For Physicians, Sometimes It's Better Not to Give, Or Receive

August 3, 2011

Most physicians are aware that ethically they should not pay those in a position to refer to their practice, nor should they accept gifts from providers to whom they refer patients. However, physicians may not realize that giving and receiving gifts may actually be illegal under numerous laws.

In my 14 years of working with and lecturing physicians on issues related to their medical practices, one of the topics that always leads to animated conversation is the legality of giving and receiving gifts among physicians, referral sources, and patients. Gift baskets, meals, golf outings, and even free tickets to concerts or ballgames are common gifts for physicians, surgery centers, and MRI facilities to send their best referral sources. What’s wrong with that?

Most physicians are aware that ethically they should not pay those in a position to refer to their practice, nor should they accept gifts from providers to whom they refer patients. However, physicians may not realize that giving and receiving gifts may actually be illegal under numerous laws, including the Stark laws and Anti-Kickback Statute.

Under Stark, which generally prohibits physicians from referring federal patients for certain designated health services to an entity with which the physician (or immediate family member) has a financial relationship, physicians may not accept gifts valued at more than $359 in 2011, with each gift being a maximum of $30. For gifts given to a group which are not designated for a particular physician, the law does not clearly apply; however, I typically recommend that the group be treated as a physician and that “group” designated gifts not exceed the $359 limit.

The Anti-Kickback Statute is a criminal statute that is generally implicated by the giving of anything of value in order to induce a referral of a patient, services, or item billable to a the federal health care program. Both the giver and the receiver of the gift may violate the statute.

This statute is intent-based and therefore the intent behind the receipt (or making) of the gift is important to determine whether the law has been implicated. There is no gift-giving exception under the Anti-Kickback Statute, but the OIG has determined that incentives of nominal value (not more than $10 per item or $50 in the aggregate for a year to a single individual) are likely acceptable.

When I raise these monetary guidelines, physicians typically bring up the same comments: How do you value a single slice of pizza or a particular bottle of wine? How are we supposed to have time to track gifts? What if you give the same gift to everyone? It’s Christmas - everyone receives gifts!

There are no great answers to these questions and I appreciate that these laws are largely seen as yet another administrative burden by most physicians. But the goal behind the law is achieved if even one person questions his or her conduct: What is the reason you send a gift to some physicians and not others? Is it to induce referrals? Is it to show appreciation for past referrals? Is the value of the gift linked to the value of the referrals? What does the pattern of gift giving show about both the giver of gifts and the recipient?

If your practice has not been in the habit of tracking gifts, it’s advisable to create a policy that will bring you into compliance: 

1. What type of gifts has the practice/physician received in the past that you need to watch out for? Keep in mind that gifts made to office staff should be taken into consideration as well.

2. Consider the intent behind the gifts and decide if they should be refused in the future. How would absence of the gift affect the recipient’s future referral patterns?

3. What is the value of the gifts that are being received or given? Start tracking all gifts that are received by the practice and each physician to make sure the legal limits are not exceeded.

4. Talk with counsel to determine how to handle past non-compliance with federal law and whether self-disclosure is advised.

There are other laws and exceptions that may apply to gifts that are given and received as well. But the key is to take a look at the patterns in which you practice is engaged and to start taking the necessary steps to become compliant. Once you have a policy in place, it will be one less compliance risk for both you and your practice.

Ericka L. Adler is a partner at the firm of Kamensky Rubinstein Hochman & Delott, LLP. Her primary practice focus is in the areas of regulatory and transactional health care law and she has substantial experience structuring sophisticated health care ventures and advising clients regarding compliance with federal and state health care laws and regulations. Adler lectures to and advises physicians and other providers regarding regulatory health care issues, day to day practice management, physician contract matters and negotiations and other business issues that impact healthcare today. E-mail her here.