Texas and New Mexico Hospice Organization

Current Hospice Marketing Issues Prepared for the Texas and New Mexico Hospice Organization May 21, 2010

Marie C. Berliner, Esq. Austin, Texas (512) 610-2098

 Current Regulatory Environment  Marketing Implicates Several Laws:

 Federal and State Fraud and Abuse Law (Anti-kickback)

 “Stark” Law (Physician Anti-Self Referral)  Not applicable to Hospice …yet

 Prohibition on Inducements (gifts to patients)  Current Regulatory Environment  Increased Enforcement and Scrutiny by Federal and State Agencies  OIG  ZPICs  Hospice length of stay  RACs  No activity yet  State Medicaid Fraud Control Units  Heightened scrutiny in Texas

 Current Regulatory Environment  Fraud Enforcement and Recovery Act of 2009  Created new liability for retaining overpayments  Health Care Reform Laws  Increase in direct funding for enforcement  Expanded coverage paid for through recoupment of overpayments and enforcement of fraud laws

 Marketing Activities

 Marketing to Facilities and Referral Sources  Hospital discharge planners  Nursing Home Administrators  ALF Administrators/managers

 Marketing to Physicians

 Marketing Activities  Marketing to patients and families  Valuable items or services  Personalized items or services

 Marketing to the “Public”  Targeted populations (e.g., ALF, retirement community, senior center)  Malls, health fairs, etc.  Fraud and Abuse (AKS) and Stark Law

 Two Different Statutes  Stark not applicable to Hospice

 Terminology defined

 “Safe Harbors” = exceptions  Anti-Kickback Law  Prohibits anyone from offering or paying;  Soliciting or receiving;  Remuneration;  Direct or indirect, in cash or kind;  In exchange for;  The referral of Medicare or Medicaid business. o (Social Security Act, §1128B)

 AKS, cont’d.  Merely offering or soliciting = violation, even if the other party does not accept the offer

 Remuneration is broadly defined to include anything of value such as:  below fair market value rental rates,  payments in excess of the value of services rendered  free services  providing an income generating opportunity.

 AKS, cont’d.  Remuneration can be direct;  Kickback (per referral)  or indirect:  Disproportionate return on investment  Paying high amount for private business in order to secure Medicare business.  Agreement to cross refer  Hiring someone’s relative

 AKS, cont’d.  Referral may be made by anyone who:  orders or requests a Medicare or Medicaid reimbursable item or service;  Certifies the need for services, signs POCs,  “Directs” health care business, recommends.  Includes physicians, non-physician practitioners, marketers, discharge planners, ALF Administrators, etc.

 AKS Safe Harbors  Numerous exceptions (a) – (y) define arrangements that, even though technically violate the statute, will not be considered illegal when conducted in accordance with regulatory criteria.  All criteria must be met to fit within exception.  Compliance not mandatory - continuum of risk  Intent-based statute  No “de minimus” exception

 Texas AKS Statute

 Texas Occupations Code, §102.001  Applies to all payor sources, including patient  Can violate both state and federal laws  Adopts federal safe harbors

 Inducements (“Enticements”)  A person may not offer anything of value (more than nominal) to a patient or their family member in order to influence their to selection of a specific provider of covered items or services.

 Interpreted primarily through OIG Advisory Opinions

 “Freebies”

 Inducements  OIG Three Part Test:  Is the item or service something of “value?”  Nominal value set forth in regulation ($10 per/$50 aggregate) annually  Value to a “reasonable beneficiary” for intangibles, or where value is not readily ascertainable.  No cash or cash equivalents  Inducements  Is the benefit “likely to influence” the patient’s selection of provider?

 Cultivating personal relationships  Entering patients’ homes, meeting families  Providing individualized evaluations or information

 Inducements

 Does or should the offeror know that the benefit is likely to influence the patient’s selection of provider?  Targeting certain patient populations for free items or services is an indicator of calculated marketing scheme designed to influence referrals

 Healthcare Market Reality  Many practices that are commonplace and accepted in the business world are illegal in the healthcare world.  referral fees  Arrangements for space, personnel equipment, etc. that are not set at fair market value  cross referrals  verbal “understandings”

 Nursing Homes  Administrator is referral source  Other staff may also be referral sources

 Cross referrals arrangements are suspect  “We’ll use you for GIP/respite care if you refer your hospice residents to us.”

 Space rental arrangements  Highest number of enforcement actions on OIG website involve leases with referral sources.  Nursing Homes  Do not use your staff to do their work  E.g., placing an aide in the facility to do the facility’s job  Also applies to clerical/billing personnel  Could be construed as a kickback to the nursing facility.  CoP on NF contracts requires delineation of responsibilities and coordination of care  Nursing Homes  CHC days  Offering or promising a specified number of CHC days per patient, in exchange for referral  Applies to offers made directly to patients  Subject of aggressive scrutiny by TX Medicaid  CHC should only be provided when clinically indicated and documented  Period of crisis  To keep the patient at home  Actively dying is not a medical “crisis.”

 Compensation Arrangements with Marketing Personnel

 Independent Contractors versus W-2 Employees  Who makes the decision to refer?  Can I pay my marketers based on commission?  What should be in the contract?  Documentation of marketing efforts.  Bona Fide Employee Exception  “Remuneration” does not include any amount paid by an employer to an employee, who has a bona fide employment relationship with the employer, for employment in the furnishing of any item or service for which payment may be made in whole or in part under Medicare, Medicaid or other federal health care programs.  Bona Fide employee, cont’d.  “Employee” has the same meaning as it does under the Internal Revenue Code.  Not just W-2 status  Control by employer  What is an appropriate compensation amount?  Difference of opinion in legal community  Total compensation package

 Medical Directors  Arrangement set forth in writing  Material terms set out  Duties, hours, etc.  Compensation fair market value  Admin versus direct patient  Specialist versus PCP  Make sure physician does what they are required to do (in the Contract)  Documentation  Non-Physician Referral Sources  Hospital Discharge Planners  Request in writing to be included on list of hospices  Non-physicians not subject to $355 limit

 ALF Managers/Administrators  Ripe for attention, because captive, concentrated audience  Be careful of lease arrangements

 Marketing to Physicians  Can I take a physician to dinner? Ball game? Opera?

 Can I bring do-nuts (pizza, sandwiches, etc.) to a physician’s office?

 Track spending per physician  Use Stark law $355 per physician/per year as “guideline”

 Marketing to the Public  Educational Seminars and presentations  Small and large groups (community, church, senior centers, etc.)  Participation in health fairs, malls, etc.

 Documentation – the Forgotten Art

 Documentation almost always makes or breaks a “case.”  Poor documentation makes an already suspicious investigator question the credibility of the file.  Good documentation may quell suspicion of wrongdoing.