WASHINGTON--A provider that offers free oxygen is at risk of violating the anti-kickback statute, the HHS Office of Inspector General warned in an advisory opinion last week.

According to the OIG, the DME company, whose name has been redacted, currently offers free interim oxygen to Medicare patients while they wait for the results of physician-conducted oximetry tests, which can take anywhere from a few days to several weeks. Medicare does not cover interim oxygen before the results of the test show that they qualify.

The company requested an opinion from the OIG on the free oxygen program as well as a proposed arrangement where the company also would provide free overnight oximetry tests. Medicare does not recognize the results of provider-administered oximetry tests for home oxygen coverage decisions, but the company said the testing would provide preliminary data to patients and physicians as they awaited the official test results.

The DME provider said that it doesn't advertise the free oxygen program and that it wouldn't advertise the free oximetry program, either. The company told the OIG that providing free interim oxygen is a common practice among providers and that patients had learned about the program from physicians or other Medicare beneficiaries.

According to the opinion, however, the free oxygen and oximetry tests amount to remuneration to beneficiaries and are designed to generate business.

"While providing the free interim oxygen or the overnight oximetry, [the DME company] has or would have the opportunity to initiate a relationship with the beneficiary, and it is reasonable and probable that for future purchases the beneficiary would select a supplier with whom he or she is already familiar," the OIG said. "The fact that the interim oxygen and overnight oximetry is or would be offered without charge increases the chances that a beneficiary would take advantage of the offers, thus maximizing opportunities for [the DME company] to initiate a relationship with the beneficiary prior to his or her selection of a supplier."

The OIG added that the proposed arrangement to provide free oximetry tests poses an additional fraud and abuse risk "as it appears to be a thinly veiled scheme to evade the barrier interposed between beneficiaries and oxygen suppliers by the Medicare rule that bars DME suppliers (except hospitals) from performing the oximetry test necessary to qualify a beneficiary for covered oxygen."

To view the advisory opinion, click here.