All health care providers need to be aware of the fraud and abuse laws governing the business of health care. These laws dictate the foundations of ethical practice.
The Anti-Kickback Statute (AKS) (42 U.S.C. §1320a-7(b)) states "it is illegal to knowingly and willfully solicit or receive any remuneration in return for referring an individual to a person for the furnishing of any item or service for which payment may be made in whole or in part by Medicare or Medicaid." Most states have a similar law that covers state-specific issues, like third-party payers.
What the Anti-Kickback Law Says (and Why You Could Be Breaking It)
The law has three main elements: knowingly and willfully, remuneration, and referring. All three elements must be present in order for a violation to occur.
Knowingly and willfully refer to intention of the parties. Generally speaking, intent looks at the purpose of the action. According to the Affordable Care Act, "a person need not have actual knowledge of the AKS or specific intent to commit a violation ... [i]nstead, simply knowledge of receiving the kickback." This makes the intent part of this statute a pretty low bar. All that is needed to prove intent is that you received or gave something of value for a referral.
Remuneration is a term used to describe any benefit someone can receive either directly or indirectly. This can include cash, gifts, discounted services, reduced rent, and waivers of deductibles and co-pays. Giving a welcoming gift to a patient, giving a free dinner to a prospective patient or reducing your fee for services are included. Critical for most chiropractors, this would include giving free services away to patients so they will either start care or continue with care.
Referring implicates both parties – the referrer and referee. While the care delivered may be necessary and legitimate, if one purpose of the remuneration is to induce referrals, then the statute would be violated.
For instance, a patient is referred for advanced imaging. This is the proper and medically necessary care for this patient. The imaging center is thankful for the referral and sends the referring chiropractor tickets to a sporting event or concert as an expression of gratitude. Depending on the payer type, this may be a violation of the Anti-Kickback Statute.
Penalties for Violations
Violations of AKS can be harsh. Any violation of AKS also triggers a violation of the False Claims Act. Between the two violations, fines can easily go over $25,000 and prison terms of 10 years for each violation. Even if you avoid big fines and jail time, violations of the law can lead to exclusion from all federal health programs, such as Medicare and Medicaid.
Early in 2018, the Department of Justice settled with a chiropractor on allegations of violations of AKS. This chiropractor was treating Medicare patients by chiropractic adjustments and electric muscle stimulation. The EMS was given away as a free service. Even though the service is non-covered, this was deemed a violation of AKS.
The DOJ alleged not only violations of AKS, but also False Claims violations. The chiropractor settled the allegations by paying a fine of about $80,000.
The lesson here is that you cannot give away free services to Medicare patients. This includes exams, X-rays, modalities, massage or products. Doing so is viewed as an inducement, with the purpose being to have that patient continue care and have adjustments billed to Medicare.
Fee Reductions: Illegal vs. Legal
Beyond the obvious giving away of services or paying for referrals, reducing your fees to a "cash" price would also likely be viewed as an inducement. This would be giving something of value (reduced fees) so the patient will continue care in your office.
The alternative to a "cash" fee is to use a discount medical plan organization (DMPO) to legally reduce your fees to an appropriate level. You can use a DMPO for all non-covered services when dealing with Medicare or any other insurance. This will allow you to comply with all applicable laws while still allowing you to discount your usual and customary fees. Using a DMPO is the legal and compliant way to handle financial matters in your practice.
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