Tag Archives: Office of Inspector General

OIG Advisory Opinion Approves Surgical Device Warranty Program Intended to Reduce Readmissions

On September 17, 2018, the Office of Inspector General (OIG) of the Department of Health and Human Services published a favorable Advisory Opinion allowing a manufacturer of surgical devices and wound care products to offer a warranty program to hospital customers covering three joint replacement products (“Proposed Arrangement”).

Under the Proposed Arrangement, the manufacturer would refund hospitals for the combined purchase price of three of its products if a patient who received them as part of a joint replacement surgery was readmitted to the hospital within 90 days following the …

OIG Advisory Opinion Allows PHO Network Hospitals to Give 100% Discount on Medigap-Covered Inpatient Deductibles, with Savings Shared as a Premium Credit to Patients

The Office of Inspector General (OIG), Health and Human Services, issued an Advisory Opinion allowing an arrangement between a licensed offeror of Medicare Supplemental Health Insurance policies (Medigap Offeror) and a preferred hospital organization (PHO) having network hospitals across the U.S. (the “Arrangement”).  Under the Arrangement, the PHO’s network hospitals would provide discounts of up to 100% on Medicare Part A inpatient deductibles incurred by patients who are Medigap policyholders (the “Arrangement”). Normally, these deductibles would have been covered by the Medigap Offeror. Each time a network hospital provides a …

One-Two Punch: On Consecutive Days, DOJ Announces High Dollar Fraud and Abuse Settlements with Hospitals

The Department of Justice (DOJ) announced two significant False Claims Act (FCA) settlements in recent days that signal continued close government scrutiny of billing, coding and referral practices at hospitals.

On August 2, DOJ announced an $84.5 million dollar settlement with Michigan-based health system William Beaumont Hospital. The settlement resolves allegations of non-compliance with the Anti-Kickback Statute (AKS) and Stark Law arising from “improper relationships with eight referring physicians” that led to the submission of false claims to government health care programs.

DOJ alleged that the defendant provided compensation substantially …

OIG Posts Telemedicine Advisory Opinion

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.…

OIG Reports That CMS Paid Practitioners For Telehealth Services That Failed To Meet Medicare Requirements

On April 5, 2018, the Office of the Inspector General (OIG) announced its findings that the Centers for Medicare and Medicaid Services (CMS) paid practitioners for telehealth services that did not meet Medicare requirements. Certain telehealth services are reimbursable by Medicare as Part B services. According to the OIG, it engaged in a review of telehealth services after finding that Medicare paid a total of $17.6 million in telehealth payments in 2015, compared to just $61,302 in 2001.…

OIG Rescinds Advisory Opinion Due to Requestor’s Failure to Disclose Information

On November 28, 2017, the Office of Inspector General (OIG) rescinded advisory opinion 06-04, in which it had previously determined that a charity’s (Requestor) proposal to provide assistance to financially needy Medicare beneficiaries did not warrant the imposition of sanctions. The OIG explained that “public interest requires rescission” after finding that Requestor failed to comply with earlier factual certifications that were material to the original advisory opinion.

Under the program, the Requestor provides assistance with premiums and cost-sharing obligations for patients with two specific chronic diseases. Most of the …

OIG Issues Advisory Opinion to Pharmacy

On September 7, 2017, the HHS Office of Inspector General (OIG) issued an Advisory Opinion to the owner of a retail pharmacy chain (Pharmacy) that would allow Federal health care program beneficiaries to participate in a paid membership program (Program).  The Program would include discounts and rebates on certain prescriptions and, where offered, on selected clinic services.

The Program was being offered previously to customers who satisfied certain eligibility criteria and paid an annual fee to join, but Federal program beneficiaries had not been permitted to enroll. In seeking the …

OIG Settles EMTALA Allegations Involving Psychiatric Care

On June 2, 2017, AnMed Health and the Office of Inspector General (OIG) for the United States Department of Health and Human Services agreed to a $1.295 million settlement of allegations that AnMed had violated the Emergency Medical Treatment & Labor Act (EMTALA) (Section 1867 of the Social Security Act). The OIG alleged that AnMed failed to provide appropriate medical screening and stabilizing treatment to individuals presenting to the ED with unstable psychiatric emergency medical conditions.…

New OIG Advisory Opinion Allows Waiver of Cost Sharing in Research Studies

The Office of Inspector General (OIG) recently issued Advisory Opinion 17-02, allowing waivers or reductions of cost-sharing amounts owed by financially needy Medicare beneficiaries in connection with certain clinical research studies conducted at a non-profit medical center.  In the advisory opinion, the OIG reiterated its longstanding concern about routine waivers of Medicare beneficiary cost-sharing amounts in the absence of financial hardship, and noted this can lead to liability under the anti-kickback statute (AKS).  The research studies were conducted utilizing protocols under the Medicare Coverage with Evidence Development (CED) framework …

EHR Vendor Settles False Claims Act Suit for $155 Million

Electronic health record (EHR) vendor eClinicalWorks (eCW) recently entered into a settlement with the US Department of Justice (DOJ) and the Department of Health and Human Services’ Office of Inspector General (OIG) to resolve allegations under the federal False Claims Act (FCA) that eCW misrepresented its software and paid customers kickbacks to promote its products. The settlement imposes joint and several liability for payment on the EHR Vendor and three of its founders for $154.92 million, and liability for settlement payments individually by a developer ($50,000) and two project managers …

OIG Publishes Prioritized Recommendations for HHS

The OIG has released the 2017 Compendium of Unimplemented Recommendations, summarizing prioritized recommendations relating to HHS programs and operations.   Topping the list are recommendations relating to hospitals, including:

  • Reimbursement rates for critical access hospital swing beds should be adjusted to the lower rates for similar services provided in skilled nursing facilities.
  • Reimbursement rates for hospital outpatient department procedures should be adjusted to the lower rates for similar procedures conducted in ambulatory surgical centers.
  • Medicare should adopt a hospital transfer payment policy to lower hospital reimbursement for beneficiaries who are

DOJ Announces $23 Million in Settlements Related to Implantation of ICD Cardiac Devices

On February 17, 2017, the U.S. Department of Justice (DOJ) announced settlements with 51 hospitals related to implantable cardioverter defibrillators (ICD), totaling over $23 million.  Combined with previously announced settlements, the DOJ has now reached agreements with more than 500 hospitals totaling more than $280 million relating to ICDs.   According to the DOJ, most of the 51 settling defendants were named in a False Claims Act qui tam lawsuit filed by a health care reimbursement consultant and a cardiac nurse.  U.S. ex rel. Ford et al. v. Abbott Northwestern

New Anti-Kickback Safe Harbors and Exceptions to CMP Law

On December 7, 2016, the Department of Health and Human Services Office of Inspector General (OIG) issued a long-awaited final rule establishing new Anti-Kickback Statute (AKS) safe harbor protections and codifying regulatory exceptions to the Civil Monetary Penalties Law (CMP).

Local Transportation Safe Harbor

This safe harbor protects local transportation made available by an “Eligible Entity” as long as the following conditions are met.  An “Eligible Entity” is any individual or entity, except for individuals or entities (or family members or others acting on their behalf) that primarily supply health

OIG Issues Favorable Advisory Opinion for Cost-sharing Waivers and Stipends in a Clinical Research Study

On December 13, 2016, the Office of Inspector General (OIG) issued a favorable Advisory Opinion to a university health system (the Requestor) for two arrangements relating to a federally-funded clinical research study designed by a physician-employee (the Study):

  1. a proposal to waive the cost-sharing obligations of Study participants (Participants) for medically necessary health care services received under the Study protocol (the Proposed Arrangement), and
  2. payment of a stipend to Participants for the time and effort required to participate (the Current Arrangement).

OIG Recommends More Monitoring of Hospital Compliance With Two-Midnight Rule

The Office of Inspector General (OIG), Health & Human Services recently released a report detailing its analysis of hospital compliance with the Centers for Medicare & Medicaid (CMS) “two-midnight” rule during fiscal year 2014, which allows Medicare payment for inpatient claims only if the treating physician expects that the patient will require hospital services at least two midnights. The two-midnight policy was implemented by CMS to, in part, reduce inconsistent use of inpatient and outpatient hospital stays and address improper payment for short inpatient stays. The OIG found that hospitals …

OIG Increases Nominal Value for Gifts to Beneficiaries

In a Policy Statement by the Office of Inspector General (OIG), Health & Human Services released December 7, 2016, the OIG updated its long-standing interpretation of the term “nominal value” with regard to gifts to federal health care program beneficiaries that do not comprise “remuneration” under section 1128A(a)(5) of the Social Security Act. The OIG now interprets nominal value as having a retail value of no more than $15 per item and $75 in the aggregate per patient annually, as long as the items are not cash or cash equivalents. …

OIG’s 2016 Report on Provider-Based Facilities

On June 16, 2016, the Office of Inspector General (OIG), Department of Health and Human Services, issued a report on the Centers for Medicare & Medicaid Services’ (CMS) oversight of provider-based facilities.  In the report, the OIG concluded that although CMS is taking steps to improve its oversight, vulnerabilities nevertheless remain.

As part of its Bipartisan Budget Act of 2015, Congress had eliminated provider-based status for new off-campus outpatient departments of a provider. The Centers for Medicare & Medicaid Services’ (CMS) provider-based rules currently allow a hospital or health system …

Fraud And Abuse Waivers For ACOs

On October 29, 2015, the Centers for Medicare & Medicaid Services (CMS) and the Office of Inspector General (OIG), Health & Human Services issued a final rule (Final Rule) regarding waivers (ACO Waivers) of the physician self-referral law (Stark law), the federal Anti-Kickback Statute, and the Civil Monetary Penalties Law (CMP) provision relating to beneficiary inducements for Medicare accountable care organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP). The ACO Waivers waive the application of these fraud and abuse laws to certain ACO activities that are reasonably related …

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