On February 14, 2022, the Office of Inspector General (OIG) issued Advisory Opinion No. 22-03 (Advisory Opinion) regarding a home health agency’s (Requestor) proposal to pay nurse aide certification tuition costs on behalf of new employees hired to work as certified nurse aides (Proposed Arrangement). The OIG concluded that the Proposed Arrangement would not generate prohibited remuneration under the federal anti-kickback statute (AKS) or the beneficiary inducements civil monetary penalties (CMP).

Proposed Arrangement

The Requestor owns and operates home health agencies that employ certified nurse aides (CNAs). Many (over 90%) of Requestor’s patients are “medically fragile children” who require long-term services at a level similar to services that might be provided in a skilled nursing facility or hospital. Under the applicable Medicaid plan, services that are provided by parents or relatives to medically fragile children are reimbursable if the parent or relative is certified as a CNA in the state and employed by a home health agency.

Under the Proposed Arrangement, the Requestor would offer to pay the tuition costs of nurse aide certification programs for new employees who have been hired to work as CNAs but who have not yet passed the CNA certification exam. In addition to tuition costs, Requestor would pay salaries to the employees for Requestor-required training and services provided by the employees prior to CNA certification. (The state Medicaid plan provides reimbursement for certain services provided by individuals that have completed a nurse aide certification program but have not passed the CNA certification exam.)  Requestor certified that the employees would be bona fide employees from the time of hire.

Requestor expects that most employees who would participate in the Proposed Arrangement will be parents or relatives of Medicaid-eligible, medically fragile children, but Requestor will not limit the Proposed Arrangement to those parents or relatives. Requestor will make the Proposed Arrangement available to all new employees.

Additional features of the Proposed Arrangement include:

• Employees’ continued employment would be contingent on completing the certification program and passing the CNA exam;

• An employee would only need to reimburse Requestor for the tuition costs if the employee did not remain employed with Requestor for 1 year after passing the CNA exam; and

• Requestor will not terminate the employment of a CNA that provides care to their child or a relative’s child if the children receive home health aide services from a home health agency other than Requestor.

OIG’s Analysis

The OIG determined that the Proposed Arrangement would implicate the AKS and the CMP because paying salaries to and reimbursing tuition on behalf of, employees constitutes renumeration that could induce the parents or relatives to refer children to the Requestor, or to select the Requestor, for the provision of services that are reimbursable by Medicaid.

However, the OIG concludes that the Proposed Arrangement would satisfy the AKS statutory exception and regulatory safe harbor for employees because the salaries and tuition costs would constitute amounts paid to an employee for providing services that are reimbursable under Medicaid. The OIG went on to explain that the Proposed Arrangement would not run afoul of the CMP, as the CMP includes an exception for any practice that is permitted by an AKS exception or safe harbor, and the Proposed Arrangement is permitted under the bona fide employee exception and safe harbor.

Conclusion

In the current health care employment market, providers may look for creative solutions to attract the workforce necessary to provide patient care. This Advisory Opinion demonstrates the OIG’s willingness to permit one such solution where appropriate safeguards are in place and an applicable AKS exception or safe harbor is met.

As the OIG has emphasized, Advisory Opinions are issued only to the requestors of the opinion, and have no application to, and cannot be relied upon by, any individual or entity, nor may they be introduced into evidence by anyone other than the requestors to prove the individual or entity did not violate the anti-kickback statute, or any other law.

*This post was co-authored by Erin Howard, legal intern at Robinson+Cole. Erin is not yet admitted to practice law.