OIG Issues Favorable Opinion on Online Medical Information Sharing and Referral Database Service
On November 30, 2011, the U.S. Department of Health and Human Services, Office of Inspector General (OIG), issued OIG Advisory Opinion No. 11-18 regarding an online service that would be used to exchange information between healthcare practitioners, providers, and suppliers. The OIG concluded it would not impose administrative sanctions under the federal anti-kickback statute (42 U.S.C. §1320a-7b) (the Anti-kickback Statute), even though the proposed arrangement to provide this online service could generate prohibited remuneration under the Anti-Kickback Statute if the requisite intent to induce or reward referrals of federal healthcare program business were present.
This advisory opinion was requested by a publicly traded company (the “Requestor”) that provides web-based business services to physician practices. Under the proposed arrangement, the Requestor would offer a new service to its existing customers, called the Coordination Service, to facilitate the exchange of information between healthcare practitioners, providers, and suppliers and to help providers and suppliers keep track of patients receiving services from other healthcare professionals. The Coordination Service would assist healthcare providers in making referrals to other providers by: (1) sending the demographic, medical record, insurance, and billing information of a patient when the patient is seen by other providers; (2) issuing appropriate referral reminders; (3) tracking communications with other healthcare providers; and (4) exchanging information about orders, order results, and healthcare recommendations.
Healthcare providers would use the Coordination Service to access an electronic database (the “Network”) to identify other providers to which they would like to make a referral. The Network of providers in the database would include information from providers in the Requestor’s existing database, publicly available healthcare provider databases, the Requestor’s clients, and any other healthcare provider that requests to be included in the Network database.
The Requestor would offer healthcare providers the option of entering into Trading Partner Agreements that would allow them to customize their profiles in the Network database and to more comprehensive information from providers who make referrals to them through the Coordination Service. Healthcare providers are not required to enter into Trading Partner Agreements with Requestor in order to receive referrals through the Coordination Service. However, healthcare providers who do not enter into a Trading Partner Agreement would not be able to customize their Network profiles and would not be able to receive formatted orders as providers who enter into Trading Partner Agreements with the Requestor.
Under the proposed arrangement, the Requestor would charge providers a discounted monthly subscription fee for EHR services to automate and manage medical record-related functions. The Requestor would also charge three types of transaction-based fees for referrals made and received using the Coordination Service: (1) a base fee for transmitting the referral (Transmission Fee); (2) for referrals made to providers with a Trading Partner Agreement, a fee for the work performed by the Requestor to record and maintain the provider’s preferences, to attach clinical documentation, to facilitate appointment scheduling, and to provide reports regarding referrals received through the Coordination Service (Functionality Fee); and (3) a fee for work performed by Requestor to verify insurance benefit eligibility and obtain the referral authorization (Service Fee). The Requestor certified that the Transmission, Functionality, and Service Fees would all be set at fair market value, both individually and in the aggregate.The Requestor would charge a Transmission Fee (similar to a “per click” fee) each time a provider makes a referral using the Coordination Service. If the provider receiving the referral is a Trading Partner with Requestor, because they previously entered into a Trading Partner Agreement, then they would be responsible for the Transmission Fee. If the provider receiving the referral is not a Trading Partner with Requestor, then the provider making the referral would be charged the Transmission Fee. The total amount of Transmission Fees changed to a provider making a referral would not exceed the amount paid by a provider to Requestor for EHR-related services.
The Functionality Fee and Service Fee would always be paid by the Trading Partner. The Functionality Fee would be a fixed fee, assessed each time a provider uses the Coordination Service to make a referral to another provider who is a Trading Partner. The Service Fee would depend upon the extent to which services are provided, and would be assessed each time it is applicable.
The OIG commented that the “efficient exchange of health information between Health Professionals is a laudable goal,” however, when the exchange takes place in the context of patient referrals, the means used to exchange the information may implicate the Anti-kickback Statute. In its analysis, the OIG focused on two aspects of the fee structure under the proposed arrangement. First, the OIG reviewed whether any payments by healthcare providers with Trading Partner Agreements for any additional services constituted remuneration in return for the Requestor to influence healthcare providers to make referrals to these providers. The OIG also reviewed whether the discount to fees for the Requestor’s EHR services received by physicians who refer to physicians with Trading Partner Agreements constituted indirect remuneration from the Trading Partner physicians to other physicians to induce referrals.
Based on the following reasons, they concluded that the facts and circumstances of the proposed arrangement would adequately reduce the risk that the remuneration provided under the proposed arrangement could be an improper payment for referrals or for arranging for referrals of federal healthcare program business:
- The Requestor would include any healthcare provider within its online Network database from which a provider could make a referral, regardless of whether a provider enters into an agreement with Requestor or pays any fees to Requestor. Furthermore, the Requestor would not control or influence the decision as to which healthcare provider a referral would be made.
- The Transmission, Functionality, and Service Fees would reflect the fair market value of the actual services Requestor would provide, both individually and in the aggregate. Such fees would not vary based on the value the items or services that a healthcare provider who receives a referral might provide to federal healthcare program beneficiaries. Additionally, the Requestor’s fees would add value unrelated to inducing referrals, thereby distinguishing the proposed arrangement from an arrangement in which a party pays a fee for priority in receiving referrals, rather than for actual services provided.
- The proposed arrangement’s fee structure would be unlikely to influence a provider’s referral decision, both because the amount of the Transmission Fee would be low, and the aggregate amount of Transmission Fees that could be charged to a provider would be capped to ensure that a provider who makes referrals does not pay more for the aggregate services than they would have paid for the EHR Service alone.
- The Coordination Service, which would utilize the comprehensive Network open to all healthcare providers, is designed to facilitate the exchange of information between Health Professionals, not restrict the potential providers to which another provider may make a referral.
- Trading Partners would not have access to a larger referral stream than Non-Trading Partners, and Non-Trading Partners would not be disadvantaged with regard to the opportunity to receive and respond to referrals made through the Coordination Service.
In reaching a favorable conclusion for the Requestor, the OIG seemed to base its decision in large part on the fact that any healthcare provider could request to be included in the electronic referral database, and that any payment or discount in fees owed to Requestor would be based on value-added services unrelated to referrals. Another important aspect to the OIG’s conclusion is that in the context of health information exchange and care coordination, transaction-based charges that would be consistent with fair market value outside of a referral relationship may be distinguishable from the “per-click” fees that the OIG generally considers to be suspect in an arrangement.
Clay Countryman is a partner with Breazeale, Sachse & Wilson, L.L.P.