HHS-OIG Approves Uniform Chiropractic Rebate Program for Federal Recipients


Andrew and Quynh are legal assistants at the firm and their work is supervised by licensed attorneys. Their admission to the bar in Washington, DC and California is pending.

On October 4, 2021, the Office of the Inspector General (OIG) of the Ministry of Health and Social Services issued a favorable advisory opinion on a proposal from a chiropractic clinic operator to extend an existing rebate program to beneficiaries a federal health plan.

The requesting clinics initially offered various discount programs to their privately insured or self-paid patients, but not to federal health care program recipients. Many health care providers are reluctant to give federal recipients access to certain rebate programs because they fear it violates federal anti-kickback and recipient inducement laws. Specifically, the concern is that if beneficiaries receive discounts, clinics would offer patients something of value – a discount on self-paid services – in exchange for the ability to seek out federally reimbursed services through a provider. specific.

To address these concerns, the operator of the chiropractic clinic requested an advisory opinion from the OIG on a new rebate model that would extend rebate programs to recipients of the federal health care program. While the OIG found that the proposed rebate program may result in prohibited compensation for patients, it also said it would not pursue enforcement action based on the nature of the requesting clinics’ specific rebate model.

Although only the operator of the requesting chiropractic clinic can rely on this opinion, the OIG’s analysis implies that the equalization of discount rates between reimbursable and non-reimbursable chiropractic services at the federal level reduces the legal risk under anti-backsliding and beneficiary incentive laws. Suppliers with similar rebate programs should take note of this to inform their compliance strategies.

Gentle treatment of discounts on uniforms by non-participating suppliers

Providing discounts on a combination of federally reimbursable and non-reimbursable services creates substantial legal risk. Federal health care programs do not cover all chiropractic treatments and the clinics applying in this scenario are non-participating providers. Clinics submit claims directly to Medicare, which then reimburses patients for the payments they have made to the provider.

Rebate programs under this framework may trigger penalties under the anti-kickback and recipient incentive law when rebates for self-paid services induce patients to request less discounted services, which the federal government will pay in. Ultimately. Because of this risk, chiropractic clinics have prohibited federal health care program recipients from using similar discounts.

Under the proposed discount model involved in this advisory opinion, chiropractic clinic programs would equalize the percentage discount on a bundle of services. The clinics would offer a discount on all services provided in a bundled package, including services reimbursed by the federal government, at the exact same rate. Therefore, if a discount prompts a patient to seek services, the federal health care program would receive a discount equivalent to that received by the commercial payer. In addition, the clinics would allow all patients to have access to discounts under the same conditions, whether they paid for themselves, whether they are insured by the State or by private insurance. This alignment of incentives and business practices was key to the OIG’s view that it would not impose administrative penalties for this discount model.

Uncertain application of analysis to similar rebate programs

While the OIG has given the green light to requesting clinics for the proposed remission model, there can be no assurance that similarly structured remissions would be immune from administrative penalties. The OIG noted that similar programs could amount to prohibited payments when a health care provider intends to cut back on self-paid services in order to create a higher demand for federally reimbursed services. Given this uncertainty, suppliers seeking to establish similar arrangements should not assume that they are immune from OIG sanctions.

Analysis of this rebate model and the associated advisory opinion sheds light on how to prepare future rebate programs for regulatory review. In addition to evenly weighting discounts across departments, OIG noted several factors in its decision to allow discounts here. For example, the proposed rebate model would be the same for self-paid, privately-provided and federally-covered services. In addition, discounts would be publicly announced outside of clinics, but would not be available at the point of care unless a patient mentions them. Healthcare providers should consider similar administrative safeguards in their own discount programs to avoid the appearance of impropriety through strategic discounts.


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