Part 2: Utilization of Post-Acute Services by Residents of Assisted Living Facilities (ALF’s): Renting Space
Elizabeth E. Hogue, Esq.
Office: 877-871-4062
Fax: 877-871-9739
Twitter: @HogueHomeCare
As the number of years in which they have been in business increases, ALF’s are more eager to help their residents “age in place.” ALF’s often view availability of services from post-acute providers; including Medicare home care, private duty home care, hospice, and home medical equipment (HME); as essential to allow them to achieve this goal. While ALF’s want to encourage utilization of these types of services by residents, ALF’s cannot lose sight of the fact that the healthcare industry is highly regulated. With ever-increasing emphasis on fraud and abuse compliance, ALF’s and post-acute providers cannot afford to violate the law. How can ALF’s encourage the use of services available from post-acute providers by residents? What are the potential legal pitfalls that ALF’s and post-acute providers must avoid?
A key legal pitfall for arrangements between ALF’s and post-acute providers includes violations of the federal anti-kickback statute. This statute provides, in part, as follows:
(1) Whoever knowingly and willfully solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind–
(A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under this subchapter, or
(B) in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under this subchapter,
shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25,000 or imprisoned for not more than five years, or both.
(2) Whoever knowingly and willfully offers or pays any remuneration (including kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person
(A) to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under this subchapter, or
(B) to purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under this subchapter,
shall be fined not more than $25,000 or imprisoned for not more than five years, or both…”
A kickback occurs when a provider makes referrals to another provider and then something flows back from the provider that receives referrals to the provider that makes referrals. The application of this statute to arrangements in which post-acute provider receive referrals from ALF’s is clear. ALF’s make referrals to post-acute providers. If something flows back from post-acute providers to ALF’s, there may be an impermissible kickback. An example of such a potential kickback occurs when post-acute providers rent space from ALF’s from which they received referrals.
There are, however, a number of exceptions or “safe harbors” to the above statute. The next article in this series will focus on how ALF’s can meet the requirements of the space rental safe harbor so that post-acute providers can rent space from ALF’s in order to enhance the provision of services to residents.
©2012 Elizabeth E. Hogue, Esq. All rights reserved.
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