Senior living providers aren’t subject to the same scrutiny as government-supported long-term care entities, but they must still be careful not to cross anti-kickback regulatory lines.
As gift-giving season approaches, it’s important to remember that giving and receiving business gifts can be problematic for senior living providers. Too much gift exchanging can indeed cause a compliance nightmare. Two seasoned attorneys weigh in …
Federal Guidelines
The federal Anti-Kickback Statute prohibits anyone from knowingly offering, soliciting, providing, or receiving a kickback or other remuneration in exchange for a referral involving any federally funded health-care program, including Medicare and Medicaid. And while senior living providers are generally unaffected by this regulation, it can be argued that providers can potentially influence their residents’ decisions when it comes to purchasing health-care items and services that are reimbursed under federal health-care programs. Accordingly, a senior living provider may be subject to liability under the federal Anti-Kickback Statute to the extent that it is receiving something of value at no charge from another provider in return for exerting influence on their residents to purchase a reimbursable item or service from that provider.
Any individual or entity found liable for violating the Anti-Kickback Statute is subject to criminal and civil prosecution, as well as significant monetary penalties, forfeiture of any sums gained through the violation, and imprisonment of up to five years per violation. Moreover, an individual or entity that is found guilty of violating the Anti-Kickback Statute may be excluded from participating in the federal health-care programs.
No Safe Harbor
There are a number of “safe harbors” under the Anti-Kickback Statute that set forth arrangements that are not considered to violate the statute. There is, however, no safe harbor in the Anti-Kickback Statute for de minimus forms of remuneration. Accordingly, any remuneration, no matter how small, may result in a violation if it is intended to induce referrals.
Most states have their own version of an anti-kickback law that can expose senior living providers to liability. These states have so-called all-payor statutes and regulations, which mirror the federal Anti-Kickback Statute, but apply them without regard to federal payment, thereby generally prohibiting the payment or receipt of remuneration to or from a health-care provider in exchange for a referral. Penalties for violation of these statutes and regulations include substantial fines and imprisonment.
Therefore, providers who are not careful in their holiday gift-giving can run afoul of the Anti-Kickback Statute and any related state laws. Before you let that pharmaceutical company pay for your office holiday party, it is important to keep the following in mind:
- Know your state requirements. It is important for senior living providers to be familiar with the state laws governing senior living generally, and any other specific provisions relating to the payment or receipt of monetary and non-monetary compensation in exchange for referrals to and from potential referral sources, including other health-care providers.
- Clearly define policies and practices. Senior living communities should establish clear policies governing gift-giving and receiving because such exchanges may be viewed as inducements to influence referrals. These policies should be incorporated into the community’s compliance program and should also set a limit on the aggregate annual amount that can be spent on gifts. Advisories from the Office of Inspector General of the U.S. Department of Health and Human Services have set a “nominal value” of remuneration at $10 per item and not more than $50 per year. Keep in mind, however, that the Anti-Kickback Statute provides no exception for nominal gifts. Therefore, if one purpose of the gift is to induce a referral, then there is at least a technical violation of the statute and enforcement is generally left to the government’s discretion.
- Train your staff. As part of its compliance training, providers should ensure that staff clearly understand the community’s gift guidelines, as any violations by staff could impart liability on the part of the employer.
- Remember that the rule on gifts applies to all. The Anti-Kickback Statute and most state laws prohibit soliciting or giving anything of value in return for a referral. Therefore, do not assume that non-physicians can accept unlimited gifts. These rules cover all potential referral sources, including physical and occupational therapists, hospice providers, and home health agencies.
—Jo-Ann Marchica is a senior associate in the Health Care Group at Arent Fox, LLP in New York.
—Micahel E. Anderson is a partnerat Arent Fox, LLP in Washington, D.C. where he chairs the firm’s health-care practice.
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