Category Archives: Articles

Articles from AnswerStat

Hospital Answering Services Could Be Risky

By Mike Wilson, JD

Hospitals that provide answering services to physicians at below fair market value (FMV) may risk violating federal or state law – with serious consequences. “Stark II” is a federal law to discourage doctors from referring Medicare and Medicaid patients to entities with which they have a financial relationship, which can include indirect compensation in the form of benefits. For example, hospitals that rent office space to physicians below FMV may violate Stark. Possible penalties include denial of Medicare and Medicaid payments, reimbursement of past payments, and exclusion from Medicare or Medicaid in the future, as well as civil penalties of up to $100,000.

The federal Anti-Kickback Statute prohibits physicians from receiving compensation for referral of patients covered under Medicare, Medicaid, and other federal health programs. Again, compensation could include indirect benefits such as below FMV office leases. Unlike Stark, Anti-Kickback also requires proof of intent to induce referrals. The Anti-Kickback Statute has potential criminal penalties, civil penalties of up to $50,000, treble damages, and exclusion from federal health programs. Some states also have laws similar to Stark or Anti-Kickback.

Language in the Stark regulations suggests that free meals for doctors in the hospital cafeteria, for example, are subject to Stark. Concerns then may be, are free or heavily discounted answering services for doctors a kind of “compensation” subject to Stark? If so, the arrangement would fall under one of the exceptions in the regulation or it would be a violation. For example, if the “compensation” does not exceed $300 per year (and meets other requirements) or is provided at fair market value (and meets other requirements), there is no Stark violation. However, the exception most likely to apply to answering services is the “medical staff incidental benefits” exception.

Medical Staff Incidental Benefits: This exception has eight requirements, all of which must be met (when reading the quotes from the regulation below, substitute “answering service” for “compensation”):

  1. “The compensation is offered to all members of the medical staff without regard to the volume or value of referrals or other business generated between the parties.”
  2. “The compensation is offered only (emphasis added) during periods when the medical staff members are making rounds or performing other duties that benefit the hospital or its patients.”
  3. “The compensation is provided by the hospital and used by the medical staff members only on the hospital’s campus (emphasis added).”
  4. “The compensation is reasonably related to the provision of, or designed to facilitate directly or indirectly the delivery of, medical services at the hospital (emphasis added).”
  5. “The compensation is consistent with the types of benefits offered to medical staff members by other hospitals.”
  6. “The compensation is worth less than $25 per occurrence of the benefit.”
  7. “The compensation doesn’t take into account the value or volume of referrals or business generated.”
  8. “The compensation arrangement does not violate the Federal anti-kickback statute.”

Third Party Enforcement: Many courts have held that third parties can bring an action against violators of Stark or the Anti-Kickback Statute under the False Claims Act. This act allows “whistleblowers” to sue violators and be compensated with a percentage of the recovery. The False Claims Act has its own set of penalties, including treble damages and attorney fees.

This article is not intended to give legal advice. This is a highly specialized area of law and litigation over Stark has yet to generate much case law for guidance. In addition, further regulations are to be issued in the near future. Given the potential exposure, prudent hospitals will seek sound legal advice before offering professional answering services to physicians.

Mike Wilson is an attorney and author. He teaches at Sullivan University in Lexington, Kentucky.

[From the Summer 2003 issue of AnswerStat magazine]

Fraud Alert Issued: Prohibited Telemarketing by Health Care Suppliers

By Kathryn L. Holloman and Corrine Parver, Esq

On March 3, 2003, the Department of Health and Human Services’ Office of the Inspector General issued a Special Fraud Alert regarding unsolicited telephone contacts with Medicare beneficiaries. Despite a ban on such contacts by the Social Security Act, the Department found widespread violations of the Act. Therefore, the Special Fraud Alert was issued. Because teleservices and marketing firms may be affected by the Act, it is important to familiarize yourself with this important law that is receiving so much attention.

Despite the statutory prohibition against unsolicited telephone contacts set forth in Section 1834(a)(17) of the Social Security Act, the Office of the Inspector General (OIG) Alert noted that some Durable Medical Equipment (DME) suppliers were using independent marketing firms to make unsolicited telephone calls to Medicare beneficiaries. In response to this lack of compliance to the statutory provisions, on March 3, 2003, the OIG issued its Alert regarding telemarketing by DME suppliers.

Three provisions of the Alert follow: First, the Alert reaffirms that DME suppliers are prohibited from making unsolicited telephone contact with Medicare beneficiaries. Then, it expressly prohibits both unsolicited telemarketing conducted directly by a DME supplier and unsolicited telemarketing conducted by another party on behalf of the DME supplier, except in the three circumstances set forth in Section 1824(a)(17)(A) of the Social Security Act. The OIG based its decision to apply the prohibition to marketing agencies on the theory that DME suppliers cannot do indirectly that which they cannot do directly. The Alert, therefore, expands the statutory language of Section 1834(a)(17) to apply to unsolicited telephone contacts by independent marketing agencies as well as by DME suppliers.

Second, the Alert also holds DME suppliers responsible for verifying that both the marketing activities conducted by, and information purchased from third parties do not involve impermissible activities. Specifically, DME suppliers are required to verify that information purchased from third parties was neither obtained nor derived from a prohibited activity. DME suppliers must also confirm that prohibited activities are not involved in marketing activities conducted by third parties with whom the DME supplier contracts or otherwise does business. The Alert expands the scope of Section 1834(a)(17) in that no language in the statute addresses these issues.

Finally, the Alert states that both DME suppliers and telemarketers are potentially liable for false claims for payments generated by impermissible solicitations. Claims for items or services that are generated by prohibited telephone solicitations are considered false claims. Both the DME supplier and the telemarketer are subject to criminal, civil, and administrative penalties for causing the filing of false claims. The Alert, therefore, expands the prohibition against payments for false claims and the potential penalties for filing such claims applying to claims generated by independent marketing agencies.

Details about the Social Security Act: Pursuant to Section 1834(a)(17)(A), suppliers of Medicare-covered items may not make unsolicited telephone calls to Medicare beneficiaries regarding the furnishing of covered items, except in three specific circumstances:

  • The beneficiary has given the supplier written permission to make contact by telephone;
  • The contact regards an item the supplier has already furnished to the beneficiary; or
  • The supplier has furnished the beneficiary with at least one covered item during the fifteen-month period preceding the date the supplier contacts the beneficiary.

If a supplier improperly contacts a beneficiary, Section 1834(a)(17)(B) prohibits Medicare payments for items furnished subsequent to the unsolicited contact. Specifically, the statute provides that no payment shall be made for any item furnished by a supplier that knowingly contacted a beneficiary in violation of the law. The OIG classifies these claims for payment as false; violators will be potentially subject to criminal, civil, and administrative penalties.

Summary: Section 1834(a)(17) of the Social Security Act prohibits both unsolicited telephone contacts to Medicare beneficiaries by suppliers of Medicare-covered items, and payment for items furnished subsequent to prohibited contacts. The Alert expands these prohibitions by applying them to independent marketing agencies working on behalf of DME suppliers. It also requires DME suppliers to verify that information purchased from third parties and marketing activities which are conducted by such parties do not involve prohibited activities.

Ms. Holloman, a second year law student at University of North Carolina Law School, was a Summer Associate at Dickstein Shapiro in July 2003. Ms. Parver is a partner in the Health Law Services Practice of Dickstein Shapiro Morin & Oshinsky LLP, a Washington, D.C.-based law firm. She may be reached at 202-775-4728 or

[From the Summer 2003 issue of AnswerStat magazine]

Case Study: Remote Call Center Agent Stations

By Gary J. DuPont

The use of remote workers is increasing and often expands the pool of available talent. Recognizing the need to address attrition, load balancing, quality and costs that are problematic to all call centers today, Masco Services Inc. (MSI) took proactive steps utilizing remote workers to change its call center staffing paradigm. It serves as a model and complements a corporate initiative to reduce traffic in Boston’s Longwood Medical Area.

MSI is utilizing two technologies to accomplish the integration of remote workers. The first implementation involves the use of the Teltone Office Link product. It is a flexible, affordable solution that offers seamless connectivity from any location. Two units are required per agent, one at the agent site, the other at the host/automatic call distribution (ACD) location. This technology allows a remote agent to dialup and log into their Avaya ACD. Once logged on, the agent appears to the ACD like any other on-site agent. Agents use 2500 compatible telephone sets with 10-20 programmable speed dial buttons for ACD access codes and frequently called numbers. Staff working on different shifts can share access to the unit. However, agents cannot use the proprietary ACD sets at the remote site.

All connections are made using feature access codes. Several routine call types are sent to these remote agents. A call whisper feature on the PBX/ACD identifies the call type to the agents. The client database is available to the remote worker via high-speed Internet connection and a virtual private network (VPN). The greatest advantage of this application is the ability to build and test the system one agent at a time without significant up front investments.

The second technology that MSI uses is the Avaya Definity Extender unit and a standard Avaya CTI application. This technology permits remote agents to dial up and log into the ACD over standard analog lines, using Avaya proprietary digital ACD telephone sets. The host unit (or Avaya switch) has two ports, one for the ACD and one to the switched line; at the agent end, one port is for the switched line, the other for the digital proprietary set. The telephone interfaces with the PC to provide computer telephony integration (CTI) using Avaya Passageway units. Working closely with Xtend Communications, MSI’s agent console vendor, the remote agent has full functionality to the console features and ACD. Again, high-speed Internet access is required in addition to a VPN. This technology is compatible with Avaya and Nortel ACDs, but there may be restrictions on how far from the central office the agent can be located.

No matter which technology is deployed, toll charges may apply so it is important that the remote agents have a flat-rate long distance price plan. Remember that the technology is only as good as the people using it. MSI recommends that call centers develop a sound interviewing and selection process and establish firm policies and procedures to monitor performance, quality assurance (QA), and communication pathways to the home office.

In the future, MSI plans to change its remote agent platform to Avaya IP Agent, a soft phone application that works through the agent’s personal computer. It is a cost effective solution that will allow them to expand their remote worker program. Avaya IP Agent allows the agent to work from any PC, as long as there is high-speed access via VPN to the corporate network. Remote agents will be able to administer CTI screen pops more easily, eliminating the use of extraneous hardware devices.

Gary J. DuPont is Director of Telecommunications for Masco Services Inc.

[From the Summer 2003 issue of AnswerStat magazine]

Benchmarking Your Call Center

By Peter Lyle DeHaan, Ph.D.

Peter DeHaan, Publisher and Editor of AnswerStat

What is benchmarking? At its simplest, benchmarking is objectively comparing your call center with others. Brad Cleveland of Incoming Calls Management Institute states that “Benchmarking is comparing products, services, and processes with those of other organizations, to identify new ideas and improvement opportunities.” Whereas Dr. Jon Anton of Purdue University defines benchmarking as “A structured, analytical approach to identify, deploy, and review best practices to gain and maintain competitive advantage.”

Benchmarking is a safe, anonymous, and effective way to obtain input from peers which can be used to compare and contrast your call center operation to others. This feedback provides a baseline for determining areas of deficiency, as well as success. Benchmarking produces quantifiable results, real numbers from real businesses, thereby offering real solutions. Also, once a benchmarking process has been implemented, it can be easily repeated and updated on a periodic basis. This provides a time line of successive snapshots of your business. In essence, benchmarking makes it possible to create a report card showing your successes, your shortcomings, your improvements, and your relapses – all with respect to your peers, but done so privately and confidentiality.

Therefore, call center benchmarking is the comparison of your operation with statistical results from the norm of industry peers. These numeric measurements are called metrics. Metrics can be in the form of financial data, sales numbers, operational quality and efficiency, human resource efficacy, or whatever is deemed to be the most valuable to the participants, though typically and primarily they are operational in nature.

Successful benchmarking follows a progressive path towards a desired outcome. First and foremost, there must be a desire to obtain and use the information. Next, you need to determine who will be invited to participate. It is essential for participants to have an interest in the results and a commitment to contribute. Beyond that, it is imperative that all participants have sufficiently similar businesses. In many cases, it is wise to select those using common equipment or software platforms, since operational metrics are hard to reliably compare when their sources employ dissimilar statistical paradigms.

The third step is to determine which numbers to measure. It is recommended to start small, obtaining only a few key numbers (as participants become engaged in the process and realize the value of it, then other metrics can be added). It will then be necessary to develop a standard determination of how the information will be gathered or the calculations will be made. For without a standard methodology, each participant will make the calculations as they see fit, rendering any results unreliable. These two steps can be both time-consuming and contentious. Assistance from someone with experience in benchmarking or a background in statistical analysis is most beneficial at this point. This outside assistance serves to greatly simplify the process and save valuable time. Also, if this person does not have a direct vested interest in the results, they are better able to objectively guide the process.

The fifth step is a critical one. It is to develop the survey form, which includes documenting the source or calculation of the data. Although this seems like a simple and straightforward process, it is one fraught with peril, as a less than ideal survey form will doom the process to misanalysis or failure. Again, someone with experience in benchmarking or developing survey forms will be most helpful. Then, regardless of the quality of the survey form – or its developer – it is of paramount importance to test it. What may seem perfectly clear to those who developed and reviewed the form, could cause confusion or misinterpretation to those completing it. Therefore, a small field test should be conducted. Any problems uncovered in the test will need to be corrected before the benchmark survey is distributed to all participants.

The next two steps are the most important, as concerns in these areas can cause otherwise willing participants to decide not to complete the survey or to color their responses. Quite simply these steps are to gather the completed surveys and then to compile the results. Concerns reside in who performs these two steps. It is imperative that this person or group be trusted and respected by all participants and that there not be any perception of impropriety or a conflict of interest. As such, it is recommended that someone who is not participating in, and will not benefit from, the benchmarking results be assigned the task of both collecting and tabulating the responses.

The results of the benchmarking survey are only presented in aggregate form and then only to those who responded. All individual answers must be fully protected. In some cases, such as providing cross-sectional or demographic analysis, certain sections may need to be eliminated due to a small number of responses which would effectively expose one or two participants. The results, often along with an analysis and commentary, are distributed to all who submitted data.

Although conducting a benchmarking study once is valuable, the real benefit comes from repeated studies over the course of time. Therefore, it is important to follow-up with those who participated to determine any problem areas needing correction or additional data to be collected. These changes must be made before the survey is repeated. Depending on the nature of the information, the survey should be repeated at least annually, possibly quarterly, or even monthly.

Some examples of benchmarking metrics:


  • Percent of calls answered
  • Average time to answer
  • Percent of calls placed on hold
  • Average hold time
  • Occupancy (percent of time spent working)
  • Average call duration
  • Average wrap up time
  • Number of calls answered per month
  • Amount of time spent on calls per month
  • Schedule adherence

Sales and Marketing

  • Number of sales made
  • Sales per hour
  • Average revenue per sale
  • Number of inquiries
  • Closing ratios
  • Source of leads

Human Resource

  • Annual turnover rate
  • Average employee (CSR) tenure
  • Cost to hire one new employee
  • Cost to train one new employee
  • Starting pay per hour
  • Average hourly rate


  • Percent of revenue spent on labor
  • Percent of revenue spent on marketing promotions
  • Percent of revenue spent on all sales and marketing efforts
  • Number of clients
  • Average revenue per client
  • Cost per sale
  • Profit margin

Conclusion: Benchmarking is a valuable mechanism to bring outside experience, information, and knowledge into a business. With this input, business goals become more defined and realistic; direction, clearer; and focus, sharper. It is an opportunity for improvement that should be seized.

Peter Lyle DeHaan, PhD, is the publisher and editor-in-chief of AnswerStat. He’s a passionate wordsmith whose goal is to change the world one word at a time.

[From the Summer 2003 issue of AnswerStat magazine]