OIG Advisory Opinion Offers Lessons for Digital Health Sites

The U.S. Department of Health and Human Services' Office of Inspector General (OIG) issued Advisory Opinion 21-20 on Dec. 16, 2021, that discusses a number of issues of importance to digital health providers, such as those that offer online provider directories. Only the requestor may rely on the opinion, but it discusses legal concepts that are relevant to financial arrangements of certain healthcare apps and websites.

Overview of the Opinion

The opinion relates to the requestor's proposed online platform that would allow users to search for and contact home-based healthcare providers (the Platform). The requestor would charge listed providers on a per-click basis and publish a newsletter in which third parties could purchase advertising space. The OIG determined that the proposed arrangement would generate prohibited remuneration under the federal Medicare/Medicaid anti-kickback statute (AKS) if the required intent to induce referrals were present.

The OIG found that it also could generate prohibited remuneration under the law prohibiting inducements to beneficiaries (the Beneficiary Inducements CMP), 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. Nevertheless, the OIG elected not to impose sanctions on the requestor under the specific facts as described. Other than the requestor, however, no one may assume that similar arrangements would escape sanctions unless they seek their own advisory opinion from the OIG.

The Platform would allow users to search for home care providers meeting certain criteria and include a conspicuous notice indicating that the search results featured only those who paid a fee to be listed. The Platform would not steer users to any particular providers who paid to be listed. If no providers meeting the user's search criteria paid to be listed, the Platform would list providers who had not paid but might meet the user's criteria. Users could access the Platform for free, rate providers on a scale of one to five stars and post reviews. Providers would pay a monthly fee to be listed, as well as a fixed per-click or per-contact fee. The fee would not be adjusted to account for users who actually purchased a provider's services.

The requestor also proposed to provide a free newsletter to users who request it through the Platform. Healthcare and non-healthcare entities could purchase ad space in the publication, with the requestor selling spots on a first-come, first-served basis. Advertisers would be charged a fixed monthly fee, and the requestor would not leverage user data to direct certain ads to specific users.

The OIG found that the proposed arrangement would implicate the AKS due to the per-click payment the requestor would charge to "recommend" the listed providers. Interestingly, the OIG also found that allowing users to access the platform at no charge would constitute "remuneration" to those users, which "could be intended to induce Users to refer themselves to Enrolled Providers for the provision of items and services that are reimbursable by a Federal health care program." The opinion does not provide details regarding why merely offering a free online search engine would constitute remuneration to its users. Due to a number of specific parameters regarding newsletter ads, the OIG concluded that the requestor would not be recommending the entities that advertise in the newsletter, so "this aspect of the Proposed Arrangement would not implicate the Federal anti-kickback statute."

The OIG provided the following reasons why it would not impose sanctions under the AKS or the Beneficiary Inducements CMP:

1. The requestor certified that the fees it would charge would be fixed, not vary by enrolled provider and would be consistent with fair market value. The requestor would charge providers a contact fee regardless of whether a user received services from the provider, and the fees would not increase or decrease based on the number of contacts the provider receives. Additionally, the fees would not affect a provider's placement in the platform listings or the frequency of those listings. Instead, the providers would be listed based on a user's specific criteria.
2. The requestor is not itself a provider or supplier and is not affiliated with any provider who may be listed, even though one of the owners of the requestor is licensed to provide certain healthcare 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 from the general public could use the platform, regardless of 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 other things, refraining from promoting specific items or services of the providers – including all providers who meet a user's search criteria – and notifying users that the listed providers have paid a fee.

Conclusion and Considerations

A key takeaway from this OIG advisory opinion is that financial arrangements involving healthcare providers and referral sources can trip up the uninformed. Any type of financial arrangements involving advertising or recommending healthcare providers could potentially implicate the AKS and state counterparts. Merely providing an online platform to enable the general public to locate providers could potentially constitute remuneration.

Companies involved in these arrangements should review the advisory opinion carefully, consider requesting their own opinions and ensure that their arrangements comply with relevant laws and rules.