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Health Law Alert Special Supplement: OIG 2008 Advisory Opinions
Summer 2009
By: Julie E. Kass, William T. Mathias, Joshua J. Freemire, and Jillian Wilson
OIG 2008 Advisory Opinion No. 08-01: OIG Approves Bulk Replacement PAP
The OIG's first advisory opinion for 2008, issued January 28, 2008, addresses whether a proposed "bulk replacement" PAP violates either the antikickback statute or CMP prohibition against inducements to beneficiaries. Bulk replacement PAPs provide free drugs in bulk quantities — typically on a monthly or quarterly basis — to hospitals, clinics, and other safety net providers to replace drugs dispensed to patients who meet established PAP criteria. The OIG concluded that the proposal potentially implicates the antikickback statute and the CMP. Nevertheless, based on a combination of safeguards certified by the requestor, the OIG approved the program and determined that the imposition of sanctions would not be warranted.
Click to continue...OIG 2008 Advisory Opinion No. 08-02: OIG Allows Honorary Charitable Donations
Advisory Opinion 08-02, issued on January 29, 2008, is one of a short list of advisory opinions in which the OIG has concluded that the antikickback statute is not implicated. The proposed arrangement involves a marketing and research company's idea to encourage physicians to complete online surveys by making a donation to a public charity in their honor. The OIG concluded that the antikickback statute was not implicated because the proposed arrangement did not generate any remuneration for the physician.
Click to continue...OIG 2008 Advisory Opinion No. 08-03: OIG Approves Prompt-pay Discounts
The OIG issued Advisory Opinion 08-03 on January 30, 2008, analyzing whether a proposed arrangement pursuant to which a health care system would provide prompt-pay discounts to inpatients and outpatients, including those covered by Medicare, Medicaid and other federal health care programs, violates either the CMP prohibition against inducements to beneficiaries or the antikickback law. The OIG concluded that the proposed arrangement (1) would not constitute grounds for imposing CMPs; and (2) could implicate the antikickback statute if the requisite intent to induce or reward referrals of federal health care program business were present, but would not result in administrative sanctions under the antikickback statute or the CMP against inducements to beneficiaries.
Click to continue...OIG 2008 Advisory Opinion No. 08-04: OIG Approves Free Trial Prescription Program
In Advisory Opinion 08-04, issued February 5, 2008, the OIG addressed a proposed agreement pursuant to which a pharmaceutical manufacturer proposed offering a free trial prescription program to hemophilia A patients, including federal health care program beneficiaries. The OIG was asked to opine on whether this proposed arrangement would violate the antikickback statute. Based on the facts certified by the requestor, the OIG concluded that while the proposed arrangement could potentially generate prohibited remuneration under the antikickback statute if the requisite intent to induce or reward referrals of federal health care program business were present, it would not impose administrative sanctions based on the facts of the particular arrangement.
Click to continue...OIG 2008 Advisory Opinion No. 08-05: OIG Approves Pharmaceutical Kiosks in Physician Offices
In an Advisory Opinion issued February 15, 2008, the OIG responded to a pharmaceutical company's request to determine whether its proposal to place electronic kiosks in certain physicians' waiting rooms that offered free disease-state screening questionnaires implicates either the antikickback statute or the CMP prohibition against inducements to beneficiaries. The OIG concluded that the proposed arrangement would not implicate the antikickback statute because the kiosks had no independent value to either the physicians or their patients, and, as such, could not generate any prohibited remuneration. For these same reasons, the OIG concluded that the proposed arrangement would not subject the requestor to CMPs for inducements to beneficiaries.
Click to continue...OIG 2008 Advisory Opinion No. 08-06: OIG Rejects Free Labeling of Test Tubes, Collection Containers for Dialysis Facilities
In Advisory Opinion 08-06, issued May 2, 2008, the OIG considered a laboratory’s proposal to provide selected dialysis facilities with free labeling of test tubes and specimen collection containers to send specimens to that laboratory for testing. The OIG concluded that the proposed arrangement could potentially generate prohibited remuneration under the antikickback statute. A careful reading of this opinion suggests that the laboratory requesting the opinion may have been seeking a negative opinion.
Click to continue...OIG 2008 Advisory Opinion No. 08-07: OIG Approves Gift Card Program
Advisory Opinion 08-07, issued June 27, 2008, analyzes a proposed arrangement by a health care system to provide $10 gift cards to patients who experience service shortfalls. The OIG analyzed the proposed arrangement under both the prohibition against inducements to beneficiaries and the antikickback statute. The OIG concluded that (i) the proposed arrangement did not constitute prohibited remuneration under the prohibition against inducements to beneficiaries and (ii) while the proposed arrangement could potentially generate prohibited remuneration under the antikickback statute, if the requisite intent to induce or reward referrals was present, the OIG would not impose sanctions based on the facts of the particular arrangement.
Click to continue...OIG 2008 Advisory Opinion No. 08-08: OIG Okays ASC Joint Venture Between Hospital Corporation, Surgical Group
In Advisory Opinion 08-08, posted July 25, 2008, the OIG found a joint venture between a hospital corporation and a surgical group contained sufficient safeguards to mitigate the potential risk of fraud and abuse under the antikickback statute so that the OIG would not impose sanctions.
Click to continue...OIG 2008 Advisory Opinion No. 08-09: OIG Approves Orthopedic Surgery/Neurosurgery Gainsharing Agreements
Advisory Opinion 08-09, issued July 31, 2008, is another favorable opinion on gainsharing arrangements. The gainsharing arrangement at issue, however, is in the context of orthopedic surgery and neurosurgery, which have yet to be discussed in the OIG's gainsharing advisory opinions.
The gainsharing arrangement at issue is among an academic medical center, orthopedic surgery groups that employ only orthopedic surgeons, and a neurosurgery group that employs only neurosurgeons. The employed surgeons have active medical staff privileges at, and refer to, the medical center, with which each group had entered into a separate gainsharing agreement. The arrangement is administered by a program administrator, who will collect data and analyze and manage the arrangement in exchange for a fixed monthly fee.
Click to continue...OIG 2008 Advisory Opinion No. 08-10: OIG Disapproves Block Leases Between Physicians and Urologists
In Advisory Opinion No. 08-10, issued August 19, 2008, the OIG analyzed a proposed arrangement under which a physician practice group would provide space, equipment and personnel to groups of urologists through block leases. The OIG determined that the lease arrangement would subject the participants to CMPs and exclusion under the antikickback statute.
Click to continue...OIG 2008 Advisory Opinion No. 08-11: OIG Approves Waiver of Cost-sharing Obligations in Clinical Trial
On September 17, 2008, the OIG issued Advisory Opinion 08-11, addressing the issue of whether cost-sharing obligations may be waived for Medicare beneficiaries who are participating in the Long-term Oxygen Treatment Trial (the LOTT) sponsored by the National Heart, Lung, and Blood Institute (NHLBI) and CMS. The requestors asked whether such waiver would constitute grounds for the imposition of sanctions under the beneficiary inducement CMP or the antikickback statute.
Click to continue...OIG 2008 Advisory Opinion No. 08-12: OIG Okays Insurance Preauthorization Services
On September 19, 2008, the OIG issued Advisory Opinion 08-12, which addressed whether an entity can provide purely administrative insurance preauthorization processing and submission services for various radiology and imaging centers. The OIG determined that, based on the protections included in the arrangement, the arrangement would not generate prohibited remuneration under the antikickback statute.
Click to continue...OIG 2008 Advisory Opinion No. 08-13: OIG Approves Medigap Policy Discounts for Use of Preferred Hospital Network
In Advisory Opinion 08-13, issued September 23, 2008, the OIG addressed the use of a "preferred hospital" network as part of a Medicare Supplemental Health Insurance (Medigap) policy and whether the arrangement would constitute grounds for sanctions under the CMP prohibition against beneficiary inducements or the antikickback statute. Under the arrangement, the Medigap plan indirectly contracts with hospitals for discounts on the otherwise applicable Medicare inpatient deductibles for its policyholders and also, at the time of the next policy renewal, reduces the premium for policyholders utilizing a network hospital for an inpatient hospital stay. The OIG determined that it would not impose sanctions because the arrangement posed a low risk of fraud and abuse, notwithstanding its determination that the arrangement generates prohibited remuneration under the antikickback statute and implicates the beneficiary inducement prohibition.
Click to continue...OIG 2008 Advisory Opinion No. 08-14: OIG Approves Motivational Incentives Offered by Substance Abuse Treatment Center
On September 24, 2008, the OIG issued Advisory Opinion 08-14, analyzing the application of the CMP prohibition against beneficiary inducement or the antikickback statute to a substance abuse treatment center's use of motivational incentives. The requestor, a nonprofit treatment center which treats a high proportion of Medicare beneficiaries, intended to offer motivational incentives (MIs) to help patients overcome difficulties maintaining abstinence or attending and participating in activities integral to their treatment plans. MIs are never issued in the form of cash; rather, they are gift certificates redeemable at gas stations, grocery stores, and similar locations. Generally, MIs are issued in amounts between $5 and $10, and the total amount of MIs issued to any patient were not expected to exceed $200 per month (and in most cases, were expected to be far less). Although the MIs generally would not exceed the amounts that may be offered to beneficiaries under the exception (as interpreted by the OIG) for items of "nominal value," the aggregate amount offered to some beneficiaries may exceed the $50 annual limit imposed on programs offering incentives of nominal value. MIs would be introduced only when a patient's treating physician determines that MIs are clinically indicated for effective treatment and would be issued in conformance with the treatment guidelines developed by NIDA and SAMHSA for the use of MIs.
Click to continue...OIG 2008 Advisory Opinion No. 08-15: OIG Approves Cardiology Gainsharing Agreement
In Advisory Opinion 08-15, issued October 6, 2008, the OIG analyzed an existing gainsharing agreement between a hospital and several cardiology groups, under which the cardiology groups would be paid based on the hospital's savings across 30 specific recommended savings areas in relation to cardiac catheterizations performed in the hospital's laboratory. These areas of potential savings, which were identified by a program administrator tasked with analyzing and administering the program, can be grouped into three broad categories — Product Standardization (25 items), "Use as Needed" Devices (4 items), and Product Substitution (1 item).
Click to continue...OIG 2008 Advisory Opinion No. 08-16: OIG Okays Gainsharing Agreement with Medical Staff
On October 5, 2008, the OIG issued Advisory Opinion 08-16, in which it analyzed a proposed gainsharing arrangement between a hospital and a to-be-formed physician group. Under the arrangement, the hospital would share with the physician group up to 50 percent of certain performance-based compensation the hospital receives from a private insurer.
Click to continue...OIG 2008 Advisory Opinion No. 08-17: OIG Gives Okay to PAP Administered by Internet-based Pharmacy
OIG Advisory Opinion No. 08-17, issued October 14, 2008, addresses a nonprofit foundation providing financial assistance to cover cost-sharing amounts owed by financially needy patients (uninsured and insured, including Medicare and Medicaid beneficiaries) receiving outpatient drug therapy for a particular disease state. The OIG analyzed the program under both the CMP prohibition against inducements to beneficiaries and the antikickback statute. Similar to Advisory Opinions 06-09 and 06-13, and consistent with the OIG's Special Advisory Bulletin on Patient Assistance Programs for Medicare Part D Enrollees, the OIG concluded that (i) the proposed arrangement did not constitute prohibited remuneration under the prohibition against inducements to beneficiaries and (ii) while the proposed arrangement could potentially generate prohibited remuneration under the antikickback statute, the OIG would not impose sanctions based on the facts of the particular arrangement.
Click to continue...OIG 2008 Advisory Opinion No. 08-18: OIG Approves County Fund for Payment of Cost-sharing Amounts
On October 21, 2008, the OIG issued Advisory Opinion 08-18, addressing a proposal whereby a medical center that provides ambulance services would not bill bona fide county residents for Medicare cost-sharing amounts for ambulance services, but would rather accept payment from a county fund created through a special tax. The OIG considered the proposed arrangement under both the CMP prohibition of inducements to beneficiaries and the antikickback statute, and concluded no sanctions would be imposed because there was not a routine waiver of cost-sharing amounts.
Click to continue...OIG 2008 Advisory Opinion No. 08-19: OIG Okays Pay-per-call Advertising
On November 5, 2008, the OIG released Advisory Opinion 08-19, which considers the application of the antikickback statute to Internet advertising paid for by chiropractors on a "pay-per-call" or "pay-per-lead" basis. The OIG determined that the arrangement would not be subject to sanctions, given certain important conditions and safeguards built into the arrangement. The conditions and safeguards described by the OIG, however, significantly narrow the universe of acceptable arrangements.
Click to continue...OIG 2008 Advisory Opinion No. 08-20: OIG Approves DMEPOS Consignment Closets
On November 19, 2008 the OIG issued Advisory Opinion 08-20, addressing a proposal whereby two DME suppliers would (i) place an inventory of DMEPOS in consignment closets on-site at certain hospitals, and (ii) have licensed personnel on-call or on site at the hospital to train and educate patients who have selected one of the suppliers to supply their DMEPOS needs. The OIG determined that the arrangement would not generate prohibited remuneration under the antikickback statute.
Click to continue...OIG 2008 Advisory Opinion No. 08-21: OIG Approves Cardiology Gainsharing Agreement
On November 25, 2008, the OIG issued Advisory Opinion 08-21, concerning an existing gainsharing agreement between a hospital and four cardiology groups based on certain cost-saving measures implemented in certain cardiac catheterization procedures.
Click to continue...OIG 2008 Advisory Opinion No. 08-22: OIG Okays Part-time Physician Employment Arrangements
In OIG Advisory Opinion 08-22, the OIG concluded that the part-time employment of two physicians would not generate prohibited remuneration under the antikickback statute, and thus would not result in sanctions. The requestor of the opinion is a nonprofit tax-exempt corporation established for the purpose of employing physicians. It is wholly owned by another corporation, which is not identified, and the relationship between the physicians and the parent entity is not part of the OIG's analysis. Each of the physicians maintains medical practices separate and apart from the requestor. The requestor would employ the two physicians on a part-time basis to perform endoscopies on the requestor's premises. The amount paid to the physicians would be consistent with fair market value.
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