On October 15, 2013, the Department of Health and Human Services, Office of Inspector General (“OIG”) issued Advisory Opinion No. 13-13 (issued October 8, 2013, posted October 15, 2013) related to the provision of dental care services to financially needy children. The OIG ultimately determined that the arrangement would not constitute grounds for exclusion or grounds for the imposition of civil monetary penalties and would not generate prohibited remuneration under the Anti-kickback Statute.

Under the facts presented, the requesting party (the “Requestor”) is a non-profit community health services organization and a subsidiary of a nationwide health care system. The Requestor provides dental care services to children of financially needy families. Most of the participants in the dental care program are covered by Medicaid, however, the Requestor does not bill Medicaid or any other Federal program for the dental health services. The Requestor’s proposal involved a change in its billing process so that it would begin to bill Medicaid for items and services provided to Medicaid beneficiaries. The Requestor would continue to provide the same free services to uninsured or underinsured patients.

Since the Requestor would charge Medicaid for the same services it would provide for free to financially needy, uninsured or underinsured patients, the Requestor sought OIG’s guidance as to whether or not the arrangement would be “substantially in excess” of its “usual charges.” The Social Security Act permits the Secretary to exclude a provider that charges Medicare or Medicaid amounts that are “substantially in excess” of its usual charges.

The OIG noted that when calculating “usual charges,” its enforcement policy does not take into consideration free or substantially reduced charges to uninsured or underinsured patients who are self-paying patients for the services furnished. Furthermore, the OIG stated: “the OIG has never excluded or attempted to exclude any provider or supplier that provides discounts or free services to uninsured or underinsured patients.” Following this policy, the OIG concluded that it would not seek to exclude the Requestor from participating in the Federal healthcare programs as a result of the proposed arrangement. Additionally, since the Requestor would not provide free services to Medicaid beneficiaries and would not bill other Federal healthcare programs, no remuneration would be provided to those patients and as such neither the Federal Anti-kickback Statute nor the civil monetary provision would be implicated. The conclusion reiterates the OIG’s views established in 2004 (“Hospital Discounts Offered to Patients Who Cannot Afford to Pay Their Hospital Bills”)1 and 2007 (Addendum to “Hospital Discounts Offered to Patients Who Cannot Afford to Pay Their Hospital Bills”).2

While the Advisory Opinion has limited application only to the requesting party, it nonetheless provides important insight to the OIG’s continuing policy regarding the provision of free services to uninsured and underinsured patients. Absent the issuance of a final rule on the subject, the OIG’s 2004 policy remains in force.