OIG: Provider Can’t Offer Free Oxygen, Oximetry Tests

WASHINGTON–A provider that offers free oxygen is at risk of
violating the anti-kickback statute, the HHS Office of Inspector
General warned in an advisory opinion last week.

According to the OIG, the DME company, whose name has been
redacted, currently offers free interim oxygen to Medicare patients
while they wait for the results of physician-conducted oximetry
tests, which can take anywhere from a few days to several weeks.
Medicare does not cover interim oxygen before the results of the
test show that they qualify.

The company requested an opinion from the OIG on the free oxygen
program as well as a proposed arrangement where the company also
would provide free overnight oximetry tests. Medicare does not
recognize the results of provider-administered oximetry tests for
home oxygen coverage decisions, but the company said the testing
would provide preliminary data to patients and physicians as they
awaited the official test results.

The DME provider said that it doesn’t advertise the free oxygen
program and that it wouldn’t advertise the free oximetry program,
either. The company told the OIG that providing free interim oxygen
is a common practice among providers and that patients had learned
about the program from physicians or other Medicare
beneficiaries.

According to the opinion, however, the free oxygen and oximetry
tests amount to remuneration to beneficiaries and are designed to
generate business.

“While providing the free interim oxygen or the overnight
oximetry, [the DME company] has or would have the opportunity to
initiate a relationship with the beneficiary, and it is reasonable
and probable that for future purchases the beneficiary would select
a supplier with whom he or she is already familiar,” the OIG said.
“The fact that the interim oxygen and overnight oximetry is or
would be offered without charge increases the chances that a
beneficiary would take advantage of the offers, thus maximizing
opportunities for [the DME company] to initiate a relationship with
the beneficiary prior to his or her selection of a supplier.”

The OIG added that the proposed arrangement to provide free
oximetry tests poses an additional fraud and abuse risk “as it
appears to be a thinly veiled scheme to evade the barrier
interposed between beneficiaries and oxygen suppliers by the
Medicare rule that bars DME suppliers (except hospitals) from
performing the oximetry test necessary to qualify a beneficiary for
covered oxygen.”

To view the advisory opinion, click here.