On March 3, 2017, the Office of Inspector General of the U.S. Department of Health and Human Services (“OIG”) issued Advisory Opinion 17-01, which concluded that a hospital could offer free or reduced-cost lodging and meals to certain underserved patients, even patients who are beneficiaries of Federal health care programs, without risking liability under the Federal Anti-Kickback Statute (“AKS”) or Civil Monetary Penalties Law (“CMPL”). Though binding only on the specific (unnamed) hospital that requested the opinion, Advisory Opinion 17-01 offers valuable guidance that can assist other providers in determining their own liability risks.


The proposed arrangement at issue involved the requestor hospital providing free or reduced-cost lodging at a nearby hotel to patients from rural or underserved areas. The hotel’s rates were around $70 per night, and the arrangement would cover a qualifying patient’s stay one night before and up to two nights after receiving care at the hospital. The hospital also proposed to provide meals from the hospital’s cafeteria for up to $15 per overnight stay. Patients who qualified for this arrangement would be those who: (1) live at least 90 miles away from the hospital, (2) live either in a medically underserved area or in a health professional shortage area, (3) have income at or below 500% of the Federal poverty level, and (4) have a qualifying circumstance (e.g., being scheduled for treatment at the hospital before 10:00 a.m., or having a follow-up appointment at the hospital within 48 hours after treatment). The proposed arrangement would not include providing cash, cash equivalents, or any other payment to patients, and the hospital estimated that between 100 to 200 patients would qualify annually for the proposed program.


The OIG analyzed whether this proposed arrangement could violate the beneficiary inducement prohibition under the CMPL, which generally provides for sanctions against anyone who offers or provides remuneration to any beneficiary that is likely to influence the beneficiary’s selection of health care items or services that are wholly or partially paid for by a federal health care program. The OIG also analyzed whether the arrangement could violate the AKS, which prohibits anyone from knowingly and willfully offering, paying, soliciting, or receiving any remuneration to induce or reward referrals of items or services paid for by federal health care programs.


As to the CMPL question, the OIG concluded that the proposed arrangement would fall under the “promotes access to care” exception to the beneficiary inducement prohibition, because it would help “remove certain socioeconomic and geographic barriers” and thus promote the beneficiary’s access to appropriate and necessary care. The OIG also reasoned that the proposed arrangement presented a low risk of harm to federal health programs because the arrangement was (1) unlikely to interfere with clinical decision-making, (2) unlikely to increase costs to federal health programs, and (3) would not raise patient safety or quality-of-care concerns. As to the AKS, the OIG noted that although the promotes access to care exception does not apply to the AKS, the proposed arrangement would not subject the hospital to liability under the AKS for the same reasons the proposed arrangement qualified for the CMPL exception. You can read the entire advisory opinion here.


The attorneys at Chilivis Grubman represent healthcare providers of all types and sizes in connection with government investigations and audits and a wide variety of other regulatory and compliance matters, including those involving the Stark Law, Anti-Kickback Statute, and False Claims Act. For any questions, or if we can assist you in connection with a healthcare regulatory or compliance issue or audit/investigation, please contact us at (404) 262-6505 or sgrubman@cglawfirm.com.