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HHS Issues Favorable Advisory Opinion for Online Healthcare Directory Charging Per-Click Fees

On September 5, 2019, the Department of Health and Human Services (HHS) Office of the Inspector General (OIG) issued OIG Advisory Opinion 19-04 ( Advisory Opinion). The Requestor asked OIG if providing an online healthcare provider directory (Directory) to federal healthcare program beneficiaries (beneficiaries) would violate the Anti-Kickback Statute (AKS) or constitute a prohibited Beneficiary Inducement. The online directory would allow beneficiaries to search and book medical appointments, and the Requestor would charge healthcare professionals a per-click or per-booking fee to be listed in the directory. The directory would also allow sponsored advertisements where healthcare professionals would pay a per-impression or per-click fee for such advertisements. The OIG indicated that the arrangement would not violate the Beneficiary Inducement prohibitions, and although it may generate remuneration prohibited by the AKS, OIG would not impose sanctions on the Requestor because the risk for federal healthcare program fraud or abuse is low.

The Requestor operates the Directory through a website and mobile application that allows patients to search for and schedule appointments with health care providers (Providers) who are suggested based on an algorithm. Suggestions are made according to factors such as services needed, geographic location, time, and accepted insurances, among others. The Directory provides a list of up to 200 Providers based on a user’s input criteria, and the Directory does not recommend any single Provider. The Requestor is not a healthcare provider and has no affiliations with any healthcare provider.

The Requestor does not charge users a fee, although it does offer non-beneficiaries certain promotions valued at $10 or less. Requestor charges most Providers a flat, monthly subscription fee to be listed on the Directory. In some locations, Requestor charges Providers a lower monthly fee coupled with either (1) per-booking fees for each appointment booked through the Directory by new patients, or (2) per-click fees for each time a user clicks on the Provider’s name in the Directory. Currently, beneficiaries can only view the Directory results where Providers pay only the flat monthly fee to be listed in the Directory, but Requestor desires to allows beneficiaries to view the Directory where it charges the per-click or per-booking fees. The foregoing fees are set in advance and based on valuations provided by an independent valuation firm.

Lastly, Requestor allows Providers to purchase banner advertisements that are displayed on the Directory or on third-party websites, in exchange for a per-impression fee that is charged each time the advertisement is viewed. Requestor plans to offer an alternative fee structure where it charges Providers each time a user clicks on the advertisement. The advertisements do not promote any particular item or service offered by the Providers, and are currently only visible to non-beneficiaries, although the Requestor desires to allow beneficiaries to view the advertisements. The advertisement fees are determined based on a bidding process where the Requestor sets the minimum bid. Requestor would establish an alternative process to offer keyword pricing where the Providers could pay varying amounts based on certain search terms that would trigger display of the advertisement.

The OIG indicated that the Directory would not violate the prohibition on beneficiary inducements because it is unlikely that the Directory or access thereto would influence a beneficiary to select a certain Provider. The OIG noted that because patients take into account various considerations when selecting a Provider—not just the online marketplace convenience—but also previous relationships, experiences, reputations, and other factors making it unlikely that access to the Directory alone would cause a beneficiary to select a Provider listed in the Directory over other Providers not listed.

The OIG then explained that although the arrangement implicated the AKS because the Requestor is arranging for items and/or services that may be reimbursed by a federal healthcare program in exchange for the fees it charges to Providers described above. However, the OIG concluded that the arrangement presented a low risk of fraud or abuse due to the following:

  1. Even though certain fees would be based on a per-click or per-booking amount, the compensation would be fair market value, set in advance , would not be connected to patient volumes or users’ insurance statuses, and would not take into account any business generated for the Providers through the Directory. Further, the user’s input data drives results from the Directory so the Requestor is not favoring any particular Providers.
  2. The Requestor is not a Provider and is not affiliated with a Provider, so it is not in a position of trust with the user, and it does not recommend one single Provider but instead provides users with a list from which to choose. The OIG differentiated this arrangement from potentially problematic advertising or marketing by Providers, such as so-called “white coat” marketing by physicians.
  3. The advertisements do not specifically target beneficiaries, and any sponsored results will be labeled as such.
  4. The marketing activity would not relate to specific services that can be obtained from Providers as a result of booking an appointment through the Directory, and the Directory does not promote Providers based on other factors, including how much they pay to Requestor. Users will also be told that Providers pay to be listed reducing the chance that a user believes the listed Providers are the only options for potential Providers.
  5. The Directory is available to the public and is not limited by an individual’s insurance status. Requestor would use insurance information only to match users with Providers that accept such insurance and not to influence decision making.
  6. The Requestor would not be offering anything of value to beneficiaries (other than access to the Directory) to induce beneficiaries to select any particular Providers.

This Advisory Opinion offers insight to the factors considered by OIG in a Beneficiary Inducement and AKS analysis. Its application to a new form of technology will be important going forward as uncertainty related to the application of fraud and abuse laws is an ever-existing consideration in the modern healthcare industry. As new technology for healthcare services emerges, advisory opinions may play an important role in understanding best implementation practices without running afoul of fraud and abuse laws.

As the OIG has emphasized, Advisory Opinions are issued only to the requestor(s) of the opinion, and have no application to, and cannot be relied upon by, any other individual or entity, nor may they be introduced into evidence by anyone other than the requestors to prove the individual or entity did not violate the Civil Monetary Penalties Law, the Anti-Kickback Statute, or any other law.

This post was co-authored by Michael Lisitano, legal intern at Robinson+Cole. Michael is not yet admitted to practice law.

Copyright © 2019 Robinson & Cole LLP. All rights reserved.

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About this Author

Nathaniel Arden, Robinson Cole Law Firm, Hartford, Healthcare Law Attorney
Associate

Nathaniel Arden is a member of Robinson+Cole’s Health Law Group. He advises hospitals, health systems, physician groups, community providers, and other health care entities on a variety of health law and business issues. His practice focuses on health care-related regulatory and transactional matters, as well as health care-related information technology issues. Nathaniel has an extensive background in the healthcare industry, and he worked at a large academic medical center prior to joining the firm.

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