On May 31, 2018, the Office of Inspector General (OIG) issued Advisory Opinion No. 18-03 regarding an arrangement in which a not-for-profit Federally qualified health center look-alike (Provider) would provide, at no charge, certain information technology-related equipment and services to a County Department of Health health clinic (County Clinic) for use in telemedicine encounters with County Clinic’s patients (Proposed Arrangement). The OIG concluded that although the Proposed Arrangement could potentially generate prohibited remuneration under the Federal Anti-Kickback Statute, 42 U.S.C. §1320a-7b(b) (AKS), if the requisite intent to induce or reward referrals of Federal health care program business is present, the OIG will not impose administrative sanctions on Provider or County Clinic (collectively, Requestors) in connection with the Proposed Arrangement.

Under the Proposed Arrangement, Provider will use grant funds it receives from the State Department of Health, AIDS Institute, for the primary purpose of increasing access to HIV prevention services in the state, to furnish to County Clinic telemedicine hardware (e.g. laptop and cameras) (Telemedicine Items) as well as technical assistance with the Telemedicine Items (e.g. installation, maintenance, updates and training). The Proposed Arrangement furthers the purpose of the grant funds for a number of reasons. First, County Clinic is currently unable to provide pre-exposure prophylaxis (PrEP) and post-exposure prophylaxis (PEP) consultations and prescribing services to its patient population and has to refer patients outside of the clinic, when such services are necessary. Second, the Telemedicine Items can be used by County Clinic to refer patients to Provider, or other qualified providers, for virtual PrEP and PEP consultations and prescription. Third, a male or minor County Clinic patient, which requires PrEP and PEP consultations and follow-up, would be required to travel approximately 25 to 30 minutes by car, from County Clinic, to obtain the same services that Provider will furnish virtually at County Clinic. Taken together, the Telemedicine Item will improve patient access to HIV prevention services and make it more likely that patients will seek out and receive such services.

Although County Clinic and Provider will bill Federal healthcare programs for fees and services provided using the Telemedicine Items, and County Clinic could serve as a potential source of Federal healthcare program business for Provider, the OIG found that the Proposed Arrangement presents a low risk of fraud and abuse for the following reasons:

  • The Proposed Arrangement includes several safe guards to prevent inappropriate patient steering: (i) County Clinic is under no obligation to refer patients to Provider for PrEP and PEP consultations and following up; (ii) County Clinic will advise those patients that services can be obtained virtually or in-person from Provider or any another qualified provider; and (iii) there is nothing unique about the Telemedicine Items which limit or restrict its use to particular software or other technology systems and networks.
  • While Provider operates a pharmacy that can fill PrEP and PEP prescriptions, the Proposed Arrangement is unlikely to result in inappropriate patient steering to Provider’s pharmacy as it is located 80 miles from County Clinic and does not provide mail-order services. Additionally, Provider and County Clinic will not recommend a specific pharmacy to fill prescriptions and County Clinic patients are free to fill prescriptions at any pharmacy they choose.
  • It is unlikely that the Proposed Arrangement will inappropriately increase costs to Federal health care programs because: (i) regardless of the Proposed Arrangement, County Clinic would perform and bill to Federal healthcare programs certain services for patients that sought PRrEP and PEP consultations, including preliminary tests, consultations, follow-up, and referral for clinically appropriate care; (ii) increased access to HIV prevention services is consistent with the purpose of Provider’s grant funds; (iii) PrEP and PEP services and treatments are limited in scope and appropriate to prescribe only under limited clinical circumstances; and (iv) increased access to preventative HIV services can reduce HIV prevalence and promote public health.
  • The primary beneficiaries of the Proposed Arrangement will be County Clinic patients who receive HIV prevention services more conveniently and efficiently through the Telemedicine Items, especially in circumstance where PEP administration is necessary as it must be taken within 72 hours following exposure to HIV.

While this OIG Advisory Opinion may only be relied on by the Requestors, it provides insight into the OIG’s application of the law relevant to similar programs where telemedicine hardware and/or software is provided at no cost. Of particular interest, the OIG included a footnote that its conclusion regarding the Proposed Arrangement may change in the event Provider’s pharmacy offers mail-order services or opens a location closer to County Clinic.