On March 2, the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services published Advisory Opinion 22-04, approving a program under which the requestor provides digital contingency management tools and incentives, including cash equivalents, to motivate behavioral health changes in individuals who suffer from substance use disorders. OIG addressed the potential benefits of contingency management programs in its December 2020 final rule promulgating new and modified safe harbors (Final Rule) but declined to expand its new safe harbor for patient engagement and support to include cash and cash-equivalent payments offered in connection with such programs.
This favorable opinion is noteworthy both because the program involves the award of cash equivalents, about which OIG has longstanding concerns, and because the total value of those cash equivalents may exceed the $500 cap ($527 as adjusted for inflation) that OIG imposed in the new safe harbor for patient engagement and support.
The Proposed Arrangement
The requestor is a privately held digital health company that uses smartphone and smart debit card technology to provide contingency management services to individuals with substance use disorders. The requestor certified that its contingency management program is a highly effective, cost-efficient treatment that uses incentives to motivate and sustain positive behavioral changes in individuals with substance use disorders. The requestor contracts with various entities, including health plans, addiction treatment providers, and employee assistance programs. The requestor certified that its program is evidence-based, protocol-driven, and consistent with the National Institute on Drug Abuse’s principles for the effective treatment of substance use disorders. The requestor is not enrolled as a provider or supplier in any federal healthcare program.
The program’s services include appointment and medication reminders, saliva and breathalyzer testing, cognitive behavioral therapy, certified recovery coaching, and virtual support groups. Requestor provides the services digitally using an evidence-based, automated algorithm. Although the program is entirely digital, incentives may be tied to in-person services furnished by the requestor’s customers. Some of the requestor’s customers may bill federal healthcare programs for the in-person services they provide.
The program provides what OIG characterizes as incentives—but what arguably are rewards—when individuals complete certain events, such as attending a treatment session, or achieve certain behavioral goals, such as a negative substance test. The requestor provides the incentives via a smart debit card that may not be used in certain locations, such as bars or liquor stores. It is unclear whether the smart debit card precludes members from purchasing products prohibited by the program, such as alcohol or tobacco, at other locations, such as grocery stores.
Each incentive offered in connection with the program is relatively small; however, the requestor provides incentives more frequently in the initial phase of treatment, when the member is subject to more frequent substance testing. Incentives are capped at $200 per month and $599 per member per year.
Although individuals may self-enroll in the program, the requestor typically contracts with health plans, addiction treatment providers, and other entities that pay for the program. Customers may either pay a flat monthly fee for each eligible member or select a pay-for-performance model under which they pay the requestor for achieving certain agreed-upon targets for abstinence. The requestor certified that the fees are consistent with fair market value and do not vary based on the volume or value of referrals.
OIG’s Analysis
OIG noted that the program generates two remunerative streams that potentially implicate the federal Anti-Kickback Statute (AKS) and the civil monetary penalty prohibition on federal beneficiary inducements (CMP). First, OIG noted that the requestor’s customers pay the requestor a fee to provide the program’s services, some of which could offer a financial incentive to members to receive a federally billable service. Second, OIG stated that the requestor passes on some of the fees it receives to members when they complete certain events or achieve specific behavioral goals, some of which may involve federally reimbursable services.
OIG began by reiterating its longstanding concerns about incentives provided to beneficiaries to obtain federally reimbursable services, stating that such incentives could corrupt medical decision-making and lead to overutilization, patient steering, and increased costs. Despite these concerns, OIG ultimately concluded that the arrangement poses a minimal risk of fraud and abuse for several reasons, including that:
- The program is protocol-driven and consistent with government-funded, evidence-based research. OIG noted that the requestor cited various sources that affirmed that contingency management is a highly effective, cost-efficient treatment for individuals with substance use disorders. OIG determined that the incentives under the program were part of a protocol-driven treatment program and not an inducement to seek federally reimbursable treatment.
- The individual incentives are low in value and capped at $200 per month and $599 per year. OIG was careful to specify that any amount of remuneration can implicate the AKS. However, OIG nonetheless concluded that each incentive’s low individual value, combined with the fact that the requestor was not enrolled as a provider or supplier in any federal healthcare program, reduced the risk of overutilization.
- Many of the requestor’s customers have no incentive to induce members to receive federally reimbursable services. OIG concluded that the requestor’s varied customer base and that the customers’ fees do not vary with the volume or value of federally reimbursable services reduced the risk that a customer would pay the requestor to generate federally reimbursable business.
- The smart debit card has anti-relapse protections. OIG recognized that the incentives are cash equivalents because they are provided via a smart debit card. However, OIG concluded that the anti-relapse protections and the lack of any incentive on the requestor’s part to overutilize federally reimbursable services mitigated the risks of fraud and abuse.
Takeaways
OIG’s analysis is noteworthy for several reasons. First, although OIG describes the individual incentives requestor provides under the program as “relatively low [in] value,” the aggregate payments to beneficiaries may reach $200 per month and $599 per year. These amounts are sizable compared to the amounts cited in OIG’s relatively sparse guidance on this issue. For example, OIG’s “nominal value” guidance states that non-monetary remuneration with a retail value of no more than $15 per item or $75 in the aggregate on an annual basis is sufficiently “inexpensive” and does not implicate the CMP.
Although this guidance remains in effect, stakeholders now have another benchmark—in this case involving monetary remuneration in the context of both the CMP and the AKS—against which to judge the facts and circumstances of patient engagement programs involving cash-equivalent remuneration. As always, OIG advisory opinions are only binding on the parties thereto.
Second, the requestor’s incentive payments may exceed the controversial cap OIG included in the Final Rule’s new patient engagement and support safe harbor. Indeed, although OIG considered contingency management at length in the Final Rule, it elected neither to include an exception to the cap nor allow for remuneration in the form of cash or cash equivalents for contingency management programs. Instead, OIG explained that it was “considering addressing [these issues] in future rulemaking.”
It appears, for now, that the agency is taking a piecemeal approach to both contingency management and debit card incentive programs. We anticipate seeing more advisory opinions involving patient engagement and support, particularly from requestors who were not satisfied with the scope of the new safe harbors.
