Los Angeles-Based Hospital

The hospital’s general counsel and Board of Directors were concerned with how their marketing firm was promoting the hospital’s services to nursing homes, convalescent homes and other, smaller facilities. The hospital hired Guidepost Solutions to investigate the marketing firm’s practices and determine its compliance with regulations specific to the healthcare industry.

It’s common and legal for hospitals to employ marketing firms to promote their facilities to smaller healthcare institutions, but paying fees or other remuneration for referrals is illegal, and often results in criminal and civil charges. If the marketing firm was involved in kickback schemes or conduct violations, the hospital would also be strictly liable.

Guidepost Solutions conducted an in-depth investigation of the hospital’s employees and marketing vendor including a review of the vendor’s applicable documents and contract with the hospital. This helped determine the amount of money received; where patients originated and what medial services were provided; and how the marketing firm was spending money on promotional activities.

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The investigation also involved interviewing the marketing firm’s executives to dig deeper and get a better understanding of their activities and determine their truthfulness.

The review revealed that the owner of the marketing firm was a convicted felon; the business generated by the marketing firm came from facilities known to be rife with internal fraud; and a marketing firm executive worked for a healthcare facility referring patients to the hospital.

Guidepost Solutions presented its findings to the hospital’s Board of Directors. The findings provided the hospital with an accurate account of the marketing firm’s activities and positions the hospital to make an informed decision regarding this specific vendor, as well as a thorough analysis in the event it or the marketing firm are scrutinized in the future by state or federal officials.