Medicare Compliance & Reimbursement

Use these steps below to weigh your options before responding.

Question: In this day and age of acute sensitivity to fraud and abuse, I have a question that directly relates to covertly or indirectly paying for referrals. In our small community we have a fellow home health agency that also has DME and infusion divisions. They are separate providers but share the same name. They take discharge planners and physicians out to happy hour monthly and have even taken physicians out golfing that I know of. Can they do this? Perhaps the marketing rules for DME and infusion therapy are more liberal than what I am familiar with in the home health arena?

Answer: "The anti-kickback rules are the same for all providers and suppliers, unless they are subject to a specific exception," explains attorney Marie Berliner with Joy & Young in Austin, Texas, "There is no exception for DME or infusion."

The issue of whether someone has crossed the line in marketing is a moving target, Berliner tells Eli. There is no "de minimis" exception to the anti-kickback statute, technically, so all gifts to physicians are kickbacks. However, in practice, there is an assumption that de minimis gifts do not usually influence physician referral patterns.

The HHS Office of Inspector General has indicated that its "bright line" for gift giving is no more than $10 per gift and $50 per year. If you're convinced that your competitor is providing "gifts" beyond this level, then you have a number of options to consider, counsels attorney Robert Markette, Jr. with Benesch Friedlander Coplan & Aronoff in Indianapolis.

Step 1: The friendly approach. You may start off by approaching your competitor and/or the referral source and offering some collegial advice about their questionable practices. "Try 'Hey, have you considered you might be committing a felony by...,'" Markette suggests. You can hand off an article on the topic by a third party, such as a trade group, trade press publication, or conference presentation. This word to the wise may be enough to nip any improper behavior in the bud.

Step 2: Take it up the ladder. Perhaps you approached a marketer or other staff member at first with the issue. If you see no changes, it may be time to take up the problem with someone higher up in the hierarchy -- the administrator, Board of Directors, or compliance officer of a parent organization, Markette offers.

Boards of directors sometimes want to stay hands-off, but pointing out the directors' personal liability in such situations may spur them to take some action, Markette advises. "The OIG has been clear ...about holding the Board responsible," he notes. "As directors, they have an obligation to be aware."

Markette has seen success in approaching compliance officers in the larger organizations. In one case, the competitor's staffer engaging in the disputed behavior was fired after the report, he relates.

Step 3: Report to the authorities. If you've got hard proof of your competitor's illegal activity and they haven't responded to repeated attempts to change their behavior, it may be time to report the activity to the OIG, 1-800-HHS-TIPS line, state surveyors, or other applicable authorities.

However, providers who have tried this tactic rarely report success. Unless it's a multi-million dollar fraud scheme like those recently busted in Miami, Dallas, L.A., and other cities with HEAT task forces, you may get shuffled to the bottom of investigators' pile of complaints. For example, in a recent case reported by Markette's client, prosecutors told the provider point blank they have bigger fish to fry.

It may be worth reporting, even if the matter is small, because multiple reports from various entities against the same provider might garner attention, Berliner offers. If you do report, be sure to include specifics, she reminds. "The government is less likely to follow up on general reports of potentially fraudulent behavior."

But keep in mind that if you do catch investigators' eye, you shouldn't be surprised to get swept up in a broad fraud probe of your area, Markette points out. "It's the law of unintended consequences," he notes. "You may find yourself fielding pointed questions about your own practices."

Step 4: Apply pressure. Just because authorities may not take action doesn't mean you shouldn't. If you let fraud in your community spiral out of control, you begin facing the public relations nightmare associated with the high-profile Miami and Texas fraud busts -- and the associated fraud scrutiny of the entire region that comes with it.

As much as possible, providers should try to police themselves and apply pressure to their competitors to get them to cease illegal behavior, Markette recommends. You may consider steps such as having your attorney send them a letter.

Step 5: File a lawsuit. If all else fails, you may consider filing a lawsuit against the offending competitor. But consider all the ramifications first, Markette urges. For example, filing suit will almost certainly upset the referral source involved. "Consider that bridge burned," he notes.

Remember, even if you file a qui tam lawsuit that is sealed for now, it eventually will be unsealed. Then you'll be named publicly as the whistleblower, and will have to deal with fallout from your community and referral sources, Markette reminds agencies.

Ask yourself how much the competitor's activity is really hurting your business. If it's just some fancy lunches, chances are the doc is unlikely to be significantly swayed, for example. You usually have to give a physician more money to truly be influential, Markette observes. But if the competitor is taking docs on lavish trips to Hawaii, that's another matter.

Also keep in mind that the monetary threshold for influencing the referral sources' staff may be much lower, Markette highlights. Fancy lunches for hospital discharge planners may go significantly further in securing referrals and taking away your business, for example.

Likewise, fairly small amounts of money offered straight to beneficiaries can prove very effective in luring them away from your agency. Markette's clients have seen competitors cold call patients and offer them perks such as getting them "free" medical equipment and supplies, securing them more hours of service from aides, and paying their family personal care attendants higher wages.

Step 6: Know how to field inappropriate requests. When referral source staff or patients start asking you for the same kinds of kickbacks your competitor is offering, "be prepared to respond and educate," Markette counsels. Explain to them why engaging in the behavior is illegal and puts them at risk.