Anti-Kickback Statute

One of the AKS’s purposes is to ensure that healthcare providers do not enter into certain relationships with other entities or individuals that are intended to induce the referral of beneficiaries of federal health plans. Specifically, the AKS prohibits a person or entity from knowingly or willfully offering, soliciting, paying, or receiving remuneration to induce federal healthcare program referrals. “Remuneration” refers to anything of value paid directly or indirectly, in cash or in kind, which is intended to induce the referral of patients. Such remuneration can include cash, free goods or services, discounts, gifts, below-market rent, or relief of financial obligations.

A violation of the AKS exposes home health agencies to criminal penalties, including imprisonment for up to five years, fines, and mandatorily exclusion from participating in federal healthcare plans. Administrative consequences include civil money penalties of up to $50,000 per violation and three times the value of the remuneration involved.

CMPL and Stark Law

Additionally, the CMPL prohibits home care agencies from inducing patronage from patients directly with gifts valued at more than $15 per item and $75 per year.^[6] Providing free health screenings and transportation, cash gifts, free medical equipment, and other gratuities to patients creates risks for home health agencies. Substantial penalties called for in the CMPL could result in financial ruin for the provider.

Similarly, the Stark Law prohibits physicians from referring patients for certain services, including home health services and durable medical equipment, to entities with which the physician has a direct or indirect financial relationship. Unless an exception applies, if a physician has a financial relationship with a home care agency, like a medical director contract, that physician may not refer Medicare or Medicaid patients to that home health agency. Further, the entity receiving the patient referral cannot seek Medicare or Medicaid reimbursement for the service. A commonly used Stark Law exception is one for services arrangements with physicians, but only if certain criteria are met, including having a signed, written contract in place. The prohibition also extends to financial relationships of the physician’s immediate family members, so contracting with a referring physician’s wife to perform clinical or marketing services is an example of a practice that may be prohibited. Violations of the Stark Law include civil monetary penalties of up to $15,000 for each service, plus an assessment of three times the amount claimed.

Violations of the AKS and the Stark Law can result in substantial liability under the False Claims Act^[7] that can arise from whistleblower complaints or government enforcement. Also, home health agencies must refund reimbursement received for services performed pursuant to prohibited referrals.

Compliance tips

• If in doubt about the legality of an arrangement with a referral source, seek help from a health law attorney.

• Create a system to track all financial relationships with physicians, physicians’ family members, and other referral sources to ensure written contracts are in place, signed, and renewed per the contractual terms.

• Train marketing personnel on limitations on benefits that can be provided to referral sources and patients based on the AKS, the CMPL, and the Stark Law.

• Create a tracking system for marketing personnel and others who may give items/gifts to referring physicians or patients.

• Develop policies addressing contracts and space rental with referral sources, and gifts to patients or referral sources.

• Allow only certain designated leaders in the home health agency to enter into contracts, leases, or other financial arrangements with actual or potential referral sources and use pre-approved contract forms.

Risk area two: Medical necessity and homebound status

For Medicare coverage, home health services must be ordered and certified by a physician, the patient must be homebound, and the services must be reasonable and necessary to diagnose or treat the patient’s illness, injury, disease, or condition. Clinical records must contain documentation showing that a patient is homebound (i.e., confined to the home). A physician (or other allowed provider) must certify the patient’s homebound status and the need for services, as well as establish and sign a plan of care. Additionally, the certifying physician’s plan of care must be periodically reviewed to ensure continuing coverage, and the home health agency should document its review of the patient’s home health needs. Reasonable and necessary home care services must include either skilled nursing care on a part-time or intermittent basis, physical therapy, speech-language pathology services, or a continued need for occupational therapy. Custodial home care is not covered by the Medicare program but, in some cases, may be covered by state-authorized Medicaid waiver programs. Home care agencies must have processes in place to admit only those patients that meet these criteria and to discharge patients when they no longer meet Medicare medical necessity and homebound status requirements.

Failure to meet these standards creates risk for home health agencies because Medicare payers, the OIG, and audit contractors conduct reviews to determine whether services billed to federal healthcare programs meet these criteria. Such reviews can result in demands for the return of reimbursement paid for noncompliant services. These overpayment determinations and demands for refunds can cost home care providers in terms of administrative time as well as legal and consulting fees to challenge such determinations. Failure of an organization to document compliance with medical necessity of its services and the patient’s homebound status may also expose the organization to substantial civil penalties under the False Claims Act.

Risk area three: HIPAA and HITECH Act

Protecting the security and privacy of patient information is of utmost concern in the context of home health care. The Health Insurance Portability and Accountability Act (HIPAA), as amended by the Health Information Technology for Economic and Clinical Health (HITECH) Act, is intended to ensure that healthcare organizations provide such protections and impose substantial fines for organizations that fail to adequately protect patient information or improperly disclose it.

The risk of inadvertent or unauthorized disclosure is heightened in home care because home health workers work outside the office and often have remote access to protected health information (PHI) under HIPAA. Home care caregivers typically carry electronic devices like laptop computers, tablets, and cell phones that contain or access PHI. If one of these devices is stolen or communication is intercepted, an unauthorized disclosure may occur. Moreover, home care workers are in the community and patients’ homes where phone calls and discussions with patients can be overheard. Only patients may authorize in writing the release of their own PHI. Beyond HIPAA, state privacy laws may provide more stringent standards for the protection of patient information, such as Social Security numbers and financial information.

Risk area four: Excluded individual or entities

Home health employers must ensure that their employees and referring physicians are not excluded from participation in federal programs by performing appropriate background screening. Being “excluded” means that an entity or individual has been excluded, debarred, suspended, or is otherwise ineligible to participate in (i) federal healthcare programs such as Medicare or Medicaid by the OIG, or (ii) federal procurement and nonprocurement programs, including those administered by the General Services Administration (GSA). No federal healthcare program payment may be made for items or services furnished, ordered, prescribed, or provided under the direction of an excluded person or entity.^[8]

As an example of the risk arising from excluded individuals, home health agencies that receive payments for services of a nurse or therapist that was excluded at the time the services were provided must refund such reimbursement to the federal payer. Likewise, if a home health agency submits claims for its services referred by an excluded physician, such refunds are also required. Without proactive screening processes in place, providers can be hit hard financially if such exclusions are discovered after reimbursement is received.

To promote efficient and accurate screening, both the OIG and GSA publish databases that list entities and individuals that are excluded from participation in federal programs under their purview. The OIG database, the List of Excluded Individuals and Entities (LEIE), which is downloadable and updated monthly, is found on its website.^[9] The GSA System for Awards Management (SAM) is searchable on the GSA website.^[10]