The U.S. Department of Health and Human Services Office of Inspector General (“OIG”) recently issued Advisory Opinion No. 23-15 (“Advisory Opinion”), a favorable opinion involving a consulting firm’s (“Requestor”) proposal to offer gift cards to its existing physician practice customers for referring potential new customers. The OIG approved the Proposed Arrangement (defined below), noting that none of the three potential streams of remuneration stemming from such arrangement implicated the federal Anti-Kickback Statute (“AKS”).
The Requestor, who provides consulting services to physician practices, proposed to provide a $25 gift card for each recommendation made to a prospective physician practice customer, with an additional $50 gift card offered if the prospective customer ultimately engages the consulting firm for services (“Proposed Arrangement”). The Requestor’s services further include offering physician practices training related to the Medicare Merit-Based Incentive Payment System (“MIPS”), which could result in higher Medicare reimbursement to the Requestor’s clients.
In reaching its favorable opinion, the OIG’s analysis focuses on three potential financial streams originating from the gift cards and outlining how they could benefit both the Requestor and its clients:
- First, the remuneration generated by the gift cards for the physician practice customers who recommend Requestor to potential physician practice customers;
- Second, the physician practice customers’ payments to the Requestor for consulting services; and
- Third, the opportunity for the physician practice customers to potentially earn a fee resulting from the Requestor’s consulting services in the form of higher MIPS reimbursements.
The Advisory Opinion greenlights the Proposed Arrangement for the following reasons:
- The first stream of remuneration does not implicate the AKS because the gift cards the Requestor’s existing customers would receive would not be in return for the physician practices making referrals of, purchasing, arranging for or recommending services reimbursable in whole or in part by federal health care programs.
- Neither the second nor the third financial stream trigger the AKS because while physician practice customers pay the Requestor to provide consulting services, the Requestor certified that it does not recommend the purchasing, leasing or ordering of any items or services paid in whole or in part under a federal health care program to its customers.
- Finally, the potentially higher MIPS-related Medicare payments arising from the consulting services and the opportunity for customers to earn a fee would not be in exchange for referrals for or the purchase of any item or service paid for in whole or in part under a federal health care program.
Practical Takeaways
This Advisory Opinion provides useful guidance for entities offering advisory services to physician practices and seeking to implement a reward program for its clients, as well as physician practice clients of such entities that might receive such rewards. The Advisory Opinion also provides new insight regarding limited scenarios where gift cards may be permissible. Although the OIG issued a favorable decision, entities seeking to establish similar programs to that of the Proposed Arrangement should consult with qualified fraud and abuse counsel.
For more information about this advisory opinion or topic in general, please contact:
- Erin Drummy at 317-977-1414 or edrummy@hallrender.com;
- Alyssa James at 317-429-3640 or ajames@hallrender.com;
- Katherine Schwartz at 317-977-1432 or kschwartz@hallrender.com;
- Caulin McGraw at 317-977-1421 or cmcgraw@hallrender.com; or
- Your primary Hall Render contact.
Special thanks to Antoine Neumann, Summer Associate, for their assistance in the preparation of this article.
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.
