OIG Advisory Opinion 15-01, released February 2, concludes that an arrangement under which a privately-owned provider advertises and provides free diapers and portable playpen cribs to Medicaid beneficiaries in connection with services it provides under a state’s Maternal Infant Health Program (Program) could potentially generate prohibited remuneration under the anti-kickback statute (AKS). However, the advisory opinion states that the OIG will not impose administrative sanctions on the unnamed provider and that the arrangement would not constitute grounds for the imposition of civil monetary penalties (CMPs).

Under the state’s Program, licensed clinicians provide care coordination and intervention services to pregnant women and infant children who are Medicaid beneficiaries. Program services are reimbursable under the Medicaid Program. The Program is designed to “promote healthy pregnancies, positive birth outcomes, and infant health and development.” All pregnant women and infant children who are Medicaid beneficiaries are Program-eligible.

The Program encourages participating providers to offer incentives to eligible and enrolled mothers, such as free diapers. The participating provider who solicited the Advisory Opinion (Requestor) provides eligible and enrolled mothers with a free pack of diapers at their initial consultation, and another at each subsequent appointment. If a mother enrolls in the program, selects the Requestor as her services provider, and completes ten scheduled visits, she is eligible to receive a free playpen crib.

The opinion notes that the prenatal services and postnatal well-baby visits that the Requestor provides are specifically identified in the regulation that defines preventive care in connection to CMPs (42 CFR 1003.101). The Requestor offers and provides these incentives in order to promote the delivery of these preventive services.

Therefore, OIG concluded that the Requestor will not be subject to sanctions because the value of the diapers is nominal and its provision of diapers and playpen cribs to Medicaid beneficiaries falls within the preventive care exception to the CMP statute.

OIG also reasoned that neither the diapers, nor the playpen cribs, are disproportionally large in relationship to the value of the Program services, and that these Program services are not tied to the provision of the medical care that the Medicaid beneficiaries receive.

Due to this “combination of reasons,” OIG will not subject the Requestor to administrative sanctions under the AKS in connection with this offering. While the OIG’s analysis applies only to this specific arrangement, the factors that the OIG considered in drawing its conclusions are instructive for other providers contemplating similar arrangements.

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