OIG Gives Green Light to Employee Tuition Reimbursement Benefits

Staff shortages have become a rampant problem for many hospitals and labs. Finding nurses and other health care professionals that possess the required certifications is particularly challenging. One creative solution is to pay the tuition costs of employees seeking certification. If your lab has or is contemplating paying employees’ tuition benefits, you need to go to school on new OIG Advisory Opinion No. 22-03 addressing the federal Anti-Kickback Statute (AKS) implications of such arrangements.

The Proposed Arrangement

The arrangement involves owners and operators of home health agencies that employ certified nurse aides (CNAs) to treat patients, over 90 percent of whom are Medicaid-eligible “medically fragile children” requiring levels of services similar to those provided at a skilled nursing facility or hospital. Medicaid reimburses for services provided by parents or relatives to medically fragile children if the parent or relative is certified as a CNA in the state and employed by a home health agency. Under the proposed arrangement, the agencies would hire individuals seeking to become CNAs. In the initial phase before certification is obtained, the employees would receive mandatory orientation and perform services covered by Medicaid. The agencies would pay:

• The employees’ program tuition costs directly to the school; and
• Salaries to the employees for completing orientation and any services they perform.

The agency certified that the employees would be “bona fide employees.” But to remain employed, they’d have to successfully complete the nurse aide certification program and pass the state CNA exam. Employees wouldn’t have to pay back the tuition costs as long as they remained employed with the agency for one year after passing the CNA exam. CNAs wouldn’t be terminated for providing care to their own or a relative’s child if the children receive home health aide services from another agency.

The OIG’s Analysis

The arrangement could be problematic under the AKS, the OIG explained, because paying salaries to and reimbursing tuition of employees is a form of “remuneration” that could induce the parents or relatives to refer children to the agency or choose the agency as their Medicaid service provider. On the other hand, AKS exceptions and safe harbors for employees could apply: The statutory exception (Section 1128B(b)(3)(B) of the AKS) allows for “any amount paid by an employer to an employee (who has a bona fide employment relationship with such employer) for employment in the provision of covered items or services.” The safe harbor in the AKS regulations (42 C.F.R. § 1001.952(i)) specifies that the term “remuneration,” as in illegal remuneration, doesn’t include “any amount paid by an employer to an employee, who has a bona fide employment relationship with the employer, for employment in the furnishing of any item or service for which payment may be made in whole or in part under Medicare, Medicaid, or other federal health care programs.” The OIG concluded that the proposed arrangement, provided that all of the described safeguards were implemented, would satisfy both the AKS exception and safe harbor for employees because the salaries and tuition costs would constitute amounts paid to an employee for providing services that are reimbursable under Medicaid.

Takeaway

Although the proposed arrangement in the new OIG Advisory Opinion involves home health agencies, the AKS principles apply equally to other kinds of providers, including labs. The moral is that the AKS statutory exception and safe harbor for employees may give you some leeway in offering tuition reimbursement benefits to new recruits and current staffers seeking certifications.