Jeff Baird on Requesting an OIG Advisory Opinion: Eliminating Uncertainty

“Dealing with fraud and abuse issues is akin to visiting
Alice in Wonderland,” says attorney Jeff Baird, chairman of the
health care group at Brown & Fortunato. “What is down is up,
what is up is down, and every day we descend through the proverbial
rabbit hole. This is particularly true when a DME company desires
to enter into a business arrangement with a referral source such as
a physician, hospital or long-term care facility.

“The challenge,” continues Baird, “is that when a DME
company ‘does business with’ a referral source, kickback issues
invariably arise. The Medicare anti-kickback statute states that a
kickback may occur when a provider gives anything of value to a
person/entity in exchange for referring a Medicare patient or in
exchange for ‘arranging for the referral of’ a Medicare
patient.

“The anti-kickback statute is broadly worded and, arguably,
it can apply to almost any type of arrangement between a provider
and a referral source,” Baird says. “When designing a business
arrangement with a referral source, the prudent DME company will be
careful to avoid violating the anti-kickback statute. It can do so
by fitting the arrangement (or substantially fitting the
arrangement) within one of the safe harbors to the anti-kickback
statute.”

An even more conservative approach, according to Baird, “is
for the DME company to submit a request to the OIG for an advisory
opinion.”

Check his explanation in the following Q&A.

Question: In laymen’s terms, what is a request for an
OIG advisory opinion?

Answer: The Office of Inspector General is an
agency within the Department of Health and Human Services. CMS,
which administers the Medicare program, also falls within HHS. The
purpose of the OIG is two-fold: to educate health care providers on
how to avoid fraud and investigate alleged fraudulent
activities.

If you go to Google and type in “Office of Inspector General,”
you will land on the OIG’s official website. One of the links on
the website leads you to published advisory opinions. Any health
care provider, including a DME company, can submit a detailed
letter to the OIG that describes an existing or proposed
arrangement with a referral source.

The requestor will ask the OIG to give its opinion as to whether
or not the arrangement violates the anti-kickback statute. The OIG
will review the arrangement and then say one of three things:
“Absolutely not!” or “Looks OK” or “We don’t particularly like it
but would not be inclined to bring an enforcement action.”

Question: Is a published advisory opinion “the
law?”

Answer: No, it is not the law, but the provider
would be foolish to act contrary to a published opinion. It is
likely that the Department of Justice, the NSC and the courts will
take the same position as set out in the advisory opinion.

Question: Does an OIG advisory opinion address other
potentially fraudulent issues such as the Stark physician
self-referral statute, the telephone solicitation statute, the
beneficiary inducement statute and the False Claims
Act?

Answer: No. An advisory opinion only addresses
whether remuneration, in an arrangement proposed by the requestor,
constitutes illegal remuneration in violation of the anti-kickback
statute.

Question: Is the published advisory opinion binding on
providers other than the requestor?

Answer: No. The opinion is binding only on the
requestor. However, other providers that are involved in the same
or a similar arrangement should take notice of the advisory opinion
and adhere to its guidance.

Question: Will the requestor have the ability to talk
informally to the OIG before it issues the opinion? Will the
requestor have the right to withdraw the advisory opinion
request?

Answer: Yes to both questions. The requestor
may have informal discussions with the OIG regarding the advisory
opinion request. If the OIG expresses concerns about the
arrangement, then the requestor will have the opportunity to modify
the arrangement so as to address the OIG’s concerns. If it appears
that the OIG simply does not like the arrangement, then the
requestor will have the right to withdraw the advisory opinion
request.

Question: Who is the advisory opinion request addressed
to?

Answer: Chief, Industry Guidance Branch;
Department of Health and Human Services; Office of Inspector
General; Office of Counsel to the Inspector General; Room 5527,
Cohen Building; 330 Independence Ave, S.W.; Washington, D.C.
20201.

Question: How many originals and how many copies must be
submitted?

Answer: Original and two copies.

Question: What information must be included in the
advisory opinion request?

Answer: (1) To the extent known to the
requestor, the identities, including the names and addresses, of
the requestor and of all other actual and potential parties to the
arrangement, that are the subject of the request for the advisory
opinion.

(2) The name, title, address, and daytime telephone number of a
contact person who will be available to discuss the request for an
advisory opinion with the OIG on behalf of the requestor.

(3) A declaration of the subject category or categories for
which the advisory opinion is requested.

(4) A complete and specific description of all relevant
information bearing on the arrangement. This description includes:
(a) for existing arrangements, complete copies of all operative
documents; (b) for proposed arrangements, complete copies of all
operative documents, if possible, and otherwise descriptions of
proposed terms, drafts, or models of documents sufficient to permit
the OIG to render an informed opinion; (c) detailed statements of
all collateral or oral understandings; (d) if applicable, a
designation of trade secrets or confidential commercial or
financial information; (e) a signed certification by the requestor;
(f) a declaration regarding whether an advisory opinion request
(regarding Stark) will be submitted to CMS; and (g) each
requestor’s Taxpayer Identification Number.

Jeffrey S. Baird, Esq., is chairman of the Health Care Group
at Brown & Fortunato, P.C., a law firm based in Amarillo,
Texas. He represents pharmacies, infusion companies, home medical
equipment companies and other health care providers throughout the
United States. Baird is Board Certified in Health Law by the Texas
Board of Legal Specialization. He can be reached at 806/345-6320 or
[email protected].