|Footnotes for this article are available at the end of this page.
On March 2, 2022, the Department of Health and Human Services, Office of Inspector General (OIG) published Advisory Opinion No. 22-04 (the “Opinion”), analyzing a program whereby the Requestor provides comprehensive digital management support tools and incentives, including cash equivalents, to motivate behavioral health changes in individuals with substance use disorders. The Requestor inquired whether its program would constitute grounds for sanctions under the federal Anti-Kickback Statute (AKS) or the Beneficiary Inducements Civil Monetary Penalty (CMP) Provision. The OIG concluded that although the arrangement would generate prohibited remuneration under the AKS (if the requisite intent were present) and may generate prohibited remuneration under the Beneficiary Inducements CMP Provision, the OIG would not impose administrative sanctions on the Requestor under either statutory authority.
This Opinion is noteworthy because the Requestor’s program involves the award of cash equivalents, which has been a longstanding concern for OIG, and because the total value of those cash equivalents may exceed the $500 cap that OIG imposed in the new safe harbor for patient engagement and support.
The Advisory Opinion
According to the facts presented, the Requestor is a privately held digital health company that is not enrolled as a provider or supplier in any federal healthcare program and therefore does not bill any federal healthcare program for items or services furnished through the program. The Requestor utilizes smartphone and smart debit card technology to implement an incentives-based contingency management system designed to motivate and sustain behavioral health efforts in people suffering from various substance use disorders, including disorders involving opioids, stimulants, alcohol, and nicotine. 1
The Requestor contracts with a variety of entities, including health plans, addiction treatment providers, employee assistance programs, research institutions, and other treatment providers (“Customers”), to offer its program to individuals with substance use disorders. An individual may seek the Requestor’s services via referral from a Customer or self-referral. Individuals or their families may pay for the program directly, in which case the individual or family member is the Customer. The Requestor receives fees from Customers on: (a) a flat monthly basis per eligible, active member; or (b) a pay-for-performance model, in which the Requestor is paid upon a member achieving certain agreed-upon targets for abstinence. The Requestor certified that the aggregate fees are consistent with fair market value and do not vary based on the volume or value of business generated under federal healthcare programs. Fees vary based on, among other things, the service configurations being purchased and the intensity of behavioral targets that are planned for each member. Fees include the costs of the application, any substance testing equipment that is shipped to the member, test monitoring, medication self-administration monitoring, appointment attendance monitoring, recovery coaching, and incentives.
The Requestor assesses an individual’s appropriateness for enrollment in the program through various means, including a structured interview and a branching algorithm to determine if the individual: (a) has a substance use disorder; (b) requires treatment, and if so, for which substance(s); and (c) requires a specific level of care. Enrollment specialists, under the guidance of licensed clinical supervisors, determine the type of services (e.g., alcohol, drug, or nicotine testing, or medication administration reminders) and amount of services appropriate for each individual enrolled in the program. Once an individual is enrolled in the program, the Requestor’s algorithm continuously varies the frequency of testing according to the individual’s performance (e.g., results of substance testing or participation in recovery coaching). Substance testing and incentives for achieving specified behavioral goals (e.g., a negative substance test) are phased out over time. The Requestor’s technology establishes a schedule of expected target health behavioral events, objectively validates whether each expected event has occurred, and, if it has, promptly disburses the exact, protocol-specified incentives to the individual. Monetary incentives are capped at $200 per month, with an annual maximum of $599 per individual per year.
The Requestor’s program is digital and does not include any in-person elements with the Requestor. The Requestor’s incentives, however, may be tied to certain services furnished in-person by other providers. While the majority of the Requestor’s current Customers are entities that do not bill federal healthcare programs, some current Customers bill, and other potential future Customers may bill, federal healthcare programs for services they provide (e.g., group therapy sessions).
OIG determined that there are two streams of remuneration applicable to the Requestor’s program that potentially implicate the AKS and the Beneficiary Inducements CMP: (a) the Customers’ fee payments for the Requestor’s services, which OIG noted “could incentivize a Member to receive a federally billable service”; and (b) the monetary incentives members receive for achieving certain behavioral health goals, which OIG noted, “may involve services that could be billable to federal healthcare programs (e.g., a counseling session) by a particular provider or supplier, which could be a Customer.” Although OIG emphasized its longstanding concerns relating to the offer of incentives intended to induce beneficiaries to obtain federally reimbursable items and services, OIG concluded that the arrangement at issue presents a minimal risk of fraud and abuse under the AKS and that OIG would not impose sanctions under the Beneficiary Inducements CMP for the following reasons:
- the Requestor’s program, including the monetary incentives for achieving behavioral health goals, is “protocol-driven” and consistent with evidence-based research and demonstrated cost-effective treatment of substance use disorders;
- the individual incentive payments given to members are relatively low value and capped on a monthly and annual basis;
- a substantial portion of the incentive payments is not associated with federally payable services (e.g., participating in self-guided therapy modules or self-administering breathalyzer or saliva drug testing);
- because the Requester is not enrolled as a provider or supplier in any federal healthcare program and does not bill any such federal programs for the services furnished under the program, OIG determined that the incentive payments to members represent a low risk of encouraging overutilization of federally reimbursable services;
- most of the Requestor’s Customers have no incentive to induce a member to receive federally reimbursable services, and the fees paid by Customers do not vary based on the volume or value of any federally reimbursable services; and
- while noting that cash and cash-equivalent remuneration given to beneficiaries may raise substantial fraud and abuse risks, the OIG determined that the Requestor’s program included adequate safeguards to mitigate against such risks, including (a) that the Requestor (an entity that does not bill federal healthcare programs) determines what types of services each member needs and what monetary incentives will be attached to those services and (b) the smart debit cards contain anti-relapse protections.
While OIG describes the incentive payments members may receive under Requestor’s program as “relatively low value,” the aggregate payments each member may receive are $200 per month and $599 per year. These amounts are sizable compared to prior OIG guidance, including OIG’s “nominal value” guidance, which provides that non-monetary remuneration with a retail value of no more than $15 per item or $75 in the aggregate on an annual basis is sufficiently “inexpensive” and does not implicate the CMP. While that guidance remains in effect, this Opinion provides another guidepost to assess patient engagement programs involving cash equivalent remuneration.
Additionally, the Requestor’s incentive payments may exceed the cap OIG included in the Final Rule’s new patient engagement and support safe harbor. While OIG considered contingency management in the Final Rule, OIG did not include an exception to the cap or allow for remuneration in the form of cash or cash equivalents for contingency management programs.
While this Opinion applies only to the specific facts and proposed arrangement presented in the Opinion and should not be relied upon as general policy, the Opinion offers informal guidance to the retail industry about practices or arrangements that implicate the AKS and Beneficiary Inducement CMP Provision, and OIG’s approach to assessing contingency management and incentive programs. For more information on this Opinion or other issues addressed herein, please contact AGG Healthcare attorney Chesley McLeod.
 The Requestor includes abuse and anti-relapse protections into the smart debit cards such that the debit cards cannot be used at bars, liquor stores, casinos, and certain other locations, and cannot be used to convert credit to cash at ATMs or gas stations. Furthermore, the Requestor can monitor the usage of the smart debit cards, allowing coaches and providers to be signaled of the possible need for intervention in the event of a blocked purchase.