Medicare Compliance & Reimbursement

Could your good intentions get misconstrued as kickbacks? Find out

Donating to tax-exempt organizations with which you have an ongoing business relationship could prove to be a tricky arrangement. But new tips from the HHS Office of Inspector General could help you steer clear of the pitfalls.

In a Dec. 29 Advisory Opinion (No. 04-18), a health system asks if a donation from its affiliated charitable foundation to the only inpatient hospice in town will break anti-kickback rules. The new hospice, which will furnish inpatient and outpatient care to the homeless, among other patients, may refer some patients to the health system's hospital - also the only one in town - for items or services.

Three elements likely will keep this arrangement from violating anti-kickback statutes, the OIG says:

 Patient referrals from the hospice to the health system pass muster because patients who elect Medicare hospice services are required to "relinquish their rights to curative care for their terminal illnesses," the opinion reads.

 Neither the health system nor the foundation will exert any influence over the hospice's use of the donated funds, the OIG says. The federal government and hundreds of businesses and citizens also will donate.

 The donations will have a fixed annual cap and will last five years. Also, the donation amount won't take into account any referrals or other business the hospice might generate for the health system. And the hospice won't be required to purchase items or services from the health system.
"A business relationship between a donor and a donee does not make a tax-deductible donation automatically suspect under the anti-kickback statute," the OIG says in the opinion.

To read more, go to www.oig.hhs.gov/fraud/advisoryopinions/opinions.html.