As previously discussed, on April 3, 2020, the U.S. Department of Health and Human Services (HHS) 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 the recent inquiry discussed in our May 17 post, providing guidance on the following question:

“Would the offer or provision of cash, cash-equivalent, or in-kind incentives or rewards to Federal health care program beneficiaries who receive COVID-19 vaccinations during the public health emergency violate OIG’s administrative enforcement authorities?”

A broad range of entities are offering a wide variety of incentives and rewards from food and beverages, tickets to concerts and baseball games, cash, to even State sponsored exclusive lottery tickets, to individuals who receive the COVID-19 vaccine. Because effective, expeditious, and widespread vaccine administration is crucial to the COVID-19 pandemic response, OIG has concluded that because certain incentives and rewards may promote broader access to and uptake of COVID-19 vaccinations, these incentives do not violate OIG’s administrative enforcement authorities.

Federal health care programs like Medicare, Medicaid, TRICARE, and CHIP reimburse for COVID-19 vaccine administration so the offer or provision of incentives and rewards to beneficiaries of these programs who receive the vaccine from a particular practitioner, provider, or supplier implicates the AKS and CMP beneficiary inducement prohibition provisions. Indeed, there are longstanding concerns regarding the provision of anything of value to Federal health care program beneficiaries intended to induce the utilization of reimbursable items or services-remuneration because such activities generally violate the Federal anti-kickback statute.

However, in the limited context of the COVID-19 public health emergency, a health care provider, supplier, or managed care organization offering or providing a reward or incentive in connection with the beneficiary receiving the COVID-19 vaccine (either one or both doses) would be of sufficiently low risk under the AKS and Beneficiary Inducements CMP if certain safeguards are met, as follows: (1) the incentive or reward is furnished in connection with receiving a required dose of a COVID-19 vaccine; (2) the vaccine is authorized or approved by the Food and Drug Administration as a COVID-19 vaccine and is administered in accordance with all other applicable Federal and State rules and regulations and the conditions for the provider or supplier receiving vaccine supply from the Federal government; (3) the incentive or reward is not tied to or contingent upon any other arrangement or agreement between the entity offering the incentive or reward and the Federal health care program beneficiary; (4) the incentive or reward is not conditioned on the recipient’s past or anticipated future use of other items or services that are reimbursable, in whole or in part, by Federal health care programs; (5) the incentive or reward is offered without taking into account the insurance coverage of the patient (or lack of insurance coverage) unless the incentive or reward is being offered by a managed care organization and eligibility is limited to its enrollees; and (6) the incentive or reward is provided during the COVID-19 public health emergency.

Furthermore, the incentives and rewards offered to Federal health care program beneficiaries who receive the COVID-19 vaccine offered and paid for by entities that are not affiliated or connected with any health care industry stakeholder (e.g., restaurants, local or State Departments of Health) have minimal risk under the AKS and the CMP. Incentives or rewards offered and funded by such entities would not be an enforcement priority for OIG, and absent some other fraud scheme, OIG would not bring an administrative enforcement action based on the offer or provision of such COVID-19 vaccine incentives and rewards. The Federal anti-kickback statute and Beneficiary Inducements CMP relate to items and services for which payment may be made in whole or in part under a Federal health care program. Consequently, it is unlikely that these statutes would be violated by incentives and rewards furnished to commercially insured or uninsured individuals.

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.

For related commentary, please see our previous posts:

OIG Removes Mandatory Cost-Sharing Obligations for COVID-19 Ambulance Transport Waiver (May 17, 2021)
Free FQHC COVID-19 Testing Approved by OIG (March 22, 2021)
Per-Click Compensation for Philanthropic Entity’s COVID-19 Vaccine Site Low Risk of Fraud According to OIG (March 2, 2021)
OIG Responds to Free/Discounted Lodging and Free Antibody COVID-19 Test Inquiries (August 27, 2020)
OIG Responds to Physician Group COVID-19 Personal Protective Equipment Arrangement Inquiry (May 17, 2020)
OIG Updates Enforcement Responses to COVID-19 Arrangement Inquiries (May 13, 2020)
OIG Requests Inquiries on Enforcement Related to COVID-19 Arrangements (April 13, 2020