OIG offers guidance on hospital discounts

In response to suggestions that two laws enforced by the Office of the Inspector General (OIG) of the Department of Health and Human Services (HHS) may prevent hospitals from offering discounted prices to uninsured patients. The OIG discusses each law on its web site, www.oig.hhs.gov, as follows:

"The Federal Anti-Kickback Statute. The federal anti-kickback statute prohibits a hospital from giving or receiving anything of value in exchange for referrals of business payable by a federal health care program, such as Medicare or Medicaid. The federal anti-kickback statute does not prohibit discounts to uninsured patients who are unable to pay their hospital bills.

"However, the discounts may not be linked in any manner to the generation of business payable by a federal health care program. Discounts offered to underinsured patients potentially raise a more significant concern under the anti-kickback statute, and hospitals should exercise care to ensure that such discounts are not tied directly or indirectly to the furnishing of items or services payable by a federal health care program.

"Section 1128(b)(6)(A) of the Social Security Act. This law permits, but does not require, the OIG to exclude from participation in the federal health care programs any provider or supplier that submits bills or requests for payment to Medicare or Medicaid for amounts that are substantially more than the provider’s or supplier’s usual charges. The statute contains an exception for any situation in which the Secretary finds "good cause" for the substantial difference. The statute is intended to protect the Medicare and Medicaid programs — and taxpayers — from providers and suppliers that routinely charge the programs substantially more than their other customers.

"The OIG has never excluded or attempted to exclude any provider or supplier for offering discounts to uninsured or underinsured patients."