Part 3: What Can Providers Give to Patients?

The following article is about giving free items and services to patients.

Please do not hesitate to contact us with comments, questions, or requests for additional information.
Elizabeth E. Hogue, Esq.
(877) 871-4062
Providers, including marketers, are tempted to give patients and potential patients free items and services. While providers usually have good intentions, they must comply with applicable requirements. 
As Part 1 of this series indicates, there are two applicable federal statutes: the Anti-Kickback Statute (AKS) and the Civil Monetary Penalties Law (CMPL). Part 1 also makes it clear that there are a number of exceptions or “safe harbors. If providers meet the requirements of applicable safe harbors or exceptions, they can give patients and potential patients free items and services that would otherwise violate applicable requirements. 
Part 2 describes an exception for items and services of nominal value with a retail value of no more than $15 per item or $75 in the aggregate per patient on an annual basis that may be given by providers to beneficiaries. Providers may not, however, give cash or cash equivalents. 
The OIG also says that providers may give free items and services to patients with demonstrated financial need. The exception based on financial need does not include cash or cash equivalents. Cash equivalents include checks, gift certificates and gift cards. 
The CMPL says that the following requirements must be met to qualify for this exception:
  • The items or services are not offered as part of any advertisement or solicitation.
  • The offer to give items or services is not tied to the provision of other items or services reimbursed in whole or in part by the Medicare or Medicaid Programs.
  • There is a reasonable connection between the items or services and the medical care of the patient.
  • Providers give items or services after a determination has been made in good faith that patients are in financial need.
The AKS does not include a similar safe harbor or exception, but the OIG has stated that the AKS does not prohibit discounts to uninsured patients who are unable to pay for items and services.
Good faith determinations that patients are in financial need is key. Determinations should be based on policies and procedures that providers consistently apply to make these decisions. Policies and procedures should include requirements to document financial need. Such policies and procedures are often referred to as policies on “charity care.”
Providers have discretion to take a variety of factors into account to determine financial need. Such factors may include:
  • Patients' income, assets and expenses
  • Amounts due for services and items provided
Needless to say, providers should avoid inflated income guidelines that result in free items or services given to beneficiaries who are not really in financial need.
Providers may ask patients to provide documentation of their financial status. Decisions about financial need may also be based on other reasonable methods, such as documented interviews with patients and questionnaires.
Policies and procedures that govern free items and services given to patients should also require periodic review of patients' financial status, since it may change over time. Providers should recheck patients' needs at reasonable intervals to help ensure that their financial status has not changed significantly.
The key to use of this exception is undoubtedly consistent application of a policy and procedure to make determinations about financial need. Now is the time to review or develop and implement policies that cover free items and services given to patients.
©2021 Elizabeth E. Hogue, Esq. All rights reserved.
No portion of this material may be reproduced in any form without the advance written permission of the author.


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