On June 30, 2009, the Department of Health and Human Services Office of Inspector General (“OIG”) posted Advisory Opinion 09-07. This advisory opinion reviewed an arrangement whereby an operator (the “Requestor”) of numerous dialysis facilities that serve patients with end-stage renal disease (“ESRD”) looked to expand an existing program that provides free oral nutritional supplements (“Supplements”) to malnourished patients on dialysis (“Arrangement”). Because providing Supplements may influence which provider a patient chooses, OIG reviewed the Arrangement to determine whether it violated the civil monetary penalties provision or Anti-Kickback Statute of the Social Security Act (the “Act”).
The Requestor and its affiliates operate several dialysis facilities which serve ESRD patients, many of whom are federal health care program beneficiaries. The Requestor asserts that malnutrition is common in ESRD patients. Consumption of Supplements at or around the time of dialysis treatment can improve an ESRD patient’s nutritional status and decrease his or her risk of hospitalization, infection and mortality. To reverse historically low compliance rates, the Requestor operates a program that provides 40 Supplement doses per eligible patient per year and proposes an expansion of the Arrangement to provide 156 Supplement doses per year to each eligible patient.
The OIG determined that providing ESRD patients with Supplements implicates section 1128A(a)(5) of the Act, the civil monetary penalties provision that prohibits beneficiary inducements, and section 1128B(b) of the Act, the Anti-Kickback Statute. However, several conditions of the Arrangement effectively minimize its risk of abuse.
- Supplements would be provided based on medical need, as determined by the attending physician. The patients must be in the Requestor’s dialysis program and have a serum albumin level less than or equal to a target level. The serum albumin target levels are set by the Requestor in accordance with the independently established National Kidney Foundation guidelines.
- Patients view Supplements as medicinal in nature because of their unpalatable nature, rather than something of value.
- Appropriate safeguards are established to maximize compliance with physician recommendations and minimize diversions:
(a) Patients must consume the Supplement at or around the time of the dialysis treatment.
(b) The Supplement is provided in an individual dose rather than in bulk.
- The Arrangement would not be advertised or promoted to potential patients, including the federal health care beneficiaries.
- Supplements are not, ordinarily, covered under federal health care programs and, furthermore, the costs of the Supplements would not be shifted directly or indirectly to any federal health care program.
Based upon the aforementioned factors, the Arrangement creates only a limited risk of abuse. Therefore, the OIG decided that the conditions and safeguards are consistent with the stated purpose of the Arrangement, to improve the nutritional status of malnourished ESRD patients and reduce their risk of further health complications.
While the Arrangement could potentially violate the civil monetary penalties provision by providing something of value to a Medicare or state health care program beneficiary and the Anti-Kickback Statute by influencing an ESRD patient’s provider selection, the OIG decided, based on the facts and circumstances related to OIG by the Requestor, that it would not subject the Arrangement to civil monetary penalties or administrative sanctions. Please note that the OIG has limited this Advisory Opinion to the particular facts and circumstances of the Arrangement and, therefore, this Advisory Opinion does not have the force of law.