Increased federal investigation from the Office of Inspector General, the Centers for Medicare and Medicaid Services, and the Agency for Healthcare Administration has brought with it a new level of importance to the decision of where to send your referrals for Durable Medical Equipment (DME). These laws and some recent prosecutions have changed this issue from an ethical concern to a major liability.

Still not concerned? Consider these recent articles posted on the Office of Inspector General’s Web site:

• A national DME company based in Florida agreed to pay $10 million and enter into a 5-year integrity agreement to resolve its liability under the Anti-Kickback Statute provision of the CMPL and the Stark Law. The OIG alleged that XYZ DME offered and paid remuneration to potential and existing referral sources to induce referrals of patients to XYZ DME for the furnishing of durable medical equipment. The remuneration included sporting and entertainment event tickets, gift certificates, rounds of golf, golf equipment, fishing trips, meals, advertising expenses, office equipment, and medical equipment, as well as payments pursuant to purported consulting agreements.

• Two south Florida pulmonologists agreed to pay $65,066 and $57,030, respectively, and enter into a 3-year Integrity Agreement to resolve their liability under the Anti-Kickback Statute provision of the CMPL and the Stark Law. The OIG alleged the doctors violated those laws by accepting gifts, including Miami Dolphins tickets and meals, from a DME supplier in exchange for patient referrals.

• A group practice and two Pennsylvania physicians (respondents) agreed to pay $50,000 to resolve their liability under the Anti-Kickback provision of the CMPL and the Stark Law. The OIG alleged the respondents received illegal remuneration from a home health company in the form of monthly lease payments for rental space in exchange for Medicare patient referrals.

Anti-Kickback Statute
The federal anti-kickback statute proscribes the offering, payment, solicitation or receipt of any remuneration in exchange for a patient referral or referral of other business for which payment may be made by a federal healthcare program, including Medicare and Medicaid. Violations of the Anti-kickback statute can result in significant criminal penalties, civil penalties of up to $50,000 for each violation, as well as imprisonment.

I have been working in this field for a long time and have seen countless violations of the Stark laws. Questions like what are you going to do for me? and statements like we are contracted with a supplier already or even gifts like Gucci bags for Christmas are nothing new. Recently I was even asked to “bid” on the referrals from a large physicians’ office. Frankly, the behavior and blatant requests for kickbacks is extremely discouraging. I grew up in this business. My family started Colonial Medical Supplies 25 years ago when I was in grade school. I remember how hard they had to work to make the company successful, and it makes me feel ashamed to be a part of an industry today that is so driven by lunches, Gucci bags, and bids.

As prevalent as it is, these violations are rarely from the physician themselves. Often, there is a referral coordinator, an office manager, or even a receptionist making requests without the physician’s knowledge. Because the physician can be held liable for actions of his staff, this can turn into a major liability for the physician himself. That liability coupled with increased investigations makes it crucial for the physician to become aware of what is going on in his office.

In order to protect yourself and your staff, it’s important to be aware of recent changes in the Stark laws, as well as how your staff handles referrals from your office.

How do you protect yourself? Look at where your referrals are going and consider this:

• Is the decision to send the referral to XYZ Company based on the best possible care to the patient?
• Is the patient given a choice of where to receive their supplies?
• Do you, your staff member, or a family member have any financial ties to the company?
• Do you have a written Code of Ethics, and is that code followed and monitored?
• In reviewing your contracts, who do you receive or make payments to?
• Who owns the building where you practice?
• Do you rent space to a company you refer to?
• Is the rent structured in advance, and is the payment “fair market value?”
• Does your office staff or referral coordinator receive gifts from vendors? If so, is there a value to the patient? Is the gift of nominal value?

The provision of reasonable gifts should not carry with them any expectation from physicians (such as alteration of the physicians’ prescribing practices).

In closing, I urge physicians to be aware of where their referrals are going. In addition, suppliers must refrain from encouraging physicians and referral sources to accept inappropriate gifts in exchange for patient referrals, which ultimately takes away patient choice and has the potential to compromise patient care.



January 2008

Tags:

Bookmark:

Digg

Facebook

Technorati

Newsvine

Google

Related: