By Fisher, JD, CHC, CCEP

Radiation Therapy Referral Kickback Arrangements with Investors.

A national operator of radiation therapy centers, has agreed to settle a False Claims Act action alleging that it submitted claims violated the Anti‑Kickback Statute by paying of $11.5 million and entering into a 5 year Corporate Integrity Agreement with the Office of Inspector General.  The arrangement involved payments to investors who were allegedly targeted because of their referral potential to the therapy centers.  The challenged arrangement involved a series of leasing companies that accepted investments from referring physicians.  The investment interests resulted in the payment of investment returns that the government considered to be remuneration for referrals in violation of the Anti-Kickback Statute.  The whistleblower who originally raised the issue will receive up to $1.725 million.

This case involves a garden variety claim of a kickback by investment interest.  The typical investment case involves targeting potential investors who are in a professional position to make referrals to the company in which they are asked to invest.  The referral source has a financial incentive to increase referrals.  This might be an excellent financial investment scenario, but the problem is that the investment return might well be an illegal kickback; which is potentially a federal felony.

Read more here: Health Law Blog

  

By Fisher, JD, CHC, CCEP

Substance Abuse Treatment Center Fraud Scheme Results in Guilty Plea

The Department of Justice recently announced the guilty plea of two individual alcohol and substance abuse treatment center owners for their participation in what DOJ labeled a “multi-million dollar health care fraud and money laundering scheme.”  The two individuals owned a licensed substance abuse service provider (or treatment center) offering clinical treatment services for persons suffering from alcohol and drug addiction. The treatment center also offered medication-based treatment for opioid addiction.

The government had accused the two owners of paying illegal kickbacks/bribes to “sober homes” in exchange for the referral of the sober homes’ insured residents to treatment program. The sober homes provided safe and drug-free residences for individuals suffering from drug and alcohol addiction. This made them a prime source of potential referrals to the treatment program.

The accusations against these defendants read like a laundry list of thinly veiled kickback schemes.  Some of the specific accusations included:

1. Providing funds used to purchase or rent several sober home properties under purchase agreements or leases that were in the names of other parties so as to disguise the source of funds.
2. Paying remuneration for referrals in the form of free or reduced rent, insurance premiumRead more here: Health Law Blog

     

Free Transportation Services and the Anti-kickback Statute

Advisory Opinions, Safe Harbors, and other Guidance

It is a fairly common practice for healthcare facilities, whether long term care facilities, hospitals, or large clinics, to offer free transportation services to patients and sometimes the visitors or guests of the patients. These arrangements require analysis under the Medicare Anti-Kickback Statute because a free service is being provided to the patient and could be viewed to at least partially be for the purpose of inducing the patient to seek services or for referral sources of these patients to refer them for services of the facility.

The OIG has viewed some arrangements where free or low cost transportation is provided to be a violation of the Anti-Kickback Statute and other arrangments to be permissible, even though arguably there is some element of remuneration to induce referrals. The OIG has issued advisory opinions that provide a great deal of guidance on the factors that the OIG will examine when determining which free transportation services are abusive and which will be permitted. Most recently, the OIG released a safe harbor provision that describes the conditions for safe harbor coverage of shuttle services and transportation of existing patients.

Failure to comply with a safe harbor does not necessarily mean that an arrangement violates the AKS. The advisory opinion that have been issued in this area are very instructive of the types of arrangements and various factors that the OIG considers to be suspect.

The particular case involved in the advisory opinion involved a skilled nursing facility that proposed offering local transportation to friends and family of nursing facility residents. The facility is located in an area that is not easy to access and requires payment of a $9 toll to cross a bridge. The service was to be provided uniformly regardless of income level or the source of payment for the residents’ care. There would be no charge for the transportation services and the cost would not be claimed on any Federal health program cost report. The value of the service to the families and friends of each patient is estimated to be over $50 per year. The facility did not plan to advertise the service broadly and advertising would be limited to its normal service area. A written policy would govern the operation of the transportation program.

The OIG found that the particular transportation arrangement would not violate the Anti-Kickback Statute.

The specific reasons given to approve this particular arrangement were (i) that the free transportation was not to assist patients to obtain care or for the benefit of referral sources to the facility, (ii) the program would be offered uniformly, regardless of the payment source for the services to the resident at the facility, (iii) the type of service is reasonable for the circumstances and is not a luxury item, (iv) the arrangement will only be offered and advertised locally and would not be used to expand the service area of the facility, (v) the marketing would be reasonably limited, (vi) local public transportation in the area is limited, (vii) the arrangement is consistent with the mission of providing quality care to patients, and (viii) the costs will not be claimed under any Federal health program.

These factors are instructive, and many are similar to the conditions in the recent safe harbor regulations. Circumstances that do not meet the safe harbor should be structured as close to the safe harbor as possible, but meeting the safe harbor completely is the only way to assure compliance short of requesting an advisory opinion. With all of the various guidance that has been issued in this area, together with the safe harbor regulations and comments, one can gain a very good understanding of the types of arrangements that will gain the disapproval of regulators.