UTILIZATION MANAGEMENT

You Make the Call: Incentivizing MDs to Order More Early Screening Tests

A Managed Care Organization (MCO) wants to pay providers incentives to increase early and periodic screenings, diagnostic and treatment (EPSDT) services to Medicaid patients. Payments are capitated, i.e., providers get a set per enrolled Medicaid patient amount regardless of services actually utilized. The MCO provides per-enrollee incentive payments to providers for meeting benchmarks based on increases in EPSDT services provided:

Incentive Amount Incentive Trigger
$1 per patient 10% to 19% year-over-year increase in screenings
$2 per patient 20% to 29% year-over-year increase in screenings
$3 per patient 30% or higher year-over-year increase in screenings

The MCO would offer no incentives for recruiting new Medicaid beneficiaries nor participating in any of its other plans. It would also cover the payments out of its own pocket and doesn’t pass them on to Medicaid. 

QUESTION

Does the arrangement violate anti-kickback rules?  

  1. Yes because it incentivizes doctors to order more tests
  2. No because it includes proper safeguards

ANSWER

  1. According to a new OIG Advisory Opinion 18-11, this arrangement would, in fact, be acceptable.

EXPLANATION

The OIG said the proposed arrangement would fall under the Eligible Managed Care Organization (EMCO) safe harbor because:

  • Payments would be based solely on the provision of Medicaid services to existing enrollees; and
  • The arrangement wouldn’t inappropriately increase or shift costs to federal health care programs.

The OIG also noted that the objective of increasing EPSDT tests is consistent with the strategy of the State Medicaid agency.

Takeaway: While not technically binding (nor applicable to Stark Law), the new Advisory Opinion is significant to not just payors but also labs and other providers considering arrangements incentivizing utilization of EPTSD testing. Specifically, the OIG has now provided a blueprint on how to structure these arrangements to fall into the EMCO safe harbor. In the larger context, this opens the door to offering physicians incentives for modifying their normal ordering patterns for proactive and strategic public goals even if it results in higher test utilization.

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