Marketing on the Internet

The anti-kickback and self-referral laws as well as HME-specific rules imposed by CMS address marketing issues. Yet one of the fastest-growing and most exciting marketing opportunities for home care suppliers raises a number of legal issues. I refer, of course, to the Internet.

Home care companies may view the dazzling e-health frontier with visions of dollar signs floating before them, but those pesky anti-fraud laws from the world of bricks and mortar still apply. A number of e-health businesses, for example, have revenue models that depend on directing patients toward vendors selling goods reimbursable by Medicare and Medicaid. Under the anti-kickback statutes, health care providers may not recommend or arrange for the purchase or leasing of any item or service covered by Medicare or Medicaid. That language potentially captures a range of promotional, marketing, advertising and discounting activities.

For general guidance about Internet promotional strategies, providers can gain insight from a 1999 Advisory Opinion from the Office of Inspector General (OIG). The opinion describes a public relations arrangement between podiatrists and a discount shoe retailer, but it has general application to home care suppliers.

The podiatrists proposed that they join a national network, make scheduled appearances in stores to answer customers’ foot care questions and provide brief screenings. The podiatrists also would participate in the professional training program for shoe sales managers and associates. The retailers, in turn, were to post in-store flyers promoting the arrangement.

Even though it ultimately blessed the arrangements, the OIG stated that the economic benefits flowing between the podiatrists and the retailers potentially violated the anti-kickback statute. The OIG noted that the podiatrists did not charge for the in-store appearances, and this meant that there was no “fair market value” for their appearances, raising the question of whether the offering of free services in exchange for referrals took place. The OIG noted more generally that the retailer was “orchestrating an opportunity for podiatrists to market their services personally — and exclusively — to potential patients.” Lack of access by competing podiatrists was evidently a factor in the OIG’s concerns.

This Advisory Opinion is significant because it does not just target providers who exchange “remuneration” (something of value) for referrals. Instead, it focuses on the more nebulous concept of arranging or recommending referrals. This focus implicates core issues in general health care marketing and advertising, and so actually has much larger significance — particularly as the Internet continues to grow as a marketing resource.

The OIG opinion concluded that the podiatric arrangement included sufficient safeguards to make it at low risk for fraud. This can help guide home care companies seeking to design innovative Internet marketing strategies without running afoul of the law:

• Participants in the podiatric arrangement paid fixed fees to the network that did not vary with referral rates. Podiatrists agreed to appear in stores for six months or a year, even if they did not drum up new business. By analogy, it is important for home care companies to have a fee structure that is not sensitive to referrals, and to stick with the relationship for awhile.
• An employee or customer who asks about a podiatrist’s private practice received a written notice explaining that the retailer did not endorse the doctor and that the potential patient had freedom of choice. This probably means that the OIG would not be content with a hard sales pitch about a home care company’s services. It is more prudent to prepare information about how choice is important.
• The public relations effort targeted the general public; the OIG disfavors providers who target captive audiences.

Neil Caesar is president of the Health Law Center (Neil B. Caesar Law Associates, PA), a national health law practice in Greenville, S.C. He also is a principal with Caesar Cohen Ltd., which offers compliance training, outsourcing and consulting and the author of the Home Care Compliance Answer Book. He can be reached by e-mail at [email protected] or by telephone at 864/676-9075.