The Office of the Inspector General (OIG) recently issued Advisory Opinion 17-01 to a health system (Requestor) for an arrangement to provide free and reduced-cost lodging and meals to financially disadvantaged patients (Proposed Arrangement). In issuing this positive opinion, the OIG applied the Access to Care exception to the prohibition on beneficiary inducements under the Civil Monetary Penalties (Beneficiary Inducement CMP).

One of the hospitals operated by the Requestor provides services to a rural and medically underserved patient population. Under the Proposed Arrangement, the Requestor would offer financially needy patients residing in rural or underserved areas free or reduced-cost lodging at a hotel near the hospital where rooms are approximately $70 per night. Requestor would also provide eligible patients free or reduced-cost meals at the hospital’s cafeteria, not exceeding $15 per overnight stay. The hospital would pay the hotel directly and would not provide cash or cash equivalents to patients.

Patient eligibility would be determined after an appointment was scheduled, and patients must:

  • reside at least 90 miles from the hospital in a medically underserved area or a designated health professional shortage area;
  • have a household income less than 500% of the federal poverty level and meet the Requestor’s financial needs criteria; and
  • have an appointment for treatment within certain established timeframes.

The amount of financial assistance would be determined on a financial need-based sliding scale established by the Requestor under its written financial assistance policies.

The OIG found that despite implicating the anti-kickback statute (AKS) and the Beneficiary Inducement CMP, the Proposed Arrangement satisfies the requirements of the “promotes access to care exception” to the Beneficiary Inducement CMP, and it would not impose sanctions on the Requester under the AKS. In support of its conclusion, the OIG cited the following features of the Proposed Arrangement:

  • It would promote beneficiaries’ access to care by removing socioeconomic and geographic barriers that may prevent or discourage patients from receiving medically necessary care. As a result, it would not raise patient safety or quality-of-care concerns.
  • It is unlikely to interfere with or skew clinical decision-making because patient eligibility is not based on receipt of any particular service, and the Requestor would not provide any remuneration to clinicians for referring patients to the hospital.
  • The costs of the Proposed Arrangement would not be included in the hospital’s cost report or otherwise passed through to any federal health care program.
  • It would not be advertised or marketed to eligible patients, and would be offered only to patients who had already made appointments.

The OIG noted that it would have likely come to a different conclusion if the assistance under the Proposed Arrangement was for luxury accommodations or expensive meals.

At the same time that it issued Advisory Opinion 17-01, the OIG also modified Advisory Opinion 02-1 to incorporate safeguards to independent charity patient assistance programs that are consistent with advisory opinions and other guidance issued by the OIG subsequent to Advisory Opinion 02-1.


This post was co-authored by Valeriya Svystun, legal intern at Robinson+Cole. Valeriya is not yet admitted to practice law.