OIG Releases Advisory on Digital Program for Treatment of Substance Use Disorders

On March 2, 2022, the Office of Inspector General (“OIG”) of the Department of Health and Human Services (“HHS”) issued an advisory opinion concluding that a digital program for the treatment of Substance use would raise minimal fraud and risk of abuse. OIG advisory opinions address the application of certain fraud and abuse authorities to existing or proposed business arrangements of the requesting party.

Advisory Opinion No. 22-04 is noteworthy given the OIG’s consideration of the unique aspects of the Requestor’s Digital Processing Program, which provides digital tools and contingency management (“CM Incentives”). ”), including cash equivalents, to motivate behavioral health changes in people who suffer from substance use disorders. As digital health companies consider unique offerings to improve health outcomes and reduce costs, this advisory opinion provides guidance on potential safeguards for designing digital health offerings. The advisory also follows the recent release of a Healthcare Common Procedure Coding System (“HCPCS”) code to qualify digital therapies by the Centers for Medicare and Medicaid Services (“CMS”). These developments will continue to support digital health companies, as well as drug or device manufacturers considering digital health offerings that complement their products (e.g., medication adherence apps and add-on apps to smart devices) , in navigating the complex and evolving digital health market.

Program background

The OIG issued the notice in response to a request submitted on behalf of a digital health company (“Requester”). Applicant contracts with various entities, including health plans, addiction treatment providers, employee assistance programs, and other institutions (“Clients”), to provide disability treatment services. drug addiction and CM incentives to individuals via smartphone technology and smart debit cards. The applicant has certified that the program is evidence-based, protocol-based, and consistent with principles published by the National Institute on Drug Abuse.

Registration and operation of the program

People can be referred to the program by a client or can refer themselves. An Enrollment Specialist, under the supervision of a Certified Clinical Supervisor, determines the type of services appropriate for individuals enrolled in the Program (each a “Member”). For example, Members can receive the following services from the Applicant via smartphone:

• Automated appointment reminders and attendance verification;
• Medication reminders and verification of self-administration;
• Saliva drug tests, breathalyzers, Smokerlyzer CO tests for tobacco and saliva cotinine tests for electronic cigarettes, all verified by self-video;
• Self-guided cognitive-behavioral therapy (“CBT”) modules;
• Various surveys and assessments;
• Certified recovery coaching;
• Community strengthening and family formation; and
• Daily support groups.

The applicant is not a provider or supplier under any federal health care program. However, Members may or may not receive federally reimbursable services (for example, a federally reimbursable counseling session) from another provider or vendor, including a client.

Services are delivered and CM incentives are distributed according to an automated, evidence-based algorithm over a 12-month period, which is divided into three phases of approximately four months each. During the initial “anchoring” phase, the member undergoes frequent drug testing and receives active CM incentives to achieve specified behavioral health goals. During the second “building phase”, the frequency of substance testing and CM incentives decrease. Finally, the “maintenance phase” reinforces behavioral health goals with non-incentive reinforcers.

The applicant provides CM incentives via a chip debit card. Members are eligible to receive CM incentives based on (1) verified substance testing that meets medical expectations (70% of potential CM incentives); (2) treatment attendance (20%); and (3) completion of self-guided CBT modules and other features, including follow-up self-assessments (10%). CM incentives are capped at $200 per month, with an annual maximum of $599.00 per member per year.

Customer payment for the program

The applicant’s contracts with various clients, and individual members and their families can also pay directly for the program. Applicant offers two payment models: a flat monthly fee per eligible active member and a pay-for-performance model, whereby Applicant is paid when a member achieves certain agreed-upon abstinence goals.

CM incentives are held in reserve until the member has successfully completed the specified goals. When a Member does not engage with the app in a given month, the system marks that Member as “inactive”. No fees are charged to customers for inactive members, and unspent CM Incentive fees are held in reserve until the member becomes active again.

Legal analysis

The OIG found that two aspects of the program could potentially involve the Federal Anti-Kribery Act (“AKS”) and the CMP Recipient Incentives. First, even though the applicant does not bill federal health care programs, it collects fees from clients and provides services that could induce a member to receive a federally billable service (for example, a reimbursable counseling session federal level). Additionally, there is at least a theoretical risk that a client could pay the applicant’s fee to generate business or reward federally reimbursable service referrals. Some of the fees a customer pays are passed on to members as CM inducements, in part based on the use of services that might be billable to federal health care programs by another provider or vendor, including including the same customer.

Nonetheless, the OIG has determined that the program poses minimal risk of fraud and abuse for four reasons.

1. The program is protocol-driven and evidence-based. The plaintiff cited reliable sources indicating that MC is “highly effective” and “cost effective” for the treatment of substance abuse disorders.
2. The risk of overuse of federally reimbursable services is low. According to the OIG, CM incentives have a “relatively low [monetary] assess.” Additionally, a substantial portion of CM incentives are not tied to federally charged services, and the applicant themselves never bill federal health care programs for services provided.
3. The risk is low that a client pays the applicant’s fee to generate business or reward federally reimbursable service referrals. Fees paid by clients do not vary based on the volume or value of federally reimbursable services rendered by that client. Instead, the program is protocol-driven and defined by the requester.
4. Safeguards mitigate the risk of fraud and abuse associated with cash and near-cash compensation. The requester has full control over the services a member needs and the CM incentives associated with those services. Additionally, the chip debit card cannot be used in bars, liquor stores, casinos, or certain other locations and cannot be used to convert credit to cash. The applicant can also monitor chip debit card usage, allowing recovery coaches and vendors to be alerted in the event of a blocked purchase.