United States: OIG Approves Free Lodging And Meals Under "Promotes Access To Care" Exception To Beneficiary Inducement CMP

Last Updated: April 24 2017
Article by Samantha C. Flanzer and William T. Mathias

In Advisory Opinion 17-01, published March 10, 2017, the Department of Health and Human Services, Office of Inspector General (OIG) approved an academic medical center's proposal to provide free or reduced-cost lodging and meals to certain financially-needy patients. Based on the specific facts presented, the OIG concluded the proposed arrangement would not constitute grounds for the imposition of civil monetary penalties under the civil monetary penalty against beneficiary inducements (Beneficiary Inducement CMP), or administrative sanctions under the anti-kickback statute.

The advisory opinion is notable in that it marks the first time the OIG has applied the "promotes-access-to-care" exception to the Beneficiary Inducement CMP. To that end, the OIG's analysis provides a roadmap for analyzing whether an arrangement "promotes access to care and poses a low risk of harm to patients and Federal health care programs," as required under the exception.

Overview of Facts

An academic medical center (Requester) sought approval to provide free or reduced-cost lodging and cafeteria meals to certain low-income patients receiving services at one of its four hospitals (the Hospital). The Hospital operates a Level I trauma center and provides specialized services such as organ transplants and advanced outpatient oncology. The arrangement would be limited to patients that meet the following criteria:

  • Reside 90 or more miles from the Hospital;
  • Live in either a medically underserved area (MUA) or a health professional shortage area (HPSA) of the Hospital's state;
  • Have a household income of 500 percent or less of the federal poverty level (FPL) and otherwise meet the Requester's financial need criteria; and
  • Are either: (a) required to be present for evaluation at the Hospital before 10:00 a.m.; or (b) have a follow-up appointment/surgery at the Hospital within 48 hours of on-site care.

The proposed free or reduced cost-lodging would consist of a single room at a modest hotel located two miles from the Hospital for one night before and up to two nights after treatment at the Hospital. Lodging would be free for participating patients whose income is at or below 138 percent of the FPL and reduced for incomes up to 500 percent of the FPL. While family members may stay with the patient in the hotel room, lodging would not otherwise be made separately available to family members.

The free or reduced-price meals would be made available for overnight stays only, and limited to $15 at the Hospital's cafeteria.

There would be no cap on the amount of free or reduced-cost lodging and meals patients could receive in a given year. That being said, the Requester anticipates only 100 to 200 of Hospital patients would qualify for the arrangement each year. Under no circumstances would cash, cash equivalents or other payments be provided to patients in lieu of the free or reduced-price lodging or meals.

Hospital staff would identify eligible patients only after they have been scheduled for treatment at the Hospital. The proposed arrangement would not be advertised, nor would any remuneration be provided to a clinician to encourage him or her to refer eligible patients to the hospital. Furthermore, the Requester certified that no costs of the proposed arrangement would be shifted to a federal health care program or costs otherwise reported on a Hospital cost report or claims.

Lastly, and of import, the Hospital agreed that it would not condition eligibility for the proposed arrangement on the receipt of any particular item or service from the Hospital. The Hospital would audit and monitor the proposed arrangement under its compliance program.

Legal Analysis

The OIG began its analysis by laying out the criteria necessary to satisfy the "promotes-access-to-care" exception to the Beneficiary Inducement CMP. To qualify for the exception, remuneration – in this case, free/reduced-price lodging and meals – must: (a) promote access to care; and (b) pose a low risk to the Medicare and Medicaid program and its beneficiaries.

Promotes Access to Care

The OIG explained that to "promote access to care," the remuneration must improve beneficiaries' ability to obtain items and services payable by Medicare or Medicaid. The OIG noted that arrangements should give patients the tools they need to remove barriers caused by socioeconomic, educational, geographic, mobility and other circumstances.

Here, the OIG concluded that the free/reduced-cost lodging and meals, which would be made available only to certain low-income patients from rural and/or medically underserved areas, would remove certain socioeconomic and geographic barriers that could prevent patients from getting necessary care, including early morning appointments and follow-up care.

Poses a Low Risk of Harm

The OIG indicated that to constitute a "low risk of harm," the remuneration provided must: (i) be unlikely to interfere with, or skew, clinical decision making; (ii) unlikely to increase costs to federal health care programs or beneficiaries through inappropriate or over-utilization; and (iii) not raise patient safety or quality of care concerns.

As applied to the free/reduced-cost lodging and meals, the OIG concluded that all three prongs of the test were satisfied.

First, the OIG held the proposed arrangement was unlikely to interfere with clinical decision making – clinicians were barred from receiving remuneration as an inducement to refer eligible patients and patient eligibility for the arrangement was not conditioned on the receipt of any particular service provided by the Hospital.

Second, the OIG determined the arrangement posed a low risk of overutilization – it was not advertised; no portion of the costs of the arrangement would be shifted to a federal health care program or reported on a cost report; and the small subset of eligible patients would be notified only after they were an established Hospital patient with a scheduled Hospital service.

Third, the OIG identified no patient safety or quality of care concerns – rather, it concluded the arrangement served to remove for patients logistical and financial obstacles to medically necessary care.

The OIG then noted that, although the CMP exception for promoting access to care is not directly applicable to the anti-kickback statute, the proposed arrangement would not be subject to sanctions under the anti-kickback statute based on the same reasoning outlined above.


Advisory Opinion 17-01 provides significant insight into how the OIG will apply the "promotes-access-to-care" exception under the Beneficiary Inducement CMP, and further demonstrates the exception's potentially broad reach. Of additional importance, the OIG appears to recognize that, while the exception is not strictly applicable to the anti-kickback statute, the same analysis of liability can be applied. Thus, health care providers now appear to have a fair amount of flexibility in designing programs to promote access to care.

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.