OIG Addresses Financial Incentives for Referrals

In May, the U.S. Department of Health and Human Services Office of the Inspector General (OIG) addressed a rewards program occurring in some Continuing Care Retirement Communities (CCRCs), according to Benesch Attorneys at Law. Under these programs, employees and residents would receive a gift card, cash incentive, or credit towards their own living fees, for referring a potential resident to the CCRC.

At first glance, this looks like it violates the Medicare and Medicaid Anti-Kickback Law. The Anti-Kickback Law imposes penalties for anyone offering incentives or cash rewards in exchange for referrals or recommendations for programs and services reimbursable under the Medicare and Medicaid programs. This includes anything from assisted living facilities to durable medical equipment.

Surprisingly, the OIG concluded that the incentive programs taking place at CCRCs are not in violation of anti-kickback laws, primarily because independent living is not reimbursable under Medicare or Medicaid, and technically the referrals are going to the independent living unit of the CCRCs. A CCRC is designed to offer independent living, assisted living, and skilled nursing facility services from the same campus, but the incentives do not apply to residents who move directly into the assisted or skilled units.

The OIG reasoned that many of the independent living referrals will never utilize the CCRC’s assisted or skilled nursing services, and whether or not they do at some point in the future is out of the immediate control of the referring resident or employee.

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2 Responses to “OIG Addresses Financial Incentives for Referrals”

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