With an analysis partially relying on the Sgt. Schultz defense, the Office of Inspector General's first Advisory Opinion of 2014 declines to impose sanctions under the Anti-Kickback Statute on placement fees paid for referrals to senior residential communities, even though the referrals might at some point generate Medicare or Medicaid payments.
OIG Advisory Opinion No. 14-01, posted January 21, 2014, was issued in response to a request by the parent of a group of senior residential communities and skilled nursing homes. At issue was a contract under which a placement agency receives a fee for each resident it refers to the residential communities. The fee is a percentage of a resident's charges for the first one or two months. At the time of referral, the residents are not on Medicare or Medicaid, but that might later change and they might receive federally paid services from one or more of the residential communities' affiliates.
Citing four factors, the Opinion declined to impose sanctions. First, the fees are based only on rent and services for the first one or two months. Second, the arrangement applies only to residents not currently on Medicare or Medicaid. Third, the housing and services in question are not federally payable.
The fourth factor is essentially the Sgt. Schultz defense. Remember how on Hogan's Heroes, Schultz covered his eyes and chanted, "I see nothing!"? Opinion 14-01 notes that the parent company is able to track referrals among its subsidiaries (such as from a residential community to a nursing home) and to know which referred residents eventually receive Medicare or Medicaid services, but it does not do so. It sees nothing!