Discharge Planning and Skilled Nursing Facility Referral Arrangements

Discharge Planning and Skilled Nursing Facility Referral Arrangements at a Glance

Discharge planning and skilled nursing facility (SNF) referral arrangements are subject to intense scrutiny under both the Anti-Kickback Statute (AKS) and Stark Law. These arrangements, which often involve coordination between hospitals and SNFs, are particularly vulnerable to allegations of improper financial incentives, such as kickbacks or improper referrals. The legal framework surrounding these relationships includes strict prohibitions on remuneration that could influence referrals, as well as specific exceptions and safe harbors that may apply under certain conditions.

The Legal Framework

The Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), prohibits the knowing and willful offer, payment, solicitation, or receipt of remuneration to induce or reward referrals of items or services payable by a federal health care program. This includes arrangements between hospitals and SNFs, particularly where discharge planning is involved. Violations can result in criminal penalties, including fines of up to $100,000 or imprisonment for up to 10 years, or both.

The Stark Law, 42 U.S.C. § 1395nn, imposes additional restrictions on physician self-referrals for designated health services to entities with which the physician has a financial relationship. Unlike the AKS, Stark Law violations are civil in nature and are enforced by the Centers for Medicare & Medicaid Services (CMS). However, the Stark Law also includes exceptions that may apply to certain referral arrangements, including those involving discharge planning and SNF referrals.

The safe harbor regulations under the AKS, 42 C.F.R. § 1001.952, provide a framework for lawful arrangements that may otherwise appear to violate the statute. These include categories such as investment interests, space rental, equipment rental, personal services and management contracts, referral services, group purchasing organizations, and electronic health records items and services. However, discharge planning and SNF referral arrangements must be carefully evaluated to ensure compliance with these safe harbors and avoid falling into prohibited categories.

The Federal Overlay

The federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), makes it a felony to knowingly and willfully offer, pay, solicit, or receive remuneration to induce or reward referrals of items or services payable by a federal health care program. The Stark Law, 42 U.S.C. § 1395nn, separately prohibits physician self-referrals for designated health services payable by Medicare or Medicaid, on strict-liability terms. Both regimes carry safe harbors and exceptions published at 42 C.F.R. § 1001.952. State referral and fee-splitting statutes operate alongside these federal prohibitions and can apply even where no federal program payment is involved.

Reading the Research Desk

To further explore related topics, visit the AKS Defense Research Topics desk, the statute explainer, the safe-harbor research note, the AKS/Stark overlap analysis, recent decisions, and the FAQ.