There have been many enforcement actions and settlements with durable medical equipment (DME) suppliers over the past 24 months. Many of the cases involve overbilling, claims for medically unnecessary equipment and the improper use of lead generation and referral sources.
DME companies often purchase sales leads from third-party lead generation companies (LGC). However, DME suppliers need to be conscious and careful about how they pay for sales leads, especially if their customers/patients participate in the Medicare or Medicaid program for their supplies.
Federal healthcare laws are particular when it comes to how healthcare providers, including DME suppliers, obtain information on patients. These laws may come into play when DME suppliers attempt to generate new business by contracting with LGCs, which can cause suppliers to violate any number of healthcare law like the Anti-Kickback Statute (AKS).
As the AKS relates to the Durable Medical Equipment industry, it is acceptable for a DME supplier to “purchase a lead.” However, it is a violation of the AKS for the supplier to “pay for a referral.” So, when a DME supplier contracts with a lead generation company or another type of third-party marketing firm, it’s important to understand whether they are purchasing an “unqualified lead” or are they purchasing a “qualified lead” which can be considered a patient referral, making the purchase illegal.
DME suppliers can and should pay a set FMV price-per-unqualified lead. An unqualified lead is a prospect’s/patient’s name, phone number and address or email address. A qualified lead/patient is a prospect with much more information, such as prescription, doctor’s name, Medicare information, etc. Government regulators consider a qualified lead as a patient referral and paying a set price-per-qualified lead could be problematic. Therefore, it’s recommended to play it safe and pay a set FMV price-per-unqualified lead and then pay an FMV hourly rate to qualify the lead.