OIG Issues Advisory Opinion on Hospital Provision of Free or Reduced-Cost Lodging and Meals.

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently issued an advisory opinion regarding a hospital system’s proposal to provide free or reduced-cost lodging and meals to certain financially needy patients.  The requestor owns and operates four hospitals, one of which provides specialized services such as organ transplant and advanced outpatient cancer treatment.  Under the proposed arrangement, the requestor would provide certain patients residing in rural or underserved areas with access to services that they may not be able to obtain locally.  The requestor would offer a free or reduced-cost stay in a local hotel for one night before and up to two nights after treatment at the hospital.  They would also provide free or reduced-cost hospital cafeteria meals, up to $15 per overnight stay.  The requestor set forth a number of patient qualification criteria including travel distance, residence location, income, appointment time, and follow-up requirements.  Eligible patients would be identified by hospital staff after the patients have already been scheduled for treatment.  The decision of whether to provide free or reduced-cost lodging and meals would be based on a sliding scale of the patient’s annual household income as a percentage of the poverty level.  The program would undergo ongoing audit and monitoring and would not be advertised or marketed to patients.

The OIG found the following:

• The proposed arrangement implicates both the AKS and CMP standards. However, it (1) would not constitute grounds for sanctions under the Beneficiary Inducements CMP and (2) would not subject the requestor to administrative sanctions under the AKS;
• The lodging and meals provided under the proposed arrangement satisfy the requirements of the “Promotes Access to Care Exception” by improving a beneficiary’s ability to obtain items and services payable by Medicare or Medicaid; and
• The remuneration provided under the proposed arrangement poses a low risk of harm to the Medicare and Medicaid programs or beneficiaries.

The OIG opinion concluded that it would not impose sanctions under the Anti-Kickback Statute (“AKS”) or the Beneficiary Inducements Civil Monetary Penalties (“CMP”) for the proposed arrangement.

The OIG advisory opinion is available at:

https://oig.hhs.gov/fraud/docs/advisoryopinions/2017/AdvOpn17-01.pdf.