OIG Issues Additional Favorable Advisory Opinion Regarding Medigap Plan and Preferred Hospital Organization Arrangement

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On July 7, 2021, OIG posted Advisory Opinion No. 21-07 relating to a proposed arrangement between a Medigap Plan and a Preferred Hospital Organization (PHO). The proposed arrangement involves (i) a discount on policyholder’s Medicare Part A deductible, (ii) a policyholder premium credit, and (iii) a monthly administrative fee to the PHO. The arrangement is designed to incentivize the Medigap plan’s policyholders to seek inpatient care from a hospital within the PHO network. OIG concluded that the proposed arrangement poses a sufficiently low risk of fraud and abuse under the Federal Anti-Kickback Statute and it would not impose administrative sanctions under the Beneficiary Inducements Civil Monetary Penalty (CMP) in connection with the proposed arrangement. The proposed arrangement and OIG’s analysis is nearly identical to three advisory opinions issued in May, Advisory Opinions Nos. 21-03, 21-04, and 21-05. Additional analysis regarding those advisory opinion is available here.

Advisory Opinion No. 21-07 is available here.

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