• OIG Issues Policy Statement on Waiver of Medicare or Medicaid Beneficiary Cost-Sharing Amounts Attributable to Retroactive Increases in Payment Rates
  • July 26, 2010
  • Law Firm: King Spalding LLP - Atlanta Office
  • On June 25, 2010, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS) released a policy statement to assure providers, practitioners, and suppliers that they will not be subject to OIG sanctions if they waive additional beneficiary cost sharing related to retroactive increases in Medicare and Medicaid payment rates.

    New federal statutes or regulations may result in retroactive increases in Medicare and Medicaid payments to certain providers and suppliers participating in those programs.  Because beneficiary cost sharing often is calculated as a percentage of providers’ reimbursement rates, any retroactive payment changes will also have the effect of causing a retroactive increase in beneficiary cost sharing (“Retroactive Beneficiary Liability”).

    Ordinarily, a provider’s waiver of Medicare or Medicaid cost-sharing amounts may implicate certain federal laws such as the Anti-Kickback Statute and beneficiary inducement prohibition. However, the June 25 policy statement clarifies that providers, practitioners, and suppliers will not be subject to OIG sanctions if they waive Retroactive Beneficiary Liability, subject to the following conditions:

    • The policy statement applies only to items and services furnished during the time period between the effective date of payment rate increases until the date on which CMS actually implements the increased payment rates, called the “Retroactive Period.”
    • The policy statement applies only to waivers of Retroactive Beneficiary Liability, which is the increase in the beneficiary’s cost-sharing amount attributable to the retroactive increases in payment rates.
    • The policy statement only applies to waivers of Retroactive Beneficiary Liability if: (1) providers uniformly offer the waivers to all affected beneficiaries; (2) providers do not offer waivers as part of any advertisement or solicitation; and (3) the waivers are not conditioned in any manner on the provision of items, supplies, or services.