OIG Issues Favorable Opinion Regarding Post-Discharge Services Arrangement

by King & Spalding

The Department of Health & Human Services Office of Inspector General (OIG) recently issued a favorable advisory opinion regarding an electronic health record vendor’s plan to provide services to hospitals to help manage post-discharge patient care.  Under the proposed arrangement, the vendor—a subsidiary of a major pharmaceutical manufacturer—would sell hospitals a package of services aimed at helping them avoid costly readmissions.  OIG concluded that the proposed arrangement would not result in sanctions under the Anti-Kickback Statute or constitute grounds for the imposition of civil monetary penalties. 

The proposed arrangement involves the vendor’s provision of a set of software and other services for patients hospitalized for one of the conditions set out in the Hospital Readmissions Reduction Program established by the Affordable Care Act.  Currently, those conditions are acute myocardial infarction, congestive heart failure, and pneumonia.  Each hospital would contract with the vendor directly or through a group purchasing organization and would be able to purchase services on a patient-by-patient basis. 

Patients meeting eligibility criteria would be offered the vendor’s services prior to discharge.  Among other things, the services provided to a participating patient would include: 

  • Using the vendor’s software platform to share the patient’s discharge plan and other limited medical information with selected health care providers designated by the patient;
  • Establishing a patient liaison to contact the patient following discharge to ensure the discharge plan is being followed;
  • Fielding patient questions via the Internet or by telephone;
  • Coordinating patient transportation at the patient’s own cost;
  • Providing unbranded educational materials;
  • Documenting the addition of new medications to medical records; and
  • Providing the patient with prescription refill reminders.

The proposed arrangement would also involve three different fees paid by participating hospitals:  an initial flat fee to cover the implementation of the vendor’s software platform; an annual per-patient fee to cover certain technology and personnel costs; and additional fees to cover extra services requested by participating hospitals.  The vendor certified that the rates upon which the fees are based would be set at fair market value.

With respect to the Anti-Kickback Statute, OIG concluded that the proposed arrangement posed a low risk of fraud and abuse.  OIG reasoned that the proposed arrangement was unlikely to lead to increased costs or overutilization of services reimbursable by federal health care programs, noting that the services could potentially result in savings to such programs by decreasing hospital readmissions.  OIG also advised that the proposed arrangement was unlikely to affect medical decision making, as any participating patients would have already been hospitalized with certain conditions and would not begin receiving services until after discharge.  OIG added that there was a low risk of impermissible patient steering.  Due to the vendor’s certification regarding its implementation of certain safeguards—e.g., the fees under the arrangement would not be tied to drug formulary decisions—OIG concluded that the proposed arrangement was not designed to promote the pharmaceutical products of the vendor’s parent company. 

With respect to potential civil monetary penalties, OIG concluded that the proposed arrangement would not result in prohibited conduct because the services at issue would not be likely to cause a participating patient to order or receive a federally payable health care item or service from a particular provider, practitioner, or supplier.

The advisory opinion, which OIG posted on August 16, 2013, is available here.

Reporter, Greg Sicilian, Atlanta, +1 404 572 2810, gsicilian@kslaw.com.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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