At this time of year, many health care professionals consider showing their appreciation by giving gifts to patients, other practitioners, or business acquaintances. Any gift between potential referral sources implicates the usual list of fraud and abuse laws, including Stark , Anti-Kickback Statutes , Civil Monetary Penalties Laws , or Fee Splitting prohibitions. The following is a general guide to help ensure that your holiday gift-giving does not get you in trouble with the government:
1. Gifts to Patients. Federal laws generally prohibit offering gifts to government program beneficiaries to induce utilization of items or services payable by government programs (e.g., Medicare or Medicaid). The OIG does permit inexpensive gifts to program beneficiaries so long as (1) they are not cash or cash equivalents; and (2) they have a retail value of no more than $10 individually and $50 in the annual aggregate per patient. In addition, the OIG does allow discounts or write-offs to the financially needy if certain conditions are met. As for patients who are not government program beneficiaries, there is probably not much risk in offering reasonable appreciation gifts, especially if (1) practitioners follow the $10 per gift / $50 per year standard described above; (2) the patient’s services are not paid by insurance; or (3) the practitioner can otherwise prove that the gift is not offered to induce referrals.
2. Gifts to Other Practitioners. If the other practitioner is not a potential referral source, there is little risk in giving gifts. On the other hand, if the other practitioner is a potential referral source, then the fraud and abuse statutes generally prohibit offering, giving, or soliciting gifts with the intent to induce referrals. The OIG’s compliance guidance for physicians suggests that “nominal” gifts or gratuities may be permissible, but, unlike patients, offers no specific guidance as to what a “nominal” gift might be. In addition, a gift to or from a physician (or a physician’s family member) establishes a financial relationship that will trigger Stark. If the gift is to or from a physician (or a physician’s family member), Stark generally prohibits the physician from referring patients for designated health services , and prohibits the entity receiving the improper referral from billing for such services, regardless of the parties’ intent in giving the gift. The safest course is not to give or accept gifts to or from other practitioners if you may refer patients to or receive referrals from the other practitioner, especially if the referrals are for items or services payable by government programs.
3. Gifts or Appreciation Events for Medical Staff Members. The fraud and abuse statutes also apply to gifts offered by hospitals or other facilities to medical staff members if the gifts are offered to induce referrals. The Stark regulations contain an exception that allows hospitals and other entities with medical staffs to give medical staff members gifts or other non-monitory benefits if the following conditions are met: (1) the gifts do not exceed an aggregate value of approximately $300 per physician per year (subject to annual CPI adjustment); (2) the gift is not based on the volume or value of referrals; (3) the gift is not solicited by the medical staff; and (4) the gift is not intended to induce referrals. In addition, Stark allows hospitals or other facilities to provide one medical staff appreciation event for all medical staff members each year without impacting the $300 limit; however, any gifts or gratuities given at the event count toward the $300 annual limit.
4. Gifts from Vendors. The fraud and abuse laws also apply to gifts received from vendors if they are intended to induce referrals, especially orders for items or services payable by government programs. Again, the OIG compliance guidance for physicians suggests that “nominal” gifts may be permissible, but does not define what a “nominal” gift might be.
5. Charitable Donations. Purely charitable donations should not present a problem so long as they are not made with the intent to induce referrals. Stark contains an exception that allows physicians to make charitable donations to a hospital or other non-profit entity so long as they are not solicited or made in a manner based on the volume or value of any referrals, and are not otherwise made with the intent to generate improper referrals.
Conclusion. Giving gifts to potential referral sources may create unintended consequences for practitioners and health care facilities. Practitioners should not offer gifts as a way to reward past or induce future referrals unless the practitioner is certain that either (1) the gift is outside the realm of the fraud and abuse statutes; or (2) the gift fits within one of the regulatory exceptions, including those cited above. As a practical matter, gifts of nominal value should not create problems, but the state and federal governments offer little guidance as to what they would consider to be nominal.
If you have questions about these or other legal issues, please contact a member of our Health Law group 208.344.6000.
- 42 U.S.C. § 1395nn; 42 C.F.R. § 411.351 et seq.
- 42 U.S.C. § 1370a-7b; 42 C.F.R. § 1001.952.
- Idaho Code § 41-348.
- 42 U.S.C. § 1320a-7a; 42 C.F.R. § 1003.101.
- Idaho Code § 54-1814(8).
- OIG Special Advisory Bulletin, Offering Gifts and Other Inducements to Beneficiaries (8/02).
- OIG Compliance Program Guidance for Individual and Small Group Physician Practices, 65 F.R. 59441.
- “Designated health services” include clinical laboratory services; physical, occupational or speech therapy; radiology and certain imaging services; durable medical equipment and supplies; parenteral and enteral nutrients, equipment and supplies; prosthetics and orthotics; home health services; outpatient prescription drugs; and inpatient and outpatient hospital services. 42 C.F.R. § 411.351.
- 42 C.F.R. § 411.353.
- 42 C.F.R. § 411.357(k).
- See OIG Compliance Program Guidance for Pharmaceutical Manufacturers, 68 F.R. 23738; see also J. Washlick & S. Welch, “Physician-Vendor Marketing and Financial Relationships Under Attack”, Journal of Health and Life Sciences Law, American Health Lawyers Ass’n (Oct. 2008); AMA Opinion E-8.061, Gifts to Physicians from Industry.
- 65 F.R. 59441.
- 42 C.F.R. 411.357(j).