How physicians can limit their risk in healthcare marketing
Avoid breaking the kickback law
The federal Anti-Kickback Statute (AKS) establishes criminal and civil penalties for persons who offer, pay, solicit or receive anything of value, directly or indirectly, in exchange for referrals. The AKS has been interpreted as covering any arrangement where one purpose of the payment is to obtain money for referral of services, or to induce further referrals.
In addition to exclusion from federal payer programs, criminal penalties for violating the AKS include fines of up to $25,000 with jail time of up to five years per violation. Civil penalties include $50,000 per kickback, and three times the payments received unlawfully by providers.
Paying outside marketers
Frequently, physician practices like to pay marketers based on a percentage of the business generated. This arrangement limits the practice’s upfront costs and motivates effort.
Although not strictly prohibited, the federal government scrutinizes these arrangements because the financial incentive creates a risk of increased costs to federal government programs. The concern is that if you are rewarding people for generating referrals, they may try to solicit patients and push treatment that might not be needed.
Given the risks involved, it is not prudent to pay marketers based on a percentage. An arrangement won’t be scrutinized, however, if it meets the requirements of a “safe harbor,” which is an exception to the AKS.
There are two safe harbors that commonly apply to marketing arrangements: bona fide employee relationships and personal services and management contracts.