October 22, 2019

October 22, 2019

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October 21, 2019

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OIG Approves Per-Click Fee Arrangement for Online Healthcare Directory

On September 10, 2019, the Office of Inspector General of the Department of Health and Human Services (“OIG”) published Advisory Opinion 19-04.  In this favorable opinion, OIG approved a technology company’s proposal to make its online healthcare directory search results visible to federal healthcare beneficiaries in locations where the company charges the healthcare professionals a per-click or per-booking fee to be included in the directory.  It also approved the company’s proposal to make sponsored advertisements that appear on its online healthcare directory and on third-party websites visible to federal healthcare beneficiaries.

This opinion provides valuable insight regarding how OIG evaluates the fraud and abuse risks posed by online scheduling tools, as well as demonstrates OIG’s recognition of the increasing importance of technology in the delivery of healthcare.

Proposed Arrangement

The company that requested the opinion operates an online website and mobile app (the “Platform”) that allows users to select various criteria to search for healthcare providers and book medical appointments.  In response to a user’s selected search criteria, the Platform returns up to 200 results using a proprietary algorithm.  The algorithm does not filter or prioritize providers based on the amount they pay the company or any other non-user selected criteria.  Users are not charged a fee to use the Platform, and federal healthcare program beneficiaries are not offered anything of value through the Platform, other than convenience.

The company charges fees to providers who wish to be included in the directory using several different fee structures, including flat monthly subscription fees, and lower annual subscription fees combined with per-booking fees or per-click fees charged when users book an appointment through, or click on a result generated by, the Platform.  The per-booking fees would apply regardless of a user’s insurance status, and only with respect to users who identify themselves as new patients.  Previously, Platform results were made visible to users who indicated they were federal healthcare program beneficiaries only when the beneficiaries were located in locations where the providers paid flat monthly subscription fees.  Under the proposed arrangement, the company would make Platform results visible to federal healthcare program beneficiaries under each of its payment structures.

In addition to paying to be included in the Platform results, healthcare providers also may purchase sponsored results, which are displayed prominently within the Platform results when they match users’ search criteria as well as on third-party websites.  Sponsored results would be clearly labeled as advertisements and would not promote any particular item or service.  Under the proposed arrangement, the company would make sponsored results visible to federal healthcare program beneficiaries.  The company’s advertising activities, including the display of sponsored results, would not specifically target federal healthcare program beneficiaries.  The company charges healthcare providers for sponsored results through per-impression and per-click fees that it establishes through a bidding process and that the company certified do not exceed fair market value.

OIG Analysis

OIG first addressed the civil monetary penalty provision prohibiting inducements to beneficiaries, which imposes penalties against any person who offers or transfers remuneration to certain beneficiaries that the offeror knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier.  OIG concluded that the proposed arrangement would not implicate this prohibition, as access to the Platform’s functionality, alone, would be unlikely to influence a beneficiary to select a particular provider, practitioner, or supplier.

OIG then noted that the proposed arrangement would implicate the anti-kickback statute,[1] because the company would be arranging for the furnishing of federally reimbursable items and services through the Platform results, and would be recommending the purchase of particular items and services through the sponsored results, in exchange for the fees it charges to participating healthcare providers.  However, OIG found that the proposed arrangement presented a low risk of fraud and abuse under the anti-kickback statute for a number of reasons, including:

  • Although the per-booking and per-click fees the company would charge would vary, the company sets the fees in advance and certified that they would not exceed fair market value. Whether a provider appears in the Platform results depends on user-selected criteria, so the fees the providers would pay would not determine the frequency with which they would appear in the results.  Moreover, the per-booking fees would apply regardless of a user’s insurance status, and only with respect to users who identify themselves as new patients.

  • The company is not a provider or supplier and is not in a position of trust vis-à-vis the users.

  • The company’s advertising activities are passive in nature, and the advertisements are clearly labeled as such and would not specifically target federal healthcare program beneficiaries.

  • The Platform results would not prioritize providers based on the amount they pay or any other non-user criteria, and the sponsored results would not promote any particular item or service.

  • Any member of the public may use the Platform, regardless of insurance status, and the company would not use insurance information to target federal healthcare program beneficiaries or otherwise influence their decision-making.

  • The company would not provide anything of value to federal healthcare program beneficiaries, other than the inherent convenience associated with use of the Platform.

Notes and Comments

Although advisory opinions cannot be relied upon by any entity other than the requestor, they provide insight as to how OIG would analyze similar arrangements.  Over the past several years, OIG has demonstrated an increasing willingness to approve arrangements in which technology is used to improve or enhance beneficiaries’ healthcare or even, as in this case, user experience.  For example, in Advisory Opinion 19-02, OIG approved a pharmaceutical manufacturer’s proposal to loan a limited-functionality smartphone to financially needy patients who do not have the technology necessary to receive adherence data from a sensor embedded in their prescribed antipsychotic medication, and in Advisory Opinion 18-03, OIG approved a proposal under which a FQHC look-alike would provide free technology items and services to facilitate telemedicine encounters related to HIV prevention.  As federal healthcare program beneficiaries become more comfortable with, and reliant upon, technology, OIG will be forced to continue to grapple with the fraud and abuse risks such technologies pose.


[1] The anti-kickback statute which makes it a criminal offense to knowingly and willfully offer or receive remuneration to induce or reward the referral of items or services reimbursable by a federal healthcare program.  42 U.S.C. 1320a-7b(b).

©2019 Epstein Becker & Green, P.C. All rights reserved.

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About this Author

Jennifer Michael Health Care Attorney Epstein Becker Green
Member of the Firm

JENNIFER E. MICHAEL is a Member of the Firm in the Health Care and Life Sciences practice, in the Washington, DC, office of Epstein Becker Green. She focuses her practice on federal and state fraud issues, including anti-kickback, self-referral, false claims, and regulatory compliance.

Before joining Epstein Becker Green, Ms. Michael served as Chief of the Industry Guidance Branch at the U.S. Department of Health & Human Services, Office of Counsel to the Inspector General. In that role, she led a team of attorneys responsible for interpreting and applying...

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