WASHINGTON — The Department of Health and Human Services' Office of Inspector General, in an advisory opinion issued Nov. 19, gave the go to two HME providers to place equipment in hospital supply closets and have licensed personnel either on site or on call to train patients in the use of respiratory equipment.
While the OIG has said previously that consigning equipment can create the risk of fraud and abuse, it said in this case — in which the consignment closets will be provided at no cost, as will the use of phones and a desk — because "no remuneration will flow" between the suppliers and the hospitals, the two providers would not risk violating anti-kickback statutes present in the Social Security Act.
As with all advisory opinions, this one was issued only to the two providers seeking the opinion (their names were redacted) and has no application to other individuals or entities, the OIG said.
However, providers can draw some guidance from the opinion.
"To a large extent, this opinion confirms what most health lawyers believe to be required by existing law," said Neil Caesar of the Health Law Center in Greenville, S.C. "But we have some clear guidance as to the type of relationship that works, and anyone who varies from that is taking a big chance."
Caesar noted that there are some nuances that differ from previous OIG opinions. This opinion focuses on hospital supply closets, while previous opinions centered on supply closets in physician offices. The new opinion also deals with the issue of having on-site or on-call personnel to train or educate patients requiring respiratory equipment.
Both are permissible under the new advisory opinion, Caesar said, but with a caveat: "You cannot have any role to play before the choice [of a provider] is made," he said.
That means that the provider's on-site licensed personnel, such as a respiratory therapist, cannot have any contact with a patient prior to the patient selecting his or her provider.
As well, the provider's employees may not provide any services to patients who have selected another supplier.
The chosen suppliers would directly bill payers, including Medicare and Medicaid, for the equipment.
Providers may not pay any remuneration to hospitals or anyone affiliated with the hospitals for the use of consignment closets nor may hospitals charge the providers for use of a hospital desk and phone connected to the hospital's internal telephone system, the opinion said.
While all this is positive, there is a caution, according to Caesar.
"Generally, the OIG doesn't go out of its way [to issue opinions] on things it doesn't care about. This suggests that there has been, and will continue to be, scrutiny of these types of relationships," he said. "It's a flag that says you can do things, but it's also a flag that says, 'We're watching.'"
