OIG Issues Advisory Opinion on Hospital Training Facility

On January 13, the Office of Inspector General (OIG) posted an advisory opinion in which it approved a hospital’s request to provide discounted training to a fire department’s personnel at the hospital’s facility.

The hospital asked the government watchdog whether such an arrangement would constitute grounds for the imposition of sanctions under the exclusion authority of the Social Security Act or be a violation of the Anti-Kickback statute.

The OIG noted that based on the facts provided, although the arrangement could potentially result in prohibited remuneration under the Kick-Back statute, the arrangement presented a low risk of fraud.

The proposed arrangement was as follows:

The requestor is a nonprofit healthcare system with several hospitals and other healthcare facilities, including a training facility. That state-of-the-art facility offers hands-on clinical training to healthcare professionals and was described as the only facility in the area with the resources to allow emergency personnel to train under conditions simulating complex rescue scenarios.

The healthcare system offers a discount on certain costs for sessions at the facility as part of its charitable mission. The local fire department also provides emergency ambulance services and uses paramedics who provide both basic and advanced life support. There are specific protocols in place that require emergency personnel to evaluate a patient’s needs to determine where that patient should be transported.

The fire department has been using the training facility since 2014 to train its emergency personnel on advanced airway management techniques. The training facility, using a set of pre-established criteria, provides the fire department with a discount for the use of the facility.

Generally speaking, the criteria for discounts depends on whether the session educates healthcare providers who have a direct impact on patient care in the community and whether the session constitutes an education-related cost under the state’s statutory definition of community benefits. If both criteria are met, the discount is provided.

Under the Anti-Kickback statute it’s a criminal offense to knowingly and willfully offer, pay, solicit, or receive remuneration to induce or reward referrals or items or services reimbursable by a federal healthcare program.

The OIG noted that while providing a discount for use of the training facility to a current or future referral source could implicate the Anti-Kickback statute, based on the facts of this particular case, it believed the arrangement presented a low risk of fraud and abuse.

It gave the following reasons:

  • Requestor certified that the only medical transportation services the fire department provides are emergency transport services. Neither the number of federal healthcare program beneficiaries who require such services from the fire department, nor the treatment these patients may receive at a hospital, is related to the existence or implementation of the arrangement
  • There are specific protocols in place for fire department personnel to follow when selecting destinations for emergency ambulance transfers and they are based on objective standards. In addition, the agreement expressly disclaims any referral requirements and the amount of the discount is not tied directly or indirectly to the volume or value of referrals.
  • The arrangement may benefit the community by improving the quality of emergency ambulance services in the city. Requestor certified that no other training facility in the area has a comparable facility or offers similar training opportunities. Patients in the community, including those who ultimately do not receive care at requestor, may receive higher-quality services from paramedics who are more equipped to manage unusual or difficult cases during transport.
  • The public receives the financial benefit of the arrangement because the discount reduces the funds the city must allocate for training of the fire department’s personnel.  Therefore, the city is actually receiving the financial benefit.

Based on those aforementioned facts, the OIG determined that it would not impose sanctions on the healthcare system. However, it also noted that the opinion is limited to the specific facts of this case and cannot be relied upon by others.

The Health Law Offices of Anthony C. Vitale can assist you with questions you may have about business arrangements. For more information, 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

The Health Law Offices of Anthony C. Vitale

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