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Medicare Guidelines for Gifts

Medicare offers health insurance to almost all Americans age 65 or older. Authorized under the Social Security Act, Medicare is administered by the federal Department of Health and Human Services (HHS). (See Reference 3) Legislative amendments prohibit physicians and other health care providers from offering a gift to Medicare or Medicaid beneficiaries if the offer is likely to influence a beneficiary's choice of Medicare-covered items or service. Civil fines can be $10,000 per violation. The bulletin "Offering Gifts and Other Inducements to Beneficiaries" from the HHS' Office of Inspector General (OIG) provides guidance on Medicare gift issues. (See Reference 2)

  1. Inexpensive Medicare gifts

    • When enacting the "no gifts" rule, the legislative history shows giving valuable gifts raised quality and cost concerns. Economic incentives could lead to unnecessary, cheaper, or lower quality care. (See Reference 2, page 1) The OIG interprets the legislation (section 1128A(a)(5) of the Social Security Act) as allowing inexpensive gifts or services, other than cash or cash equivalents, to no more than $10 retail value per individual gift and $50 per patient annually. (See Reference 2, page 2)

    Medicare gift exceptions

    • Providers can offer more expensive items or services, if the items fit within one of five statutory exceptions. Providers can waive cost-sharing amounts based on financial need. Another exception is properly disclosed health plan co-payment differentials. Also allowed are incentives promoting the delivery of "certain preventive care services." Any practice "permitted under the federal anti-kickback statute pursuant to 42 CFR 1001.952" is also allowed, as are waivers of hospital outpatient co-payments in excess of minimum co-payment amounts. (See Reference 2, page 2)

    Possible Medicare gifts

    • The OIG states that it continues to consider requests for advisory opinions regarding exceptions. Favorable opinions are expected to be "limited to situations involving conduct that is very close to an existing statutory or regulatory exception." (See Reference 2, page 2) The limited nature of gifts coupled with the prohibition of waiving co-payments, deductibles, or providing services free of charge led the Texas Medical Association to offer this advice to its members in a 2009 headline concerning Medicare and Medicaid services: "Don't Offer Gifts or Other Inducements to Medicare or Medicaid Patients." (See Reference 1)

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