The Office of Inspector General (OIG) has expressed the opinion that medical service providers who make use of so-called aggregation website marketing services—where online marketing companies are paid for referring customers to healthcare providers—are not illegal under current kickback rules.
In Advisory Opinion No. 23-04, issued on July 6, 2023, the OIG said that while the payment of such fees (including “click-per-pay” online advertising) did for all practical purposes generate prohibited remuneration under the federal anti-kickback statute, the OIG would not impose any administrative sanctions. The OIG’s opinion comes after a provider of such services requested an official legal opinion on the issue.
According to the OIG advisory, the requesting provider is a company which, through its website and mobile application, allows individuals to search and book medical appointments with medical service providers who have contracted with that company to appear with individual profiles on its internet-based offerings. Members of the public can specify search criteria such as the services needed, a geographic area, a preferred appointment time, and the user’s insurance, if they have one.
In response, the company’s application generates personalized search results listing providers based on the criteria the user specified. The users are not charged for using the application, but the company earns revenue from the medical service providers who are contracted into the web application. These fees are based upon standard rates, “pay-per-click” fees, and individual profile advertisements, the latter of which are displayed based upon the user’s search criteria.
The OIG ruled that although the arrangement would generate prohibited remuneration under the federal anti-kickback statute, and that it would also generate prohibited remuneration under the Beneficiary Inducements CMP (civil monetary penalty), the OIG would not impose administrative sanctions on any of the contracting parties.
The OIG said that the risk of fraud and abuse presented by the arrangement was sufficiently low under the federal anti-kickback statute for the following reasons:
1. Although the per-booking fees vary by medical specialty, geographic location, and in certain circumstances, other relevant factors affecting fair market value, they are set in advance and do not exceed the fair market value.
2. The online company is not a provider or supplier of any medical items or services, so its relationship with the target population is distinguishable from potentially problematic arrangements involving marketing by healthcare providers and suppliers.
3. The online company’s advertising activities, including the display of sponsored results and general advertisements, do not specifically target federal healthcare program beneficiaries.
4. The online company’s marketing activities do not relate to any specific items or services.
5. The potential user base is the general public, meaning any individual, regardless of insurance status, can access the application and view all the service offerings.
6. The query results generated do not prioritize medical service providers based on: (i) the amount providers pay or are willing to pay requestor; (ii) whether providers have a spending cap; (iii) providers’ historical use of spending caps; (iv) the volume or value of any federal healthcare program business generated for providers through the Marketplace; or (v) any other non-user-centric criteria.
In conclusion, the OIG ruled, the online company does not offer or give anything of value to federal healthcare program beneficiaries other than functionality and convenience, which would otherwise serve to influence their selection of a healthcare professional or other healthcare choices.
The opinion implies that all healthcare service providers—including long-term care facilities—who make use of such online marketing strategies, do not have to be concerned about violating the anti-kickback rules.
* As usual, the OIG also advised that this “opinion may not be relied on by any person” other than the company which made the specific request.
Compliance Perspective
Issue
The Anti-Kickback Statute prohibits individuals or entities from asking for or receiving any remuneration in exchange for referrals of federal healthcare program business. The OIG may seek a CMP or exclusion against individuals or entities who knowingly and willfully: (1) offer or pay remuneration, directly or indirectly, to induce referrals of federal healthcare program business; or (2) solicit or receive remuneration, directly or indirectly, in return for referrals of federal healthcare program business. Failure to promptly report a kickback can result in lawsuits, fines, and other sanctions.
Discussion Points
- Review policies and procedures for preventing and reporting an anti-kickback violation. Update your policies and procedures as needed.
- Train all staff on federal and state anti-kickback statutes and what can be considered a kickback. Include information on how to report concerns and suspected violations, and make sure staff know that prompt reporting is mandatory. Document that the trainings occurred and place in each employee’s education file.
- Periodically audit staff understanding to ensure that they are aware of what should be done if they suspect an illegal kickback has occurred, whether intentionally or unintentionally. Conduct audits of documentation and billing routinely to prevent and detect errors before they progress to a false claim.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
