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Office of the Inspector General (OIG) Advisory Opinions

Office of the Inspector General (OIG) Advisory Opinions 

Overview

The Office of the Inspector General (“OIG”) of the Secretary of Health and Human Services (“HHS”) may, at its discretion, issue legal opinions, known as “advisory opinions” to one or more requesting parties indicating whether a proposed or existing business arrangement could be violative of federal fraud and abuse statutes and regulations and, if so, whether it is subject to OIG administrative sanctions.  Though not considered binding for any party other than the party or parties requesting the opinion, advisory opinions can provide meaningful guidance on the application of the federal Anti-Kickback Statute and other federal fraud and abuse laws to specific factual situations. 

Policy

An OIG advisory opinion is a legal opinion issued by the OIG to one or more requesting parties determining whether, and to what extent, the requesting party’s or parties’ existing or proposed business arrangement is potentially violative of federal fraud and abuse laws.  The opinion is legally binding on HHS and the requesting party or parties, but is not binding on any other governmental department or agency.  No other person or entity may rely on an advisory opinion issued to another party.  42 C.F.R. § 1008.53.  A party that receives a favorable advisory opinion is protected from OIG administrative sanctions, so long as the arrangement at issue is conducted in exact accordance with the facts submitted to the OIG.  42 U.S.C. § 1320a-7d(b)(4)(A); 42 C.F.R. § 1008.59.  Nevertheless, the OIG publishes redacted versions of issued advisory opinions on its website.  While those published opinions cannot be explicitly relied upon by third parties, they can provide helpful guidance about what types of arrangements the OIG deems permissible or impermissible.  42 C.F.R. § 1008.47.  Though some arrangements might be deemed by OIG to be potentially violative of federal fraud and abuse laws, the OIG might still conclude that the arrangement is not subject to OIG sanctions due to the facts and circumstances underlying the proposed arrangement.  For example, the OIG recently ruled that an arrangement for a hospital to compensate physicians for on-call services performed for uninsured patients might generate prohibited remuneration; however, the OIG concluded that this particular arrangement would not be subject to administrative sanctions, because the circumstances giving rise to the arrangement and safeguards undertaken by the hospital rendered the risk of fraud or abuse very low.  OIG Advisory Opinion 09-05. 

Authority

Congress empowered HHS to create and implement the advisory opinion process under those provisions of Social Security Act which provide guidance regarding the application of health care fraud and abuse sanctions.  42 U.S.C. § 1320a-7d.  The statute specifies those matters which are eligible, and not eligible, for the issuance of advisory opinions by HHS in consultation with the U.S. Attorney General. 42 U.S.C. § 1320a-7d(b).  Advisory opinions are issued as to the following matters: (a) what constitutes prohibited remuneration under the Federal Anti-Kickback Statute (42 U.S.C. §§ 1320a-7a(i)(6) and 1320a-7b(b)) (“AKS”); (b) whether an arrangement or proposed arrangement satisfies any of those safe harbors listed in the AKS statute as activities that do not constitute prohibited remuneration; (c) whether an arrangement or proposed arrangement satisfies the criteria established by HHS regulations, for activities which do not result in prohibited remuneration; (d) what constitutes an inducement to reduce or limit services to individuals entitled to federal medical benefits within the meaning of the civil monetary penalties provisions enumerated in 42 U.S.C. § 1320a-7a(b) (sometimes referred to as the “hospital incentive law”); and (e) whether an activity or proposed activity constitutes grounds for the imposition of administrative sanctions.  42 U.S.C. § 1320a-7d(b)(2).  Advisory opinions shall not address: (a) whether fair market value shall be, or was, paid or received for goods, services or property; or (b) whether an individual is a bona fide employee under the Internal Revenue Code.  42 U.S.C. § 1320a-7d(b)(3). 

Agency Guidance

The OIG has issued regulations providing highly specific guidance about the process for submitting a request for an advisory opinion, the responsibilities of the OIG upon receipt of such request, advisory opinion fees and the scope and effect of advisory opinions.  42 C.F.R. §§ 1008.1-1008.59. 

In 1999, pursuant to the final order issued in 63 Fed. Reg. 38311-38326 (July 16, 1998), the OIG issued a preliminary checklist for advisory opinion requests which is keyed to specific regulatory requirements.  Though not recently revised, that checklist is available here: http://oig.hhs.gov/fraud/docs/advisoryopinions/precheck.htm.  The OIG also makes available on its website a list of recommended preliminary questions and supplementary information that a party should consider in submitting a request for an advisory opinion. http://oig.hhs.gov/fraud/docs/advisoryopinions/prequestions.htm

Though not issued formally by way of a proposed or final ruling, the OIG website contains a list of topics which, in addition to those referenced in the statute, are not appropriate for the advisory opinion process.  These include: hypothetical situations; “model” arrangements; general questions of interpretation; activities in which the requesting party is not, and does not plan to, be involved; the application of statutes not contained within the sections governing civil monetary penalties, exclusion from Medicare and the AKS; and the application of the Stark Law.  These topics, as well as other useful information about the advisory opinion process, can be found on the OIG’s FAQ page at: http://oig.hhs.gov/fraud/advisoryopinions/aofaq.asp.

Conclusion

Advisory Opinions offer the requesting party the opportunity to receive a legal, binding determination from the OIG as to whether a proposed business arrangement is potentially violative of federal fraud and abuse laws and/or subject to sanction by the OIG.  However, each advisory opinion is binding only as to HHS and the requesting party or parties.  The OIG publishes these opinions in redacted form for public reviewing which, while requiring careful review and comparison to their own potential arrangements, allow third parties to gain important insight about how to structure arrangements that are less likely to be vulnerable to administrative sanctions by the OIG. 

Acknowledgment

AHLA would like to thank ____________ for drafting this article and ________ for able editorial assistance.