The US Department of Health and Human Services Office of Inspector General has issued a new advisory opinion targeting subscription-based referral management software platforms used in healthcare.
Advisory Opinion 26-15 concludes that such arrangements raise serious concerns under the federal Anti-Kickback Statute, a finding with broad implications for the industry.
At the centre of the opinion is an arrangement where home health agencies pay subscription fees to a technology vendor operating an online referral management platform connecting hospitals with those agencies.
The platform allows subscribing agencies to receive and respond to electronic referral requests from hospitals, while non-subscribing providers must rely on fax, email, telephone or other manual methods.
Because hospitals often award referrals on a first-come, first-served basis, subscribing agencies gain a meaningful competitive advantage by being able to respond faster than their non-subscribing rivals.
OIG determined the arrangement does not qualify for protection under the referral services safe harbor at 42 C.F.R. ยง 1001.952(f) and poses more than a minimal risk of fraud and abuse.
The regulator expressed concern that the arrangement effectively allows providers to improve their access to referrals by purchasing software subscriptions rather than competing on the quality of care they provide.
OIG also warned that providers paying subscription fees “could face pressure to recoup” those costs, potentially creating incentives for overutilisation or billing for medically unnecessary services reimbursable by federal health care programs.
The opinion largely revisits OIG’s analysis in Advisory Opinion 11-06, a 15-year-old unfavourable ruling addressing a similar arrangement, though it does not engage with significant regulatory changes made in the intervening period.
Notably, OIG modified the personal services safe harbour in 2020 in a manner that could open the door for arrangements like those discussed in Advisory Opinion 26-15 to fit within that safe harbour, a development the new opinion does not address.
OIG has also previously issued at least two favourable opinions, Advisory Opinions 19-04 and 23-04, focused on an online provider directory that bears some resemblance to the referral software addressed in the latest ruling.
Healthcare technology vendors, post-acute care providers including home health agencies, and hospitals that use referral management software should review their current arrangements with legal counsel in light of the new opinion.
As referral management software and other technology-enabled referral platforms become more common across the healthcare industry, organisations developing, marketing or using these technologies face growing scrutiny from federal regulators.