Unfavorable OIG Advisory Opinion for Health Insurance Company’s Plan to Share Savings with Covered Groups
The Office of the Inspector General for the Department of Health and Human Resources (“OIG”) issued a new advisory opinion, Advisory Opinion No. 24-08. The entity requesting the opinion (“Requestor”) was a corporation providing health insurance coverage and administrative services to group health plans, such as employers, trusts, and union groups (“Groups”). Under the proposed arrangement, the Requestor would give the Groups an opportunity to share in a percentage of the Requestor’s savings (“Gainshare Payment”) by entering into agreements to provide coverage to the Group’s enrollees for basic benefits under Medicare Parts A, B and D. The Requestor and each Group also would negotiate whether the Requestor would charge any additional amount as a premium. Each agreement would include conditions that would govern when a Group would be eligible for a Gainshare Payment. The Gainshare Payment would be based on a negotiated “medical loss ratio” that would be calculated by dividing expenses incurred by the Requestor by revenues received. The Requestor and a Group would negotiate a target medical loss ratio percentage, and if the final calculated medical loss ratio for the Group was below the negotiated target, the Requestor would pay the Group the Gainshare Payment. The amount of the Gainshare Payment could exceed any additional premium amount paid by the Group and could be paid to a Group that does not pay an additional premium to Requestor. The OIG indicated that the Proposed Arrangement, if undertaken, would generate prohibited remuneration under the Federal anti‑kickback statute, if the requisite intent were present, which would constitute grounds for the imposition of sanctions.
CMS Updates Rural Emergency Hospital Guidance
Last week, the Centers for Medicare and Medicaid Services (“CMS”) updated its guidance for hospitals participating or wishing to participate in Medicare and Medicaid as a rural emergency hospital (“REH”). Specifically, CMS updated its REH Conditions of Participation as well as better defined the conversion process for those hospitals wishing to be classified as an REH. To learn more about REHs, check out CMS’s fact sheet.
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