On April 28, 2022, the Office of Inspector General (“OIG”) published Advisory Opinion 22-08 in which the OIG declined to impose sanctions against a federally qualified health center (“Requestor”). The Requestor proposed an arrangement to loan smartphones to patients to allow those patients to access telehealth services. The OIG concluded that although the proposed arrangement would generate prohibited remuneration under the federal Anti-Kickback Statute (“AKS”) and the beneficiary inducements prohibition under the Civil Monetary Penalties Law (“CMP”), the OIG would not impose sanctions because of the safeguards in place and the arrangement’s limited scope. 
 
What You Need to Know:

• The OIG’s analysis in this advisory opinion provides insight to health care providers on safeguards that should be incorporated into programs to promote access to care, particularly through telehealth.  
• Although the arrangement addressed in this OIG Advisory Opinion is of limited scope and duration, and the analysis is specific to the Requestor’s circumstances, providers of telehealth services should understand the guidance provided by OIG and should ensure similar arrangements comply with federal and state laws.  

​Proposed Arrangement

Requestor is a federally qualified health center serving low-income individuals, including federal health care program beneficiaries. Requestor provides telehealth services to its patients through a smartphone application. Requestor loaned approximately 3,000 smartphones and chargers to its existing patients who did not have a device that could run the telehealth application. Smartphones and chargers were provided to existing patients on a first-come, first-served basis. New patients are not eligible to receive the loaned devices.  

The smartphones have limited capabilities; they can only be used to make and receive phone calls, send and receive text messages, use Requestor’s telehealth application, and view the respective patient’s medical records. Patients can keep the smartphone as long as Requestor has furnished at least one service to the patient in the prior twenty-four month period (even if the service is not a telehealth service). Requestor asked that patients return the smartphone if they are no longer receiving services from Requestor. Patients can use the smartphones to receive telemedicine services from other providers, however, given the smartphones’ use limitations, patients can only use the telehealth application downloaded on the smartphone. The telehealth services offered by Requestor to patients under this arrangement are medically necessary and are covered by Medicare and Medicaid. Requestor plans to allow patients to continue to use the smartphones after the end of the COVID-19 public health emergency. 

Requestor received grant funding from the federal Communications Commission (the “FCC”) and a local charity to purchase the smartphones. Requestor certified that it used the funding in compliance with all requirements imposed by the FCC and the local charity. Requestor has not, and will not, use its own funds to purchase smartphones or chargers as part of the arrangement and does not anticipate receiving further funding for this arrangement. The funds received covered voice and data services for the first twelve months of use. Although Requestor used its own funds to provide voice and data service for two months after the initial funding expired, Requestor cannot continue to cover these costs. Therefore, patients must secure their own voice and data services moving forward; patients who do not are not able to use the smartphones.  

OIG’s Legal Analysis

1. Legal Framework

The AKS prohibits paying, soliciting or receiving remuneration to induce or reward referrals for items or services reimbursed under federal health care programs. The statute’s prohibition also extends to remuneration to induce, or in return for, the purchasing, leasing, or ordering of, or arranging for or recommending the purchasing, leasing, or ordering of, any good, facility, service, or item reimbursable by a federal health care program. The Department of Health and Human Services has promulgated safe harbor regulations that, if met, protect persons from violating the AKS. However, safe harbor protection is afforded only to those arrangements that satisfy all of the conditions set forth in the safe harbor.

The beneficiary inducements prohibition under the CMP provides for the imposition of civil monetary penalties against any person who offers or transfers remuneration to a Medicare or state health care program beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier for the order or receipt of any item or service for which payment may be made, in whole or in part, by Medicare or a state health care program. For the purposes of the beneficiary inducements CMP, “remuneration” includes “transfers of items or services for free or for other than fair market value.” There are exceptions to the beneficiary inducements prohibition, including the Promotes Access to Care Exception which provides that the term “remuneration” does not include “remuneration which promotes access to care and poses a low risk of harm to patients and federal health care programs.”

2. Beneficiary Inducements CMP Analysis

The OIG concluded that the arrangement implicates the beneficiary inducements prohibition under the CMP because the arrangement may influence patients to select Requestor to receive items and services that are reimbursable under Medicare or Medicaid. Importantly, the OIG concluded that during the COVID-19 public health emergency, the arrangement satisfied the Promotes Access to Care Exception to the beneficiary inducements prohibition under the CMP for the following reasons:

• The arrangement reduces socioeconomic barriers to care and improves beneficiaries’ access to care by serving patients at or below 200 percent of the federal poverty guidelines and giving the technology only to patients who do not have a smartphone capable to access telehealth services;
• The arrangement is not likely to influence clinical decision-making;
• Although the arrangement may increase utilization of telehealth services, the OIG noted the increase would not be inappropriate because it is limited to current patients and patients must continue to receive services; and
• There is no evidence the arrangement poses patient safety or quality-of-care concerns. Requestor would not provide telehealth services if doing so would raise patient safety or quality of care concerns. OIG acknowledged that during the public health emergency, providing a telehealth option to patients is likely to promote patient safety.  

The OIG limited its analysis to the public health emergency because it is uncertain if the Requestor’s offered telehealth services will continue to be covered by Medicare or Medicaid after the conclusion of the public health emergency.

3. Anti-Kickback Statute Analysis

The OIG noted that the arrangement implicates the AKS because Requestor allows patients who have already received limited-use smartphones and chargers to continue using the smartphones and chargers free of charge, which could induce those patients to receive items and services from Requestor that are reimbursable by a federal health care program. OIG first noted that the arrangement does not satisfy the requirements of any AKS safe harbor. However, due to the safeguards present in the arrangement, the OIG concluded that the arrangement presents only a minimal risk of fraud and abuse. In addition to the safeguards in the arrangement above, the OIG noted that Requestor received funds from the FCC and a local charity, both of which are entities with no financial interest in patients receiving services from Requestor. In addition, Requestor certified that it used the funding in compliance with all requirements imposed by those funders.  

Conclusion

The OIG’s analysis in this Advisory Opinion 22-08 provides insight to health care providers on safeguards that should be incorporated into programs to promote access to care, particularly through telehealth. Although the arrangement addressed in this OIG Advisory Opinion is of limited scope and duration, and the analysis is specific to the Requestor’s circumstances, providers of telehealth services should understand the guidance provided by OIG and should ensure similar arrangements comply with federal and state laws.