OIG Will Not Sanction Referral Agreement with Residential Community Provider

​An arrangement between the owner of senior residential communities and skilled nursing facilities and a referral agency that promotes the skilled nursing homes could generate prohibited remuneration but would not be subject to sanctions because of risk reduction strategies in place, according to a January 2014 advisory opinion from the U.S. Department of Health and Human Services’ Office of Inspector General (OIG). The owners of 11 senior residential communities and 2 skilled nursing facilities sought the advisory opinion. It certified that only a small number of residents in its residential communities receive any federal funding through a state Medicaid Elderly Waiver Program; although the skilled nursing facilities provide reimbursable care through both Medicare and Medicaid, its services are not available to residents of the residential communities. In the proposed arrangement, the referral company is paid for new residents of the residential communities based on a percentage of the residents’ first month or first two months fees.