Nov 14, 2018
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Marketing for DME & Pharmacy Providers: Know Your Subcontractor!

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marketing for dmeBy: Michael Silverman

Regulatory compliance is a mandatory investment for any healthcare business owner looking to stay out of serious and personal legal peril, let alone one hoping to keep their company viable.

Yet there is seemingly an onslaught of providers that blatantly run afoul of many of these regulations, knowingly or not, or those that believe they may have found a loophole.

Concerning the latter, there is an important mantra that such DME and pharmacy providers should remember and live by: “[W]hat a provider cannot do directly, it cannot do indirectly through an intermediary.”

Marketing for DME – What exactly am I talking about?

DME providers enrolled with CMS (should) know they cannot solicit or ‘cold call’ Medicare Part B beneficiaries, per the Federal Anti-Solicitation Statute, and that they cannot offer anything of value to a potential patient that could induce them to utilize them as a provider, in accordance with the Beneficiary Inducement Statute.

Likewise, DME and pharmacy providers (should) know that they cannot pay a physician in exchange for referring patients or for writing a prescription, as that violates a myriad of laws, including the Federal Anti-Kickback Statute and Florida’s Patient Brokering Act.

However, over the past several years many DME and pharmacy suppliers have been utilizing companies they subcontract with, who violate these healthcare regulations. This is especially true in the telemedicine space. Such suppliers may think that by utilizing an intermediary and distancing them from the prohibited behavior, it may insulate them from liability; that could not be further from the truth.

By virtue of utilizing a contractor that does not comply with the regulations, the provider, in turn, is not complying with the regulations. It’s as simple as that, and essentially becomes fruit of the poisonous tree.

That’s because suppliers submitting claims to healthcare programs/insurers are responsible for knowing and vetting their subcontractors/(data) source. Its essentially a ‘knew or should have known’ standard, and the regulators tasked with enforcing these laws will not accept excuses from providers who act like ostriches burying their heads in the sand – if a certain course of conduct is prohibited by a supplier, it too is off limits to anyone the provider is working with.

For example, a DME provider subcontracting its marketing efforts needs to ensure that such marketers have permission to contact a Medicare beneficiary – if the subcontractor makes unsolicited contact with such a patient, and then puts the DME supplier in touch with the patient, the anti-solicitation regulation has been violated. The provider cannot cold call Medicare patients – same applies to its business partners.

Similarly, provider’s marketing partners who offer gifts to potential patients, or worse yet, engage with telemedicine providers or other physicians and cover the cost of that patient’s office visit, a myriad of laws including the Federal Anti-Kickback Statute are implicated. A DME/pharmacy provider knows it cannot pay a physician in exchange for the return of prescriptions or even for an office visit – why would it think its business partners may do so?

While providers billing Medicare that do not comply with any of these regulations additionally run afoul of the Federal False Claims Act, those intermediary companies involved are not without serious liability, insofar as many anti-kickback regulations impose penalties upon anyone who aids and abets with the process, which can be criminal in nature.

Accordingly, it’s an absolute must to know your business partners and how they do their job and conduct their operations. At the end of the day, providers are responsible for the claims they submit and are not insulated because they did not directly participate in the prohibited behavior.

Know your business partners. Get representations in writing. Audit them for compliance just as you should do with your own business.

 

 

The post Marketing for DME & Pharmacy Providers: Know Your Subcontractor! appeared first on Florida Healthcare Law Firm.



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