Don’t run afoul of these federal regulations

What investigators look for in discharge planning

In a draft report submitted to Bruce Vladeck, administrator of the Health Care Financing Administration (HCFA) in Baltimore, officials at the Department of Health and Human Services’ Office of the Inspector General (OIG) cite five federal requirements for discharge planning with regard to Medicare beneficiaries:

Patients in need of evaluation should be identified on a timely basis.

A discharge planning evaluation should be completed for patients identified during the initial screening, including an evaluation of the patient’s capacity for self-care and the possibility of this patient being cared for in the environment from which he or she entered the hospital.

Discharge plans should be developed by qualified personnel, patients should be counseled as needed to prepare them for post-hospital care, and the initial implementation of the patient’s discharge plan should be done by the hospital.

The hospital must transfer or refer patients, along with necessary medical information, to appropriate facilities for follow-up care.

The hospital must reassess its discharge planning process on an ongoing basis to ensure that it is responsive to the discharge needs of its patients.

The report also cites Section 1802 of the Social Security Act, which "seeks to ensure that free choice is guaranteed to all Medicare patients." According to the language of the act, "Any individual entitled to insurance benefits under this title may obtain health services from any institution, agency, or person qualified to participate under this title if such institution, agency, or person undertakes to provide him such services." According to the draft report, "some within the home health industry" interpret this provision to mean that whenever a discharge planner refers a patient for post-hospital services, that patient must be given a choice about which service provider he or she want.

Had it passed, the Hospital Self-Referral Act of 1996 (H.R. 4100) would have expressly required that discharge planners provide patients being discharged to post-hospital services with a list of participating providers in the service area.

Other important regulations pertinent to the discharge planning process include the following:

Utilization review regulations.

The Code of Federal Regulations (42 CFR Section 482.30, Conditions of Participation) state that hospitals must have in place a utilization review plan that provides for review of services "furnished by the institution and members of their medical staff to patients entitled to Medicare and Medicaid."

Federal anti-kickback laws (Stark provisions).

The anti-kickback statute, which was drafted largely to stem fraud and abuse among physicians and managed care plans, also applies to the discharge planning process. According to the OIG report, the statute "makes it illegal to offer or pay anything of value to induce a person to order any item for which payment may be made under the Medicare or Medicaid programs."

The civil penalty for violating the anti-kickback statute is $25,000 per case. Criminal prosecutions can also result.

A separate but related statute forbids physicians from "preparing care plans or certifying or recertifying to the need for care" when they hold a "significant ownership interest in" or a significant financial or contractual relationship with a home health agency. Medicare and Medicaid will not reimburse when physicians refer patients to home health agencies in which they have an ownership interest.

Finally, in its June 1995 home health fraud alert, OIG warned providers that "providing hospitals with discharge planners, home health coordinators, or home care liaisons in order to induce referrals can constitute a kickback."

Joint Commission standards.

The Joint Commission on Accreditation of Healthcare Organizations, based in Oakbrook Terrace, IL, views referring patients to one’s own home health agency as "an ethical issue," covered by its Patient Rights and Organizational Ethics standards, says Anne Kobs, associate director for standards at the Joint Commission. Of particular interest to case managers are standards RI 4.1 and RI 4.2, which address marketing, admission, transfer, discharge, and billing practices. "Also, we go on to say that the code addresses the relationship of the hospital and its staff members to other health care providers, educational institutions and payers," Kobs says.

A new standard to take effect in 1998, RI 4.4, further addresses the hospital’s code of ethical and professional behavior, in order to "protect the integrity of clinical decision making, regardless of how the hospital compensates or shares financial risk with its leaders, managers, clinical staff and licensed independent practitioners," Kobs says.

Kobs adds that, with regard to the issue of discharging patients to a hospital-owned home health agency, the Joint Commission does not and probably will not set a standard governing a maximum percentage of total referrals. "That’s too prescriptive," she says.

[For more information on discharge planning standards and regulations, contact:

Anne Kobs, associate director for standards, Joint Commission on Accreditation of Healthcare Organizations (JCAHO), One Renaissance Blvd., Oakbrook Terrace, IL 60181. Telephone: (630) 792-5902.

Department of Health and Human Services, Office of the Inspector General, public affairs office, Washington, DC. Telephone: (202) 619-1142.]