OIG Advisory Opinion on e-Referral Vendor Contracts

On July 7 and September 29, 2011, AHCA’s Legal Committee provided guidance for providers who had e-referral vendor contracts with companies that provide electronic discharge referral services.  The guidance was believed necessary in light of the 2011 OIG Advisory Opinion (No. 11-06) indicating that certain types of contracts for hospital patient referrals through soft-ware internet access arrangements to post-acute care providers’ data bases may violate the Federal Anti-Kickback law.  In July, AHCA encouraged providers to review their current contracts and ask for an affirmative representation or warranty in the contract from the e-referral companies that their arrangement did not violate the Anti-Kickback law and an indemnification (e.g., protection) for damages in the event the provider suffered some loss as a result.  AHCA also provided a form letter (from MO Health Care Association) to help members articulate their concerns and begin a discussion with the vendors regarding some assurances to this effect.  Some vendor companies have issued explanations about their business models, and why their model is different from the model addressed in OIG’s advisory opinion.  Unfortunately, the legal opinions and assurances from the vendors have not been forthcoming. 

Subsequently, in September, AHCA encouraged providers to begin negotiations to insert “draft language” into their current contracts whereby the vendor would affirmatively represent that the arrangement does not violate the Anti-Kickback Law and to further indemnify the provider should the arrangement subsequently be determined to violate the Anti-Kickback Law.   Since that time, we understand that some providers have been successful in inserting this type of language into Curaspan contracts; however Allscripts has refused to accept our proposed language.  In light of that development, AHCA is now suggesting that providers with existing contracts, or those who are contemplating entering into such a contract in the future, with vendors who refuse to make such warranties and representations in the contract, to ask for and retain all correspondence with the vendor relative to this issue and any legal opinions from outside counsel that the e-referral companies may have offered or released to date.  The reason for this is that in the event a law enforcement agency raises a potential Anti-Kickback violation regarding this arrangement  in the future (please note that  AHCA is not aware of any to date), these documents may  be useful to show that the provider relied on the e-referral vendor’s responses and legal opinions in good faith and that this would hopefully ameliorate any Anti-Kickback violation and/or resulting penalties.  Please note that this precaution would not necessarily provide a complete defense to a claim by the law enforcement agency that the Anti-Kickback Law was violated.