OIG Approves Free Hearing Exams by Hearing Aid Supplier/Audiometric Testing Provider

On October 5, the Office of Inspector General (“OIG”) issued Advisory Opinion 12-13, approving a proposed arrangement allowing a hearing aid supplier to bill Medicare for certain audiometric testing services, while also offering a free hearing exam to potential patients (“Proposed Arrangement”). The requestor owned a chain of hearing aid supply and service locations which provided, among other things, a free hearing exam as part of an effort to promote hearing aid sales. The free exam consisted of certain tests which partially overlap/are precursors for procedures that are separately reimbursable under Medicare, but to this point the requestor had not billed Medicare for such services.

The OIG approved the Proposed Arrangement, determining that it would not constitute grounds for imposition of civil monetary penalties under the Civil Monetary Penalties Statute (the “CMP”), and that the OIG would not impose administrative sanctions under the Anti-kickback Statute (the “AKS”).

In its application of the CMP laws, the OIG noted that offering the free hearing exam amounted to more than nominal economic value (i.e., greater than $10), but because it would be unlikely to influence beneficiaries to select the requestor as their provider of Medicare-payable audiometric testing, there was no violation of the CMP.

Specifically, among others, Advisory Opinion 12-13 relied on the following factors to arrive at its conclusion:

• The Requestor certified that the free hearing exam is offered to customers without regard to their insurance coverage, health status, or whether the customers purchase any goods or services from the Requestor;

• The Requestor does not bill the free hearing exam tests to Medicare, and obtaining the Free Hearing Exam does not qualify a patient for Medicare coverage of any items or services;

• The Requestor certified that it would not recommend that a customer receiving a free hearing exam also undergo the Medicare-payable audiometric testing;

• The Requestor would not attempt to obtain the prescription or order for the Medicare-payable audiometric testing on behalf of a customer; and
• The Requestor does not contract with or employ physicians or other providers that prescribe/order items or services for which a federal health care program can be billed.

Interestingly, Advisory Opinion 12-13 never embarked on an AKS-specific analysis – rather, it simply stated that the same reasons for approving the arrangement for CMP purposes were sufficient to satisfy AKS requirements.

The opinion is a reminder that, while the OIG is willing to approve arrangements despite patient marketing/incentive initiatives that have the potential to run awry of CMP or AKS, it will only do so if such arrangements are properly structured with appropriate safeguards and risk mitigators.

For more information regarding this and related issues, please contact Adrienne Dresevic, Esq., or Clinton Mikel, Esq. at (248) 996-8510, or visit the HLP website.

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