News & Insights


January 8, 2024

Health Headlines – January 8, 2024


OIG Issues Favorable Advisory Opinion Permitting Consultant to Provide Gift Cards to Physician Practice Customers - On January 3, 2024, OIG posted Advisory Opinion 23-15, a favorable advisory opinion allowing a consultant (the Requestor) who provides practice optimization services to physician practices to provide the physician practice customers with gift cards in exchange for recommendations to other physician practice customers.

Proposed Arrangement

The Requestor provides practice optimization services to physician practices, which include identifying workflow issues, data analytics, compliance monitoring services and bi-annual Medicare Merit-Based Incentive Payment System (MIPS) eligibility checks, annual MIPS- related training, auditing MIPS-related performance measures and assistance with submitting MIPS data.  The Requestor would like to give its current customers who recommend Requestor’s services to prospective customers a $25 gift card per recommendation and an additional $50 gift card if the current customer’s recommendation is successful (the Proposed Arrangement).

OIG’s Determination

After careful consideration of the facts, OIG determined that the Proposed Arrangement would not implicate the Federal anti-kickback statute (AKS) because it would not generate prohibited renumeration under the statute. 

OIG stated that the Proposed Arrangement would involve three potential streams of remuneration: (1) Requestor would give gift cards to physician practice customers who recommend the Requestor to potential physician practice customers; (2) physician practice customers would pay the Requestor for consulting services; and (3) physician practice customers would potentially receive an opportunity to earn a fee as a result of the consulting services in the form of higher MIPS reimbursements from Medicare.

OIG considered the following factors in making its decision that all three instances of renumeration were not prohibited under the AKS:

  • With respect to item 1, the gift cards provided to current customers would not implicate the AKS because they are not being provided in exchange for the physician practice customers making referrals of, purchasing, arranging for, or recommending services reimbursable by a Federal payor.
  • With respect to items 2 and 3, the Requestor certified that it does not recommend to physician practice customers the purchasing, leasing, or ordering of any items or service for which payment may be made to a Federal health care program, and if the consulting services do result in higher MIPS-related payments from the Medicare program, that payment is not contingent on referrals for, the purchase of, or arranging for or recommending the purchase of any item or service reimbursable by a Federal payor.

The full text of the OIG Advisory Opinion is available here.

Reporter, Kimberly Rai, New York, +1 212 556 2198,

OIG Issues Favorable Advisory Opinion Regarding Retirement-Linked Voluntary Redemption Offer to Physician Partners – On January 3, 2024, OIG posted Advisory Opinion No. 23-12 regarding an arrangement by which certain hospitals (the Hospitals) would make a redemption offer to all of their physician partners reaching age 67 to have their partnership units repurchased by the Hospitals over a 2-year period, contingent upon the physician partners agreeing to retire from practicing medicine (the Arrangement). OIG concluded that although the Arrangement would implicate the Federal anti-kickback statute (the AKS), it would not impose civil monetary penalties on the Hospitals because the Arrangement presents a sufficiently low risk of fraud and abuse.

The Hospitals are organized as a limited liability partnership that operates a hospital and wholly owns another entity that operates another hospital. Relevant here, the limited liability partnership has a class of shareholders consisting of a medical center entity that is wholly owned by a nonprofit corporation and a separate class of shareholders comprised of individual physicians with direct partnership units (the “Physician Partners”). The partnership agreement permits the redemption of a Physician Partner’s partnership units upon that Physician Partner’s voluntary retirement from the practice of medicine. According to the Hospitals, the lack of a mandatory retirement age makes it difficult for the Hospitals to anticipate when physicians will exercise redemption-upon-retirement provisions. According to the Hospitals, the Arrangement enhances economic certainty regarding liquidity needs arising from Physician Partner redemptions.

Under the Arrangement, the Hospitals would offer all Physician Partners who have obtained age 67 the option to have their partnership units redeemed in three equal increments over a two-year period. In exchange, the Physician Partners would agree to retire within six (6) months after receiving the first redemption payment. The Hospitals would anticipate making similar offers every year going forward, and always making the redemption offers available to all Physician Partners turning age 67 during that calendar year.

The Arrangement includes certain safeguards relative to the AKS:

  • The Physician Partners would be required to sign a document affirming that they would not be in a position to make a referral of patients to the Hospitals (or any of their partners) once retired.
  • The Physician Partners would have a reasonable (30 to 60 days) time for Physician Partners to determine whether to accept the redemption offer.
  • The Physician Partners would have six months to retire after receiving the first redemption payment to enable those doctors to orderly wind down their medical practices and inform patients of their retirement.
  • The redeemed partnership units would be offered to existing and new Physician Partners through annual partnership offerings and without regard to age or the volume or value of referrals or other business generated for the Hospitals or any of their partners.

OIG noted that the Arrangement implicates the AKS because the Hospitals offer remuneration to eligible Physician Partners who refer patients, including Federal health care program beneficiaries, to the Hospitals and their partners, and the eligible Physician Partners would continue to make such referrals for up to six months after receiving the first retirement redemption payment. However, OIG found the risk of fraud and abuse presented by the Arrangement to be sufficiently low under the AKS because:

  • The Arrangement, if offered in any specific year, is extended to all Physician Partners turning age 67 in that calendar year without condition upon referrals to the Hospitals and their partners and, therefore, the risk of steering and increased cost to federal healthcare programs is lessened.
  • The remuneration paid pursuant to the Arrangement is unlikely to result in unfair competition due to the no-referral certificate and the Physician Partners only continuing to refer patients to the Hospitals and their partners for up to six months, which is a limited amount of time intended to allow for the orderly winding down of the Physician Partners’ medical practices.

The OIG Advisory Opinion is available here.

Reporter, Christopher C. Jew, Los Angeles, + 1 213 443 4336,


OIG Issues Favorable Advisory Opinions Regarding Incentives to Encourage Medigap Beneficiaries to Seek In-Network Care

On January 3, 2024, OIG posted two favorable advisory opinions regarding the use of financial incentives to encourage beneficiaries of Medigap policies to seek care from preferred hospital networks. OIG Advisory Opinions 23-13 and 23-14 provided favorable opinions on insurance companies’ proposals to provide discounts on inpatient deductibles and premium credits against policy renewals to policyholders who use a network hospital for inpatient stays. The proposed arrangements and OIG’s analysess mirror numerous other advisory opinions issued by OIG in 2021 and 2022. Previous reporting on those advisory opinions is available here (Advisory Opinion Nos. 21-03, 21-04, 21-05), here (Advisory Opinion No. 21-07), here (Advisory Opinion No. 21-09), here (Advisory Opinion No. 21-11), and here (Advisory Opinion No. 22-12).