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Billing for Free
Supplies Provided by Home Medical
Equipment (HME)
Suppliers and Infusion Companies
Elizabeth E.
Hogue, Esq.
Office:
877-871-4062
Fax:
877-871-9739
E-mail:
ElizabethHogue@ElizabethHogue.net
Providers are
under increasing pressure to be as cost-effective as possible. As a result,
agencies may ask other providers like HME suppliers and infusion companies to
give them free items needed to render services to patients.
Some agencies may
be tempted to provide supplies that they received for free to patients, or ask
other providers to do so, and then bill third-party payors for them, including
the Medicare and Medicaid Programs. Agencies may also be tempted to include the
costs of free supplies on cost reports that they continue to file under the
Medicare Prospective Payment System (PPS) or with other third party payors such
as the Medicaid Program.
Providers with a
thorough understanding of fraud and abuse in the Medicare/Medicaid Programs will
immediately recognize that this practice is fraudulent. This practice is not
within a “gray area.” It is clearly against the law. Nonetheless, there are
still agencies who engage in this practice.
For example, a
urologist in Bloomfield, Connecticut was charged with billing payors for free
samples of a drug used to treat prostate cancer, Lupron Depot. The samples were
supplied to the urologist by “Company X” free of charge. The physician, in
turn, supplied the drug to his patients. Based upon claims submitted to payors
for the free dosages of the drug, the urologist collected between $30,000 and
$40,000.
The applicability
of this case to agencies is clear. Just as the urologist was charged with
billing for drugs that he received free of charge, agencies that give supplies
they receive for free to patients and then bill payors for them are also
engaging in fraud. Agencies must be extremely careful not to engage in this
practice.
In addition, when
the free items are provided by suppliers and infusion companies that get
referrals from agencies, these items are clearly kickbacks in the form of free
goods in exchange for referrals. This practice is also clearly prohibited by
the Office of the Inspector General (OIG) of the U.S. Department of Health and
Human Services.
There is a
federal statute that generally prohibits anyone from either offering to give or
actually giving anything to anyone in order to induce referrals. 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..."
Agencies in
Kentucky, for example, receive payments from the Medicaid Program for services
rendered to patients that also include the cost of supplies. When agencies
receive these items for free from other providers to whom they make referrals,
these items are clearly prohibited kickbacks. The practical “rule of thumb”
with regard to this issue is as follows: When agencies receive items for free
that they would otherwise have to pay for, they are likely prohibited kickbacks.
What are some
practical ways that providers can avoid these fraudulent practices?
First, providers
should educate staff that this practice is fraudulent. Training should be
provided at an inservice program that is mandatory for every staff member to
attend.
Both agencies and
other providers may wish to carefully monitor use of supplies and inventory to
make certain that items are not being provided or received without payment.
PROVIDERS BEWARE!
The possible consequences of engaging in the practices described above are very
serious. Providers may be criminally prosecuted and/or civil action may be
taken against them. Consequences include large criminal fines and jail time.
Providers may also be required to pay civil money penalties or may be suspended
or excluded from participation in Medicare, Medicaid, and other state and
federal health care programs.
Some providers
continue to “thumb their noses” at fraud and abuse prohibitions. Don’t be one
of them.
(To obtain an
80-minute video that can be used to train staff as described above, send a check
for $105.00 that includes shipping and handling made out to Elizabeth E. Hogue,
Esq. to Fulfillment, 107 Guilford, Summerville, SC 29483.)
©Copyright,
2008. Elizabeth E. Hogue, Esq. All rights reserved.
No portion of
this material may be reproduced in any form without the advance written
permission of the author.
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