The Department of Health and Human Services Office of Inspector General (HHS-OIG) recently published a Special Fraud Alert warning health care providers (e.g., prescribers, pharmacies, durable medical equipment providers, clinical laboratories) to steer clear of certain telemedicine arrangements and outlining seven “suspect” characteristics that may present heightened risk of fraud and abuse.

The alert coincides with a third round of criminal “telemedicine takedowns” announced by the Department of Justice (DOJ)  in the last several years, reflecting DOJ’s continued focus on identifying and dismantling fraudulent arrangements that exploit telemedicine technologies and related regulatory flexibilities in the wake of the COVID-19 pandemic.

Telemedicine technologies have created a multitude of opportunities for growth and innovation within the health care industry and are well-positioned to become an ongoing cornerstone of our health care delivery system. However, given the increased level of regulatory scrutiny of telemedicine arrangements, providers and telehealth technology companies, including drug and device manufacturers that offer telemedicine technologies (e.g., platforms, mobile applications) for prescribers and patients that facilitate virtual care,  should carefully plan and closely evaluate existing arrangements to ensure compliance with applicable state and federal laws and avoid implication amongst the recent uptick in enforcement.

Continue Reading Telehealth Under Scrutiny: OIG Special Fraud Alert and DOJ Enforcement Highlights Suspect Characteristics Associated with High-Risk Telemedicine Arrangements

After a long line of opinions scrutinizing the use of rewards programs offered by providers, the Department of Health and Human Services’ Office of Inspector General (“OIG”) issued Advisory Opinion 22-16 on August 19, 2022– a favorable opinion for the provision of gift cards to Medicare Advantage (“MA’) plan enrollees who complete educational modules as part of an online surgical treatment learning tool.

The opinion adds flexibility to existing opinions on gift cards and patient engagement programs and, while binding only on the requestor, provides insight into the OIG’s evolving view of these programs.

Continue Reading OIG Approves Rewards Program for Medicare Advantage Organizations

In its February 14, 2022 advisory opinion the Department of Health and Human Services Office of Inspector General (OIG) allowed a Home Health Agency (HHA), that predominantly serves Medicaid eligible children, to pay the nurse certification program tuition costs for new employees seeking to work as certified nurse aides (CNAs). According to OIG, the tuition payments are permissible under the bona fide employee safe harbor.

The Anti-Kickback statute prohibits a person from knowingly and willfully offering, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, in exchange for or to induce the referral of any item or services covered by a federal health care program. However, the statute includes exemptions for certain situations, one of which involves certain payments to bona fide employees.

In this case, the OIG stated that it would not seek enforcement under the federal Anti-Kickback Statute or the Beneficiary Inducements Civil Monetary Penalty Statute as the arrangement to pay the tuition costs would not be deemed prohibited remuneration under either law. However, the advisory opinion was warranted as the tuition program had the added wrinkle of potentially being a benefit to the relatives of medically fragile children using the HHA’s services and charging those services to Medicaid.
Continue Reading OIG permits home health agency to pay nurse aide certification tuition costs

On February 4, 2022, the Department of Health and Human Services’ Office of Inspector General (“OIG”) issued a favorable advisory opinion on a proposal by a nonprofit children’s hospital to enter into an arrangement with two individual donors, who intend on making a testamentary gift to the hospital that would be used to reduce and subsidize costs incurred by patients.

The OIG indicated it would not impose administrative sanctions, despite the fact that the proposed arrangement would not fall squarely within any safe harbor under the federal Anti-Kickback Statute (“AKS”) or exception to the definition of “remuneration” for purposes of the beneficiary inducement prohibition (“Beneficiary Inducement CMP”).

Arrangement created restricted endowment fund

Under the proposed arrangement, the hospital would be the beneficiary to a restricted endowment fund established through a testamentary gift from two donors. The fund would be used to subsidize bills for families with children who have an established care relationship with the hospital’s physicians and who receive services provided by the hospital’s programs.

Continue Reading OIG approves arrangement involving a testamentary gift to a nonprofit hospital to reduce costs for pediatric patients

In the first advisory opinion of 2022, the Department of Health and Human Services’ Office of Inspector General (OIG) allowed Medicaid beneficiaries to qualify for a benefit available to low-income individuals, even though the arrangement would not qualify as a “retailer reward.”

The OIG stated it would not seek enforcement of the federal Anti-Kickback Statute or the Beneficiary Inducements Civil Monetary Penalty Statute (CMP Law) for an arrangement proposed by a web-based retailer that that sells a wide variety of consumer goods and services, and that offers fee-based membership programs with a number of benefits, including pharmacy-related benefits.

The retailer requested an advisory opinion from OIG to allow individuals to use Medicaid enrollment to qualify as eligible for participation in the discount programs that provided certain expedited free shipping, and discounts on food and grocery items. In issuing a favorable advisory opinion, OIG determined that allowing individuals to use their Medicaid enrollment status as a qualification presented a minimal risk of fraud and abuse to federal health programs.

Continue Reading OIG permits retailer to use Medicaid enrollment as qualification for discount program

The Department of Health and Human Services’ Office of Inspector General (OIG) will be lifting its long-standing refusal to accept requests for advisory opinions if the request describes a course of action that is “the same or substantially the same” as a course of action that is either under investigation by OIG, or is the subject of a proceeding involving a governmental agency. As of February 10, 2022, a new final rule issued by the OIG will do away with that restriction and allow entities to request an advisory opinion, even if the requested course of action is the same or substantially the same as one under investigation or is the subject of a proceeding involving a governmental agency. Previously, the OIG’s policy deliberately left unsettled many fraud-and-abuse issues implicated by pending investigations or litigation.

As the final rule points out, however, seeking clarity during a pending investigation or litigation will carry risk: the mere fact that a course of action is the subject of a qui tam case or under investigation “will weigh against the issuance of a favorable advisory opinion because such circumstances generally indicate that the arrangement does not present a sufficiently low risk of fraud and abuse.”

This warning seems to assume that all investigations and litigation have equal merit, which is certainly not the case with matters initiated by self-appointed whistle-blowers under the False Claims Act, who often bring cases with very little merit. Nevertheless, the new rule provides flexibility, and provides opportunities for the OIG to provide guidance to health care companies seeking to develop business opportunities that, for example, a long-pending and/or declined qui tam case may have stymied.

Continue Reading Pending investigations/cases no longer prevent OIG advisory opinions

Andrew and Quynh are law clerks at the firm and their work is supervised by licensed attorneys. Their admission to – respectively – the Washington, D.C. and California bar is pending.

On October 4, 2021, the Department of Health and Human Services Office of Inspector General (OIG) issued a favorable advisory opinion on a proposal by a chiropractic clinic operator to extend an existing discount program to federal health plan beneficiaries.

The requesting clinics initially offered various discount programs to their privately insured or self-paid patients, but not to Federal health care program beneficiaries. Many healthcare providers are hesitant to give federal beneficiaries access to certain discount programs because of concern that doing so would run afoul Federal anti-kickback and beneficiary inducement statutes. Specifically, the concern is that if the beneficiaries receive discounts, clinics would provide patients with something of value—a discount on self-paid services—in exchange for the option to seek federally reimbursed services through a specific provider.

To address these concerns, the chiropractic clinic operator requested an advisory opinion from OIG on a new discount model that would extend discount programs to Federal health care program beneficiaries. While OIG found that the proposed discount program could result in prohibited compensation to patients, it also stated that it would not pursue an enforcement action based on the nature of the requesting clinics’ specific discount model.

Although only the requesting chiropractic clinic operator may rely on this opinion, OIG’s analysis implies that equalizing discount rates across federally reimbursable and non-reimbursable chiropractic services reduces legal risk under anti-kickback and beneficiary inducement statutes. Providers offering similar discount programs should take note to inform their compliance strategies.
Continue Reading HHS-OIG approves uniform chiropractic discount program for federal beneficiaries

The Department of Health and Human Services (HHS) released complementary rules this past Friday, November 20, 2020, to modernize and clarify the regulations that interpret the Physician Self-Referral Law (the Stark Law) and the federal Anti-Kickback Statute.

As we wrote when the proposed rules were released last autumn (see client alerts here and here),

The much-anticipated final rules modernizing the safe harbors under the Anti-Kickback Statute (AKS) and the physician self-referral exceptions under the Stark Law are officially under review by the Office of Management and Budget (OMB). The Department of Health and Human Services (HHS) anticipates publishing the final rules in August 2020, although that target date is

The HHS Office of Inspector General (OIG) has issued its annual solicitation of recommendations for new or revised Anti-kickback Statute (AKS) safe harbors and new Special Fraud Alerts.  In reviewing proposed safe harbor changes, the OIG will consider the extent to which the proposals would increase or decrease:

  • Access to health care services
  • Quality of

Today, the Department of Health and Human Services (HHS) announced proposed changes to modernize the regulations that interpret the Physician Self-Referral Law (the Stark Law) and the Federal Anti-Kickback Statute. In a press release, HHS states these proposed rules are intended to “provide greater certainty for healthcare providers participating in value-based arrangements and providing coordinated care for patients . . . while maintaining strong safeguards to protect patients and programs from fraud and abuse.”

Over the last 30 years, HHS has issued a series of final regulations establishing exceptions and safe harbors that limit the reach of the Stark Law’s strict liability civil penalties and the Anti-Kickback Statute’s criminal penalties to protect from enforcement certain non-abusive and beneficial arrangements. These final regulations have not, however, reflected the significant shift in recent years in health care delivery and payment systems from a fee-for-service model to models based on improving value and quality of care provided to patients. As a result, many in the health care industry identify these laws, as well as the Civil Monetary Penalty (CMP) Law, as barriers to more effective care coordination and management that can deliver value-based care to improve quality of care, health outcomes, and efficiency. In response, on June 25, 2018, the Centers for Medicare & Medicaid Services (CMS) published a Request for Information seeking input on how it could address existing Stark Law barriers to these emerging value-based payment and delivery systems. Similarly, on August 27, 2018, the Office of Inspector General (OIG) published a Request for Information seeking feedback on how OIG could modify or add new safe harbors addressing these barriers. CMS and OIG received more than 350 comments each, which HHS has considered in publishing these proposed rules.

CMS and OIG Coordinated Proposals

The proposed rules, which span hundreds of pages, reflect close coordination between CMS and OIG, which tried to align the regulations, where appropriate, and the proposals are significant. More specifically, the coordinated proposals include:

  1. Three new exceptions and safe harbors for value-based payment arrangements
  2. Modifications to the existing electronic health record (EHR) exception and safe harbor
  3. The addition of a new exception and safe harbor related to the provision of cybersecurity technology and services


Continue Reading Proposed Rules to Modernize Stark Law and Anti-Kickback Statute Released Today

Seeking to “eliminate any confusion,” the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) has formally withdrawn proposed civil money penalty (CMP) and anti-kickback (AKS) safe harbor regulations that it no longer intends to finalize.  Specifically, the OIG is withdrawing:

  • A 1994 proposed rule that would have codified the

The Centers for Medicare & Medicaid Services (CMS) and the Office of Inspector General (OIG) have finalized changes to State Medicaid Fraud Control Unit (MFCU) regulations to reflect statutory changes and policies adopted since the MFCU rules were first issued in 1978.  Among other things, the regulations incorporate statutory policies that:  authorize a federal matching

The Office of Inspector General (OIG) of the Department of Health Human Services (HHS) has issued a request for information (RFI) on ways to amend or add new safe harbors to the Anti-Kickback Statute and exceptions to the beneficiary inducement provisions of the Civil Monetary Penalty statute, in order to foster arrangements that promote care

On July 18, 2018, the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) submitted to the Office of Management and Budget (OMB) for regulatory review a proposed rule entitled “Removal Of Safe Harbor Protection for Rebates to Plans or PBMs Involving Prescription Pharmaceuticals and Creation of New Safe Harbor

Federal health fraud recoveries for FY 2017 totaled $2.6 billion, according to the latest HCFAC program annual report, compared to $3.3 billion in FY 2016. The Department of Justice (DOJ) opened 967 new criminal health care fraud investigations in FY 2017, filed criminal charges in 439 cases involving 720 defendants, obtained convictions of 639

The Department of Health and Human Services, Office of Inspector General, has issued a new Risk Alert focusing on the home health agency (HHA) survey process.  The alert specifically examined whether HHA-supplied patient lists during surveys may omit certain patients from review and thereby present opportunities to conceal fraudulent activity or health and safety violations.