The US Department of Health and Human Services Office of Inspector General (OIG) published favorable Advisory Opinion No. 23-15 on January 3, which concluded that a consultant’s proposal to provide gift cards to existing physician practice customers in exchange for referring other physician practices to the vendor would not implicate the federal Anti-Kickback Statute (AKS).
Key Takeaways from OIG Advisory Opinion No. 23-15
In Advisory Opinion No. 23-15, the requestor provided consulting services to physician practices, including data analytics services, electronic health record consulting services, compliance monitoring services, and auditing, training, and other services related to Medicare’s Merit-Based Incentive Payment System (MIPS).
The consultant proposed to offer existing physician practice customers gift cards for referring prospective physician practice customers to the consultant. Under the proposal, the consultant would provide existing customers a $25 gift card per recommendation, and, if such recommendation resulted in a new physician practice customer engaging the consultant, then the referring physician practice customer would receive an additional $50 gift card.
Critically, the consultant certified that it does not recommend 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 (FHCP) to any physician practice customer. Further, the consultant confirmed that no consulting services (or any items or services outside of the proposed arrangement) would be paid for, in whole or in part, directly or indirectly, by a FHCP, and that it does not have an ownership or investment interest in any entity that does provide items or services reimbursable by a FHCP.
However, the consultant acknowledged that some of its services could result in physician practice customers receiving higher MIPS reimbursement from Medicare, although its consulting fees are unrelated to whether a physician practice customer receives greater or lesser MIPS-related reimbursement as a result of the consulting services provided. In addition, the consultant confirmed that it does not advise customers to take any action, or otherwise promote any activity, that would violate any billing requirements.
In evaluating the proposed gift card arrangement, OIG highlighted that it would involve three potential streams of remuneration:
- The consultant providing gift cards to existing physician practice customers who recommend the consultant’s services to prospective physician practice customers
- Physician practice customers’ payment to the consultant for consulting services
- Physician practice customers potentially receiving higher MIPS reimbursement from Medicare as a result of the consultant’s services
Ultimately, however, OIG found that none of these potential streams of remuneration would implicate the AKS due to the following:
- The provision of gift cards to customers would not be in return for the physician practices making referrals of, purchasing, arranging for, or recommending services that are reimbursable in whole or in part by a FHCP.
- While the consultant would receive payment from physician practices for its services, the consultant’s services would not involve recommending to customers the purchasing, leasing, or ordering of any item or service for which payment may be made in whole or in part under a FHCP.
- While the consulting services might result in increased MIPS-related reimbursement from Medicare, any increased reimbursement received 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 an FHCP.
Advisory Opinion No. 23-15 serves as a reminder to go “back to the basics” when evaluating a proposed arrangement for compliance with the AKS to consider whether the services at issue are reimbursed in whole or in part by a FHCP.
As an example, consider if the vendor at issue instead replaced the physician practice’s heating, ventilation, and air conditioning (HVAC) system and had a customer referral program that included a gift card to the physician practice for referring the vendor to other customers (including other physician practices). In this case, it would likely be understood that services furnished by the HVAC vendor were not reimbursed by a FHCP.
Although the consultant/vendor in Advisory Opinion No. 23-15 advises physician practice customers on healthcare industry–specific matters, including MIPS and electronic health record–related topics, the consultant’s services are not reimbursable by FHCPs and did not cross over into recommending any items or services paid for by FHCPs, similar to the HVAC vendor scenario. For this reason, the provision of gift cards did not implicate the AKS.
For any questions on this advisory opinion or compliance with the AKS and other healthcare fraud and abuse laws in general, reach out to your Morgan Lewis healthcare contact or the authors of this blog post.