OIG Advisory Opinion Okays Treatment-based Patient Incentives

A blue door with two small holes in it.

A digital health company that uses smartphone and smart debit card technology to operate an incentive program for patients with substance use disorders was given a favorable advisory opinion by the Office of Inspector General for the Department of Health and Human Services (OIG) to provide patient incentives in the form of a debit card for achieving certain behavioral health goals.

While such patient incentives might be considered a violation of the federal Anti-Kickback statute and the Beneficiary Inducements CMP, the OIG determined that this particular arrangement presents a minimal risk of fraud and abuse and therefore the agency would not impose sanctions. Generally, the OIG is concerned that programs involving remuneration to beneficiaries can “corrupt medical care decision-making, which could result in over-utilization, increased costs, steering to particular providers or suppliers or inappropriate medical choices.â€

Although the requestor does not bill federal healthcare programs, it does contract with health plans, addiction treatment providers, employee assistance programs, research institutions and other treatment providers. These “customers†pay the requester a monthly member fee.

The OIG noted that it was giving its blessing to the arrangement for the following reasons:

  • The patient incentives are part of a protocol-driven, evidence-based treatment program rather than an inducement to seek, or a reward for having sought, a particular federally reimbursable treatment.
  • The incentives were unlikely to encourage over-utilization of federally reimbursable services because the dollar amount of the incentives is low, (typically under $5 per successful test or achievement of other specified behavioral health goal), and are capped at a maximum of $200 per month and $599 per year. An incentive might start at $2 per successful breathalyzer test for five tests per week and potentially reach $3.50 per successful test for three tests per week later in the program. Similarly, for drug saliva testing it may start at $5 per successful test for two tests per week and progress to $10.50 per test once a week. Moreover, many of the customers are not healthcare providers or suppliers and therefore do not have an incentive to induce a member to receive federally reimbursable services.
  • Many of the requestor’s customer base are individuals or entities that do not have an incentive to induce a member to receive federally reimbursable services. Also, fees paid by customers do not vary based on the volume or value of any federally reimbursable services and the program is protocol driven and set by the requestor, not the customer.
  • While the incentives are loaded onto a smart card, there are certain safeguards to mitigate the risk of fraud and abuse. Also, the smart card has anti-relapse protections. For example, coaches and providers are signaled of the possible need for intervention in the event of a blocked purchase. Also, the cards cannot be used at bars, liquor stores, casinos, or certain other locations, nor can it be used to convert credit to cash at ATMs or gas stations.

Petitioners request OIG Advisory Opinions on matters ranging from the provision of lodging and meals by hospital systems for patients being treated at their facility, to providing free medication, to joint venture arrangements. Every advisory opinion is specific to each case and is limited to the scope of the proposed arrangement.

The Health Law Offices of Anthony C. Vitale can assist clients with drafting requests for Advisory Opinions to the defense of violations of the Anti-Kickback statute and Beneficiary Inducements CMP. You can contact us at 305-358-4500 or send us an email to info@vitalehealthlaw.com and let’s discuss how we might be able to assist you.

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The Health Law Offices of Anthony C. Vitale