AMARILLO, TX – Technology is the great equalizer. It allows large and small DME suppliers alike to market throughout the United States. Lead generation companies (“LGCs”) are an outgrowth of technology. A LGC uses web platforms to generate prospective customers (or “leads”) for DME suppliers. Suppliers pay the LGCs for the leads. Conceptually, this type of arrangement is permissible.
However, as is often the case, “the devil is in the details.” In structuring a lead generation arrangement, the parties need to be careful so as to not violate federal law. If structured improperly, a lead generation arrangement can violate the Medicare anti-kickback statute, (ii) HIPAA, (iii) the telephone solicitation statute, and/or (iv) Supplier Standard # 11. Set out below are key provisions that a DME supplier should insert in a lead generation agreement to reduce the risk of violation of federal law. In the provisions below, I refer to the lead generation company as “LGC” and I refer to the DME supplier as “Supplier.”
LGC’s Services
• LGC will conduct marketing campaigns on behalf of Supplier, to include direct-to-consumer marketing using various media such as direct mail marketing, internet and e-mail marketing, and phone marketing where and when permitted by applicable law and regulations, to obtain and generate Leads (as defined below) within the geographic area described in Attachment A. Marketing campaigns conducted by LGC on behalf of Supplier will be in accordance with the Scope of Work set forth on Attachment B. All marketing materials, web pages, and scripts, including the opt-in language for electronic signatures that LGC will use in its communication with Leads, must be approved in advance by Supplier.
• LGC will forward to Supplier, on a weekly basis and in such form and manner (including electronically) as Supplier may direct, all Leads identified through the marketing services described herein. The term “Lead” means the following information concerning an individual who has expressed an interest in obtaining DME: (i) contact information consisting of the individual’s name, date of birth, address, telephone number, e-mail address and other information as Supplier may, from time to time, specify; (ii) primary and secondary insurance information; (iii) physician name, address, phone number, fax number, and NPI; (iv) diagnosis; (v) products or supplies in which the Lead may be interested; and (vi) documentation of the individual’s written permission to be contacted, via telephone, e-mail and mail, specifically by Supplier. LGC does not warrant or represent that Supplier will generate any sales of DME or other business from any Leads. Author’s note: Because of the scope of information provided about the Lead, it is important that the Agreement comply or substantially comply with the Personal Services and Management Contracts safe harbor to the Medicare Anti-kickback Statute (“AKS”). Among other requirements, the compensation paid by the Supplier to the LGC must be fixed one year in advance and be the fair market value equivalent of the LGC’s services. See the section, below, entitled “Compensation.” Additionally, in order to avoid problems with the telephone solicitation statute and Supplier Standard #11, the Lead must consent to be contacted specifically by the Supplier.
• LGC will record every telephone call with a Lead or potential Lead, and will provide the recording to Supplier within 24 hours of Supplier’s request. LGC will make available to Supplier the ability for Supplier to monitor LGC’s telephone calls on a real-time basis.
• LGC will not obtain or collect Health Information, other than provided in Section 1.2, concerning a Lead. Health Information includes the individual’s past or current medical condition, payment information, and any other information that would be considered to be Protected Health Information if received or generated by a Covered Entity. Capitalized terms used in this Section 1.4, and the same terms used elsewhere in this Agreement, will be as defined in the Health Insurance Portability and Accountability Act of 1996, 42 USC 1320d, and the corresponding regulations contained in 45 CFR Parts 160 and 164 (collectively, “HIPAA”).
• LGC will provide Leads with information, approved in accordance with Section 1.1, concerning Supplier’s DME services, as appropriate for that Lead.
• LGC will call a Lead to verify and obtain the information specified in Section 1.1 only after the Lead has provided written permission for such telephone call. LGC will not transfer any Lead obtained for Supplier to any other person or entity.
• When engaged in a telephone call with a Lead, or potential Lead, LGC will utilize a script approved by Supplier.
• When Supplier’s name is contained on a website managed or utilized by LGC, Supplier will be the only entity listed on the website. The consent-to-be-called form (or “box”) will specifically list Supplier. When a LGC representative calls a Lead or potential Lead, the LGC representative will state that he or she is calling on behalf of Supplier. Before a website may be used that contains Supplier’s name, Supplier must approve the website.
Compensation
As full compensation for LGC’s services, Supplier will pay LGC $___________, which such amount will be paid in 12 equal monthly payments of $___________. The first payment will be made on the _____ day of ____________, 2016, with like payments on the _____ day of each month thereafter.
Covenants of LGC
• All services will be performed in compliance with all applicable state and federal laws and regulations including, without limitation, The Electronic Signatures in Global and National Commerce Act (“E-Sign Act”), 15 U.S.C.§7001(a);
• All Leads contacted by LGC will have given prior written permission to permit such contact, and LGC will maintain documentation of all such permissions;
• All Leads forwarded to Supplier will have given prior written permission to permit telephone, e-mail and mail contact specifically by Supplier (in accordance with applicable state and federal laws and regulations including, without limitation, the Federal E-Sign Act) and LGC will maintain documentation of all such permissions;
• LGC will not obtain or collect Health Information, other than provided in Section 1.2, from a Lead;
• LGC will not employ or contract with any individual or entity that is excluded from participation in any federal or state health care program or excluded by any federal agency from receiving federal contracts;
• All Leads forwarded to Supplier will be generated by LGC, and in no event will LGC forward to Supplier any Leads purchased or obtained from another person or entity; and Author’s Note: It is important that the LGC generate Leads organically. By that I mean the LGC should not purchase Leads from “lead brokers.” Assuming that the LGC is not a “covered entity” as defined by HIPAA, then by organically generating Leads there likely will not be a HIPAA violation.
• LGC will not directly or indirectly pay compensation to any physician who writes an order for DME that is forwarded to Supplier; and
• If LGC or any of its officers, directors, employees, or contractors becomes aware of any pending adverse action by a state or federal governmental agency, including any of the actions described in Section 5.1.a., LGC will give written notice thereof to Supplier within 48 hours of the time it became aware of the pending adverse action.
Right to Audit
Supplier has the right to audit LGC for the purpose of verifying LGC’s obligations under this Agreement, including the verification of LGC’s representations and covenants in Section 5. Supplier may exercise such right to audit by giving LGC written notice thereof. No later than 15 days from the receipt of such notice, LGC will make available its documentation, records, and employees for inspection and examination by Supplier. Each party will be responsible for its own costs and expenses in connection with such audit. Supplier’s election to not exercise such right to audit will not be construed as a waiver or otherwise prejudice its rights under this Agreement or applicable law.
Denise Leard will be presenting the following webinar:
AAHOMECARE’S EDUCATIONAL WEBINAR
Waiver or Reduction of Medicare and Commercial Co-Payments: What You Can and Cannot Do
Presented by: Denise M. Leard, Esq., Brown & Fortunato, P.C.
Tuesday, October 4, 2016
2:30-4:00 p.m. EASTERN TIME
DME suppliers have an obligation to take reasonable steps to collect co-payments from Medicare beneficiaries. Of course, this is easy to do when the beneficiary has supplemental insurance. This is not quite so easy when the beneficiary does not have supplemental insurance. From the viewpoint of the OIG, it is important for the beneficiary to pay something. This causes the beneficiary to have “equity” in the process thereby making the beneficiary a wiser consumer of health care products and services. When a DME supplier routinely waives co-payments … and particularly when the supplier advertises that it waives co-payments, then the OIG considers this to be a kickback, inducement, and a false claim. According to the OIG, the supplier can only waive a co-payment when the supplier has made a patient-specific decision to waive … and that decision is based on the financial condition of the beneficiary. Interestingly, contracts with commercial insurers and state statutes impose substantially the same requirements on DME suppliers that bill commercial insurers. This program will discuss the requirements imposed upon DME suppliers to attempt to collect co-payments from Medicare beneficiaries and commercial patients, and the steps that the supplier should take before waiving a co-payment.
Register for Waiver or Reduction of Medicare and Commercial Co-Payments: What You Can and Cannot Do on Tuesday, October 4, 2016, 2:30-4:00 pm ET, with Denise M. Leard, Esq., of Brown & Fortunato, PC.
Please contact Ika Sukh at [email protected] if you experience any difficulties registering.
FEES
Member: $99.00
Non-Member: $129.00
Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, PC, a law firm based in Amarillo, Tex. He represents pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization, and can be reached at (806) 345-6320 or [email protected].
