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Posts Tagged ‘OIG Advisory Opinion’

Referral Fee Fine Despite Kickback Concerns – OIG Advisory Opinion 14-01

Friday, January 24th, 2014

Independent Placement Agency Fee By Senior House Approved By OIG

senior housing kickback oig opinionThe Office of Inspector General posted its first advisory opinion of the year this past Tuesday.  OIG Advisory Opinion No. 14-01 responds to a nonprofit senior housing and geriatric care provider’s question of whether it may pay an independent placement agency a fee for referring new residents to its facilities.  Despite concerns that the arrangement could potentially generate prohibited remuneration under the anti-kickback statute, the OIG opinion states it would not impose sanctions in connection with the arrangement.

Here’s the facts:

  • The senior care provider operates 11 senior residential communities, two skilled nursing facilities, and a management company.
  • The residential communities offer to their residents various services – including skilled nursing services (e.g. wound care) and help with daily living activities (e.g. housekeeping).
  • A Medicaid program pays for services provided to residents in three of the residential communities.  Other than this, the skilled nursing facilities are the only entities that provide federally reimbursed health care services to residents.
  • Two of the residential communities pay an independent placement agency for referring new residents.  The placement agency receives a fee for every referral – a percentage of the new resident’s charges for his or her initial month or two.
  • The placement agency is prohibited from referring, and the residential communities are prohibited from accepting, residents who are known to rely on Medicaid, Medicare, or other state or federal funding.
  • Neither of the residential communities provide services reimbursed by Medicare.

Although the two residential communities pay a placement fee for a resident who may in the future receive federally reimbursed services from one of the senior care provider entities (which would potentially be illegal remuneration under anti-kickback laws), the OIG advisory opinion indicates that this referral arrangement is fine because:

  1. The placement fee is calculated only considering initial rent and services.
  2. The contracts underlying the arrangement prohibit both placement and acceptance of potential residents who are known to rely on government funding for their health care.
  3. Neither of the residential communities using the referral arrangement provide services reimbursed by Medicare.
  4. The senior care provider does not track referrals or common residents or patients nor do they limit their residents’ choice of providers.

Please feel free to contact John Fisher, CHC, CCEP, in the Ruder Ware Health Care Industry Focus Group for more information.

OIG Approves Free Insurance Authorization Services by Radiology Group

Tuesday, November 6th, 2012

OIG Advisory Opinion 12-10 – Radiology Insurance Pre Approval Service

A recent OIG advisory opinion addressed the legality, under the Medicare Anti-Kickback Statute, of a radiology group’s proposed program to provide free insurance pre-approval services when the treating physician orders a radiology service. The radiology group requested the advisory opinion out of concern that the potential value to the treating physician through reduction in administrative burden involved in gaining pre-approval could be considered to be “remuneration” that is intended to induce referrals to the radiology group.

In response to the advisory opinion request, the OIG stated that it believed the risk of fraud in the pre-authorization program to be minimal. The OIG reasoned that in the majority of cases, the treating physician is not likely to know who is responsible for obtaining pre-approval because the responsibility for obtaining pre-approval varies by insurance companies. The OIG also found it relevant that the program was made available to all patients without consideration for the source of referral or the identity of the payor. The OIG pointed to additional safeguards that were built into the proposed program.

Diagnostic or ancillary service providers who offer or wish to offer free pre-authorization services should reference the OIG Advisory Opinion No. 12-10. Although a favorable decision was reached in that opinion, the decision only protects the party who requested the opinion. Free pre-authorization services by diagnostic and ancillary providers can raise Anti-Kickback Statute concerns if a program is not structured to reduce risk.

For more information regarding this or other health law issues, contact John H. Fisher, II at Ruder Ware.

John H. Fisher

Health Care Counsel
Ruder Ware, L.L.S.C.
500 First Street, Suite 8000
P.O. Box 8050
Wausau, WI 54402-8050

Tel 715.845.4336
Fax 715.845.2718

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