On December 11, 2024, the U.S. Department of Health and Human Services, Office of the Inspector General (OIG) published a Special Fraud Alert in response to the uptick in abusive marketing practices between Medicare Advantage Organizations (MAOs), health care providers, and ancillary participants (such as agents and brokers).
In particular, OIG highlights substantial concerns with MAOs that offer or pay remuneration to providers for referrals. While regulations allow providers to engage in limited marketing or enrollment activities on an MAO’s behalf, providers (and their staff) cannot accept compensation from the MAO for these activities. Similarly, OIG identifies significant risks associated with providers who offer or pay remuneration to agents or brokers for referrals, particularly where the agents or brokers can influence enrollees to select particular providers. Such remuneration, whether in the form of bonuses, gift cards, or in-kind payments, can result in:
- individuals being enrolled in Medicare Advantage plans that fail to meet their particular needs, sometimes without their consent;
- selectively targeting individuals for enrollment who are profitable for the MAO while avoiding enrolling individuals who are expected to be more costly to the MAO such as those with disabilities;
- inappropriately steering enrollees to low-quality or more costly plans; and
- unfairly restricting competition for MAOs or providers who do not or cannot pay for referrals.
The Special Fraud Alert also sets forth a non-exhaustive list of suspect characteristics related to marketing arrangements. Examples of arrangements with a heightened risk of fraud and abuse include those offering or paying remuneration that:
- is disguised as payment for legitimate services, but is intended as payment for referring individuals to a particular Medicare Advantage plan;
- is in exchange for sharing patient information that MAOs may use to market to potential enrollees;
- is contingent or varies based on the demographics or health status of individuals enrolled or referred for enrollment; and
- varies with the number of individuals recommended or referred to a provider, MAO, or plan.
Given the potential for patient harm and since paying for referrals implicates the Federal Anti-Kickback Statute, the Civil Monetary Penalties Law, and the False Claims Act, providers should exercise caution when considering these marketing arrangements. Each arrangement is different and must be evaluated on its own merits to ensure compliance with applicable laws.
A complete copy of this Special Fraud Alert is available here.
Should you have any questions regarding the above, or need your potential arrangement assessed, please contact the authors, the Garfunkel Wild attorney with whom you regularly work, or email us at [email protected].