In The News

Preferred Provider Arrangements Between Home Health, Hospice and Private Duty Agencies, and Assisted Living Facilities and Retirement Communities

Managers at assisted living facilities (ALF's) and retirement communities are often committed to keeping residents in their facilities for as long as possible. There are, of course, costs associated with filling vacancies. In addition, if residences remain empty for any length of time, then the profitability can be severely adversely affected.

Consequently, to the extent that agencies can assist residents to remain in their homes, ALF's and retirement communities may be extremely interested in establishing ongoing relationships with these types of providers. ALF's and retirement communities can be valuable referral sources for companies, both in terms of the volume of patients and the types of patients referred.

Relationships with ALFs and retirement communities may be especially helpful to private duty or home care agencies in order to “fill the gaps” in care provided by other types of providers of services in patients’ homes.

Management at ALF's and retirement communities may wish to make referrals to a single company or limit referrals to a few providers. The perception among managers of these types of facilities, whether true or not, seems to be that providers are more likely to assist them in meeting the goal of limiting resident turnover if they have preferred provider relationships with them. 

The COVID-19 pandemic may have enhanced the desire to deal with a limited number of providers in order to gain some control over the number of caregivers in communities.

Providers may wish, therefore, to approach ALF's and retirement communities to see if they are interested in these types of arrangements. If they are, management of ALF's and retirement communities may be interested in signing a Preferred Provider Agreement in order to cement relationships with providers.

Preferred Provider Agreements must generally comply with requirements of the federal anti-kickback statute (AKS).

Providers may not understand that this statute is applicable to them even though they are not Medicare-certified and do not receive payments from the Medicare Program. If providers, ALF's, or retirement communities involved in referral arrangements receive any type of federal or state funds, including, but not limited to, payment for services provided from Medicaid waiver programs, managed Medicaid programs, the Tri-Care Program, VA or any other state or federal programs, then the anti-kickback statute may apply. 

The anti-kickback statute generally says that anyone who either offers to give or actually gives anyone anything in order to induce referrals has engaged in criminal conduct. There are, however, several exceptions to this statute that may be applicable. 

Providers must ask two crucial questions regarding the application of the anti-kickback statute to referral arrangements:

  1. Is there a kickback?
  2. If so, is there an exception or "safe harbor" that permits the arrangement, even though it would otherwise violate the statute?

A kickback or rebate occurs when a provider receives referrals from another provider and something flows back from the provider who received referrals to the referral source. If there is a kickback or rebate, providers must automatically ask the second question listed above. If they fail to utilize applicable exceptions, they could miss out on useful marketing strategies that are likely to result in numerous referrals.

Regarding Preferred Provider Agreements, however, it is important to note that no money or anything of value should change hands between providers and the other party involved in these types of agreements. Thus, there is no kickback.  

Providers can, therefore, enter into Preferred Provider Agreements and avoid violations of the anti-kickback statute so long as no money or anything else of value is given to ALF's and retirement communities in exchange for referrals.

This prohibition includes free services. ALF's may, for example, have to provide inservice education programs or conduct quality assurance (QA) programs in order to maintain licensure. If providers make these services available free of charge, they may have rendered free services in exchange for referrals. 

From a practical point of view, a good rule of thumb to use when evaluating whether activities may constitute free services is to ask whether ALF's or retirement communities would have to expend their own resources to provide these services if they were not provided by companies who receive referrals. If the answer to this question is "yes," then they may constitute impermissible kickbacks.

The parties to Preferred Provider Agreements must also make certain that they honor patients’ choices of providers.

Additional key provisions of Preferred Provider Agreements may include:

  • A list of services that providers can render to residents of ALF's and retirement communities
  • Representations and warranties of both parties that they have all required licenses, certifications, etc. to conduct business and have not been suspended or excluded from participation in federal and state health care programs, if applicable
  • Requirements for both parties to maintain certain types and amounts of liability insurances
  • Agreements regarding indemnification of each party for the acts and omissions of the other, if appropriate

The market for home care services is rapidly expanding, but the competition for referrals among providers remains extremely fierce. Providers are well-advised to utilize Preferred Provider Agreements to assist them to increase and/or maintain referrals in order to help ensure profitability.

©2023 Elizabeth E. Hogue, Esq. All rights reserved.

No portion of this material may be reproduced in any form without the advance written permission of the author.


Organ Damage for 59% of Patients with Long COVID Continues a Year After Initial Symptoms

A new comprehensive study of organ impairment in long COVID patients over 12 months shows organ damage persisted in 59% of patients a year after initial symptoms, even in those not severely affected when first diagnosed with the virus.

The study, published in the Journal of the Royal Society of Medicine, focused on patients reporting extreme breathlessness, cognitive dysfunction and poor health-related quality of life. 536 long COVID patients were included in the study. 13% were hospitalized when first diagnosed with COVID-19. 32% of people taking part in the study were healthcare workers.

Of the 536 patients, 331 (62%) were identified with organ impairment six months after their initial diagnosis. These patients were followed up six months later with a 40-minute multi-organ MRI scan (Perspectum's CoverScan), analyzed in Oxford.

The findings confirmed that 29% of patients with long COVID had multi-organ impairment, with persistent symptoms and reduced function at six and twelve months. 59% of long COVID patients had single organ impairment 12 months after initial diagnosis.

A member of the research group, Professor Amitava Banerjee, Professor of Clinical Data Science at the UCL Institute of Health Informatics, said, "Symptoms were common at six and twelve months and associated with female gender, younger age and single organ impairment."

The study reported a reduction in symptoms between six and 12 months (extreme breathlessness from 38% to 30% of patients, cognitive dysfunction from 48% to 38% of patients and poor health-related quality of life from 57% to 45% of patients).

Professor Banerjee added, "Several studies confirm persistence of symptoms in individuals with long COVID up to one year. We now add that three in five people with long COVID have impairment in at least one organ, and one in four have impairment in two or more organs, in some cases without symptoms."

He said, "Impact on quality of life and time off work, particularly in healthcare workers, is a major concern for individuals, health systems and economies. Many healthcare workers in our study had no prior illness, but of 172 such participants, 19 were still symptomatic at follow-up and off work at a median of 180 days."

The underlying mechanisms of long COVID remain elusive, say the researchers, who did not find evidence by symptoms, blood investigations or MRI to clearly define long COVID subtypes. They say that future research must consider associations between symptoms, multi-organ impairment and function in larger cohorts.

Prof Banerjee concluded, "Organ impairment in long COVID has implications for symptoms, quality of life and longer-term health, signaling the need for prevention and integrated care for long COVID patients."


Home Health Leads to Higher Costs After Hip Surgery, Study Finds

McKnight’s Long-Term Care News | By Rachael Zimlich
Home healthcare services provided after hospital discharge have, in general, been associated with reduced healthcare cost and utilization. A new study examining costs after hip replacement surgery hints that such benefits may be exaggerated.
In a new study published in the Journal of Arthroplasty, researchers examined the home healthcare service records of patients who underwent elective hip replacements between 2010 and 2019. The goal was to determine the value of home health services to patients who were discharged to their homes after a total hip replacement.
The home health care group had a higher rate of emergency department visits and hospital readmissions in the initial 90-day post-operative period than the self-care group, researchers found. Length of hospital stays and total cost of care a year out from surgery was also higher in the home health care group, according to the report.
As part of the study, investigators examined rates of complications such as joint infection and hardware problems for a year after surgery. The primary medical complications observed in the post-operative period were fairly common to other surgeries and included pulmonary embolism, deep vein thrombosis, myocardial infarction, pneumonia, sepsis and urinary tract infection.
The study also found there was no significant difference in the development of these complications in the study group discharged with home health care services and the study group that was discharged to their own care.
Researchers say the study challenges previously held notions that home healthcare services after hospital discharge are associated with cost savings across the board. Instead, the study suggests that more research be done to examine patient-specific discharge needs, focusing the use of home healthcare services on the most at-risk population instead of assigning this level of care in a one-size-fits all strategy based on a specific diagnosis or procedure type.


NIH Updated Chronic Pain Sheet

Chronic pain (pain that lasts for a long time) is a very common problem. National survey data from 2019 showed that about 20 percent of U.S. adults had chronic pain. It is more common in older people than younger ones and in those from rural areas compared to those from urban areas. Military veterans are another group at increased risk for chronic pain. 

The scientific evidence suggests that some complementary health approaches, such as acupuncture, hypnosis, massage, mindfulness meditation, music-based interventions, spinal manipulation, tai chi, qigong, and yoga, may help people manage chronic pain. 

Go to the Fact Sheet


Health Industry Could be Playing Defense on Medicare

Axios | By Caitlin Owens
After years of trying to squash the expansion of government-funded health care and preserve business from private payers, the health care industry is suddenly facing new threats to the revenue it receives from the Medicare.

Why it matters: Behind all of the political posturing around sustaining the program is a cold, hard fact — the program's trust fund is expected to go bankrupt as soon as 2028. To prevent that from happening, lawmakers have three options: raise taxes, cut benefits, or cut payments to the health care industry.

State of play: House Republicans' statements on Medicare have been carefully worded, and notably don't say that the program shouldn't be touched. 

  • After warning that Medicare is "on the pathway to insolvency," House Energy and Commerce Committee Chair Cathy McMorris Rodgers said in a statement last week that "Republicans stand ready to strengthen and preserve these programs, without cutting benefits to seniors."

The big picture: Republicans are shining a spotlight on the program's long-term finances as they call for federal spending reductions. But the GOP has ruled out tax increases as a solution and is acutely aware that it will be hammered by Democrats if it proposes benefit reductions for seniors. 

  • That leaves payment reductions as the most politically tolerable solution, if they put forward any policy solutions at all. 
  • But any significant cuts to insurers, drug companies or hospitals would be strenuously opposed — a dynamic already playing out over Medicare Advantage proposals made by President Biden.

Driving the news: Amid all of the debt ceiling and spending drama, the Biden administration has proposed two Medicare Advantage payment rules that threaten insurers' profits. 

  • The first claws back billions of dollars in overpayments made to insurers for administering private Medicare plans over the last few years. The second, which was proposed earlier this month and has not been finalized, would decrease payments to Medicare Advantage plans by more than 2% next year, insurers say.
  • The payment update could translate into a a $540 decrease in benefits per member per year, according to an Avalere analysis funded by the Better Medicare Alliance and released yesterday.
  • Democrats have already reduced what Medicare will pay pharmaceutical companies in the future through the Inflation Reduction Act, which allows the program to negotiate the cost of certain drugs and imposes financial penalties to companies whose price increases outpace inflation.

What they're saying: Some Republicans are leaning into the opportunity to accuse Biden of hypocrisy.

  • "Joe Biden is trying to gut Medicare benefits. Seniors can't trust Democrats to protect Medicare," said National Republican Senatorial Committee spokesman Philip Letsou in a statement highlighting the analysis. 
  • But decreasing federal payments to Medicare Advantage plans ranks as one of the most effective ways to cut program spending.

The intrigue: The Medicare solvency discussion is particularly tricky for providers, who absent further action would see drastic payment cuts if the trust fund runs out. 

  • But popular spending reduction proposals target them too, and hospitals argue that now is not the time to talk about cutting their pay. 
  • "I hope that there will be action beforehand. We wont get to that cliff," said Chip Kahn, president and CEO of the Federation of American Hospitals. "But I don't think right now — coming off of COVID, and all the changes and effects of it ... I don't think this year is a good year to do it."
  • "We've got to be very careful," he added. "It probably means at some point in time there will be a solution that includes many of the items and effects many of the players." 

The bottom line: Picking a fight with the health care industry may be a more attractive option than cutting seniors' benefits, but that's a very low bar. And yet when it comes to addressing Medicare's financial future, neither party has very many options.

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