Recently, the Department of Health and Human Services Office of Inspector General (“OIG”) issued Advisory Opinion No. 22-08 (the “Advisory Opinion”), approving a federally qualified health center’s (“FQHC’s”) provision of “locked” smartphones and chargers to existing patients in order to promote access to telehealth services (the “Arrangement”).
Background
The FQHC primarily serves low-income individuals, certifying that 94% of its patients report incomes at or below 200% of the federal poverty level. The FQHC offers telehealth services to patients through a telehealth application (the “Telehealth App”) accessible through a smartphone.
In connection with the COVID-19 public health emergency (the “PHE”), and the expanded coverage of telehealth services by Medicare and state Medicaid programs in response thereto, the FQHC received grant funding from the Federal Communications Commission and a local charity to purchase approximately 3,000 smartphones. The funding also covered voice and data services for the first year each smartphone was in use.
Each smartphone was “locked,” such that only voice calls, text messages, viewing access to the respective patient’s medical records and the Telehealth App could be used. The smartphones were loaned, together with a compatible charger, to certain patients on a first-come, first-served basis. Only existing patients who had received at least one service by the FQHC in the past 24 months were eligible to borrow a smartphone, and the FQHC screened patients to determine whether they already had access to a smartphone compatible with the Telehealth App.
Under the Arrangement, patients were able to keep the smartphones as long as the patient had received at least one service, whether telehealth or in-person, from the FQHC in the prior 24-month period. The FQHC paid for an additional 2 months of voice and text service after the initial year‑long period covered by grant funding, after which time the patient was responsible for securing such service if they wished to continue to use the smartphone. Patients were asked to return the smartphone to the FQHC if they left the FQHC’s service area or otherwise stopped receiving services from the FQHC.
The FQHC’s objective for the Arrangement was to improve access to telehealth services during and beyond the PHE. The FQHC cited a secondary benefit in enabling patients to socially connect with others during the PHE.
OIG Analysis
The Anti-Kickback Statute (“AKS”) makes it a criminal offense to knowingly and willfully offer or receive remuneration in an effort to induce or reward referrals of items or services reimbursable by federal health care programs.
The Civil Monetary Penalties Law (“Beneficiary Inducement CMP”) prohibits offering items or services to federal health care program beneficiaries for free or less than fair market value when the offeror knows or should know that the item or service will induce the beneficiary to choose a particular health care provider for services. An exception to the Beneficiary Inducement CMP’s definition of “remuneration” exists for “remuneration which promotes access to care and poses a low risk of harm to patients and Federal health care programs” (the “Promotes Access to Care Exception”). This provision is applicable to “[i]tems or services that improve a beneficiary’s ability to obtain items and services payable by Medicare or Medicaid, and pose a low risk of harm to Medicare and Medicaid beneficiaries and the Medicare and Medicaid programs . . . .”
In its analysis, OIG noted that the Arrangement implicated both the Beneficiary Inducement CMP and the AKS because the provision of smartphones and chargers to patients could induce those patients to receive items and services from the FQHC that are reimbursable to Medicare and Medicaid. Nevertheless, OIG determined that it would not impose sanctions under the Beneficiary Inducement CMP or the AKS in connection with the Arrangement.
In reaching its conclusion, OIG first determined that the Arrangement satisfies the Promotes Access to Care Exception during the PHE. OIG declined to opine on the satisfaction of this exception after the PHE given the uncertainty regarding coverage of telehealth services post‑pandemic. OIG cited the following characteristics of the Arrangement in support of its analysis:
- Provision of smartphones may remove socioeconomic barriers to accessing telehealth services for those who do not already have such a device;
- The Arrangement does not appear likely to skew the clinical decision-making of the health care providers involved in the patients’ treatment;
- The Arrangement is limited to existing patients, no additional smartphones will be provided and the smartphones provided are limited in utility beyond the Telehealth App and, as such, the risk is low that patients will seek out services from the FQHC solely to maintain use of or to obtain a loaned smartphone, mitigating the risk of overutilization or inappropriate utilization; and
- OIG did not identify any patient safety or quality-of-care concerns related to the Arrangement.
Importantly, OIG noted that even if the Arrangement did not meet the Promotes Access to Care Exception after the expiration of the PHE, it would not impose administrative sanctions under the Beneficiary Inducement CMP in light of the above characteristics.
Finally, OIG determined that although the Arrangement does not satisfy a safe harbor to the AKS, based on the “combination of safeguards present in the arrangement,” any risk of fraud and abuse under the AKS was minimal. In addition to those identified above, OIG observed the following factors in its low risk analysis:
- Funding for the smartphones was provided by parties financially disinterested in patients receiving services from the FQHC;
- The FQHC complied with the requirements of said funding in administering the Arrangement; and
- There was no indication that the FQHC would use the smartphones to inappropriately increase utilization of federally reimbursable services.
Practical Takeaways
The Advisory Opinion provides helpful guidance to providers considering arrangements to improve or allow access to telehealth services, both during the PHE and following its expiration. If your entity is considering such a program, or if you have other questions regarding this Advisory Opinion or any other fraud and abuse concerns, please contact:
- Erin Drummy at (317) 977-1414 or edrummy@hallrender.com;
- Caitlin Bell-Butterfield at (919) 228-2408 or cbell-butterfield@hallrender.com; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
