On December 7, 2016, HHS OIG issued a “General Policy Statement Regarding Gifts of Nominal Value to Medicare and Medicaid Beneficiaries” (Policy Statement). In the Policy Statement, OIG announced that it is changing its interpretation of “nominal value” for the purposes of the civil monetary penalties law (CMP) from no more than $10 per item or $50 in the aggregate per patient in a year to no more than $15 per item or $75 in the aggregate per patient in a year. OIG reiterated that gifts (except cash or cash equivalents) provided to beneficiaries that are below the nominal value need not satisfy an exception to the CMP.
The CMP (section 1128A(a)(5) of the Social Security Act; 42 U.S.C. § 1320a-7a(a)(5)) provides for the imposition of civil monetary penalties against any person who offers or transfers remuneration to a Medicare or Medicaid beneficiary that the benefactor knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of any item or service for which payment may be made, in whole or in part, by Medicare or Medicaid. “Remuneration” is defined in the statute as, among other things, waivers of copayments and deductible amounts and transfers of items or services for free or for other than fair market value.
In a 2000 rule implementing the CMP, OIG took the position that “incentives that are only nominal in value are not prohibited by statute. . . .” 65 Fed. Reg. 24400, 24411 (Apr. 26, 2000). In support of this position, OIG pointed to a Congressional Conference Committee report accompanying the enactment of the CMP, in which Congress expressed its intent that inexpensive gifts of nominal value be permitted. In the 2000 rule, OIG interpreted nominal value to mean no more than $10 per item, or $50 in the aggregate on an annual basis. The newly-released Statement Policy adjusts these figures to $15 per item or $75 in the aggregate on an annual basis.
Last year’s advisory opinion 15-01 provides an example of an arrangement that fit within the nominal value exemption. There, the requestor advertised free diapers and play yards to certain Medicaid beneficiaries to induce the beneficiaries to enroll in a maternal infant health program, choose a particular provider, and participate in billable visits. OIG concluded that the arrangement would not subject the requestor to sanctions under the CMP in part because the diapers were nominal in value.
