OIG advisory opinion offers lessons for digital health sites

The Office of the Inspector General (OIG) of the US Department of Health and Human Services has released Advisory Opinion 21-20 on December 16, 2021, which addresses a number of important issues for digital healthcare providers, such as those who offer provider directories online. Only the applicant can rely on the opinion, but it discusses legal concepts relevant to the financial arrangements of certain healthcare apps and websites.

Notice preview

The notice relates to the online platform offered by the applicant that would allow users to search and contact home healthcare providers (the platform). The requester would charge the listed providers on a per click basis and publish a newsletter in which third parties could purchase ad space. The OIG determined that the proposed arrangement would generate compensation that is prohibited under the Federal Medicare / Medicaid Anti-Recoil Act (AKS) if the intent required to induce referrals was present.

The OIG found that it could also generate remuneration that was prohibited under the law prohibiting inducements to beneficiaries (the CMP on Incentives to Beneficiaries), which provides for the imposition of civil monetary penalties if the person providing the remuneration knew or should know that it is likely to influence the beneficiary’s selection of a particular Medicare or Medicaid provider. Nonetheless, the OIG chose not to impose sanctions on the claimant due to the specific facts described. However, other than the applicant, no one can assume that similar provisions would escape sanctions unless they seek their own advisory opinion from the OIG.

The platform would allow users to search for home care providers that meet certain criteria and would include a prominent notice that the search results only included those who paid a fee to be listed. The platform would not direct users to particular vendors who paid to be listed. If no supplier meeting the user’s search criteria has paid to be listed, the Platform will list the suppliers who have not paid but could meet the user’s criteria. Users could access the platform for free, rate vendors on a one to five star scale, and post reviews. Providers would pay a monthly fee to be listed, as well as a flat fee per click or per contact. The fees would not be adjusted for users who actually purchased the services from a provider.

The requester also offered to provide a free newsletter to users who request it via the Platform. Healthcare and other entities could purchase ad space in the publication, with the applicant selling spots on a first come, first served basis. Advertisers would be charged a flat monthly fee and the requester would not use user data to direct certain advertisements to specific users.

The OIG found that the proposed arrangement would involve the AKS due to the pay-per-click request that the requester would charge for “recommending” the listed vendors. Interestingly, the OIG also found that allowing users to access the platform for free would constitute “compensation” for those users, which “might be intended to entice users to refer to the providers registered for the provision of items and services reimbursable by a federal health care program. The notice does not specify why the mere offer of a free online search engine would constitute remuneration for its users. ‘a number of specific parameters regarding newsletter advertisements, the OIG concluded that the applicant would not recommend entities that advertise in the newsletter, therefore “this aspect of the proposed arrangement would not implicate the law federal anti-kickback ”.

The OIG provided the following reasons why it would not impose sanctions under the AKS or CMP on recipient incentives:

1. The plaintiff certified that the fees he would charge would be fixed, would not vary by registered supplier and would be in accordance with fair market value. The requester would charge providers a contact fee regardless of whether a user received services from the provider, and the charge would not increase or decrease based on the number of contacts the provider receives. In addition, the fees would not affect a provider’s placement in platform listings or the frequency of such listings. Instead, providers would be listed based on a user’s specific criteria.
2. The applicant is not itself a provider or provider and is not affiliated with any provider that can be listed, even if one of the owners of the applicant is licensed to provide certain health services. No “white coat” marketing, whereby a physician or other professional in a position of trust would be able to influence a user, would be involved.
3. Anyone in the general public could use the platform, regardless of their insurance status or source of payment. Users would not receive any remuneration other than free use of the platform.
4. The platform included other methods to reduce the risk of fraud and abuse, including, among others, refraining from promoting specific items or services from vendors – including all vendors who meet the criteria for search for a user – and notify users that the listed providers have paid a fee.

Conclusion and Considerations

One of the main lessons of this OIG advisory opinion is that financial arrangements involving health care providers and referral sources can trip the uninformed. Any type of financial arrangement involving advertising or recommending health care providers could potentially involve AKS and its state counterparts. The mere provision of an online platform allowing the general public to locate providers could potentially constitute remuneration.

Companies involved in such agreements should carefully review the advisory opinion, consider seeking their own opinions, and ensure that their agreements comply with applicable laws and rules.