On March 24, 2023, the Workplace of Inspector Normal (“OIG”) issued Advisory Opinion 23-03 (the “Opinion”), by which it determined to not impose sanctions on an Association to offer pay as you go reward playing cards to sufferers for sure preventative screening checks (the “Association”).
As a part of the Association, a laboratory and its father or mother firm (the “Firms”) would offer a pay as you go card, akin to a Visa or Mastercard reward card, of as much as $75 to sure people to encourage these people to return the pattern assortment package related to an FDA-approved colorectal most cancers screening check (the “Check”). Within the Opinion, the OIG decided that it could not impose administrative sanctions beneath the Anti-Kickback Statute (“AKS”) or the Beneficiary Inducements prohibition within the Civil Financial Penalties Legislation (“CMP”) for the Association.
FOCUS ON THE FACTS: Overview of Particular Safeguards Below the Association
In its evaluation, as at all times, the OIG relied closely on the particular information of the Association. Particularly, the OIG famous that the Check should be prescribed by a well being care supplier performing throughout the scope of their prescribing authority (the “Prescriber”). The Check package is then mailed to the affected person’s residence. The affected person should acquire their very own stool pattern and ship the Check package again to the laboratory. As such, the Prescriber doesn’t management whether or not the Check package pattern is shipped to the laboratory – that step is throughout the affected person’s management.
Subsequent, the Firms licensed they might implement sure safeguards associated to the Association, together with the next:
- The Reward Card can be mailed solely to these sufferers who return the Check package by a specified deadline.
- They might advise sufferers that the Reward Card is probably not used for gadgets or companies supplied by the Firms.
- Every affected person can be restricted to receiving one Reward Card per 36-month interval, a time interval that aligns with Medicare’s protection for the Check, which is as soon as each 36 months.
- The Firms would implement processes to make sure that the recipient of the Reward Card had not already obtained a Reward Card within the prior 36-month interval.
- The Firms wouldn’t have interaction in some other patient-focused promotion of the Association, akin to direct-to-consumer commercials on third-party web sites or commercials in newspapers, on tv or radio, or in magazines in reference to the Association.
- The Firms wouldn’t promote or market the Association to Prescribers or provide or pay any remuneration to Prescribers in reference to the Association.
THE OIG’S ANALYSIS:
The OIG suggested that the Association would implicate the Beneficiary Inducements CMP and AKS due to the provide and switch of remuneration to Medicare sufferers, probably ensuing within the buy of laboratory companies in reference to the Check. Nonetheless, the OIG concluded that it could not impose administrative sanctions on the Firms in reference to the Association beneath both regulation based mostly on the fact-specific evaluation outlined beneath.
Overview of the Proposed Association Below Federal AKS
At a excessive stage, the OIG concluded that the Association presents a minimal threat of fraud and abuse beneath the AKS. Notably, the OIG cited to its prior opinion on preventative care companies, noting that:
“From an anti-kickback perspective, the chief concern is whether or not an association to induce sufferers to acquire preventive care companies is meant to induce different enterprise payable by a Federal well being care program. Related components in making this analysis would come with, however not be restricted to: the character and scope of the preventive care companies; whether or not the preventive care companies are tied straight or not directly to the supply of different gadgets or companies and, if that’s the case, the character and scope of the opposite companies; the idea on which sufferers are chosen to obtain the free or discounted companies; and whether or not the affected person is ready to afford the companies.”
Accordingly, the OIG decided that the Association is unlikely to result in improperly elevated prices or overutilization as a result of the Check prescription is proscribed in a number of methods. For instance, the Check is proscribed to sufferers aged 45-75-years-old and every affected person might solely acquire one prescription each 36-months. Moreover, as a result of Reward Playing cards are solely supplied to sufferers who return the Check, slightly than to all sufferers who obtain a Check, Prescribers will be unable to anticipate whether or not the Firms would provide or present the Reward Card to sufferers for which the check was ordered.
Second, the Association would profit sufferers and the Medicare program by selling compliance with a beneficial screening check. Notably, over thirty p.c of sufferers who obtained a Check weren’t returning their pattern. Lastly, the OIG famous that the listed safeguards set forth by the Firms scale back the danger of fraud and abuse.
Beneficiary Inducements CMP and the Preventative Care Exception
When analyzing the Beneficiary Inducements CMP, the OIG targeted on the exception to the definition of “remuneration” beneath part 1128A(i)(6)(D) of the Social Safety Act, excluding incentives given to people to advertise the supply of preventive care the place the supply of such companies aren’t tied (straight or not directly) to the supply of different companies reimbursed in complete or partially by Medicare or an relevant State well being care program. (the “Preventive Care Exception”).
The OIG opined that the Reward Card beneath the Association would fulfill this exception as a result of the Reward Card promoted the supply of a preventative screening check and the Reward Card would neither be an instrument convertible to money, nor, on this specific case, disproportionately massive in relationship to the worth of the preventive care service. Whereas the OIG made a observe that $75 could also be too massive in different contexts, it thought of the advantages to beneficiaries and the long run well being care prices anticipated to be prevented on account of the Exams when evaluating the proportionality on this occasion.
Reward playing cards and different various types of remuneration stay on the OIG’s radar and topic to scrutiny. Notably, the OIG lately revealed an FAQ discussing the way it differentiates between “money,” “money equivalents,” and “in-kind” reward playing cards.
Whereas the Opinion supplies some flexibility, you will need to observe that the OIG highlighted that its opinion is, as at all times, particular to the information offered within the Firms’ Association right here. Notably, the OIG acknowledged:
“We recognize that the Reward Card might current the chance for sufferers to obtain beneficial remuneration that might induce them to buy federally reimbursable companies and warning that if any of the foregoing information had been totally different, we possible would attain a unique conclusion with respect to the danger offered by this kind of association beneath the Federal anti-kickback statute, no matter whether or not the association satisfies an exception to the Beneficiary Inducement CMP.”
Accordingly, comparable preparations should be rigorously reviewed to make sure compliance with relevant regulation. If in case you have additional questions associated to this submit, attain out to a member of Sheppard Mullin’s Healthcare Workforce.
 42 U.S.C. § 1320a–7b(b).
 42 U.S.C. § 1320a–7a(a)(5).