Take Our 2nd Annual ICD-10 Preparedness Survey

For the second year in a row, Daymarck is conducting a research study on  ICD-10 implementation preparedness. By participating, you’ll be registered in a drawing for a $100 gift card to Shutterfly, in honor of the National Association for Home Care (NAHC) Annual Meeting & Exposition: Making Memories and Magic in Orlando, Florida, October 21-25, 2012. And, more importantly, your feedback will help the industry gain important insights as we transition to ICD-10 in 2014.

We will share this year's survey results on our blog and website. In the meantime, read the findings from last year's survey - and we hope to see you at NAHC National.

NAHC Annual Meeting: Making Memories in Orlando

NAHC's Annual Meeting & Exposition: Making Memories & Magic in Orlando
October 21 - 25, 2012

In the midst of an election year, it is vital that we talk about homecare and the importance it provides to millions of Americans. And what better time to do this than at NAHC's Annual Meeting & Exposition in Orlando, Florida? Both President Obama and former Governor Romney are scheduled to speak and are expected to share their thoughts on the future of homecare. The list of keynote speakers this year includes other influential healthcare leaders like Donna Shalala, Professor of Political Science and President of the University of Miami and Former U.S. Secretary of Health and Human Services and Senator Susan M. Collins (R-ME).

Daymarck is pleased to be exhibiting again this year at NAHC Annual, sharing our message of how homecare is an important part of the solution to the healthcare crisis. Back in July at NAHC's Financial Executives' Conference, we met with hundreds of financial executives to talk about compliance, coding, and of course, ICD-10. It was exciting to meet with small and large agencies to show them how Daymarck provides peace of mind and cost savings so that they can do what they do best - provide excellent patient care. We look forward to meeting new faces and seeing old friends in October and continuing those conversations.

Please come visit us at booth #316 where we’ll be administering our 2^nd annual ICD-10 preparedness survey and giving out disposable cameras to participants. We’ll also be raffling off a $100 gift card to Shutterfly so that you can share your memories with friends and family.

If you can’t make this year’s convention, you can always attend virtually by keeping up with us here and on Facebook and Twitter. Let's make memories together!

Top 10 Things To Do Now To Prepare for ICD-10

We know with the recent date change there's a lot of confusion about ICD-10 among home health coders and agencies right now. And we are here to help. We recently updated one of our most popular ICD-10 blog posts to help home care agencies develop a plan so that they are full prepared when October 1, 2014 hits. 

Share and let us know what you think.

Here are the Top 10 things that you should be doing right now:

1)   Start talking to all your vendors (point of care, EHR, billing, etc.) to see what they are doing to prepare. They should be able to tell you their clear plan leading up to implementation.

2)   Take a look at any planned provider or system changes and decide if you should do them before, during or after ICD-10 implementation. Ask yourself how this change will be impacted by ICD-10.

3)   Identify your current coding work flow (who is doing how many codes) and what impact ICD-10 will have on it. Then decide what your new workflow process will be.

4)   Decide how you will train your staff on ICD-10. Will it be in-house or external? If you are a Daymarck customer, our training resources will be available to you so you don’t have to worry about this.

5)   Take a hard look at your personnel and determine if they are up to the challenge. This may mean you will need to hire new people or use an outside partner. Make sure your staff is committed to the change and not just doing it to keep their jobs.

6)   To ensure people are committed to the transition, communicate and start conversations about ICD-10 and its benefits and impact with your staff. Communicating with clinicians should be a very strong focus, as many are not up to speed on the necessity and reasoning for the change to ICD-10.

7)   Determine how ICD-10 will impact your budget. Budget constraints can include decreased productivity, training costs, and longer time getting Request for Anticipated Payments (RAPs) out meaning decreased cash flow.  For smaller agencies with limited cash flow, delays in getting RAPs out can be detrimental.

8)   Cultivate the relationship between coders and clinicians as ICD-10 will force them to work more closely together. Good relationship and communication between these two groups will help overcome decreased productivity. While these two groups may have different goals, encourage them to think of the big picture.  

9)   Decide how you will overcome a decrease in productivity. Our recent survey showed the average decrease will last seven months. With decreased productivity and the same staff, you will either get less assessments out per day or force personnel to work longer hours which can lead to burnout. Have a plan to make sure both your staff is taken care of and your assessments are getting done.

10) Take a deep breath. It may seem overwhelming now, but with proper planning and  communication, we’ll get through it together. And when it’s all said and done it will be great for the industry.

Creating our Code of Ethics Policy

We are proud to share our new Code of Ethics and Standards of Ethical Coding with you. The Code was adopted from AHIMA’s Code of Ethics and modified to fit our industry and culture.

It may feel like one more thing to do, but having a code of ethics and standards is important for any business – and vital for one in the healthcare industry. Coding is one of the core health information management functions, and due to the complex regulatory requirements affecting the health information coding process, coding professionals are frequently faced with ethical challenges. 

That’s where our Code of Ethics comes in.

Check out our Standards of Ethical Coding and our Code of Ethics and let us know what you think in the comments section. Leave us a note if you need help working on yours. 

Public Comments Can Make a Difference

On Friday, we submitted our public comment on CMS's Home Health PPS Rate Update for CY 2013. You can too. Formal comments are being accepted until September 4, 2012. 

As we noted in our blog post on August 8, we are concerned about restricting the use of OASIS field M1024 to fractures only. If implemented as written, we believe there is going to be a significant case mix (CM) decrease with unintended consequences for patients.

Our public comment offered the following solution: 

1. Fully implement what “Attachment D” was meant for by collaborating with HHA industry expects and revising and updating Attachment D annually as both coding rules and HHA payment regulations are updated on an annual basis. 
   
2. Do not restrict diagnoses codes limited to M1024 other than what is the intention of Attachment D. If it is the intent of CMS to control CM by limiting diagnosis to this field, a full cost analysis is needed prior to implementation. 
   
3. Mandate that only CM codes are placed in M1024 and not allow EMRs to allow otherwise. Have MACs audit for accuracy. 
4. Acknowledge the use of certified coders in homecare. Give them the ability to correct inaccurate coding by clinicians, with specific documentation on what was corrected and why.

View our comment on the Federal Register's website. Let us know if you plan to submit a comment.

NAHC Report: Diagnosis Coding Changes Proposed in 2013 PPS Notice Carry Negative Impact

At Daymarck, we are pleased that the National Association for Home Care and Hospice (NAHC) is also concerned about CMS' proposed prohibition of reporting any diagnosis codes other than fracture codes in OASIS at M1024. The NAHC Report Article published on Aug. 21 (and attached below) discusses their concerns and urges home health agencies to evaluate the impact of these proposed changes.

According to William Dombi, Vice President for Law at NAHC, "The proposal may affect two to four percent of episodes as much as $200 per episode. That is a material impact that should require CMS to drop this idea or recalibrate all the case mix weights to make sure the change is budget neutral."

We are are pleased to offer a reprint of the article below.  Read what Daymarck has to say on this important issue, including our public comment to CMS.

NAHC Report Article

Issue# 2026, 8/21/2012

Diagnosis Coding Changes Proposed in 2013 PPS Notice Carry Negative Impact
NAHC Urges Agencies to Review the Rule Change

In the 2013 Prospective Payment System (PPS) proposed rule, the Centers for Medicare & Medicaid Services (CMS) revealed a plan that would result in the prohibition of reporting any diagnosis codes other than fracture codes in OASIS at M1024.

In the July 13 Federal Register notice, CMS stated that when they updated and released Attachment D: Selection and Assignment of OASIS Diagnoses in December 2008 “this guidance was designed to ensure that providers limited the number of diagnoses assigned to M1024.” M1024 replaced M0245 in OASIS C. M0245 was the OASIS data field created to record case-mix diagnoses ICD-9 Coding rules required that V codes be used in primary and secondary diagnoses in order to ensure compliance with Health Insurance Portability and Accountability Act (HIPAA) requirements. According to CMS, an analysis of home health claims found that many home health agencies don’t comply with Attachment D guidance.

CMS Position

According to Attachment D, home health agencies are limited to reporting Fracture, Diabetes, Neuro 1 and Skin 1 codes in M1024. However, Diabetes, Skin 1, and Neuro 1 codes may be reported in M1010 and M1020. Fracture codes are the only codes that may not be reported as primary or secondary diagnosis. As a result, CMS has proposed two enhancements for the HH PPS Grouper:

Restrict M1024 to only permit fracture (V-code) diagnoses codes which according to ICD-9-CM coding guidelines cannot be reported in a home health setting as a primary or secondary diagnosis.
Pair the fracture codes (V-code) with appropriate diagnosis codes to limit the award of grouper points only when these pairings appear in the primary and payment diagnosis fields.

Revise the HHRG logic to permit equivalent scoring when the Diabetes, Skin 1 or Neuro 1 codes are submitted immediately following the V-code in the M1020 position without requiring utilization of the payment diagnosis field.

Shortcomings of CMS Proposal

In its efforts to update the HH PPS case-mix system, CMS had its contractor analyze home health claims and OASIS data from the first five years of the PPS to determine whether the case-mix system required revisions. As a result of this analysis the original diagnostic categories of Diabetes, Neuro, Ortho and Skin were expanded, and several new diagnostic categories were added that included: blindness, blood disorders, cancers, gastrointestinal disorders, heart disease, and hypertension. The data analyzed led to the determination that these additional diagnostic conditions were indicators of home health resource utilization. Much of the information about the impact of these diagnoses on resource utilization was collected from the period of time prior to the implementation of the HIPAA. Therefore, the diagnoses were reflective of coding practices at that time, including the reporting of conditions that were resolved by surgery or recovery, but for which home health patients received aftercare.

For example, such gastrointestinal disorders, as acute appendicitis and cholelithiasis are never conditions for which a Medicare beneficiary would receive home health services. However, prior to HIPAA and the establishment of M0245, and even into 2004, reporting of conditions resolved by surgery as primary and secondary diagnoses was the longstanding practice of home health agencies providing post-surgical care.

These CMS proposed changes to the HHRG will deprive home health agencies of case-mix points and payment for services for care to patients whose conditions are resolved by surgery, disregarding the fact that these diagnoses were found to impact resource use. Included are the majority of gastrointestinal conditions, cancers and orthopedic conditions treated by surgery as well as resolved infections that require post-acute care in the home for (e.g. meningitis). Furthermore, prohibiting reporting of diagnoses that require V code reporting in the primary and secondary fields in OASIS M1024 will eliminate all vehicles for capturing important public health and health planning data sources about underlying medical conditions that require post-acute home health services.

The National Association for Home Care & Hospice (NAHC) has identified a vast array of diagnoses that will no longer be eligible for case-mix points if removed by surgery, including conditions in the following ICD-9 categories: 140-199, 213-234, 320-329, 414, 440,530-562, 564-567, 569 and 570, 574-577, 685, 707, 711, 713, 715 and 716, 720-724, 726 and 727, 730, 731, 733, 741, 785, and 831-838.

NAHC urges home health agencies to evaluate the impact of these proposed changes. To learn more about this proposal and other proposed rule changes and payment updates for 2013 the Federal Register notice can be accessed at http://www.gpo.gov/fdsys/pkg/FR-2012-07-13/pdf/2012-16836.pdf. Comments about this proposal and other changes to home health regulations (F2F encounter, therapy reassessment requirements) must be submitted to CMS by 5PM on September 4, 2012.

Home Health PPS Rate Update for CY 2013

Changes to OASIS Field M1024

On July 6, 2012, CMS announced proposed changes to the Medicare home health program for 2013 that, as they noted in a press release, “would foster greater efficiency, flexibility, payment accuracy and improved quality.” 

We wish that were the case. 

As many of you know already, by law CMS has to update the payment rate every year. While many of the primary focuses of the proposed changes are expected, and in fact will do some good, there are a few major items that are receiving very little attention and should be of concern to home healthcare agencies and their patients and families. Specifically, we are very concerned about proposed changes restricting the use of OASIS field M1024. While on the surface the rule would appear to simplify coding of this section, if implemented there is going to be a significant case mix (CM) decrease, with unintended results affecting patient care. 

The proposed rule addresses what CMS sees as an overuse of diagnoses assigned to M1024. Basically, M1024 is an additional optional area of the OASIS form where codes are put in to help with payment calculation. Its use should only be used on a limited basis, but because of poor direction and management from CMS in the past, plus ongoing issues with EMRs, home healthcare agencies (HHAs) have been inconsistent on how they have used this field over the years.

 

CMS also states in the proposed rule that many HHAs are not complying with the guidelines of “Attachment D” which was published in December 2008. It is true that adoption of Attachment D by the home healthcare industry has been spotty. But CMS is also not acknowledging its lack of proper implementation of Attachment D. First of all, they published these guidelines 11 months after the PPS changes went into effect which these guidelines covered.  When they were first published, they were full of errors and the examples that they had within the document did not even follow their own guidelines. They later revised these guidelines but, as industry experts will tell you, they still continue to provide confusing and conflicting guidance. In 2010, HHA switched to OASIS-C, however, Attachment D still uses the language of OASIS-B (i.e. M0246). 

 

How does CMS expect an industry to follow the guidelines when they are riddled with errors, offer conflicting guidance and are out-of-date?

Other ongoing issues have also contributed to the use of M1024 that CMS fails to address in this rule. Many EMR systems, for example, are not setup properly and require every V code to have a corresponding code in M1024.  In the past, CMS has told agencies that this is “okay” as they are limited by their EMR system, instead of demanding that the EMR system fix the problem.

Lastly, if there is a coding error, and it is the difference between a clinician and a coding specialist, CMS has stated in the past that they would rather have incorrect coding from a clinician rather than proper coding from a trained professional. Yes, you read that correctly. [See Quarterly CMS Q&A question 44.1 from category 4 located here on page 29 ]

With this proposed rule, CMS is taking an extremely narrow worldview and wants to limit the CM diagnosis categories to fractures only. One example where an agency is at significant risk is in the case of a status post-mastectomy patient who is not receiving additional treatment for cancer. Typically, an aftercare code would be used in M1020/M1022 and the Breast Neoplasm code would go in M1024. This would add CM points and non-routine supply points to the episode. Based off the proposal, these patients would receive less reimbursement. This may be an oversight of CMS or it could be intentional to lower the overall CM average.

Bottom line, this rule will affect reimbursement for a significant population of patients within the industry and there has been no discussion of it. Instead of legislating, let’s take a step back and offer a sensible solution that fixes the problem, not make it worse. We call on CMS to…

• Fully implement what “Attachment D” was meant for and not restrict diagnoses codes limited to M1024 other than what is the intention of Attachment D.
• Form a committee of homecare industry experts to fix Attachment D. Mandate that only CM codes are placed in M1024 and not allow EMRs to allow otherwise. Have MACs audit for accuracy.
• Acknowledge the use of certified coders in homecare. Give them the ability to correct inaccurate coding by clinicians. Allow them to make the change, with specific documentation on what was corrected and why. 

Read the entire rule published in the Federal Register on July 13, 2012 here.CMS will accept comments on the proposed rule until Sep. 4, 2012. We are already working on ours.

Fundamental Difference Between Home Care and Institutional Care

By Elizabeth E. Hogue, Esq.

Discharge planners/case managers who work in institution such as acute hospitals, skilled nursing facilities, etc; may not have thought of a fundamental difference between home care and care provided in the institutions in which they work.  The difference is that discharge planners/case managers and other staff at institutions have at least fundamental control over the environment in which they provide services.  Homecare providers, including home health agencies, hospices, HME (home medical equipment) companies and private duty agencies, work in an environment that is completely controlled by patients and their families.  They have little or no control over the environment in which they render care to patients.

Consequently, home care providers, are, for example, vulnerable to physical violence and even death.  Several home care nurses have been fatally shot within the past several years. The murder of a home care nurse, along with the patient and the patient’s mother, in Maryland received national attention from the media several years ago.  Some agency staff members make visits to patients’ homes accompanied by armed guards because visiting staff are vulnerable to patients, their families, anyone who enters the patients’ homes, and going to and from patients’ homes.

Home care staff  are also subject to attack from various sorts of animals.  Dogs are the most obvious offenders.  Imagine being attacked by a flock of pecking geese as you attempt to enter a patient’s home or coming eye to eye with a pet alligator named Bubba in a mobile home in Louisiana.  True stories!  There are no fellow staff members to call for help under these circumstances.  There is no security force to call for assistance.  Home care staff members are on their own and extremely vulnerable to attack by humans and animals.

Home care providers are also vulnerable to injury because of the physical surroundings in which they work.  A manager at a home health agency related a sad story about a nurse on the staff who made a routine visit to a patient who lives alone in her home.  The physical condition of the patient’s home was compromised.  As the nurse was making her way to the patient’s bedside, she fell through the floor of the patient’s home!  Unfortunately, she suffered severe injuries and required back surgery.

Agencies owe their employees a duty of reasonable care.  That is, they are responsible to take reasonable precautions to protect their employees from harm.  The Occupational Health and Safety Administration (OHSA) has affirmed this obligation on the part of home health agencies.  This obligation is becoming far easier to talk about than to fulfill in increasingly threatening environments for home care personnel. 

Of course, a key question regarding this obligation on the part of agencies is: What is reasonable?  Providers are clearly obligated to make reasonable efforts to identify situations in which their workers are likely to be injured.  This means that they must gather as much information about patients, their primary caregivers and their home environments as possible prior to admission. 

In order to help ensure that they have as much information as possible, providers may want to review patients’ charts, talk to patients and/or their families while they are still in the hospital or SNF, etc.  It is not always necessary to decline to accept referrals of patients based on the information obtained.  If advance information is available, home care providers can act to protect staff and help patients.  Put Bubba in a cage! 

Case managers/discharge planners who impede efforts of home care providers in their efforts may enhance the likelihood that patients will go without needed services and home care providers will be injured. 

Providers that fail to meet their obligations in this regard may be the target of suits for negligence by employees and/or workers’ compensation claims.  Since occupational health and safety requirements include a general mandate to employers to provide a safe working environment for their employees, as described above, agencies may also face OSHA violations when workers allege that conditions are unsafe.

               

It may be helpful for case managers/discharge planners to imagine being all alone in an urban area that has a reputation for being unsafe or in an isolated rural area knocking on the door of a patient’s home for the first time not knowing what is on the other side of the door.  If case managers/discharge planners think carefully about this scenario that is enacted by home care providers hundreds of times a day, they are likely to better understand why agency staff members want as much information about patients prior to admission as possible.

©2012 Elizabeth E. Hogue, Esq.  All rights reserved. 

No portion of this material may be reproduced in any form without the advance written permission of the author.

Its Almost Time for the Annual NAHC Financial Management Conference: July 15-17 in Dallas, TX

We can’t believe its already time for the NAHC Financial Management Conference; where has the first half of the year gone?

If you’re attending this year’s show in Dallas, Texas July 15-17th, we hope you’ll take a minute (or two) to stop by our booth (#304). We’ll be giving out free Custom Coding Cost Analysis’s to show how you can improve efficiencies and your bottom line. Our analysis will include how ICD-10 will influence your organization’s productivity and bottom line. For a more in-depth analysis of your coding expenses and efficiency recommendations, please email Carie Wright for a specific meeting time.

We understand folks are uncertain about how their organizations will adapt to regulatory changes like ICD-10, and we know it’s becoming harder and harder to stay profitable. That is where our team can help. Our goal for this event is to help attendees improve their bottom line by making home healthcare coding as pain-free as possible.

For those attending, we look forward to seeing you in Dallas and discussing how using a professional coding team can save your organization money while remaining 100% compliant. And if you can’t make it, stay tuned here and on Facebook or Twitter for updates during and post-show.

How to Help Ensure Adequate Supervision of Home Care Staff in Order to Avoid Negligence and Allegations of Fraud and Abuse

By: Elizabeth E. Hogue, Esq.

Home care is different from institutional care in a number of ways.  One crucial difference is that field staff members are essentially working without direct supervision on a routine basis.  The cost of providing direct supervision for staff as they provide services to home care patients is prohibitive.  Consequently, providers are vulnerable to claims that they failed to adequately supervise staff.  These claims may include allegations of negligence and fraud and abuse. 

Perhaps the greatest risk involves staff members who say they made visits that they really did not make.  Changes in patients' conditions may not be addressed when visits are missed.  Visits that are claimed, but turn out not to have been made after all, are also a common basis for allegations of fraud and abuse.

In view of inherent limitations on agencies to directly supervise field staff, what is the applicable standard of care that must be met?  Generally speaking, appropriate supervision means that agencies must make reasonable efforts to ensure that field staff meet applicable standards of care.  Reasonable efforts to ensure adequate supervision may include the following:

-        New employees may be required to make several visits with experienced employees with proven track records so that any deficiencies in abilities or practices of new staff can be determined as quickly as possible.  The results of these visits must, of course, be documented.

-        Agencies should develop and implement a policy and procedure that requires random supervisory visits.  Thereafter, managers should make "unannounced" supervisory visits to patients' residences at all hours of the day and night so that employees understand that they may be directly supervised at any time without notice.

-        Managers may also wish to investigate commercially available systems for tracking the arrival and departure of field staff members at each patient's home.  These systems may require staff to place a telephone call that registers in a computer when they arrive at patients' homes and again when they depart. 

               

Of course, these systems are not foolproof.  Instances have been reported in which staff members paid patients and/or family members to call in for them as though the worker arrived and departed patients' homes.  To the extent that the use of such systems makes it clear that agencies are using reasonable means to help verify that services were actually rendered, even if the system is circumvented, it helps to ensure that agencies have adequately managed risks associated with visits that are not made as scheduled.

-        Agencies should also develop and implement policies and procedures that require patients and/or someone else present in patients' homes when visits are made to sign a document verifying that services were provided.  If the patient cannot sign and no one else is present to sign, staff should be required to provide a detailed explanation for missing signatures.

-        Quality assurance staff should conduct retrospective audits to make certain that signatures from patients and/or family members verifying services are routinely obtained.  When there are a number of instances in which specific staff members failed to obtain signatures as required, despite the presence of a written explanation, further investigation must be conducted to determine why signatures are missing on multiple occasions.

-        Agencies should continue to use patient satisfaction surveys to assist them to satisfy their obligation to monitor workers.  Agency staff members sometimes correctly observe that most of the surveys returned by patients fall into a category that can best be described as: "We love our nurse!"  Nonetheless, valuable information can occasionally be gleaned from surveys.

For example, a patient of an agency responded to a survey by saying that he was quite pleased with the care provided, but wished that the agency would not send a different nurse every day.  The staff was initially quite puzzled by this response since their records showed that the same nurse had visited the patient each day.  Following further investigation, however, the staff was astounded to learn that the agency worker was "subcontracting" the care of the patient to members of an extended family so that, indeed, the patient was being cared for by a different "nurse" each visit!

It is impossible for agencies to duplicate the supervision provided by institutional providers.  Nonetheless, reasonable efforts to supervise field staff will work in agencies’ favor when workers' performance is scrutinized.

©2012 Elizabeth E. Hogue, Esq.  All rights reserved. 

No portion of this material may be reproduced in any form without the advance written permission of the author.

Proposed One Year Delay of ICD-10

As many of you may have heard, yesterday HHS announced a proposed rule that would delay the compliance date of ICD-10 for one year, from October 1, 2013 to October 1, 2014.

While we have stated our opposition to a delay, we are pleased that HHS has issued a proposed date so that people can move forward and properly plan with a new date in effect.

We also applaud HHS for addressing the added costs this delay will cause. They state a 1-year delay would add 10 to 30 percent to the cost—or $1 to 6.4 billion— for entities that have spent or budgeted for the transition. It’s disappointing that those who were properly preparing will incur these penalties, but what’s more of a concern is the message it sends about the ability to procrastinate. While some organizations may think, “Why should we prepare early, we might get penalized,” that’s not a gamble we would want to take.

Despite the fact that groups like the AMA opposed ICD-10 because of it’s financial burden, HHS explains the reason for a delay is to allow ample time between implementation of Version 5010 (now going into effect June 2012), which is needed before ICD-10 can be implemented.

One thing is clear in the HHS proposal. They have no intent to completely kill ICD-10 and move to ICD-11. ICD-10 is coming, albeit a year later than anticipated, and organizations need to prepare.

What now? Organizations will need to re-evaluate their timelines. If you were behind the ball before, now is your chance to get on track. If you were already on track for the 2013 deadline, it doesn’t mean you can do nothing for the next 12 months. Spend the time improving on any weaknesses such as documentation by clinicians and work to cultivate relationships between clinicians and coders. Here are 10 more steps you can take to be properly prepared.

As always, we are here to help make the transition to ICD-10 as easy and pain-free as possible. We’re confident everyone can meet the final compliance date and it will make our healthcare system more efficient and cost effective.

Tell us in the comments, how do you feel about the one year delay?

OIG Says Use of Discount Coupons Is Permissible Under Certain Circumstances

By: Elizabeth E. Hogue, Esq.

The Office of Inspector General (OIG) posted Advisory Opinion No. 12-02 on March 27, 2012.  In this Advisory Opinion, the OIG concluded that providers may post discount coupons on websites for their services and products that patients may download and utilize, so long as appropriate safeguards are in place.  The Requestor of the Advisory Opinion proposed to contract with physicians and other providers and suppliers who want to post discount coupons for health care items or services on the Requestor’s website.  According to the Requestor, coupons may include discounts on items or services that are reimbursable by Federal health care programs; such as Medicare, Medicaid, Medicaid waiver, and TriCare; if they comply with all applicable requirements.  Coupons for free items or services are prohibited. 

It is also important to note that the Requestor does not make referrals to providers and suppliers who elect to post discount coupons.  Providers and suppliers who want to post discount coupons will pay the Requestor a flat fee to do so.  Otherwise, there is no financial relationship between the Requestor and providers and suppliers who post coupons.

In its analysis of this proposed arrangement, the OIG first notes that the arrangement involves two activities that may implicate the anti-kickback statute: (1) Selling advertising space on the website to health care providers and suppliers that may bill Federal health care programs and (2) Posting providers’ coupons for health care items or services on the website.  According to the OIG, the coupons could also implicate the civil monetary penalty provision prohibiting inducements to beneficiaries.

The OIG went on to say that both posting coupons and advertising on the website constitute advertising activities that are clearly meant to induce use of an item or service.  In evaluating marketing or advertising, the OIG considers a number of factors, such as the identity of the party engaged in the marketing activity and the party’s relationship with its target audience, the nature of the marketing activity, the item or service being marketed, the target population, and any safeguards to prevent fraud and abuse. 

The OIG based its conclusion that the proposed activity is of low risk upon the following factors:

(1)    The Requestor is not a health care provider or supplier.

(2)    Payments from providers and advertisers to the Requestor do not depend in any way on customers using the coupon or obtaining services from providers or advertisers.

(3)    Advertising under the proposed arrangement may take the form of banner or pop-up advertisements on a publicly accessible website that are not directed at specific customers visiting the website.

(4)    Coupons on the website are like coupons that consumers receive via the mail.  Customers do not pay for the service and have no up-front investment, so the risk is low that providers’ or suppliers’ judgment would be improperly influenced to render unnecessary or inappropriate services based on customers’ possession of coupons. 

The OIG also addressed risks associated with the content of coupons and also concluded that the arrangement is of low risk for the following reasons:

(1)     Coupons on the website would be for a reduced price or percentage reduction on particular items or services and discounts would benefit both payors and patients, so that federal health care programs would benefit from reduced costs associated with coupons.

(2)    Terms of Use on the website require providers to comply with the discount safe harbor under the anti-kickback statute. 

Based upon the description of the proposed arrangement provided by the Requestor of the Advisory Opinion, the OIG concluded that arrangement does not constitute grounds for imposition of civil monetary penalties.  The arrangement also does not trigger administrative sanctions under the federal anti-kickback statute.  Unless this type of arrangement is prohibited by state law, therefore, providers may post discount coupons on websites consistent with the OIG’s guidance.

©2012 Elizabeth E. Hogue, Esq.  All rights reserved. 

No portion of this material may be reproduced in any form without the advance written permission of the author.