Did it ever occur to you that a Preferred Provider Organization might run afoul of the federal anti-kickback statute by paying for the services of a marketing firm on the basis of PMPM (per member per month)? On October 13, 2006 the OIG posted advisory opinion No. 06 17. The dental network (the “Network”) contracted with a marketing firm for services. The marketing firm introduced a third party administrator (“TPA”) to the network. The marketing TPA made the network available to one of its clients, a Federal employee health benefits plan. Most of the beneficiaries in the Federal employee health benefit plan do not qualify for federal healthcare benefits programs, although some do.
The OIG blessed the arrangement because the compensation owed to the marketing company was only tangentially related to the generation of federal health program benefits. It indicated that it based its conclusion on the fact that relatively few Federal program dollars would be paid out and that the marketing fees created no discernible incentive for the generation of Federal Program Business.
The OIG added a caution:
We might have reached a different conclusion, however, if the proportion of items and services payable by Federal health care programs had been greater, or if these were other indices suggesting a nexus between the compensation paid to the marketing company and the generation of Federal Health Care program business.
There is a bit of irony here. (Apparently, the OIG doesn’t do irony intentionally.) What if the contract was with a Medicare HMO? The Network is a PPO that accepts capitation in the form of a per member per month payment. The Network makes its money by not providing services to the federal program beneficiaries. The network pays the marketing agent not on the basis of the volume of Federal Health care business but on the basis of the number of covered lives under the program. The actual referral source is in fact the TPA, not the marketing agent, who apparently receives no direct benefit except the enlistment of a relatively cheap provider network for its plan beneficiaries. The analysis in this Advisory Opinion and its caveats seem more than a little flawed.
Comments