Your community liaison has a meeting with a nursing facility's director of nursing on Thursday. The facility works with two hospices and is open to a third. The liaison wants to bring lunch for the staff, offer free in-services, and mention that your aides could help out on the floor when they are in the building. One of those is required, one is risky and one is on an OIG list of suspected kickbacks.
Hospice marketing compliance is mostly about one relationship: the hospice and the facility that controls access to its residents. This guide sets out the law, the practices OIG has named, what you can legitimately say and do, and a review to run on your liaison program this week.
Why Facility Relationships Draw Scrutiny
OIG explained the risk in its March 1998 Special Fraud Alert on nursing home arrangements with hospices. Nursing home operators control which hospices may serve their residents, and an exclusive or semi-exclusive arrangement can have substantial monetary value to a hospice. The alert also observed that nursing home residents receiving hospice care have, on average, longer lengths of stay than hospice patients in their own homes, and that because hospices receive a fixed daily payment, fewer services may mean higher profit per patient.
That combination, a gatekeeper, a valuable population and a per diem payment, is why the same concerns appear again in OIG's industry-specific compliance program guidance for nursing facilities, which tells facilities that requesting or accepting remuneration from a hospice may expose both parties to liability if it might influence the facility's choice of hospice. Your counterpart at the facility has been told the same rules you have.
The Law Behind Hospice Marketing Compliance
The Anti-Kickback Statute, 42 USC 1320a-7b(b), makes it a felony to knowingly and willfully offer or pay any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce someone to refer an individual for, or to arrange for or recommend, any item or service payable by a federal health care program. Soliciting or receiving it is equally a felony. The penalty is a fine of up to $100,000, up to 10 years in prison, or both.
OIG's General Compliance Program Guidance (November 2023) adds two points that matter for marketing. The statute has been interpreted to cover any arrangement where one purpose of the remuneration is to induce referrals. And conviction leads to mandatory exclusion from federal health care programs. "We mainly did it to say thank you" is not a defense if inducing referrals was also a purpose.
Patients and families are covered too. The 1999 hospice guidance notes that a hospice offering an incentive it knows or should know is likely to influence someone to choose it may face civil money penalties. The GCPG says OIG currently treats incentives to beneficiaries as nominal, and outside that penalty, at no more than $15 per item or $75 in the aggregate per year.
The Practices OIG Has Named
The 1998 alert lists specific practices it calls suspected kickbacks. Every liaison should know them by heart:
- Offering free goods, or goods below fair market value, to induce a nursing home to refer patients.
- Paying room and board for a Medicaid hospice patient above what the facility would have received directly from Medicaid had the patient not elected hospice.
- Paying the facility for "additional" services that Medicaid already treats as included in room and board.
- Paying above fair market value for additional non-core services that are not included in room and board.
- Referring hospice patients to the facility to induce it to refer patients back.
- Providing free or below-market care to facility residents during their skilled nursing stay, expecting them to choose your hospice when the benefit runs out.
- Providing staff at your expense to do work the facility would otherwise do.
The OIG Compliance Program Guidance for Hospices (1999) adds marketing-specific risk areas: high-pressure marketing to ineligible beneficiaries; improper patient solicitation such as "patient charting," where a hospice reviews facility residents' records without permission to find prospects; sales commissions based on length of stay; and incentives to actual or potential referral sources such as physicians, nursing homes and hospitals. The guidance says marketing information should be clear, correct, non-deceptive and fully informative, should not suggest the terminal prognosis is of limited importance, and should prominently feature the eligibility requirements.
What You Can Say and Do
Compliance does not mean silence. A hospice can compete on the quality of its care and the reliability of its service:
- Explain eligibility accurately. Who qualifies, what the election means, and what the hospice will and will not provide. The 1999 guidance asks for exactly this.
- Describe your service commitments. Response times, after-hours coverage, interdisciplinary team visits and how you communicate changes. Make only commitments your staffing supports.
- Deliver the orientation the rules require. Under 42 CFR 418.112(f), hospice staff, in coordination with facility staff, must assure orientation of facility staff who care for hospice patients, covering hospice philosophy, comfort and pain control methods, symptom management and principles about death and dying. Required orientation tied to hospice patients is part of the arrangement. A free general education program for the whole facility, offered to win referrals, is a different question for counsel.
- Put the arrangement in writing. The same section requires a written agreement signed by both parties before hospice services begin in the facility, with listed contents. A clear agreement with fair market value terms for any services you buy is the strongest protection you have.
Applying It: The Thursday Meeting
Take the liaison's three ideas from the opening.
- 1.Lunch for the staff. Not on the 1998 list by name, but it is remuneration to people who influence referrals. Many hospices set a written policy on meals and gifts to referral sources with a low value cap, a log, and a ban on cash equivalents, and have counsel approve it. Without a policy, the default answer should be no.
- 2.Free in-services. Orientation for staff who care for your hospice patients is required under 418.112(f). Free continuing education unrelated to your patients, offered to a facility you are courting, needs review.
- 3.Aides helping on the floor. Hospice staff doing work the facility would otherwise do, at the hospice's expense, is on OIG's list of suspected kickbacks. The answer is no.
A Liaison Program Review You Can Run This Week
- 1.Pull every facility agreement. Confirm it is signed, current and includes the contents 418.112(c) requires. Flag any room and board terms above the Medicaid rate.
- 2.List every payment to every facility in the last 12 months: room and board, purchased services, sponsorships, space. Match each to the agreement and a fair market value basis.
- 3.Review liaison compensation. Remove any element tied to length of stay, census days or referrals from a specific source, and have counsel review any element tied to admissions volume.
- 4.Collect marketing materials. Check that each states eligibility prominently, describes the election accurately and makes no promise of indefinite care.
- 5.Audit the gift and meal log against your policy. If there is no log, start one.
- 6.Check record access. Confirm liaisons never review facility residents' charts to identify prospects. Referrals come from the facility, the physician or the family.
- 7.Train and attest. Brief every liaison on the 1998 list and have them sign that they understand it.
Keep the evidence. A compliance program that cannot show its reviews has, for practical purposes, not done them. The compliance software guide covers why software should organize this work while people make the decisions. Cap exposure is a related risk in the same long-stay population; the FY 2027 hospice payment rates guide shows how to project it monthly.
Where Systems Help
The hardest part of a liaison program is visibility: who met whom, what was given, and where each referral came from. Nuraflow is being designed with referral relationship pipelines and source attribution and an approval step for agency social media content, so marketing activity sits in the same record as referrals rather than in personal phones and spreadsheets.
This article is general information, not legal advice. Arrangements with referral sources should be reviewed by healthcare counsel, and OIG's advisory opinion process exists for arrangements that remain uncertain.