By Michelle L. Bedoya, J.D. and George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law
On June 22, 2016, the United States Department of Health and Human Services (HHS) Office of Inspector General (OIG) published a fraud alert regarding improper arrangements and conduct involving home health agencies (HHAs) and physicians. The alert comes as a result of recent investigations and studies, where it has been found that home health fraud in Medicare continues to warrant scrutiny and attention from the OIG, its law enforcement partners, and the Centers for Medicare & Medicaid Services (CMS).
According to the alert, in the past year, home health agencies, individual physicians, and home-visiting physician companies have faced criminal conviction and civil settlements for defrauding Medicare because they have:
1) made or accepted payments for patient referrals;
2) falsely certified patients as homebound; or
3) billed for medically unnecessary services or for services that were
Payments in Return for Referrals of Beneficiaries.
Home health agencies were alleged to have violated the Federal anti-kickback statute (AKS) by directly or indirectly paying physicians in return for referrals of Medicare beneficiaries to home health agencies.
In turn, physicians were alleged to have violated the AKS because they directly or indirectly, either solicited or received payments from home health agencies in exchange for referring Medicare beneficiaries to those home health agencies.
These payments, between home health agencies and physicians, were sometimes disguised as compensation agreements for services provided. For example, a Medical Director agreement, which purportedly based compensation of a physician for services rendered as Medical Director of a home health agency, would act as a front of validity. According to the OIG, these agreements were actually mere guises for illegal payments for referrals of Medicare beneficiaries.
A Valid Compensation Agreement.
A valid compensation agreement for services, between home health agencies and physicians, must comprise of arrangements and payments that are commercially reasonable and at fair market value.
According to the OIG, payments that are made or received to induce referrals, raise the following concerns:
1) corruption of medical judgement;
2) patient steering;
4) unfair competition; and
5) increased costs to Federal health care programs.
Other Federal Law Violations.
According to the alert, the government also alleged that home health agencies, individual physicians, and home-visiting physician companies violated other federal laws such as the health care fraud statute and the statute that prohibits false statements relating to health care matters.
Entities or individuals that are engaged in fraudulent activities involving federal health care programs, such as Medicare and Medicaid, are potentially subject to criminal, civil, and administrative sanctions.
Home health agencies and physicians should rely on experienced legal counsel for guidance in proper compensation agreements to ensure compliance with federal laws.
What do you think of the OIG’s alert? Leave your comments below.
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“Alert: Improper Arrangements and Conduct Involving Home Health Agencies and Physicians.” U.S. Department of Health and Human Services: Office of Inspector General, 2016.
About the Authors: Michelle L. Bedoya, J.D., is an attorney with The Health Law Firm and a long-time consultant to home health agencies. George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, FL 32714, Phone: (407) 331-6620.
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