and updating their compliance and quality programs. Key risk areas include quality of care and quality of life, Medicare and Medicaid billing requirements, and the Anti-Kickback Statute. The Nursing Facility ICPG also highlights certain factors particularly relevant to those who invest in the nursing facility sector, including the need for parent-level oversight of and active engagement with compliance, quality, and resident safety programs; the need to comply with recently revised ownership and management disclosure reporting requirements; and the need to comply with cost reporting requirements concerning related-party transactions. Additional ICPG documents are expected in 2025. OIG has indicated that it plans to issue ICPG for MA organizations, as well as hospitals and clinical laboratories. Investors in these and other sectors should review the guidance carefully and devote appropriate resources to maintain effective compliance programs. Although the guidance itself is voluntary and non-binding, it reflects OIG’s priorities and may be leveraged in future enforcement actions. 9. On the Backside of the MA Special Fraud Alert BY STEWART KAMEEN & JENNIFER MICHAEL On December 11, the HHS OIG issued a Special Fraud Alert (SFA) on what it refers to as “suspect” marketing schemes involving “questionable payments and referrals” between MA plans, healthcare professionals (HCPs), and third-party marketers (such as agents and brokers) that pose fraud and abuse risk under the federal Anti-Kickback Statute (AKS). While we expect investment in entities downstream of MA Organizations (MAOs) to expand with the growth of the MAO market share, investors should prioritize diligence around marketing and referral relationships early in a transaction with the SFA in mind. In this SFA, OIG describes two categories of payment-for-referral schemes in the MA space that it views as suspect. First, the SFA states that payments from MAOs to HCPs for referring patients to the MAOs’ plans are “a substantial area of risk.” The SFA cites MA regulations that prohibit HCPs from accepting compensation from MAOs for marketing and enrollment activities. The SFA also states that suspect payments, such as gift cards or in-kind remuneration, may result in beneficiaries making enrollment decisions that are not in their best interest. In addition, the SFA identifies payments from HCPs to agents and brokers to refer or recommend MA plan beneficiaries to the HCP as a “second area of risk.” The SFA notes that beneficiaries may be unaware of these financial arrangements when discussing potential HCP selection decisions with the agents and brokers and that such arrangements may result in beneficiaries selecting an HCP who is not best suited to their needs. For both categories, the SFA includes a non-exclusive list of what OIG refers to as “suspect” characteristics that, in the agency’s view, could indicate an arrangement presents a heightened risk of fraud and abuse under the AKS. For instance, OIG highlighted arrangements through which an HCP pays an agent or broker to recommend the HCP to a Medicare enrollee or to refer the enrollee to the HCP, or in a manner that varies with the number of individuals referred to the HCP. OIG also flagged arrangements whereby an HCP pays an agent or broker in a manner that is contingent upon or varies based on, the demographics or health status of individuals enrolled in or referred to an MA plan. Although SFAs have no binding effect on stakeholders, they reflect OIG’s enforcement priorities and highlight OIG’s current focus on what it considers “suspect” practices or arrangements. Investors with interests downstream of MAOs, in particular HCPs, therefore should consider the SFA when structuring or evaluating their compliance programs.
7 HEALTHCARE PRIVATE EQUITY: 2025 OUTLOOK & TRENDS IN M&A |
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