OIG: Limit free care to volunteer-provided support
New clues on how to navigate murky waters
Using volunteers to provide certain services and staying clear of providing clinical services are the keys to legally giving nonhospice patients free care without running afoul of federal anti-kickback statutes, according to an analysis of a recent Department of Health and Human Services’ Office of Inspector General (OIG) advisory.
The April 18 advisory, issued to Hospice of Martin & St. Lucie and Hospice Foundation of Martin & St. Lucie, both in Stuart, FL, offers a road map for hospices who are either wondering about their own charitable services or are interested in providing more free care.
First to ask
In 1999, the hospice and its foundation implemented its Transitions program, which calls for the provision of volunteer services for clients in their homes and in nursing homes. They sought OIG’s opinion, effectively setting themselves up as a test case for the question of free services.
The hospice asked the OIG whether offering certain services free of charge to patients with a terminal illness — a terminal prognosis of one year or less to live — would constitute grounds for sanctions under the anti-kickback statute.
The OIG granted a qualified approval of the program in April. While the OIG said the hospice could allow volunteers to visit patients and not seek fair market payment for the service, it had the potential to generate prohibited remuneration under federal anti-kickback laws. And although it could be construed that the hospice is offering the services in exchange for future referrals, the OIG said the facts surrounding the hospice’s program did not subject it to sanctions.
"The provision of free services to potential hospice patients may implicate two statutes: the civil monetary penalty prohibiting the offer or transfer of remuneration to beneficiaries as inducements to use a particular provider, practitioner, or supplier . . . and the anti-kickback statute," wrote D. McCarty Thornton, chief counsel to the inspector general, in the OIG advisory.
Community service
However, the hospice is careful to make clear distinctions between the free services it provides to nonhospice patients and the core services it provides to hospice patients, says Mary Knox, CEO of both Hospice of Martin & St. Lucie and the Hospice Foundation of Martin & St. Lucie. "There is no clinical involvement," she says. "It’s a community service that we are providing, not hospice services."
The volunteer services include:
• friendship and visitation;
• transportation;
• assistance with writing and reading correspondence;
• running errands;
• food preparation;
• respite care for the family or caregiver.
The program is designed to provide services to both clients at home and patients residing in nursing homes, many of whom are not eligible for the hospice benefit. A home service volunteer can provide all of the six services, while a nursing home volunteer is limited to providing only friendship and visitation, transportation, and assistance with writing and reading correspondence.
Knox says volunteers have assisted 75 home health clients since the program began last year, but the hospice has yet to accept a nursing home client because they are still trying to iron out details with that portion of the program. The hospice currently uses 25 volunteers to provide free services.
In April 1998, the OIG issued a special fraud alert detailing problematic arrangements between hospices and nursing homes. Among those arrangements, the OIG paid particular attention to free care given to nursing home patients. OIG warned hospices and nursing homes that arrangements where hospices provide free services to nursing home patients — defined as patients for whom the nursing home collects reimbursement under the skilled nursing benefit — were subject to sanctions. The only exception is when free care is provided to patients who have exhausted their skilled nursing facility benefits.
But under the program, Hospice of Martin & St. Lucie avoids questionable practices by ensuring that the free services it provides do not duplicate services provided by the nursing home, such as food preparation, for which the nursing home is reimbursed by Medicare.
The OIG agreed. "Under the program, the hospice does not offer any services to nursing home patients that duplicate the [services] nursing homes are obligated to provide, such as food preparation and respite care, or that are covered by the Florida Medicaid nursing facility per diem," the advisory said.
Federal laws prohibit a person from offering or transferring remuneration to a beneficiary that is likely to influence the beneficiary to order items or services from a particular provider, practitioner, or supplier for which payment may be made by Medicare or state health care programs. Violation of anti-kickback laws come with a maximum $25,000 fine and up to five years in prison.
According to the OIG, the proposed program raises three principal issues. The first is whether the hospice knows or should know that its provision of free services to potential hospice patients will likely influence the patients’ choice of hospice provider. The second is whether one purpose of the program is to induce patients to use the hospice. The third is whether the provision of services to the patients who live in nursing homes may be remuneration to the nursing homes for permitting the hospice access to their patients.
While the OIG said that at least some of the services being provided may have value and constitute remuneration, it would not subject the program to sanctions under the anti-kickback statute for several reasons. First, the services are provided by unpaid volunteers. Second, the benefits of the program are primarily intangible and psychic in that they are designed to help the patients adjust to their illnesses by helping them cope with the day-to-day burdens of life, the OIG said. In other words, the free care does not include services considered part of the hospice core services.
Third, the OIG said, the program provides a substantial benefit to a vulnerable patient group. Finally, it said there are "substantial barriers" to a beneficiary’s election of hospice care, including the requirement that they renounce coverage for curative medical treatment for the terminal condition.
The OIG noted that it has additional concerns with the provision of those services to patients in nursing homes. "In particular, we are concerned that the services provided by the hospice could substitute for services the nursing home would otherwise have to provide, thereby resulting in the hospice providing free services to the nursing home," said the OIG.
While the OIG was clear in its advisory that its opinion should not be taken as permission or protection of similar nursing home and hospice arrangements, Knox says hospices can learn from the advisory opinion.
Aside from clearly separating volunteer services from clinical services, Knox says proper training of volunteers and staff is essential.
For example, volunteers providing free services are instructed not to discuss hospice care with their clients to ensure that there is no underlying suggestion that they should become a hospice patient.
Staff, although not involved in the free services, should also be made aware of the program simply because, Knox says, they should know the kinds of community service the organization provides.
Knox adds that hospices need to work with their community partners, including physicians, to inform them of the added community resource. Hospice of Martin & St. Lucie employs a full-time coordinator whose responsibility is to work with community organizations who could refer clients to the hospice’s program.
Hospice of Martin & St. Lucie’s approach to providing free services to nonhospice patients might cause other hospices to recall the days when hospices provided similar community services. Since the advent of OIG scrutiny, hospices have pulled back many of those services to avoid sanctions.
"I think the problem was that hospices had provided free care for those who could not afford it," says Karen Woods, executive director of Alexandria, VA-based Hospice Association of America. "As a result of OIG investigations, hospices began asking, Can we still do this?’"
The advisory, Wood says, provides an indication of OIG’s direction. That direction points to providing support services rather than hospice care. In addition, she says, hospices should adopt clear policies that spell out not only what services will be provided for free, but also who is eligible for free services. If it’s a community service, then the free care should be granted to everyone, regardless of ability to pay; or if the hospice intends to use a sliding scale, the policy should explain how eligibility for free care is determined.
In the end, Knox says, it is the hospice’s intentions that are the determining factor. The services that are included in the Hospice of Martin & St. Lucie’s program fulfill a need that existed within its community. It was that community need — not the need to increase referrals — that prompted the program’s creation.
"This is not intended to induce patients to [use] our program," says Knox. "Our board has always been supportive of programs that help the community."
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