AMARILLO, TX – Health care is evolving from the traditional “fee-for-service” (FFS) model to an “integrated care” model. Under the FFS model, health care providers (physicians, hospitals, therapists, pharmacies, DME suppliers, etc.) operate in separate “silos.” Each provider is paid for the services/products it delivers…regardless of whether such services/products result in a positive patient outcome. Plus, in the FFS model, the providers do not coordinate with each other. This approach is expensive and inefficient.
Third party payors (TPPs) are pushing providers into the integrated care model. Under this model, providers are expected to coordinate with each other so that they work as a “team” to heal the patient…and then keep the patient healthy. Further, reimbursement is tied to patient outcome. While commercial insurers are on the forefront in pushing the integrated care model, government health care programs are also going down this path.
DME suppliers have a unique role to play in the integrated care model. Unlike most other health care providers, DME suppliers (i) visit their patients’ homes, (ii) communicate regularly with their patients and their caregivers, and (iii) communicate with their patient’s treating physicians. In other words, DME suppliers are in the position to help patients become healthy and, more importantly, to remain healthy.
As DME suppliers engage in the integrated care model, they will desire to provide products and services to patients, free of charge, intended to “promote access to care.” In doing so, suppliers need to first be aware of prohibition contained in the federal beneficiary inducement statute. But then equally as important, suppliers should be aware of the easing of restrictions against providing free products and services designed to promote access to care. Such easing of restrictions can be found in the Affordable Care Act (“ACA”), OIG regulations, and in two recent OIG Advisory Opinions.
Beneficiary Inducement Statute
Under section 1128A(a)(5) of the Social Security Act (the Act), enacted as part of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), and commonly known as the “beneficiary inducement” statute, a person who offers or transfers to a Medicare or Medicaid beneficiary any remuneration that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of Medicare or Medicaid payable items or services, may be liable for civil monetary penalties (“CMPs”). The beneficiary inducement statute defines “remuneration” to include, without limitation, waivers of copayments and deductible amounts (or any part thereof) and transfers of items or services for free or for other than fair market value. The statute and implementing regulations contain a limited number of exceptions.
In the Conference Committee report accompanying the enactment of section 1128A(a)(5), Congress expressed its intent that inexpensive gifts of nominal value be permitted. The Office of Inspector General (OIG) expressed its interpretation of “inexpensive” or “nominal value” to mean a retail value of no more than $10 per item or $50 in the aggregate per patient on an annual basis and noted that it would periodically review these limits and adjust them according to inflation, if appropriate. Effective December 7, 2016, the OIG is interpreting “nominal value” as having a retail value of no more than $15 per item or $75 in the aggregate per patient on an annual basis. As with the OIG’s previous interpretations, the items may not be cash or cash equivalents.
Affordable Care Act and OIG Regulations
Notwithstanding the prohibition contained in the beneficiary inducement statute, the ACA provides exceptions to what might constitute “remuneration” under the CMPs, including an exception for remuneration that “that poses a low risk of harm and promotes access to care.” In December 2016 the OIG issued final regulations regarding patient incentive arrangements. The OIG defines “care” (in the context of “access to care”) as “access to items and services that are payable by Medicare or a state health care program for the beneficiaries who receive them.” The OIG interprets “promoting access to care” as “improving a particular beneficiary’s, or a defined beneficiary population’s, ability to obtain items and services payable by Medicare or a state health care program.”
Promoting access to care includes the removal of “socioeconomic, educational, geographic, mobility or other barriers that could prevent patients from seeking care (including preventive care) or following through with a treatment plan.” As an example, the OIG makes a distinction between free child care and movie tickets: “[P]roviding free child care during appointments also could promote access to care and help a patient comply with a treatment regimen. In contrast, offering movie tickets to a patient whenever the patient attends an appointment would not fit in the exception; such remuneration would be a reward for receiving care and does not help the patient access care, or remove a barrier that would prevent the patient from accessing care.”
The OIG set out different factors and analysis tests for the “low risk of harm” component. The OIG stated that remuneration would pose a low risk of harm to Medicare and Medicaid beneficiaries and federal health care programs by (i) being unlikely to interfere with, or skew, clinical decision making, (ii) being unlikely to increase costs to federal health care programs or beneficiaries through overutilization or inappropriate utilization, and (iii) not raising patient safety or quality of care concerns.
OIG Advisory Opinion 17-01
In conjunction with its regulations, the OIG released Advisory Opinion 17-01 (“AO 17-01”), which expanded on its “low risk of harm” analysis by including additional factors to examine when assessing patient benefits. In addressing “skewing clinical decision making,” health care providers and suppliers should look at whether (i) eligibility to receive the remuneration is conditioned on receipt of a particular service from the supplier and/or (ii) the physician receives remuneration that encourages referring eligible patients to the supplier. In addressing “increased costs to federal health care programs,” the supplier should look at whether the patient incentive arrangement will shift the remuneration cost to federal health care programs. In addressing “overutilization,” the supplier should look at whether (i) it is actively marketing the program to attract patients, (ii) the program is being offered before the patient decides to use the supplier, and (iii) the offered remuneration is encouraging patients to seek out unnecessary or poor quality of care. If the answer is “yes” to one or more of these factors, then it is likely that the patient incentive arrangement does not result in a “low risk of harm.”
When discussing activities that facilitate access to care, the OIG says that “promoting access to care” constitutes “improving a particular beneficiary’s, or a defined beneficiary population’s, ability to obtain items and services….” This includes removing “socioeconomic, educational, geographic, mobility or other barriers that could prevent patients from seeking care…or following through with a treatment plan.” However, the OIG is careful to distinguish activities that directly provide access to care from activities that are not directly related. For instance, “providing free child care during appointments…could promote access to care…[while] offering movie tickets to a patient whenever the patient attends an appointment…would be a reward for receiving care and does not help the patient access care….” According to the OIG, the following examples promote access to care:
- A physician practice purchases a subscription to an internet based food and activity tracker that offers information on healthy lifestyles for diabetic patients. This helps the patient understand and manage interaction between disease state and lifestyle and creates a record that facilitates interactions with the physician for future care planning.
- A hospital sends patients home with inexpensive devices that record data that is then transmitted to the hospital or the patient’s physician. This increases the patient’s ability to capture information necessary for follow-up care and to comply with the patient’s treatment plan.
- A provider/supplier provides patients with an item that dispenses medications at a certain time with the correct dosage. This pertains to adherence to the treatment plan (i.e., may reduce errors associated with the patient not remembering or misunderstanding the physician’s instructions).
OIG Advisory Opinion 19-03
The latest OIG guidance on providing free products and services designed to promote access to care is set out in OIG Advisory Opinion 19-03 (“AO 19-03”). The scenario described in the AO is as follows:
- The Requestor is a nonprofit medical center that provides inpatient and outpatient hospital-based services.
- The Clinic is an affiliate of the Requestor that offers primary care and certain specialty services at several facilities located in the geographic region that the Requestor serves.
- The Requestor and Clinic are under the control of an integrated health system operating in three states (“Health System”).
- The Requestor has developed a program to provide free, in-home follow-up care to certain patients who the Requestor certifies are at higher risk of admission or readmission to a hospital.
- Under an existing arrangement (“Current Arrangement”), the Requestor offers in-home care to patients with congestive heart failure (“CHF”) who qualify for participation, and under a proposed arrangement (“Proposed Arrangement”), the Requestor would expand the program to qualifying patients with chronic obstructive pulmonary disease (“COPD”).
- According to the Requestor, the goals of both arrangements are to increase patient compliance with discharge plans, improve patient health, and reduce hospital inpatient admissions and readmissions.
- Clinical nurse leaders screen patients to determine if they meet the following eligibility criteria for the Current Arrangement. First, a patient must have CHF and be (i) currently admitted as an inpatient to the Requestor, or (ii) a patient of the Requestor’s CHF Center who was admitted as an inpatient to the Requestor within the previous 30 days. Second, the clinical nurse leader must identity the patient as high risk for hospital inpatient readmission using a risk assessment tool utilized throughout the industry to predict the risk of unplanned readmission or emergency department visits subsequent to a hospital discharge. Third, the patient must have arranged to receive follow-up care at the CHF Center. If a patient does not plan to seek follow-up care, intends to receive follow-up services elsewhere, or expresses uncertainty about where he or she will receive follow-up care, then the patient is not informed of the Current Arrangement. Fourth, the patient must be willing to enroll in the Current Arrangement after consultation with the clinical nurse leader. Finally, the patient must be discharged to – or reside at – a personal residence or an assisted living facility (“ALF”) in the Health System’s service area.
- The Proposed Arrangement generally would have the same eligibility requirements as the Current Arrangement.
- The Requestor offers the Current Arrangement, and would offer the Proposed Arrangement, to any patient who meets the eligibility criteria, regardless of the patient’s health insurance status or his or her ability to pay for medical services. The Requestor certifies that it does not, and would not, advertise or market the arrangements to the public. Further, the Requestor does not, and would not, publicize the arrangements on its website.
Under both arrangements, patients who meet all eligibility criteria, and who choose to participate, receive two visits from a community paramedic each week for approximately 30 days following enrollment. Each visit takes place in the patient’s home or Assisted Living Facility and lasts approximately 60 minutes, during with time the community paramedic may perform some or all of the following activities (collectively, the “Services”):
- review the patient’s medication;
- assess the patient’s need for follow-up appointments;
- monitor the patient’s compliance with the discharge plan of care or the patient’s disease management;
- perform a home safety inspection; and
- perform a physical assessment, which may include checking the patient’s pulse and blood pressure, listening to the patient’s lungs and heart, checking any wounds, running an electrocardiograph, drawing blood and running blood tests using a portable blood analyzer, or administering medication.
The community paramedic uses a clinical protocol to deliver interventions and to assess whether a referral for follow-up care is necessary. The community paramedic documents all activities and interventions he or she performs during the course of the visit in the patient’s electronic medical record. If a patient requires care that falls outside the community paramedic’s scope of practice, the community paramedic directs the patient to follow up with his or her established provider. For urgent but non-life threatening medical needs, the community paramedic calls the patient’s established provider, and such provider follows up with the patient as he or she deems appropriate.
In many cases, the Requestor or the Clinic is the patient’s established provider. If a patient requires care unrelated to his or her CHF or COPD for which he or she has no established provider, the community paramedic contacts the Requestor or the Clinic, as applicable, to determine if the Requestor or the Clinic can address any immediate needs, but the patient may obtain care from the provider of his or her choice, and the community paramedic informs the patient of this fact. According to the Requestor, this approach fosters integrated care delivery for patients and improves patients’ adherence to their treatment plans, which is particularly important for patients with chronic diseases.
The Requestor and the Clinic bill, and would bill, for any follow-up services they provide outside the scope of the arrangements at the same rate that they would bill for such services if the patient was not participating in the arrangements. The Requestor employs, on either a full-time or part-time basis, the community paramedics who provide the Services. Neither the Requestor nor the Clinic compensates, or would compensate, any employee or contractor based on the number of patients who enroll in the arrangements. All costs associated with the community paramedic visits provided under the arrangements are, and would be, allocated to the Requestor.
With one exception, the Services are not covered or reimbursed by federal health care programs when performed by a community paramedic. One Medicaid program reimburses for community paramedic services that Requestor represents are similar to the Services, but the Requestor represents that it does not, and would not, bill this Medicaid program for the Services. Neither patients nor any payors are, or would be, billed for the Services, and the Requestor does not, and would not, shift any costs related to the arrangements to Medicare, Medicaid, other payors, or individuals.
In reviewing the Current Arrangement and the Proposed Arrangement, the OIG observed that the arrangements could potentially violate the federal anti-kickback statute (“AKS”) and the federal beneficiary inducement statute. Nothwithstanding the foregoing, the OIG concluded that it would not bring an enforcement action against the arrangements under these statutes. This conclusion is based on the following:
- According to the OIG, the Services provide a significant benefit to patients in the form of free health care services and care management furnished in their homes. As such, the Services constitute remuneration from the Requestor to patients participating in the arrangements. The OIG further states that the remuneration could influence a patient to select Requestor or the Clinic for federally reimbursable items and services. And, according to the OIG, the “Promotes Access to Care” exception under the beneficiary inducement statute does not protect the arrangements.
- Although the remuneration implicates the beneficiary inducement statute, the OIG believes that the arrangements’ benefits outweigh any risk of inappropriate patient steering that the beneficiary inducement statute was designed to prevent. For example, before learning about the arrangements, patients already must have selected the Requestor or the Clinic for follow-up services related to their CHF or COPD. With respect to future services unrelated to their CHF or COPD, the community paramedics direct patients to follow up with their established provider. Patients are informed that they have the right to choose their provider. Of particular importance is that the arrangements foster integrated care delivery, which is particularly important for individuals with chronic diseases because it improves their adherence to their treatment plans.
- If the arrangements work as intended, they are unlikely to lead to increased costs to federal health care programs or patients through overutilization or inappropriate utilization. To the extent that the arrangements increase utilization of health care services, such an increase likely would reflect appropriate utilization from patients receiving medical necessary care as a result of the arrangements. Further, the arrangements would result in overall savings to federal health care programs if they successfully achieve the goals of improving patient health and reducing hospital inpatient admissions and readmissions.
- The risk that the arrangements will interfere with or skew clinical decision making is low.
- The arrangements would not be marketed or publicized.
- The scope and duration of the Services appear reasonably tailored to accomplish the goals of increasing patient compliance with discharge plans, improving patient health, and reducing hospital admissions and readmissions.
Applicability to DME Suppliers
DME suppliers are in a unique position to actively participate in the integrated model of health care. Unlike most health care providers, DME suppliers (i) have visited patients’ homes, (ii) communicate on a regular basis with patients and their caregivers, and (iii) communicate on a regular basis with patients’ treating physicians.
DME suppliers can enter into Preferred Provider Agreements (“PPAs”) with hospitals that are designed to reduce the hospitals’ exposure under the Hospital Readmissions Reduction Program. According to this program, if a patient is readmitted after discharge within a certain period of time, for a particular disease, then the hospital can be subjected to future payment reductions from Medicare. Pursuant to a PPA, when a patient is about to be discharged from the hospital, and when the physician orders DME for the patient to use in the home, then the hospital will give patient choice as to which DME supplier will provide the product. If the patient does not express a preference for a supplier, then the hospital can recommend the supplier that has the PPA with the hospital.
If the patient chooses the supplier (that has the PPA with the hospital), then in addition to providing the DME for home use, the supplier will provide “value-added” services designed to improve the patient’s health … and keep him from being readmitted to the hospital. These “value-added” services can include (i) reminding the patient and his caregiver that the patient needs to take his prescription medication; (ii) reminding the patient and his caregiver about the patient’s upcoming physician appointments; (iii) reminding the patient and his caregiver about the importance of hydration and healthy foods; and (iv) notifying the treating physician if the patient is not adhering to his treatment plan.
In addition to providing “value-added” services, the DME supplier can collect patient outcome data reflecting the patient’s progress … or lack thereof. The supplier can provide this data to the hospital, the treating physician, and to the third party payor (“TPP”). In providing the data to the hospital, the supplier can show the benefits of the hospital entering into the preferred provider relationship with the supplier. In providing the data to the physician, the supplier can show the benefit of the physician referring patients to the supplier. And by providing the data to the TPP, the supplier can show the benefit of the TPP maintaining the supplier on the TPP’s provider panel. In conjunction with, or separate and apart from, a PPA with a hospital, the DME supplier can provide free products and services designed to promote access to care … while avoiding problems under the beneficiary inducement statute. In doing so, the supplier needs to follow the guidance contained in AO 17-01 and AO 19-03. For example:
- The DME supplier can direct a nurse, respiratory therapist, occupational therapist, paramedic, or other type of clinician to drive to patients’ homes to check on their health and determine if they are adhering to the prescribed treatment plan.
- The DME supplier can place equipment in the patient’s home that is designed to monitor whether the patient is using the supplier’s equipment as prescribed.
- The DME supplier can place equipment in the patient’s home that allows the supplier to have real time visual/audio communications with the patient and his caregiver.
- The DME supplier can direct a dietician/nutritionist to work with the patient and his caregiver on eating healthy.
- The DME supplier can give the patient access to intent-based education programs relevant to the patient’s medical condition.
AAHOMECARE’S EDUCATIONAL WEBINAR
Kickbacks, Inducements, False Claims and Other Fraud Landmines to Avoid
Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C. & Markus P. Cicka, Esq., Brown & Fortunato, P.C.
Tuesday, June 25, 2019
2:30-3:30 p.m. EASTERN TIME
The DME supplier lives in the proverbial “glass house.” If the supplier does something that it should not be doing, then someone knows about it. That “someone” can be an employee, a competitor, a third-party payor, or a governmental agency. The DME supplier must strive to be “pristine” in all that it does. Unfortunately, the many federal and state anti-fraud laws read like The DaVinci Code … in Latin. This program will discuss the key federal anti-fraud laws that can trip up a DME supplier, including the anti-kickback statute, the Stark physician self-referral statute, the beneficiary inducement statute, the general health care fraud statute, and the False Claims Act. The program will also give examples of state anti-fraud laws that are similar to the federal laws. The program will discuss activities that can cause problems for the supplier. Equally as important, the program will discuss practical steps that the DME supplier can take to avoid fraud landmines.
Register for Kickbacks, Inducements, False Claims and Other Fraud Landmines to Avoid on Tuesday, June 25, 2019, 2:30-3:30 p.m. ET, with Jeffrey S. Baird, Esq. and Markus P. Cicka, Esq., of Brown & Fortunato, PC.
AAHomecare’s Retail Work Group
The Retail Work Group is a vibrant network of DME industry stakeholders (suppliers, manufacturers, consultants) that meets once a month via video conference during which (i) an expert guest will present a topic on an aspect of selling products at retail, and (ii) a question and answer period will follow. The next Retail Work Group video conference is scheduled for June 26, 2019, at 11:00 a.m. Central. Tim Rutti, Valley Medical Supplies, will present “Designing a Storefront Based on Your Company’s Focus.” Participation in the Retail Work Group is free to AAHomecare members. For more information, contact Ashley Plauché Manager of Government Affairs, AAHomecare (email@example.com).
Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, PC, a law firm based in Amarillo, Texas. 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 firstname.lastname@example.org.