OIG OKs plan to help financially needy patients

Dialysis patients would benefit

A dialysis company may contribute to a Medicare Part B premium assistance program for financially needy end-stage renal disease patients, according to an advisory opinion issued Nov. 6 by the Office of the Inspector General.

The advisory opinion concludes that donations to a Medicare premium assistance program administered by a charitable organization "would not constitute grounds for the imposition of civil monetary penalties" under the Social Security Act "because the contributions are not made to, or on behalf of, an individual eligible for Medicare or state health care program benefits."

Under the proposed arrangement, the charitable organization "will have absolute discretion" regarding the use of provider contributions made to the organization, according to the opinion.

The opinion was in response to a proposed arrangement under which a dialysis company ("Company X") would make donations to a charitable organization ("Organization A") to fund a program to pay for Medicare Part B or Medigap premiums for financially needy Medicare beneficiaries with end-stage renal disease (ESRD). Under the plan, some or all of the beneficiaries might receive treatment from Company X.

The company in question owns 12 renal dialysis facilities in "State Z" and is a wholly owned subsidiary of another company ("Company Y"), OIG notes. Organization A is an independent 501(c)(3) charitable organization "providing financial support to needy persons in State Z with ESRD for items such as transportation, medication and other living expenses," according to the document.

OIG notes that the board of the charitable organization "is not directly or indirectly controlled by Company X, Company Y or any of its subsidiaries or affiliates."

The organization provides financial support to low-income ESRD patients through a general fund and an emergency fund. Eligibility for the general fund is based on a measure of monthly income and family size and proof that the applicant is unable to pay his or her monthly expenses.

The organization is seeking to extend the general fund assistance program to include financial assistance for this patient group for health insurance premiums, including Medicare Part B and Medigap premiums, OIG states. The advisory opinion notes that eligibility for the premium assistance program is available to "any financially needy ESRD patient regardless of the provider; it is not limited to patients of Company X."

OIG found that Organization A’s status as an independent charitable entity and its administration of the proposed arrangement "provides sufficient insulation so that the premium payments should not be attributed to Company X.

"While the premium payments by Organization A may constitute remuneration to beneficiaries, they are not likely to influence patients to order or receive services from particular providers," OIG comments. "To the contrary, the insurance coverage purchased by Organization A will follow a patient regardless of which provider the patient selects, thereby enhancing patient freedom of choice in health care providers." Medicare Part B payments generally cover 80% of the composite rate for Medicare-covered maintenance dialysis services, physician services, and certain ancillary services.