SNF Marketing Practices
Marketing is a two-way street – what you give out in order to market yourselves can be just as damaging as things that you receive when you are being marketed to by vendors. Penalties for unlawful marketing practices of any kind can lead to fines of up to $50,000. Just like in life, you are who you associate with. Be sure to build business relationships with people who exercise good marketing practices to ensure that your Facility stays out of trouble in this area.
Misconceptions
There is a common misconception that the Stark Law relating to non-monetary compensation to physicians by hospitals can be cross applied to Skilled Nursing Facilities (SNFs). The nonmonetary compensation exception provides Hospitals with specific annual spending limit for physician perks, such as meals. Some SNFs use this hospital guidance to set spending limits for their marketing to physicians, which does not actually provide the Facility with any protection. In fact, in the skilled nursing industry there is no prescribed dollar amount that could protect a Facility from Anti-Kickback liability. Any money spent on marketing or anything of value received from a vendor could trigger Anti-Kickback liability.
Risky Business
To avoid any violations of the federal Anti-Kickback statute, it is important that your Facility be aware of marketing practices that raise red flags.
Being Marketed To: A common factor that leads to suspicion of a violation is the frequency of the receipt of gifts from outside vendors. Even small gifts can raise red flags if you receive them often. Frequency of gifts can draw attention to the possibility that there is an inappropriate business relationship between your Facility and that person or company. Frequency can also make the Facility look like it is depending on that relationship for referrals, which is an example of an inappropriate business relationship. Make sure to document all gifts that you receive, and review your records to check for any heightened frequency.
Another risky practice is the receipt of a gift that is given to just one individual in your organization. If this is occurring, chances are that the person has an influence on business decisions. For this reason, the gift will be seen as an effort to persuade your Facility into a business relationship. In order to avoid this risky practice, it is important that your staff knows to only accept gifts of minimum value that can be shared among staff.
Marketing to Others: All marketing expenses must be expressly tied to a business purpose. This means that your Facility should not engage in “drop-and-go gifts” where a Facility representative drops off coffee and snacks at a physician’s office without discussing any business. These gifts raise suspicion about their intended purpose because if there is no business directly connected with the gift, it may be viewed as an incentive or kickback.
Another important thing to remember when marketing is to be inclusive. Do not only market to hospitals or physicians that refer patients to you. This is important because if the government looked into your records and saw that you only provide meals to two physician offices, and those physician offices are the only ones who provide you with referrals, the government might suspect that there is an inappropriate business relationship between your Facility and the physicians.
Ways to Minimize Risk
To ensure that your Facility is in exercising safe marketing practices, your Facility should make sure that it follows these key guidelines, along with those outlined in the marketing policy in your operational manual:
Log all gifts in a gift log.
Refuse all gifts that cannot be shared among staff or are cash or cash equivalent (e.g. trips, gift cards), and document that refusal.
Document all marketing expenses. Be sure to separate transactions if you are using a credit card that is also used for purposes other than marketing.
Be inclusive with gifts. Do not exclusively market to sources that currently refer the Facility residents.
If you are not clear on whether a gift would result in a violation, err on the side of caution and just say NO!
