- January 17, 2024
- Alerts
OIG Approves Use of Gift Cards for Referrals in Certification-Heavy Advisory Opinion
The U.S. Department of Health and Human Services, Office of Inspector General (OIG) posted a favorable Advisory Opinion (23-15) permitting a consulting company’s (Consultant) proposal to offer gift cards to its current physician practice customers for referring potential new physician practice customers to Consultant. Notably, OIG determined that the proposed arrangement did not implicate the Anti-Kickback Statute (AKS).
Consultant provides consulting and other optimization services to physician practices. Physician practice customers pay Consultant for providing these services to them. Under the proposed arrangement, Consultant would give current customers who recommend Consultant’s services to potential physician practice customers a $25 gift card per recommendation. Consultant would also give current customers another $50 gift card if the potential physician practice customer hires Consultant. According to OIG, the proposed arrangement involves three potential remuneration streams:
Despite these potential remuneration streams, OIG found that the proposed arrangement did not implicate the AKS given Consultant’s many certifications. Specifically, Consultant certified that:
This favorable advisory opinion allows the use of gift cards in these limited factual circumstances. Significantly, however, this advisory opinion continues OIG’s recent positive trend of allowing the use of gift cards in certain instances. See Advisory Opinion 20-08 (allowing a Federally Qualified Health Center to provide a $20 gift card to incentivize pediatric patients who previously missed two or more preventive and early intervention care appointments to attend their rescheduled appointments);[1] see also, Advisory Opinion 22-16 (allowing an operator of an online learning tool to provide a gift card to certain Medicare Advantage plan enrollees who complete specific steps in an online patient education program.);[2] Advisory Opinion 23-03 (allowing a laboratory and its parent company to provide a prepaid gift card of up to $75 to encourage individuals to return a sample collection kit for colorectal cancer screening).[3]
Importantly, every arrangement is different and should be evaluated on its own merits. There are severe consequences for violating the AKS and the Beneficiary Inducements Civil Monetary Penalty Law (CMPL). OIG’s long-standing concerns about offering gifts and other inducements to beneficiaries is well-documented; therefore, providers and organizations must proceed with caution when proposing incentives that involve offering free or discounted items or services to beneficiaries. The potential use of incentives also requires careful consideration of applicable AKS safe harbors or CMPL exceptions, if any.
A complete copy of Advisory Opinion 23-15 is available at: https://oig.hhs.gov/documents/advisory-opinions/1147/AO-23-15.pdf
Should you have any questions regarding the above, please contact the authors, the Garfunkel Wild attorney with who you regularly work, or contact us at info@garfunkelwild.com.
Consultant provides consulting and other optimization services to physician practices. Physician practice customers pay Consultant for providing these services to them. Under the proposed arrangement, Consultant would give current customers who recommend Consultant’s services to potential physician practice customers a $25 gift card per recommendation. Consultant would also give current customers another $50 gift card if the potential physician practice customer hires Consultant. According to OIG, the proposed arrangement involves three potential remuneration streams:
- Consultant giving gift cards to physician practice customers who recommend Consultant to potential physician practice customers;
- physician practice customers paying Consultant for consulting services; and
- physician practice customers potentially receiving an opportunity to earn a fee as a result of the consulting services in the form of higher Merit-Based Incentive Payment System (“MIPS”) reimbursement from Medicare.
Despite these potential remuneration streams, OIG found that the proposed arrangement did not implicate the AKS given Consultant’s many certifications. Specifically, Consultant certified that:
- none of its services are or would be paid for, in whole or in part, directly or indirectly, by a Federal health care program;
- it would not provide any items or services outside of the proposed arrangement that may be paid for, in whole or in part, directly or indirectly, by a Federal health care program;
- it does not have an ownership or investment interest in any other entity that provides any items or services that are paid for, in whole or in part, directly or indirectly, by a Federal health care program;
- it does not recommend to any customer the purchasing, leasing, or ordering of any item or service for which payment may be made, in whole or in part, under a Federal health care program; and
- any remuneration customers receive under the proposed arrangement would not be in return for referrals for the purchase of or arranging for or recommending the purchase of any item or service for which payment may be made, in whole or in part, under a Federal health care program.
This favorable advisory opinion allows the use of gift cards in these limited factual circumstances. Significantly, however, this advisory opinion continues OIG’s recent positive trend of allowing the use of gift cards in certain instances. See Advisory Opinion 20-08 (allowing a Federally Qualified Health Center to provide a $20 gift card to incentivize pediatric patients who previously missed two or more preventive and early intervention care appointments to attend their rescheduled appointments);[1] see also, Advisory Opinion 22-16 (allowing an operator of an online learning tool to provide a gift card to certain Medicare Advantage plan enrollees who complete specific steps in an online patient education program.);[2] Advisory Opinion 23-03 (allowing a laboratory and its parent company to provide a prepaid gift card of up to $75 to encourage individuals to return a sample collection kit for colorectal cancer screening).[3]
Importantly, every arrangement is different and should be evaluated on its own merits. There are severe consequences for violating the AKS and the Beneficiary Inducements Civil Monetary Penalty Law (CMPL). OIG’s long-standing concerns about offering gifts and other inducements to beneficiaries is well-documented; therefore, providers and organizations must proceed with caution when proposing incentives that involve offering free or discounted items or services to beneficiaries. The potential use of incentives also requires careful consideration of applicable AKS safe harbors or CMPL exceptions, if any.
A complete copy of Advisory Opinion 23-15 is available at: https://oig.hhs.gov/documents/advisory-opinions/1147/AO-23-15.pdf
Should you have any questions regarding the above, please contact the authors, the Garfunkel Wild attorney with who you regularly work, or contact us at info@garfunkelwild.com.