On September 10, 2019, the U.S. Department of Health and Human Services’ Office of Inspector General (OIG) posted an opinion (Advisory Opinion 19-04) favorable to a technology company that proposed an arrangement to make its on-line healthcare directory for searching and booking medical appointments available to federal health care program (e.g., Medicare and Medicaid) beneficiaries. The arrangement also included provider sponsored advertisements on the directory and third-party websites.
Specifically, the company proposed to allow Federal program beneficiaries to search and book appointments through its website and mobile applications (the Marketplace) with providers who match the user’s search criteria. Users would not be charged a fee to use the Marketplace, but providers would pay to be listed. In certain states, the company would charge providers an annual subscription fee, plus per-booking fees for each appointment booked through the Marketplace when the user identifies him or herself as a new patient of the provider. In some other states, the company would charge the provider an annual subscription fee and a per-click fee for each time a user clicks on a provider’s Marketplace result.
In addition, providers would be able to purchase banner advertisements to be displayed on search results or third-party websites. Fees charged to providers under the arrangement would be based on fair market value.
The OIG analyzed whether the company’s proposed arrangement would constitute grounds for sanctions under the civil monetary penalty provision prohibiting inducements to beneficiaries. The OIG determined that section was not implicated because the benefit provided to Federal program beneficiaries – the functionality and convenience of the Marketplace – likely would not influence a beneficiary to select a particular provider.
The OIG also concluded that the proposed arrangement implicated the federal anti-kickback statute because the company would be arranging for the furnishing of federally reimbursable services in exchange for provider fees, and the arrangement’s intended purpose would be to induce Federal program beneficiaries to use federally reimbursable services. However, the OIG found that, for a combination of reasons, the proposed arrangement presented a low risk of fraud and abuse under the anti-kickback statute, and that it would not impose administrative sanctions under the arrangement.
If you have any questions, please contact the Garfunkel Wild attorney with whom you regularly work.