Buyer beware: New scheme is ‘a kickback’

Wednesday, June 30, 2004

BURTONVILLE, Md. - In violation of anti-kickback laws, some hospitals have begun asking HMEs, HHAs and hospice providers to perform duties normally handled by discharge planners, according to healthcare attorney Elizabeth Hogue.

“If providers agree to do these things, it would clearly be a kickback or a rebate in the form of free services to a referral source,” Hogue said. “I think providers need a heads-up that this seems to be something that is becoming more popular.”

Hogue encountered two such arrangements this spring. In each case, the hospital seemed intent on saving money by eliminating discharge planners and contracting with providers to perform discharge planning duties for free. As a conditions of participation in the Medicare program, hospitals must provide discharge planning duties and are reimbursed for doing so. It’s illegal - obviously - for a hospital to collect that reimbursement and not provide the service.

“My clients sent me the agreements, and I said, ‘What in the world is this?’” Hogue said. “It’s always something new - always trying to save the proverbial buck.”

Hogue advised her clients to avoid all such contracts. However, to maintain a good relationship with hospital referral sources, she suggested ways to structure the contracts legally. For example, an HME can work with a discharge planner to facilitate a patient’s transition to the home, but he can’t replace the planner. He can’t, for example, assess and evaluate a patient’s needs, develop discharge plans and document that plan in the patient’s file for free, Hogue said.

Healthcare attorney Neil Caesar said he’s rarely seen anything as blatantly illegal as what Hogue’s encountered. More frequently, hospitals require smaller free favors in exchange for referrals, he said.

A hospital’s efforts to save money in this fashion could be due to ignorance, Hogue said.

“But after all the years of talking about these issues, it’s getting tough to believe that,” she said.