Smartphone loan program found unlikely to break CMP law


The Office of the Inspector General (“OIG”) recently issued Advisory Opinion 22-08 (the “Advisory Opinion”), concluding that the provision of limited use smartphones by a federally qualified health center ( “FQHC”) to Patients with Income (the “Arrangement”) Did Not Have the Intent Required to Violate the Federal Anti-Kickback (“AKS”) Law[1] and was not likely to generate prohibited compensation under the Federal Civil Monetary Penalty Act Prohibiting Beneficiary Inducement CMPs.[2].

The arrangement

The FQHC mainly served people with low incomes[3] including Medicare and Medicaid beneficiaries and offered telehealth services to its patients through a downloadable telehealth app on a smartphone.

FQHC has received funding from the Federal Communications Commission (“FCC”) and a local charity to provide smart phones and some data services to its patients.[4] The FCC funding was intended to facilitate the ability of healthcare providers to procure telecommunications services and connected devices in an effort to make telehealth services available to patients during the COVID-19 public health emergency. 19 (“PHE”) pending.

FQHC loaned the smartphones on a first-come, first-served basis to existing patients who did not have a smartphone capable of running the telehealth application. Patients eligible for the program had to have received at least one FQHC service in the previous 24 months and reported income levels of 200% or below the Department of Health and Human Services’ federal poverty guidelines. The arrangement was limited to 3,000 smart devices and did not extend to new patients.

In addition to providing loaner devices, the FQHC made voice and data services available to patients free of charge for 14 months, after which patients were required to pay for these services directly. Smartphones were available to be used only to make or receive phone calls, send or receive text messages, receive telehealth services through the FQHC app, and/or view patient medical records. Smartphones could not be used to download apps or browse the Internet, and any patient who was no longer receiving services from FQHC had to return the smartphone.

BIG Analysis

The federal anti-bribery law

The AKS makes it a criminal offense to knowingly and voluntarily offer, pay, solicit or receive anything of value (in cash or in kind) to induce a person to refer to any reimbursable item or service in the under a federal health care program.[5] Violating the AKS can result in a maximum fine of $100,000, 10 years imprisonment, or both, per violation.[6]

The OIG found that, although the arrangement did not fall under the safe harbor provisions of the AKS, the safeguards in the arrangement presented only minimal risk of fraud and abuse under the AKS for the following reasons:

  • Neither the FCC nor the local charity that funded FQHC had a financial interest in patients choosing FQHC for services;

  • FQHC reported that it followed all funding requirements imposed by the FCC and the local charity; and

  • There was no indication that smartphones would be used by FQHC to inappropriately increase the use of federally reimbursable services despite FQHC’s intention to continue to allow patients to use smartphones after the expiry of the PHE.

CMP Incentive Beneficiary

The Beneficiary Incentive CMP imposes civil monetary penalties on anyone who transfers or offers a free item or service to a beneficiary of Medicare or a state health care program that the person knows or ought to know that it is likely to influence the beneficiary’s choice of provider, practitioner, or supplier, for ordering or receiving any service paid for by Medicare or a state health care program . However, supplying an item or service that “promotes access to care and poses a low risk of harm to patients and federal health care programs” is an exception (the “promoting exception ‘Health care access”).[7]

Promote access to care

In assessing whether the provision of free smartphones and data by the FQHC promoted access to care under the arrangement, the OIG concluded that the arrangement improved the ability of Medicare and Medicaid beneficiaries to access services. of telehealth. during the PHE For the following reasons:

  • Since the majority of FQHC patients reported incomes at or below 200% of the federal poverty guidelines, the provision of limited-use smartphones may reduce socio-economic barriers to accessing telehealth services;

  • Remote patient monitoring and mobile health apps have enabled healthcare providers to deliver quality healthcare directly to patients regardless of location; and

  • The Agreement was limited to patients who did not already have a device capable of running the application required to access FQHC telehealth services.

Risk of harm

The OIG concluded that the arrangement posed a low risk of harm by assessing the likelihood that compensation would interfere with clinical decision-making, increase costs to federal health care programs or beneficiaries due to use excessive or inappropriate, and improves patient safety or quality of care. care concerns. In reaching this conclusion, the OIG highlighted the following features of the Arrangement:

  • The arrangement was unlikely to interfere with clinical decision-making as there was no information to support that the use of smartphones by patients negatively impacted the clinical decision-making of healthcare professionals providing FQHC patient services;

  • The risk of overuse or misuse was low because:

    • The arrangement was limited to existing patients who already had the smartphones;

    • Patients have received at least one FQHC service in the past year;

    • Smartphones had limited functionality; and

    • Patients were required to pay directly for voice and data services after initial service delivery; and

  • The arrangement did not pose patient safety or quality of care concerns on the grounds that the use of telehealth services during PHE promoted patient safety by reducing physical contact with providers, staff and other patients and that the FQHC did not provide telehealth services when doing so posed risks to patient safety or quality of care.

Finally, it is important to note that the OIG found that, in the event that the program does not satisfy the exception promoting access to care, it would not impose administrative sanctions under the incentive CMP. beneficiaries after the expiration of the PHE based on the exception mentioned above. features of the Arrangement.

Convenient takeaways

The advisory provides useful information for healthcare providers considering arrangements to improve access to telehealth services during PHE and beyond. Healthcare entities interested in implementing similar programs should keep in mind that advisory opinions are limited to their facts and are binding only on the requesting parties. Experienced legal advisers should be consulted for advice on specific provisions prior to implementation.


[1] Section 11128A(a)(7) of the Social Security Act (“SSA”).

[2] Section 1128(a)(5) of the SSA.

[3] 94% of FQHC patients were rated as having incomes equal to or less than 200% of the federal

poverty guidelines.

[4] The FCC provided 85% and the local charity provided 15% of the funding received by the

FQHC to buy smartphones.

[5] 42 USC § 1320a-7b(b).

[6] Identifier.

[7] SSA Section 1128A(i)(6)(F).

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XII, Number 223

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