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.

OIG Finds 20% Of Home Health Claims Coded Improperly, Resulting In $462M In Improper Payment

Some concerning news hit the home health community last week.

The Department of Health and Human Services’ (HHS) Office Inspector General (OIG) released a report that showed home health agencies submitted nearly 22% of claims in error because services were either not medically necessary (2.1%) or were coded improperly (20.2%).

This is the first time OIG has significantly addressed home health’s coding on claims. They stated that one of the factors for this review was the fast rise in Medicare home health spending—84% from $8.5 billion in 2000 to $15.7 billion in 2007—which “leads to concerns about the potential for improper payments due to fraud and abuse.”

More than 10 percent of claims (a value of $278 million) were considered up-coded, and 9.8% of claims (a value of $184 million) were found to be down-coded. This equates to a net loss of $94 million for the 
Medicare system.

While the report did not go into extensive details on scenarios that they found problematic, they did give an example of the frequent inappropriate use of GERD 530.81. We plan to discuss this further in our next blog post.

The results of this report are very significant and should be taken seriously by home health agencies. Whether the error is unintentional or not, agencies can get themselves into a lot trouble. CMS is cracking down and “has begun using technologies and analytic tools to prevent fraudulent payments and identify risky providers and claims.”

On the bright side, just 2% of claims did not show medical necessity. Agencies are doing a great job ensuring the services they provide are medically needed. 

Here at Daymarck, we have a very strict compliance stance. It is our first and foremost priority. We never up-code or use filler codes, and we code every agency the same. We also stay up to date with the constantly changing rules and regulations to ensure our clients are 100% compliant.

Now more than ever it’s critical that you are submitting accurate claims. If you’d like someone to give your agency an audit to see how you are doing, we can help. Contact us to discuss a coding “check up.”

To learn more about our view on compliance, visit here.

Marketing Representatives of Post-Acute Providers Must Receive Training Regarding Appropriate Activities

By  Elizabeth E. Hogue, Esq.
 
The Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services, the primary enforcer of fraud and abuse prohibitions, recently announced that “patient recruiters,” or marketing representatives, had been convicted of fraud and were on their way to jail.  On July 12, 2011, for example, the OIG announced that a marketing representative in the Detroit area was sentenced to twenty-seven months of jail time and required to pay restitution in the whopping amount of $10,765,325.  In another case announced on July 21, 2011, a marketing representative pleaded guilty to Medicare fraud and is awaiting sentencing. 

These two recent cases bring home once again the importance of making sure that marketing representatives of home health agencies, hospices, HME companies, and private duty companies understand what is legal and what is not with regard to getting referrals.

The stakes are extremely high.  Court decisions and a federal statute make it clear that billing for referrals that were obtained in impermissible ways are false claims.  That is, if marketing representatives use inappropriate means to get referrals and post-acute providers bill for services provided to such patients, then the claims submitted are false claims.  The penalties for submissions of false claims may include:

•  Fines or civil money penalties that are three times the amount of the claims involved;         
• Jail time; and
• Suspension or exclusion from participation in the Medicare, Medicaid, and other state and federal health care programs. 

What if owners did not know what the marketing representatives were doing?  Providers need to know that court decisions say that enforcers may conclude that providers had intent if they can prove that providers knew or should have known of a pattern of fraudulent conduct.  This means that managers of post-acute providers must remain vigilant and constantly monitor the activities of marketing representatives to be sure that they don’t cross the line.

 From a practical point of view, providers should take the following actions:

• Develop and implement a policy and procedure that says that marketing representatives may not engage in new types of marketing activities without the advance written permission of appropriate managers.
• Provide initial and periodic training to marketing representatives regarding regulation of marketing  practices, including, at a minimum:
• The Federal anti-kickback statutes;
• The Federal False Claims Act;
• The so-called “Stark laws” and regulations; and   
• Any applicable state statutes.

There are few checks on marketing representatives’ activities, especially when, as a result of their efforts, they receive incentives based on the number of admitted patients referred.  Management is responsible for the oversight of these activities.  The possible consequences described above make the necessity of vigilance quite clear.

(To obtain an 80-minute video that can be used to train marketing representatives, please send a check made out to Elizabeth E. Hogue in the amount of $105.00 that includes shipping and handling to: Fulfillment, 107 Guilford, Summerville, SC 29483.)

© 2011 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.

Recent OIG Advisory May Also Apply to Vendor Fees

By Elizabeth E. Hogue, Esq.

On May 20, 2011, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services, the primary enforcer of fraud and abuse prohibitions, posted Advisory Opinion 11-06.  This Opinion makes it clear that post-acute providers that pay hospitals to participate in e-discharge planning systems likely violate the federal anti-kickback statute.  Hospitals utilizing such systems that require post-acute providers to “pay to play” also likely violate the federal anti-kickback statute.

Specifically, the OIG considered use of e-discharge planning systems by hospitals that are often encountered by post-acute providers.  In many instances, post acute providers are required to pay fees in order to receive referrals electronically through systems implemented by hospitals.  Providers who do not pay required fees receive notice of possible referrals via fax.  Consequently, post-acute providers who elect not to pay to participate in electronic discharge planning systems are significantly disadvantaged and may be effectively eliminated from any chance of receiving referrals because they are unable to communicate in a timely manner with hospital discharge planners regarding referrals.

Based upon the above, the OIG concluded that such arrangements likely violate the federal anti-kickback statute.  The OIG said that companies that provide e-discharge systems to hospitals would be soliciting and accepting, and post-acute providers would be paying remuneration in return for the arranging for the furnishing of post-acute care services by e-discharge planning companies of post-acute services for which payments would be made by federal health care programs.  The OIG went on to say that such arrangements do not qualify for protection under applicable safe harbors, including the safe harbor for referral services.  In addition, post-acute providers continue to be plagued by hospitals that claim that post-acute providers cannot enter hospitals and/or gain access to patients to coordinate post-acute services because they are “vendors.”   Hospitals may permit access by post-acute providers only if they comply with complex, inapplicable restrictions.  Still other hospitals require post-acute providers to pay fees in order to gain access to patients for the purpose of coordinating post-acute services.

On the contrary, post-acute providers; such as home health agencies, home medical equipment (HME) companies, hospices, and private duty home care agencies; are not vendors and should not be treated like vendors. They are, instead, fellow providers. Vendors are manufacturers and distributors of supplies and equipment that are utilized by hospitals on their premises.

Does the OIG Advisory Opinion described above also apply to vendor fees?

First, since post-acute providers are not vendors, the payments of fees to hospitals directly or to hospitals’ contractors who implement vendor checks may constitute impermissible kickbacks. In addition, it appears that the OIG Advisory Opinion described above may indeed apply to vendor fees.  The OIG’s main point is that post-acute providers cannot be required to pay fees in order to receive referrals, i.e. “pay to play.”  If providers who pay vendor fees received referrals, but providers who do not pay fees do not receive referrals or receive fewer referrals, such practices seem to be prohibited by the OIG.

While post-acute providers certainly understand that hospitals may want to “credential” their vendors, it is inappropriate to treat post-acute providers and vendors and require them to pay fees to qualify or be “credentialed.”  This practice seems to violate the OIG Advisory Opinion described above.

© 2011 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.

OIG on RAC Fraud Referrals

This was a report received thru the OIG Public Affairs.

Recovery Audit Contractors' Fraud Referrals (OEI-03-09-00130)

We found that between March 2005 and March 2008, recovery audit contractors (RAC) referred two cases of potential fraud to the Centers for Medicare & Medicaid Services (CMS). However, CMS reported that it received no potential fraud referrals from RACs during this period.