On October 15, 2013, the Office of Inspector General (OIG) released an Advisory Opinion concerning a community health services organization’s provision of free dental care to financially needy uninsured and underinsured patients that are not covered by Medicaid.
The organization was concerned that the free services violated two aspects of the Medicaid law: (1) the Social Security Act prohibits providers from billing Medicaid charges for items or services substantially in excess of the provider’s “usual charges,” and (2) the Anti-Kickback Statute prohibits providers from offering remuneration to Medicaid patients to induce them to receive services from the provider.
In the Advisory Opinion, the OIG stated that when a provider calculates its “usual charges,” it need not consider free or substantially reduced charges to uninsured or underinsured patients with financial need. Therefore, the OIG would not seek to exclude a provider from the Medicaid program for providing discounts to financially needy uninsured and underinsured patients.
The OIG also stated that the organization’s provision of free services to financially needy uninsured or underinsured patients does not violate the Anti-Kickback Statute because the free services will not be provided to Medicaid patients. The Anti-Kickback Statute would only be implicated if a provider used the free services as a means to induce Medicaid patients to order additional services that could be billed to the Medicaid program.
The bottom line is that providers may offer free services to uninsured or underinsured patients with financial hardship. With that said, it is critical that providers have uniform eligibility criteria to determine whether such patients actually are financially needy. In separate guidance released in 2004 the OIG outlined factors that providers should consider in determining financial need, including:
- The local cost of living;
- A patient’s income, assets, and expenses;
- A patient’s family size; and
- The scope and extent of a patient’s medical bills.
By applying these factors uniformly at all times, providers can ensure that their provision of free or discounted services meets OIG requirements.
If you would like more information please contact Casey Moriarty.