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Defining “Advertising” and “Referrals” in the Healthcare Industry

On Behalf of | Aug 25, 2015 | Health Care |

It is often necessary for healthcare professionals, pharmacies, home health care agencies, and DME businesses to advertise. In doing so, these businesses need to proceed carefully with how they compensate their marketers-especially when dealing with clients who are covered by federal or state-provided healthcare (like Medicaid, Medicare, etc.). Toxicology labs, for example, where the medical work, supplies, and other transactions is easily quantifiable and documented, require vigilance on this front to ensure that you and your business do not violate the federal Anti-Kickback Statute.

These laws prohibit individuals or businesses to receive money for referring a patients covered by government-provided healthcare for a specific medical service, like toxicology lab work. The real distinction on this issue is defining the difference between “marketing” and a “referral.” Certainly, advertising is not illegal, but now do businesses legally proceed with their marketers while still appealing to as many potential patients as possible?

The OIG Advisory Opinion 08-19

In 2008, the Office of the Inspector General considered a case in which an advertising company created a website that would give users the location of local chiropractors. In exchange, participating chiropractors would pay the advertisers for each phone call (or lead) they received. Was this in violation of Anti-kickback laws? Among many different factors of this client/marketer arrangement, OIG considered the following:

  • The advertiser collected no medical information of prospective leads.
  • Participating chiropractors paid a “fair market” value for each lead generated.
  • The advertiser’s fee to the chiropractor was issued regardless of whether the lead became a patient or the patient was federally covered.
  • The advertising website provided certain disclosures about their service and their agreements with the chiropractors.

In the end, the OIG decided that this arrangement was not a violation of kickback laws, but instead constituted a legal healthcare business/marketer arrangement. While OIG decision does not constitute a law, or cover every case, it has been a valuable reference point for healthcare industry businesses who want to comply with anti-kickback laws and still conduct a lucrative business.

Are you a DME business, home health care industry, or pharmacy that wants to ensure that their arrangement with advertisers complies with the federal anti-kickback laws? The Law Offices of Alejandro Mora, PLLC can help. Attorney Mora has been practicing healthcare law for over a decade. He is well-versed in the Anti-Kickback Statute and can not only help businesses in the healthcare industry comply, but also fight any allegations of a violation.

Get a knowledgeable Texas healthcare lawyer on your side. Contact our firm today for a free case evaluation.