Opinion greenlights post-discharge services

Friday, October 18, 2013

WASHINGTON – An advisory opinion from the Office of Inspector General (OIG) provides a framework for how HME providers can offer services to reduce hospital readmissions without violating the anti-kickback statute.

The biggest takeaway: Providers cannot supply these services to hospitals for free.

“The hospital has to pay,” said Elizabeth Hogue, a private practice attorney in Burtonville, Md. “That was crucial to the OIG’s approval.”

Advisory Opinion No. 13-10 was requested by the subsidiary of a pharmaceutical manufacturer that seeks to provide a “menu” of services to a hospital’s discharged patients to reduce readmissions. The services include liaisons who survey patients about health and compliance with discharge plans, and an IVR system that generates reports on medication adherence, appointment completions and secondary diagnoses.

Per the arrangement, the hospital would select and pay for services through a flat fee for implementation; a per-patient fee for technology and personnel; and an hourly rate for additional services requested.

“There’s a fine line you want to avoid,” said Jeff Baird, chairman of The Health Care Group at Brown & Fortunato in Amarillo, Texas. “If you provide these services for free, the hospital is a referral source and they benefit from these services, so you have a potential kickback. The hospital has to pay fair market value for the services.”

Further assuaging any concerns, the subsidiary stated it would not promote the pharmaceutical manufacturer’s products and it would not be compensated based on the sale of the manufacturer’s products.

“Anytime a provider wants to do something out of their core services, the question arises as to whether it’s a marketing funnel for the core services,” said Neil Caesar, president of the Health Law Center in Greenville, S.C. “In this case, you have a company that puts in some protections to destroy the idea that, as part of its activities, it won’t also piggyback its own work onto the service they’re providing.”

The OIG concluded that the proposed arrangement is unlikely to violate the anti-kickback statute or trigger the civil monetary penalty provision because it’s, among other things, unlikely to lead to increased costs or overutilization of federal reimbursable services.

In fact, healthcare attorneys point out, the whole point of the arrangement is to save the government money through reduced readmissions, something that’s becoming increasingly attractive to hospitals and something they’re increasingly willing to pay for.

“While we, in the DME industry, are feeling squeezed, doctors and physicians are also feeling squeezed,” Baird said. “There are numerous ways for providers to come together to keep patients healthy, and by keeping patients healthy, less money is spent.”