The U.S. Department of Health & Human Services (HHS) Office of Inspector General (OIG) recently issued a favorable advisory opinion to a health center proposing to refer individuals receiving non-medical, social, and educational services for primary care.

Under the proposal, the health center would screen individuals to see if they have visited a primary care provider in the past year. If appropriate, they would provide the individual with a list of primary care providers, including the health center. The health center would also schedule the appointment for individuals who chose to receive primary care services from the health center.

The OIG concluded the proposed arrangement implicated the federal Anti-Kickback Statute because the non-medical, social, and educational services would involve remuneration that could induce recipients to self-refer to the health center. The OIG also concluded the proposed arrangement implicated the beneficiary inducements prohibition because receipt of those services could influence beneficiaries to select the health center for primary care services reimbursable by federal health care programs.

For a combination of reasons, however, the OIG issued a favorable advisory opinion because it found the risk of fraud and abuse presented by the proposed arrangement sufficiently low under the federal Anti-Kickback Statute (AKS) and, in an exercise of enforcement discretion, the OIG concluded that it would not impose administrative sanctions in connection with the AKS or beneficiary inducements prohibition.

The OIG identified two reasons for approving the request for an advisory opinion.  First, the OIG pointed to safeguards that would reduce the risk of steering patients to the health center.  The health center proposed screening individuals for primary care services using an objective criterion, providing individuals with a list of several primary care providers organized in alphabetical order and drafted without promoting the health center, implementing an “any willing provider” standard if other community providers wished to be added to the list of primary care providers, and continuing to allow individuals to receive non-medical, social, and educational services without electing to receive primary care services from the health center.

Second, the OIG acknowledged the request had been submitted by a health center that endeavors to provide primary care services to underserved populations, regardless of their ability to pay.  The OIG noted the proposed arrangement, which may increase access to health care services, aligns with the health center’s designation under Section 330 of the Public Health Service Act (Section 330). Under the statute, the health center is required to conduct a broad range of activities focused on recruiting and retaining patients from the service area. It is permitted to provide supplemental services that promote and facilitate optimal use of primary care services. 

The OIG advisory opinion is notable because the OIG considered the health center’s obligations under Section 330 in approving the proposed arrangement. The OIG noted that the provision of non-medical, social, and educational services had been approved by the Health Resources and Services Administration (HRSA) as “Additional Services” under the health center’s “scope of project.”  The health center would be furnishing those Additional Services when it confirmed or facilitated access to primary care services, all of which would be consistent with the statutory requirements imposed on the health center, according to the OIG.

Health centers should recognize that HRSA approval of Additional Services does not exclude those services from the definition of remuneration under the federal Anti-Kickback Statute. “While HRSA has approved the specific Additional Services that Requestor would provide under the Proposed Arrangement, this fact, standing alone, does not establish that the Proposed Arrangement poses a low risk of fraud and abuse under the Federal anti-kickback statute; however, it does contribute to our understanding that Additional Services are commonly provided by Health Centers.”

Adam Falcone, Partner in Feldesman’s national health care practice, advised the health center on its request to the OIG for a favorable advisory opinion. Although the advisory opinion cannot be relied upon by any other health center as a defense to potential administrative sanctions, the advisory opinion offers insights on how the OIG would evaluate similar arrangements implemented by health centers.

For more information, please contact Adam Falcone at afalcone@feldesman.com.