With the aging boomer population, the home health services industry is a lucrative market. But anyone looking to take advantage of this opportunity is wise to complete due diligence before starting this type of venture. Part of this process likely includes coming up with a plan to get patients. Although marketing may seem fairly straightforward, those who start a business in the healthcare industry have to abide by federal and state regulations.
Why are there regulations about marketing in healthcare?
Lawmakers want to ensure healthcare providers focus on providing quality care. To help achieve this goal and protect the public they have put in place various rules and regulations. Some of these make it illegal for financial relationships that could impact care. For example, a physician generally cannot refer a patient to home healthcare facility if they or a family member have ownership interest in the facility.
What if I violate these rules?
A failure to follow regulations like the Antikickback Statue (AKS) and Stark Law can lead to harsh financial penalties and potential imprisonment.
In a recent example, two entrepreneurs who started a home health services center are headed to prison due to illegal marketing practices. The two business owners admitted to providing financial kickbacks to physicians and marketers in exchange for patient referrals. The arrangement, that spanned two years, led to $1.5 million in required restitution payments and 3 years imprisonment.
How can I make sure our marketing practices follow these and other regulations?
You can seek legal counsel to help tailor a plan to meet your business needs while staying within the bounds of the law. If already up and running, you can conduct an internal audit to check for compliance.
Attorney John Rivas is responsible for this communication