2001 OIG Advisory Opinions

01-21 A non-profit hospital proposed to purchase a 15 percent ownership interest in an ambulatory surgical center (ASC) owned and operated by a group of physicians. As part of the proposed arrangement, the hospital would also enter into written agreements to provide management services and lease office and surgical space to the ASC. The hospital and physicians certified that the management and lease agreement terms would always reflect fair market value and would not be renegotiated more than annually. The OIG concluded that the arrangement did not pose a risk of violating the anti-kickback statute because sufficient safeguards were in place to ensure that the arrangement did not reward the hospital or physicians for the volume or value of referrals.
01-20 A non-profit hospice contracted with a nursing facility to provide Medicare certified hospice services to "dual eligible" nursing facility residents (i.e., residents eligible for Medicare hospice benefits and Medicaid room and board payments). Under the arrangement, Medicaid paid the room and board reimbursement to the hospice, which in turn paid the nursing facility a higher rate than the nursing facility would have received if the resident were not Medicare eligible. The OIG said that it needed more information to rule conclusively on the arrangement but that it was possible that the arrangement might pose an inducement for the nursing home to refer residents to the hospice for services and that sanctions under the anti-kickback statute could possibly be imposed.
01-19 A hospital donated free office space to an organization that provided free end of life care to persons suffering from terminal illness. The organization's only source of funding was charitable donations. Many of those served by the organization also received Medicare covered items and services from the hospital and its affiliates. Based on the charitable nature of the donation and longstanding relationship between the organization and the hospital, the OIG concluded that the arrangement presented a minimal risk of federal health program abuse and the OIG would not impose sanctions on the hospital for participating in the arrangement.
01-18 A rural county awarded an exclusive contract to a hospital under which an ambulance company owned by the hospital would provide services to county residents under the county's emergency medical services program. The ambulance company would bill all payors for their services, including Medicare and Medicaid. The county would pay any unpaid coinsurance amounts incurred by county residents. Despite concerns about waiver of coinsurance amounts, the OIG stated that it would not impose sanctions on the arrangement because the county effectively pays the coinsurance amount from fees imposed on all its residents, and the amount of those fees approximates the amount of the annual coinsurance obligation. In addition, any potential prohibited remuneration under this arrangement inures to the public benefit as a result of the competitive bidding process by which the contract was awarded.
01-17 An ambulatory surgery center (ASC) that performs eye surgery is jointly owned by a hospital and a group of ophthalmologists. The ASC also leases operating rooms and a reception area from the hospital. Although the arrangement did not meet the safe harbor exception for ASC's, the OIG determined that the risk of fraud was sufficiently low and it would not impose sanctions. Specifically, the hospital certified that it would not make referrals of its patients to the ASC, nor would it encourage or track referrals made by other physicians with whom it was affiliated. In addition, the lease and other contractual arrangements either met a safe harbor or did not pose a great risk of fraud under the anti-kickback statute.
01-16 An HMO employed a psychologist who was excluded from participating in Medicare or Medicaid because his license had been revoked. The excluded psychologist's duties in his employment with the HMO were strictly administrative and did not involve any patient care. The OIG stated that various provisions in federal law prohibited a provider from making a claim or receiving payment for services performed by excluded individuals or entities. However, the excluded psychologist was far enough removed from the actual provision of medical or administrative services and the services he did perform were not subject to any federal funding mandate. Therefore, his employment posed a minimal risk of program abuse and would not subject the HMO to sanctions under the civil money penalties law.
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2000 OIG Advisory Opinions

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00-3 A Florida nonprofit hospice operates a community service program that uses unpaid volunteers to provide assistance, companionship, and other services without charge to terminally ill individuals who are not eligible for, or do not choose to receive, Medicare-covered hospice services. The OIG found that, even though the free services could influence the patients' choice of provider or be intended to induce the patients' to choose the hospice, it would permit the arrangement for patients receiving services in their homes or in nursing facilities. The OIG stressed, however, that the services provided by the hospice could not not duplicate any services required to be provided by a nursing facility.
00-2 A hospital proposed to reward non-physician employees for their cost-saving ideas by awarding them a percentage of the cost savings realized, and asked whether such a program would constitute an improper kickback or inducement to reduce or limit services. The OIG found that the arrangement was generally unlikely to result in kickbacks, and therefore permitted the arrangement itself, although it expressed no opinion regarding individual cost saving ideas that might in the future be proposed under the arrangement. The OIG found that the prohibition on reducing or limiting services did not apply because physicians were not eligible to participate in the program.
00-1 A consulting firm enters into contracts with hospitals to perform predominantly retrospective auditing services to identify hospital undercharges and overcharges associated with private payors, in return for a percentage of the amounts recovered. Despite the possible "spill-over" effect of such services to federal programs, the OIG found that there was minimal risk that the arrangement would have an adverse effect on federal health care programs.


1999 OIG Advisory Opinions

99-14 A health system operates a telemedicine network pursuant to a federal telemedicine grant program, and asked whether it could continue to do so following expiration of the grants. The OIG found that the arrangement potentially confered benefits on practitioners receiving subsidized telemedicine capabilities from the system, and therefore potentially implicated the anti-kickback statute. However, the OIG permitted the arrangement because, among other things, it furthered congressional intent to promote telemedicine networks in rural areas, conveyed a community benefit, and involved relatively small amounts of remuneration.
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99-12 A company asks whether a marketing program designed to increase customer traffic for certain retailers through the distribution of coupons by physicians would violate the Anti-Kickback Statute. The OIG said the program does not implicate the statute because (1) the coupons will not be tied to an item or service covered by a Federal health care program, (2) the coupons will be distributed to all the patients, without regard to their insurance coverage, (3) the retailers are not businesses specializing in Federally-reimbursable items or services.
99-11 A teaching hospital's residents provide free psychotherapy services at a nonprofit organization, which may refer a small number of patients for admission to the teaching hospital. The OIG found that the arrangement would potentially generate prohibited remuneration if the requisite intent to induce referrals were present, but held that the arrangement posed a minimal risk of abuse. The organization anticipates referring only two patients each year and the nonprofit organization does not bill any federal program for the psychotherapy services. Additionally, the arrangement affords the residents training opportunities and offers the community a benefit through increased access to mental health services.
99-10 A licensed pharmacy that dispenses respiratory drugs would like to make donations to a charity dedicated to lung disease, in return for the use of the charity's name and logo in advertisements directed at DME companies, physicians, and other health care professionals. The OIG found that the agreement would potentially generate prohibited remuneration if the requisite intent to induce referrals were present. But the OIG found there is a low risk of unlawful kickbacks because (1) the charity's ability to influence referrals is limited because the charity would not recommend any of the pharmacy's products or services, (2) the print advertisements would not be aimed at prospective patients but at a less vulnerable audience, and (3) no health care professional in a position to refer patients will receive any remuneration. Finally, the fund-raising aspect of the proposed agreement would ultimately help the intended beneficiaries of the charity--persons with lung disease.
99-9 A managed care organization would provide podiatry benefits for a self-insured employer's retirees in return for a fixed annual fee, and the MCO would assume full financial risk for Medicare cost-sharing amounts. Additionally, the network providers will bill Medicare and accept the capitation in lieu of collecting Medicare cost-sharing amounts from the employer or retiree. The OIG found that the agreement would potentially generate prohibited remuneration under the Anti-Kickback Statute if the requisite intent to induce referrals were present. But the OIG will not impose sanctions because the employer will pay the full amount of its projected copayment obligations and the providers will receive their full anticipated copayment amounts. Another important factor is the organization's extensive UR/QA program that will likely result in a reduction in Federal health care expenditures.
99-8 In return for a fixed annual fee, podiatrists get an exclusive right to participate in a program of customer and employee education at retail shoe stores. The OIG found that the podiatrists' provision of such services without charge could be seen as remuneration in return for the stores' implied recommendation of the podiatrists to the customers. However, the OIG stated that it would not subject the arrangement to sanctions because it "poses a low risk of fraud and abuse and contains safeguards that further reduce that risk."
99-7 Ophthalmologists participating in the National Eye Care Project (NECP) waive copayments and coinsurance for patients referred to them by the NECP for one year following the patients' initial visits. The OIG found that this practice entailed prohibited remuneration under HIPAA, but nonetheless stated that it would not subject the NECP or participating physicians to sanctions because (1) there was a history of approval of the NECP by the OIG since 1984, (2) there was no evidence of overutilization or abuse in connection with the NECP during its 15 years of existence, (3) the NECP helps financially needy individuals, (4) some of the services are preventive, in which case waivers of coinsurance would are permissible even without OIG approval, and (5) the benefit to any single ophthalmologist is limited.
99-6 The requesters, St. Jude's Children's Research Hospital and two affiliated but unidentified hospitals, have historically waived coinsurance and deductible amounts for pediatric oncology patients. The OIG found that the waiver of these amounts could potentially entail prohibited remuneration under the Anti-Kickback Statute, if the prohibited intent were present. However, the OIG stated that it would not subject the arrangement to sanctions because the historical research mission of the hospital constituted a public benefit and helped ensure against overutilization, waivers were reasonable to induce patients to participate in research-oriented care, and there were relatively few federal program beneficiaries or copayments involved.
99-5 A city asked whether a $50,000 annual fee imposed on ambulance companies operating in the city constituted prohibited remuneration under the Anti-Kickback Statute. Calling such an arrangement a "pay to play" arrangement, the OIG found that it clearly implicated the Anti-Kickback Statute, and depending on the intent of the parties could violate the Statute. However, the OIG stated that it would not subject the arrangement to sanctions because (1) the fee is imposed by a governmental entity empowered to regulate emergency medical services, (2) the fee is reasonably related to the costs of operating the city's 911 service attributable to ambulance calls, (3) the fee is not tied to the volume or value of referrals, and (4) the fee assessment should not increase the risk of overulitization or costs to federal health care programs.
99-4 Summary coming soon.
99-3 Summary coming soon.
99-2 Summary coming soon.
99-1 Ambulance transportation service waiving copayments when transporting Medicare patients to the hospital. The OIG found that if the requisite intent was present, the arrangement could violate the Anti-Kickback Statute. Nonetheless, the OIG indicated that it would not seek to impose sanctions on this particular arrangement.


1998 OIG Advisory Opinions

98-19 Acquisition by a independent physician association of an equity interest in a managed care organization. The OIG indicated its concern that such arrangements potentially entail prohibited remuneration. However, the OIG found that this particular IPA/MCO joint venture "posed no more than a minimal risk of fraud and abuse," and that it would not subject the proposed arrangement to anti-kickback sanctions.
98-18 An ophthalmologist and an optometrist participated in a joint venture involving a sublease of telemedicine equipment and the provision of free telemedicine consultations by the ophthalmologist for the optomotrist. The OIG found that if the requisite intent was present, the arrangement could violate the Anti-Kickback Statute. Nonetheless, the OIG indicated that it would not seek to impose sanctions on this particular arrangement.
98-17 Premiums for ESRD patients
98-16 A mail-order pharmacy proposed placing a licensed pharmacist in a hospital organ transplant center without charging the hospital for the pharmacist's services (facilitating post-translant care, preparing pharmaceutical care plans, billing and collecting for pharmacy services, etc.)
98-15 Pharmacies
98-14 Four separate hospitals in four counties sought approval for ambulance restocking programs involving drugs and medical supplies. The OIG found the drug restocking program permissible, although it potentially involved remuneration intended to induce referrals, because it was sponsored by emergency medical services councils representing diverse interests in the medical community. However, the OIG refused to find the medical supplies program permissible because it was sponsored by the hospitals only.
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98-10 A manufacturer of DME products agreed to pay an independent sales agent a commission based on a percentage of sales. The OIG found that if the requisite intent was present, the arrangement could violate the Anti-Kickback Statute. Nonetheless, the OIG indicated that it would not seek to impose sanctions on this particular arrangement.
98-9 As part of a collective bargaining agreement, a hospital agreed to adjust union members' pay every six months according to the number of patients admitted during the previous six months who were members of a coalition of unions. The OIG determined that the resulting pay increases, if any, would satisfy the terms of the employee safe harbor.
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98-7 Turns out ambulance restocking is OK after all.
98-6 Waiving coinsurance in context of National Emphysema Treatment Trial was permissible.
98-5 Coordination of benefits plan between a Nursing Home and a health care plan.
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1997 OIG Advisory Opinions

97-6 A company asked whether its hospitals could restock ambulance squads, without charge, with supplies and medications used by the squads when transporting patients to the hospitals. The OIG concluded that the proposed arrangement would likely constitute prohibited remuneration under the Anti-Kickback Statute.
97-5 A group of physicians (radiologists) and a hospital entered into a joint venture to operate an outpatient radiology imaging center. Based upon representations of the hospital regarding referrals to the imaging center, and the OIG's assumption that radiologists are unlikely to be able to generate "appreciable" referrals to the center, the OIG found that the arrangement was permissible, even though it did not qualify for safe harbor protection.
97-4 An ambulatory surgical center sought approval for a policy of declining to collect copayments from patients whose Medigap carriers refused to cover services provided at the ASC. The OIG found that the proposed arrangement may constitute grounds for the imposition of civil monetary penalties under section 231(h) of HIPAA and criminal penalties and exclusion under the Anti-Kickback Statute.
97-3 An 87-year-old nursing home resident transferred funds to her son and subsequently applied for Medicaid benefits. She asked whether this conduct violated 42 U.S.C. 1320a-7b(a)(6), which prohibits certain dispositions of assets for the purpose of qualifying for Medicaid. The statute only prohibits disposition of assets " if disposing of the assets results in the imposition of a period of ineligibility for such assistance." Because the mother was not subject to a period of ineligibility, the OIG found that her conduct was not prohibited.
97-2 A state-run program pays insurance premiums (Medicare Part B and Medigap insurance) on behalf of financially needy Medicare beneficiaries with end stage renal disease. The OIG found the arrangement permissible.
97-1 Dialysis providers make contributions to a charitable organization which in turn pays insurance premiums (Medicare Part B and Medigap insurance) on behalf of financially needy Medicare beneficiaries with end stage renal disease. The OIG found the arrangement permissible.