HHS-OIG Issues Unfavorable Advisory Opinion On Sign-On Bonuses For Home Care Agency Attendants

Highlights

• The U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) released an unfavorable opinion regarding a home care agency's sign-on bonus program for attendants, finding it posed sufficient risk of fraud and abuse under the Anti-Kickback Statute and Beneficiary Inducements CMP to warrant potential sanctions.
• The proposed arrangement failed to satisfy the employee safe harbor because of an "inextricable link" between attendant employment and client referrals, where family member attendants would simultaneously serve as both employees and decision-makers selecting the agency on behalf of their Medicaid beneficiary relatives eligible for services (clients).
• HHS-OIG distinguished this arrangement from typical employment sign-on bonuses because the attendants' employment would be based solely on providing services to their own family members, making the recruitment materials effectively operate as advertisements for new clients rather than simply employee recruitment tools.

The HHS-OIG recently released Advisory Opinion No. 25-12, an unfavorable opinion regarding the federal Anti-Kickback Statute (AKS) and civil monetary penalty laws (CMP) against beneficiary inducements as applied to a proposed sign-on bonus arrangement, offered by a home care agency, to prospective attendant employees who would primarily be family members of clients and who would serve as the decision-makers selecting the agency on behalf of those family members for the provision of in-home support services reimbursable by the state Medicaid program.

Background

The home care agency requesting the opinion (the requestor or the agency) provides in-home support services for certain eligible members covered by their state Medicaid program. Under the state's program, eligible clients could select attendants of their choice, who were not required to be certified or licensed to provide services, including personal care, homemaker services, and health maintenance activities.

The requestor certified that they anticipate their attendants to primarily be family members of potential clients, including parents, grandparents, siblings, children, or other minor relatives for whom the attendants act as guardians. In such cases, the attendants would be the decision-makers selecting an agency on behalf of their family members.

Under the state Medicaid program, a home care agency that employs attendants must also provide 24-hour back-up services for scheduled shifts, ensure adequate staffing levels, train attendants and other staff on their cases, and ensure attendants follow client's care plans. Agencies then may submit claims for services performed by attendants to Medicaid and receive payment for services.

Under the proposed arrangement, the requestor would market employment opportunities to prospective attendants, including advertising a sign-on bonus. The requestor certified that other agencies in their community offered sign-on bonuses in addition to other bonuses and that they needed to remain competitive. The sign-on bonus would be advertised only as the amount of the bonus in all recruitment materials, including print and digital media, social media posts, videos, and testimonials. The requestor certified that the purpose of the sign-on bonus was to entice prospective attendants to choose their home care agency over competitors for the provision of services to the clients for whom the prospective attendants were responsible.

HHS-OIG's Findings

In this instance, HHS-OIG concluded that the proposed arrangement would not satisfy the employee safe harbor to the Federal Anti-Kickback Statute. While acknowledging that sign-on bonuses are ordinary offerings in employment contracting and often low risk under the statute, the HHS-OIG found that the unique circumstances of this arrangement created an "inextricable link" between the employment of the attendant and the referral of the client. Specifically, the attendants would select an agency on behalf of clients who are their family members, and the very purpose of the attendant's employment would be to provide care for the client on whose behalf the attendant selected an agency. In this circumstance, the HHS-OIG determined that the advertisement of the sign-on bonus "appears to be a solicitation for an all but guaranteed referral before employment commences" rather than compensation for employment in furnishing services.

The HHS-OIG identified several risk factors that contributed to its unfavorable conclusion:

• Prospective attendants may readily interpret the advertisement of the sign-on bonus as an upfront payment received upon signing an employment contract, potentially steering selection based on which home care agency offers the most compelling bonus rather than quality of services.
• The marketing materials targeted to prospective attendant employees operate as advertisements for new clients because the attendants, in most circumstances, would be agents for the clients. This distinguishes the arrangement from typical employment bonuses offered with only hope of future referrals.
• The arrangement could incentivize home care agencies to offer increasingly higher sign-on bonuses, potentially leading to selection based on bonus amount rather than quality of services and persion of resources from client care to pay the bonuses.

The HHS-OIG also concluded that the beneficiary inducements CMP would be implicated when the requestor offered the sign-on bonus to a prospective attendant in a position to select an agency for a family member who may become a client, because that offer of remuneration would be likely to influence the attendant to choose the agency for Medicaid reimbursable services.

Key Takeaways

This advisory opinion is narrow in scope and applies specifically to circumstances where prospective employees will provide services primarily or exclusively to their family members and are the decision-makers for selecting the agency on behalf of those family members. This opinion reinforces the importance of carefully distinguishing between legitimate employee compensation and arrangements that function as inducements for referrals, particularly in healthcare settings where family members serve dual roles as both employees and decision-makers for beneficiaries.

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