The world of private practice physical therapy is certainly competitive, so it makes sense that owners and directors consider every angle when it comes to promoting their businesses. (On that note, be sure to check out our free modern PT marketing guide to learn fresh—and legally compliant—promotional strategies.) Unfortunately, some of those angles can get you and your practice in hot water with Medicare. Today, I’ll discuss handling gifts, donations, and discounts in a way that doesn’t rile up the big M.

But before I launch into that, here’s a legal primer:

Stark Law vs. Federal Anti-Kickback Statute

Both of these exist to stop financial incentives from influencing medical decision-making. However, the laws are different in scope, structure, and approach.

It’d be far more entertaining—and much less concerning and confusing—if Stark Law had to do with Game of Thrones (governance of the North set forth by House Stark). In reality, though, according to the APTA, Stark Law is a civil statute that:

  1. “prohibits physicians from making referrals for clinical laboratories or other designated health services (e.g., physical therapy services) to entities in which the physician has an ownership or financial interest”
  2. “prohibits entities from presenting or causing to be presented [with] claims or bills to any individual, third-party payor, or other entity for designated health services (e.g., physical therapy services) furnished pursuant to a prohibited referral.”

In other words, physicians can’t refer patients to certain designated health services, including physical therapy, if they’ll receive a financial benefit, except for “enumerated exceptions.” And designated health services cannot generate claims or bill to any entity if the services for which they’re billing came from a prohibited referral. (Makes POPTPs sound a bit sticky, eh? According to this article, they exist as a result of a loophole—one that the APTA is working to change.)

Now, the federal anti-kickback statute is a criminal law that, according to the APTA, “prohibits the knowing and willful offer, payment, solicitation, or receipt of remuneration to induce federal health care program business.” In short, it’s illegal to give or accept anything of value, such as gifts, trips, or hotel stays, regardless of the dollar amount, if your intent is to provide or receive referrals for patients or services covered by government healthcare programs, like Medicare and Medicaid.

Gifts to Physician Offices

When it comes to gifting, the murky part of the anti-kickback statute lies in the intent. According to the APTA, “the gift has to be given with the intent of obtaining the referral.” For example, if a PT clinic owner takes a physician out for lunch with the intent of encouraging that physician to provide more referrals, then it’s clear the PT is providing remuneration—in this case, lunch—for more business. Alternatively, if a PT clinic owner takes a physician out to lunch and discusses a new therapy technique she provides at her practice, the intent of the meeting is not generating business, but providing education. Therefore, according to the APTA, the luncheon “should be acceptable.” On the other hand, says the APTA, “golfing or fishing trips from vendors may implicate this statute because in many cases vendor costs are either directly or indirectly reimbursed by a government healthcare program, such as Medicare.”

The Stark Law also has something to say about gifts: You can provide gifts to physicians with a $300 aggregate per year allowance. However, in alignment with the anti-kickback law, the gift cannot account for the size or worth of the referral(s).

So, what to do? You can take the hardline route and prohibit giving or receiving anything of value to or from referring healthcare professionals. Or, you can make clear distinctions—with documented policies outlining guidelines and risks that your lawyer or counsel reviews—regarding intent. Modest spending (tip: establish limits) with the intent to inform and educate, (i.e., legitimate business purposes) = legal. Lavish spending with the intent to influence, give, or receive = illegal.

Patient Discounts

The anti-kickback statute allows discounts under one of the law’s safe harbors, which denotes that exemptions exist for healthcare providers who submit claims to Medicare and Medicaid if those providers properly disclose and accurately report the discounts, and those discounts represent reductions in the prices of goods and services based on arm’s length transactions. Holy mouthful. In a nutshell, you can discount the price of a specific product or service for a Medicare or Medicaid beneficiary, and that discount must occur or be set at the time of sale. However, according to ASHA, “applying such a discount cannot lower the amount collected to less than the amount allowed (the so-called ‘allowed amount’) by Medicare for the same current procedural terminology (CPT) code service. Discount-for-cash offers or policies cannot be for an amount less than what Medicare allows because Medicare prohibits providers from charging the program more than is charged to others.” So, while the APTA may say, “discount arrangements may also come in the form of waivers or deductions in insurance costs, but cannot be used as marketing incentives,” in my book, I wouldn’t impose discounts on the Medicare fee schedule to entice a patient to obtain therapy from you over another Medicare provider. Charge what Medicare’s fee schedule denotes.

One more note: patient discounts are not the same as waiving copayments. For more on that topic—and why you shouldn’t do it—check out this blog post.

Gifts to Patients

In certain circumstances, you can offer gifts—promotional products or services—to potential or current patients being reimbursed under federal healthcare programs. What are those circumstances? According to the APTA:

  1. The gifts must be “inexpensive” (i.e., a retail value of no more than $10 individually or $50 total annually per patient).
  2. The gifts cannot be cash or eligible for cash equivalents.
  3. You cannot give the gift with the intent of “securing your services to a patient.”

Now, what about incentives? As we all know in this age of gamification, incentives are an effective marketing practice. According to the APTA, patient or prospective patient incentives are permissible if that “incentive is to promote the delivery of preventive care services” and if the delivery of such preventive care services “is not related to the provision of other services.” Similar to the caveats listed in the above paragraph:

  1. Incentives cannot be cash or eligible for cash equivalents.
  2. The value of the incentive cannot be greater in value than that of the preventive care services.

The APTA also recommends that you refer to your state laws to determine if there are any additional provisions regarding patient gifts.

Now that you know the rules, it’s time to follow them. As I recommended above, define and document all rules in writing in a company policy, and ensure legal professionals thoroughly review everything. And lastly, a blanket CYA for myself: while I’m quite experienced in researching, deciphering, and writing about Medicare rules and regulations as well as legalese, I am not a lawyer nor do I have any Medicare certifications. So, please, if you have specific questions about these rules, regulations, and laws, feel free to ask them in the comments section below, but be advised, I may recommend (scratch that, I am recommending) that you speak to a legal professional or certified compliance expert.

Triumph in the Triple-Aim Game: The Healthcare Executive’s Guide to Readmission Reduction, Patient Safety Promotion, and ACO Success - Regular BannerTriumph in the Triple-Aim Game: The Healthcare Executive’s Guide to Readmission Reduction, Patient Safety Promotion, and ACO Success - Small Banner
  • Denial Management FAQ Image

    articleMay 26, 2017 | 22 min. read

    Denial Management FAQ

    During our denial management webinar , we discussed the difference between rejections and denials, explained how to handle both, and provided a five-step plan for stopping them in their tracks. The webinar concluded with an exhaustive Q&A, and we’ve amassed the most common questions here. Insurance Issues Claim Quandaries Compliance Qualms Documentation Dilemmas Front-Office Frustrations Insurance Issues We’ve had issues with auto insurances denying 97112 (neuromuscular re-education) for non-neuro diagnoses, even in cases when the patient’s medical …

  • The Complete PT Billing FAQ Image

    articleMay 24, 2016 | 25 min. read

    The Complete PT Billing FAQ

    Over the years, WebPT has a hosted a slew of billing webinars and published dozens of billing-related blog posts. And in that time, we’ve received our fair share of tricky questions. Now, in an effort to satisfy your curiosity, we’ve compiled all of our most common brain-busters into one epic FAQ. Don’t see your question? Ask it in the comments below. (And be sure to check out this separate PT billing FAQ we recently put together.) Questions …

  • Common Questions from Our PT Billing Open Forum Image

    articleAug 18, 2018 | 34 min. read

    Common Questions from Our PT Billing Open Forum

    Last week, WebPT’s trio of billing experts—Dr. Heidi Jannenga, PT, DPT, ATC/L, WebPT President and Co-founder; John Wallace, PT, MS, WebPT Chief Business Development Officer of Revenue Cycle Management; and Dianne Jewell, PT, DPT, PhD, WebPT Director of Clinical Practice, Outcomes, and Education—hosted a live open forum on physical therapy billing . Before the webinar, we challenged registrants to serve up their trickiest PT billing head-scratchers—and boy, did they deliver! We received literally hundreds of questions on …

  • Everything You Need to Know About POPTS Image

    articleNov 26, 2018 | 6 min. read

    Everything You Need to Know About POPTS

    From day one of physical therapy school, we were taught to not even entertain the idea of working for a POPTS practice. I remember hearing the words, “Your license is on the line,” and feeling vaguely scared of the potential fallout from joining one of these heinous practices. But, I was so overwhelmed by the immediacy of school concerns that I didn’t take the time to consider why. I never did work for a POPTS clinic, but …

  • Farewell, 97001: How to Use the New PT and OT Evaluation Codes Image

    articleOct 12, 2016 | 8 min. read

    Farewell, 97001: How to Use the New PT and OT Evaluation Codes

    Hear ye, hear ye: We hereby declare that as of January 1, 2017, all PTs and OTs must begin using a new set of CPT codes to bill for therapy evaluations and re-evaluations. Actually, if we are being perfectly accurate, we’re not declaring anything; CMS and the AMA are—and we’re merely the messengers. You might find it hard to believe, but with this CPT coding update, the evaluation and re-evaluation codes that PTs and OTs have come …

  • Common Questions from our Cloudy with a Chance of Reform Webinar Image

    articleFeb 13, 2017 | 13 min. read

    Common Questions from our Cloudy with a Chance of Reform Webinar

    In our first webinar of 2017 , WebPT’s co-founder and president, Heidi Jannenga, teamed up with CEO Nancy Ham to discuss the current and future healthcare trends that will impact PTs, OTs, and SLPs. (Missed it? No worries; you can view the complete recording here .) As always, we received quite a few questions during the presentation—way more than we could address live. So, we’ve put them all here, in one handy Q&A doc. Scroll through and …

  • CPT Update: Why the Valuation of the New PT and OT Eval Codes is Problematic Image

    articleJul 19, 2016 | 9 min. read

    CPT Update: Why the Valuation of the New PT and OT Eval Codes is Problematic

    The purpose of any type of reform is to drive change. And that’s certainly true when it comes to healthcare—and healthcare payment—reform. But, change often comes slowly—and in the wake of Medicare’s recently issued proposed physician fee schedule for 2017 , I have to wonder whether it’ll come too slowly for physical and occupational therapists. That’s because, while the Centers for Medicare & Medicaid Services (CMS) voiced its support for replacing the existing CPT codes for physical …

  • The How and Why of an Effective Rehab Therapy Compliance Program Image

    articleAug 9, 2018 | 7 min. read

    The How and Why of an Effective Rehab Therapy Compliance Program

    It’s no secret that the US healthcare industry is heavily regulated—and those regulations are strictly enforced. Take this recent press release from the Department of Justice (DOJ), for example. It explains how the DOJ charged 601 individuals with fraud—the largest healthcare fraud takedown in history. Among them: 71 physicians charged with falsely billing Medicare, Medicaid, and TRICARE in cases involving the prescription and distribution of narcotics. And in New York, 13 individuals were charged with conspiracy for …

  • PT and OT Evaluation Codes Cheat Sheet Image

    downloadDec 21, 2016

    PT and OT Evaluation Codes Cheat Sheet

    As of January 1, 2017, PTs and OTs must use a new set of CPT codes to bill for patient evaluations and re-evaluations. But, it's not a simple swap-out across the board; instead, when coding for initial evaluations, therapists must now select one of three codes, which are tiered according to the complexity of the evaluation. But, what separates a low-complexity evaluation from a moderate- or high-complexity one? And how should therapists go about making their coding …

Achieve greatness in practice with the ultimate EMR for PTs, OTs, and SLPs.