OIG okays providing modest hotel and meal accommodations for rural and financially needy patients.

The U.S. Department of Health and Human Services Office of Inspector General (OIG) recently issued an advisory opinion interpreting the finalized rules related to the beneficiary inducement civil monetary penalties (CMP) law. In a previous blog post, we discussed the OIG final rule that codified three exceptions to the definition of remuneration under the beneficiary inducement provision of the CMP law. The OIG advisory opinion approved an arrangement under the “promoting access to care” exception to the CMP law by authorizing a hospital system to provide free or reduced-cost lodging and meals to certain hospital patients, including federal healthcare program beneficiaries.

Under the proposed arrangement, the hospital would provide reduced-cost, and sometimes even free, hotel accommodations to eligible patients for one night before, and up to two nights after, treatment at the hospital. The hospital also proposed to provide free or reduced-cost hospital meals for each overnight hotel stay. To qualify for these benefits, patients had to satisfy all of the following criteria:

  • Reside 90 or more miles from the hospital in either a designated medically underserved area of the state or a designated professional health shortage area;
  • Have a household income that does not exceed 500 percent of the federal poverty level and meet the criteria in the hospital’s written financial assistance policy; and
  • Meet one of the follow circumstantial requirements:
    • For lodging and meals prior to treatment: the patient must be required to present at the hospital before 10:00 a.m.
    • For lodging and meals following treatment: The patient must have no need for on-site care but must be required to attend a follow-up appointment or return for surgery within 48 hours.

The total cost per night, including meals, would not exceed $85. The meals would be from the hospital cafeteria, and the hotel was a modest establishment close to the hospital, with an average per room price of $70. The patients could not receive a cash equivalent, and there would be no limit on the amount of times an eligible patient could utilize these benefits.

The OIG determined that the proposed arrangement satisfied the “promotes access to care” exception to the CMP law, which has two parts. First, the OIG examined the arrangement to determine whether the remuneration offered to a patient improves a beneficiary’s ability to obtain items and services payable under a federal healthcare program. Next, the OIG assessed whether the remuneration offered to a patient poses a low risk of harm to Medicare and Medicaid programs and beneficiaries.

In addressing the first prong, the OIG noted that the lodging and meals would likely remove certain socioeconomic and geographic barriers while facilitating an eligible patient’s ability to obtain medically necessary care. Further, the OIG determined that the program was unlikely to interfere with clinical decision-making or increase costs to federal health programs and would not raise patient safety or quality of care concerns. In concluding that the program posed a low risk of harm, the OIG found that providing free or reduced-cost lodging and meals would not constitute grounds for imposition of CMPs. The OIG also clarified that while the “promotes access to care” exception does not apply to the anti-kickback statute, the OIG would not subject the hospital to sanctions for a violation for the same reasons described above.