Private Duty Held To Same Standards As Medicare Providers

Elizabeth Hogue, Esq

Feb 4, 2020

There seems to be a myth among homecare companies that the federal anti-kickback statute applies to Medicare certified providers only. On the contrary, the anti-kickback statute applies to providers who receive funds from any state or federal healthcare program, including the Medicaid Program, VA, TRICARE, etc. Private duty providers: This means many of you!

There is a federal law that prohibits illegal remuneration. This law is often called the anti-kickback statute. It generally says that anyone who either offers to give or actually gives anything to anyone in order to induce referrals has engaged in illegal conduct. A recent enforcement action reinforces this point.

In this case a doctor and a medical sales representative were charged in a scheme to pay and receive kickbacks to generate expensive prescriptions for compound drugs. TRICARE paid over $12 million for the prescriptions. The indictment alleges that recruiters identified TRICARE beneficiaries to receive the drugs, promising to secure their prescriptions without consultation with physicians and sometimes offering money to sign up. Upon receipt of beneficiary information from recruiters, the leader of the scheme sent pre-filled prescriptions with drugs to be dispensed, refills authorized and lists of names of patients to medical professionals who signed them without consulting patients or without regard to medical necessity. Prescriptions were sent to a pharmacy in Mississippi that shipped drugs nationwide and billed TRICARE for reimbursement.

Once again, as is clear from the indictment, the alleged perpetrators were “done in,” in part by their own text messages:

When the ringleader joked about being hounded for payouts by texting Clifton, “Hashtag for the day… [Ringleader], is my check ready? #Lol.” Clifton replied, “Haha! Meeeee toooo Jay already called asking this morning too…even the rich Man[s].” Later, Clifton lamented falling TRICARE reimbursement rates by texting the ringleader, “$210 minus half for Tax$105 [sic] then dr’s cut then patients cut….Yike[s].”

In addition, it is important for providers to note that if referrals are obtained illegally in violation of the anti-kickback statute and claims are submitted for services provided to patients referred inappropriately, such claims may also violate the federal False Claims Act.

The Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services, the primary enforcer of fraud and abuse prohibitions, has clearly stated that claims submitted for services provided to patients who were referred in violation of applicable prohibitions are “false claims.” Submission of false claims may also result in criminal prosecution and/or civil liability, amounting to many thousands of dollars and suspension or exclusion from participation in the Medicare and Medicaid Programs and other federal and state healthcare programs.

In addition to the necessity to avoid payment of kickbacks, therefore, providers must be scrupulous about avoiding all illegal strategies for obtaining referrals. When referrals are obtained by any unlawful means, the consequences can be extremely adverse for providers.

Consequently, as part of the development of new marketing strategies, management must always explore the legal boundaries of proposed methods of marketing prior to implementation. In order to do so, marketing staff cannot be allowed to implement new marketing arrangements and programs without review and approval by management. Review must include a thorough examination of whether the marketing program or arrangement, as proposed, violates applicable prohibitions and, if so, whether it can be changed so that it passes muster.