift certificates are not allowed."

• Don't vary your gifts based on referral volume. Rewarding your best referral sources is one of those tactics that would be A-OK in the normal business world but is off limits in the Medicare environment.

• Beware of gift messages. You don't want to implicate the criminal anti-kickback statute by giving your referral source a gift in exchange for her referrals. So be sure your gift message doesn't say something that implies that, like "thanks for all the patients you send to us."

• Consider anti-kickback law limits. To be on the safe side, you may want to go with the lower anti-kickback limits for gifts, Markette suggests. Once you're over the $10/$50 anti-kickback law limits, you've got to prove that you are not trying to induce referrals.

A good argument is to say that it complies with the Stark regulation, Markette allows.

• Consult state laws. The federal Stark and anti-kickback laws may not be the last word on your gift-giving. Be sure to check your own state's laws to see if they put more stringent limits on you, Rifenbark says.

(Editor's note: To read how one hospital ran afoul of Stark Law, go to: http://compliancenews.inhealthcare.com/dont-try-this-at-home/how-one-hospitals-physician-giftsran-afoul-of-stark/.)