OIG Advisory Opinion: Insurance Discount for Policyholders Who Use Hospital Network

​After reviewing a proposed arrangement in which a licensed issuer of Medigap insurance policies would contract with a hospital network for discounts on the otherwise-applicable Medicare inpatient deductibles for its policyholders and, in turn, would provide $100 off the next renewal premium to policyholders who use a network hospital for an inpatient stay, the U.S. Department of Health and Human Services' Office of Inspector General (OIG) has determined that, although the arrangement could generate prohibited remuneration under the Anti-Kickback Statute, it will not impose administrative sanctions, according to a September 17, 2014, OIG advisory opinion. In the advisory opinion, OIG explains that the discounts offered on inpatient deductibles by the network hospitals and the premium credits offered by the requestor to policyholders would present a sufficiently low risk of fraud or abuse under the Anti-Kickback Statute for several reasons. First, neither the discounts nor the premium credits would increase or affect per-service Medicare payments.