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Online Coupon Advertising Gets Thumps Up From The OIG

On March 27, 2012 the Department of Health and Human Services Office of Inspector General (“OIG”) released Advisory Opinion No. 12-02. The opinion stated that a proposed website that would display coupons and advertising from health care providers, suppliers, and other entities would not lead to administrative sanctions or civil monetary penalties under the federal anti-kickback statute or the prohibition against providing inducements to beneficiaries.

A corporation would operate the proposed website that would contract with providers, suppliers, and other health care entities who wish to provide coupons and advertisements on the website. The coupons can offer discounts on services or items through either percentage or dollar-off amounts; however, the coupons cannot offer free services and any coupon must apply to the entire service cost, not just the patient’s cost-sharing obligation. Any provider who wishes to pay a membership fee may post coupons on the website. Additionally, health care providers and suppliers may choose to purchase advertising space on the website.

The OIG noted that the proposed arrangement involved two activities that could implicate the anti-kickback statute: (i) selling advertising space on the website to health care providers and suppliers that may bill federal health care programs, and (ii) posting providers’ coupons for health care items or services. The OIG further noted that the coupons could also implicate the civil monetary penalty provision prohibiting inducements to beneficiaries.

The OIG found the proposed website to have a permissibly low risk of fraud or abuse because:

• The website operator is not a healthcare provider or supplier. Although one of the members is a practicing physician, his name would not appear anywhere on the website, nor would the site claim to be operated by a doctor or other healthcare provider or supplier.

• The payments from providers and advertisers to the operators would not depend on customers using the coupons. Instead, the providers and advertisers would pay a set fee, consistent with fair market value in an arms-length transaction. Thus, the fee would not take into account the volume or value of any referrals.

• The advertising could take the form of banner or pop-up advertisements on a publicly accessible website. The website would not require customers to register, and any customer information voluntarily gathered would not be shared with providers or advertisers.

• The types of coupons decreases risk under the anti-kickback statute because they are not pre-paid coupons for services that might not be medically appropriate for the customer. For example, a coupon could include 50% off of a mammogram or $100 off of a memmogram surgery, but could not be a coupon for a free mammogram or a Groupon-style prepaid coupon for a mammogram for $10 prepaid to the coupon service. The latter two examples could cause a customer of the website to seek care they might not need because the service is either free or was paid for before consulting with the healthcare provider to determine whether the service is appropriate for the customer.

The OIG also noted that the advertising and coupons involved are similar to accurate and non-deceptive print advertising in general circulation media that does not typically raise concerns.

For more information regarding this OIG opinion or if you have questions regarding the anti-kickback statute please contact Laura Carlsen.