• OIG Allows Internet Advertising But Indicates That Advertising Falls Within the Purview of the Anti-Kickback Statute
  • December 11, 2008 | Author: Kinshasa K. Williams
  • Law Firm: King & Spalding LLP - Atlanta Office
  • The Office of Inspector General (“OIG”) of the Department of Health and Human Services on November 5, 2008 issued a favorable advisory opinion regarding an Internet advertiser’s proposal to extend its “pay per call” or “pay per lead” advertising services to chiropractors. Under the proposed arrangement, the internet advertiser would receive compensation on a “per call” or “per lead” basis from chiropractors for the online advertising service that connects the chiropractor with potential patients, some of whom may be Federal health care program beneficiaries.

    While indicating that advertising activities that are meant to induce the use of items and services potentially implicates the Anti-Kickback statute, the OIG determined that this proposed arrangement presented a minimal risk of Federal health care program abuse. The OIG’s rationale for approving this arrangement emphasized that the Internet advertiser was not a healthcare provider and had no affiliation with the healthcare industry; Federal healthcare program beneficiaries were not targeted by the advertising; payment by the chiropractor for the referral was made without regard to whether the prospect actually generated reimbursement revenue; and the referral was not to a particular chiropractor but instead to all chiropractors who subscribed for the services within a geographic area. The OIG distinguished the proposed advertising arrangement from marketing activities conducted by healthcare providers and suppliers and indicated that such activities are subject to closer scrutiny because healthcare providers and suppliers are in a position of trust.

    Historically, a number of lawyers took the position that advertising for healthcare items and services did not fall within the purview of the Anti-Kickback Statute because they did not think that payments by a provider to another party for advertising were for “referring, recommending, or arranging for the furnishing of any item or service” payable by the Medicare/Medicaid programs. Rather the advertiser was simply selling the platform for the provider to recommend itself. This Advisory Opinion calls into question the extent to which traditional advertising implicates the Anti-Kickback Statute.