Elder Care Business Owners Should Not Pay Referral Fees
A referral servicefor elder care or senior care can be flirting with legal proceedings. See more about referral services elder care!
March 11, 2005 — A ruling, on the books since 1972, called the Safe Harbor
Provisions states, in part, ‘the federal anti-kickback law’s main purpose is to
protect patients and the federal health care programs from fraud and abuse by
curtailing the corrupting influence of money on health care decisions’… it
goes on to say, … ‘anyone who knowingly and willfully receives or pays
anything of value to influence the referral of federal health care program
business, including Medicare and Medicaid, can be held accountable for a felony.
Violations of the law are punishable by up to five years in prison, criminal
fines up to $25,000, administrative civil money penalties up to $50,000, and
exclusion from participation in federal health care programs.
A referral service serves both the senior and the elder care service provider
in this manner:
- Service providers register with the referral service
- A senior
searching for a service is asked for their location
- The referral company
now emails, phones or faxes each service within the desired zip code to provide
you with this referral. (You are provided the name, phone number and address of
the senior)
- You and your staff quickly respond - you know if you get there
first, you have a higher chance of contracting with the senior
- The senior
now receives multiple sales calls from nice people who all say the same thing,
‘You should choose my company because we are the best’
- You contract with
the senior
- The referral company now sends you a bill. The bill is normally
based on the dollar amount you charge the senior.
(Example: An assisted living facility that charges $3,000 per month will
typically owe the referral service a fee of $1,500. Their neighbor, the assisted
living facility across the street charges $1,500 per month and will owe the same
referral service a fee for $750.00 for the same client, same service)
Representatives of referral companies normally earn commissions. This can
also pose a concern. If a family’s income depended on earning a high commission,
the temptation may be there to direct a senior to a service that:
a. Charges more
b. Where the staff has a history of ‘closing’ the sale.