OIG calls freebies into question

Sunday, November 12, 2006

WASHINGTON - The OIG doesn't like the idea of providers giving oximetry tests and oxygen for free to potential respiratory patients.

Both arrangements "could constitute grounds for the imposition of civil monetary penalties...(and) potentially generate prohibited remuneration under the anti-kickback statute..." the OIG stated in an advisory opinion issued last week.

Advisory opinions pertain only to the provider that requests guidance from the OIG on the legality of a particular action. However, they also give a pretty good idea of how the OIG feels about certain activities.

In this case, a DME, at a doctor's request, provides patients free home oxygen until the patient qualifies for Medicare coverage. The provider asked the OIG if that practice was legal. The DME also asked if it could, in the future, offer free oximtery tests to patients to help their physician assess their conditions.

Even though the DME said it would offer these free services only if requested by a doctor or patient and not advertise them, the OIG said both appear highly questionable. They could be seen, the OIG stated, as a kickback, where the provider gives something of value to induce business paid for by a federal program.

(In issuing advisory opinions, the OIG does not disclose the company that requested it. In this case, however, the DME furnishes, among other things, "home oxygen products and services to a national patient population.")

In reviewing the DME's questions, the OIG stated the following:

-- Arrangements whereby a prospective provider or supplier of federally-payable items and services offers beneficiaries a non-covered item or service free of charge implicate the fraud and abuse laws and must be closely scrutinized.
-- While the receipt of free interim oxygen or free oximetry testing would not commit beneficiaries to retain (the DME) as their supplier for future purchases of oxygen or other Medicare-payable supplies, it is certainly likely to influence them to select (the DME) over competitors.
-- It is worth noting, finally, that (the proposed oximetry testing) poses an additional fraud and abuse risk insofar as it appears to be a thinly veiled scheme to evade the barrier interposed between beneficiaries and oxygen suppliers by the Medicare rule that bars DME suppliers (except hospitals) from performing the oximetry test necessary to qualify a beneficiary for covered oxygen.

The OIG also stated: Any definitive conclusion regarding the existence of an anti-kickback violation requires a determination of the parties' intent, which determination is beyond the scope of the advisory opinion process."