Dealing with Hospital Discharge

Patients discharged from hospitals remain one of the most important customer bases for home care companies, so it is vital that providers be given a fair opportunity to compete for them.

Discharge planning activities have begun to come under Department of Justice scrutiny. There are many areas for potential abuse, and most can affect home care companies. For HMEs considering a greater presence within hospitals, let's go over some ideas both for expanding the company role within a hospital and for challenging inappropriate relationships by competitors.

Compliance dangers can arise from a variety of discharge activities. Some examples include referrals to a hospital-owned or -affiliated home care company; discharge planners who favor one company over all others, regardless of options or patient choice; home care company personnel who are given special treatment within the hospital, such as access to patient rooms or office space; special assistance given to discharge planning personnel by “helpful” home care companies, such as paperwork relief or patient screening; and charity care programs.

Improper discharge planning procedures can leave a home care company vulnerable to violations of the federal anti-kickback statute, federal and state antitrust law, various other state laws and accreditation requirements. Consequently, proper compliance with the rules relating to discharge planning is extremely important for hospitals and home care companies alike.

Vulnerabilities of the Discharge Planning Process

Under the law, hospitals must operate a discharge planning process that includes an evaluation of whether the patient will need post-hospital services and of the availability of such services.

The process includes the following components: a determination of the Diagnosis Related Group for the specific case; an evaluation of the patient's post-hospital requirements; whether home care is appropriate or whether hospice or nursing home placement is necessary; steps to place the patient in a nursing home, if necessary, or preparation for a home care directive; and a discussion with the patient or patient's representative about the results of the evaluation.

As part of the process, an RPN, social worker or other qualified individual may not limit the patient's options for post-hospital home health services, and must disclose any financial interest in any entity to which the patient may be referred.

One typical way for the discharge planner to address these obligations is to provide patients with a list of local service providers. If the patient doesn't select one, the hospital may suggest that the patient use the hospital's own preferred provider(s). When hospitals do use referral lists, providers are sometimes rotated on the list in order to avoid favoritism.

The hospital may even enter into a “preferred provider” arrangement, under which it agrees in writing to make referrals on a preferential basis to a specific provider when no choice is indicated by the patient. Such an arrangement allows hospitals to choose partners with whom they are familiar, and who provide the best quality of care.

The Balanced Budget Act of 1997 requires Medicare-participating hospitals to give beneficiaries who require post-discharge nursing services a list of Medicare-certified home health agencies that serve a patient's geographic area. The hospital may not specify or limit access to qualified HHAs that ask to be on the list, although many hospitals wrongly believe that it does. Note that this provision does not apply to medical equipment suppliers.

The BBA also requires the hospital to disclose whether it has a financial interest in any provider or supplier if the patient is referred to that entity. This provision does apply to equipment suppliers, as well as to HHAs, hospices and respiratory or infusion therapy suppliers. However, the BBA does not prohibit hospitals from giving patients factual information or opinions about such companies as long as they don't steer people inappropriately or deny choice.

Once hospitals have discussed discharge options with patients, they are free to refer patients to a “preferred provider” if the patient has no preference.

What Could Land You In Hot Water?

Watch for the following activities that can create compliance trouble.