Frequently Asked Questions

How do I create a Medicare certified home health care agency?

In the State of Illinois, there are three steps to become a Medicare certified home health care agency.  The first step is to create your legal entity.  The second step would be to file for and obtain license to provide home health services from the Illinois Department of Public Health.  Once you have obtained your license to provide home health services, the third step would be to apply for and obtain Medicare certification and provider number.  In the process to obtain certification, the entity must undergo an accreditation process through one of the accrediting bodies.

What is the stark law?

All Medicare providers must abide by regulations relating to certain referrals.  The Stark Law prohibits a physician from making a referral of a patient to any entity that such physician holds an ownership interest in or is a party to a compensation arrangement.  It is permissible for a Medicare provider to have a relationship with a physician that would constitute a compensation arrangement as well as allow such physician to make a referral to such provider as long as the parties comply with the safe harbor provisions.  

What is the anti-kickback rule?

Medicare providers must comply with certain regulations that restrict how they market their services.  In particular, a Medicare provider is prohibited from making any payment to any individual for the referral of a patient for the provision of designated health services.  The Anti-Kickback Rule applies both to the Medicare provider and to the party who received the referral fee.  The Anti-Kickback Rule does provide for a safe harbor, which would protect a Medicare provider as long as the relationship meets certain requirements.

Can a home health care agency hire or enter into a contract with a marketer?

Home health care agencies are sometimes under the mistaken impression that they are prohibited from having any relationship with a marketer, where that is an employee or an independent contractor.  It is true that Medicare providers are bound under the obligations of the Anti-Kickback Rules.  However, those rules do not prohibit a marketer.  On the other hand, those rules do prohibit the payment of a referral fee.  Therefore, it is important that a home health care company insure that it in compliance with the applicable Anti-Kickback Rules in any sort of relationship with their marketers.

Can home health care agencies protect their patients from unfair solicitation?

There are certain steps that home health care agencies can take in order to protect their intellectual property, including confidential patient information.  One common strategy is to require all employees and contractors to execute agreements that provide for non-solicitation of their patients.

What is the 36 month rule?

Medicare regulations currently prohibit an owner of a home health care agency from transferring a majority interest in such entity within 36 months of the date of enrollment or 36 months from the date of the last change in majority ownership.

What is a medical director agreement?

Medicare regulations require a certified home health care company to establish a group of professional personnel.  It is the goal of the professional personnel to review the various policies and procedures of the home health care company and ensure that the home health care agency is complying with the conditions of participation.  One such member of the group of the professional personnel is required to be a physician.  This party is commonly known as a medical director.  Often physicians are reluctant to perform services on behalf of the home health care company unless they are compensated for their time.  Whenever a certified Medicare home health care agency compensates a physician for any service, the company must be aware of the obligations under the Stark Law.  If a home health care agency is compensating a physician, then that position is otherwise prohibited from referring patients to that agency unless the home health care agency complies with the applicable safe harbor provisions.

What is HIPAA?

The Health Insurance and Portability and Accountability Act of 1996 is known as HIPAA.  This Act addresses the use and disclosure of individual’s health information by organizations subject to its rules.  A major goal of the rule is to ensure that individual’s health information is properly protected while allowing the flow of information that is needed to provide and promote high quality of care and protect the public health and well-being.  It is important that Medicare certified home health care agencies understand that they are subject to the rule and have to be cautious in how they handle protected information including the disclosure to practitioners, family members or friends of the patient in question.  Any time a home health care agency is asked for such information, they should consult with any attorney to verify that they are not in violation of HIPAA through disclosure.

What is a business associate agreement?

As provided above, home health care agencies are bound under the provisions of HIPAA.  Whenever a home health care company enters into a contract with a vendor, including physical therapists, accountants, billers, or any other party that provides services, the home health care company must be aware of their obligations under HIPAA.  In particular, if any protected patient information is disclosed that vendor, there would be a potential HIPAA violation.  Accordingly, home health care agencies should have all vendors enter into a business associate agreement that would obligate such vendor to comply with the obligations under HIPAA and the protection of patient information or data.

What is a branch agreement?

When a home health care company provides services to patients in a broad geographic area, it can become inconvenient for its nurses to deliver and turnover the patient notes that are created in connection with the visits.  In those situations, a Medicare provider may decide that it may be in its best interest to set up and create branch office at another location.  Such branch office would allow a home health care entity to provide a location where nurses are permitted to conduct their internal office work relating to the patient notes that are required in connection with the claims submitted to Medicare.  If a home health care company wishes to set up a branch office, they must be sure to comply with applicable state regulations.  In Particular, a branch must be located sufficiently close enough to allow the administrator of the main office to visit on a regular basis to insure compliance for the applicable regulations.