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01/01/2004 |
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Julie E. Kass Appeared in Health Facilities Management As the season of gift giving comes to a close, it may seem somewhat fitting for a compliance reminder about inducements to beneficiaries. More than a year ago, the OIG issued a special advisory bulletin relating to the civil money penalty (CMP) for inducements to beneficiaries. The CMP-enacted as part of HIPAA and its implementing regulations, which were issued in April 2000-prohibits anyone from giving anything of value to a beneficiary that the person knows or should know is likely to influence the beneficiary's selection of a particular provider, practitioner, or supplier of services paid by Medicare or Medicaid. So, for example, the law may prohibit a dermatologist from offering a free facial when a patient comes in for a routine visit. According to the OIG, offering valuable gifts to beneficiaries to influence their choice of provider raises quality and cost concerns and favors large providers that have greater financial means. Congress and the OIG are worried that a beneficiary may choose a physician or a hospital not because of their skill or the quality of services they provide, but because of the "extras" those healthcare providers might offer. Application One. Inexpensive gifts (which are defined as no more than $10 per gift and $50 in the aggregate, annually, per patient) are permitted. Two. If the gifts meet one of the statutory exceptions, they can exceed the $10/$50 limit. The statutory exceptions are:
Three. The OIG is considering new regulatory exceptions for complimentary local transportation and free goods provided in connection with clinical trials that are sponsored by the National Institutes of Health (NIH). Four. The OIG will continue to accept and respond to advisory opinion requests related to the CMP. Under the OIG's advisory opinion process, an individual or entity that is concerned about whether a particular action would violate any of the CMP or antikickback laws can request a formal ruling from the OIG. Unfortunately, because the statute is so broad and there is difficulty drawing distinctions between beneficiary types or inducements, the OIG has already concluded in the bulletin that it will be hard-pressed to issue a favorable opinion unless the arrangement meets, or comes close to, a statutory or regulatory exception. Indeed, the OIG has already issued Advisory Opinion 02-14, which declined to protect the provision of free safety equipment and pagers to hemophilia patients by an infusion company. The advisory opinion concluded that the provision of such items could potentially generate prohibited remuneration and does not meet the $10/$50 limitation. The bulletin identifies each of the elements of the statutory prohibition and sets forth their meaning. Remuneration is defined broadly as "anything of value." The OIG then states that it is implicit that "virtually any good or service ... has a monetary value." Goods and services that meet one of the five statutory exceptions would be excluded from the definition of remuneration. The bulletin also takes an expansive view of the term "inducement" According to the OIG, if the provider knows or should know that the remuneration will influence a beneficiary's decision with respect to his or her choice of provider, then the provider is offering an inducement to the beneficiary. The test the OIG will use is whether the provider acted "with deliberate ignorance or reckless disregard." No proof of specific intent is required. The bulletin also explains that inducement can occur where there is no advertisement of the benefit and where the benefit is given to current customers to induce them to purchase future goods and services. This explanation differs from the OIG's statements in the preamble to its final HIPAA regulations. There, the OIG says that a beneficiary cannot be influenced when the goods or services offered are not "advertised or otherwise disclosed to the beneficiary before the beneficiary selects a provider for services." The OIG is obviously concerned that although a benefit is not "advertised;' the prohibition could be circumvented by promoting an inducement by word of mouth. For example, the hospital may let physicians know about the benefits its hospital offers so that the physicians would inform their patients. The bottom line is that the OIG, in accordance with the statutory prohibition, wants providers to know that beneficiaries can be influenced even when there is no active advertisement on the part of the provider and that the provider will still be responsible if a beneficiary's decision was influenced by the "extras." With respect to the beneficiary, the bulletin explains that the prohibition is not dependent on the medical condition of the patient. Further, the bulletin cautions that there is no exemption based on the financial need of a category of patients, such as Medicaid patients. In other words, according to the OIG, providers are not permitted to give expensive gifts to Medicaid beneficiaries simply because they are categorically needy under Medicaid. Health plans are treated differently from providers, suppliers, and practitioners-both in the regulations and in the bulletin. The CMP prohibition excludes situations where health plans give incentives to beneficiaries to encourage their enrollment in a plan, but includes situations where health plans offer enrollees inducements to use certain providers, suppliers, or practitioners (other than copayment differentials, which are statutorily excepted) once they join a plan. Interestingly, the OIG specifically excludes drug manufacturers from the definition of providers, suppliers, and practitioners, unless the drug manufacturer directly or indirectly owns or operates pharmacies or pharmacy benefit managers. Exceptions Although the bulletin provides some bright-line guidance, some practical issues are left unanswered. For example, many hospitals only have private rooms. For a hospital with single and double rooms in a community, is it appropriate to provide private rooms when they are available? Hospitals often provide coupons for family members of patients to be used in the hospital cafeteria or gift shop. Would these be permissible? Yes, if the coupons are less than $10 and the patient's family receives less than $50 worth of coupons in a year. However, the expense to the hospital, in terms of both money and time, of the record keeping necessary to track such things may outweigh the benefit to the patients. Still, if the hospital does not track the benefit, a patient might receive over $50 in a given year. What then? What It Means Julie E. Kass, JD, is an attorney, Ober|aler, Baltimore. |
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Ober, Kaler, Grimes & Shriver
Maryland
Washington, D.C. Virginia |
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