Background
The U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) released Advisory Opinion No. 26-06, a favorable opinion concluding that although a proposed arrangement in which a state-designated domestic crisis provider (the “Requestor”) would bill Federal health care programs for mental health therapy services furnished to domestic violence survivors — and waive any cost sharing for such services — would generate prohibited remuneration under the Federal Anti-Kickback Statute (“AKS”) and the Beneficiary Inducements Civil Monetary Penalty (“CMP”) if the requisite intent were present, HHS-OIG would not impose administrative sanctions given the low risk of fraud and abuse.
The Requestor serves domestic violence survivors in a rural, medically underserved area. The Requestor operates as a state subcontractor that receives state and Federal grants and provides a comprehensive suite of services to its clients, including but not limited to therapy, all of which have historically been furnished at no charge.
The Requestor historically provided therapy services to its clients through a licensed psychologist, licensed psychological associate, and licensed clinical social worker and relied on various funding streams other than insurance reimbursement to cover these services. The Requestor does not currently bill insurers for any services and is not currently enrolled in the Medicare or Medicaid programs; however, it certified that it would enroll in those programs upon receipt of a favorable advisory opinion.
Under the proposed arrangement, the Requestor would bill Medicare and Medicaid for therapy services provided to its clients and would continue to provide all services — including therapy — without charge to clients and without regard to any client’s insurance status or ability to pay.
The Requestor pointed to research explaining that financial abuse is a pervasive and effective form of power and control exerted by abusive partners over their victims and certified that, given the prevalence of financial abuse, charging cost sharing for therapy services could make them inaccessible to a significant percentage of the population it serves.
The Requestor also certified that charging cost sharing amounts to clients could be viewed by the community as inconsistent with its historical mission and how it has represented its services in the past.
HHS-OIG’s Findings
HHS-OIG concluded that the proposed arrangement would implicate both the AKS and the Beneficiary Inducements CMP. Under the AKS, the waiver of patient cost sharing for therapy services billed to Federal health care programs constitutes remuneration that could induce referrals. Under the Beneficiary Inducements CMP, the waiver of patient cost sharing could influence a Medicare or state health care program beneficiary to select the Requestor as its provider for receipt of items or services reimbursable by those programs. HHS-OIG further found that the proposed arrangement would not fall squarely within any exception to the definition of “remuneration” for purposes of the Beneficiary Inducements CMP or any AKS safe harbors.
Despite these threshold concerns, HHS-OIG concluded that the risk of fraud and abuse was sufficiently low to issue a favorable advisory opinion, based on several key considerations:
- First, the proposed arrangement is consistent with the Requestor’s historical mission. The Requestor has a longstanding track record of delivering a broad array of services to domestic violence survivors at no charge, without seeking insurance reimbursement. Continuing to waive cost sharing for therapy would preserve the Requestor’s ability to maintain its full complement of free services, in keeping with its designated role as a domestic crisis provider.
- Second, the arrangement is unlikely to result in inappropriate steering or unfair competition. HHS-OIG recognized that, by offering all services at no charge, the Requestor fills a critical gap in an area where individuals facing financial abuse in a rural, medically underserved community might otherwise lack meaningful access to care. The Requestor also committed to refraining from specifically promoting the availability of no-cost therapy.
- Third, the arrangement is unlikely to result in inappropriately increased costs to Federal health care programs. The Requestor certified that its clinicians would make independent treatment determinations and submit claims only for medically necessary services, that waived cost-sharing amounts would not be reallocated to other payors, and that eligibility for care would not turn on a client’s insurance status.
- Fourth, the arrangement would not interfere with patient freedom of choice. Clients accessing the Requestor’s other services would face no obligation to also accept therapy, leaving them free to decide independently whether to pursue mental health treatment and to choose their own provider.
For these reasons, HHS-OIG determined that the proposed arrangement would facilitate access to therapy for domestic violence survivors while presenting no more than a minimal risk of fraud and abuse under the AKS or warrant the imposition of sanctions under the Beneficiary Inducements CMP.
Key Takeaways
This advisory opinion is particularly significant for nonprofit and mission-driven healthcare providers serving vulnerable populations that are considering billing Federal health care programs while continuing to waive patient cost sharing. However, the favorable outcome was driven by a unique combination of context-specific factors, including the:
- Requestor’s longstanding historical mission of providing all services at no charge to domestic violence survivors.
- Rural and medically underserved character of the area.
- Prevalence of financial abuse among the population served that would make cost sharing a meaningful barrier to accessing care.
- Independence of clinical decision-making.
- Absence of any advertising or cost-shifting that could exacerbate typical fraud and abuse risks.
Entities contemplating similar arrangements should note that HHS-OIG expressly found that the proposed arrangement does not fall within any safe harbor to the AKS or any exception to the Beneficiary Inducements CMP. HHS-OIG also specifically cautioned that its conclusion does not upend the agency’s longstanding concerns about blanket cost sharing waivers and that, outside the context of this proposed arrangement, a historical practice of not charging patients would likely not justify such waivers. This underscores the importance of structuring cost sharing waiver arrangements carefully, and with an understanding that blanket waivers generally carry significant risk under Federal fraud and abuse laws.
