Referral fees OK, says OIG

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A long-term care provider that requested clearance for a system of paying an agency to refer patients is in the clear.

An investigation by the Department of Health and Human Services Office of the Inspector General found that adequate safeguards were in place to lower the risk that the referral fees would wind up helping the provider generate revenue stemming from federal healthcare funds.

The unnamed provider operates 11 senior residential communities and two skilled nursing facilities, according to the OIG report. 

Two of the residential communities pay a fee to a placement agency for each new resident referral.

Anti-kickback rules make it illegal to “induce or reward referrals of items or services” that are paid for by public funds, such as Medicaid and Medicare.

A key to the OIG findings was the fact that none of the residents referred through the agency would pay for their stay using Medicare or Medicaid funds.

Federal regulators noted that if the patient eventually does require public funds to pay for needed services, he or she is not bound to receive this care from the provider in question.

The OIG noted that its opinion is binding on HHS and the requesting company involved, but not necessarily other providers.