Federal health officials have given a green light to a hospice provider’s proposal to make supplemental payments to skilled nursing facilities for dual eligible patients.

The payment arrangement, proposed by an unnamed nonprofit hospice provider, would have the hospice pay nursing facilities directly for hospice patients eligible for both Medicare and Medicaid, in addition to payments the facility receives from a state managed care organization.

The proposal would ensure the nursing facilities would receive the same amount of payment they would have if a patient had not elected hospice care, the provider said. The arrangement would also take away incentives for facilities to provide a lower level of care to hospice patients, or discourage patients from electing hospice.

In an advisory opinion released Wednesday, the Department of Health and Human Services Office of Inspector General said the proposal was acceptable, even though the arrangement could potentially violate anti-kickback laws.

“The supplemental payment would never result in the nursing facility receiving more for [the hospice provider’s] Dually Eligible Hospice Patients than it receives from the Participating MCO for patients who have not elected hospice and, moreover, the total reimbursement to the nursing facility would never exceed the State’s Medicaid daily nursing facility rate,” the OIG said. “For the combination of these reasons, we believe that the [proposal] presents a low risk of fraud and abuse under the Federal anti-kickback statute.”