Posted by: Robert Markette
June 12, 2006

I was reading in the most recent Home Health Line about the recent Lincare settlement and the Community Home & Health Care prosecutions. While most providers think the kind of abuses in the Lincare case are rampant, that trend ought to be slackening. Lincare demonstrates that if you are engaging in Stark or Anti-Kickback violations because physicians indicate they will not refer if you do not give them something, you should simply look elsewhere for referrals.

Everybody in homecare should be clear that giving something of value to a physician to induce referrals is an anti-kickback violation. Even if you think every other provider in your area is giving into the physicians' "request", you should not even consider such an offer. "Everyone else is doing it" was not a defense when you were in grade school and it is not a defense or safe harbor under the fraud and abuse statutes.

If a physician approaches you in this manner, you should decline their offer. You should also remind them that they are soliciting a kickback which is a violation of federal law. In addition, I would mention to the provider requesting the "perk" that the penalties they will incur when they do get caught will substantially outweigh the paltry benefit of their deal. One group of physicians in the Lincare case ended up paying $122,000 to the Government. This was more than five times the amount of illegal remuneration they received.

The Office of Inspector General is doing more and more to curb these types of abuses. In the short term, you may feel from a business standpoint you have to acceded to the physician’s demands, but you should not. You will be in much better shape in the long term, even without these referrals. Rather than provide the remuneration to the referral source, you could spend the money on print or radio advertising, a website, a new brochure, bonuses to your marketing employees who are "bonafide employees." You are likely to get some benefit from this investment, without the risk of eventual criminal prosecution.

Of course, there are numerous situations where you have dealings with a referral source where the referral source receives remuneration for reasons other than providing referrals. In light of OIG’s efforts, when you have such an arrangement, you should be very careful to make it clear that any remuneration provided to a referral source fits within an exception. For example, Medical Directors, they should have contracts, specific duties, and clearly document their activities. When your medical director is documenting his work, he is not just doing it for the surveyors, but for any potential OIG investigators.

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