On April 27, 2022, the Office of Inspector General (OIG) published Advisory Opinion 22-08 (Advisory Opinion) in which it declined to impose sanctions against a federally qualified health center (Requestor) for an arrangement involving the loaning of smartphones to patients to allow those patients to receive telehealth services from the Requestor. The OIG concluded that although the arrangement would constitute prohibited remuneration under the Federal anti-kickback statute (AKS) and the beneficiary inducement prohibitions of the Civil Monetary Penalties Law (CMP), the limited scope of the arrangement and the safeguards in place did not warrant the imposition of sanctions.

Proposed Arrangement

As a federally qualified health center, the Requestor primarily serves low-income individuals, including beneficiaries of federal health care programs. Under the arrangement, the Requestor loaned smartphones to approximately 3,000 of its existing patients. The smartphones were provided on a first-come, first-serve basis for purposes of allowing the patients to receive telehealth services and to reduce social isolation, including during the COVID-19 pandemic. Only patients who received a service from the Requestor in the prior 24 months and who did not have a telehealth-compatible smartphone were eligible to receive a smartphone from the Requestor. Patients may retain the smartphone if the Requestor has provided at least one service to the patient within the prior 24 months; if no such service was provided, the patient is required to return the smartphone. The smartphones are locked and have limited capability—users are only able to make and receive phone calls and text messages, access the telehealth application utilized by the Requestor, and view the applicable patient’s medical records. Patients may use the smartphone to receive telehealth services from other providers, but they must only use the telehealth application utilized by the Requestor that is loaded onto the smartphone. According to the Requestor, the telehealth services it provides via the smartphone telehealth application are currently reimbursable by Medicare and Medicaid. Prior to issuance of the Advisory Opinion, the Requestor ended its loan program and will not loan additional smartphones or provide other patients with smartphones.

The Federal Communications Commission and a local charity provided Requestor with the funding to purchase the smartphones; however, the Requestor did provide patients with two months of voice and data service for the smartphones. Requestor certified that it will not fund additional voice and data services, and that the patients must pay for such services to continue using the smartphones.

OIG Analysis

According to the OIG, the arrangement implicates both the AKS and the beneficiary inducement prohibition of the CMP because allowing the patients to continue use of the smartphones for free could induce those patients to receive Medicare-reimbursable items and services from the Requestor.

The OIG first analyzed the beneficiary inducements prohibition and concluded that during the COVID-19 public health emergency (PHE) the arrangement satisfied the “promotes access to care” exception in the CMP as follows:

  • The arrangement reduces socioeconomic barriers to care and improves beneficiaries’ access to care because the Requestor serves a significant percentage (94%) of patients that are at or below 200% of the federal poverty guidelines, and patients are eligible for the arrangement only if they do not possess a smartphone capable of receiving telehealth;
  • Nothing in the arrangement suggests it will affect clinical decision-making;
  • Although the arrangement may increase utilization of telehealth services, nothing in its structure suggests that such increase would be inappropriate because the arrangement is limited to the current patients that have a loaned smartphone, and each patient is required to receive only one service from the Requestor over a 24-month period to retain the smartphone. The OIG found that this reduced the risk of patients seeking care from the Requestor solely to retain the smartphone; and
  • There was no evidence that the Requestor would provide telehealth services if doing so would raise patient safety or quality of care concerns and, during the PHE, providing a telehealth option to patients is likely to promote patient safety.

The OIG limited the above analysis to the PHE because the OIG is uncertain whether the telehealth services offered by the Requestor will continue to be covered by Medicare or Medicaid following the end of the PHE. However, the OIG further concluded that even if the arrangement does not meet the “promotes access to care” CMP exception, it would not impose sanctions due to the low-risk nature of the arrangement.

The OIG next turned to the AKS. It concluded that although no safe harbor applied to the arrangement, it presents no more than a minimal risk of fraud and abuse for the same reasons as analyzed under the CMP. The OIG further noted that the fraud and abuse risk was low because the smartphones were purchased with funding from entities that have no financial interest in patients receiving care from the Requestor.


Although the arrangement addressed in this Advisory Opinion is of limited scope and duration, the OIG’s analysis provides insight to health care providers on safeguards to consider incorporating into innovative programs intended to promote access to care, particularly through use of telehealth—both during and after the PHE.

As the OIG has emphasized, its Advisory Opinions are issued only to the requestors of the opinion, and have no application to, and cannot be relied upon by, any individual or entity, nor may they be introduced into evidence by anyone other than the requestors to prove the individual or entity did not violate the anti-kickback statute or any other law.

Photo of Nathaniel Arden Nathaniel Arden

Nathaniel Arden is a member of Robinson+Cole’s Health Law Group. He advises hospitals, physician groups, community providers, and other health care entities on a wide variety of health law and business matters. He regularly assists clients with transactional and regulatory issues, including Medicare…

Nathaniel Arden is a member of Robinson+Cole’s Health Law Group. He advises hospitals, physician groups, community providers, and other health care entities on a wide variety of health law and business matters. He regularly assists clients with transactional and regulatory issues, including Medicare and Medicaid fraud and abuse, health information privacy and security, compliance, licensure, clinical trials and health care-related information technology issues. Read his full rc.com bio here.