On February 2, 2015, OIG posted a favorable Advisory Opinion regarding the provision of certain free items to Medicaid beneficiaries by a state maternal infant health program (the “Program”). The Program is designed to promote healthy pregnancies and infant health and development through care coordination and intervention services. As part of the Program, eligible Medicaid beneficiaries receive one pack of diapers during the initial consultation and are not required to enroll in the Program to receive the initial free pack of diapers. Those who do enroll may receive one additional free pack of diapers per billable visit. The total value of the diapers per beneficiary is less than $50. In addition, beneficiaries who enroll and complete all ten visits receive a free play yard, valued at $50.

OIG considered whether this arrangement could result in the imposition of civil monetary penalties under the Anti-Kickback Statute, which makes it illegal for providers to “knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program.” OIG concluded that such an arrangement would not result in sanctions because the free diapers were of nominal value, and the diapers and play yards meet the “preventive care exception” to the civil monetary penalties statute. The “preventive care exception” excludes from the definition of “remuneration” incentives “given to individuals to promote the delivery of preventive care services where the delivery of such services is not tied (directly or indirectly) to the provision of other services reimbursed in whole or part by Medicare or an applicable State health program.” OIG noted that its opinion was limited to the Program that requested the opinion and should not be relied on by other entities. Nevertheless, the advisory opinion provides insight regarding how OIG may view other maternal infant health programs giving away certain free items to beneficiaries.

The advisory opinion is available here.