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OIG Greenlights Free Telemedicine Equipment Aimed at HIV Prevention

OIG Monitor David Blank

On May 24, 2018, the U.S. Department of Health and Human Services (HHS) Office of the Inspector General (OIG) issued a favorable advisory opinion regarding an arrangement involving free telemedicine equipment and technical support provided by a federally qualified health center (FQHC) look-alike to a county health clinic for HIV prevention services. In OIG Advisory Opinion 18-03, OIG found that although the arrangement implicated the federal anti-kickback statute (AKS), the proposal presented a low risk of fraud and abuse.

Under the proposed arrangement, a FQHC look-alike (“Provider”) and county health clinic (“Clinic”) partnered to improve access to HIV prevention related services by making care more accessible through technology. Under the proposed arrangement, the Provider would use State Department of Health grant funds to provide the Clinic with free telemedicine equipment for the limited use of providing HIV prevention services. The services would include consultations regarding the prescribing of pre- and post-HIV exposure medications. The Clinic did not have the capabilities to perform the on-site consultations. The remuneration in the arrangement included free equipment consisting of: a laptop or computer with high-quality speakers; a webcam; a microphone; a GlobalMed TotalExam 3 Camera; and videoconferencing software (“Telemedicine Equipment”) and technical support services relating to the equipment.

The Clinic would advise patients that they could receive medical consultations either virtually via telemedicine consultation from the Provider or another qualified provider, or in-person by referral to the Provider or another qualified provider. To the extent the consulting practitioner prescribed any medications, the Provider certified that patients would have the choice to fill the prescription at any pharmacy, and that neither the Provider nor the Clinic would recommend a specific pharmacy. The Clinic would also not be required to refer patients to the Provider for follow-up items or services regardless of whether the patient received a Provider consultation.

The Analysis

OIG acknowledged the arrangement implicated the AKS because one purpose of providing the Telemedicine Equipment and technical support services could be to induce referrals of federal health care program business. However, OIG concluded the arrangement presented a low risk of fraud and abuse under the AKS because of several safeguards aimed at patient steering, overutilization, and the arrangement’s overall promotion of access to services and the improvement of beneficiary health and welfare.

OIG found the arrangement contained several safeguards that addressed improper patient steering including: the Clinic was not required to refer patients to the Provider; any qualified practitioner or provider could use the Telemedicine Equipment because of technological compatibility with various information technology systems; the parties would not restrict or limit the flow of information; and there was no requirement that any medications prescribed subsequent to a consultation would be filled by the Provider's pharmacy located 80 miles from the Clinic. Of note, OIG opined its conclusions could change in the event the Provider offered mail pharmacy services or was geographically closer to the clinic.

OIG also determined that the arrangement was unlikely to increase federal health care program costs through overutilization because additional access to HIV prevention services are consistent with the purpose of the grant funding; the consultation services are likely to occur even in the absence of the arrangement, the specific HIV services are limited in scope and application, and accesses to preventative HIV services could reduce the prevalence of the disease with the implied assumption that long term program costs could be reduced.

Lastly, OIG concluded that the patients receiving HIV prevention services under the arrangement would be the primary beneficiaries, most significantly because post-HIV exposure medication must be taken within 72 hours, and any ancillary benefit to the Clinic or Provider is secondary to beneficiary health.

The Takeaway

This opinion highlights the OIG’s recognition of the important role that telemedicine plays in society today, and that creative arrangements may be implemented to ensure beneficiaries have access to the services they need regardless of location.

OIG’s favorable opinion was based in large part on the arrangement’s safeguards against patent steering and overutilization. The OIG will continue to closely scrutinize partnerships between referral sources to ensure program beneficiaries and the public fisc are protected from high risk arrangements. Providers contemplating any similar type arrangement must always account for beneficiary choice and access concerns, competitive marketplace advantage concerns, and overutilization concerns that all lead to potential to increase program costs. These concerns will always be paramount in the mind of the OIG, and therefore, paramount to providers. As always, each proposed arrangement must be evaluated on the specific facts of the proposal, and it is always best to seek the counsel and advice of a health care attorney prior to engaging in any arrangement where a provider contemplates providing free items or services to a potential referral source.

For additional information or to learn more about this or other OIG advisory opinions and enforcement initiatives, please call your Quarles & Brady attorney or contact