Moving the HME Industry Forward

General Healthcare

Patient Incentive Arrangement That Promotes Access to Care

Jeffrey S. Baird, JD • June 24, 2018

AMARILLO, TX – In prior Medtrade Monday articles, I have discussed the Civil Monetary Penalties (“CMPs”) prohibition against offering anything of value (“remuneration”) to federal health care program patients (“patients”) in which the DME supplier knows or should know is likely to influence the patient’s selection of a DME supplier. Notwithstanding this prohibition, the Affordable Care Act (“ACA”) provides exceptions to what might constitute “remuneration” under the CMPs, including an exception for remuneration that “that poses a low risk of harm and promotes access to care.”

Further, in December 2016 the Office of Inspector General (“OIG”) issued final regulations regarding patient incentive arrangements. In conjunction with the final regulations, the OIG released Advisory Opinion 17-01 (“AO 17-01”) that also addresses patient incentive arrangements. These two documents discuss how patient engagement and access incentives can be structured to avoid penalties under the CMPs.

The OIG defines “care” (in the context of “access to care”) as “access to items and services that are payable by Medicare or a state health care program for the beneficiaries who receive them.” The OIG interprets “promoting access to care” as “improving a particular beneficiary’s, or a defined beneficiary population’s, ability to obtain items and services payable by Medicare or a state health care program.”

Promoting access to care includes the removal of “socioeconomic, educational, geographic, mobility or other barriers that could prevent patients from seeking care (including preventive care) or following through with a treatment plan.” As an example, the OIG makes a distinction between free child care and movie tickets: “[P]roviding free child care during appointments also could promote access to care and help a patient comply with a treatment regimen. In contrast, offering movie tickets to a patient whenever the patient attends an appointment would not fit in the exception; such remuneration would be a reward for receiving care and does not help the patient access care, or remove a barrier that would prevent the patient from accessing care.

The OIG set out different factors and analysis tests for the “low risk of harm” component. The OIG stated that remuneration would pose a low risk of harm to Medicare and Medicaid beneficiaries and federal health care programs by (i) being unlikely to interfere with, or skew, clinical decision making, (ii) being unlikely to increase costs to federal health care programs or beneficiaries through overutilization or inappropriate utilization, and (iii) not raising patient safety or quality of care concerns.

AO 17-01 expanded on its “low risk of harm” analysis by including additional factors to examine when assessing patient benefits. In addressing “skewing clinical decision making,” suppliers should look at whether (i) eligibility to receive the remuneration is conditioned on receipt of a particular service from the supplier and/or (ii) the physician receives remuneration that encourages referring eligible patients to the supplier. In addressing “increased costs to federal health care programs,” the supplier should look at whether the patient incentive arrangement will shift the remuneration cost to federal health care programs.

In addressing “overutilization,” the supplier should look at whether (i) it is actively marketing the program to attract patients, (ii) the program is being offered before the patient decides to use the supplier, and (iii) the offered remuneration is encouraging patients to seek out unnecessary or poor quality of care. If the answer is “yes” to one or more of these factors, then it is likely that the patient incentive arrangement does not result in a “low risk of harm.”

According to the OIG, the following examples promote access to care:

  • A physician practice purchases a subscription to an internet based food and activity tracker that offers information on healthy lifestyles for diabetic patients. This helps the patient understand and manage interaction between disease state and lifestyle and creates a record that facilitates interactions with the physician for future care planning.
  • A hospital sends patients home with inexpensive devices that record data that is then transmitted to the hospital or the patient’s physician. This increases the patient’s ability to capture information necessary for follow-up care and to comply with the patient’s treatment plan.
  • A provider/supplier provides patients with an item that dispenses medications at a certain time with the correct dosage. This pertains to adherence to the treatment plan (i.e., may reduce errors associated with the patient not remembering or misunderstanding the physician’s instructions).

The “take aways” for DME suppliers are:

  • It is acceptable to promote access to care…not to reward access to care.
  • Facilitating patient-physician communication, and facilitating compliance with the treatment plan, are in a “safe zone.”
  • The DME supplier needs to stay away from offering cash or cash equivalents. According to the OIG, “…some forms of remuneration (including cash or cash equivalents) would not be low risk, as we have indicated in previous guidance, such as the 2002 Special Advisory Bulletin.”


Jeff Baird will present the following webinars:


Proper vs Improper Marketing Practices

Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C.

Tuesday, July 10, 2018

2:30-3:30 p.m. EASTERN TIME

The DME supplier is caught in the “Perfect Storm” of competitive bidding, low reimbursement, and aggressive audits. The result is that it is a challenge for the supplier to handle the increasing demand while generating a profit. The successful supplier needs to set itself apart from its competition. One important way to do this is to implement an innovative marketing program and enter into strategic arrangements with physicians, hospitals, and other referral sources. In so doing, it is important that the supplier not run afoul of federal and state anti-fraud laws. This program will discuss anti-fraud laws that govern marketing programs and arrangements with referral sources. Examples include the federal anti-kickback statute, the Stark physician self-referral statute, and the beneficiary inducement statute. Equally important, this program will discuss the types of marketing programs and arrangements with referral sources that are legally acceptable, that fall within the proverbial “gray area,” and that are downright prohibited.

Register for Proper vs Improper Marketing Practices on Tuesday, July 10, 2018, 2:30-3:30 p.m. ET, with Jeffrey S. Baird, Esq., of  Brown & Fortunato, PC.

FEES:              Member: $99.00  Non-Member: $129.00


Webinar Sponsored By: HME Business

Avoiding Fraud Landmines, Relationships With Physicians, & Building a Referral Network

Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C.

Thursday, July 12, 2018

 11 a.m. Pacific / 1 p.m. Central / 2 p.m. Eastern

With 78 million Baby Boomers retiring at the rate of 10,000 per day, we know the demand for DME is increasing exponentially, but that demand is butting up against limited funding from government programs and third-party payers. At the same time, providers must face down the “perfect storm” of competitive bidding; low reimbursement; stringent documentation requirements; and aggressive audits. How can they come out on top?

To survive and succeed in such a market, HME providers must implement innovative marketing programs and enter into heavily tailored arrangements with physicians and other referral sources. In so doing, it is essential that the supplier not step onto any fraud landmines.

This webinar will discuss the federal and state anti-fraud laws that DME suppliers must adhere to, including the federal anti-kickback statute; the federal Stark physician self-referral statute; the federal beneficiary inducement statute; the federal telephone solicitation statute; and examples of their state counterparts.

We will cover the types of marketing programs and relationships with physicians/other referral sources that are legally acceptable, including paying commissions to W2 employee marketing reps; paying fixed annual compensation to marketing companies; entering into Medical Director Agreements with physicians; sponsoring educational talks by physicians; providing meals and related items to physicians and their staffs; entering into “preferred provider” arrangements; and purchasing leads. This webinar will discuss those programs/arrangements that are legally unacceptable.
Equally as important, this webinar will set out concrete steps that the DME supplier can take to avoid fraud landmines in the first place, and take remedial steps if the supplier discovers that it may have engaged in fraudulent actions. Attend so you will:

  • Know the federal anti-fraud laws that the provider must follow, and potential legal pitfalls.
  • Understand what marketing programs/arrangements with referral sources are legally acceptable, and which arrangements to avoid.
  • Know the steps the provider should take to avoid problems under federal and state anti-fraud laws.

Register for Avoiding Fraud Landmines, Relationships With Physicians, & Building a Referral Network on Thursday, July 12, 2018, with Jeffrey S. Baird, Esq., of  Brown & Fortunato, PC.

Registration:  $99.00



Proper vs Improper Telehealth Arrangements

Presented by:

Jeffrey S. Baird, Esq., Brown & Fortunato, P.C.

Tuesday, July 24, 2018

2:30-3:30 p.m. EASTERN TIME

As the 78 million Baby Boomers continue to age and retire, the demand for health care will increase exponentially. The challenge is that this demand will run up against the fact that there is limited money to pay for health care. As a result, third party payers and health care providers are searching for ways to provide health care more cost effectively. One of these ways is telehealth. Utilization of remote patient monitoring and video conferencing can allow the DME supplier to maintain real time communication with its patients and their caregivers…thereby eliminating the need for the supplier to send an employee to the patient’s residence. When a physician has a telehealth encounter with a patient, and if the encounter results in an order being transmitted to the DME supplier, then this is a faster way for the supplier to receive and process orders. All of this is the “wave of the future.” However, as is often the case, the “devil is in the details.” This webinar will discuss the legal parameters within which the DME supplier can use telehealth/video conferencing to monitor patients and communicate with their caregivers. The webinar will also focus on when, in the eyes of CMS, a physician order received by a DME supplier (resulting from a telehealth encounter between the patient and the physician) is valid…and when it will be rejected by CMS.

Register for Proper vs Improper Telehealth Arrangements on Tuesday, July 24, 2018, 2:30-3:30 p.m. ET, with Jeffrey S. Baird, Esq., of  Brown & Fortunato, PC.

FEES:              Member: $99.00  Non-Member: $129.00 

Jeffrey S. Baird, JD, is Chairman of the Health Care Group at Brown & Fortunato, PC, a law firm based in Amarillo, Tex. He represents pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Mr. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization, and can be reached at (806) 345-6320 or