OIG offers bright-line’guidance on inducements

The Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) released a special advisory bulletin Aug. 29 that attempts to clarify rules surrounding gifts and other inducements to beneficiaries. However, health care attorneys gave the advisory mixed reviews.

"It is somewhat conservative, but I think it does level the playing field," says Paul Demuro, a partner with Latham and Watkins in San Francisco. For example, he says the OIG is becoming increasingly consistent regarding the $10 rule for inexpensive gifts.

Charles Oppenheim, a partner with Foley and Lardner in Los Angeles, says the OIG’s bulletin glosses over the nuances of the prohibition such as the fact that the remuneration must be an inducement. "That implies that any remuneration over $10 per item or $50 a year violates the statute unless it comes within a specific exception, which is untrue," he asserts.

"Whether the remuneration would induce a patient to select the provider depends on many factors and requires a more subtle analysis," he maintains. For example, he argues that if a patient is choosing which hospital to use for open-heart surgery, a gift worth $11 will not influence that decision. However, it might if a patient is deciding what dentist to use to fill a cavity.

"It also matters whether the remuneration is tied to the choice of provider," argues Oppenheim. For example, he says that gifts that are specifically tied to the use of services are different than a $15 item given to each person with no obligation to the first 100 people who stop by a booth at a health fair.

OIG says the bulletin is designed to provide "bright-line guidance" to protect federal health care programs and "level the playing field" among providers. The OIG points to four main principles. First, it says it has interpreted the prohibition to permit "inexpensive gifts" to Medicare or Medicaid beneficiaries if the retail value is no more than $10 individually and no more than $50 in the aggregate annually per patient.

Second, the OIG says providers may offer beneficiaries more expensive items or services that fit within one of the five statutory exceptions.

The OIG says that it also is considering several regulatory exceptions. Specifically, the agency reports that it may solicit public comments on additional exceptions for complimentary local transportation and for free goods in connection with participation in certain clinical studies.

Regarding the latter, the OIG reports that it may propose a new exception for free goods and services, possibly including waivers of copayments, in connection with certain clinical trials that are principally sponsored by the National Institutes of Health or another component of HHS.

He also endorses how OIG handled the chronic conditions issue, and says providers sometimes argue they can offer things to beneficiaries because they have chronic conditions. However, the OIG maintains that there should not necessarily be an exception for these patients because they represent one of the bigger areas for abuse.