Medicare Compliance & Reimbursement

Going overboard on number of directors raises a red flag.

The newest compliance hotspot for home care providers is medical director kickbacks. Home health providers should be forewarned: Medicare can all but shut down a provider's cash flow if charges of medical director kickbacks arise.

In response to provider requests, the Centers for Medicare and Medicaid Services addressed the issue of medical director kickback fraud in the April 21 Open Door Forum for home care providers.

Recently, CMS has suspected home health agencies of paying physicians for referrals through sham medical directorships, a CMS official warned in the forum. "You need to hire a physician when you need work to be done," the staffer stressed. "Be sure what you hire them for is for the work and not for anything else but the work."

Gene Tischer of the trade association Associated Home Health Industries of Florida called in with medical director horror stories, where agencies are paying physicians up to $5,000 per month for directorships. In one case, an HHA with a census of 200 had 27 medical directors, Tischer related in the forum, which drew more than 185 callers.

The "medical director position is being abused a lot," Tischer claimed. Stiff competition for referrals in many areas is spurring the illegal activity, he theorized.

Make Sure Med Directors Aren't Repeating Work

The CMS official urged listeners to determine the reasonable amount of medical director work an agency of their size requires, then hire physicians to perform the work. If directors work part-time for the agency, then having multiple directors to perform tasks might make sense, she said. But if multiple directors are performing redundant work, that's a red flag.

Experts: Timesheets Can Up Compliance

When asked if medical director timesheets are necessary, CMS responded that timesheets aren't required but are a very good idea. Although a specific tool isn't mandated, "what really matters is that if we ever investigated you, you could show us ... the work the physician had done," the official explained.

CMS recommended medical directors meet these requirements, included in the personal services safe harbor to the anti-kickback statute: