The Office of Inspector General (“OIG”) of the United States Department of Health and Human Services (“DHHS”) recently issued Advisory Opinion No. 06-01, which opined unfavorably regarding a home health agency’s practice of providing prospective postoperative patients with preoperative home safety assessments.
The facts provided to the OIG were that a nationwide home health agency provides free assessments of home safety for patients scheduled to undergo orthopedic surgery. The agency learns of the patient upon notification from either the patient’s orthopedic surgeon or a surgery scheduler. The home health agency certifies that the orthopedic surgeon and scheduler receive no remuneration from the agency for these referrals. Once the home health agency is provided the referral, it contacts the patient to provide a home safety assessment through licensed physical therapists, either by phone or in person at the patient’s residence. The assessment includes learning about the patient’s medical history and residence. Limited suggestions are provided by the therapists, but no skilled care is provided. The therapist provides written materials to each patient to disclose that the patient has no obligation to obtain any services from the home health agency and that there are other agencies who can provide postoperative services. The patient is told that he/she remains free to choose whichever home health care provide he/she prefers. No postoperative services are arranged for during the preoperative assessment. These assessments are not a covered service under Medicare or Medicaid, although some managed care payers apparently cover the in-home services, generally paying between $85-$100 per assessment. The home health agency valued a telephone assessment at less than $10.00.
The OIG opined this arrangement could constitute grounds for the imposition of penalties under the Federal Civil Monetary (“CMP”) Statute, which provides for imposition of CMPs against anyone who gives anything of value to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider or item or service for which payment is made, in whole or in part, by Medicare or Medicaid. A CMP violation may result in exclusion from participation in all federal health care programs.
The OIG discounted the fact that home safety assessments are not covered by Medicare or Medicaid. It believes that arrangements whereby a prospective provider of services payable by a federal health care program offers beneficiaries a non-covered item or service free of charge implicate the fraud and abuse laws “and must be closely scrutinized.”
The OIG analyzed three CMP issues. First, do the free assessments constitute remuneration to the beneficiary? The OIG found remuneration because of the amount paid by private insurers. The OIG also was not willing to agree that the value of telephone assessments is nominal, focusing on the value to the beneficiary, not the cost to the provider. It assigned value because the service is free, and the manner delivered would lead a reasonable beneficiary to believe the service has value. Additionally, the source of the recommendation is the treating orthopedic surgeon.
Second, the OIG analyzed whether the assessments are likely to influence beneficiaries to select the home health agency for postoperative items and services payable by Medicare or Medicaid. The OIG believes that the surgeon’s (or surgeon scheduler’s) recommendation makes it “reasonable and probable” to believe the same company would be recommended for postoperative services. The OIG also expressed concern about the physical therapist’s opportunity to “initiate a personal relationship” with the beneficiary, making it more likely that the home health agency would be chosen as the postoperative provider. Additionally, because the assessment is without charge, the beneficiary likely would schedule it, thus “maximizing opportunities” for the agency’s physical therapists to become acquainted with the beneficiaries early on
Third, the OIG considered whether the agency knows or should know the arrangement is likely to influence beneficiaries to choose it for postoperative items or services. The OIG stated that the arrangement appears “calculated” to generate postoperative business, based on the structure and operation of the arrangement. It also expressed concern that the assessments were offered only to patients scheduled for surgery, making the need for postoperative care by a home health agency more likely. Accordingly, the OIG believed it is probable that the requester knows or should know that the assessments would be likely to generate federal program business. Any freedom of choice disclosures would be insufficient to safeguard against improper inducements.
The OIG also opined that the arrangement potentially violates the Anti-Kickback Statute, but did not provide a separate Anti-Kickback analysis.
The OIG gave no opinion, because one was not sought, regarding the legality of the arrangements with the individuals (surgeons and surgeon schedulers) who refer the patients to the home health agency for assessments. Additionally, the OIG commented that nothing in the Advisory Opinion addressed whether a patient would benefit from receiving preoperative assessments or whether a home health care agency could sell those assessments for an appropriate fee.