OIG signs off on Medicaid plan’s preventive screening incentive payments

A pediatrician and his patient
An OIG-approved arrangement allows a Medicaid plan sponsor to offer incentive payments to providers that increase preventive screening rates for children. (Getty/shironosov)

The Department of Health and Human Services’ (HHS) fraud enforcement office signed off on an arrangement that would allow a Medicaid plan sponsor to provide incentive payments to providers that increase their preventive health screenings for children. 

In a request submitted to the HHS Office of Inspector General (OIG), a Medicaid managed care organization that also provides coverage under the Children’s Health Insurance Program (CHIP) and Medicare Advantage described its plans to incorporate additional incentive payments for providers that increase their preventive screening rates.

The insurer said it planned to pay network providers $1 per enrollee for increasing Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) services by 10% between 2018 and 2019. Providers that increase screening services by 20% would receive an additional $2 per enrollee and a 30% increase would garner a $3-per-enrollee boost.

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EPSDT includes comprehensive and preventive health services for children under 21, according to Medicaid.gov. Those services could include laboratory tests, immunizations and physical exams, along with vision, hearing and dental services. 

In an advisory opinion (PDF) issued this week, OIG said the arrangement would not violate the Anti-Kickback Statute. Although it would increase utilization of EPSDT services, and potentially lead to high capitated payment rates in future years, OIG acknowledged that the proposal would help the plan “lower its costs by detecting Enrollees’ health conditions earlier, thereby helping them to achieve better health outcomes.”

RELATED: Preventive care falls short: Only 8% of U.S. adults receive all appropriate services

Furthermore, the arrangement would not increase costs for the federal healthcare program during 2019 since the plan is required to bear all preventive screening costs under its capitated payment arrangement with the federal government. 

That existing capitated payment model reduces the risk of unnecessary services or charges, Matthew Fisher, an attorney with Mirick, O'Connell, DeMallie & Lougee in Massachusetts told FierceHealthcare. Plus, the intent behind preventive screenings is to catch illnesses or complications earlier, which is likely to generate cost-savings in the long term.

“The combination of these factors shows that any risk of kickback is low because all goes to trying to save the program money,” Fisher said, adding that the approval offers a test case and insight for other plans considering similar arrangements.

RELATED: OIG’s anti-kickback request for information offers providers an opportunity for ‘legal clarity’

The Trump administration has pushed to modernize the Anti-Kickback Statute and Stark Law to better align with value-based payments. Earlier this year, OIG issued a request for information about reforming the Anti-Kickback Statute, and the Centers for Medicare & Medicaid Services (CMS) has requested “bold ideas” for reforming the Stark Law.

While both laws offer safe harbors to shield healthcare organizations from enforcement, many have pointed to the laws as impediments to the shift from fee-for-service to value.

“Ultimately, the opinion underscores that changes consistent with the recent CMS requests for information on value-based care need to be pursued,” Fisher added. “The regulations, while flexible and allowing of arrangements that are good for value-based care, still engender concern and, thus, better alignment is needed.”