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OIG Approves Online Directory for Health Care Professionals

The HHS Office of the Inspector General (“OIG”) issued Advisory Opinion No. 23-04 on July 6, 2023 regarding the use of and “Proposed Changes” to an online directory for health care professionals.  Specifically, the “Requestor” inquired as to whether the Proposed Changes would warrant sanctions under section 1128A(a)(1) of the Social Security Act (“Act”) as it relates to section 1128B(b) (the “Federal anti-kickback statute”), section 1128A(a)(5) of the Act (the “Beneficiary Inducements CMP”), or section 1128(b)(7) as it relates to the commission of acts described in the Federal anti-kickback statute and the Beneficiary Inducements CMP.

The Opinion ultimately concludes that although the Arrangement would generate prohibited remuneration if the requisite intent were present, OIG will not impose administrative sanctions on Requestor under the Act, as the sections relate to the Federal anti-kickback statute and Beneficiary Inducements CMP.

  1. Factual Background

Requestor operates a platform though a website and mobile app (“the Marketplace”) that allows users to search and book appoints with medical professionals regardless of insurance status. “Providers” contract with the Requestor to maintain profiles. The Marketplace offers an algorithmic search tool. It filters Providers in Results according to criteria set by Users.

Requestor does not charge Users, but charges Providers fees for appointments booked by new patients on the Marketplace. The OIG specifically notes that “other than the functionality of the Marketplace and potential convenience [. . .], Requestor does not offer or give Federal health care program beneficiaries anything of value in connection with using the Marketplace.”

  1. Provider Fees

Under the Arrangement, Providers pay Requestor according to one fee agreement where Providers are charged for each appointment booked by a new patient. Booking Fees vary depending on medical specialty, location, and other factors. Booking Fees are agnostic regarding a User’s insurance status. Requestor certified that fees do not exceed fair market value and are not based on business or referrals of Federal health care program beneficiaries.

Requestor allows Providers to set spending caps that limit the number of new patient bookings that a Provider may receive during a month. Caps reset automatically for a new month. Providers determine these caps, their amount, and whether to cancel or edit at any time. Caps can be applied to individual Providers, groups, or health care practices.

  1. Proposed Changes
  2. Results Features

Providers are removed from search results when they reach their spending cap. When a User identifies as a potential new patient, the User cannot book an appointment with a capped Provider. Existing patients may still book appointments with spend-capped Providers because they are not subject to new patient Booking Fees.

Under the Proposed Changes, capped Providers would no longer be filtered out of search results for Users who identify as Federal health care program beneficiaries or who decline to provide insurance information (Non-Commercial Users). Instead, capped Providers will appear in search results but cannot be booked.

Requestor would make disclosures on the profile of a capped Provider. First, Requestor would state that the Provider has no appointments available. Second, an information icon would state that (i) the Provider’s Marketplace availability may not reflect their full availability and (ii) Providers may be able to accommodate appointment requests through direct contact. A “Notify Me” option would be available to receive an automatic notification for future availability.

  1. Results Ordering

Under the Arrangement, Provider search results are ordered by an engagement data algorithm to match User criteria based on profile clicks and appointment bookings of non-capped Providers. Under the Proposed Changes, the algorithm would additionally measure User engagement of capped Providers’ profile clicks and Notify Me clicks.

Additionally, the algorithm tracks Provider characteristics, not their identity. OIG presents an example: if a User engaged with Dr. A located within 5 miles, Dr. A may appear closer to the top of future searches. However, if Dr. A only has appointments more than 5 miles away in the future, their profile will appear lower in the search results. In this example, the algorithm would have used clicks or bookings with Dr. A to determine that a User engaged with Providers within 5 miles. It is the location of the Provider that informs the result, not the identity.

With respect to Non-Commercial Users, the algorithm would not filter or prioritize Providers based on what a Provider will pay, if they have or had a spending cap, the volume of Federal health care program business generated, or other non-User-centric criteria. Under the Proposed Changes, it is unclear whether the algorithm would use engagement data to deprioritize Providers who, by virtue of their spending cap, are limiting their fees because the Proposed Changes have not eyt been implemented, the algorithm would use many criteria for results, and the weighting of criteria would not be fixed.

  1. Sponsored Advertisements

Under the current Arrangement, Providers can purchase sponsored advertisements to be displayed in Marketplace results or on third-party websites. Ads feature individual Providers but do not promote services. They can be viewed by all Users, but do not target any User. Sponsored results match a User’s search criteria and are “readily distinguishable” from general search results because they are labeled.

Sponsored results are charged by “Per-Impression Fees” or “Per-Click Fees.” Simply viewing a page with sponsored results constitutes an “impression.” Per-Click Fees apply when a User clicks on a specific sponsored result. Requestor certified that these fees do not exceed fair market value, do not depend on User’s insurance, booked appointments, or whether a User becomes a patient, and do not vary with the items or services provided by a Provider.

Per-Click and Per-Impression fees are calculated by a bidding process. This allows Providers to bid in an advertisement auction or on keyword search terms. Requestor sets a starting bid and Providers can bid different amounts for different keyword terms.

  1. Legal Analysis
  2. Law
  3. Federal Anti-Kickback Statute

Under the Federal Anti-Kickback Statute, “it is a criminal offense to knowingly and willfully offer, pay, solicit, or receive any renumeration to induce or in return for, the referral of an individual to a person for [. . .] any item or service reimbursable under a Federal health care program.” “The statute’s prohibition also extends to remuneration to induce, or in return for, the purchasing, leasing, or ordering of, or arranging for or recommending the purchasing, leasing, or ordering of, any good, facility, service, or item reimbursable by a Federal health care program.” Remuneration includes a transfer of anything of value.

A violation is a felony punishable by maximum fines of $100,000.00, 10 years of imprisonment, or both. Those convicted are excluded from Federal health care programs. OIG may also impose fines.

  1. Beneficiary Inducements CMP

Beneficiary Inducements CMP allow for fines against a person who “offers or transfers remuneration to a Medicare or State health care program beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier for the order or receipt of any item or service for which payment may be made, in whole or in part, by Medicare or a State health care program.” OIG may exclude a violator from Federal health care programs. Section 1128A(i)(6) defines “remuneration” as including “transfers of items or services for free or for other than fair market value” for purposes of the Beneficiary Inducements CMP.

  1. Analysis

The Arrangement implicates the Federal anti-kickback statute for three reasons. First, Providers pay for User recommendations through booking and sponsorship fees. Second, Providers pay fees for appointments and services reimbursable by a Federal health care programs. Third, Requestor provides remuneration to Users in the form of “free use of the Marketplace.” Remuneration may induce Users to pay Providers for services reimbursable by Federal health care programs. Since the Arrangement is not protected by a safe harbor, the Arrangement is evaluated on the totality of the facts and circumstances.  OIG offers eight reasons for not imposing sanctions here.

First, OIG relies on the fact that Booking Fees are set in advance and do not exceed fair market value. While Booking Fees vary based on search criteria, they are not determined by the value of Federal health care program referrals or business. The Fees apply only when a new patient books an appointment, regardless of insurance status or the volume or value of any business generated. Under the Proposed Changes, the Marketplace algorithm would not filter or prioritize Providers based payment, their spending caps, the Federal health care program business generated, or other non-User-centric criteria. Thus, the frequency and placement of Provider search results will not be determined by their Booking Fees. Additionally, neither Per-Impression or Per-Click fees exceed fair market value and are not affected by a User’s insurance status or the volume value of any business generated.

Second, OIG reasoned that because Requestor is not a “provider or supplier of medical items or services,” its relationship with Users is “distinguishable from potentially problematic arrangements involving marketing by health care providers . . . .” Requestor does not share a Provider’s “position of trust” that may “exert undue influence” when recommending services.

Third, Requestor’s advertisements and Sponsored Results do not target Federal health care program beneficiaries and are described as “passive in nature.” In contrast to personalized, targeted communications, sponsored advertisements are only posted on the Marketplace or third-party websites.

Fourth, OIG emphasizes that the sponsored ads would only promote specific Providers, not services or items. Additionally, OIG noted that under the Proposed Changes, Requestor would discontinue filtering out Providers who have reached their spending cap in Results for Non-Commercial Users. Thus, the algorithm does not reward Providers who are willing to pay more, decline to cap their fees, or have more volume of Federal health care program business. Furthermore, Users will understand that the Marketplace does not show the full scope of health care providers.

Fifth, OIG notes that the User base of the Marketplace is the general public. Thus, anyone can access it. While the Marketplace collects insurance information, Requestor does not utilize the information to “target” Federal health care program beneficiaries. Instead, the purpose of collecting insurance information is to match Users with available Providers and to save time filling out paperwork in person.

Sixth, the Proposed Changes include transparency safeguards for spend-capped Providers. The Marketplace would no longer filter out spend-capped Providers to Non-Commercial Users, allowing Users to view capped Providers to be contacted directly. The information icon and Notify Me button will provide information and will contact Users when a Provider becomes available. These disclosures provide alternatives to book appointments. This reduces the risk of “inappropriately steer[ing] Non-Commercial Users to certain Providers.”

Seventh, Requestor also certified that the order of search results would not be affected by a Provider’s fee payments, a spend cap, volume of Federal health care program business, or other non-User-centric criteria. Instead, the order is determined by the matching of the Provider’s characteristics to the User’s search criteria.

Lastly, OIG concluded that Requestor does not offer anything to Federal health care program beneficiaries (other than the access and convenience of the Marketplace) to induce them to use the Marketplace or otherwise influence their selection of a health care professional or service.

For the same reasons listed above, OIG stated that in an exercise of its discretion, it will not impose sanctions under the Beneficiary Inducements CMP in connection with the Arrangement and Proposed Changes.

OIG lastly noted that this opinion is subject to limitations: the opinion has no applicability to other arrangements, is issued only to Requestor, cannot be entered into evidence (unless by Requestor), applies only to statutory provisions addressed, does not bind any agency other than the U.S. Department of Health and Human Services, and should not be construed to express any opinion regarding liability under the False Claims Act.

Read the article online on Law.com/Legal Intelligencer.

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Vasilios J. (Bill) Kalogredis, Esq. has been exclusively advising physicians, dentists, and other health care professionals and their businesses as to contractual, regulatory and transactional matters for over 45 years. He is Chairman of Lamb McErlane PC’s Health Law Department. bkalogredis@lambmcerlane.com. 610-701-4402.

*Anna O’Brien, Lamb McErlane Summer Law Clerk contributed to this article. Anna attends Villanova University Charles Widger School of Law. Along with her education, student and community leadership opportunities have been priorities for Anna. At Villanova, she is the current Vice Chairperson of the Charles Widger School of Law Moot Court Board. She has competed in the William & Mary Spong Constitutional Law Competition preparing briefs and oral arguments.  In 2022, Anna was the first-place winner of the Theodore L. Reimel Moot Court Competition at Villanova.