OIG Gives Blessing to Gift Card Arrangement

A blue door with two small holes in it.

Last month, the Office of Inspector General (OIG) published an advisory opinion in which it declined to impose sanctions for an arrangement under which the requestor provides gift cards to Medicare Advantage enrollees who complete an online learning program related to potential risks, benefits, and expectations relating to surgeries.

The requestor stated that the program is designed to enhance the patient experience, increase patient literacy about surgery, reduce the incidence of inappropriate surgeries, and mitigate complications, errors, and infections for those surgeries that do occur. It also stated that the program was associated with statistically significant decreases in certain utilization and cost measures related to surgery.

The OIG concluded that while the arrangement would constitute prohibited remuneration under the federal anti-kickback statute (AKS) and the beneficiary inducement prohibitions of the Civil Monetary Penalties Law (CMP), it unlikely would impact competition among providers or influence selection of a particular provider and therefore determined that the arrangement did not warrant the imposition of sanctions.

Under the arrangement, the requestor contracts with Medicare Advantage Organizations (MAO) to offer the program to enrollees and charges each MAO per member, per month. Enrollees who complete the first module receive a $25 gift card to a retailer. The second module is designed for patients who have opted to undergo surgery. However, the gift card is not contingent on whether the patient undergoes surgery, pursues a non-surgical treatment option, receives any additional treatment, or demonstrates surgery literacy on the survey.

The survey consists of 17 questions and all MAOs must obtain CMS approval of all materials that the requestor uses to promote the program and the arrangement. The program is not advertised and the MAO cannot include information about the gift cards in its marketing to prospective enrollees.

Under the federal anti-kickback statute, it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce, or in return for, the referral of an individual to a person for the furnishing of, or arranging for the furnishing of, any item or service reimbursable under a federal healthcare program.

Under the federal anti-kickback statute, the OIG concluded the arrangement presents a sufficiently low risk of fraud and abuse for the following reasons:

  • The arrangement is unlikely to increase costs to federal healthcare programs or result inappropriate utilization and could potentially have the opposite effect.
  • Because the program is not advertised, the OIG concluded there are numerous other factors (other than the prospect of obtaining a $25 gift card) that may be more likely to influence a Medicare program beneficiary when making a re-enrollment decision (e.g., the MAO’s scope of benefits, premiums, cost-sharing amounts, provider network, and customer service).
  • The arrangement is unlikely to impact competition among healthcare providers, practitioners, or suppliers because the program does not make recommendations.

The Beneficiary Inducements CMP provides for the imposition of civil monetary penalties against anyone who offers or transfers remuneration to a Medicare or state healthcare program beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier for the order or receipt of any item or service for which payment may be made, in whole or in part, by Medicare or a state healthcare program.

Under the CMP, the OIG concluded that because the program does not refer to, or recommend any provider, practitioner, supplier, or service, the remuneration provided to enrollees is not likely to influence an enrollee’s selection of a particular provider, practitioner, or supplier.

“To the extent the remuneration has the potential to influence a beneficiary’s selection of a particular MA plan, we note that an MA plan is not a provider, practitioner, or supplier for purposes of the Beneficiary Inducements CMP,†OIG stated.

It’s important to note that this advisory opinion (and any advisory opinion) is limited in scope to the arrangement and is not applicable to any other arrangements.

This isn’t the first time the OIG has issued an advisory opinion relating to the issuance of gift cards in a healthcare setting. In December 2020, the watchdog agency gave a favorable ruling to a request by a federally qualified health center to offer gift cards as an incentive to get certain pediatric patients to attend rescheduled preventive and early intervention care appointments.

In June 2008, the OIG gave a favorable ruling to a healthcare system’s proposal to provide $10 gift cards to patients whose service expectations were not met.

If you have any questions or concerns about your healthcare facilities’ business arrangements, please contact the Health Law Offices of Anthony C. Vitale for a consultation. You can reach 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.

Ready to find out more?

Call 305-358-4500 to schedule a
FREE 15-minute consultation today!

Posted in

The Health Law Offices of Anthony C. Vitale