The Office of Inspector General for the Department of Health and Human Services (OIG) recently issued yet another favorable Advisory Opinion on the use of gift cards to motivate patients to receive medically necessary or preventive care services. The proposed arrangement involves an in-home colorectal cancer screening company’s proposal to provide gift cards of up to $75 to encourage patients to return their samples for their colorectal cancer screening. Though the OIG noted that the gift cards implicate the federal Anti-Kickback Statute (AKS) and the Beneficiary Inducements CMP because they would influence patients to receive reimbursable services from the requestor, the OIG concluded that the arrangement presented a minimal level of risk.  

The Proposed Arrangement

The requestor both manufactures and tests a non-invasive colorectal cancer screening test kit that has been approved by the U.S. Food and Drug Administration and designated by the U.S. Preventative Services Task Force (USPSTF) as a recommended preventative test for adults ages 45 to 75 years. When a patient is prescribed the test kit, the kit is mailed to their home, and, in the privacy of their own home, the patient collects a stool sample. The stool sample is then returned with the kit for testing by the requestor.

While the test kit itself provides patients with an alternative to the more invasive colonoscopy procedure that takes place in an office under some level of sedation or anesthetic, the requestor certified to the OIG that more than 30% of patients fail to return the test kit. In an effort to collect the test kits in a timely manner, the requestor normally follows up with patients at least once via phone, email, text, and/or letters. Under the proposed arrangement, the requestor would follow up twice, but on a third attempt would send the patient a letter indicating the ability to receive a gift card with a value of up to $75 if they return the test kit.

Beneficiary Inducements CMP

The OIG concluded that the gift cards satisfied the Preventive Care exception to the Beneficiary Inducements CMP, which applies to incentives given to individuals to promote the delivery of preventive care services where the delivery of the services is not tied to the provision of other services reimbursed by federal health care programs. One requirement of the Preventive Care exception is that the incentive (e.g., the gifts card) cannot be disproportionally large in relationship to the value of the preventive care service, and Medicare reimburses $500 for the colorectal cancer screening. The OIG stated that, under a different set of facts, a $75 incentive might be disproportionally large in relationship to a preventive care service valued at $500. But the exception also takes into account the future health care costs reasonably expected to be avoided as a result of the preventive services, which evidently led the OIG to give more weight to the value of the colorectal screening.

AKS

The OIG reiterated its longstanding concerns about beneficiary remuneration, which can inappropriately steer beneficiaries to certain providers and suppliers with greater financial resources over smaller entities and entice providers and suppliers to offset the cost of the incentives by providing unnecessary or subpar services. Nevertheless, the OIG concluded that the gift card arrangement presents a minimal risk of fraud and abuse for the following reasons:

• Unlikely to Result in Improperly Increased Costs to Federal Programs or Overutilization. The OIG determined that because (i) the test kit is recommended for all adults ages 45-75 every 1 to 3 years; (ii) Medicare only reimburses the test every 36 months; and (iii) the requestor would only provide the gift cards once every 36 months, the proposed arrangement is unlikely to improperly increase costs to federal health care programs. Furthermore, the arrangement does not offer any financial incentives to prescribers, and prescribers would not have any way of knowing that a patient is more or less likely to return the test kit. Thus, the proposed arrangement is unlikely to influence a prescriber to order this specific test over another. Moreover, Medicare reimburses the test at a fixed rate, precluding the requestor from passing on the costs associated with the gift cards to federal health care programs.

• Promotes Compliance with a Recommended Screening Test. The OIG noted that the arrangement would encourage the use of a screening test that has been recommended by the USPSTF and the American Cancer Society. The OIG distinguished the screening test, which requires patients to interact with their own stool from a saliva collection test, for example, and noted that a gift card may be necessary to encourage patients to return samples for this particular type of test.

• Safeguards Reduce Risk of Fraud and Abuse. The OIG stated that the safeguards implemented by the requestor, such as not advertising to patients or prescribers and not offering the gift cards to patients who have received them within the last 36 months, curtails the risk of fraud and abuse.

Conclusion

Though gift cards and other incentives given to Medicare and Medicaid beneficiaries can implicate both the federal AKS and the Beneficiary Inducements CMP, this latest OIG Advisory Opinion is one of several Advisory Opinions on gift cards favorable to patients that offer key guidance for health care providers and suppliers interested in adopting similar patient incentive programs.