Post Date: December 12, 2016               Topics: Fraud and Abuse

The Department of Health and Human Services Office of the Inspector General (OIG) recently issued a Policy Statement increasing the dollar thresholds for gifts of “nominal value” to Medicare and Medicaid beneficiaries from $10 per item to $15 per item or from $50 in the aggregate per patient annually to $75 in the aggregate per patient annually.

The beneficiary inducement prohibition under section 1128(1)(5) of the Social Security Act prohibits a person from offering or transferring to beneficiaries of Medicare, Medicaid, and other state health care programs any “remuneration” that the person knows (or should know) is likely to influence the beneficiaries to choose goods or services from a particular supplier or provider that may be paid for in whole or in part by such health care programs. The law defines “remuneration” broadly, to include, without limitation, waivers or reductions of coinsurance and deductible amounts and transfers of items or services for free or for any amount less than fair market value. The beneficiary inducement prohibition applies to a broad range of patient gifts and inducements, such as gift cards, clothes, and toys.

In a Special Advisory Bulletin issued in 2002, the OIG stated that inexpensive or “de minimis” gifts or incentives (other than cash or cash equivalents) do not constitute remuneration for purposes of the beneficiary inducement prohibition. At that time, the OIG interpreted “inexpensive” and “nominal value” to mean a retail value of no more than $10 per item and no more than $50 in the aggregate annually per patient. The OIG stated that it would periodically review these thresholds and adjust them according to inflation, if applicable.

As of December 7, 2016, the OIG increased “nominal value” to a retail value of no more than $15 per item or $75 in the aggregate per patient on an annual basis. The items still may not be cash or cash equivalents.