OIG Approves Arrangement Based on New Exception to Beneficiary Inducement Prohibition

Written by Karen Lovitch and Stephanie Willis

In OIG Advisory Opinion 11-16, the OIG found that a Domiciliary Services Program (the “Program”) offered by a non-profit research hospital (the “Requestor”) is protected from enforcement under the Anti-Kickback Statute and the prohibition on beneficiary inducement found in the civil monetary penalties law (the “CMP law”).   Through the Program, the Requestor (described by the OIG as an “internationally known, not-for-profit institution”) offers families of children receiving highly specialized treatment free transportation, lodging, meals, and other services aimed at maintaining quality of life (e.g., developmental items such as strollers, handling of patient mail, and special occasion parties) during the patient’s stay.

Although the Program would implicate both the Anti-Kickback Statute and the beneficiary inducement prohibition, the OIG concluded that eight factors sufficiently protected the Requestor from enforcement.  Among other things, the OIG noted that:

  • the Program does not result in cost-shifting – directly or indirectly – to federal health care programs or third party payors;
  • the Requestor does not advertise the Program or otherwise use it as a marketing tool;
  • the Program does not lead to overutilization because the Requestor limits availability to patients who meet the pre-determined admission criteria for clinical research protocols, which reduces the likelihood that patients would self-refer to obtain the benefits of the Program;
  • the Program promotes access to care because the lodging and transportation services reduce the burdens of participation for the patient’s family, thereby increasing the likelihood that patients will adhere to research and treatment regimens;
  • the specialized lodging facilities address patient care issues specific to those in the treatment protocol, e.g., infection control and patient hygiene; and
  • “substantial public benefits” are derived from the Requestor’s decision to engage in specialized research of catastrophic diseases in children.

The OIG supported the Program even though the Requestor did not limit recipients to those in financial need, which was the case in Advisory Opinion 11-01, which concerned the provision of free transportation and lodging services by a network of nonprofit hospitals offering free pediatric care for certain catastrophic and intractable injuries and medical conditions.  In both opinions, the OIG cited to an amendment to the CMP law included in the Affordable Care Act that allows remuneration to be given to beneficiaries if it “promotes access to care and poses a low risk of harm to patients and Federal healthcare programs.”  The OIG’s willingness to invoke this exception is encouraging, given that it has yet to promulgate regulations or otherwise provide guidance on its interpretation of the provision.

Leave a Comment