Avoiding Anti-Kickback Violations in Ambulance Marketing
Think $25,000 is a lot to spend for a pizza? Cross the line and violate anti-kickback laws and you might just find yourself writing a check in just that amount.
As the government cracks down on the abuse of Medicare and State health care programs by private ambulance companies, which we have witnessed in recent headlines, many nervous private ambulance service owners are taking a closer look at their business practices to avoid the bad press, civil monetary penalties (CMPs), and even criminal prosecution that can come to an ambulance company’s principals and agents alike when abuse does occur.
The all too familiar Medicare Patient Protection Act of 1987 addresses some of the abuses that commonly occur in the private ambulance industry but for this article, we’re going to single out the anti-kickback statutes that prevent ambulance companies from “buying” their customers’ business.
Like most laws and regulations written by government officials, the language of the regulations are both specific and vague at the same time and the interpretation of this language is perceived differently among ambulance industry professionals nationwide. I have heard private ambulance professionals claim all sorts of illogical excuses, exceptions, and opinions on what is and what isn’t a violation of anti-kickback statutes.
I am no attorney and obviously cannot render a legal opinion about where the line exists that differentiates between a simple act of marketing and an illegal kickback. With that said, however, the statutes state clearly that “any person who knowingly solicits or receives any remuneration directly or indirectly, overtly or covertly, in cash or in kind” for the referral or product or service sales payable under a federal health care program could be in violation of the anti-kickback statutes. It of course goes on to apply this to the provider of the “remuneration” as well.
It is important to note that the statutes considers remuneration in excess of “nominal” value a potential violation of the statutes but they don’t define what “nominal” is when it applies to private ambulance companies and their dealings with facilities that receive Medicare funding. The Office of the Inspector General does define nominal when dealing with individual Medicare recipients but for us in the private ambulance industry. The term “nominal” is subject to interpretation and unfortunately what many ambulance companies find out the hard way…it’s not your interpretation but the OIG’s that matters.
I could go on and on about this but this article isn’t meant to school you on anti-kickback statues but instead on how to avoid violating these statutes with good old-fashioned marketing; the kind of marketing missing in so many of the private ambulance companies in operation around the U.S.
Getting down to the basics of building a solid marketing plan takes us accepting some inalienable truths about marketing, people, and the way the two interact.
Marketing is a people business.
The nature of our industry makes the acquisition of exclusive facility contracts not only nearly impossible but also incredibly dangerous in terms of violations to federal and state laws. One wrong move could cost you your career, your money, and even your freedom so many healthcare facilities avoid the practice of awarding exclusive contracts entirely when any part of their income is derived from federal health care programs. What this means for us is that even when we do get that contract finally signed we are most likely just one of a number of contracted vendors for the facility.
At the end of the day, it’s not the CEO, CFO, DON, or other member of upper management from the facility that picks up the phone to transport Mrs. Jones to her MRI; it’s the lower-level nurses, case managers, and unit clerks calling for these services. Apart from (possibly) knowing that a contract with your company actually exists, chances are that you hold no special place in these employee’s hearts unless you have made some real marketing efforts to build personal relationships with them. With that said, following some basic marketing strategies and processes, we can build our businesses without finding ourselves on the receiving end of an OIG investigation.
Marketing is a People Business
Building relationships with facility staff members (your actual callers) takes time and effort but it is these relationships that will stand up against all the pizzas, pens, notepads, doughnuts, and whatever else your competition is showering the facility with.
A good relationship is one where both parties feel free to communicate with each other without judgment or confrontation. It’s one where, when problems arise, each party believes that their relationship with the other party will result in faster and more satisfactory resolution than would occur with another business partnership with weaker relationship. A good relationship is one where both parties realize that they’re doing business but with the feeling that they’re doing this business with a friend.
Focus on the people that call you opposed to the businesses and you will reap huge benefits without spending a fortune on foods, gifts, and other expensive marketing items.
The sales process is comprised of every step your customer must go through to obtain the product or service you are selling. At each one of the steps from the realization of a need for services to the actual purchase or acquisition of these services represents an area where friction can occur.
Friction is of course the resistance between objects as they move against each other. In terms of the sales process, friction is all your business practices, policies, and hurdles that your customer must overcome to actually take receipt of your product or service.
A single incoming phone line that’s always busy, unrealistic paperwork requirements and late arrivals are all examples of things that can create friction in your own sales process. By breaking your sales process down into its individual steps you can identify and fix the causes of this friction to improve your sales process and make the ordering of your services easy and painless for your customers which will result in higher sales through repetitive business.
I have written an entire article entitled “Ambulance Marketing: Friction Burns” on the concept of friction in the sales process so for a lengthy discussion on the subject, I invite you to find this and spend the few minutes it takes to read.
Perception is Key
If you take a moment to look around at other marketing messages in other industries, you might just be surprised how much of that messaging is directly aimed at creating a perception in the customer’s mind as opposed to actually painting a picture of reality.
Turn on the TV and you’ll see commercials about how fresh the produce is at a fast food restaurant, how wearing a cologne or perfume will make you more desirable, that shopping at a mega grocery store will save you money, or how insuring your car with one company will ensure that your vehicle will be repaired when another company would make you pay for it yourself.
The reality is that most fast food restaurants get their produce from the same vendors, cologne and perfume won’t turn you into a god with chiseled abs, mega stores aren’t always the cheapest, and insurance policies are going to be pretty similar across providers.
Your customers don’t see your office building, they don’t know how much money your company has in the bank and they don’t know how profitable or responsible your company is. Your customer’s perception of your business comes down to the field staff they interact with, the dispatch center personnel they speak to, and the marketing materials your company distributes.
Focus your efforts on these three areas and you will be well on your way to increasing sales and positively impacting your customer’s perception of your private ambulance company.
Make a Plan
Of course, avoiding trouble with anti-kickback regulations takes a solid marketing plan employing a variety of strategies. Don’t let this short article serve as your only source for marketing information. The tried and true marketing strategies that have built this country and the companies within it apply just as well to the private ambulance industry as they do to shrink wrapped snack.
Pens and pads have their place in private ambulance marketing but they are not a marketing strategy on their own. Take some time to put together a strategic ambulance marketing plan for your company that delivers the right message, through effective channels, and increases the perceived quality of your company and you will find that no amount of your competition’s pens, pads, or pizzas can compete and you’ll win doubly by avoiding anti-kickback laws altogether.
Christopher M. Webb brings over 15 years of marketing experience through multichannel development to the private ambulance industry. He is the Vice President of MiK
Market Systems, the creator of the EmergiTrack CRM software, and the author of “Marketing 911” (Ambulance Marketing for the Rest of Us) ISBN 978-1-4507-9243-1 and can be reached at email@example.com.