Use caution with gifts to Medicare patients

An August 2002 “Special Advisory Bulletin” by the Office of the Inspector General (OIG) at the US Department of Health and Human Services, notes that HIPAA rules prohibit providers from offering valuable gifts to Medicare patients as an inducement to choose a provider. Offering ‘giveaways’ to attract business favors providers with larger businesses who may have greater financial resources while producing a disadvantage to the smaller business providers. There is broad language with a number of marketing practices potentially affected by this rule (Section 1128(a)(5)). The following are some, but not all of the rule language:

  • The OIG has interpreted the prohibition to permit Medicare or Medicaid providers to offer beneficiaries inexpensive gifts (other than cash or cash equivalents) or services without violating the statute. For enforcement purposes, inexpensive gifts or services are those that have a retail value of no more than $10 individually, and no more than $50 in the aggregate annually per patient.
  • Providers may offer beneficiaries more expensive items or services that fit within one of the five statutory exceptions: waivers of cost-sharing amounts based on financial need; properly disclosed copayment differentials in health plans; incentives to promote the delivery of certain preventive care services; any practice permitted under the federal anti-kickback statute pursuant to 42 CFR 1001.952; or waivers of hospital outpatient co-payments in excess of the minimum co-payment amounts.
  • The OIG is considering several additional regulatory exceptions. The OIG may solicit public comments on additional exceptions for complimentary local transportation and for free goods in connection with participation in certain clinical studies.
  • In sum, unless a provider’s practices fit within an exception (as implemented by regulations) or are the subject of a favorable advisory opinion covering a provider’s own activity, any gifts or free services to beneficiaries should not exceed the $10 per item and $50 annual limits.

More information can be found in the OIG bulletin posted at http://oig.hhs.gov/fraud/docs/alertsandbulletins/SABGiftsandInducements.pdf. Next week, we’ll consider a OIG decision that allow grocery store gift cards to be offered to Medicare-age patients.