Note: If you missed Part 1 of this article in the March 2023 Sentinel, please click here to read it.
Codes of professional ethics typically address (and prohibit) the payment or receipt of kickbacks, but also may address the separate and sensitive issue of whether a provider may accept a gift from a patient. As most providers know, accepting a gift from a patient is about much more than merely saying “thank you” or avoiding giving offense, as such a gift can complicate the provider-patient relationship. In particular, the American Medical Association Code of Ethics (which has been adopted as binding on physicians in many states, including Tennessee) provides:
Patients offer gifts to a physician for many reasons. Some gifts are offered as an expression of gratitude or a reflection of the patient’s cultural tradition. Accepting gifts offered for these reasons can enhance the patient-physician relationship. Other gifts may signal psychological needs that require the physician’s attention. Some patients may offer gifts or cash to secure or influence care or to secure preferential treatment. Such gifts can undermine physicians’ obligation to provide services fairly to all patients; accepting them is likely to damage the patient-physician relationship. The interaction of these factors is complex and physicians should consider them sensitively before accepting or declining a gift.
AMA Code of Ethics, Op. 1.2.8.
In particular, and as the AMA Code of Ethics notes, providers to whom a patient offers a gift should:
Alternatively, a provider could suggest that the patient make a charitable contribution instead of a gift to the provider. If a patient makes such a contribution, the recipient charity should be a bona fide tax exempt organization that is independent of, and not controlled by, the provider. Whether the provider may suggest a gift to a particular organization, and whether the patient may give a gift to an organization in which the provider participates through management (e.g., as a board member) or services (e.g., as a volunteer or staff member), would depend on the specific circumstances and whether the gift to the organization could reasonably be viewed as benefitting the provider in some way.
For example, a suggestion by a provider that a patient make a gift to the American Heart Association, even if the provider serves on the local board or provides volunteer services for the organization, would probably pose little to no risk of violating ethical standards (or applicable laws governing healthcare fraud, waste and abuse). On the other hand, a gift to a private foundation controlled by the provider or benefitting the provider or the provider’s patients in some targeted way, or to an organization that materially compensates the provider for the provision of services, would likely give rise to the same concerns as a gift made directly to the provider.
Takeaways and Specific Circumstances
Often, when considering whether a proposed course of conduct would violate healthcare fraud and abuse laws, it is helpful to consider how one would explain the conduct to a cynical government regulator. Such an exercise can highlight the differences between ordinary business activities, such as marketing and showing gratitude for business relationships, and problematic behavior intended to induce or reward referrals.
While no general recitation of “good” and “bad” characteristics is a substitute for expert legal advice in a given case, and no gift of any value is truly free from all compliance risk, some gifting scenarios are common enough that they can be distilled into general rules of thumb for providers to keep in mind when considering giving a gift to, or receiving a gift from, a patient or referral source. Those rules include the following:
Ultimately, as much as a physician or other healthcare provider may appreciate his or her patients and referral sources, any expression of appreciation beyond words of thanks raises at least the potential for legal exposure. Providers considering giving or receiving gifts should do so carefully and intentionally, keeping applicable law, published guidance, and internal policies in mind and considering whether to consult with an experienced health care attorney to minimize the chances that gratitude is mistaken for a grift.
If you have questions regarding gifts, SVMIC recommends contacting your corporate attorney or our Medical Practice Services Department at ContactSVMIC@svmic.com or 800.342.2239.
As an experienced health care, corporate and transactional lawyer, Mark Ison recognizes that business success requires both attention to granular details and an appreciation of the larger context in which decisions are made. He brings this perspective to his work serving both health care and non-health care industry clients, providing counsel that combines a business attorney’s practical guidance and strategic vision with an immersive understanding of each client’s operational, financial, and compliance challenges.
Mark’s ability to parse the countless nuances of ever-changing laws and guidance, and his grasp of how they intersect with the day-to-day and long-term realities faced by healthcare providers facilitates his actionable counsel. He is particularly well-versed in fraud and abuse matters, including under federal laws such as the Stark Law, Anti-Kickback Statute, False Claims Act, Civil Monetary Penalties Law and HIPAA, and analogous state laws governing self-referral, fee-splitting, kickbacks, the corporate practice of medicine, and privacy. His practice also includes substantial work on matters involving Medicare reimbursement and reassignment, including audits, appeals, and disputes, as well as facility and professional licensing, professional entity formation and qualification, prompt payment, and other issues.
Clients across the healthcare spectrum rely on Mark for his compliance expertise and transactional and operational experience, including physicians and physician groups, nurse practitioners, physician assistants, physical therapists and chiropractors, as well as physician joint ventures, laboratories, pharmacies, independent diagnostic testing facilities, ambulatory surgery centers, and healthcare technology and device companies. He works with clients on a broad range of operational and transactional issues, such as the formation, operation, dissolution, purchase and sale of professional practices and related entities (including complex private equity-backed transactions and physician-hospital integration transactions), employment and recruitment agreements, management agreements, professional services agreements, joint ventures, payor disputes, and covenants not-to-compete.
Not limiting his practice exclusively to health care clients, Mark has represented clients in many other industries in connection with mergers and acquisitions, venture capital and private equity financing, securities matters, business formation and dissolution, and day-to-day operational issues, including leasing and licensing transactions and employment matters.
Mark is an adjunct instructor in health law at the Belmont College of Law and is a frequent speaker on health law topics, notably with respect to fraud and abuse and healthcare mergers and acquisitions.
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