Marketing Pitfalls

1. Marketing Pitfalls NCAL Webinar November 6, 2008 www.lanepowell.com

2. Presenters • Barbara J. Duffy • Duffyb@lanepowell.com • Robin Dale • Daler@lanepowell.com • Warren Babb • Babbw@lanepowell.com • Erik Price • Pricee@lanepowell.com

3. Marketing Pitfalls • General Trends • Fair Housing • Risk Management • Health Insurance Portability and Accountability Act (“HIPAA”) • Anti-Kickback • Questions

4. General Trends In Assisted Living • Fair Housing Claims More Pervasive • Consumer Advertising Related Claims • Personal Injury Claims Now Seem to Include Claims Related to Advertising • HIPAA and Assisted Living • Sensitive Fraud Environment

5. Fair Housing

6. Fair Housing • The Fair Housing Act makes it unlawful to discriminate in the sale, rental, and financing of housing because of race, color, religion, sex, handicap, familial status, or national origin.

7. Fair Housing • The Act makes it unlawful to make, print, or publish, or cause to be made, printed or published, any notice, statement, or advertisement, with respect to the sale or rental of a dwelling, that “indicates” any preference, limitation, or discrimination violating the provisions of the Act.

8. Fair Housing • Any material or marketing used to promote a community is covered by the Act. • These include, print material, television, radio and other electronic media, brochures, pamphlets, annual reports, billboards, pictures of the facility posted in a sales office, specialty marketing devices, and even business cards.

9. Fair Housing • Because the Act bans any housing-related communication that “indicates” discrimination, courts have adopted essentially a strict liability standard with respect to discriminatory advertising.

10. Problematic Language • Use of certain terms or phrases that convey a discriminatory preference may be considered unlawful under the Act. • However, it is acceptable for communities to describe themselves and their activities rather than the prospective or hoped for resident.

11. Problematic Language • Advertisements should not contain explicit exclusions, limitations, or other indications that protected classes are not welcome or are exposed to different criteria than other potential residents.

12. Problematic Language • HUD guidance prohibits the use of language that could directly or indirectly be interpreted as conveying a discriminatory intent. Examples include: • Adjectives describing the community or preferred resident in racial, ethnic, or sex-based terms;

13. Problematic Language • Examples include: • Words indicating preferred race, color, religion, national origin, sex, disability, or familial status; and • Explicit exclusions indicating discrimination based on disability (e.g., “no wheelchairs”).

14. Problematic Language • Communities must also be careful not to convey perceived religious discrimination.

15. Human Models • HUD advertising guidelines cite the “selective use of human models” as a potential violation.

16. Human Models • The use of human models in advertisements raises the issue of whether the community is communicating a preference for one group of persons or another.

17. Other Advertising and Marketing Techniques • HUD guidelines specifically address the possibility that the selective use of advertising can lead to discriminatory results in violation of the Act.

18. Risk Management

19. Advent of Tort Reform has led plaintiffs attorneys to seek alternative legal theories. • Breach of Contract • Consumer Claims • Misrepresentation • Fraud

20. Five Basic Rules • Sensitize Marketing Dept. to Risk Mgmt Issues • Avoid “meet/exceeds” language • Separate Ad material for Independent and AL • Realistic “Daily Life” Orientation DVDs/videos • Written Notice of Changes/Reductions to Services

21. Marketing v. Risk Management – the Classic Struggle • Sales teams trained to present most favorable impressions • Brochures, Print Ads and Internet Ads/websites • Mission Statements (Posted on Internet)

22. Marketing v. Risk Management – the Classic Struggle • Avoid Overstatement/Exaggeration • Describe Services Not Aspirations/Goals

23. Avoid “Meets/Exceeds” Phraseology • Common usage of Meet/Exceeds Gov. Standards/Regulations • Buzz words – Quality, Professional, Superior • Open-ended “promises,” Ambiguous terms

24. Separate Promotional Material for Independent Housing and Assisting Living • Different Regulations and Standards for Two Types of Housing • Public/Courts Blur Lines between types – assume all are ALF • If all in one Ad/Brochure Conspicuously and Expressly state both are provided and ALF services not offer to Independent Residents

25. “Daily Life” Orientation DVDs/Videos • Reality Based, Showing True Services • Short – Three – Five Minutes • Take Care What the Voice Over Says • Serves as Audio/Visual Record of Representations made to residents and families • Resident/Family Sign Form Acknowledging Watching Video

26. Written Representations/”Promises” must be “taken back” in writing • Changes to Amenities, Services, Policies • Written Advance Notice of Changes • Sent to Residents by Mail • Conspicuously Posted in Common Areas • Announcements Made at Facility Meetings/Events

27. Health Insurance Portability and Accountability Act (“HIPAA”)

28. HIPAA • Does HIPPA apply?

29. HIPAA • Always obtain resident permission • HIPAA requires revocability • State Privacy laws may apply

30. Federal Medical Referral Laws and Regulations • Marketing Risks From: • Anti-Kickback Laws • Stark “Physician Self-Referral” Laws

31. Anti-Kickback and Stark LawsMarketing Risk Areas • Two Areas of Risk • Marketing to providers, suppliers, vendors • Marketing to residents

32. What Are Theses Laws? • Anti-Kickback • “Stark” Physician Self-Referral

33. Anti-Kickback • Real Life ‘Kickbacks’ • Cash back credit cards • Frequent flyer miles • Gas discounts for groceries

34. Anti-Kickback • Why Are Federally Reimbursed Health Care Providers Treated Differently? • The Government does not want to pay the cost of kickbacks • Medical judgments are clouded by financial incentives

35. Anti-Kickback • Referrals of Federal health care program-covered goods or services; • Payment, either direct or indirect, in cash or in kind; and • Intent to induce referrals.

36. Stark “Physician Self-Referral” Law Congressman Pete Stark (D. CA)

37. StarkThe Very Basics • 42 U.S.C. § 1395nn • “. . .If a physician (or an immediate family member of such physician) has a financial relationship with an entity . . ., then the physician may not make a referral to the entity for the furnishing of designated health services for which payment otherwise may be made” under Medicare (and to some extent Medicaid).

38. Stark and Anti-Kickback • Examples of arrangements that violate these laws • Hospices • Ambulance Services • Joint Ventures • DME • Medical Director Contracts

39. How Does This Relate to Marketing?

40. Marketing to Providers, Suppliers, Vendors • Marketing department seeking to lower costs or add revenue through: • Giveaways to referring physicians • Relationships with vendors • Exploring joint venture opportunities

41. Marketing to Prospective Residents • Marketing materials emphasizing relationships with providers or vendors, i.e., “Passing the savings on to you” • Inadvertently boasting of relationships that may violate these laws • Drawing attention of competitors/regulators

42. Government Urges: Marketing Program and Activities Should Be Part of Fraud and Abuse Compliance Program