Overview of the OIG Advisory Opinion No. 18-03

The Office of Inspector General (OIG) of the U.S. Department of Health and Human Services issued Advisory Opinion No. 18-03 regarding an arrangement in which a federally qualified health center look-alike (the “Provider”) proposes to donate information technology (IT) equipment and services to a county health clinic (the “County Clinic”). The purpose of this donation is to support telemedicine consultations for patients at the County Clinic (the “Proposed Arrangement”).

The OIG determined that, although the Proposed Arrangement could potentially constitute prohibited remuneration under the federal Anti-Kickback Statute (AKS) and Civil Monetary Penalties Law (CMPL) by incentivizing or rewarding referrals related to federal health care program business, it would exercise its enforcement discretion and decline to impose sanctions on either the Provider or the County Clinic (collectively, the “Requestors”).

The OIG concluded that, while the Proposed Arrangement technically implicates the federal Anti-Kickback Statute (AKS) due to the exchange of remuneration, the specific facts and safeguards in place substantially limit the potential for fraud or abuse. The opinion emphasized that the arrangement’s primary aim is to enhance patient access to care, especially in underserved and remote areas, without providing undue influence over referral or prescribing patterns. Ultimately, the OIG determined that it would not impose administrative sanctions in connection with the Proposed Arrangement, highlighting the importance of robust compliance measures and transparency when structuring similar telehealth donations.

Government’s Perspective on Telemedicine Donations

The analysis and findings presented by the OIG clarify the government’s perspective regarding donations that advance telemedicine capabilities. The Advisory Opinion reflects support for collaborative initiatives in telemedicine, particularly as coverage and reimbursement continue to expand under federal health care programs. According to the OIG’s guidance, the advantages gained by rural or remote communities through improved access to health care services may outweigh concerns about possible remuneration associated with future referrals.

Description of the Proposed Arrangement

The County Clinic, operating as a division of the County Department of Health, offers confidential testing, treatment, and counseling for sexually transmitted infections. While the Provider and County Clinic have an existing referral relationship, their facilities are geographically separated by approximately 80 miles, which poses challenges to patient accessibility.

The Proposed Arrangement entails the Provider donating IT equipment and services to the County Clinic to facilitate telemedicine consultations for HIV prevention and treatment. The Provider would finance the equipment, installation, and ongoing maintenance using grant funding from the State Department of Health. For telemedicine services rendered, the Provider would submit claims to Medicare for professional services, whereas the County Clinic would act as the originating site and invoice the state Medicaid program for the originating site fee. The originating site is not required to supply personnel or equipment to qualify for the facility fee, a stipulation for telehealth consultation coverage.

OIG’s Analysis of the Proposed Arrangement

The OIG recognized that the County Clinic would receive remuneration through the donated equipment and services, and the Provider would have the opportunity to bill for telehealth consultations referred by the County Clinic. This arrangement could potentially involve prohibited remuneration under the AKS, but the OIG identified several factors that minimize fraud and abuse risk:

• Safeguards are in place to prevent patient steering to the Provider, including the ability to use the technology with any other provider and giving patients the choice between virtual or in-person consultations.
• The arrangement is unlikely to result in steering patients for prescriptions to pharmacies operated by the Provider or the County Clinic.
• No increased cost is expected for any federal health care program.
• Patients will benefit from greater access to treatment, increasing the likelihood that they will seek and receive needed services.

Importantly, the County Clinic would not gain ownership of the equipment. The Provider would use State Department of Health grant funds for the equipment and services, and the state agency would retain title and the authority to reclaim the equipment at any time. This distinction may impact on how similar donations are structured in other arrangements.

Comparison to Prior Advisory Opinions

Previous OIG Advisory Opinions (99-14, 04-07, and 11-12) found no sanctions were needed for IT equipment donations since these did not directly result in federally reimbursed services. Unlike those cases, the current Proposed Arrangement allows both the County Clinic and Provider to bill federal programs after telemedicine visits or follow-ups. However, the OIG concluded costs would not increase, as the Clinic would already conduct initial tests and refer patients when clinically appropriate, regardless of this arrangement.

In reviewing similar fact patterns, the OIG has previously addressed situations where health care entities donate equipment or services to facilitate telemedicine. In these opinions, the OIG consistently emphasizes the importance of safeguards that prevent improper inducements or overutilization. The presence of clear patient choice, limitations on exclusive use, and oversight by a third-party funding agency have been cited as mitigating factors that reduce the risk of violating the Anti-Kickback Statute. These precedents suggest that the structure of the current arrangement aligns with established OIG guidance, provided that all protective measures remain in place and the arrangement continues to prioritize patient access and program integrity.

Facility Fee and Patient Benefits

The OIG notes that the County Clinic would get extra reimbursement as the telemedicine originating site but does not address why this facility fee is not counted as an increased cost. Since the clinic does not provide HIV prevention via telemedicine, it previously did not receive payments for these services when referring patients for in-person visits.

Both the County Clinic and the Provider are able to bill for facility fees associated with telemedicine encounters. The OIG noted, however, that these fees are not expected to create additional costs for federal health care programs, as the services would have been provided and billed in the ordinary course of care regardless of the arrangement. Furthermore, patients stand to benefit from enhanced convenience and timely access to specialty care, potentially improving health outcomes through earlier intervention and management of chronic conditions.

Conclusion

The OIG appears willing to prioritize patient health benefits over any secondary or tertiary benefits to the referring provider, especially when those benefits are unlikely to cause over-utilization and may decrease costs to federal health care programs.

In summary, the OIG’s analysis indicates that the proposed telemedicine arrangement is consistent with established regulatory principles, as long as appropriate safeguards remain in place. The arrangement’s structure is designed to expand access to necessary healthcare services without introducing improper financial incentives or additional burdens on federal programs. Ongoing oversight and adherence to compliance protocols will be essential to ensure continued alignment with OIG expectations and to safeguard both patient interests and program resources.