Regulations that govern Medicare providers in the home healthcare industry are complicated. It is important that all owners of home health care businesses understand the rules in order to prevent the possibility of violating applicable codes. This is ever more critical due to the increasing scrutiny by the Office of the Inspector General and the FBI.

Three (3) main statutes should be considered when evaluating your marketing program:

Anti-Kickback Statute

The Federal Anti-Kickback Statute prohibits any person or organization from paying or receiving any remuneration to induce or reward referrals of services that are reimbursable by a federal healthcare program. Remuneration includes the transfer of anything of value, either directly or indirectly, overtly or covertly, in cash or in kind. These Anti-Kickback rules are to be considered primarily when dealing with your employees or independent contractors who provide marketing services to your company. These rules would also apply to any relationships with social workers or other employees of nursing homes, hospitals, physician clinics, or otherwise. Simply put, this rule must be considered where your company makes any payment to a party who you contract or engage in for marketing services.

Stark Law

The Stark Law prohibits a physician from referring a patient to an entity furnishing designated health services that is covered by Medicare if the physician (or an immediate family member) has a financial relationship with the entity. Clearly, the Stark Law would prohibit a physician from referring a patient to its own home healthcare agency or an agency of which the physician owns a certain percentage of the ownership interest. The Stark Law however extends beyond that and would also prohibit a physician from referring a patient to a home healthcare agency if that physician merely has some sort of compensation relationship (such as an employment relationship or an independent contractor relationship). Both the Anti-Kickback rules and the Stark Law contain a “safe harbor” that would protect a certain relationship as long as all of its requirements are met.

Civil Monetary Penalty Act

The Civil Monetary Penalty Act imposes monetary penalties against any person who provides a remuneration to a Medicare or Medicaid beneficiary where the person knows or should know that such action is likely to influence the beneficiary selection of a particular provider. Remuneration is defined as transfers of items or services for free or other than fair market value. The Office of the Inspector General has determined that nominal incentives are not prohibited by the statute. A nominal incentive is one with a value to be no more than $10.00 per item or $50.00 in the aggregate on an annual basis. Assuming a gift in question is above and beyond the nominal value, the key determination is whether or not the item is likely to influence the selection of the company as a home health provider.

It would be our recommendation that no gift or service is provided to a perspective beneficiary prior to their determination or selection of your company its home healthcare provider. In addition, we would also recommend that you do not advertise or market the provision of any such gifts or services as a way to induce the selection of your company as a home healthcare provider. I would also recommend that at the time the admission of a patient with your agency, that they be notified of their rights to choose any home healthcare provider.

Corporate Compliance Policy

All home health care business in this climate must adopt a thorough corporate regulatory compliance policy. Most home health businesses have adopted extensive policy and procedures that govern the operation of the company. Many policy and procedures do not include regulatory compliance concerns and/or the creation of a system to ensure that the company maintains regulatory compliance. This would also include the appointment of a compliance officer whose duties would be to insure that the company remains in compliance. We would be happy to provide you with such corporate compliance policy.