Q&A with Jeff Baird: Utilizing a Call Center

Call centers are a viable option, according to health care attorney Jeff Baird of Brown & Fortunato, but providers should be aware of the legal landmines.

Question: I keep hearing about call centers. What exactly is a call center?

Answer: A call center can be internal or external. Let’s say that ABC Medical is a mail-order supplier of diabetic testing supplies. ABC may have a group of employees who take up 1,000 square feet. This group of employees can, by phone and the Internet, market to referral sources, communicate with patients, communicate with physicians, and “chase the paperwork.”

Because the internal call center is made up of ABC’s employees, the standard HIPAA, kickback, and subcontracting rules do not apply. (This Q&A will not discuss internal call centers.)

Now let’s say that ABC contracts with an external, or outside, or outside, call center. I will refer to this outside call center as “XYZ.” XYZ is a 1099 independent contractor of ABC. XYZ may be located down the street, across the state, in another part of the U.S. or in a foreign country (e.g., the Philippines). From a business standpoint, ABC would like for XYZ to do the same sorts of things that an internal call center can do. However, the law will not allow this.

Question: Let’s say that ABC properly accumulates leads, or prospective customers. For example, ABC may own and manage its own website. A lead will visit the website, submit contact information and ask ABC to call the lead. Or ABC will advertise in a magazine, newspaper, television or radio; a lead will call ABC in response to the ad, leave a voicemail or message and ask for a return call. Or ABC will mail out (U.S. Postal Service) marketing materials. In response, the lead will mail back to ABC a signed card asking to be called. Or ABC will purchase leads from a reputable Internet lead provider; the leads will have consented to be called by a diabetic supplier. You get the picture; ABC now has a bucket of leads that it needs to call.

Can ABC forward the leads to the external call center, have the call center call the leads, and have the call center (i) collect the lead’s medical information; (ii) collect the lead’s Medicare (and other insurance) information; (iii) obtain the AOB (assignment of benefits) from the lead; and (iv) contact the lead’s physician in order to obtain the physician’s order and other documentation?

Answer: I would advise against this. The external call center (XYZ) will be construed to be a subcontractor of ABC. CMS has published guidance that states that a subcontractor may not engage in intake, assessment and coordination of care with the physician. The information described in (i) through (iii) of the question will be construed to be “intake, assessment and coordination of care.” An employee of ABC needs to initially talk to the lead and obtain the lead’s (i) medical information, (ii) Medicare (and other insurance) information, and (iii) AOB. An employee of ABC needs to talk to the lead’s physician and obtain the order and other documentation. The call center can subsequently call the lead (who, by that time, will be a customer) and confirm reorders.

Question: After ABC has obtained the medical, insurance and other information, can the call center assume the responsibility of calling the customer each time that the customer comes up for a refill of his order?

Answer: Yes.

Question: What kind of agreement needs to be in place between ABC and XYZ?

Answer: ABC and XYZ need to enter into a call center agreement that has a HIPAA-compliant “business associate addendum” attached to it. The agreement needs to be detailed and needs to spell out clearly what the call center can and cannot do. For example, the agreement will need to include the following provisions:

• XYZ will not release or use lead information for any purpose other than to handle reorders and other specific duties spelled out in the agreement.

• XYZ customer service reps will adhere to a telephone script provided by ABC. This is important because, at the end of the day, ABC is the entity that is responsible to the Medicare program. ABC cannot ship supplies to the customer unless the customer truly qualifies for the reorder; if the XYZ customer service rep goes off script and arranges for the reorder when the customer does not need the reorder, then the responsibility falls on ABC’s shoulders.

• The gold standard will be for the calls to be recorded; the silver standard will be for the calls to be monitored on a regular basis and for some of the calls (at random times) to be recorded.

• There will be a formal customer complaint procedure. In other words, when a customer complains about something to XYZ’s customer service rep, then XYZ must take down the information and immediately notify ABC.

• ABC will have the right to audit XYZ’s operations.

Question: How can ABC pay XYZ?

Answer: The most conservative approach is for ABC to pay a fixed annual fee (e.g., $120,000 over the next 12 months) to XYZ. A less conservative approach (but one that has low risk of an enforcement action) is for ABC to pay XYZ on a per call or hourly basis.

The compensation cannot be directly or indirectly tied to whether or not a customer reorders. The compensation cannot be a percentage of what ABC collects. Let me explain. XYZ is not marketing for ABC; XYZ is not calling on physicians nor is it bringing in new customers for ABC. XYZ’s role is to communicate with customers about their reorders. Therefore, at first blush it appears that there is no way that the agreement can violate the Medicare anti-kickback statute.

The statute states that a provider may not pay anything to a person or entity for referring a Medicare patient, “arranging for” the referral of a Medicare patient, or for essentially doing anything that will result in a Medicare payment. The “one purpose” test, set out in court decisions, states that if one purpose behind a payment is to induce referrals of Medicare patients, then the anti-kickback statute is violated, even though the primary purpose behind a payment is to compensate for actual services rendered and even if the compensation is fair market value.

However, an argument can be made that each time a customer reorders his supplies from the call center, he becomes a “new customer;” and each time XYZ talks to a customer about a reorder, and the customer states that he is ready for a new shipment of supplies, then XYZ is “arranging for the referral” of a Medicare patient or is otherwise responsible for a Medicare payment.

In order to address this risk, the compensation from ABC to XYZ cannot be tied to the number of reorders. A fixed annual fee is an important element of the “Personal Services and Management Contracts” safe harbor to the anti-kickback statute. If an arrangement falls within a safe harbor, then as a matter of law, the anti-kickback statute is not violated. If the compensation is on an hourly or per call basis, and is not tied into whether the customers reorder, then it is unlikely that the government would bring an enforcement action.

Question: Is there a way that XYZ can call a lead (a prospective customer), on behalf of ABC, before the lead decides to become a paying customer of ABC?

Answer: Yes. Look at the second question above. Assume that leads (or prospective customers) are coming ABC’s way from a number of directions: in response to television, magazine, newspaper, radio ads; in response to direct mailings; in response to ABC’s website; and/or the purchase of leads by ABC from a reputable internet lead provider.

Assuming the leads have given a proper consent to be called, then XYZ (on behalf of ABC) may call the leads and verify the information previously given by the leads and verify that the leads are interested in purchasing products from ABC. However, at that point, the lead needs to be handed over to ABC so that an ABC employee can handle the intake, assessment and coordination of care. Thereafter, XYZ can assume responsibility for calling the customers to confirm their needs for reorders.

Jeffrey S. Baird, Esq., is chairman of the Health Care Group at Brown & Fortunato, P.C., a law firm based in Amarillo, Texas. He represents pharmacies, infusion companies, home medical equipment companies and other health care providers throughout the United States. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization. He can be reached at 806/345-6320 or [email protected].