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Brett D. McNeal (firstname.lastname@example.org) is Associate General Counsel at Lexington Medical Center in West Columbia, SC.
The U.S. Department of Health and Human Services, Office of Inspector General (OIG) published Advisory Opinion (AO) 19-03. There, the OIG delivered a favorable opinion to a nonprofit medical center that had wanted to send its paramedics to the residences of established patients deemed at risk for admission or readmission and to provide a series of services to them without charge. AO 19-03 is notable because it represents one of the few times—in the advisory context, at least—the department, against a specific factual backdrop, explained its views of the Promote Access to Care Exception, which prevents liability for conduct that would otherwise violate the Civil Monetary Penalty Law’s (CMPL) prohibition against giving items of value to patients for the purpose of steering them to a particular provider. OIG’s position is that the prohibition is implicated only if the inducement is connected with the selection of a particular provider. (The reader should note the availability of a host of other statutory and regulatory exceptions to liability under the CMPL, including any arrangement deemed permissible under the Anti-Kickback Statute (AKS). Before this AO, there were three others, and all were favorable, yet they had differing rationales. OIG did issue other AOs dealing with the Promote Access to Care Exception, but these were published before the department finalized its regulations. This article will walk through the elements of the exception and use the AOs to highlight the variables that drove OIG’s analyses, further defining and clarifying OIG’s enforcement philosophy in this space.
Congress passed the CMPL in 1981. By then, reports of healthcare fraud and abuse were opening eyes wider in Congress and state legislatures, and Congress feared that a large swath of it was essentially beyond the reach of law enforcement. Not because existing law did not proscribe such behavior in the first place, but because the enforcement of those laws required action to be taken by the Department of Justice (DOJ). The high volume of cases brought to U.S. attorneys for prosecution results in their being able to prosecute only those involving a significant amount of money or warrant imprisonment, which has proven to be an ineffective deterrent to fraudulent practices under the Medicare and Medicaid programs. This heavy reliance on judicial enforcement unavoidably involved a massive concentration of effort and resources by the government, risk of adverse judgment, and evidentiary considerations, among others. It also meant that conduct the OIG found objectionable may go unaddressed if the DOJ declined to pursue that matter. The net effect was that bad actors could navigate in some safe zones and be free from the concern that they’d be held accountable for that behavior. The CMPL empowered OIG to police that behavior themselves through sanctions, penalties, and program exclusion.
The CMPL’s original scope was the submission of fraudulent claims. It authorized the OIG to impose penalties up to $2,000 for every claim a person submitted to Medicare or Medicaid for payment for items or services that they didn’t actually provide, or if the items or services were not eligible for payment. Also falling within the prohibition were claims submitted to a state under maternal and child welfare grants pursuant to 42 U.S.C. § 701 et seq. and claims submitted in violation of an agreement the person had with the United States or a state agency. OIG could recoup its investigative costs and repair the damage sustained by the government by levying assessments equal to two times the amount claimed and exclude providers from federal healthcare programs altogether.
Congress has serially amended the law over the years to make the penalties more potent and to deputize the OIG to patrol even more areas of concern where, today, the OIG’s CMPL authority is quite vast. The CMPL now encompasses kickbacks, making business arrangements with excluded providers, payments by hospitals by way of gainsharing arrangements to physicians to restrict the range of benefits Medicare or Medicaid patients are entitled to, or failing to return an overpayment, among many others. Relevant here is the Beneficiary Inducement CMPL, which Congress included within the Health Insurance Portability and Accountability Act of 1996. The Beneficiary Inducement CMP prohibits a person from offering or transferring remuneration to a program beneficiary if such person knows or “should know” that that is likely to influence the individual to order or receive from a particular provider, practitioner, or supplier any item or service for which payment may be made, in whole or in part, by Medicare or Medicaid or a state healthcare program. The term “program beneficiary” means an individual eligible for benefits under Medicare or a state healthcare program, which includes the Medicaid program; maternal and child welfare programs under 42 U.S.C. § 701 et seq.; social service programs under 42 U.S.C. § 1397 et seq.; and the Children’s Health Insurance Program under 42 U.S.C. § 1397 et seq. “Should know” means that a person, with respect to information, (a) acts in deliberate ignorance of the truth or falsity of the information, or (b) acts in reckless disregard of the truth or falsity of the information. A specific intent to defraud is not required.
The CMPL defines remuneration to be the transfer of anything of value for free or less than fair market value. Congress later amended this definition in the Patient Protection and Affordable Care Act and carved out an exception for items and services that: (1) promote access to care, and (2) pose a low risk of harm to patients and federal healthcare programs. An October 3, 2014, rulemaking announced OIG’s proposal to further define several key terms, which were largely finalized without exception on December 7, 2016, and memorialized in the definition of remuneration in 42 C.F.R. § 1003.110 .
Promote access to care
OIG established that things of value that would otherwise constitute remuneration would be excluded from the definition of the term if they promote access to care by improving a beneficiary’s ability to obtain items or services payable by Medicare or Medicaid. It was asked by a hospital system if that included the system’s plan to pay for hotel lodging and meals in its cafeteria for its existing patient base who met certain financial criteria and who had to travel great distances to seek the care they needed. The OIG concluded that it did in AO 17-01. Similar to providing free child care services to a patient who couldn’t otherwise afford it in order for the patient to attend a smoking cessation program, the lodging and meals were clearly intended to remove socioeconomic—and in this case, geographic—barriers that stood in the way of the patient receiving care that they needed. OIG commented in its rulemaking that the removal of socioeconomic, educational, geographic, mobility, and other barriers were squarely within the reach of the exception, and this informed its position to adopt a broader interpretation of the regulation. The language it used in the preamble appears rather prominently in the opinion as it analyzes this element of the exception.
A similarly favorable outcome was arrived at in AO 19-02. There, a pharmaceutical company wanted to loan limited-functionality smartphones to patients who were prescribed a specific medication made by the company. This oral, FDA-approved medication had within it a sensor that emitted an electrophysiological signal that would be detected by a wearable patch on the patient’s abdomen, which would in turn transmit data to an application that could only be accessed on the patient’s smartphone. Among other criteria, only patients with limited financial resources and who did not already have a smartphone were eligible to receive one. OIG accepted that the sensor added clinical value to the medication for the patient that would go unrealized without the means for relaying the data it generated. Because the smartphone played such a critical, indispensable role to the patient’s ability to gain the full scope of the medication’s benefit, it concluded that this improved the patient’s ability to seek care.
OIG came to a different conclusion in two other opinions. In AO 18-05, a nonprofit medical center wanted to make available a host of resources to caregivers who provide daily living assistance to persons with debilitating chronic conditions. These resources included access to a resource library, stress reduction workshops, and respite care resources. The center also wanted to provide, among other things, personal listening devices and need-based financial assistance. OIG said plainly that none of these would qualify, because they are not connected to the medical care received by either the caregivers or for those they care for. They may be given with some beneficial purpose in mind, but they do not help close the distance between a patient and their healthcare.
A proposal from a hospital in AO 19-03 received similar news. Some patients with congestive heart failure were deemed by the medical center to be at a high risk for admission or readmission to the hospital, which meant that they were eligible to receive in-home care from a paramedic employed by the medical center to, among other things, review the patient’s medication, monitor the patient’s compliance with the discharge plan, or perform a home safety inspection. Because the entire offering did not improve these patients’ ability to seek reimbursable care, OIG concluded that the exception was not met. They singled out the home safety inspection in particular as not improving the beneficiary’s ability to seek care.
Low risk of harm
The Promote Access to Care Exception also requires that the remuneration pose only a low risk of harm to patients and federal healthcare programs. Pursuant to its rulemaking authority, OIG established three criteria for purposes of satisfying this, and they appear in 42 C.F.R. § 1003.110 , which provides that the remuneration must be: (1) unlikely to interfere with, or skew, clinical decision-making, (2) unlikely to increase costs to federal healthcare programs or beneficiaries through overutilization or inappropriate utilization, and (3) not raise patient safety or quality-of-care concerns.
Interference with clinical decision-making
Remuneration may interfere with clinical decision-making in any number of ways. OIG has expressed longstanding concern over direct marketing activities, to name but one. Another would be a classic tying arrangement, where the provider conditions the receipt of remuneration on the patient’s agreement to seek other healthcare items and services from the provider. The absence of this factor was one of the reasons the OIG was not concerned with the hotel and lodging in AO 17-01. There, eligibility for the remuneration and the receipt of it were not in any way connected. A patient was eligible based on their financial resources and where they lived. Medical center staff did not initially disclose the availability of the hotel benefit to the patient. Rather, the staff took steps to inform the patient of the program only after the patient had already selected the medical center for care and after an initial eligibility decision had been made. This has a certain symmetry with the other reason OIG cited as material in its analysis and which dovetails with its longstanding concerns about “white coat marketing”—that no one on the care team was compensated to encourage them to refer these patients to the center.
OIG seemed to take a categorical view in AO 19-02 that a prescriber’s clinical decision-making could not be influenced by the sheer fact that their patient would receive—from a third party—a smartphone that could perform no other function except those closely aligned with the patient’s care related to a particular medication that they would prescribe. The smartphone couldn’t be used to access the internet and surf the web or check social media applications. It could only pass on data from the medication. The acquisition of the data may provide a tangible benefit to the prescriber, which may in turn provide incentive for them to order the medication. But the manufacturer’s loaning the smartphone to the patient would not, as OIG saw it, play a role in the prescriber’s decision-making.
Increasing costs to federal health care programs or beneficiaries
A provider will be able to avail itself of the Promote Access to Care Exception only if the remuneration is unlikely to increase costs to federal healthcare programs or beneficiaries through overutilization or inappropriate utilization, which OIG has often linked with marketing and advertising campaigns. As noted above, in neither AO 17-01 nor AO 19-03 were the programs advertised in any way, which did not escape OIG’s notice. The beneficiaries of them were kept in the dark about them until after a treatment decision was arrived at. And, further, in both cases the costs of the items were fully absorbed by the requesters and were not, in other ways, shifted to federal healthcare programs. OIG said it could conceive of a number of ways that a provider could shift costs in an inappropriate manner, singling out upcoding and providing medically unnecessary services as specific examples. Although OIG made this observation in the 2016 Final Rulemaking in the context of the safe harbor to the Anti-Kickback Statute for cost-sharing reductions for emergency ambulance services, it likely provides some insight into how the department would similarly construe this requirement in the Promote Access to Care context. The hospital in AO 17-01 represented that neither it nor its parent company would claim those costs on its cost report or load those costs into claims they submit for reimbursement for services rendered. That fact alone seemed to satisfy the OIG that this requirement was met in that arrangement.
Safety and quality concerns
The final requirement is that the remuneration not raise patient safety or quality-of-care concerns. OIG did not establish a particular test for this or provide greater clarity on these terms in its rulemakings. It touches on it in AO 19-02 only to say that the remuneration (in that case, the limited functionality smartphone) would increase patient safety and quality care, because it would provide a channel for the prescriber to monitor the effectiveness of the medication. A patient who was not obedient in taking the medication would have that data passed along to the provider. If the medication performed in unexpected ways, either by not producing a clinical effect or by bringing about an unpleasant side effect, the provider could be immediately aware of that and adjust the treatment plan. Viewed this way, OIG here treats remuneration that enhances patient safety or quality-of-care concerns on par with remuneration that does not raise concerns.
OIG was more definitive in AO 17-01. It focused on the patients themselves as opposed to the clinical staff or the hospital operators, and asked whether the remuneration would cause the patient to seek out unnecessary or poor quality care. It stated that the remuneration there did not raise these concerns, and even went further to say that removal of logistical and financial obstacles enabled the patients to receive necessary care, which actually benefited patients.
The Promote Access to Care Exception is welcome relief to providers seeking assurances that their efforts to remove socioeconomic and geographic barriers standing between their patients and the care they need will not expose them to liability for violating the Beneficiary Inducement CMP. OIG has issued four advisory opinions, allowing the provider community to better understand the contours of the exception, at least with respect to how OIG sees them. Providers would be wise to take inventory of these and take a fresh look at their existing policies and procedures with respect to patient remuneration. More OIG opinions will ultimately follow, and it is expected that HHS will make further changes affecting Beneficiary Inducement CMP liability as part of its larger efforts to recast much of the existing regulatory environment around its goals of promoting a broader absorption of alternative care delivery systems and incentivizing reimbursement methodologies that prioritize value over volume. Providers should continue to monitor further developments that ideally will further refine OIG’s enforcement philosophy of the Beneficiary Inducement CMP.
An organization’s policies should highlight that its decision to provide remuneration to patients is not for the purpose of influencing the selection of a particular provider or the organization.
Confine the universe of remuneration to only those benefits that are directly related to a patient getting care they need.
A provider must not advertise or market the availability of the remuneration, at least not until after the treatment plan has been established.
Perform a careful, individualized assessment for each patient and determine what, if any, barriers could prevent them from getting care.
Ensure that the cost for providing the remuneration will be internalized to the organization alone, and not defrayed or otherwise shifted to a cost report or claim.