On January 13, the Department of Health and Human Services Office of Inspector General (“OIG”) issued Advisory Opinion 14-01, in which the OIG stated it would not impose sanctions against an independent placement agency referring seniors to two senior communities for a fee based on a percentage of each new resident’s charges for the first month or two; however, these charges did not comprise costs billed to a federal health-care program.

Specifically, the OIG concluded that this remuneration arrangement did not violate the anti-kickback statute because 1) the two senior communities did not provide services reimbursable by Medicare, and 2) the community residents did not receive Federally payable services at the time of referral. Although the OIG stated it was possible that the community residents might eventually become eligible for services offered by the Medicaid program, the OIG identified several factors in the arrangement that adequately reduced the risk of fraud and abuse: 1) fees paid to the placement agency did not include the costs of any services billable to federal healthcare programs; 2) the referrals of any seniors who would rely on federal healthcare programs for payments to the two senior communities were banned; 3) the two communities did not provide any Medicare-reimbursable services; and 4) the choices of providers or suppliers for the community residents were not restricted. The OIG concluded, therefore, that the facts and circumstances of the arrangement “adequately reduce the risk that the remuneration provided under the arrangement could be an improper payment for referrals or the generation of Federal healthcare program business.”

Read the full Advisory Opinion.