Medicare Compliance & Reimbursement

Providing services and supplies on the house invites kickback troubles. If you want to help dialysis facilities with specimen prep, you need to beware of garnering improper referrals, according to a HHS Office of Inspector General advisory opinion (No. 04-16).

Example: A laboratory provides dialysis facilities with both composite rate tests (included in the composite rate that Medicare pays) as well more lucrative non-composite rate tests (separately billable and not Medicare-covered). Could that lab provide the dialysis facilities with lab workers and supplies needed to centrifuge, sort, pack and ship specimens to the lab - at no cost to the facilities?

Answer: According to the OIG, free services and supplies still provide a "functional" discount and could be construed as soliciting improper referrals of government business. In such an arrangement, the dialysis facilities could improve expense reimbursement under the composite rate system, and the labs could generate substantial revenue in a competitive market if they influence the dialysis facilities' selection of a laboratory.

"The arrangement poses a significant risk of improper 'swapping' of business, especially in light of the lab's representation that many of its competitors are agreeing to such 'discounts.' These competitor 'discount' arrangements may similarly run afoul of the anti-kickback statute," the opinion reads.

To read more, go to www.oig.hhs.gov/fraud/docs/advisoryopinions/2004/ao0416.pdf.
 
Lesson Learned: Labs need to guard against improperly attracting business from dialysis facilities.