Helping people is often a primary motivation for healthcare providers’ entry into their industry. Accompanying those good intentions sometimes is a desire to provide free care to those patients and communities who need it. However, because free or discounted care can be viewed as illegal remuneration provided to incentivize business and referrals, free and discounted care programs can result in exposure under various state and federal healthcare fraud and abuse laws, such as the Antikickback Statute, False Claims Act, Civil Monetary Penalties Law, and the Stark Law. When providing free or discounted care programs, it is critical to structure advertising, service provision, and other items carefully to comply with operative healthcare laws.
1. Crash Course: Bigger Healthcare Fraud & Abuse Laws.
Healthcare hosts an added and intensive regulatory dimension missing from many other industries. The below are just some potentially-operative laws when considering how to provide discounted or free care programs:
- Antikickback Statute. Codified at 42 U.S.C. § 1320a–7b(b), the AKS makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration (anything of value, in cash or in kind) to induce or reward referrals for services or goods reimbursable by a federal healthcare program. The remuneration need not be direct, and the prohibited purpose need not be the sole purpose. Compliance efforts must be tailored carefully to fit any otherwise-prohibited conduct within a named safe harbor.
- Civil Monetary Penalties Law (CMP). Social Security Act Section 1128A(a)(5) imposes civil fines and penalties for providing something of value to a Medicare or state healthcare program beneficiary, such as a Medicaid recipient, that the person knows or should reasonably know will likely affect that beneficiary’s selection of a healthcare provider where the services are payable by a state or federal healthcare program such as Medicare.
- False Claims Act. The False Claims Act (FCA) prevents healthcare providers, entities, and individuals from knowingly submitting, or causing to be submitted, false claims to federal programs like Medicare and Medicaid for payment. Examples of violations can center upon billing for services not rendered, upcoding, billing for medically unnecessary services, and unbundling, among others.
- Stark Law. Section 1877 of the Social Security Act (42 U.S.C. 1395nn), also known as the physician self-referral law:
- Prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship, unless the requirements of an applicable exception are satisfied; and,
- Prohibits the entity from filing claims with Medicare (or billing another individual, entity, or third-party payor) for any improperly referred designated health services.
- A financial relationship may be an ownership or investment interest in the entity or a compensation arrangement. Stark Law compliance must be structured carefully to fit any otherwise-prohibited conduct within a named exception.
- State Equivalents. To cover any gaps left by the federal laws aforementioned, many states impose state equivalents.
2. Compliance Risk Caused by Free Care.
Healthcare providers risk violating the Antikickback Statute or Civil Monetary Penalty Law through the provision of free or discounted care, including consultations or screenings where no medical advice is provided. This is because free or discounted care has potential to influence patient choices regarding care received where payable by a federal healthcare program. Likewise, violations can occur where a purpose, goal, or aim of the free or discounted care is to incentivize or reward referrals.
The Office of the Inspector General has issued numerous advisory opinions articulating its perspectives regarding free or discounted care*. These should be reviewed closely with healthcare counsel to ensure discounted or free care programs comply.
3. Considerations When Providing Free or Discounted Care.
The below comprise some steps healthcare providers and organizations can take to compliantly effectuate noble intentions associated with free and discounted care programs**:
- Do not collect insurance information. By refraining from intaking insurance payor information, a provider can show regulators that the program’s goal is not to bill. In support of that contention, providers can point to the absence that no payor information was obtained.
- Stick to your intentions. Promoting discounted or free care as part of a wider community-based initiative can also help show the program’s intent to expand access to care for patients who truly need it.
- Watch out for advertising pitfalls. A primary area of risk under free or discounted care programs lies in how they are advertised. Advertising provides regulators with critical evidence bearing upon the intent behind such programs, and can therefore impact exposure tremendously. When spreading the word regarding free or discounted care programs:
- Do:
- Frame the discounted or free care program in terms of community-based initiatives.
- Provide the free or discounted care without and eye towards inducing referrals or additional business.
- Remind patients to keep their primary care or other healthcare provider that is not you informed.
- Do Not:
- Advertise at other facilities or institutions.
- Affix a monetary or other value (i.e. “worth a $200 value!”, or similiar marketing language.)
- Request, reward, or pay for referrals in connection with the free or discounted care program.
- Offer gifts, cash, or any other remuneration to patients to induce participation in the free or discounted care program.
- Provide free transportation, unless structured to comply with operative fraud and abuse laws.
- Hold raffles or other prize drawings to incentivize participation.
- Waive copays while still billing insurance.
- Do:
- Get it in writing. Program Informed Consent or other disclosure documentation should clearly apprise each participant that they are not expected to return, nor is the free or discounted care program in any way an advertisement for future care. Again, a risk of violation remains, however this measure provides additional supporting documentation that the discounted or free care program goal is not to incentivize or reward referrals, or to affect choices regarding future care.
- Do not recommend that patients return for future services. Instead, suggest that they confer with their primary care or other physician. While not dispositive, this can help show that the provider did not intend to provide value in exchange for future business. This includes marketing for billable services provided in conjunction with the free or discounted care.
4. Conclusion.
Reviewing guidance promulgated by the Office of the Inspector General, applicable laws and regulations, and conferring with qualified healthcare legal counsel can be the difference for effective compliance efforts. Free and discounted care programs are wonderful tools for expanding access to care and raising awareness regarding impactful community and public health matters. When approached without intention, however, they can substantiate organizational and other liability for compliance issues.
* See e.g., Office of Inspector General Advisory Opinions: 09-11; 00-3; 13-13; 12-17; 10-08; 11-04; 03-7; 06-01; 18-05; and others accessible at oig.hhs.gov/compliance/advisory-opinions/index.asp.
** This blog is provided for informational and educational purposes only. The steps enumerated hereunder are non-exhaustive and untailored toward any unique circumstance. Please confer with a qualified compliance and healthcare attorney regarding your individual situation.
