Two Recent OIG Advisory Opinions Banner Image

Healthcare Law Blog

Two Recent OIG Advisory Opinions

October 9, 2019

As technology continues to be a pervasive platform for the healthcare industry in improving patient care, the Office of Inspector General of the Department of Health and Human Services (OIG) posted Advisory Opinion 19-04 which approved a technology company’s proposal to make visible to federal healthcare program beneficiaries its online healthcare directory for searching and booking medical appointments and sponsored advertisements. The company employs a proprietary algorithm which returns up to 200 results and the users are not charged any fees or offered anything of value. Those same healthcare providers pay flat monthly subscription fees or annual subscription fees, per-click or per-booking fees, to be listed in the company’s directory and may choose to pay for sponsored advertisements on the company’s directory and third-party websites. The OIG concluded that the proposed arrangement would not violate the anti-kickback or civil monetary penalty provision statutes for numerous reasons, one of which being the many factors that influences a user’s ultimate choice of healthcare professionals, and mere access alone to the company’s website would be unlikely to induce a user to select a particular provider over another. For the Advisory Opinion, click here

At the same time the OIG issued 19-04, the OIG issued Advisory Opinion 19-05 allowing a proposal for a community health center (the “Requestor”) to purchase real estate from a limited liability company (LLC) owned and managed by an excluded individual. The OIG's List of Excluded Individuals/Entities (LEIE) consists of individuals and businesses that have been convicted of offenses in connection with federal healthcare programs and, therefore, must be excluded from all Medicare, Medicaid, and other federal healthcare programs. The OIG indicated the proposed arrangement would not run afoul of the civil monetary penalties law because the proposal did not involve the provision of an item or service for which payment may be made under any federal healthcare program. Under the Proposed Arrangement, the Requestor would purchase real estate including a medical clinic already operated by the Requestor from a company owned and managed by an excluded individual. The Requestor would obtain an independent appraisal for the real estate and not maintain an ongoing relationship with the excluded individual after the purchase. Importantly, the Requestor certified that the purchase would not entail claims to federal healthcare programs or use federal grant funds. This Opinion provides important insight into the OIG’s interpretation of the prohibition against contracting with excluded individuals and its analysis of when real estate becomes an “item” under the 1128A(a)(6) of the Social Security Act. For the Advisory Opinion, click here.

Both opinions contained the traditional disclaimer that the advisory opinion can only be relied upon by the specific company that requested it, but a recent proposed regulation, 84 FR 40482-01, that we previously reported on may alter this longstanding rule. For the proposed regulation, click here.

If you have any questions, please contact <a href="mailto:Khaled J. Klele or <a href="mailto:Latoya Caprice Dawkins.

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