On June 11, the U.S. Department of Health and Human Services Office of Inspector General (OIG) published Advisory Opinion 25-03, approving a proposal by a management services organization (MSO) and its friendly PC (Requestors) to enter into agreements with telehealth providers and their MSOs to lease employees and provide certain administrative services.
The Requestors’ proposal, which is designed to increase patient access to in-network telehealth providers, provides industry stakeholders with a framework to increase patient access to care while avoiding fraud and abuse risk.
The Proposed Arrangement
The MSO Requestor provides non-clinical management services to the friendly PC Requestor, which maintains contracts with payors—including commercial health plans, Medicare Advantage (MA) Organizations, and Medicaid managed care plans—that cover approximately 80% of all commercially covered lives and 65% of MA covered lives.
Under the Proposed Arrangement, the Requestors would enter into agreements with certain third-party telehealth providers (Third-Party PCs) and their MSOs (Third-Party MSOs) to lease employees and provide certain administrative services. Specifically:
- The friendly PC Requestor would lease healthcare professionals from the Third-Party PCs. The Requestors would credential the leased healthcare professionals and enroll them under the friendly PC Requestor’s payor contracts so the healthcare professionals could provide covered telehealth services to the Third-Party PCs’ patients who are insured by a plan with which the friendly PC Requestor has a payor agreement. The friendly PC Requestor would pay the Third-Party PCs a fair market value hourly rate based on each healthcare professional’s licensure type. The Requestors certified that the friendly PC Requestor would pay the hourly rates regardless of whether it receives reimbursement for the telehealth services from a third-party payor.
- The Third-Party MSOs would provide certain administrative services—including accounting, marketing, administrative support, and information technology services—to the MSO Requestor. The MSO Requestor would pay the Third-Party MSOs a fair market value administrative fee that does not take into account the volume or value of referrals or business otherwise generated between the parties.
The Proposed Arrangement is intended to expand the Third-Party PCs’ patients’ access to in-network telehealth services, particularly in rural and underserved communities where such patients are negatively impacted by limited access to covered telehealth services. The Requestors certified that the Proposed Arrangement would satisfy all of the personal services and management contracts safe harbor’s requirements.
OIG’s Analysis
OIG concluded that, although the Proposed Arrangement would implicate the federal Anti-Kickback Statute, the hourly and administrative services fees would be protected by the personal services and management contracts safe harbor.
OIG arrived at this conclusion based on the Requestors’ certification that the Proposed Arrangement would meet all of the safe harbor’s requirements and the fact that the friendly PC Requestor would pay the Third-Party PCs the agreed-upon hourly rates regardless of whether it ultimately received reimbursement from a third-party payor.
Takeaways
As always, this opinion is limited to the Requestors and to the particular facts and circumstances described in the opinion. With that said, the Proposed Arrangement, which is designed to increase patient access to care, particularly in rural and underserved areas, provides a framework that industry stakeholders may use as a model when considering expanding patient access to covered telehealth services.
Industry stakeholders should exercise caution, however, when entering into similar arrangements with different payment methodologies, such as percentage-based compensation models, as such arrangements could fall outside the personal services and management safe harbor’s protection and may violate state laws prohibiting percentage-based compensation.
