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, including those inquiries discussed in a May 13 post and a May 17 post, most recently providing guidance approving certain discounted lodging and free antibody testing arrangements:

  1. Oncology practice may provide free or discounted lodging to certain patients. Oncology practices often attract patients from a wide catchment area—with patients traveling for chemotherapy or radiation treatment. To assist such treatment, nonprofits have developed free or discounted lodging programs near some of the largest cancer treatment facilities to assist financially needy patients, including federal health care program beneficiaries. An oncology practice questioned whether it could provide such free or discounted lodging to these beneficiaries in lieu of a nonprofit, in instances where the nonprofit has closed due to the COVID-19 public health emergency, or where the beneficiaries must travel due to treatment site closures because of the COVID-19 public health emergency. OIG opined that the oncology practice providing free or discounted lodging to financially needy Federal health care program beneficiaries posed a low risk of fraud and abuse so long as the following conditions are met:
    1. The patient resides at least 50 miles from the treatment site.
    2. The patient is an established patient of the oncology practice who had already scheduled treatment prior to the offer of free or discounted lodging.
    3. The patient’s physician determines that provision of free or discounted lodging would facilitate access to care while the patient is receiving treatment.
    4. The practice reasonably believes that the patient would have qualified for such free or discounted lodging from a nonprofit that is closed due to the COVID-19 public health emergency.
    5. Payment is in-kind, made directly to a hotel or motel and only for number of nights required for treatment.
    6. The hotel or motel is located in close proximity to the treatment site.
    7. The practice does not advertise or otherwise use the offer of free or discounted lodging for patient recruitment.
    8. The lodging is provided during the COVID-19 public health emergency.

Such limitations effectively only provides protection under the AKS and CMP to providers that are located near a pre-existing but closed nonprofit that was assisting patients with such lodging in the past. If a provider wanted to add such service during the COVID-19 public health emergency where there was not such a nonprofit, the provider would not have protection from this FAQ response. That said, such providers might have another option to structure such an arrangement. OIG noted that free or reduced-cost lodging could meet the Promotes Access to Care exception to the beneficiary inducement CMP, specifically pointing to their past guidance in OIG Advisory Opinion 17-01. Providers would still need to consider the AKS, but depending on the factual circumstances, additional flexibility max exist, particularly for oncology providers, to establish lodging programs during the COVID-19 public health emergency.

  1. Clinical laboratories may provide free COVID-19 antibody testing to patients who are undergoing other blood tests.

A clinical laboratory asked OIG whether it could provide free antibody testing to federal health care program beneficiaries (and other payor patients) in conjunction with other medically necessary blood tests performed by the laboratory. I.e., as part of a paid for blood test panel for other necessary care, could the laboratory also screen for COVID-19 antibodies. The laboratory told OIG that it would encourage those with positive antibodies to donate blood plasma containing COVID-19 antibodies. The laboratory would also make the results available to both patients and physicians, as well as report it to the Centers for Disease Control and Prevention (CDC) and state public health agencies. OIG opined that providing free COVID-19 antibody testing to patients already undergoing other medically necessary blood tests poses sufficiently low risk of fraud and abuse so long as the following safeguards are employed:

  1. The physicians ordering the tests do not receive remuneration from the clinical laboratory in connection with the free antibody-testing program.
  2. The patients receiving the tests do not receive remuneration from the clinical laboratory in connection with the free antibody-testing program.
  3. The tests are only offered to patients receiving other medically necessary blood tests.
  4. No payor, including the patient, a commercial insurance company, or a federal health care program, is billed for the antibody tests.
  5. The antibody tests are approved by the U.S. Food and Drug Administration (FDA) or are subject to an FDA-issued Emergency Use Authorization.

OIG further clarified that it views the provision of the free antibody testing as a sufficiently low risk of fraud and abuse because of the corresponding benefit to public health. The antibody testing would identify patients whose blood plasma contains COVID-19 antibodies, which may be donated and used for experimental treatments. Further, the reporting to the CDC and state public health agencies aids those entities in tracking the spread of COVID-19. This position suggests that OIG could negatively view a similar arrangement where the tests were not used to promote blood plasma donation or reported to the CDC or state public health agencies, even if the other safeguards are employed. In such a situation, OIG could view the antibody testing to violate the CMP as a free or discounted service to a federal health care program beneficiary.

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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, recognizing the statements do not bind all investigative bodies who could take a different view. OIG will likely continue to require such arrangements to end at the end of the COVID-19 public health emergency declaration, and therefore, providers should plan for the post-pandemic period depending on the arrangement when utilizing these statements.

McGuireWoods has published additional thought leadership related to how companies across various industries can address crucial COVID-19-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.