OIG sets parameters for online healthcare directory

Category: HHS, OIG, Anti-Kickback Statute, Civil Monetary Penalties Law

OIG sets parameters for online healthcare directory


In newly issued Advisory Opinion No. 19-04, the U.S. Department of Health and Human Services Office of Inspector General (OIG) addressed whether a technology company’s online healthcare directory for searching and booking medical appointments would violate the federal Civil Monetary Penalties Law or Anti-Kickback Statute.

Under the proposed arrangement, healthcare professionals would pay the company a flat annual subscription fee to be listed on the directory, and, in certain states, healthcare professionals would pay a lower annual subscription fee, plus either a per-click or per-booking fee. The company represented that each of these fees would be set in advance based on valuations by an independent, third-party valuation firm. In addition to these fees, providers would be able to purchase banner advertisements, either on a per-impression or per-click basis, depending on the state, that would be displayed at the top or on the side of the directory results and in some cases on third-party websites. The per-impression and per-click fees for sponsored advertisements would be determined through a bidding process.

The OIG determined that the proposed arrangement would not implicate the Civil Monetary Penalties Law because access to the online healthcare directory alone would not likely impact a beneficiary’s selection of a particular provider. The OIG noted, however, that the proposed arrangement would implicate the Anti-Kickback Statute, in that the company, through its scheduling service, would be arranging for the furnishing of federally reimbursable items and services in exchange for a fee, and the company would be engaging in advertising activities related to federally reimbursable items and services through its directory and sponsored results. Notwithstanding, the OIG concluded that the proposed arrangement would present a low risk of fraud and abuse under the Anti-Kickback Statute for a combination of the following reasons:

  • First, even though the per-click and per-booking fees may vary by medical specialty, geographic location, and certain other relevant factors, the fees would be set in advanced based on valuations by an independent, third-party valuation firm and would not take into account the users’ insurance status nor the volume or value of any business generated for a provider in the directory. Notably, the fees that providers would pay would not affect the frequency with which the providers appear, or their placement, in the directory results.

  • Second, given the company is not a healthcare provider or supplier, in OIG’s view, the company did not warrant the same level of scrutiny as “white coat” marketers in the healthcare profession do given their position of trust and ability to exert undue influence.

  • Third, the company’s advertising activities would not specifically target federal healthcare program beneficiaries and would otherwise be passive in nature, in that initial contact with the company would be initiated by the user and not the company. In addition, the company would clearly mark the sponsored results as paid advertising and would include more pronounced lettering and conspicuous coloring in advertisements whenever it determined that a user is a federal healthcare program beneficiary.

  • Fourth, the company would not promote any particular item or service or prioritize any particular provider based on the amount the provider pays, but rather the search results would be based solely on user-centric information, such as providers who accept the user’s insurance, offer services within the user’s geographic area, or are available within the user’s designated timeframe.   

  • Fifth, because the company’s potential user base is the general public who, regardless of insurance status, can access the company’s website and its services, the proposed arrangement would not target federal healthcare program beneficiaries.

  • Lastly, the company certified that it would not provide anything of value to federal healthcare program beneficiaries to induce them to use the directory or that otherwise might serve to influence their selection of a healthcare professional.

This opinion provides a helpful template for companies designing healthcare marketplaces without running afoul of federal fraud and abuse laws. Notably, the OIG appears to pave the way for use of certain “per-click” or even “success-based” marketing fees, provided there are sufficient safeguards to minimize the influence a company has to generate business for a particular provider. In Advisory Opinion 10-23, the OIG stated in 2010 that “per-click” and “success-based” marketing fees were inherently subject to abuse and reflective of the volume or value of business generated for a provider. In the context of the online directory described above, however, the OIG was not concerned with the fact that the company’s aggregate fees would increase with more clicks or new-patient bookings through its directory, presumably because the programmatic and passive nature of the directory would limit the company’s ability to drive additional business through the directory or to influence the selection of particular providers or services.

Belmont Law student Amy Zink contributed to this report.

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