OIG Issues Advisory Opinion on Discounted Training

In a recent Advisory Opinion, the U.S. Department of Health and Human Services’ Office of Inspector General (OIG) approved a proposed arrangement whereby a hospital would offer discounted training to employees of one of the hospital’s referral sources, a local fire department.

The hospital is part of a non-profit health system that offers clinical training to healthcare professionals who seek to advance their clinical skills or acquire new skills. As part of its community benefit programs and to further its charitable purpose, the hospital offers discounted training if the following criteria are met: (i) the trainee has a direct impact on patient care in the community; and (ii) the training constitutes an “education-related cost” as defined under the state’s statutory definition of community benefits. The hospital had been providing training to personnel of the local fire department for several years pursuant to a written agreement and was now seeking to provide the training for a discounted rate.

Although any arrangement involving the provision of free or below-market value items or services to a referral source is considered suspect under the federal Anti-Kickback Statute, the OIG concluded that this arrangement would present a low risk of fraud or abuse due to the following factors:

(i) There was little risk of overutilization or increased costs to any federal healthcare program. The training was not tied in any way to the volume or value of referrals between the parties. The written agreement expressly disclaimed any referral requirements and the hospital further certified that, since the agreement has been in place, there have been no significant changes with respect to the hospital-destination decisions made by the fire department when emergencies handled by the fire department required transport to a local hospital.

(ii) On a similar note, there was little risk that the fire department would steer patients to this particular hospital. The fire department has specific protocols for its personnel to follow when selecting a hospital destination for emergency transports, which protocols are based on objective criteria and have not been modified since the agreement between the hospital and fire department has been in place.

(iii) The arrangement would benefit the local community by ensuring that the emergency personnel are properly trained and, therefore, improving the quality of emergency services. The hospital also certified that no other hospital in the area offered similar training opportunities and that it was the only facility with the resources necessary to provide such training for emergency personnel that simulates complex emergency rescue scenarios.

Finally, the remuneration offered under the arrangement (i.e., the discount for the training) would be a benefit to the public, not a private entity, because it reduces the amount of funds that the city would need to allocate to otherwise train its fire department personnel.