OIG Issues Favorable Advisory Opinion Regarding Discounts between Medigap and PHO’s

The OIG concluded that while the proposed arrangement could generate prohibited remuneration under the federal Anti-Kickback Statute, the OIG would not impose administrative sanctions in this case because the arrangement would be unlikely to increase costs for federal healthcare programs, is unlikely to lead to inappropriate utilization of healthcare services, and would be unlikely to impact competition or patient choice. This marks the fifth time since December 18, 2023, that the OIG has issued a nearly identical opinion on the issue of PHO discounts for Medigap policyholders. Specifically, all 5 OIG opinions allowed a Medigap insurance company contracting with the PHO to provide discounts on the otherwise-applicable Medicare Part A inpatient deductibles for policyholders and, in turn, allowed the Medigap insurer to provide a premium credit of $100 off the next renewal premium to those policyholders who used a network hospital within the PHO’s network for an inpatient stay. According to the OIG, five separate Advisory Opinions were issued because there were multiple parties to the fact pattern and each requested an Advisory Opinion specific to that party.