Posted by: Robert Markette
November 20, 2006

I spoke at the Kentucky Home Health Associations annual conference last Thursday. During a break, I had the opportunity to speak to some of the attendees. One of the topics that came up in the conversation was fraud and abuse. That is not so surprising, given the broad reach of the fraud and abuse laws and the myriad ways they can hamper marketing activities.

During the conversation, one of the attendees asked about a letter I had mentioned during my talk. The letter I refer to is a letter that was sent out by a Cincinnati area hospital. The letter was warning home health providers that the hospital had heard of certain practices in the home health market in Cincinnati that it found intolerable. Having read the letter, I would agree that most of what the letter listed were obviously illegal arrangement.

I had suspected the letter was an overreaction by the hospital, but according to the attendees, most of the practices listed in the letter were common amongst agencies in that area. For example, the letter specifically addressed one of my favorites topics providing free services to clients. Even though OIG has been overly clear on this one, it is apparently still a very common practice. Other practices that were mentioned as common included, home health agencies having multiple medical directors and home health agencies completing claims paperwork for physicians. For those of you who read this blog, you already know those are prohibited practices under fraud and abuse.

From what the attendees said, this aggressiveness is a result of how competitive the home health marketplace can be. Agencies are willing to cross the line, in order to generate business. Also, it seems some of the agencies marketing personnel disagree with OIGs position on certain arrangements.

Although I often disagree with how broadly the fraud and abuse laws are applied, that does not change OIGs enforcement position. If OIG has declared a practice to be a violation, you may disagree with them and argue your point during the investigation and prosecution, but dont expect to win. (At least not without a long and costly legal battle.) You have been put on notice and you should avoid arrangements that violate OIGs stated position.

That is not to say some relationships could not be structured or restructured to avoid OIGs concerns, but that is a course of action best taken with the clear, written advice of knowledgeable legal counsel. Unfortunately, in many cases, it appears agencies are simply responding to what everyone else is doing. If some agencies are pushing the envelope, others feel pressured to do the same to keep up. As I have said many times in the past, everyone else is doing it is not a defense.

If you are in a market where you competitors are using remunerative arrangements to generate referrals, fight the urge to do the same thing. Instead, find other ways to market and discuss with your attorneys other ways you might compete legally. If referral sources want similar perks from you, just say no. In the long run, you will be better off, because if you are violating fraud and abuse laws, you are likely to pay far more in recoupments, penalties and legal fees than the illegal remuneration generated in referrals in the first place.

In short, engaging in these kinds of relationships because of market pressure is penny wise, but pound foolish.

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