As previously discussed, on April 3, 2020, the U.S. Department of Health and Human Services Office of Inspector General (OIG) issued a process for inquiries to be submitted to OIG about whether administrative enforcement discretion would be provided for certain arrangements directly connected to the 2019 novel coronavirus (COVID-19). OIG established this process to provide regulatory flexibility to ensure necessary care responding to COVID-19, particularly with respect to the federal anti-kickback statute (AKS) and civil monetary penalty (CMP) beneficiary inducement prohibition provisions. OIG responses are publicly available through a frequently asked questions (FAQ) posting on the OIG COVID-19 portal. OIG has continued to update this FAQ since its initial publication, actively posting responses to the following topics with the specific limitations described below:

  1. Providers prescribing extended courses of treatment may assist established patients with transportation. An oncology group practice that temporarily closed a particular office location due to patient and staff exposure to COVID-19 questioned whether it could provide transportation assistance to established patients (e.g., vouchers or reimbursement for taxis or ridesharing services) so that the patients could continue receiving oncology care at one of the practice’s other locations. This transportation assistance likely would not satisfy the mileage requirement of the already-existing AKS local transportation safe harbor. OIG opined that transportation assistance that does not meet the local transportation safe harbor would pose low risk of fraud and abuse so long as the following conditions are met:
    1. First, the transportation assistance is provided by an “eligible entity” to an “established patient” as defined under 42 C.F.R. § 1001.952(bb).
    2. Second, the transportation assistance must be provided only when necessary because of the COVID-19 outbreak, and only during the period of the public health emergency.
    3. Third, the transportation assistance must not be air, luxury, or ambulance-level transportation.
    4. Fourth, access to the transportation assistance must not be related to the past or anticipated volume or value of federal health care business associated with that patient.
    5. Fifth, the established entity may not publicly market or advertise the transportation assistance or market or advertise any health care items or services during the course of the transportation.
    6. Sixth, any drivers or persons arranging for the transportation may not be paid on a per-beneficiary-transported basis.

OIG went beyond simply dealing with office closures caused by the COVID-19 outbreak, noting urban providers may similarly want to offer such assistant for patients who would typically take public transport. Such purpose is acceptable under OIG’s guidance. While the question posed only related to an oncology group, OIG expanded the scope of its opinion by stating that transportation assistance would likely present a low risk of fraud and abuse for other physicians prescribing extended courses of treatment such as chemotherapy, dialysis, radiation therapy, cardio/pulmonary rehabilitation treatment, or behavioral health services.

  1. Mental health providers could provide phone or data service for patients. Mental health and substance abuse disorder providers questioned whether they could accept donations in order to fund phone, service, or data plans for financially needy patients who do not have their own cell phones and otherwise would not be able to access those plans. The providers clarified that any such funding would be for providing medically necessary services while in-person care is unavailable. In response, the OIG opined that providing a cell phone and related phone, service, or data plan by a mental health or substance abuse disorder provider to patients poses a low risk of fraud and abuse so long as the following safeguards are employed:
    1. First, the provider must determine, in good faith, that the patient is in financial need before providing a cell phone or plan.
    2. Second, the provider must determine, in good faith, that the patient needs a cell phone or plan in order to access medically necessary services related to his or her mental health or substance abuse disorder.
    3. Third, all services provided using the cell phone or plan are medically necessary.
    4. Fourth, the provider uses the funding from a public entity, private charity or health plan solely to provide access to a cell phone or plan.
    5. Fifth, the provider must not market the cell phone or plan.
    6. Sixth, the provider must offer the cell phone or plan only to “established patients” as defined under 42 C.F.R. § 1001.952(bb).
    7. Seventh, the provision of the cell phone or plan is limited to the period of the public health emergency, requiring that the patient return the phone, the provider cease funding the plan, or both, at the end of the period.

OIG clarified that its response  applies only to any potential fraud and abuse concerns associated with the relationship between the provider and the patient, and it did not contemplate any risks associated with the relationship between the donor and the provider or patient. While the question focused on receipt of funds from a donor the OIG noted that there are too many potential relationships that could implicate—and present risk under—the federal fraud and abuse laws to address through the FAQ process.

  1. A hospital can suspend rental charges for a federally qualified health center look-alike. OIG opined that a hospital could assist a federally qualified health center look-alike (FQHLA) by waving rental charges during the public health emergency. Under the Stark Law blanket waivers, which OIG adopted for the AKS, below market rental charges to a physician are protected. However, an FQHLA is not a physician. Nonetheless, OIG opined that a hospital suspending rental charges and foregoing the accrual of interest for a FQHLA poses a low risk of fraud and abuse so long as the following conditions are met:
    1. First, the suspension of rent and accrual of interest is set out in a written document that lays out all material terms and is signed by the parties.
    2. Second, the suspension of rent and accrual of interest is not conditioned on the volume or value of Federal health care program business generated between the FQHLA and the hospital.
    3. Third, the arrangement allows the FQHLA to refer patients to any individual or entity it chooses.
    4. Fourth, the suspension of rent and accrual of interest is only made available to an FQHLA when necessary because of the COVID-19 outbreak.
    5. Fifth, the suspension of rent and accrual of interest is only available for the period of the public health emergency.

OIG has previously expressed significant concerns with laboratories …. Here, however, OIG opined that the proposed arrangement would pose a low risk of fraud and abuse.

  1. A clinical laboratory can pay fair market value fees to a retail pharmacy for costs related to collection sites. In this fact-specific scenario, a clinical laboratory that bills payors, including Federal health care programs, questioned whether it could pay fair market value to a retail pharmacy that sets up COVID-19 testing collection sites and incurs costs associated with running the sites. OIG has previously expressed significant concerns with laboratories offering anything of value as it could be seen as inducing referrals. This has been the case for payment for collecting, processing, and packaging patient specimens as it will likely be more than fair market value. Here, however, OIG opined that the proposed arrangement would pose a low risk of fraud and abuse so long as the following conditions are met during the public health emergency:
    1. First, the retail pharmacy must actually incur costs associated with running the sites.
    2. Second, the payment for the items and services provided by the retail pharmacy must be fair market value.
    3. Third, the retail pharmacy must not submit claims to Federal health care programs that reimburse it, in whole or in part, for the costs associated with running the site. In addition, the retail pharmacy cannot receive payments from programs like the CARES Act Provider Relief Fund that could theoretically compensate the retail pharmacist for these services. Any such reimbursements or grants could allow double payment indicating an unlawful intent.

OIG further emphasized that it was not opining on what constitutes a fair market value, but that the parties must determine an appropriate amount themselves. This guidance suggests how critical fair market value would be for such a relationship with a clinical laboratory, unlike some of the other questions discussed above.

In addition to certain factual circumstances, OIG responded to questions about why they did not adopt all of the Stark Law blanket waivers in its guidance McGuireWoods recently discussed. Essentially, OIG viewed the difference in the Stark Law and AKS in such a way that the waivers related to “referrals” (including those on ownership) as opposed to “remuneration,” as well as CMS’ waiver on non-written arrangements, meant that it was not warranted to offer similar protection. That said, OIG encouraged specific circumstances to be submitted for response during this COVID-19 public health emergency to OIGComplianceSuggestions@oig.hhs.gov.

* * * * *

McGuireWoods will continue to monitor OIG’s release of further FAQs as additional providers utilize this inquiry mechanism. Providers may welcome the flexibility provided by OIG exercising enforcement discretion during the COVID-19 pandemic assuming that OIG’s FAQ responses continue to provide. OIG will likely require such relationships to end at the end of the COVID-19 public health emergency declaration, and therefore, providers seeking to utilize these statements in care to their communities should plan to terminate the relationship at the end of the pandemic.

McGuireWoods has published additional thought leadership related to how companies across various industries can address crucial coronavirus-related business and legal issues, and the firm’s COVID-19 Response Team stands ready to help clients navigate urgent and evolving legal and business issues arising from the novel coronavirus pandemic.