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As the shift toward value-based care continues to transform the healthcare industry, hospitals and health systems are increasingly utilizing incentive-based physician compensation structures. Incentive-based compensation often includes a combination of a base salary with a variable bonus component tied to performance metrics, with the metrics being chosen based on overarching organizational goals, such as improving quality of care and managing costs. With these aims in mind, hospitals and health systems often base bonus achievement on meeting certain objective metrics, such as patient satisfaction scores, productivity measures, adherence to clinical guidelines, cost-saving measures, or other quality indicators most applicable to the department or physician group involved.Continue Reading Navigating Gainsharing Pitfalls in Value-Based Models

Most Medicare Advantage (“MA”) beneficiaries rely on agents and brokers to help them navigate the complex process of selecting a health plan that will meet their needs. In exchange, brokers and agents received certain fixed payments set by Medicare, as well as, in some cases, significant additional payments from health plans. Concerned over the potential for abuse, these arrangements have been the subject of Congressional scrutiny and an enforcement priority for both the Department of Justice (“DOJ”) and the Department of Health and Human Services Office of the Inspector General (“HHS OIG”). The Biden Administration and the Centers for Medicare & Medicaid Services (“CMS”) are tackling this issue head-on in a recently published final rule that addresses both marketing tactics and compensation methodologies used by Medicare Advantage organizations (“MAOs”) to pay MA agents or brokers.[1]Continue Reading Increased Scrutiny into Agents & Brokers in the Medicare Advantage Space

The United States District Court for the Eastern District of Virginia recently dismissed an appeal by the Pharmaceutical Coalition for Patient Access (“PCPA”) that challenged a negative opinion issued by the U.S. Department of Health and Human Services, Office of the Inspector General (“OIG”) concerning pharmaceutical manufacturers’ offers of cost-sharing subsidies to Medicare Part D (“Part D”) beneficiaries. The opinion under review was Advisory Opinion No. 22-19,[1] which we previously wrote about[2] and in which the OIG advised that if pharmaceutical manufacturers offered the proposed cost-sharing subsidies to Part D beneficiaries via PCPA, they could be subject to liability under the Federal health care program Anti-Kickback Statute (the “AKS”), even though the proposed subsidies would not violate the Civil Monetary Penalty Law’s Beneficiary Inducement Prohibition (“BIP”).Continue Reading District Court Elucidates the Meaning of “to Induce” Under the Federal Health Care Program Anti-Kickback Statute

In late April this year, the Office of Inspector General, Department of Health and Human Services (OIG) announced that it would make changes to its existing body of healthcare compliance program guidance (CPGs) as part of its current Modernization Initiative.[1] These CPGs were directed at various segments of the health care industry and provided specific guidance on risks posed by industry practices. To kick off the initiative, OIG indicated that it would first issue a new general compliance program guidance (GCPG) by year end applicable to individuals and entities in all segments of the health care industry that would address overarching compliance elements regarding federal fraud and abuse laws, compliance program basics, compliance program effectiveness and general process and procedures. Thereafter, OIG said it planned to update existing industry-specific compliance program guidance (ICPG), which would include tailoring each to address fraud and abuse risk areas specific to a particular industry and describing the compliance measures that industry could take to reduce these risks[2].Continue Reading OIG General Compliance Program Guidance November 2023

Late last week, the Department of Health and Human Services Office of the Inspector General (“OIG”) posted Advisory Opinion No. 23-07 affirming the broad protection available for compensation to employed physicians under the bona fide employee exception and safe harbor to the federal Anti-Kickback Statute (the “AKS”). The opinion highlights flexibility for healthcare providers seeking to compensate employees in ways that align incentives with their employers, and particularly for physician practices to align employed physicians with use of the practices’ ambulatory surgery center (“ASC”) capabilities.Continue Reading OIG Confirms the Broad Protection of Employee Safe Harbor

On August 21, 2023, the New York State Office of the Medicaid Inspector General (OMIG) announced updates to the Medicaid overpayment self-disclosure program, which now includes an abbreviated process for reporting and explaining overpayments that are considered routine or transactional in nature and have been already voided and adjusted.Continue Reading New York Medicaid Providers Now Have Two Pathways to Self-Disclose Overpayments to the Office of the Medicaid Inspector General

Industry stakeholders have been eagerly waiting for the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) and the Secretary of HHS to provide more clarity on federal information blocking enforcement rules since the Office of the National Coordinator for Health Information Technology (ONC) issued its final information blocking rules in 2020.[i] Continue Reading HHS OIG Publishes Eagerly-Anticipated Federal Information Blocking Enforcement Final Rule

The Office of Inspector General (“OIG”) within the U.S. Department of Health and Human Services (“HHS”) is responsible for detecting and preventing fraud, waste, and abuse in federal health care programs. The OIG has authority to enforce the federal Anti-Kickback Statute (“AKS”) and the Beneficiary Inducements Civil Monetary Penalty law (“CMPL”). One of the ways that the OIG utilizes its enforcement authority is through the issuance of advisory opinions. Continue Reading OIG 2022 Advisory Opinions: Year in Review

On Thursday, February 23, the Office of the Inspector General for the Department of Health and Human Services (“OIG”) issued its first Advisory Opinion (“AO”) of the new year – OIG AO No. 23-01 – permitting a drug manufacturer to provide financial assistance for transportation, lodging, meals, and other out-of-pocket expenses to eligible patients receiving the manufacturer’s drug (the “Arrangement”). Overall, OIG concluded that: (1) the risk of fraud and abuse presented by the manufacturer’s Arrangement was sufficiently low under the Federal anti-kickback statute; and (2) the remuneration offered under the Arrangement was not likely to influence a beneficiary to order the manufacturer’s drug (the “Drug”) from a particular provider and therefore did not constitute grounds for the imposition of sanctions under the Beneficiary Inducements CMP. Ultimately, the crux of this decision came down to the unique manufacturing and distribution of the Drug, which (i) is the only available potentially curative treatment for an ultra-rare disorder; (ii) pursuant to its FDA approval, can only be manufactured at a single facility, located on the campus of a treatment center (the “Treatment Center”); (iii) can only be administered within 3 hours after being manufactured; and thus, can only be administered at the single Treatment Center site.Continue Reading OIG Advisory Opinion Alert: Medical Flights for Patient Access

The Biden Administration has expressed a deep concern about nursing home owners and related parties excessively profiting off of the residents they serve to the detriment of quality care. To address this concern, President Biden has asked Congress to implement laws that will empower federal agencies such as the Centers for Medicare and Medicaid Services (CMS) to increase accountability for facility ownership and expand enforcement authority at the ownership level. In addition, the federal agencies that regulate and oversee nursing homes (and some states[1]) have or plan to take action to ensure more transparency, compliance and enforcement regarding nursing facility ownership. Indeed, the U.S. Department of Health and Human Services’ Office of Inspector General (OIG) announced last week that it will undertake an audit of skilled nursing facility Medicare payments to related parties. Facility owners and operators should heed these developments, which as discussed below, focus on several fronts, and ensure that their relationships and operations are in accord with existing federal and state related party laws and regulations.Continue Reading Nursing Homes Beware: the Government has Increased Its Scrutiny of Related Parties

On August 19, the Department of Health and Human Services Office of Inspector General (“OIG”) posted a favorable advisory opinion, AO 22-16, with respect to the provision of gift cards to Medicare Advantage (“MA”) plan enrollees who complete certain steps in an online patient education program. This opinion underscores potential flexibility for with Medicare Advantage Organizations (“MAOs”) and their vendor partners to offer incentives to patients to engage in learning and health care engagement activities that may improve health outcomes without inappropriately steering patients toward particular providers or MA plans.Continue Reading OIG Blesses Gift Cards for Patient Engagement with Education Tool