United States: OIG Issues Advisory Opinion Addressing Lodging And Meals Assistance for Financially Needy Patients

Morris Miller is a Partner in the Tallahassee office

On March 3, 2017, the Office of Inspector General (OIG) of the Department of Health and Human Services issued OIG Advisory Opinion No. 17-01, in which the OIG addressed whether a hospital's proposal to provide free or reduced-cost lodging and meals to certain financially needy patients (1) would constitute grounds for the imposition of civil monetary penalties (CMPs) under Section 1128A(a)(5) of the Social Security Act (the Act), which provides for CMPs against a person who offers or transfers remuneration to a federal health care program beneficiary that the person knows or should know is likely to influence the beneficiary's selection of a particular provider (the CMP Statute), and (2) would violate the Medicare anti-kickback statute, Section 1128B(b) of the Act, which prohibits the offer or payment of remuneration to induce the referral of federal program beneficiaries.

The hospital proposed to offer certain patients residing in rural or underserved areas free or reduced-cost lodging at a hotel near the hospital for one night before, and up to two nights after, treatment at the hospital (rates at the hospital were approximately $70 per night), and meals at the hospital's cafeteria not to exceed a value of $15 per overnight stay. To qualify for the free or reduced-cost lodging and meals, a patient would have to satisfy certain financial need criteria (assistance levels would vary based on the patient's income as a percentage of the federal poverty level), reside at least 90 miles from the hospital and in a medically underserved or health professional shortage area, and satisfy certain other criteria generally relating to the scheduling of the patient's services at the hospital.

Based on the facts underlying the request for the advisory opinion, the OIG concluded that (1) the proposed arrangement would not constitute grounds for the imposition of CMPs because it qualified as remuneration that promotes access to care and poses a low risk of harm to patients and federal health care programs; and (2) although the proposed arrangement could potentially generate prohibited remuneration under the anti-kickback statute if the requisite intent to induce or reward referrals were present, the OIG would not impose administrative sanctions in connection with the proposed arrangement.

In concluding that the proposed arrangement would not violate the CMP Statute, the OIG relied upon a provision of the Affordable Care Act and related regulations that became effective in January, 2017, under which, for purposes of the CMP Statute, "remuneration" does not include remuneration that promotes access to care and poses a low risk of harm to patients and federal health care programs (the "Promotes Access Exception"). In the recent regulations, the OIG interpreted the Promotes Access Exception to apply to:

[i]tems or services that improve a beneficiary's ability to obtain items and services payable by Medicare or Medicaid, and pose a low risk of harm to Medicare and Medicaid beneficiaries and the Medicare and Medicaid programs by — (i) [b]eing unlikely to interfere with, or skew, clinical decision making; (ii) [b]eing unlikely to increase costs to Federal health care programs or beneficiaries through overutilization or inappropriate utilization; and (iii) [n]ot raising patient safety or quality-of-care

42 C.F.R. § 1003.110 (2017) (defining "remuneration").

In reaching its conclusion in Advisory Opinion No. 17-01, the OIG considered the following factors important:

  • The free or reduced-cost lodging and meals would promote access to care because they would  remove certain socioeconomic and geographic barriers that could prevent patients from obtaining necessary hospital services and facilitate patients' attendance at treatment appointments to obtain medically necessary care (including enabling patients to attend early morning appointments and to obtain follow-up care after a treatment).
  • The proposed arrangement was unlikely to interfere with clinical decision-making, because the hospital would not condition eligibility for the assistance on the receipt of any particular service provided by the hospital and the hospital would not provide remuneration to any clinician to encourage him or her to refer patients to the hospital.
  • The hospital certified that it would not shift any of the costs of the patient benefits to any federal health care program nor report any of the costs on hospital's cost reports or claims.
  • The hospital would identify patients who were eligible for the benefits only after they had scheduled services at the hospital
  • The hospital would not advertise or market the proposed arrangement to patients, and only a small fraction of the hospital's patients would receive the lodging and meals, making it unlikely that the purpose of the arrangement was to facilitate medically unnecessary or inappropriate care. (The OIG observed that the proposed arrangement would facilitate access to care at the hospital of the patient's choice and reduce risks, including the risk of missed appointments, inherent in long-distance travel immediately before and after a hospital treatment.)
  • The hospital would not provide luxury accommodations or expensive restaurant meals.
  • The hospital would audit and monitor the proposed arrangement under the hospital's compliance program.
  • Nothing in the proposed arrangement appeared to encourage patients to seek out unnecessary or poor quality care (to the contrary, the arrangement would remove logistical and financial obstacles for patients to obtain necessary treatment).

Although the Promotes Access Exception does not apply to the anti-kickback statute, for the same reasons described above, the OIG concluded that the proposed arrangement would not subject the hospital to administrative sanctions under the anti-kickback statute.

The OIG reached a similar conclusion a year ago in OIG Advisory Opinion No. 16-02, which involved an academic medical center that proposed to provide transportation assistance and lodging for pregnant women. Since the issuance of Advisory Opinion No. 16-02, the OIG has promulgated the 2017 regulations concerning Promotes Access Exception, on which Advisory Opinion No. 17-01 was based, as well as the final safe harbor regulations covering the provision of free or discounted transportation services. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.