WASHINGTON — In a recent advisory opinion, the Office of Inspector General frowned on the use of a proposed online referral service in which home care providers would pay a fee to electronically receive and respond to referral requests from hospitals. That, the OIG said, could implicate the anti-kickback statute and lead to administrative sanctions because the arrangement would mean soliciting money from providers to take on the treatment of federal health care program beneficiaries.
That's a no-no under the anti-kickback statute, which prohibits soliciting, providing or receiving any type of remuneration that could lead to the referral of services paid for by federal health care programs.
Under the proposed arrangement, providers would pay a one-time implementation fee, plus a monthly fee. Non-paying providers would still be in the referral system's database, but they would not be able to receive or respond to referral requests electronically. Instead, they would have to respond to any requests from the hospital by fax or phone.
According to the May 20 opinion, because hospitals often discharge patients to providers on a first-come, first-served basis, providers with the ability to electronically receive and respond to referral requests through the system "would have a significant competitive advantage over non-paying providers. In fact … non-paying providers would be significantly disadvantaged vis-à-vis paying providers under the proposed arrangement — and may effectively be eliminated from any chance of receiving the patient — because they would not be able to communicate with hospital discharge planners and accept referrals in a timely manner."
Thus, the OIG found, providers paying the system fees would be more likely to get patients not because they provide superior care but because they paid for the opportunity.
The OIG viewed the arrangement under the framework of section 1128(b)(7) of the Social Security Act and the civil monetary penalty provision at section 1128A(a)(7). These sections relate specifically to the federal anti-kickback statute.
Attorney Neil Caesar, president of the Health Law Center, Greenville, S.C., said the decision is consistent with prior advisory opinions dealing with the concept of selling information.
"One of the key conditions to the OIG's analysis here was that if there is a charge to the people who are going to be on the list, it can't be more than the costs associated with having them be on the list," explained Caesar. "In other words, there should be no profit motive associated with them being on the list."
Caesar acknowledged it is OK, and often an important marketing tool, to purchase leads. "But you can't purchase referrals," he added, "and this advisory opinion is another example of that fact."
Ultimately, providers must ask questions of leads companies to be sure that they are not inadvertently purchasing something that invokes anti-kickback rules, Caesar said.
"As to the costs of what they are being asked to pay, providers must do a bit of probing if they are asked to be on any kind of access list," he cautioned. "The recommended action in this case would be to have something explicit in writing from the referral agency, or the online company in the present OIG example, saying that the costs they are charging represent entirely the actual costs in setting this up."
The OIG also found that some providers might have a hard time paying the fee to the referral system but would feel they had to do so to remain competitive. As a result, pressure to recoup their costs could create incentives to provide unnecessary services or upcode, the opinion said.
Read the advisory opinion in full.