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HHS-OIG Issues Favorable Opinion on Community Health Center’s Primary Care Referral Services to Underserved Individuals Receiving Non-Medical Services such as Free Diapers, Books, Toys, and Door Locks
Monday, June 2, 2025

HHS-OIG released a favorable opinion regarding designated community health centers providing primary care referral services in combination with additional non-medical services (such as door locks for victims of crimes and free diapers to parents) that improve health outcomes for members of the community served by the CHC. 

The proposed arrangement included safeguards, HHS-OIG said, that limited risk under the civil monetary penalty laws against beneficiary inducements and Anti-Kickback Statute and accordingly did not warrant sanctions. 

The proposed arrangement may increase access to health care services, which is consistent with the statutory purpose and associated requirements of community health centers designated under Section 330 of the Public Health Service Act. 

The U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG) recently released Advisory Opinion No. 25-02, a favorable opinion regarding the federal Anti-Kickback Statute (AKS) and civil monetary penalty laws (CMP) against beneficiary inducements as applied to a designated community health center (CHC) under Section 330 of the Public Health Service Act (PHS Act), identifying community members in need of primary care services and referring these individuals to primary care providers.

Background

Designated CHCs under the PHS Act are required to provide outreach services that include certain non-medical, social, and educational services intended to improve health outcomes in the CHC’s community by enabling community members to access healthcare services, including but not limited to, supplemental health services that promote and facilitate optimal use of primary care health services by such individuals. Importantly, designated CHCs must also provide primary health care services to individuals within their community regardless of their ability to pay. 

Here, the CHC requesting the advisory opinion (Health Center) provides certain Health Resources and Services Administration (HRSA)-approved additional services, such as lock replacements for victims of violent crime and diapers and other baby gear for children 5 years and under, to members of the community. According to Health Center, while many members of the community obtain these additional services from Health Center, frequently such individuals do not also attempt to access any primary healthcare services offered by Health Center, alone or in connection with their receipt of such additional services, due to financial concerns and/or insufficient awareness of the availability of, or knowledge about how to obtain access to, those primary healthcare services. 

To address this issue, Health Center proposed providing any community member who has not completed a primary care visit in the past year with an alphabetized list of primary healthcare providers (which includes the Health Center). The list would be drafted and updated to include “any-willing” provider who elected to be included on the list, even if such providers were not employed by, or under an arrangement with, Health Center. If a community member selected a primary care provider employed by or contracted with Health Center from the provider list, Health Center would schedule an appointment for the individual or, if the individual chose a non-Health Center provider, then the Health Center would make an electronic referral to the provider chosen by the individual.

HHS-OIG's Findings

In this instance, HHS-OIG found that the proposed arrangement implicates the AKS as the furnishing of additional (non-medical) services constitutes remuneration to the individual when coupled with the proposed offer to schedule a primary care provider appointment, which may induce individuals to obtain health care services from Health Center that are billable to federally funded healthcare programs. HHS-OIG further determined that the proposed arrangement implicates the CMP against beneficiary inducements because the provision of additional (non-medical) services in combination with the proposed primary care referral services could influence federal healthcare program beneficiaries to select Health Center to obtain primary care services.

In reaching its conclusion, HHS-OIG cited the following safeguards within the proposed arrangement as diminishing the risk of fraud and abuse:

  • Individuals in need of primary care services would be identified using an objective criterion (i.e., whether the individual has seen a primary care provider within the last year), which does not promote Health Center. 
  • The list of primary care providers would be: (i) organized in alphabetical order; and (ii) drafted in a manner that does not promote Health Center (e.g., by not using bold font, underlining, or other emphasis to identify Health Center). 
  • Health Center would include at least several providers on the list distributed to patients and also would implement an “any willing provider” standard, such that, if a community provider (e.g., CHC, hospital, primary care physician practice) would like to be included on the list of primary care providers that is given to individuals receiving additional services, then the request for inclusion on the list would be honored at all times. 
  • Health Center certified that individuals could continue to receive its additional services without electing to also receive primary care services from Health Center. In the event an individual receiving such additional services selects a non-Health Center provider from the provider list, Health Center would provide complete contact information to the individual and the requested primary care provider sufficient to effectuate the referral. 

An additional factor that HHS-OIG relied on in determining that the proposed arrangement poses low risk of fraud and abuse was the alignment between the stated purposes of the proposed arrangement and Health Center’s obligation as a CHC under the PHS Act to engage in activities to facilitate access to primary health care services for members of the community it serves, regardless of their ability of pay. According to HHS-OIG, the offer of HRSA-approved additional services together with confirmation and/or coordination of the individual’s access to primary care services would be consistent with Health Center’s statutory obligations under the PHS Act. 

HHS-OIG ultimately concluded that the proposed arrangement poses little risk of fraud and abuse due to the safeguards and consistency with Health Center’s responsibility to increase health care access for patients in its community. 

Key Takeaways

In this Advisory Opinion, HHS-OIG affirmed the role of CHCs under Section 330 of the PHS Act in providing programs that expand access to healthcare services for underserved patient populations. In doing so, HHS-OIG reiterated the importance of safeguards in developing and effectuating such programs to reduce fraud and abuse risk under the AKS and the CMP.   

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