Summary of OIG Advisory Opinion 11-18

On November 30, 2011, the OIG issued a favorable Advisory Opinion, No. 11-18, concerning a proposed arrangement that would facilitate the electronic exchange of information between health care practitioners, providers, and suppliers (the “Proposed Arrangement”).  Although, the Proposed Arrangement potentially implicates the Anti-Kickback Statute and includes a per-click fee arrangement, the OIG advised that it would not subject the data management company (the “Requestor”) to administrative sanctions under the Anti-Kickback Statute.


The Requestor is a publicly traded company that offers three principal services to assist physicians and physician practices: (1) billing services to automate and manage back-office operations (the “Billing Service”); (2) electronic management of medical records (the “EHR Service”); and a messaging service which automates practice communications with patients (the “Messaging Service”). These services are offered in a package or a la carte for a monthly subscription fee, which fee is calculated based upon a percentage of collections or a flat monthly rate.

Proposed Arrangement

Under the Proposed Arrangement, the Requestor would provide a new service intended to facilitate the exchange of information between health care practitioners, providers, and suppliers (“Health Professionals”), and which would also assist Health Professionals in keeping track of patients receiving services from other Health Professionals (the “Coordination Service”). According to the Requestor, offering the Coordination Service in combination with the EHR Service would assist Health Professionals that wish to make referrals (“Ordering Health Professionals”) in sending medical records, insurance information, and billing information, among other value-added services.

Specifically, Ordering Health Professionals would use the Coordination Service to access an electronic database (the “Network”) and exchange patient information with Health Professionals to which they make referrals. Requestor proposes to use a number of different methods to populate the Network, and there would be no cost to Health Professionals to be included in the Network. The Requestor would also offer Health Professionals that are interested in receiving referrals the opportunity to enter into “Trading Partner Agreements” with Requestor, although these would not be required to receive referrals through the Network. Health Professionals that enter into Trading Partner Agreements (“Trading Partners”) would be able to customize their profiles in the Network to include information such as area of specialty, subspecialty, appointment availability, as well as their personal preferences for receiving referrals, such as formatting, clinical information, etc.

Ordering Health Professionals would be charged a per-click transaction-based fee for transmitting referrals (the “Transmission Fee”). Trading Partners would also pay a fee each time they receive a referral from an Ordering Health Professional (the “Functionality Fee”). The Proposed Arrangement is fairly complex and includes a number of additional transactions, fees, discounts, and value-added services.

Anti-Kickback Analysis

The Proposed Arrangement does not fit squarely within any potentially applicable safe harbors. Nevertheless, and despite the manner in which the fees are calculated, the OIG concluded that the Transmission Fee and Functionality Fee are not problematic under the Anti-Kickback Statute. First, with respect to the Transmission Fee, the OIG concluded that the use of a per-click arrangement is reasonable under these circumstances, because the Requestor would assess the Transmission Fee each time an Ordering Health Professional makes a referral, regardless of whether the patient follows through and actually receives the referral services. Because the fee is assessed in this manner, the OIG concluded that it could be distinguished from traditional per-click “success fees”.

With respect to the Functionality Fee, the OIG noted several reasons why it was permissible for the Trading Partners to pay a fee each time they received a referral. First, the OIG concluded that the Trading Partners were not paying for enhanced access to a referral stream, because even non-Trading Partners could receive referrals through the Network. Instead, the Functionality Fee was assessed for the value-added services provided to the Trading Partners by Requestor, such as recording and maintaining a Trading Partners preferences, facilitating appointment scheduling, etc. Of course, Requestor also certified that the both the Transmission Fee and Functionality Fee, individually and in the aggregate, reflect the fair market value of the services.

For these reasons, among several others, the OIG concluded that they would not subject the Requestor to administrative sanctions under the Anti-Kickback Statute.

You can get a copy of the Advisory Opinion here —–> Advisory Opinion 11-18

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