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Patient Engagement Tools and Supports: Analysis of the New Anti-Kickback Statute Regulatory Safe Harbor
Wednesday, December 2, 2020

Providers have a new tool in their toolbox to promote population health. The Health and Human Services Office of Inspector General (OIG) has adopted a new, extremely broad safe harbor that allows certain providers to give patients tools and supports, with a value of up to $500 annually, in order to achieve specified identifiable health goals. The goal can be to promote adherence to a drug or treatment regimen or prevent/manage a disease or condition. It gives providers flexibility to provide tools and supports to address social determinants of health such as transportation, nutrition and safe housing. For Medicare fee-for-service providers, these tools used to be restricted to providers who participated in a Medicare demonstration program, such as an accountable care organization, or participated in a capitated arrangement with a Medicare Advantage plan and used these tools under care management or other plan-driven arrangements. The tools are now available to all providers who participate in a value-based enterprise (VBE).


The OIG has made incremental steps over the years to enable plans and providers to promote the health of a patient population. In the past, traditional fee-for-service providers could rely on the “preventive care exception” to the definition of “remuneration” to provide patients with a free item or service to promote the delivery of a preventive health care service. For example, a provider could give a patient a gift card if they scheduled and received a preventive service, like a mammogram. Medicare Advantage plans have been given greater flexibility to provide supplemental benefits, as well as rewards and incentives, to encourage its members to engage in preventive health activities or activities designed to support medication compliance.

The new safe harbor is different from these traditional exceptions and is perhaps best understood as an expansion of the waivers the OIG has historically provided to participants in an Accountable Care Organization. For almost 10 years, the OIG has granted waivers to participants in a number of Centers for Medicare and Medicaid Services (CMS) models and programs,1 starting with the waivers to entities participating in the Pioneer Accountable Care Organization (ACO) Model program in 2011.2 That waiver allowed Pioneer ACO participants to provide items and services to beneficiaries for free or below fair market value if the items or services were in-kind, and the items or services were either preventive care items or services or would advance one of the following clinical goals:

  • Adherence to a treatment regime

  • Adherence to a drug regime

  • Adherence to a follow-up care plan

  • Management of a chronic disease or condition3

A more recent waiver applicable to participants in the Next Generation ACO Model contains similar requirements.4

Eligible Participants

The new patient engagement and support safe harbor is similar to the previous ACO waivers in that it requires the provider to be a participant in a value-based enterprise (VBE). The OIG rejected comments to provide a rural health exception, or an exception for solo practitioners, noting that it would not be difficult to form a VBE. The OIG suggested that a solo practitioner could enter into an arrangement with another individual or entity to form a VBE and identify a target population. The OIG also noted there is no requirement that the participants be at financial risk.

The final rule explicitly prohibits certain entities from the scope of the safe harbor. For example, the VBE participant must not be:

  • A pharmaceutical manufacturer, distributor or wholesaler

  • A pharmacy benefit manager

  • A laboratory company

  • A pharmacy that primarily compounds drugs or primarily dispenses compounded drugs

  • A manufacturer of a device or medical supply, except as described below

  • An entity that sells or rents durable medical equipment, prosthetics, orthotics or supplies covered by a federal health care program

  • A medical device distributor or wholesaler

A patient engagement tool or support may be offered by medical device or medical supply company, provided it is not owned in whole or in part by a physician or a physician’s immediate family member, and the tool or support in question is digital health technology.

Not only are these entities prohibited from providing patient engagement tools and supports, but they are prohibited from funding tools and supports. The OIG believes, based on prior experience, that these entities pose a higher risk of misusing the safe harbor to market their products and services rather than improve the coordination and management of patient care.

Eligible Patients

The new safe harbor is limited to patients who are in a “target population.” For example, the VBE could identify an initiative to be make a tool or support available to patients over the age of 65 with chronic diabetes. Notably, the patient population cannot be defined by payor, so all individuals within the target population, regardless of payor, must be eligible for the tool or support. The target population can be defined to include patients of a certain age with a specific illness such that virtually all participants would be Medicare beneficiaries. This is permissible as long as the population does not select patients based on their particular insurance.

The OIG rejected a comment that proposed to apply the safe harbor to all patients, even those outside of the target population, provided the tools and supports “predominantly” address the needs of the target patient population. The OIG determined limiting the benefit to patients in the target population would ensure that the tools and supports have a nexus to the VBE’s underlying value-based purpose.

The OIG noted in commentary that, although there is a requirement that the tool or support be furnished directly to the patient, it can be furnished to the patient’s caregiver or family member as long as the tool or support satisfies all conditions of the safe harbor.

Examples of Patient Engagement Tools and Supports

The final rule was written to facilitate a wide variety of tools and supports. The proposed rule provided specific examples of protected tools and supports: health-related technology, patient health-related monitoring tools and services, and supports and services designed to identify and address social determinants of health. The final rule does not provide an exhaustive list of “social determinants of health,” and removes specific examples of tools and supports that would limit creativity or stifle innovation. The final rule “articulates our policy to be agnostic to the types of in-kind tools and supports that can be protected by the safe harbor if all safe harbor conditions are met.”

Limitation on In-Kind Goods and Services

There are a few basic limitations on the tools and supports that can be provided consistent with the safe harbor. First, it must be an in-kind item, good or service. Second, it must have a direct connection to the coordination and management of care of the target population. Finally, the tool or support must not be cash or a cash equivalent.

The OIG notes the term “cash equivalent” restricts the use of most gift cards to facilitate the tool or support but allows for the provision of limited-use gift cards. The OIG noted it considers debit cards, rebate checks and most gift cards to be “cash equivalents” and not a protected form of in-kind remuneration. Gift cards offered by large retailers or online vendors that sell a wide variety of items would be considered a “cash equivalent” because it could easily be used to purchase items and services that would not support a permissible goal. However, a gift card that is limited to certain categories of items or services that meet the conditions of the safe harbor would meet the in-kind requirement. Examples provided by the OIG include a gift card for a service that delivers the ingredients necessary for a healthy meal or a ride share voucher/gas card to address obstacles with transportation access to medical appointments.

The way the OIG is treating gift cards is consistent with recent guidance regarding the term “cash equivalent.” In 2016, the OIG issued a final rule on the new safe harbor protecting items and services that improve a beneficiary’s ability to obtain items and services payable by Medicare or Medicaid and pose a low risk of harm to Medicare and Medicaid programs.5 In a footnote, the OIG explained it defines “cash equivalents” as “items convertible to cash (such as a check) or that can be used like cash (such as a general purpose debit card, but not a gift card that can be redeemed only at certain stores or for a certain purpose, like a gasoline gift card.)6

Interestingly, the OIG noted that a cash payment directly to another entity for the patient could be considered an “in kind” support or tool. For example, the direct payment from a provider to a utility company on behalf of the patient, or payment to a third party for the purchase of an electronic scale or a tablet to provide continuing education could be considered in-kind remuneration because the beneficiary does not directly receive cash or cash equivalent remuneration.

The OIG declined to include the waiver of cost-sharing obligations as a permissible in-kind tool or support. The OIG did not believe it would be appropriate or feasible to make distinctions regarding cost-sharing waivers based on particular categories of services. The OIG reiterated its policy that cost-sharing amounts may be waived based on individualized, good faith determinations of financial need.

Social Determinants of Health

While refusing to define an exhaustive list of “social determinants of health,” the OIG gave examples of tools and supports related to social determinants of care that could be structured to fit in the safe harbor:

  • Provision of in-kind transportation, such as transit or rideshare vouchers organized by the VBE participant

  • Home modifications such as grab bars, air filters or purifiers and other physical or structural modifications that allow patients to live safely at home

  • Temporary housing for an individual experiencing homelessness or living far from a hospital following a surgical discharge

  • Providing broadband access to a patient to enable remote patient monitoring or virtual care

  • Grocery or meal delivery services, nutrition supplements and nutrition education

  • Exercise or fitness programs or equipment

  • Vehicle modifications

  • Incentives as part of addiction recovery programs, including peer-to-peer programs and contingency management programs

  • Incentives as part of mental health programs

  • Supports related to interpersonal violence

The OIG also listed examples of tools and supports that would be unlikely to fit in the safe harbor, such as tools and supports related to finding employment and routine or ongoing rent or utility payments.

Health-Related Technology and Patient Monitoring

As noted above, the OIG did not finalize a definition of health-related technology and patient monitoring in the final rule to avoid inhibiting creativity and ingenuity. However, the OIG provided some examples of remote patient monitoring tools including:

  • Connected scales and blood pressure monitors that track and transmit data to a provider

  • Applications that allow a patient’s mobile device to monitor activity or other data

  • A smartphone that facilitates telehealth services with a provider

  • A platform that facilitates telehealth

  • Patient communication and counseling services

Prohibition on Marketing

One of the more ambiguous provisions of the final rule prohibits a VBE participant from using the tools and supports to market other reimbursable items or services to patients or for patient recruitment purposes. The OIG noted it does not intend to prohibit all communication from VBE participants to potentially eligible patients. An example of an impermissible communication is an announcement to a target patient population about the availability of free air conditioning filters if the patients come in for an office visit. The communication would be permissible if it provided information on the need for asthma patients to ensure the air in their home is clean and to contact the physician for more information. The OIG noted any particular communication requires a highly fact-specific assessment.

Required Goals for the Tools and Supports

The final rule requires that the proposed tool or support advances one or more of the following goals, as recommended by the patient’s licensed health care professional:

  • Adherence to a treatment regimen

  • Adherence to a drug regimen

  • Adherence to a follow-up regimen

  • Prevention or management of a disease or condition

  • Ensuring patient safety

The OIG notes the patient’s licensed health care professional does not need to provide written certification that the tool or support furthers one of these goals, but it should be documented in some manner. The OIG believes the patient’s licensed health care professional is in the best position to determine whether the tool or support is directly connected to the coordination and management of the patient’s care, advances one of the above enumerated goals, and will not result in medically unnecessary or inappropriate reimbursable items or services.

The OIG did not define the phrase “licensed health care professional,” but noted it could include a physician, physician assistant, nurse practitioner, qualified speech-language pathologist and registered dietician.


  1. See https://www.cms.gov/medicare/physician-self-referral/fraud-and-abuse-waivers

  2. See https://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/Downloads/Pioneer-ACO-Model-Waivers.pdf

  3. Id.

  4. See https://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/Downloads/next-gen-aco-2nd-amended-waivers-12122018.pdf

  5. Revisions to the Safe Harbors Under the Anti-Kickback Statute and Civil Monetary Penalty Rules Regarding Beneficiary Inducements, 81 Fed. Reg. 88368, 88393 (December 7, 2016).

  6. Id. n.19.

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