OIG Says Beware of Paying for Online Hospital Referrals

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.