The Office of Inspector General (OIG), Health and Human Services issued an Advisory Opinion allowing an arrangement proposed by a federally qualified health center look-alike (FQHC look-alike) to provide free technology items and services to a clinic run by a county Department of Health (County Clinic), that would facilitate telemedicine encounters (the Arrangement).  Although the OIG found that the Arrangement could potentially implicate the anti-kickback statute (AKS), the OIG concluded that it would not impose administrative sanctions.

FQHC look-alikes are community based health care providers that meet the requirements for the FQHC program but do not receive funding.  FQHC look-alikes are eligible to apply for reimbursement under FQHC Medicare and Medicaid payment methodologies and to purchase discounted drugs through the 340B Federal Drug Pricing Program.  In addition, they receive automatic Health Professional Shortage Area designation and may access National Health Service Corps providers.

Under the proposed Arrangement, the FQHC look-alike would use grant funds received from the State’s Department of Health to furnish certain information technology-related equipment and services at no charge, to facilitate telemedicine encounters with the County Clinic’s patients related to HIV prevention – i.e., consultations regarding medications for pre-exposure prophylaxis (PrEP) and post-exposure prophylaxis (PEP).

The OIG commented that the FQHC provided remuneration consisting of the telemedicine items and services as well as the opportunity to earn originating site fees for services furnished using the items provided.  In turn, the County Clinic could serve as a potential source of referrals of Federal health care program business for certain consultations and follow-up items and services that the FQHC look-alike would provide.

The OIG concluded that the Arrangement would present a low risk of fraud and abuse under the AKS, based upon, among other reasons:

  • The Arrangement would include safeguards intended to prevent inappropriate patient steering to the FQHC look-alike, including the freedom of the County Clinic to refer patients to others; notification by the County Clinic to all patients who want to receive the applicable consultations that they could get them either virtually via telemedicine or in person from the FQHC look-alike or other providers; and that nothing inherent to the telemedicine items would: (i) limit or restrict the use or compatibility of the telemedicine items with different information technology systems, software applications, or networks; or (ii) inhibit the ability of any users of the telemedicine items to communicate or exchange data accurately, effectively, securely, and consistently with different information technology systems, software applications, and networks.
  • The Arrangement would be unlikely to result in inappropriate patient steering to the FQHC look-alike’s pharmacy because: there would be no recommendations by either entity for a specific pharmacy to fill orders for the applicable medications and patients would be free to choose their own pharmacy; and it was unlikely that a patient would choose to use the FQHC look-alike’s pharmacy because it was 80 miles away and did not offer mail-order services.
  • The Arrangement was not likely to inappropriately increase costs to the Federal health care programs, where the applicable patient care services would have been provided regardless of whether the Arrangement was in place. Although the Arrangement would increase utilization, increased HIV prevention services would be consistent with the purpose of the grant funds from the State and also could reduce the prevalence of HIV and promote public health.
  • Finally, although the entities could both potentially benefit from the Arrangement, the primary beneficiaries would be the County Clinic patients, who could receive HIV prevention services more conveniently and efficiently through use of the telemedicine items. The OIG found this to be particularly important in light of the fact that certain HIV prevention medications (PEP) need to be taken within 72 hours of possible exposure.