OIG seems to favor Shriners billing payers

The Health and Human Services Office of the Inspector General has issued an advisory opinion that would allow a system of pediatric hospitals to begin billing private insurers, Medicare and Medicaid for its services.

The system is not named specifically in its opinion, but the OIG's description strongly suggests the petitioner is the 20-facility Shriners Hospitals for Children in Tampa Bay, Fla. It refers to the system as being founded by a "Fraternity" during the first quarter of the 20th century, and that the fraternity operates as a separate entity.

The Shriners hospitals have never charged for services, but the system has struggled financially in recent years, its endowment losing about 40 percent of its value during the current economic downturn. In 2009, the Shriners considered closing six of its 22 hospitals, and its facility in Louisiana moved toward merging with Louisiana State University Health Sciences Center-Shreveport.

The OIG notes that the unnamed system would only bill patients with insurance coverage and treat those without insurance free of charge. In lieu of being able to bill both private and public payers, the system would provide transportation and lodging to the families of patients at no cost.

The OIG also concludes that while the waiver of cost-sharing for those who have insurance may be a violation of anti-kickback statutes, its purpose in doing so was clearly charitable and it would not seek sanctions.

For more:
- read the OIG advisory opinion (.pdf)