October 2002

Deborah Green’s LEGAL Q&A

Q A number of my Medicare patients have no family and get very lonely and depressed during the holidays. When the holiday season is here, may I give them a small holiday gift, provide them with free transportation to my office, or waive their co-payment as a gesture of goodwill?

A You may not offer or transfer to any Medicare or Medicaid beneficiary any remuneration that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider, or you may be liable for civil monetary penalties of up to $10,000 for each wrongful act. “Remuneration” includes waivers of co-payments and deductible amounts (or any part thereof), and transfers of items or services for free or for other than fair-market value.

However, in a Special Advisory Bulletin issued Aug. 29, 2002, the DHHS Office of the Inspector General (OIG) provided some exceptions to this rule. The OIG has interpreted the prohibition to permit providers to offer beneficiaries inexpensive gifts (other than cash or cash equivalents) or services.

Inexpensive gifts and services are those with a retail value of no more than $10 individually, and no more than $50 in the aggregate, annually, per patient.

Providers may offer beneficiaries more expensive items or services that fit within one of five statutory exceptions:

1. Waivers of cost-sharing amounts based on financial need; such waiver must be non-routine, unadvertised, and based on determination of each individual’s financial need or the exhaustion of reasonable collection efforts.

2. Properly disclosed co-payment differentials in health plans; covers incentives that are part of a health plan design such as lower plan co-payments for using preferred providers (waivers of co-payments are not protected by this exception).

3. Incentives to promote the delivery of certain preventive care services; acceptable services are described in “Guide to Clinical Preventive Services” published by the U.S. Preventive Services Task Force (available on line at http://odphp.osphs.dhhs.gov/pubs/guidecps). Such incentives may not be in cash or cash equivalents and may not be disproportionate to the value of the preventive care provided.

4. Any practice permitted under the federal Anti-Kickback Statute safe harbor pursuant to 42 C.F.R. Sec. 1001.952.

5. Waivers of hospital outpatient co-payments in excess of the minimum co-payment amounts. Other regulatory exceptions, including complimentary local transportation and free goods associated with participation in certain clinical studies, are currently being considered. However, they have not yet been included as an exception, so you may not yet provide such services to your patients.

Ms. Green has been a practicing attorney since 1977. She is admitted to the practice of law in New York and Florida.

LEGAL DISCLAIMER
This column is governed expressly by the terms of this disclaimer and provided for educational purposes only. The accuracy of the information is not warranted, nor is it intended to be advice as to a specific fact pattern. The information contained herein is not presented as legal advice with respect to any matter, and no attorney-client relationship is hereby established.