Marketing Hospice Services to ALFs: Preferred Provider Agreements

New research published in Health Affairs shows that utilization of hospice services among Medicare beneficiaries is greater in assisted living facilities (ALFs) than in other settings, including private homes. Hospices should, therefore, market their services intensively to ALFs.


This finding is not surprising because management at assisted living facilities (ALFs) are often committed to keeping residents in their facilities for as long as possible.  There are, of course, costs associated with filling vacancies.  In addition, if residences remain empty for any length of time, profitability can be severely adversely affected. Consequently, to the extent that hospices can assist residents to remain in their apartments, ALFs may be extremely interested in establishing ongoing relationships with them.


In addition, management at ALFs may wish to make referrals to a single hospice or to limit referrals to a few hospices.  The perception among managers of ALFs, whether true or not, seems to be that providers are more likely to help them to meet the goal of limited resident turnover if they have preferred provider relationships with them.


Providers may wish to approach ALFs to see if they are interested in preferred provider relationships.  If they are, then management of ALFs may want to sign Preferred Provider Agreements in order to cement these relationships with hospices.


The anti-kickback statute may apply if providers or ALFs involved in referral arrangements receive any type of federal or state funds, including, but not limited to, payments for services provided from Medicaid waiver programs, managed Medicaid programs, the Tri-Care Program, the VA or any other state or federal programs. The anti-kickback statute certainly applies to most hospices since they are often certified by the Medicare Program


The anti-kickback statute generally says that anyone who either offers to give or actually gives anyone anything in order to induce referrals has engaged in criminal conduct. There are, however, a number of exceptions to this statute that may be applicable.


Hospices should ask two crucial questions about the application of the anti-kickback statute to referral arrangements:

  1. Is there a kickback or rebate?


  1. If so, is there an exception or “safe harbor” that permits the arrangement even though it would otherwise violate the statute?

A kickback or rebate occurs when a provider receives referrals from another provider and something flows back to the referral source from the provider who received referrals. If there is a kickback or rebate, providers must automatically ask the second question listed above.  If they fail to utilize applicable exceptions, they may miss out on useful marketing strategies that are likely to result in numerous referrals.


With regard to Preferred Provider Agreements, however, it is important to note that no money or anything of value changes hands between providers and the other party involved.  Consequently, there is no kickback or rebate.  Hospices can, therefore, enter into Preferred Provider Agreements and avoid violations of the anti-kickback and rebate statute so long as no money or anything else of value is given to ALFs in exchange for referrals.


The parties to Preferred Provider Agreements must also make certain that they honor patients’ choices of providers. There are a number of sources of patients’ right to freedom of choice of providers applicable to arrangements between hospices and ALFs:

  1. Court decisions or the common law says that all patients – regardless of payor source, type of care rendered, or types of providers involved – have the right to control the care they receive and who provides it.
  2. A federal statute that guarantees all Medicaid patients the right to freedom of choice of providers. This statute may be applicable if either party receives reimbursement from the Medicaid Program.

Unless state statutes or regulations require otherwise, there is no requirement that ALFs must present lists of providers from which residents may choose in order to comply with the above. When patients express preferences for certain providers, however, their choices must be honored despite the existence of Preferred Provider Agreements. The agreement of the parties to a Preferred Provider Agreement to honor patients’ choices should be included in such Agreements.


The market for hospice services is expanding, but the competition for referrals among providers seems to be extremely fierce.  Providers would be well advised to utilize Preferred Provider Agreements to assist them with increasing and/or maintaining referrals in order to help ensure profitability.



©2020 Elizabeth E. Hogue, Esq.  All rights reserved.

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Federal Anti-Kickback Statute Applies to Medicare Providers and Others, Including Private Duty Companies!

There seems to be a myth among homecare companies that the federal anti-kickback statute applies to Medicare certified providers only. On the contrary, the anti-kickback statute applies to providers who receive funds from any state or federal healthcare program, including the Medicaid Program, VA, TRICARE, etc. Private duty providers: This means many of you!

There is a federal law that prohibits illegal remuneration. This law is often called the anti-kickback statute. It generally says that anyone who either offers to give or actually gives anything to anyone in order to induce referrals has engaged in illegal conduct. A recent enforcement action reinforces this point.

In this case a doctor and a medical sales representative were charged in a scheme to pay and receive kickbacks to generate expensive prescriptions for compound drugs. TRICARE paid over $12 million for the prescriptions. The indictment alleges that recruiters identified TRICARE beneficiaries to receive the drugs, promising to secure their prescriptions without consultation with physicians and sometimes offering money to sign up. Upon receipt of beneficiary information from recruiters, the leader of the scheme sent pre-filled prescriptions with drugs to be dispensed, refills authorized and lists of names of patients to medical professionals who signed them without consulting patients or without regard to medical necessity. Prescriptions were sent to a pharmacy in Mississippi that shipped drugs nationwide and billed TRICARE for reimbursement.

Once again, as is clear from the indictment, the alleged perpetrators were “done in,” in part by their own text messages:

When the ringleader joked about being hounded for payouts by texting Clifton, “Hashtag for the day… [Ringleader], is my check ready? #Lol.” Clifton replied, “Haha! Meeeee toooo Jay already called asking this morning too…even the rich Man[s].” Later, Clifton lamented falling TRICARE reimbursement rates by texting the ringleader, “$210 minus half for Tax$105 [sic] then dr’s cut then patients cut….Yike[s]”

In addition, it is important for providers to note that if referrals are obtained illegally in violation of the anti-kickback statute and claims are submitted for services provided to patients referred inappropriately, such claims may also violate the federal False Claims Act.

The Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services, the primary enforcer of fraud and abuse prohibitions, has clearly stated that claims submitted for services provided to patients who were referred in violation of applicable prohibitions are “false claims.” Submission of false claims may also result in criminal prosecution and/or civil liability, amounting to many thousands of dollars and suspension or exclusion from participation in the Medicare and Medicaid Programs and other federal and state healthcare programs.

In addition to the necessity to avoid payment of kickbacks, therefore, providers must be scrupulous about avoiding all illegal strategies for obtaining referrals. When referrals are obtained by any unlawful means, the consequences can be extremely adverse for providers.

Consequently, as part of the development of new marketing strategies, management must always explore the legal boundaries of proposed methods of marketing prior to implementation. In order to do so, marketing staff cannot be allowed to implement new marketing arrangements and programs without review and approval by management. Review must include a thorough examination of whether the marketing program or arrangement, as proposed, violates applicable prohibitions and, if so, whether it can be changed so that it passes muster.

©2020 Elizabeth E. Hogue, Esq. All rights reserved.

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Home Health Coding – Specificity

By Sharon Litwin January 17, 2020

When applying a diagnosis code, the most specific code that describes a medical disease, condition, or injury should be selected.
‘‘Unspecified’’ codes are used when there is lack of information about location or severity of medical conditions in the medical record. Whenever possible, use a precise code whenever more specific codes are available.

If additional information regarding the diagnosis is needed, follow up with the referring provider in order to ensure the Plan of Care (POC) is sufficient in meeting the needs of the patient.
Many of the codes that are unacceptable for primary diagnosis are because the underlying reason is not established or coded.

M54.5, Low back pain or
M62.422, Contracture of muscle, right hand
Both are site specific, but don’t indicate the cause of the pain or contracture.
CMS expects a more definitive diagnosis indicating the cause of the pain or contracture as the reason for the skilled care, in order to appropriately group the home health period. Again, remember that these can always be used as secondary diagnoses.

There are diagnosis in which it is acceptable to use an unspecified code, even as the primary diagnosis, such as CHF, i50.9, and Diabetes, type 2- E11.9. Obviously, if there is a more specific than these unspecified diagnoses, you would use those and follow the coding guidelines.

Coding Specificity: Muscle Weakness
This is a very commonly-used primary diagnosis in home health, used when Physical Therapy is ordered. CMS states that M62.81, ‘‘Muscle weakness, generalized’’ is extremely vague, and therefore, will not be accepted as a Primary Diagnosis under PDGM. “Generalized muscle weakness, while obviously a common condition among recently-hospitalized patients, does not clearly support a rationale for skilled services and does not lend itself to a comprehensive plan of care.”

In the 2008 HH PPS final rule, CMS said, ‘‘Muscle Weakness (generalized)’’ is a nonspecific condition that represents general symptomatic complaints in the elderly population”. However, until PDGM, muscle weakness has been used as a common primary diagnosis.

CMS states in the final rule 2020, that inclusion of this code, Muscle Weakness, ‘‘would threaten to move the case-mix model away from a foundation of reliable and meaningful diagnosis codes that are appropriate for home care. Clinical record documentation must describe how the course of therapy treatment for the patient’s illness/ injury is in accordance with accepted professional standards of clinical practice. Without an identified cause of muscle weakness, it would be questionable that the course of therapy treatment meets these professional standards. A more appropriate code would be one of the muscle wasting & atrophy codes as grouped into the musculoskeletal group, which indicate the reason for the generalized muscle weakness & provide more clarity for the necessity of skilled services.” (72 FR 49774)

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New Conditions of Participation for Discharge Planning for Home Health Agencies

The Centers for Medicare and Medicaid Services (CMS) published a final rule on September 30, 2019, that requires home health agencies to make substantial changes in discharge planning. The final rule is effective sixty days from publication so it becomes effective on November 29, 2019.

We will present a teleconference on October 23, 2019, from 1:00 to 2:30 p.m. EST to review the changes to the Conditions of Participation (CoPs) in depth. Click here for more information. Please join us!

In the meanwhile, a significant changes in CoPs for home health agencies with regard to discharge planning is that agencies will be required to assist patients who are transferred to another home health agency or discharged to a SNF, IRF, or LTCH to select a post-acute provider.

Home health agencies must use and share data with patients and their caregivers that includes, but is not limited to, home health agency, skilled nursing facility (SNF), independent rehab facility (IRF), or long-term care acute hospital (LTCH) quality measures and data on resource use measures. The data shared with patients and their caregivers must be relevant and applicable to patients’ goals of care and treatment preferences.

The basis for this requirement is that CMS believes that recognizing patient preferences and assisting patients with transfer options will support communication between patients and home health agencies and ultimately support patient-informed decision-making and improve patient care and satisfaction.

CMS goes on to say information provided to patients and their caregivers must include data from IRF Compare, Home Health Compare, Nursing Home Compare and Long-Term Care Compare to assist patients and their caregivers to make decisions about post-acute providers.

CMS says home health staff members are not expected to provide patients and their caregivers with detailed and complex analyses of quality and resource use data that may confuse patients and their caregivers.

Home health agencies are also not expected to attempt to provide patients with data that does not exist. In other words, no “homemade data!”

According to CMS, home health agency staff members must put forth their “best effort” to answer patients’ questions about data presented to them. CMS says that home health agencies should also refer to
for additional resources and help with regard to data presented to patients and their caregivers.

Further information mandated by the IMPACT Act will be available in forthcoming regulations. CMS will also provide interpretive guidelines at some point after publication of the final rule. More to come in future articles on this topic!

©2019 Elizabeth E. Hogue, Esq. All rights reserved.

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Proposed Rules Issued Today to Reform the Stark Law and Anti-Kickback Statute

The U.S. Department of Health and Human Services (HHS) has issued proposed regulations today to implement changes to the Stark Law and federal Anti-Kickback Statute (AKS). The purpose of the changes is to support value-based and coordinated care.

The proposed rules include new value-based exceptions under the Stark Law based on recognition by CMS that incentives are different in a healthcare system that pays for value rather than the volume of services provided. CMS says that the new exceptions will continue to protect against overutilization and other harms while giving providers added flexibility to improve the quality of care for patients.

Proposed changes to the regulations related to the AKS and the Civil Monetary Penalties Law issued by the OIG today would, if finalized, address a longstanding concern that current regulations unnecessarily limit the ways in which providers can coordinate care for patients. Changes are intended to make it easier for providers to comply with the law by establishing specific safe harbors for these arrangements.

Here are some examples involving coordinated care, value-based care, data sharing and patient engagement activities that may be difficult to fit under existing exceptions or safe harbors, but may be protected by the new rules:
• Home care and hospice providers may share data analytics services with other providers.
• Home care and hospice providers can work with other providers in new ways to coordinate care for patients discharged from hospitals, including the provision of care coordinators to ensure that patients receive appropriate follow up care, data analytics systems to help ensure that patients are achieving better health outcomes, and remote monitoring technology to alert physicians or caregivers when patients need interventions to help prevent unnecessary ER visits and readmissions.
• Home care and hospice providers could provide smart pillboxes to patients without charge to help them remember to take their medication on time. Providers can also teach patients how to use the pillboxes that automatically alert providers and caregivers when patients miss doses of medications so that they can promptly follow up with patients.
• Providers may improve their cybersecurity and the cybersecurity of nearby providers that they work with frequently. In order to do so, providers can donate cybersecurity software for free to other providers that refer patients. The software will help to ensure that hackers cannot attack providers’ computers and helps prevent hackers from spreading attacks to other providers.
• Providers may furnish patients with technology capable of monitoring patients’ health and that allows for two-way, real time interactive communication between patients, physicians and other providers.
• Providers may also furnish other providers with data analytics software to help them monitor patients’ health outcomes.

This is the first in a series of articles about the proposed rules. Stay tuned for much more!

©2019 Elizabeth E. Hogue, Esq. All rights reserved.

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Major Changes to Provider Enrollment

Major Changes to Provider Enrollment
The Centers for Medicare and Medicaid Services (CMS) has announced major changes in provider enrollment effective on November 4, 2019. These changes will allow CMS to revoke healthcare providers or suppliers’ Medicare/Medicaid enrollment if they are affiliated with “bad actors” and pose an undue risk of fraud, waste or abuse based on their relationships with other sanctioned providers. The notice of the final rule implementing these changes appeared in the Federal Register on September 10, 2019.

As of the effective date, Medicare and Medicaid providers will be required to disclose current or previous affiliations with organizations that have:
• Uncollected debt;
• Had a payment suspension under a federal healthcare program;
• Been excluded from either the Medicare and/or Medicaid Programs; or
• Had billing privileges denied or rescinded.
In addition, CMS will be able to revoke or deny enrollment if providers and suppliers:
• Attempt to get back into the program under a different name;
• Bill for services from non-compliant locations;
• Exhibit a fraudulent or wasteful pattern of ordering services or drugs; or
• Have an outstanding debt to CMS from an overpayment that was referred to the Treasury Department.
Providers that falsify enrollment applications may be prohibited from enrolling in the Programs for up to three years.

CMS says that it expects these provisions will cause 2600 new withdrawals of providers per year from the Programs. Providers may face a number of difficulties related to these new rules.

Perhaps most importantly, it is unclear whether providers who are subject to these rules will receive a meaningful opportunity to appeal. Providers need an opportunity to be heard before disenrollment under these rules occurs. If providers are disenrolled from the Programs prior to their appeals, the consequences are likely to be the same, i.e., providers will go out of business because they cannot go without payments from the Medicare and Medicaid Programs for extended periods of time.

It is also important to note that the likely consequence of new disclosure requirements is that some managers, owners and directors will become unemployable in the healthcare industry because of their past affiliations. As a result of these rules, it now matters with whom providers have associated.

In short, the consequences of these rules for providers are potentially very severe. Historically, at least anecdotally, the completion of the enrollment process has not gotten the attention it deserves. Now is the time to tighten up the enrollment ship!

©2019 Elizabeth E. Hogue, Esq. All rights reserved.

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Fraud and Abuse Enforcers Target Discharge Planners

Federal Criminal Complaints have been filed against thirty defendants in the San Francisco area who are charged in a “patients-for-cash” kickback scheme. The complaints center on Amity Home Health Care, the largest home health care provider in the Bay Area, and Advent Care, Inc., a hospice. Under the leadership of Ridhima “Amanda” Singh, Chief Executive Officer, the federal government claims that Amity and Advent paid kickbacks to discharge planners/case managers at hospitals and social workers at skilled nursing facilities (SNFs), among others, in exchange for referrals.

The Criminal Complaints says that discharge planners/case managers in hospitals and SNFs received the following in exchange of referrals of home health and hospice patients:
• Cash periodically delivered in envelopes
• Gift cards ranging in value from $2,000 to $5,000
• Handbags from Gucci, Louis Vuitton and Nordstrom
• All expenses paid trips to Napa, California
These alleged payments and gifts clearly violate the federal anti-kickback statute. This statute generally prohibits anyone from either offering to give to actually giving anything to anyone in order to induce referrals.

If convicted, all parties involved may be subject to imprisonment for up to ten years and fines of $500,000. So, the stakes are high!

Anecdotally, for years the home care industry has been rife with rumors that discharge planners/case managers in hospitals and SNFs were accepting kickbacks in exchange for referrals. For perhaps the first time, fraud enforcers are targeting discharge planners/case managers for enforcement action. It may be the first time, but it surely will not be the last time.

This makes it even clearer that discharge planners/case managers must just say, “NO!” The “jig is up,” as they say. Discharge planners/case managers, you have been discovered! Enforcers now know, if they didn’t before, that there are discharge planners/case managers who accept payments and other items in exchange for referrals. Case managers/discharge planners can certainly expect more enforcement actions against them in the near future.

©2019 Elizabeth E. Hogue, Esq. All rights reserved.

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Enforcement Action in San Francisco: What Happened?

Federal Criminal Complaints have been filed against thirty defendants in the San Francisco area who are charged in a “patients-for-cash” kickback scheme. The complaints center on Amity Home Health Care, the largest home health care provider in the Bay Area, and Advent Care, Inc., a hospice. Under the leadership of Ridhima “Amanda” Singh, Chief Executive Officer, the federal government claims that Amity and Advent paid kickbacks to marketers, doctors, discharge planners/case managers at hospitals, and social workers at skilled nursing facilities (SNFs) in exchange for referrals.

What kinds of kickbacks were allegedly given to referral sources in this case? The Criminal Complaints in these cases are based on the following:
• Cash periodically delivered in envelopes in closed door meetings in amounts up to $5000.00 per delivery
• Tickets to supporting events, including tickets to Golden State Warriors’ basketball games
• Cash “longevity bonuses,” i.e., the longer hospice patients received hospice care, the more money referral sources received
• Sham medical directorship/consultant contracts under which no services were ever performed, but payments to physicians were made
• All expenses paid trips to Las Vegas
• Gift cards ranging in value from $300.00 to $5,000.00
• Handbags from Gucci, Louis Vuitton and Nordstrom
• Items from Chanel, Neiman Marcus and Yves Saint Laurent
• Tickets to Beyoncé concerts
• All expenses paid trips to Napa, California
If the allegations are true, and excerpts from text messages and telephone conversations in the Criminal Complaints seem to indicate that they are, what a terrible shame for everyone involved! It may be tempting for providers, especially competitors to gloat. Resist this temptation! These allegations harm not only those individuals involved, but the entire home health and hospice industries. Hospital discharge planners/case managers and social workers at SNFs come off looking pretty badly, too. Read it and weep!

©2019 Elizabeth E. Hogue, Esq. All rights reserved.

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Home Health Agencies Can Do It

Changes in the home health industry have been continuous and extremely significant for at least the past 20 years. Now here comes another new payment model (PDGM), pre-claim review, etc. And there is surely more to come, as always! Among other changes, PDGM will require more detailed coding of claims. There is some fun lurking in ICD-10 codes in the form of codes that are just plain weird. How about, for example, “Bitten by Orca, Initial Encounter?”

There’s more! Such as:
• Prolonged Stay in Weightless Environment, Initial Encounter
• Unspecified Spacecraft Accident Injuring Occupant, Initial Encounter
• Tidal Wave Due to Landslide, Initial Encounter
• Explosion of Bicycle Tire, Initial Encounter
• Walked into Wall, Initial Encounter
• Sucked into Jet Engine, Initial (and likely last!) Encounter
• Injury to Rider of Inflatable Recreational Watercraft Being Pulled Behind Other Watercraft, Initial Encounter
• Occupant of Animal-Drawn Vehicle Injured in Collision with Other Animal-Drawn Vehicle, Initial Encounter
• Pedestrian on Roller-Slakes Injured in Collison with Pedal Cycle in Nontraffic Accident, Initial Encounter
• Heelies Colliding with Stationary Object, Initial Encounter
• Toxic Effect of Contact with Venomous Toad, Assault, Initial Encounter (My favorite!)
• Accident to, on or Involving Land-Yacht, Initial Encounter
• Assault by Hot Tap Water, Initial Encounter
You know the old saying: If we didn’t laugh, we would cry! But here’s the important point: home care providers have shown that they are adaptable and resilient beyond measure. Providers will undoubtedly apply these characteristics of adaptability and resilience to all of the challenges ahead, too. Can do!

©2019 Elizabeth E. Hogue, Esq. All rights reserved.

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Hospital Discharge Planning: Insights

A recent study of the experiences of patients and their caregivers with transitions from hospitals to other care settings, published in the Annals of Internal Medicine, reveals the following insights:
• When physicians show compassion toward patients and their wishes, including taking the time to talk with them openly about their conditions, patients and their families may make the best decisions about care.
• Patients and their caregivers want to feel prepared to take care of themselves or their loved ones after leaving hospitals. They want assurances that their needs will be met until they have recovered their health.
• Despite implementation of strategies to prevent readmissions, hospitals often don’t meet the above needs. The healthcare system often feels hazardous to patients’ health, unsafe and stressful from the point of view of patients and their caregivers.
• More studies are needed regarding what patients and caregivers need and want after they are discharged from hospitals that include asking patients and their caregivers directly what they need and want.
• Interviews with patients, caregivers and participants in focus groups show that patients and their caregivers want physicians to provide actionable information, simple gestures from health professionals to show patients that they care about their well-being, and collaborative planning.
• Patients and their caregivers want to know who is responsible for their care at all times.
A lot of what patients and their caregivers need is not “rocket science,” but amounts to plain old respect and tender loving care (TLC)!

Post-acute providers can help hospital discharge planners/case managers provide what patients and caregivers need. Post-acute providers can:
• Talk openly with patients and caregivers about their wishes.
• Provide on-going support and recognition of the needs of both patients and caregivers
• Reassure patients and their caregivers that their needs will be met.
• Show patients and their caregivers “the love!”
Together we can do better for patients and their families.

©2019 Elizabeth E. Hogue, Esq. All rights reserved.

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