LegalEase: Stay on top of wound care consultants, product reps

By Elizabeth E. Hogue, Esq.
Burtonsville, MD

Agencies feel increasingly under the gun. Generally speaking, as is the case with many industries today, they perceive that they are under great pressure to be more cost-effective.

Nonetheless, patients, especially those receiving home care, often need intensive, expensive, and complex treatment in order to prevent or heal pressure ulcers.

Providers sometimes are tempted to turn to wound care consultants and representatives of the wound care industry for expertise in order to achieve efficiency in the problematic area of care. A primary concern raised by such relationships is the potential for violation of fraud and abuse prohibitions.

Specifically, providers must be mindful of a federal statute that prohibits illegal remunerations, kickbacks, or rebates as follows:

"Whoever knowingly and willfully offers or pay any remunerations, 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;

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 guilty of a felony and upon conviction thereof, shall be fined not more the $25,000 or imprisoned for not more than five years, or both."

The Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services, the primary enforcer of Medicare/ Medicaid fraud and abuse publications, has been quite clear that free services may constitute an impermissible kickback or rebate.

Violations of the above statute may result in dire consequences for wound care consultants, representatives of wound care companies, and providers.

What can wound care consultants and representatives of wound care companies appropriately provide to agencies?

Although it is difficult to draw 100% clear definitions, at least at this time, the following seems clear:

  • For the most part, consultants and representatives of wound care companies must be careful not to provide services free of charge that providers otherwise would be financially responsible to render. When such services are provided free, the OIG may conclude that providers received an inappropriate kickback or rebate.
  • Consistent with this general principle, wound care professionals and companies should not examine patients and chart the results of their examinations in the patients’ charts.

The full scope of services rendered by wound care consultants may, of course, be provided to agencies consistent with an agreement that meets the requirements of the personal services and management contract "safe harbor," including the following:

  • The parties must sign written agreements for the provision of such services that include a term of at least one year.
  • Services to be provided must be spelled out in such written agreements.
  • Providers must pay for services received at fair market value, without taking into account the volume or value of referrals made.
  • Such services genuinely must be needed and, to some extent, be standard in the industry.

Wound care companies and consultants historically have been an important source of expertise in a troublesome area of care for many providers. Greater clarity is needed regarding limits on services related to wound care, so that everyone involved can avoid potential fraud and abuse issues.

[A complete list of Elizabeth Hogue’s publications is available by contacting: Elizabeth E. Hogue, Esq., 15118 Liberty Grove, Burtonsville, MD 20866. Telephone: (301) 421-0143. Fax: (301) 421-1699. E-mail: ehogue5@comcast.net.]