Beneficiary Inducement Statute: Two Important Exceptions

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Medicare and commercial insurers are pushing providers and suppliers away from the traditional fee-for-service (“FFS”) reimbursement model and towards a coordination of care reimbursement model. Under the coordination of care model, reimbursement is tied to patient outcome, which is dependent upon providers and suppliers working together. CMS and the OIG have correctly determined that the federal anti-kickback statute (“AKS”), the beneficiary inducement statute, and the Stark physician self-referral statute (“Stark”) restrict the ability of providers and suppliers to coordinate with each other and provide free health care products and services to patients that are designed to improve their health.

Recognizing this dilemma, the OIG published Advisory Opinion 17-01 and Advisory Opinion 19-03. These opinions approved free services by providers to patients in which such services were designed to break down socio-economic barriers to healthcare. Further, on October 9, 2019, the OIG published proposed changes/additions to the safe harbors to the AKS and CMS published proposed changes/additions to exceptions to Stark. The goals of the proposed changes are to promote coordination of care and break down socio-economic barriers to health care.

The message for DME suppliers is that CMS and the OIG are acknowledging the importance of providers coordinating with each other and providing free health care products and services to patients…even if doing so would have historically implicated the AKS, Stark and the beneficiary inducement statute. This article focuses on two important exceptions to the beneficiary inducement statute.

Read the full story from Jeff Baird, JD, published in Medtrade Monday.

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