OIG Increases “Nominal Value” Gift Amounts for Medicare & Medicaid Beneficiaries

Under Section 1128A(a)(5) of the Social Security Act, a person who offers or transfers to a Medicare or Medicaid beneficiary any remuneration that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider or supplier of Medicare or Medicaid payable items or services may be liable for civil money penalties of up to $10,000 for each wrongful act. “Remuneration” is defined under the act to include, among other things, waivers of co-payments and deductible amounts (or any part thereof) and transfers of items or services for free or for other than fair market value. The act contains a limited number of exceptions permitting Medicare or Medicaid providers to offer beneficiaries inexpensive gifts (other than cash or cash equivalents, e.g., gift cards) or services without violating the law.

Last month, the Department of Health & Human Services, Office of Inspector General (OIG) issued a policy statement clarifying the terms “inexpensive” and “nominal” in order to offer updated guidance to providers and suppliers. In the policy statement, the OIG specified that “nominal value” means having a retail value of no more than $15.00 per item or $75.00 in the aggregate per patient on an annual basis. This is a slight change from the OIG’s previous guidance issued in 2000, which defined the term to mean a retail value of $10.00 per item or $50.00 in the aggregate on an annual basis.

Health care entities and individual providers and suppliers should review their corporate compliance policies and practices to ensure that any gifts to beneficiaries are of nominal value as defined in the policy statement, or otherwise meet an exception to the prohibition on inducements. If you need assistance in reviewing or revising your corporate compliance and related policies, please contact us.