Billing/Reimbursement

Marketing, Joint Ventures and Arrangements with Referral Sources

In order to avoid governmental scrutiny, it is crucial that all marketing programs and business arrangements be established and implemented properly.
by Jeffrey S. Baird, Esq.

The home medical equipment industry today is a totally different animal from yesterday. The industry has matured, technology has progressed and demand is increasing exponentially. The flip side is that the industry has been hit with breathtaking legislative and regulatory changes.

Now more than ever, in order to succeed, an HME company must have an innovative marketing program and enter into strategic joint ventures and business arrangements. But there are legal parameters that must be followed when implementing all of them.

Legal Guidelines

  • Medicare Anti-Kickback Statute — The anti-kickback statute provides for criminal penalties for any person or company that solicits, receives, offers or pays any remuneration to a person or company to induce that person/company to refer an individual for Medicare-covered items or services, or to purchase, lease, order or arrange for or recommend purchasing, leasing or ordering any Medicare-covered item or service, subject to certain exceptions.

  • Beneficiary Inducement Statute — This statute imposes civil monetary penalties upon a person or entity that offers or gives remuneration to any Medicare beneficiary that the offeror knows, or should know, is likely to influence the recipient to order an item for which payment may be made under a federal or state health care program. The statute does not prohibit the giving of incentives that are of "nominal value" (i.e., no more than $10 per item, or $50 in the aggregate, to any one beneficiary on an annual basis).

  • Anti-Solicitation Statute — An HME company may not contact a Medicare beneficiary by telephone regarding the furnishing of a covered item unless 1) the beneficiary has given written permission for the contact, or 2) the company has previously provided the covered item to the beneficiary and the company is contacting the beneficiary regarding the covered item, or 3) if the telephone contact is regarding the furnishing of the covered item other than an item already furnished to the beneficiary, the company has furnished at least one covered item to the beneficiary during the preceding 15 months.

  • Stark Physician Self-Referral Statute — The statute provides that if a physician has a financial relationship with an entity providing designated health services, which includes DME, then the physician may not refer Medicare patients to the entity unless one of the statutory or regulatory exceptions applies.

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