Referral Kickbacks in Home Health

A common trend is occurring between hospitals and home health agencies:  ‘vendor fees’.  Hospitals are increasingly demanding that home health agencies pay to be listed in a directory that is given to patients who are discharged and in need of home health.  These same hospitals also believe that home health agencies are not providers but vendors.


What should an agency do?  Obviously, you don’t want to lose the referral source, but at the same time, you do not want to be involved in an illegal scheme.  The best thing to do is to present the hospital with facts and information to support your argument.   A hospital system that understands the importance of integrity and anti-kickback laws should realize their error in judgment.


But, not all hospitals will realize their error.  Let’s face it – we do understand that hospitals with their own agencies routinely self-refer and have no regard for COPs and patient’s right to freedom of choice.  In fact, it seems that many discharge planners prey on uninformed patients and families who have never used home care services before.  This disregard for freedom of choice is quite disappointing.


Also what is disappointing is reporting these alleged abuses of fraud rarely result in action.  However, there is strength in numbers.  If agencies clearly document the situation, the parties involved and continue to report the blatant disregard for COPs, action will be taken.


You do have a fine line to balance – running your agency and getting referrals, but also doing so ethically and within the Conditions of Participation.   The balancing act is not easy, but must be done in order to protect yourself and your agency.


Hospitals who engage in such actions may not be a good referral source after all.  Other referrals sources are available, and we can help you identify and layout a program to help you do that.  The balancing act is an art form, but it may not be a wise business decision.