The Department of Health and Human Services (HHS) Office of Inspector General (OIG) published Advisory Opinion No. 08-13 regarding the use of a "preferred hospital" network as a part of a Medicare Supplemental Health Insurance (Medigap) policy. Under the arrangement, a Medigap plan indirectly contracts with network hospitals for discounts on applicable Medicare Part A inpatient deductibles for its policyholders that the Medigap plan would otherwise have to pay. The Medigap plan then passes back part of its savings by reducing premiums to policyholders for utilizing a network hospital for an inpatient stay. The OIG concluded that it would not impose administrative sanctions under the Anti-Kickback Statute or the prohibition on inducements to beneficiaries in connection with this arrangement because of the low risk of fraud or abuse Among other things, the OIG noted: (1) the discounts would not affect per service payments by Medicare because payments to hospitals under Part A for inpatient services are fixed and unaffected by the deductible amount; (2) the discounts should not increase utilization by beneficiaries because the beneficiaries already purchased Medigap policies to cover the entire deductible obligation; and (3) the arrangement would not unfairly affect competition among hospital since membership in the network would be open to any accredited, Medicare-certified hospital that meets the requirements of applicable state laws.