The Department of Health and Human Services Office of the Inspector General (OIG) has released an advisory opinion permitting a technology company to charge health care providers “per booking” fees to participate in its online provider directory and to allow the same providers to bid on advertising that appears as specialized search results or banner ads within its digital “marketplace.” This is the second time that the OIG has opined on this particular arrangement, having approved an earlier, although slightly different, version of the arrangement by the same company in Advisory Opinion 19-04, which was issued in 2019.
In the most recent opinion, the OIG determined that, although the arrangement might violate the Federal Anti-Kickback Statute (AKS) and the Beneficiary Inducement Civil Monetary Penalty (CMP) law, the office would not enforce those statutes against the company because the nature of the revised fees and search functionality presents a sufficiently low risk of fraud and abuse. Important to the OIG’s decision was the requestor’s certification that the fees do not exceed fair market value of the requesting company’s services to providers related to its marketplace nor do they take into account the user’s insurance status or the volume or value of referrals to the providers.
The OIG’s opinion letter protects only the current arrangement described to it by the requestor, and the agency declined to opine on any continuing contracts under an older version of the program.
Online Directory Charges Fees to Providers
The arrangement presented to OIG consists of an online health services directory that patients can use to search for health care providers and book appointments with providers of their choice – a virtual marketplace for self-service health care. If a patient chooses to book an appointment with a provider and is a new patient for that provider, the company that runs the directory charges a “per appointment” fee to that provider, subject to certain limitations outlined further below.
Additionally, the company offers health care providers opportunities to advertise their services by bidding on the ability to show up at the top of the results list as a “sponsored result”. These sponsored results appear for consumers if the provider had paid to be included in certain keywords in a search or has paid to be promoted on searches that are generally relevant to their practice area. Sponsored results are available on the directory itself and third-party websites, and advertise the availability of particular providers but do not promote any particular service or item.
The directory is available to all insured patients, both those in the commercial markets and those insured in federal health plans, like Medicare or Medicaid. While the fees are not altered depending on the patient’s insurance status, non-commercial patients, or those who refuse to provide insurance information to confirm status, are afforded slightly more transparency safeguards that OIG notes in its approval.
Per Appointment Fee Limits and Caps
The arrangement allows the company to charge health care providers a “per appointment” fee for each appointment that is booked through the website. However, that fee is limited only to new patients of the provider who are booking for the first time through the directory. Any returning or existing patients do not result in a charged fee.
The OIG focuses on this limitation as an important safeguard in its determination that the arrangement should not result in enforcement action. Because the fees do not exceed the fair market value, are not based on volume of appointments, and are not geared toward increasing usage of federal health programs, they are less likely to result in the type of fraud that the OIG is looking to prosecute.
Additionally, health care providers can place caps on their fees every month. Once those caps are reached, patients can no longer book appointments through the directory. In a change from the 2019 advisory opinion, the requestor has certified that its algorithm going forward will not filter out those providers from its search results and that any patient who has indicated that they are a non-commercial user (i.e., insured by a federal health program) or has not provided information on their insurance status will be instructed to reach out to the provider themselves to check availability.
Because the search results for a non-commercial user will not filter out capped providers and will instruct potential and known federal health plan members to reach out to the provider for availability even if the provider has reached their capped level of fees for the month, the marketplace directory would not direct patients only to providers who have unlimited spend, another mitigating factor considered by the OIG.
Algorithm does not order results based on fees
The OIG additionally found persuasive the fact that the company certified that its search algorithm to return potential provider search results was based entirely on the characteristics of the patient searching for potential providers and not on the fees paid, volume or value of federal program business, historical spending caps, or any other financial benefit to the provider. As the opinion notes, “[t]he algorithm attempts to order Providers in a manner that, based on Marketplace engagement data, most closely matches a User’s preferences.”
Additionally, the company certified that the only use of insurance status in the ordering of results in its algorithm is to elevate for patients’ review providers who accept their insurance. As a result, none of the amount of fees paid, the existence of a fee cap for any provider, nor the potential reimbursement to be received by that patient’s insurance, has any bearing on the display of that provider within the results available to a patient.
Earlier version relied on subscriptions, lacked transparency
The 2019 advisory opinion approved many of the same provisions that apply to the revised program, the primary differences being that the company historically charged annual subscription fees to health care providers for using the service and did not have the same transparency safeguards for searching for providers who reached payment caps.
The company is phasing out its annual fees as its old contracts expire, and the current OIG opinion letter indicates that this letter does not apply to those arrangements. However, to the extent that the company is operating under those contracts in a manner that conforms with the 2019 advisory opinion, that opinion still holds with respect to those practices.
It is worth noting that OIG also affirmed in this advisory opinion its long-standing views on “white coat” marketing, passive advertising, and the importance of making provider information available to a broad audience not limited by insurance status. Thus, while the opinion is not binding on anyone other than the requestor, it adds another chapter to OIG’s interpretation of the AKS and CMP law to evolving digital health care opportunities for self-service care.
Reed Smith will continue to track developments with regard to OIG enforcement of the federal health care fraud statutes. If you have any questions about this advisory opinion or would like to seek a new advisory opinion yourself, please reach out to the health care lawyers at Reed Smith.