OIG: Telehealth Equipment Donation Presents Low Risk of Fraud and Abuse

September 19, 2018 | Geoffrey R. Kaiser | Ada Kozicz | Compliance Investigations & White Collar | Health Services

In a recent advisory opinion, the U.S. Department of Health and Human Services, Office of Inspector General (OIG) concluded that a proposed donation of telehealth equipment to a referral source presented a low risk of fraud and abuse under the federal Anti-Kickback Statute. The conclusion was premised on several factors, one of which included OIG’s determination that the “primary beneficiaries” of the arrangement would be the patients who would gain greater access to healthcare services through the telehealth equipment.

OIG’s opinion supports the telehealth trend and is consistent with other guidance issued by federal and state authorities that attempt to balance certain risks associated with healthcare services provided remotely and the benefits of utilizing telecommunications technology to increase access to care and improve overall care management. Here, the donation of telehealth equipment would certainly promote the provision of telehealth services, but it also presented a risk of fraud and abuse because the donor was a federally qualified health center that had a referral relationship with the recipient, a clinic operated by the local County Department of Health.

The donor proposed to give the clinic a computer, webcam, microphone, camera and videoconferencing software free of charge. The donor would assume financial responsibility for installing, maintaining and updating such items and providing technical support services to the clinic. Since the donor would obtain the equipment through funds it received under a state grant that was intended to increase access to HIV prevention services in the state, the proposed arrangement would also limit the clinic’s use of the telehealth equipment to patient encounters related to HIV prevention.

Both the donor and the clinic could potentially bill and receive reimbursement from federally funded health care programs for telehealth visits rendered through the donated equipment. For example, if a patient came into the donor’s place of business and elected to see a clinic provider via the telehealth equipment, the clinic could bill for the service as the distant site (i.e., the site where the health care provider is located who renders the telehealth services) and the donor could bill as the originating site (i.e., where the patient receiving such services is located). Thus, both parties stood to financially benefit from the use of the donated equipment and increased provision of telehealth services.

Although the donated equipment constituted remuneration between two referral sources, OIG concluded that the proposed arrangement presented a low risk of fraud and abuse for several reasons. First, the arrangement included safeguards to prevent improper patient steering to the donor’s clinical or pharmacy services. The parties remained free to refer patients to any other provider and would advise patients of their right to elect any other provider of their choice. The parties further certified that they would not recommend a specific pharmacy to fill orders of HIV prevention medication, and patients would be free to fill their prescriptions at any pharmacy of their choice. In addition, the telehealth equipment would not be restricted in use or compatibility and the clinic could use it independent of any referrals it may receive from the donor in order to facilitate telehealth encounters with qualified providers other than the clinic.

OIG also concluded that the proposed arrangement was unlikely to inappropriately increase costs to federal healthcare programs because many of the consultations and preliminary tests would be performed by the parties irrespective of the proposed arrangement under general standards of care. The increased access to HIV prevention services would increase the odds that patients needing such services would receive them, thereby reducing the prevalence of HIV and promoting public health.

OIG also concluded that the risk of overutilization was low because the nature of the HIV prevention medications at issue were narrow in scope and only appropriately prescribed in limited clinical circumstances.

Finally, OIG explained that, while the donor and clinic stood to benefit financially, the primary beneficiaries were the patients who would receive HIV prevention services “more conveniently and efficiently,” and that improved access to HIV prevention services for the clinic’s patients was “especially important” since appropriate medication must be taken within 72 hours after exposure to HIV. This benefit, taken in consideration with the other factors summarized above, persuaded OIG that the arrangement presented a low risk of fraud and abuse under the federal Ant-Kickback Statute.

The entire OIG opinion is available here.

Related Publications


Get legal updates and news delivered to your inbox