Category Archives: Medicare Advantage

Gift Cards Violate AKS? Maybe NOT!!!

Is Giving Gift Cards to Medicaid Consumers Suffering Substance Abuse Issues Who Comply with Weekly Criteria To Promote Wellness Against the Anti-Kickback statute (AKS)?

Yes, but who cares?

OIG does not care and even published an opinion stating that OIG would not penalize the practice.

The AKS is a criminal law that prohibits the knowing and willful payment of “remuneration” to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients). Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies. In some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime. The statute covers the payers of kickbacks-those who offer or pay remuneration- as well as the recipients of kickbacks-those who solicit or receive remuneration. Each party’s intent is a key element of their liability under the AKS.

Criminal penalties and administrative sanctions for violating the AKS include fines, jail terms, and exclusion from participation in the Federal health care programs. Physicians who pay or accept kickbacks also face penalties of up to $50,000 per kickback plus three times the amount of the remuneration.

Safe harbors protect certain payment and business practices that could otherwise implicate the AKS from criminal and civil prosecution. To be protected by a safe harbor, an arrangement must fit squarely in the safe harbor and satisfy all of its requirements. Some safe harbors address personal services and rental agreements, investments in ambulatory surgical centers, and payments to bona fide employees.

However, study after study after study have demonstrated that people with substance abuse issues have a higher likelihood of success with monetary incentives. See article as an example.

OIG obviously understands the efficacy of gift cards. Maybe Congress can back up OIG because, you can be sure that, if the proposed rule is passed, litigation will ensue. People will claim that the FTC does not have the legal authority to issue such a rule in violation of the AKS.

Medicare Advantage: “Termination At Will” Clauses Legal?

Providers who contract with Medicare Advantage Organizations (“MAO”) need to know that even though the MAO is a private company, because it manages federal Medicare money, the Medicare regulations are applicable – and, possibly, not the contract that you were forced to sign. When any entity accepts the responsibility of getting tax dollars – a firehose of tax dollars, no less – prepaid – then that entity answers to all tax payers for their actions and that entity must follow the Medicare regulations.

Medicare Advantage Plans, sometimes called “Part C” or “MA Plans,” are offered by MAOs that must follow rules set by Medicare. Most Medicare Advantage Plans include drug coverage (Part D). Health care providers can contract to be in the plan’s network. MAOs include BCBS, Humana, Anthem, UnitedHealthcare, Cigna, and Aetna.

Just for an example, I pulled up the provider agreement for BCBS. Section 6.2 allows termination by either party with 60 days notice; this is the “termination at will” clause. Theoretically, BCBS or any MAO could terminate contracts with small providers and decide to contract only with larger providers. Or contract with only African-American providers. Or contract with only female-owned companies. Or contract with the providers that the CEO likes. I disagree with a termination at will clause that allows a company with so much Medicare money at its fingertips the authority to only contract with whom it wants or likes. In fact, I believe a termination at will clause violates the law.

The Courts are split on this issue. See blog.

42 CFR Section 422, et al, outlines the regulations for Medicare Advantage.

According to CMS, in order for a MAO to “Suspend, Terminate, or Not-renew Physician Contracts” specific requirements for an MA organization that operates a coordinated care plan or network MSA plan providing benefits through contracting physicians and that suspends, terminates, or non-renews a physician’s contract are as follows:

  1. The MA organization must give the affected physician written notice of the reasons for the action, including, if relevant, the standards and profiling data used to evaluate the physician and the numbers and mix of physicians needed by the MA organization.
  2. The MA organization must allow the physician to appeal the action, and give the physician written notice of his/her right to a hearing and the process and timing for requesting a hearing.
  3. The MA organization must ensure that the majority of the hearing panel members are peers of the affected physician.

42 CFR 422.202(c) and (d) and preamble of February 17, 1999, rule.

In sum, MAOs are required to provide appeal rights for any Medicare contract that is terminated. But, doesn’t that contradict with a “termination at will” clause?