Tis the Season to be Giving – OIG Increases “Nominal Gifts” Limit

The Office of the Inspector General (OIG) announced this Holiday season that it is increasing the monetary value of gifts falling under the nominal value exception to Medicare’s Civil Money Penalty Law.  Under section 1128A(a)(5) of the Social Security Act [42 U.S.C. §1320a-7(a)], a person who offers or transfers to a Medicare or Medicaid beneficiary any remuneration that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of Medicare or Medicaid payable items or services may be liable for civil monetary penalties (CMPs) of up to $10,000 for each wrongful act. “Remuneration” includes waivers of copayments and deductible amounts (or any part thereof) and transfers of items or services for other than fair market value[1].

However, as the OIG explained in its December 7, 2016 “Policy Statement Regarding Gifts of Nominal Value to Medicare and Medicaid Beneficiaries,” Congress intended to permit inexpensive gifts of nominal value.  The OIG has previously interpreted “inexpensive” and “nominal value” to mean a retail value of no more than $10 per item or $50 in the aggregate per patient on an annual basis, noting that it would periodically review these limits and adjust them according to inflation, if appropriate.[2]

The OIG now believes that the figures from 2000 should be adjusted. Thus, as of December 7, 2016, the OIG has modified its interpretation of “nominal value” to mean having a retail value of no more than $15 per item or $75 in the aggregate per patient on an annual basis.  The items may not be in the form of cash or cash equivalents. If a gift has a value at or below these thresholds, then the gift need not fit into an exception to section 1128A(a)(5).  Happy Holidays from the OIG.

[1] See section 1128A(i)(6) of the Act.

[2] See, e.g., 65 FR 24400, 24411 (Apr. 26, 2000).

OIG’s Advisory Opinion Concludes that Free Introductory Visits by Home Health Provider Are Not Prohibited Remuneration

A home health care provider’s policy of offering free introductory visits to patients who had already selected it as their home health care provider does not generate prohibited remuneration under the federal antikickback statute, the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) concluded in a recent advisory opinion. (OIG Advisory Opinion No. 15-12.) The home health agency requesting the advisory opinion (requestor) stated that a physician or a health care professional provides a list of home health providers to a patient who needs home health services. The requestor has no involvement in the patient’s selection process, nor does it offer or pay any remuneration to the physician or other referral source. After a patient chooses the requestor as his or her home health agency, an employee of the requestor (liaison) contacts the patient by telephone to see if he or she would like to have an introductory visit with the liaison. The purpose of the introductory visit is to facilitate the patient’s transition to home health services and to increase compliance with the treatment plan. The liaison does not provide any diagnostic or therapeutic service reimbursed by any federal health care program during the introductory visit and the services provided during the introductory visit do not require clinical training.

The OIG concluded that the introductory visits were not remuneration because they did not provide any actual or expected economic benefit to patients. Although the services may have some “intrinsic value” to patients, the OIG concluded that the “intangible worth to patients” created by the introductory visits do not implicate the federal antikickback statute or the Civil Monetary Penalty law.

Proposed Rules Expand OIG’s Exclusion Authority and Revise Civil Monetary Penalties

In May, the Department of Health and Human Services Office of Inspector General (OIG) proposed changes to the OIG’s exclusion authority and ability to impose civil monetary penalties (CMPs).  The proposed rules codify the changes made by the Affordable Care Act, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, and other statutory authorities.

The first rule proposes to expand the OIG’s exclusion authority in accordance with the Affordable Care Act (ACA).  79 Fed. Reg. 26810.  The comment period for this proposed rule ends July 8.  The OIG proposes that the following new conduct would subject a person to permissive exclusion:

  • conviction of an offense in connection with obstructing an audit;
  • failing to supply payment information; and/or
  • making or causing to be made any false statement, omission, or misrepresentation of a material fact on an application to a federal health care program.

The OIG’s proposed rule makes several additional changes, including the following:

  • an early reinstatement process for certain individuals who lost their health care licenses; and
  • expanding the list of individuals and entities entitled to present oral argument to the OIG before being excluded from federal health care programs.

The proposed rule also clarifies that there is no statute of limitation period for exclusions.

The second proposed rule expands the OIG’s ability to assess CMPs.  79 Fed. Reg. 27080.  The comment period for this proposed rule ends July 11.  The proposed rule adds penalties for the following conduct:

  • failing to grant OIG timely access to records following a reasonable request;
  • ordering or prescribing while excluded from federal health care programs when the excluded person knew or should know the excluded item or service may be paid for by a federal health care program;
  • making false statements, omissions, or misrepresentations in an enrollment or similar application to participate in a federal health care program;
  • failing to report and return a known overpayment; and/or
  • making or using a false record or statement that is material to a false or fraudulent claim.

The OIG is soliciting comments about its proposed clarification of the penalty for failing to report and return a known overpayment.  Under the ACA, overpayments must be reported and returned by the later of 60 days after the date the overpayment was identified or the date any corresponding cost report is due, if applicable.

The new CMP provision does not have a specific penalty amount, but uses the default penalty of up to $10,000 for each item and service.  The OIG has proposed a penalty of up to $10,000 for each day a person fails to report and return a known overpayment by the deadline.  Noting that Congress did not specify a per day penalty, the OIG also has requested comments on whether to interpret the $10,000 penalty for each item and service as pertaining to each claim for which the provider or supplier identified an overpayment.

Health care providers should continue to monitor the OIG’s rulemaking in the fraud and abuse area as the OIG continues to implement changes as a result of the ACA.