Wednesday, December 20, 2017

New OIG Advisory Opinion Regarding Network of Nursing Homes

Lilly Hummel

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued an advisory opinion (No. 17-08) regarding a company’s written proposal to develop a state-wide network of nursing facilities that would provide discounts on the daily rates they charge to private long-term care insurers and the insurers’ policyholders.
The OIG concluded that it would not impose administrative sanctions under the anti-kickback statute or the civil monetary penalties provision of the Social Security Act because the risk of improper inducement, fraud, and abuse was sufficiently low under the proposed plan.
A startup company was proposing to develop a network of nursing facilities that would provide discounts on the daily rates they charge to private long-term care insurers that contracted with the company and with participating payors’ policyholders. Facilities that maintain a quality rating of 3 stars or higher on the CMS Nursing Home Compare website and that agree to provide a set discount off of its daily private payor rate for a semi-private room covered by the participating payor, would be eligible to join the network.
Two-thirds of the discount would be allocated to the participating payor’s liability and one-third would be allocated to any amount the policyholder would owe to the facility. Each time a participating payor receives a discount from a facility, the participating payor would pay the startup company a fee for administrative services.

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