Saturday, March 7, 2009

Los Angeles Health Care Attorney: Questions About Patient Gifts

Q: During this economic down-turn, we want to offer patients a free stainless steel water bottle if they come in for a screening mammogram? Will this violate state or federal anti-kickback rules?

A: In order to analyze this issue, we need to look at federal and state law. We also need to look at whether the patients are Medicare or Medi-Cal beneficiaries. Even if your patients are not government program beneficiaries, the analysis of the law which is more specific for Medicare patients will help provide a guidance as to what is standard in the industry. Normally you can’t offer or give remuneration to a Medicare or Medicaid beneficiary in order to get the beneficiary to use services or items from a particular provider.

Under California Business & Profession Code 650, it is unlawful to offer inducement or compensation for the referral of a patient. California Business & Profession Code Section 650 must also be complied with and it states in part: “. . . [T]he offer, delivery, receipt, or acceptance by any person licensed under this division of any rebate, refund, commission, preference, patronage dividend, discount, or other consideration . . . as . . . compensation or inducement for referring patients . . . to any person . . . is unlawful.”

Federal law provides some guidance. In a Special Advisory Bulletin issued August 29, 2002, OIG refined its definition of the types of patient remuneration that violate the Anti-Kickback Statute. The agency spelled out what it considers an inexpensive gift, when more valuable goods and services may be offered and the actions that constitute inducement. Providers may offer inexpensive gifts to Medicare and Medi-Cal patients if individual gifts have a retail value of $10 or less or the total retail value of gifts offered within a year is $50 or less. This standard only applies to gifts. It does not apply to cash or cash equivalents. This means no gift certificates.

In addition, remuneration does not include incentives given to people to promote delivery of preventive care services. Such services include prenatal services, post-natal well-baby visits, or services described in the current U.S. Preventive Service’s Task Force Guide to Clinical Preventive Services. This is why hospitals can give gifts to new mothers relating to the care of the infants and dentists can give toothbrushes and dental floss.

In order to comply with laws applying to Medicare and Medi-Cal, it is necessary to make sure the incentive is not tied to the provision of other services reimbursed by Medicare or Medi-Cal and are not cash or items convertible to cash (such as gift cards) and of greater value than the service itself.

Each case needs to be evaluated separately considering the cost of the item, whether it promotes the delivery of preventive care services, whether any services to the patient are reimbursed by Medicare or Medi-Cal, and how many gifts are given collectively to the patient. In the case of a stainless steel water bottle, this could arguably be preventative given the concern over the use and re-use of plastic water bottles in leaching damaging chemicals. The price needs to be analyzed and if it is de minimus (under $10) that is another factor that would tend to support allowing this type of gift to a screening patient.

If your professional business decides to give a gift to patients, raise the issue with your health care lawyer and obtain an opinion that you can rely upon. In addition, if there is any marketing, have the ads or material reviewed by the same lawyer. The cost of a consultation will save significant amounts at the end of the day. This is simply sound risk management.

Any questions or comments should be directed to: Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals and regulated businesses, particularly health care professionals including individual physicians, corporate providers and group practices.


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