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OIG Views Favorably Arrangement to Provide Services Via Telemedicine Technology

On August 29, 2011, the Department of Health and Human Services Office of Inspector General (“OIG”) issued Advisory Opinion 11-12 in which an operating division of a non-profit corporation (“Requestor”) was seeking an opinion from the OIG regarding its “proposal to enter into arrangements to provide neuro emergency clinical protocols and immediate consultations with stroke neurologists via telemedicine technology to certain community hospitals” (“Proposed Arrangement”). Through its flagship hospital, Requestor provides neuroscience care that is nationally recognized and it aims to expand and increase patients’ access to that care through the Proposed Arrangement.

The Requestor noted that “stroke is the third leading cause of death in the nation and a leading cause of serious, long-term disability.” As such, it is common for community hospitals to transfer suspected stroke patients to comprehensive stroke centers (“Centers”) that are able to treat those patients (this also serves to protect community hospitals legally). Requestor notes that time is of the essence when treating suspected stroke patients. Under the Proposed Arrangement, hospitals with Centers will be able to treat simple stroke cases with telemedicine technology, which will allow treatment to take place at the most effective time while also allowing the hospitals to “free up resources for patients who require the level of tertiary care that the Requestor’s hospital can provide.”

Initially, the Proposed Arrangement would be between the Requestor and certain community hospitals in the Requestor’s service (“Participating Hospitals”) Area with which the Requestor has a pre-existing, significant contractual relationship (“Affiliated Hospitals”). In other words, the initial arrangement’s Participating Hospitals would be comprised solely of currently Affiliated Hospitals. The Requestor proposes to provide, at its own expense, the following to each Participating Hospital: (i) neuro emergency telemedicine technology; (ii) neuro emergency clinical consultations; (iii) acceptance of neruo emergency transfers; and (iv) neuro emergency clinical protocols, training, and medical education (collectively, “Program”). Those hospitals that do not have pre-existing, significant contractual relationships with Requestor (“Non-Affiliated Hospitals”) would be included on a case-by-case basis, taking into account rational access-to-care considerations. The Requestor proposes to enter into written agreements with the Participating Hospitals, such agreements including a two-year term and an exclusivity requirement.

The OIG determined that the Proposed Arrangement adequately reduced risk of improper payments for referrals for the following reasons:

  1. The Requestor would likely not generate considerable referrals as neither the Participating Hospitals nor the physicians would be required or encouraged to refer patients to Requestor’s hospital and no emergency physician would receive additional compensation under the Program. In fact, physicians are free to refer patients to facilities other than the Requestor’s hospital. Moreover, one of the objectives of the Proposed Arrangements is to reduce the number of transfers of stroke patients to Requestor’s hospital.
  2. Initially, the Proposed Arrangement would only be available to Affiliated Hospitals. When resources permit, Non-Affiliated Hospitals would be included in the Program based on rational access-to-care considerations.
  3. The primary beneficiaries of the Program would be the stroke patients.
  4. Neither the Requestor nor any Participating Hospital would be required to engage in any marketing activities and each would be responsible for its own marketing.
  5. It is unlikely that the Proposed Arrangement would result in increased costs to the Federal healthcare programs.


For more information regarding telehealth arrangements, please contact Adrienne Dresevic, Esq. and Carey F. Kalmowitz, Esq. at (248) 996-8510 or (212) 734-0128 or visit the HLP website.

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