Written By Joanne Ceballos
The
federal Civil Monetary Penalties statute, 42 U.S.C. 1320a–7a, allows the
government to impose Civil Money Penalties “(“CMPs”) when it determines that a
health care provider has offered remuneration to a federal health care program
beneficiary to influence the beneficiary to select the provider for services
paid for by Medicare or Medicaid. Similarly, the federal Anti-Kickback
Statute, 42 U.S.C. 1320a–7b(b), prohibits offering remuneration in exchange for
referrals of federal health care program business. These statutes
generally prevent a health care provider from advertising or offering free
goods or services to federal health care program beneficiaries to induce them
to obtain services from the provider that are payable by federal health care
programs. However, exceptions to this general prohibition do exist, and
earlier this month the OIG issued Advisory Opinion No. 15-01, which sheds
light on how the OIG evaluates arrangements where non-cash inducements are
provided to federal health care program beneficiaries.
The
Opinion was issued in response to a request by a provider of care coordination
and intervention services (“Provider”) under a state’s Medicaid-funded Maternal
Infant Health Program (the “Program”). To advance the Program’s goal of
promoting healthy pregnancies, positive birth outcomes, and infant health and
development, the Provider’s services include psychosocial and nutritional
assessments, coordination with other medical care providers and Medicaid Health
Plans, and family planning education. The state sponsoring the Program
directed Program providers to market their services to the target population
and to medical care providers who would be potential referral sources,
including advertising and offering incentives, such as free diapers, to
Medicaid beneficiaries participating in the Program. Accordingly, the Provider
advertised and offered one free pack of diapers (with a value of less than
$5.00) to Program-eligible Medicaid beneficiaries who attended an initial
consultation with the Provider, and beneficiaries who enrolled in the Program
continued to receive a pack of free diapers at each visit with the Provider up
to the Program maximum of ten visits. The Provider also advertised and
offered a free play yard, valued at approximately $50.00, to each beneficiary
who completed all ten visits.
The
OIG concluded that while the arrangement could potentially generate prohibited
remuneration under the AKS if the requisite intent to induce or reward
referrals of federal health care program business was present, it would not
impose administrative sanctions under the CMP statute for two reasons.
First, the OIG noted that the free diapers, with a value of less than $5.00 per
item and $50.00 in the aggregate (assuming a beneficiary attended and received
a package of diapers at all ten Program visits) are “nominal value” incentives
that are permissible under the OIG’s long-standing interpretation of the CMP
statute permitting non-cash incentives to a federal health care program
beneficiary of no more than $10 per item, or $50 in the aggregate on an annual
basis. Second, the OIG noted that both the diapers and the play yards satisfy
the requirements of the Preventive Care Exception in the CMP statute, 42 U.S.C.
1320a–7a(i)(6)(D).
The
regulatory criteria for preventive care incentives to be excluded from the
definition of remuneration for purposes of the CMP statute are: (1) the
incentive must be given to promote preventive care services, defined as
“prenatal service or a post-natal well-baby visits or a specific clinical
service described in the current U.S. Preventive Services Task Force's Guide
to Clinical Preventive Services;” (2) the incentive cannot be cash or an
instrument convertible to cash; (3) the value of the incentive cannot be
disproportionately large in relationship to the value of the preventive care
service; and (4) the delivery of the preventive care service is not tied
(directly or indirectly) to the provision of other services reimbursed in whole
or in part by Medicare or Medicaid. 42 C.F.R. 1003.101. The OIG
concluded that the free play yards, whether offered alone or in combination with
the free diapers, satisfied all the regulatory criteria of the Preventive Care
Exception. While it is easily understood how the Provider’s incentives
comported with the first three regulatory requirements, it is less apparent how
the Provider’s delivery of prenatal and post-natal counseling could be
considered “not tied (directly or indirectly) to the provision of other
services (namely, prenatal and post-natal well baby visits) reimbursed” by
Medicaid, since a primary purpose of the Provider’s services is to encourage
pregnant Medicaid beneficiaries to obtain proper prenatal and post-natal
medical care. The OIG reasoned, however, that even though the Provider’s
preventive services are “intended to supplement the medical care that Program
beneficiaries receive, Program services are not tied, directly or indirectly,
to the provision of that care.” In other words, Medicaid beneficiaries
could avail themselves of the Provider’s services whether or not they obtained
the recommended medical services.
While
the AKS and CMP statutes generally prohibit health care providers from offering
Medicare and Medicaid beneficiaries incentives to seek their services, the
Preventive Care Exception is one of a number of statutory exceptions to the
definition of remuneration in the CMP statute. Providers seeking to
market and promote their services to federal health care program beneficiaries
are well-advised to take into consideration the parameters set by these
statutes and their related regulations for such activities.
