OIG Advisory Opinion 08-20: Favorable Opinion Regarding Consignment Closets and DMEPOS Personnel on Site at Hospital

On November 26, 2008, the OIG posted Advisory Opinion 08-20 which deals with a proposed arrangement whereby suppliers of DMEPOS would (1) place an inventory of DMEPOS in a consignment closet at certain hospitals and (2) have licensed personnel on-call or on-site at hospitals to train home bound patients on the use of the equipment.
The OIG looked at both components of the proposed arrangement and concluded that neither would violate the anti-kickback statute because:

1. Patients will be given a choice of suppliers, including those outside of the hospital.
2. Although the consignment closets will be provided at no cost to the suppliers, as will the use of phone systems and desk by the DMEPOS personnel, there will be no referrals flowing from the suppliers to the hospital (the remuneration and referrals flow the same way).
3. The DMEPOS personnel will have no contact with patients until the patients choose the supplier as their DMEPOS supplier.
4. The DMEPOS personnel will not provide any services to the hospital that are the responsibility of the hospital, such as discharge planning or case management (their only role will be to educate patients in accordance with CMS Quality Standards for DMEPOS)

To read the full text of the opinion, please click here.