The Office of the Inspector General recently released Advisory Opinions 10-20 and 10-21. Advisory Opinion 10-20 deals with a radiology group seeking to pre-authorize insurers free of charge for referring physician groups. These requests for pre-authorization would be handled before the requestor would be providing the services. Additionally the radiology group would bear the financial risk if they were not able to obtain preauthorization from the insurers.
Although the situation where services are provided free of charge to a referring source does have a potential for risk, the OIG mentioned several mitigating factors present in the proposed arrangement to limit the risk of influencing referrals. One factor that limits the risk of influencing a referral is that the proposed arrangement would not target any specific physicians and since there are a large number of insurers the requestor would be unlikely to know the specific obligations of a physician with respect to any particular patient. To help reduce the risk of fraud and abuse, no payment would be made to physicians, no assurance of preauthorization approval would be made and all private laws would be followed. The arrangement would be operated transparently, where the insurers would know that the call center was operated by the requestor. Finally, the OIG noted that the requestor’s insurance reimbursement is at stake, which is a legitimate business purpose.
For all the aforementioned reasons, the OIG determined that the risk of inducing referrals under the proposed arrangement was minimal given the safeguards and legitimate business purpose.
Advisory Opinion 10-21 deals with a discount offered to a Medigap Plan by a preferred hospital network. These discounts would be given to policyholders who choose to use hospitals in the preferred network. This discount would be given in the form of a credit on the policyholder’s renewal premium. After analyzing the arrangement for violations of beneficiary inducement provisions of the civil money penalty statute and the Anti-Kickback statute the OIG determined that they would not impose administrative sanctions. However, they did note that the arrangement might violate the Anti-Kickback statute for prohibited remunerations.
While analyzing the arrangement, the OIG noted several features that mitigate the risk of fraud or abuse. These features include the fact that the waiver could not change or increase the services provided by the hospital, there would be no increase in utilization due to the discount because the Medigap policy would have paid the deductible had there been no discount, physicians do not receive remunerations as part of the arrangement, and that the sharing of the discount with the policy holders provided little risk to the program.
Analyzing this proposed arrangement under the beneficiary inducement statute, the OIG found that this credit, although not the same as differentials in coinsurance and deductibles, has the same effect. As such, the exceptions for differentials in coinsurance and deductibles under the beneficiary inducement statute would apply to the proposed discount. The OIG also noted that the proposed arrangement would lower costs for policyholders.
If you would like your financial arrangements analyzed for Stark, Anti-Kickback, or beneficiary inducement compliance, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.