Use the anti-kickback statute to guide you.

When it comes to giving gifts to patients and non-physician referral sources, providers should consult the federal anti-kickback statute, attorneys advise. Under that criminal law, there is an exception for gifts that are $10 per item, totaling $50 per year, notes attorney Rick Rifenbark with Foley & Lardner in Los Angeles.

The amounts in the anti-kickback statute are probably lower than the Stark limits because patients are seen as more likely to be influenced by lower-dollar items, Rifenbark says.

Now’s Not The Time For A Game Of Compliance Chicken

If health care providers decide to furnish gifts of more than $10 to patients or other non-physician referral sources, they are flirting with prosecution by the HHS Office of Inspector General, warns attorney Robert Markette Jr. with Gilliland & Markette in Indianapolis.

“It is hard to say when OIG would prosecute,” Markette tells Eli’s Home Care Week. “Is it $15? $20? $100? The larger the number, the more likely you are to get prosecuted.”

Do this: Smart agencies will keep gifts under the $10 limit, Markette advises. “Given the intense scrutiny the home care and hospice industries have been under lately, I would not want to be the  provider pushing the envelope,” he says. “Obviously, an illegal activity is illegal whether they catch you or not, but in the current environment, they are far more likely to catch you.”

Providers adhering to the anti-kickback statute should use the same playbook as those adhering to Stark — track gifts throughout the year to make sure they don’t exceed the limit, give only non-cash gifts, give the same gifts to everyone so they aren’t based on referral volume, and make sure they are also OK under applicable state laws.

© Eli’s Home Care Week.

Available on CD: “The Fair Market Value 411: A Stark and Antikickback Compliance Must,” with attorney Wayne Miller.

Santa? A whistleblower?

Writing this message on a gift card could cause your very own Compliance Nightmare before Christmas.

The holidays can present one of the biggest compliance hazards to health care providers, thanks to gift-giving for physician referral sources. Gift-giving “is an intersection where the very rigid nature of the Stark Law collides head-on with common American business practices,” warns attorney Robert Ramsey III with Buchanan Ingersoll & Rooney in Pittsburgh.

“Holiday gifts are, of course, something many non-healthcare businesses have given to their business acquaintances for years,” Ramsey tells Eli’s Home Care Week. “However, in the health care arena, such gifts can run afoul of the law depending on the circumstances.”

Look To Stark Law For Guidance

Providers should consult the Stark law when they are deciding on gifts for physician referral sources, says attorney Rick Rifenbark with Foley & Lardner in Los Angeles. That civil law limits gifts to physicians to an amount totaling $355 in 2009 — the exact amount is adjusted yearly for inflation.

Up next: Why a coffee card can land you in hot water …

Think it over: Or better yet, health care providers should refrain from giving gifts to referral sources at all, urges home care and compliance attorney Robert Markette Jr. with Gilliland & Markette in Indianapolis. “The simplest, and safest, rule is don’t give gifts.”

“Of course, that is not easy to do,” Markette admits. “Providers, like any good business people, want to acknowledge good referral sources and good patients.”

If you find foregoing gifts impractical, consider these rules set out in the Stark law:

• Adhere to the limit. The $355 isn’t a suggestion, it’s a hard and fast limit. And it applies to the value of the gift, not what it actually cost you, Rifenbark points out.

For example: If you received some very expensive items for free and want to re-gift them to physicians, you have to count the fair market value of the item, not what you paid for it, Rifenbark explains.

• Track your gift spending throughout the year. The $355 limit applies to all gifts given for the entire year. “If gifts have been furnished to physicians during the year, the value of previous gifts should be subtracted from the value of any remaining gifts,” counsels attorney Marie Berliner with Lambeth & Berliner in Austin, Texas. For more on year-long physician gift tracking, go here.

Providers must keep meticulous records of gifts so they can “easily and clearly show CMS, OIG, and anyone else that they were well within” the limit, Markette says.

Don’t forget to include in the year-long tally things like meals, tickets for sporting events, etc., Markette advises.

• Don’t give cash or cash equivalents.

A Starbucks gift card might seem like just the thing for your coffee-loving referral source, but it violates the Stark law. “Providers can give only non-cash items of nominal value,” warns Washington, D.C.-based attorney Elizabeth Hogue. “Gift cards and gift certificates are not allowed.”

• Don’t vary your gifts based on referral volume. Rewarding your best referral sources is one of those tactics that would be A-OK in the normal business world but is off limits in the Medicare environment.

“Gifts to any referral sources should all be the same, regardless of the number or value of referrals,” Berliner explains. “Everyone gets the same basket of cookies.”

“Does one referral source get a $10 gift …while your best referral source gets a $5,000 gift basket?” Markette asks. “That might cause the OIG to question what you are doing.”

• Beware of gift messages. You don’t want to implicate the criminal anti-kickback statute by giving your referral source a gift in exchange for her referrals. So be sure your gift message doesn’t say something that implies that, like “thanks for all the patients you send to us.”

“Be careful as to the written message that is delivered with the gift,” Ramsey cautions. “Anything of value given as a solicitation of Medicare or Medicaid business could be interpreted as illegal remuneration under the anti-kickback law.”

If the anti-kickback law is invoked, gifts are subject to much lower dollar amounts.

• Consider anti-kickback law limits. To be on the safe side, you may want to go with the lower anti-kickback limits for gifts, Markette suggests. Once you’re over the $10/$50 anti-kickback law limits, you’ve got to prove that you are not trying to induce referrals.

A good argument is to say that it complies with the Stark regulation, Markette allows. “But don’t forget … if even one purpose of the remuneration is to induce or reward referrals, you have the required intent” to hang you under the law.

• Consult state laws. The federal Stark and anti-kickback laws may not be the last word on your gift-giving. Be sure to check your own state’s laws to see if they put more stringent limits on you, Rifenbark says.

© Eli’s Home Care Week

Audio Training Event: How to determine a reasonable medical director rate — plus other FMV essentials to keep you compliant with Stark & anti-kickback.

Question: What kind of gift can a provider give new patients? Can the provider advertise an iPod for every new braces patient, for example?

Answer: If the patient is not a Medicare or Medicaid beneficiary, you don’t need to worry about federal anti-kickback laws. However, you should ensure that such new patient incentives comply with applicable state laws, notes lawyer Jackie Baratian, who practices in the Washington, DC office of Alston & Bird and who was previously senior counsel at the OIG. Baratian points to a possible problem with fee-splitting laws as an example.

When you’re looking at new patient incentives for Medicare or Medicaid benes, you’re wading into troubled waters. The Beneficiary Inducement Statute prohibits giving Medicare or Medicaid beneficiaries anything of value that is designed to influence their selection of a particular provider of federal health care services, according to an August 2002 OIG Advisory Opinion that addresses “Offering Gifts and Other Inducements to Beneficiaries.”

But exceptions do apply for small gifts. “There is a carve-out for inexpensive gifts or services,” Baratian explains. “If the retail value is no more than $10 for any one gift, or no more than $50 in the aggregate per patient for the year, it is excluded from the definition of remuneration.”

So tchotchkes, like pens or bags, are probably ok. The reasoning is this: “If an incentive is nominal in value, then the person providing the incentive would not and should not know that the incentive is likely to induce the beneficiary to use a particular provider,” she says. In essence, the overall goal here is to have patients making decisions based on quality of care instead of based on freebies, giveaways, or gifts.

Thus, the example in the question concerning a free iPod would clearly violate the Beneficiary Inducement Statute — if the patient is a Medicare or Medicaid one — since the cheapest iPod still starts at $59. So until Apple drops that price to $50, you shouldn’t advertise any free Shuffles for new Medicare or Medicaid patients.

Does your practice know what to do with your ‘per click’ compensation arrangements now that Stark has changed yet again? Wayne Miller explains it all.

Can we multiply the limit for a multi-physician practice? What about front office staff? Attorney Wayne Miller answers these questions and more

“We have lots of questions about Stark, anti-kickback and gifts to referring physicians,” wrote in an HC Compliance Essentials reader who attended a healthcare management seminar last week. We rounded up questions from her and her colleagues, and got plain English answers from attorney Wayne Miller.

AUDIO: Are your EMR deals complying with Stark? How to tell for sure.

The Basics: Gifts to physicians who can potentially refer Medicare or Medicaid patients to your practice or health care entity can run afoul of Stark and anti-kickback laws. Practice managers should not only be monitoring the financial arrangements between their office and physicians to whom they refer patients; they should also be tracking all the gifts and benefits, including dinners at restaurants and tickets to sporting and other entertainment events, that change hands.

Your goal is to make sure that no referring physician receives more than the annual limit on referring physician gifts under Stark. The amount is subject to the Consumer Price Index increase each year. If your office surpasses the limit, regardless of intent, you need to let CMS know.

Question 1: How much can I spend on referring physicians?

Under Stark, the annual maximum gift per person for 2009 is $355, with each gift valued at no more than $30, says Miller. “These maximums adjust annually based on CPI,” he reminds practice managers. “Gifts should be totally voluntary and there should not be any expectation or solicitation for gifts to referring physicians.” In addition, gifts may be “nonmonetary only” – in other words, you can’t give a referring doctor any cash.

“Beyond the Stark requirements,” Miller adds, “the underlying facts should be examined to ensure that gifts do not trigger the Medicare or state anti-kickback statutes. It is preferable to have an established policy on gift giving and to follow it consistently.”

Question 2: Is it OK to give a gift for each referral?

“No,” says Miller. “Gifts should not be made based on the volume or value of referrals.” Just keep in mind the limit per person.

Question 3: If there are five physicians in a practice can I multiply the $355 limit by five?

It depends on whether the gift is given to individual physicians or to the practice as a whole.

“If gifts are given to the individual doctors, each would be subject to a separate $355 limit,” Miller explains. “The applicable Stark exception would not apply to giving a gift to a medical group rather than an individual. However, we would recommend that groups be treated as one person, honing to the individual limits by analogy.”

But be careful giving gifts to groups. Under Medicare and state anti-kickback laws, gift giving is not expressly sanctioned, so it is critical that your gift policies don’t reveal an intent to induce or reward referrals.

For example, Miller points out, gifts should be modest and in the form of goods or services, not cash. Do not peg gift values to the amount or value of referrals a doctor receives. And finally, be consistent by extending gifts to providers in the same category, independent of their status as referral sources.

Question 4: How does this apply to front office staff?

The Stark law may not apply in this situation, unless the staff are family relations to the practice doctors.

“But anti-kickback laws may be implicated,” warns Miller. “Following a similar policy as with doctors may be advisable depending on the underlying fact situation, because those laws apply in the same way to staff gifts.”

Question 5: Is there a limit on what I can give front-office staff?

There are no specific gift amount standards for non-physician staff (unless of course they are family relations to physicians), but, again, general anti-kickback principles apply, Miller says.

A note on our question-answerer: Wayne Miller, a founding partner of the Compliance Law Group in Thousand Oaks, CA, has practiced health care business and regulatory law for 25 years and has extensive experience in evaluating and addressing fair market value concerns as they relate to fraud and abuse and Stark law compliance. He is a frequent speaker for Audioeducator. Learn more about the teleconferences he’s doing this fall on coding ethics, EMR and Stark, FMV, referrals, and the compliance traps of online health care, and tightened HIPAA regs.