The U.S. Department of Health and Human Services’ Office of Inspector General (OIG) recently issued a favorable Advisory Opinion (No. 26-09) regarding certain free treatment that would be offered to patients of a pediatric dental clinic. Specifically, the clinic planned to offer free comprehensive orthodontic treatment to one select patient per year.
As a general matter, the federal Anti-Kickback Statute (AKS) prohibits providers from offering anything of value to induce the referral of items or services that are reimbursable under a federal healthcare program. Free or discounted services raise scrutiny because they could encourage the recipient of the services to refer other patients to the provider for services that would be reimbursable. In this case, however, OIG concluded that the proposed program presented a sufficiently low risk of fraud and abuse under the AKS based on several factors.
First, the program would only be offered to existing patients and would not be marketed to the general public and, therefore, it was unlikely to steer patients to the dental clinic. Second, the patient who receives the free services would be selected based on an objective scoring system that takes into account clinical need, financial hardship, and community impact. These factors are unlikely to incentivize patients to inappropriately increase their utilization of services from the clinic as a way to improve their chances of being selected for the program. Finally, OIG also highlighted that the program was modest in volume, since only one patient would be selected per year.
This OIG opinion is a good indication of the need to evaluate arrangements under the AKS based on the totality of the facts and circumstances. For providers considering patient assistance or charitable initiatives, this opinion serves as a useful reminder that, while free or discounted services can be inherently suspect, carefully structured programs can pass scrutiny, particularly if they include clear guardrails with respect to scope, objective metrics, and absence of intent to drive volume.
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