The Office of Inspector General (OIG) recently gave the green-light on a medical device manufacturer’s proposed warranty program, wherein the company would provide a refund to the hospital at which a patient underwent joint replacement surgery using the company’s knee or hip implant and related products, if the patient was readmitted within 90 days because of a surgical site infection or need for implant replacement surgery. Advisory Opinion No. 18-10 concluded that although the suggested proposal did not meet the particular specifications of the warranty safe harbor to the Anti-Kickback Statute (AKS), it nonetheless posed an acceptably low risk of fraud and abuse. OIG’s approval of this warranty program is consistent with several other recent signals from OIG indicating its increasing interest in value-based arrangements.
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