OIG Advisory Opinion

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Copay Waiver Questions: OIG Opines that Charities Allowed to Help with Patients’ Insurance Obligations

by admin on January 10, 2017 1 comment

financial hardshipBy: Jacqueline Bain

In the healthcare business, giving a patient a break on a health insurance copay is often viewed as suspicious. The reasoning for the suspicion is that the financial incentive may give one provider a competitive advantage over another, or persuade a patient to seek services that might not be medically necessary.  Moreover, any person who interferes with a patient’s obligations under his/her health insurance contract may be viewed as tortuously interfering with that contract. However, in an advisory opinion issued on December 28, 2016, the OIG opined that, in certain instances, a non-profit, tax-exempt, charitable organization could provide financial assistance with an individual’s co-payment, health insurance premiums and insurance deductibles when a patient exhibits a financial need.

The party requesting the advisory opinion was a non-profit, tax-exempt, charitable organization that did not provide any healthcare services and served one specified disease. The non-profit, tax-exempt, charitable organization is governed by an independent board of directors with no direct or indirect link to any donor. Donors to the non-profit, tax-exempt, charitable organization may be referral sources or persons in a position to financially gain from increased usage of their services, but may not earmark funds and or have any control over where their donation is directed.

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adminCopay Waiver Questions: OIG Opines that Charities Allowed to Help with Patients’ Insurance Obligations

New OIG Advisory Opinion Frowns on Proposed Lab/Physician Arrangement

by admin on April 1, 2015 No comments

OIG crestMarch 25, 2015 Advisory Opinion No. 15-04 addresses a proposed arrangement involving a clinical/anatomic lab’s desire to position itself as the single lab recommended by practices.

The proposal arises in the context of the OIG Advisory Opinion process, which allows the OIG to opine on its view of how the federal anti-kickback statute might view a proposed arrangement.  Though Advisory Opinions are not “law,” they do provide good insight into prosecutorial intent.

Facts Presented

The clinical/anatomic lab (“Lab”) wanted to have agreements with physician practices to provide all their lab services.  To deal with the fact that some commercial insurers have exclusive arrangements with labs,  the Lab proposed that if a practice patient’s insurer required the patient to use another lab, the Lab would waive all fees for the affected practice patients and would not bill the patient, the medical practice or the patient.  The Lab would provide its services to these “exclusive patients” for free, while billing all other patients (and/or their insurers, including governmental payers) its fee scheduled or contracted rates.  The proposed arrangement would allegedly simplify things for the practices and keep lab results uniform.  A practice patient would be required to use the Lab.  The Lab’s services would simply be offered by the practices to their patients.  The Lab stated that the provision of free services to certain practice patients would not provide any financial benefit to the practices, although the lab would provide the practice a limited-use interface.  Samples would not be drawn in physician offices.

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adminNew OIG Advisory Opinion Frowns on Proposed Lab/Physician Arrangement

Justice Department Hits Physician Owned Distributorships (PODS)

by admin on March 11, 2014 No comments

money doctorFor the first time, the Department of Justice (DOJ) has fired a shot at a physician owned distributorship (POD).  In the case, the DOJ suit claims that the ownership interest of a neurosurgeon in a spinal surgery device distributorship has caused him to perform unnecessary surgeries.

PODs have been the source of considerable controversy for years.  A couple years ago, they caught the attention of Congress.  The Office of Inspector General of the Department of Health and Human Services (“OIG”) has even issued a Fraud Alert making clear their dislike of PODs and sending a clear shot across the bow of those who are in that industry.  In 2006, the Office of the Inspector General of HHS and CMS expressed major concerns about PODs, and cited concerns about “improper inducements.”  At that time, the OIG stopped short of prohibiting them, but called for heightened scrutiny.  CMS itself has stated that PODs “serve little purpose other than providing physicians the opportunity to earn economic benefits in exchange for nothing more than ordering medical devices or other products that the physician-investors use on their own patients.”

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adminJustice Department Hits Physician Owned Distributorships (PODS)

OIG Comes Down Hard on Physician Owned Distributorship (POD) Arrangements

by admin on October 30, 2013 No comments

OIG crestOn October 24, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS) released its long-awaited report on the prevalence of physician-owned distributorships (PODs) and the increased costs incurred by Medicare following the rise of these entities. The U.S. Senate and OIG’s investigation of PODs began in earnest in 2011 with the release of the Senate Finance Committee’s POD overview and inquiry.1 This was followed by a Special Fraud Alert issued by OIG, which characterized PODs as “inherently suspect under the anti-kickback statute.”2

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adminOIG Comes Down Hard on Physician Owned Distributorship (POD) Arrangements