How Federal Regulations Apply to Radiology Marketing

August 13, 2012

Think Stark Law doesn’t apply to radiologists? Think again. Consultant Adrienne Dresevic details the federal laws that affect radiology marketing.

The radiology market is more competitive today than ever before, and proposals to decrease reimbursement make maintaining and growing your client base essential. Doing so means marketing your services to referring physicians and patients. Federal laws, however, dictate what you can and can’t do to promote your practice. Navigating these rules can be tricky, and if you break them, repercussions can be significant.

Diagnostic Imaging talked with Adrienne Dresevic, Esq., founding partner with The Health Law Partners in New York, about the federal regulations and what you must remember when marketing your services. Dresevic is schedule to speak on the topic at this week’s annual meeting of AHRA, the association for medical imaging management, in Orlando.

What are the regulations that health care marketers need to be aware of?

In general, marketers should be familiar with the Stark Law, what it says, and how it applies to common imaging. For instance, if you have an independent diagnostic testing facility that wants to provide lunches, dinners, or entertainment for frequent referring physicians, all of those things are considered benefits to the referring physician. That triggers the Stark Law since imaging providers are designated health service entities.

There is, however, a non-monetary compensation exception - non-cash given to physicians that doesn’t exceed a certain amount per year, usually $373. Practices are responsible for tracking how they spend that $373. Is it per physician or per group, and what is the money used for? I always recommend they use a practical spreadsheet. This is an easy solution for practices of all sizes, especially if there’s only one person in charge of marketing or compliance. Practices must turn in receipts, track their spending quarterly, and review their expenditures to make sure they are reasonable. If a practice spends more than $373 per physician or group, there is an opportunity under the Stark Law to correct the mistake. Unfortunately, it means going back to the physician and asking them to return the value, and that’s a hard thing to do.

From a compliance perspective, it boils down to figuring out if you’ve really provided a benefit. And this can be tricky. For example, if an imaging marketer visits a provider’s office and provides lunch for the entire staff for $300, do they track that entire amount? They have to drill down to see if they provided a benefit of $300 to the referring physician. Unless that physician always buys lunch for the staff, the benefit provided to the individual physician will likely be around $20. However, the radiologist might want to track that full amount from the kick-back perspective because that law also looks at benefits given to staff who have the ability to direct referrals.

With the kick-back statute, there’s no bright monetary line like there is with the Stark Law. This is an intent-based law. Did you provide something in exchange for a referral? And, there’s no exception or safe harbor to go back and correct a mistake. Guidance from the Office of the Inspector General [OIG] talks about providing no cash and no exchanges for imaging referrals. If you provide something of nominal value, your risk of having provided a benefit is low under the kick-back statute. If it’s something of higher value, it’s really easy for a regulator or official to come in and say, “Let’s drill down.”

The OIG has lots of guidance for this kind of marketing activity. It’s not just about lunches and entertainment. For example, can an imaging center provide free transportation to patients? There are several opinions about what implicates a law, and there are even new updates under the Affordable Care Act. So, you still have to be very careful and follow all the safeguards to make sure you pass regulatory scrutiny.

Practices should also be mindful of the beneficiary inducement law - benefits that entice patients to use your practice. The OIG also has specific guidance here, and complementary transportation could also fall under this law. Patient satisfaction cards where you provide some type of free item or service to the patient can also trigger the beneficiary inducement law. Now, the OIG has said that if the dollar amount is low enough, around $10 - and you never provide cash - then they won’t consider it an inducement to choose your services. However, having give-aways or contests where patients put their names in a hat is a definite issue.

How will this information affect radiology practices?

These issues are really important because, I think, radiologists have assumed that a lot of their activities don’t fall within the Stark Law. If you look at the overview of Stark, the definitions are very specific, and traditionally diagnostic radiology doesn’t fall under those definitions. What orthopedics couldn’t do, a radiologist could. But, the one area the law does apply to radiology is marketing - how radiologists choose to market themselves to referring physicians. So, it’s really important for practices to understand why and how these laws can apply to their activities.

What challenges do these regulations present?

Sometimes, it’s just a practical challenge of “everyone else is marketing this way.” Clients will ask why I’m telling them that these laws apply when they walk down the street and see ads from competitors that aren’t following these statutes. Everyone wants to be competitive in the market. It’s a big challenge to explain why the laws apply and what can be done to mitigate risk. You want to work within the laws but still grow a customer base. So, rather than focusing on benefits that can be provided to individuals, let’s focus on touting the quality of services and make the radiologists available to referring physicians. These are things that are great but that don’t have any monetary limitations.

What do practices and facilities need to do to make sure they are compliant with these regulations?

There are all kinds of risks associated with health care. All we, as attorneys and consultants, can do is give them the information and guidance on how the government views certain arrangements. It’s up to them to see if they feel comfortable with what their practice is doing. And, some will be more aggressive than others. For example, if one geographic area has a lot of radiologists, a practice might offer pre-authorization assistance to referring physicians. The legality of this has been debated for a long time, and the OIG came out with a favorable opinion. However, there are still some practices not doing it because they think it’s illegal. There are a lot of issues that can be discussed - people just want to know if they’re doing OK.

Is there anything coming in the near future to be mindful of?

Even though people are tired of hearing about it, they have to focus on compliance and make sure their practice has an effective compliance program. The OIG created a voluntary compliance program, and it’s pretty much expected that you’ll have one now. If you’re investigated, the first thing the government will ask is whether you have a compliance program and why it didn’t work in that instance.

And, things are getting more serious under the Affordable Care Act. There’s now mandatory compliance for providers and suppliers enrolled in Medicare/Medicaid. If practices don’t have a compliance program, now is the time to implement one. Go back to the old program you have sitting on your shelves, dust it off, and review it. Revise it, if you need to, to address specific target areas.

With my imaging clients, I want to see that they have policies and procedures regulating their marketing efforts because federal regulators look at how practices find patients and what those relationships are like. Making sure you have effective compliance procedures ensures you’ll avoid trouble.

It’s also important to look at the relationship that you have as an imaging center or practice with your marketer. This might be a person on staff or an independent contractor. You need to know how educated they are about different regulations and what you can and can’t say. Anyone marketing on your behalf is probably educated in the laws and read the policies. But, even though employing a marketer is the safest way to avoid risk, radiologist should also read the laws and educate themselves, as well.