OIG Permits Hospital to Offer Free Lab Interfaces

In a legal advisory opinion offered to an unnamed public hospital, the federal government seems to have paved the way for hospitals to offer free software to clinicians for communicating with the lab without fear of violating anti-kickback rules. Issued by the Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services, the advisory only applies legally to the unnamed hospital that requested that OIG review the matter. However, OIG lays out a clear explanation of its thinking that could put other hospital labs at ease if they choose to offer such software to improve lab ordering and reporting with physician offices.

Part of the federal anti-kickback statute notoriously makes giving away valuable items or services to providers very risky, as the relationship can be interpreted as a kickback intended to induce or reward referrals that fall under Medicare reimbursement. However, in this case, OIG made clear that offering free software to physicians for the sole purpose of communicating with the lab would not cross the line because the software has no other value. The software is "integrally related to the offering provider's services," according to OIG.

Offering software to physicians would be considered legal in the same way that offering computers exclusively for lab interfaces is legal, OIG explained, an extension of an opinion going back to 1991. Offering a free computer or software would only cross the line if the physician could use the item for other purposes, giving the item independent value and thus constituting an illegal inducement.

The software in question for OIG's review would not replace an electronic health record system or other service, OIG noted. The only information other than lab data available through the interface would be patient names and other data necessary to process the lab orders.

The advisory option is available from the OIG website.

CMS Doubles Number of ACOs

The Centers for Medicare and Medicaid Services (CMS) announced approval for 106 new Accountable Care Organizations (ACOs), bringing the total to 250. Some 4 million Medicare beneficiaries now receive care under an ACO. To qualify for the ACO initiative, providers must meet CMS's standards for care coordination, patient safety, and other quality measures. In return, providers under ACOs receive better reimbursement if they also save money compared to benchmarks.

The new ACOs include a diverse cross-section of physician practices across the country. Roughly half of all ACOs are physician-led organizations that serve fewer than 10,000 beneficiaries. Approximately 20% include community health centers, rural health centers, and critical access hospitals that serve low-income and rural communities.

The new group of ACOs also includes 15 Advance Payment Model ACOs. These are physician-based or rural providers that gain access to bonuses from CMS to invest in staff, electronic health record systems, or other infrastructure required to pass muster in regard to care coordination under the ACO model.  In the Advanced Payment Model, Medicare recoups advance payments over time through future shared savings.

ACOs already have reduced the growth of Medicare spending, according to CMS. Growth in Medicare spending per beneficiary hit historic lows during the 2010 to 2012 period, according to a new CMS report. Projections by both the Office of the Actuary at CMS and by the Congressional Budget Office estimate that Medicare spending per beneficiary for the next decade will grow at approximately the same rate as the economy as a whole. This would represent a break with a decades-old pattern of spending growth outstripping economic growth.  

A list of the new ACOs and other information is available from the CMS Innovation Center website.