OIG Declines to Impose Sanctions on Online Healthcare Directories

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) released Advisory Opinion 23-04 (Advisory Opinion) on July 11, 2023, addressing arrangements between online healthcare directories and certain third-party websites (Directories) with federal healthcare program beneficiaries. In the Advisory Opinion, the OIG declined to impose sanctions on healthcare provider Directories offering these sort of advertising services to providers.

Under the proposed arrangement, healthcare provider Directories are serving as marketplaces in which users and potential patients can book medical appointments with physicians and other healthcare providers (Providers) who are listed on the online Directories. Patients can filter their results by searching for different types of medical providers, and the Directories generate personalized results using a proprietary algorithm.

Although no fee is charged to the patients for using the directory, Providers pay a fee to be included in the directory through an array of payment methods. Whenever potential patients click on a Provider’s profile during their searches, a “per-click” fee is charged to Providers. A “per-booking” fee is also charged to Providers for each new patient the Providers receive through the Directory which may vary in amount based on location, specialty, and other factors impacting the fair market value of the marketing service. Providers can also set spending caps, which would remove the Providers from the directory once a certain amount of booking fees has been met.

Additionally, Providers can purchase advertisements to be shown alongside the users’ search results, which only display the Provider and do not advertise any specific services. The advertisements are available to the general public and appear for all users alike – regardless of the patient’s insurance status. The advertisements do not target federal healthcare program beneficiaries specifically, and they are easily distinguishable from the search results.

The OIG found that the Directories’ payment model implicated both the Anti-Kickback Statute (AKS) and the Beneficiary Inducement Civil Monetary Penalty (Beneficiary Inducements CMP) rules because of the following:

1. Payments made from Providers to the Directories for both providing recommendations of Providers to potential patients and for arranging federally reimbursable services.
2. Remuneration from the Directories to potential patients and users, including federal healthcare program beneficiaries.

Despite these implications, the OIG indicated that it would not impose sanctions on companies operating online healthcare Directories based on the fee structure, the limited advertising services, the search algorithm, and the broad user base. The OIG reasoned that the safeguards in place adequately limit the risks of fraud and abuse. The Advisory Opinion demonstrates the OIG’s commitment to improve public health through its continued leniency with such arrangements. Providers contemplating these sort of arrangements should consider the above safeguards, while noting that future arrangements are to be considered on a case-by-case basis.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in healthcare law and regulation. If you or your healthcare entity have any questions pertaining to fraud and abuse or healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.