OIG Issues Four Advisory Opinions in December

The U.S. Department of Health and Human Services Office of Inspector General (HHS OIG) cranked out four Advisory Opinions in the waning days of 2020.

On December 18, the watchdog agency gave its blessing to a management company that wants to provide Medicaid enrollment application assistance services to certain individuals and affiliated SNFs and an HHA at below fair market value.

Specifically, under the proposed arrangement, the affiliated SNFs and the HHA would refer current patients, or in some circumstances those who are not yet patients but who have selected an affiliated SNF or HHA, to the management company for its provision of Medicaid enrollment application services. These services would include helping them complete the application questionnaire, compiling necessary paperwork, meeting application deadlines and complying with laws and guidelines. No healthcare items or services would be provided.

Although the fees charged would be below fair market value, they would not vary based on the individual or entity paying the management company. In addition, while the management company would advertise the services, it would not target other parties, including referral sources, for the affiliated SNFs or HHA or prospective patients. Also, the SNFs and the HHA would not advertise the services.

Finally, the management company would not provide any items or services that would be directly reimbursable by a federal healthcare program. However, the affiliated SNFs would include the cost of the services in its annual reports to the Centers for Medicare and Medicaid Services (CMS).

The Advisory Opinion noted that while such an arrangement could implicate both the Beneficiary Inducements provision of the CMP and the anti-kickback statute, other considerations come into play. For example, in this case the OIG noted that the remuneration would make the Medicaid applications process easier for those who might have difficulty navigating. By doing so, this would improve the ability of Medicaid-eligible patients to obtain items and services payable by Medicaid, thus making access to care easier under the Promotes Access to Care Exception. In addition, the OIG stated that the proposed arrangement would not likely interfere with clinical decision making and would unlikely increase costs through overutilization or inappropriate utilization, nor does it raise patient safety or quality-of-care concerns.

You can read the full advisory opinion here.

Remittances to Patients

On Dec. 21, the OIG ruled on a proposed arrangement regarding an existing online platform’s desire to set up a separate user pathway exclusively for patients who have Medicare as a secondary payor.

Under the proposed arrangement, the separate pathway would allow providers to offer potential remittances to patients and their third-party payors for diagnostic, procedural, and surgical care that is both elective and episodic and potentially payable by the Medicare program as a secondary payor; and patients could enter into agreements with providers, where the patients and their third-party payors could receive a portion (33 percent) of the remittances from providers, after the requestor deducts the portion of the remittances it would keep as a fee.

The new platform would list the same providers, and exclude the same entities, as the existing platform. Only those who have Medicare as a secondary payor would be permitted to use the new platform. There is no charge to join.

The only services for which providers would offer potential remittances would be diagnostic, procedural, and surgical services that are both elective and episodic and that a practitioner has determined are medically necessary for the member.

The requestor would use the members’ insurance information to provide estimates of the anticipated out-of-pocket costs for specified services across the range of providers from which they may choose to receive care. 

The OIG noted several reasons why it was giving the proposal the green light.

  • While the proposed arrangement could result in increased costs to federal healthcare programs through overutilization or inappropriate utilization, that risk would be low and that safeguards are in place to mitigate such risk.
  • The arrangement would mitigate provider incentives to increase prices to induce members to receive services because of the remittance methodologies used.
  • Because any provider with state licensure could use the platform at no charge, anti-competitive effects are low.
  • Neither the requestor nor the new platform would steer members to certain providers. Instead members would use a drop-down menu to sort providers based on a variety of factors and members would not be able to filter results based on whether that provider offered potential remittances.

You can read the full order here.

Gift Cards

On Dec. 23, the OIG 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. Specifically, the health center wanted to know whether the proposed arrangement would violate the civil monetary penalty provision (CMP) or the federal anti-kickback statute.

The requestor is identified as a nonprofit community health center with eight sites serving predominantly low-income patients. The parents of pediatric patients who have missed two or more preventive and early intervention appointments would be contacted and notified they are eligible to receive a $20 gift card from one of four retailers if they go to their appointment, regardless of their health insurance status or ability to pay for services.

The goal is to improve the attendance rate for eligible patients so that their health problems can be averted, diagnosed or treated as early as possible. The requestor said it would track whether the proposed arrangement improved attendance rates and would modify or discontinue the program after one year if the success rate fell below 50 percent.

The OIG indicated that while the proposed arrangement would not satisfy either the Promotes Access to Care Exception or the Preventive Care Exception, it was using its discretion to determine it would not impose sanctions under the Beneficiary Inducements CMP or the federal anti-kickback statute for the following reasons:

  • The risk of inappropriate patient steering would be minimized due to the narrowly defined pool of eligible patients who have an established relationship with the requestor.
  • The proposed arrangement would not likely to lead to increased costs to federal healthcare programs through overutilization or inappropriate utilization.
  • The proposed arrangement likely would not harm competition because, once again, the gift cards are targeted to a narrowly defined pool of existing patients.

You can read the full advisory opinion here.

Remuneration for Drug Therapy

On  Dec. 28, the agency ruled favorably on a pharmaceutical manufacturer’s request to provide financial assistance for travel, lodging and other expenses to certain patients prescribed its drug.

Specifically, the drug is a personalized medicine made from the patient’s own cells and is administered by a limited number of certified centers as a one-time infusion. The centers that administer the drugs are not required to prescribe the manufacturers drug exclusively.

The requestor says the remuneration it provides is designed to ensure patient safety and promote quality of care, particularly for indigent and rural patients, and is limited in its scope in terms of who qualifies, and for how much.

While the OIG noted that is generally concerned when manufacturers provide such assistance to patients who are prescribed their drugs because it might steer them to their drugs over competitors, it noted several reasons why, in this instance it would not impose sanctions. Among them:

  • The remuneration is intended to help indigent and rural patients get treatment and stay near a certified center for post-treatment monitoring.
  • The remuneration allows the patient to follow the drug’s prescribing information (i.e. to stay near a certified center).
  • There is a limited number of centers that meet FDA requirements and the drug manufacturer does not require providers to prescribe its drug exclusively.
  • Finally, the drug is prescribed for a select group of patients as a last resort and because it is a one-time treatment does not present “seeding” concerns.

You can read the full opinion here.

It’s important to note that these advisory opinions relate to the specific facts of each case and cannot be relied upon by others.

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 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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