The practice of referral-based healthcare providers giving gifts and meals to referral sources is a regulatory minefield at best. Various authorities have noted increased scrutiny from the Office of the Inspector General (OIG) in the home health industry of late. The relevant regulations, however, apply equally to all referral-based healthcare providers accepting Medicare or Medicaid payments (e.g. physical therapy, hospice, home medical equipment, personal care). In addition, anti-kickback laws and their penalties apply equally to both the gift givers and the gift receivers. Here we provide a quick summary of some rules set out by Stark Law, anti-kickback laws, and the OIG.
Penalties for violating rules governing gifts:
- Civil monetary penalties up to $100,000 if a gift is found to have as its principal purpose the intent to ensure referrals
- Repayment of Medicare or Medicaid payments related to Stark violations
- Exclusion from Medicare and Medicaid programs
- Filing a Medicare or Medicaid claim in violation of the Stark Law constitutes a “false claim” which could trigger liability under the federal False Claims Act.
In 2009, the OIG set a maximum allowable gift value of $30 per gift and $355 per year to each referral source (not to be confused with the $10 per gift / $50 per year maximum on gifts to Medicare / Medicaid beneficiaries). Unfortunately, simply counting the retail value of incoming gifts is not enough to keep healthcare professionals in the clear. There are some stipulations under which any gift would be unacceptable. If gifts of any value are construed by inspectors to be given with the intent of ensuring referrals, this would be a violation. If gifts of any value are found to have a proportional relationship with referral volume, this would be a violation. There are some exceptions, but free food often counts as gifts. Services such as continuing education credits can count as gifts, and their retail value must be considered. Cash equivalents can be instant Stark violations. Gift cards and gift certificates may be considered cash equivalents and could be an instant Stark violation regardless of value.
Since someone else’s opinion of your intent related to gift giving can make the gifts an instant violation, gift giving can be a bit of a gamble as a marketing strategy. Furthermore, ensuring that gifts are given in a way that is not proportional to referral volume is almost impossible where significant gifts are concerned. Simply giving gifts to all your active referral sources while neglecting inactive referral sources could be construed as paying for referrals.
How Investigations Get Started:
Investigations into illegal inducements typically begin with a complaint against a particular provider. Competitors, disgruntled employees of gift-recipients, and disgruntled employees of gift-givers prove the most likely complaint sources. The complaints can be completely anonymous. The OIG, CMS, or their delegates typically investigate these sorts of violations.
Reminder items such as pens, mugs, and calendars can be valuable marketing tools. Brazzell Marketing Agency now designs and prints promotional magnets which usually steer clear of gift giving rule violations. Use these guidelines to make sure that other marketing activities stay within legal boundaries. Bear in mind that, in home health and physical therapy, the best marketing strategies usually revolve around constant improvement of quality of care combined with consistent communication with a broad base of referral sources.
