ALFs and Post Acute Providers
As the number of years in which they have been in business increases, ALF’s are more eager to help their residents to “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? The most effective way to maximize utilization of these services may be to take a multi-pronged approach that includes:
Assignment of liaisons/coordinators from post-acute providers to ALF’s
Use of coordinators/liaisons at ALF’s raises issues related to violation of the federal anti-kickback statute. This statute generally prohibits providers from either offering to give or actually giving anything to referral sources in order to induce referrals. Consequently, liaisons and coordinators must be scrupulous about avoiding the provision of free services to ALF’s and/or their residents. Possible violations include “staffing” an office with an RN who responds to requests from residents in their apartments or has “office hours” to address health conditions of residents.
Renting space for coordinators/liaisons to occupy so that providers have a frequent or continuous presence on the premises of referral sources to better serve patients
Renting space from referral sources also involves potential kickbacks. ALF’s and providers must meet the requirements of the space rental exception or safe harbor. In order to do so, providers and ALF’s must enter into a written lease for a term of least one year. The lease must include the number of square feet providers are renting. Rent must be set in advance at fair market value and cannot take into account either the volume or value of referrals received. Finally, providers may rent only the amount of space that is commercially reasonable or that they actually need.
The OIG has provided significant guidance about these requirements, which providers must master before they establish these types of relationships. A common pitfall for providers is referral sources’ insistence that providers must rent an entire apartment, whether or not they need it, and must pay an amount equal to the residents’ monthly rent, which includes food and other services.
Private duty providers must comply with this safe harbor, too. Many such providers participate in federal and/or state health care programs such as Medicaid waiver programs, which means that they are subject to fraud and abuse prohibitions just like providers who participate in the Medicare Program. In addition, ALF’s may provide services that are paid for by federal or state health care programs and, therefore, must also comply.
Entering into Preferred Provider Agreements
Preferred Provider Agreements may be verbal or in writing. There may be significant value in reducing these preferred provider relationships to writing. These types of relationships raise issues related to patients’ right to freedom of choice of providers. The common law or court decisions require all types of providers to honor patients’ right to freedom of choice. There are also federal statutes that guarantee this right to Medicare and Medicaid patients. In addition, states sometimes address these issues in applicable statutes and regulations. For this reason, providers should not attempt to use standard or “sample” Agreements, but must adhere to requirements in all of the states in which they use these types of Agreements.
Providing a full range of screenings and educational events for and about common chronic illnesses or community awareness activities
ALF’s and retirement communities often ask providers to conduct educational events and basic screenings for common chronic conditions. Generally, providers may do so if they walk a relatively fine line between engaging in community awareness activities and providing free skilled services to residents that exceed $10.00 in value at a time. At a minimum, such activities must be conducted consistent with a detailed policy and procedure that governs the provision of such services, so that providers do not violate the anti-kickback statute.
Establishing relationships with post-acute providers has significant value for ALF’s. Such relationships should be based on standard documents and comprehensive policies, as described above, in order to ensure compliance.
Future articles in this series will provide more detail regarding the issues raised above.
© 2020 Elizabeth E. Hogue, Esq. All rights reserved. Elizabeth E. Hogue, Esq.
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