Earn Referrals The Right Way

Earn Referrals The Right Way

As the baby boomer generation ages, the senior care business, particularly home health, is expected to progress. According to the U.S. Bureau of Labor Statistics, the need for baby boomers to receive home health services is expected to increase to about 70 percent between 2010 and 2020. The reason for this large increase is that many would rather stay in the comfort of their own home as long as possible which in turn, creates an open market for home health businesses to exist.

When starting or running your home health business, there is an urgency to penetrate this market in order to reach target customers directly to promote your message. However, before implementing any marketing program to gain referrals and establish a relationship with other providers, it is important to understand what legalities are involved in order to avoid violating any applicable laws that are regulated and scrutinized by the Office of the Inspector General.

It is imperative that all home health care business owners understand the legal perimeters enforced on health care marketing and incorporate them into their marketing program and policies responsibly.

Stay away from committing some of the following mistakes when marketing your business:

  • Providing kickbacks to referral sources
  • Engaging in inducements to patients
  • Steering patients to certain providers

Instead, stay within the four corners of the law:

Anti-Kickback Statute

Under the federal anti-kickback statute, it is a felony for a person to knowingly and willfully offer, pay, solicit, or receive anything of value (i.e., “remuneration”) in return for a referral or to induce generation of business reimbursable under a federal health care program. The statute prohibits the offer or payment of remuneration for patient referrals, as well as the offer or payment of anything of value in return for purchasing, leasing, ordering, or arranging for, or recommending the purchase, lease, or ordering of any item or service that is reimbursable by a federal health care program. PPACA revises the evidentiary standard under the anti-kickback statute and eliminates the requirement of actual knowledge of, or specific intent to commit a violation of the statute. This amendment may make it easier for the government to prove its case.

(Original Resource: http://www.aging.senate.gov/crs/medicaid20.pdf)

Stark Law: Physician Self-Referrals

The Stark law and its implementing regulations prohibit physician self-referrals for certain health services that may be paid for by Medicare or Medicaid. Under the Stark law, if (1) a physician (or an immediate family member of a physician) has a “financial relationship” with an entity, the physician may not make a referral to the entity for the furnishing of these health services for which payment may be made under Medicare or Medicaid, and (2) the entity may not bill the federal health care program or any individual or entity for services furnished pursuant to a prohibited referral. PPACA limits certain exceptions to the Stark law.

(Original Resource: http://www.aging.senate.gov/crs/medicaid20.pdf)


The HIPAA Privacy Rule gives individuals important control over whether and how their protected health information is used and disclosed for marketing purposes. With limited exceptions, the Rule requires an individual’s written authorization before a use or disclosure of his or her protected health information can be made for marketing. So as not to interfere with core health care functions, the Rule distinguishes marketing communications from those communications about goods and services that are essential for quality health care.

(Original Resource: http://www.hhs.gov/ocr/privacy/hipaa/understanding/coveredentities/marketing.html)

State Law

In addition to the federal laws that exist, there are also state laws in which home health agencies need to review and understand in order to maintain comprehensive compliance.

Careful consideration of the above laws is critical when developing and implementing any marketing program in health care. Make sure to pay close attention to any updates that the Office of the Inspector General may impose. For the most up to date information, refer to the U.S. Department of Health & Human Services: Office of Inspector General http://oig.hhs.gov/. Most importantly, always choose to be lawful throughout your experience in the healthcare community and you can expect to gain a more successful outcome overall.