OIG issued Advisory Opinion 09-10 permitting “network hospitals to discount the Medicare inpatient deductible for the Requestors’ policyholders….” Requestors are offer Medigap policies in a majority of US states. The Arrangement would allow for the Medigap policyholders to receive a 100% discount on Medicare Part A, inpatient deductibles received at participating hospitals and preferred provider organizations (PPOs). “Each Requestor’s Medigap policy would pay the PPO a fee for administrative services each time one of its insureds receives this discount.” Then, the Requestors would return a portion of the savings from this Arrangement and give it back to the policyholder as a $100 credit for the following year’s premium.
The OIG noted that this would implicate anti-kickback and civil monetary penalties (CMP) as “[t]he law is clear that prohibited remuneration under the anti-kickback statute may include waivers of Medicare cost-sharing amounts…[t]he safe harbor regulation for waivers of inpatient deductibles specifically excludes such waivers when they are part of an agreement with an insurer, such as the Requestors.” However, for the following reasons, the OIG concluded that the Arrangement would not implicate OIG sanctions:
– the waivers would leave the per service Medicare payments unaffected;
– the discounts would make no difference to patients (because those patients affected had already purchased a supplemental insurance plan to cover those costs);
– any hospital may participate, thus eliminating unfair competition between the hospitals;
– the physicians will not receive a remuneration; and – the Arrangement could, potentially, “lower Medigap costs for the Requestors’ policy holders who select network hospitals.”
For more information, please call Adrienne Dresevic, Esq. or Carey F. Kalmowitz, Esq. at (248) 996-8510 or visit The HLP website.