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
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
- Failing to Provide Patient Choice
Hindering patient choice could invite scrutiny from the HHS
Office of the Inspector General. The OIG has stated that one factor
in the determination to impose sanctions under the Civil Monetary
Penalty Act and the anti-kickback statute is the preservation of a
patient's freedom of choice. Arrangements where referrals are
steered to a preferred home care company, without clear policies to
protect the patient's decision-making authority, will be viewed as
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