In an advisory opinion earlier this month, the U.S. Department of Health and Human Services Office of the Inspector General (OIG) found that a Medigap insurer’s arrangement allowing discounts on deductibles at certain preferred hospitals would not result in penalties under the Anti-Kickback Statute (AKS) or Civil Monetary Penalties (CMP) Law prohibition.
- Recent status: According to an advisory opinion from the HHS Office of Inspector General, a health insurer that offers supplementary Medicare insurance and a preferred hospital organization can reward members to seek care at hospitals in the organization’s network.
- Coverages: An anonymous Medigap plan and an unnamed hospital organizations are involved in the opinion. The Medicare Part A deductibles that may be incurred during a hospital stay are covered by the Medigap plan.
- Discounts: Under their arrangement, the insurer and hospital organizations agree that each network hospital can provide a discount on the Medicare Part A inpatient deductible that the supplemental plan would otherwise cover for the member, according to the inspector general. Members could also get a $100 premium credit for using network hospitals.
- Low risk of fraud: In its advisory opinion, the inspector general determined that “the proposed arrangement poses a sufficiently low risk of fraud and abuse under the federal anti-kickback statute, and we would not impose administrative sanctions.”The advisory opinion only applies to this specific arrangement, the inspector general said.
- Accreditations: The arrangement would not unfairly affect competition among hospitals, since the PPO’s hospital network would be open to any accredited, Medicare-certified hospital that meets the requirements of applicable state laws and that contractually agrees with the PPO to discount all or a portion of the Part A deductible for policyholders.