On April 22, 2022, the U.S. Department of Health and Human Services Office of Inspector General (OIG) issued a favorable advisory opinion (no. 22-08) (the “Advisory Opinion”) approving a healthcare organization loaning smartphones to promote telehealth care that it provides to underserved populations. The Advisory Opinion provides context for healthcare organizations that may similarly want to loan out smartphones to patients to assist such patients in obtaining reimbursed telehealth services, which otherwise could be considered renumeration to induce referrals and federal Anti-Kickback Statute (AKS) and Beneficiary Inducements Civil Monetary Penalty (CMP) repercussions.
The OIG concluded that while the proposed arrangement could implicate the AKS, the OIG would not impose sanctions because the arrangement met a series of safeguards, such that the OIG determined that the arrangement posed a relatively low risk of fraud and abuse. As with all OIG advisory opinions, the OIG’s conclusions apply only to the proposed arrangement. It is, however, informative for those evaluating similar smartphone or telehealth loan arrangements.
The Arrangement
The Advisory Opinion addresses an arrangement where the requester, a federally qualified health center (FQHC), loans limited-use smartphones to existing patients of the organization. Such smartphones will allow such patients to access telehealth services from the requesting FQHC. As proposed, the patients will have the right to keep the smartphones, but only if the patient received at least one service from the organization in the prior 24-month period, regardless of whether the service was telehealth related.
Under the AKS, the OIG concluded that the arrangement did not satisfy a safe harbor. However, under the Beneficiary Inducements CMP, the OIG concluded the arrangement did meet the “Promotes Access to Care Exception,” (42 U.S.C. § 1320a-7a(i)(6)(F)) which requires that the items improve the beneficiary’s ability to obtain services payable by Medicare or Medicaid, and pose a low risk of harm to Medicare and Medicaid beneficiaries and Medicare and Medicaid programs by being unlikely to skew clinical decision making, unlikely to increase costs through over utilization or inappropriate and not raising patient safety or quality-of-care concerns. In concluding this to be the case, the OIG also articulated that these same safeguards suggest there is minimal risk of fraud and abuse under the AKS, too. These safeguards, and key factors, include:
- The OIG believes that a smartphone loan arrangement can promote access to care. In the facts of the arrangement, 94% of the requesting FQHC’s patients reported incomes at or below 200% of the federal poverty guidelines and, therefore, the arrangement removed some socioeconomic barriers for accessing telehealth services. Additionally, the arrangement only provided phones to patients who did not already have a device capable of running telehealth application to access the services. At least during the COVID-19 public health emergency when Medicare and Medicaid both pay for telehealth services, such a loan promotes access to necessary telehealth care (although, as noted in the Advisory Opinion, such logic will likely continue post-pandemic assuming telehealth reimbursement continues).
- The OIG believes that a smartphone poses a low risk of harm by being (1) unlikely to interfere with clinical decision making and (2) unlikely to increase costs to Federal health care programs or beneficiaries. The arrangement did not appear to conflict with these requirements mainly because the patients did not already own smartphones and merely holding a loaned device would not necessarily lead to significant additional care. Under the arrangement, the patients must receive only one service within a 24-month period to remain eligible for the smartphone loan. The OIG did not believe such period is likely to increase costs to Federal health care programs or beneficiaries, as an FQHC would likely provide at least one service to such patients over a significant period of time as a primary entrance to the healthcare system. Potentially, a more specialized provider of care would have a different result as it could be seen as driving additional services to continue to receive the loaned phone.
- The OIG believes that use of smartphones does not raise significant patient safety or quality-of-care concerns. The OIG did not find the arrangement to have these concerns and, instead, believes it promotes patient safety and quality-of-care by allowing patients to receive health care services without coming into physical contact with providers and other staff during the COVID-19 pandemic. OIG did acknowledge that in-person visits may allow for a higher quality of patient care in many circumstances, but the OIG did not believe that the arrangement would suggest that the requesting FQHC would utilize such “telehealth services when doing so could pose patient safety or quality-of-care concerns.” Other providers seeking to mirror this Advisory Opinion may want to have procedures to ensure telehealth is only provided when warranted for the condition.
- The smartphones’ funding also reduced the likelihood of abuse. OIG favorably cited that this arrangement received funding from the Federal Communications Commission (FCC) and a local charity. The OIG believed that this would reduce risks under the AKS as neither the FCC or the charity receive financial interest when patients received services from the FQHC, and therefore such assistance did not present additional concerns. Further, the fact that the healthcare organization complied with all requirements imposed in connection with the funding also showed less risk of fraud and abuse according to the OIG.
- Limiting the smartphones’ functionality also reduce the likelihood of abuse. The smartphones in the arrangement had limited functionality. I.e., the smartphones were “locked” in a way that restricted use to only making/receiving calls, sending/receiving text messages, using the provided telehealth applications, and viewing the patient’s medical records. A patient could not download additional applications or surf the internet on the phone. The OIG had previously favorably discussed locking phones (e.g., Advisory Opinion 19-02) to reduce the likelihood of fraud and abuse as the patient has less tools from the device. Here, however, the requestor still allowed the patients to make/receive calls and send/receive text messages. The requestor certified to the OIG that it had a purpose (in addition to telehealth) to combat social isolation during the COVID-19 pandemic public health emergency (PHE). The OIG noted that since the program was not limited to the PHE, that such social isolation may need to be reconsidered in other programs. Here, however, the patients had to secure funding for their own voice and data services and therefore access to such things were not concerning enough to the OIG that it could lead to overutilization or inappropriate utilization.
Conclusion
The OIG concluded that the proposed arrangement could generate prohibited remuneration under the AKS if the requisite intent were present, but the OIG would not impose administrative sanctions because this specific arrangement would present a low risk of fraud and abuse for the reasons discussed above. Other healthcare providers that want to develop similar programs and will want to look to the OIG’s guidance for similar structuring ideas. In so doing, providers should be cautioned that the OIG had specific factual reasons for allowing this initiative and still expressed that AKS risk was possible if the requisite intent under the law was present. Accordingly, it is important to exercise caution and to construct appropriate safeguards when loaning smartphones or other technology to patients.
Further, although the OIG applied the same analysis under the “Promotes Access to Care Exception” of the Beneficiary Inducements CMP to the AKS analysis in this instance, the OIG indicated that the AKS analysis could differ. This leaves another door open for the OIG to draw a different conclusion in future. Please contact one of the authors for additional information on this advisory opinion or other related compliance concerns.