Ten Principles of Legal Marketing

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Stephen Tweed's Wednesday Report from NAHC in Los Angeles

Your update on the 2009 National Association for Home Care and Hospice Annual Convention

October 14, 2009

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In this issue...

-- Ten Principles of Legal Marketing

-- More NAHC updates at Home Health Care Leadership Minute BLOG

-- Grow Your Agency with Sales & Marketing Planning and Training

-- About the Author

Welcome,

. . .to this special edition of Home Health Care Today, the leading electronic newsletter for home health care and hospice executives who want to grow their business and get ready for the future. In this special report, we bring you the latest news and summary of programs from the 2009 NAHC convention in Los Angeles.

If you can't be here in person, here's where you will find out what's happening.


Ten Principles of Legal Marketing

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What can you do and can't you do in marketing your home health and hospice services to referral sources? What are the limitations?

Denise Bonn, Deputy Director for the Center for Healthcare Law at NAHC, presented a wonderful, concise discussion of ten key principles to consider in setting your agency's marketing policies. Denise suggested that you pay attention to these principles in your own marketing, and when observing the behavior of other agencies in your marketplace.

1. You cannot pay for referrals.

You cannot pay physicians in any way for Medicare or Medicaid referrals, you cannot pay beneficiaries for use of their HIC number, and you cannot pay a member of your staff to make these payments. Denise spoke in detail about . . .

  • Federal Anti-kickback Law
  • Safe Harbors
  • Stark II, Phase III
  • Stark II Exceptions

One point that Denise stressed is that it is not only illegal to offer inducements to get referrals, but it's illegal to solicit them. So technically, if a receptionist in a doctor's office says to your sales rep, "We only see sales people who bring lunch," that could be an illegal solicitation of a kickback.

The Stark rules only apply to physicians. The anti-kickback laws apply to all referral sources and any agency that accepts any federal reimbursement. That would include Medicare, Medicaid, VA, or other government insurance programs. Also, states have their own anti-kickback laws that may affect payments by state programs.

2. You cannot offer or furnish free services to referral sources.

This means that you cannot offer or provide any services that would normally have value to a referral source in exchange for a referral. This includes free or discounted office staff, clinical staff, billing services, or discharge planning services. This principle makes it difficult to offer continuing education for nurses and other professionals for free. You also cannot provide services to physicians to help them bill Medicare for care plan oversight and signing 485s.

3. You CAN educate referral sources about Medicare coverage and your services.

You are specifically permitted to provide education for referral sources on the benefits of the Medicare and Medicaid programs for their patients, the services that your agency provides, the details of your specialty clinical disease management programs, and the other services you provide. If the only time the referral source is available for this education is around meal time, then a modest meal may be provided as part of the education process.

4. If payment to a referral source is not reasonable and necessary, payment is likely illegal.

There are certain situations where it may be legal to pay a referral source for products or services that your agency purchases. This might include professional fees to a medical director for specific services provided or rent to an assisted living facility for office space that you need to serve that community. In any case, if the reason for your payment to a referral source is judged to be unnecessary or unreasonable, it may be illegal.

5. More than one Home Health Medical Director must be justified.

It has been common practice in some areas of the country for home health agencies to employ more than one medical director. This rule clarifies that one medical director is okay, but if you are employing more than one there needs to some very specific, documented reason.

6. Free services to influence a Medicare beneficiary to choose your home health or hospice is likely illegal.

Giving anything of value to a Medicare or Medicaid beneficiary in an attempt to induce them to use your home health or hospice services is illegal. However, the OIG has determined that small gifts of minimal value will not induce an individual to choose your agency, so you may give an item of $10 or less in value, with no more than $50 aggregate in one year.

Blood pressure clinics are okay, but you cannot promote your agency during the clinic, and you must report any abnormal results to the patient's physician.

7. Free gifts to physicians must be modest, comply with Stark, and not violate AKB.

The statute indicates that you cannot give cash or cash equivalents (gift cards), and the value of items given to physicians cannot exceed the aggregate of $300 plus the CPI updates ($355 for 2009).

8. You must always check state law.

All 50 states have some form of anti-kickback law that applies to various payment systems in the state. You need to be familiar with your own state's regulations.

The state of Florida has enacted very specific limitations on gifts as part of the marketing process. Attempts by the legislature to moderate some of these restrictions have not worked, so the regulations are still in place and very limiting.

9. You must oversee your marketers.

You must have in place policies and procedures that guide your sales and marketing staff members so they are clear about what practices are acceptable and what practices are unacceptable both by law and company policy. You must then monitor their behavior to make sure they are abiding by your company's policies. Failure to monitor does not release you from liability for violations.

One of the important points of clarification is that it is okay to pay a bonus or commission to your own employees for bringing in referrals, but it is probably illegal to pay a bonus or commission to any outside contractor for referrals. That suggests that you want to treat your sales reps as employees for tax and contractual purposes.

10. Technical compliance with fraud and abuse provisions is necessary.

These are general principles that will help you comply with the law. You still have a responsibility to make sure your sales and marketing practices are in technical compliance with the law. If you are not sure, get professional legal advice.

We found this presentation by Denise Bonn to be very helpful and concise. As with many areas of law, there are provisions that are somewhat gray and open to interpretation. However, these principles will be very helpful in making sure you, your sales people, and your agency are in compliance. It is presentations and information like this that makes your membership in NAHC and your state home care association a real value. We encourage you to join both and become active.

Click for copy of Handout


More NAHC updates at Home Health Care Leadership Minute BLOG

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In addition to the articles we've provided in our daily email updates from NAHC, we'll be posting additional information from the conference on our BLOG. Here's what's new:

  1. Recovery Audit Contractors
  2. Medicare Administrative Contractors
  3. Home Health Regulatory Update
  4. Injury and Hazards in Home Health Nursing are a growing concern
  5. Future technolgoy may help keep seniors safe

Home Health Care Leadership Minute


Grow Your Agency with Sales & Marketing Planning and Training

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With all of the changes coming to home health care and hospice as a result of healthcare reform, now is the time to focus on growing your business. The agencies with the greatest market share and the best relationships with referral sources will survive and prosper in the future.

Let Leading Home Care help you develop and implement a clear sales and marketing strategy to bring in more referrals that turn into admissions. We'll conduct a detailed assessment of your current sales and marketing people and processes.

Then we'll lead your executive leadership and marketing team through our unique sales & marketing planning process, where you'll develop your growth strategy, define your competitive advantage, design your primary and secondary marketing strategies, and set up your sales and marketing scorecard.

Then we'll provide your sales reps and hospital liaisons with an intensive sales training experience to give them the knowledge, skills, and willingness to have meaning dialog with key referral sources. We'll teach them how to get past the gatekeeper and reach the decision maker without bringing donuts or buying lunch.

Click here for the Sales & Marketing Planning and Training process


About the Author

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Stephen Tweed, CSP, is Chairman and CEO of Leading Home Care ... a Tweed Jeffries company. For over 25 years he has been a recognized leader in strategy and leadership development for home health care & hospice companies and associations. He is the author or co-author of seven books, five of which were written specifically for the home care industry. He has served on the boards of directors of three not-for-profit home care agencies, and has served as interim President & CEO of a $25 million home care company.

Stephen is a past-President of the National Speakers Association, a 3500 member international society of experts who speak professionally. He is also the father of a 38 year-old son who is physically disabled and uses the services of home care on a daily basis.

Stephen Tweed has been a speaker at every NAHC annual conference for the past 15 years. He brings a unique perspective to home health care and hospice executive leadership.

Consider Bringing Stephen in to speak for your next home health or hospice leadership gathering



Contact Leading Home Care

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phone: 1-866-209-5101

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