HHS OIG to Accept Inquiries Concerning the AKS and Other Administrative Enforcement Authorities Directly Connected to COVID-19

To enhance regulatory flexibility necessary to adequately respond to the COVID-19 pandemic, the US Department of Health and Human Services (HHS) Office of the Inspector General (OIG) recently announced that it is accepting inquiries from the health care community regarding the application of its administrative enforcement authorities, including the anti-kickback statute (AKS) and civil monetary penalty provision prohibiting inducements to beneficiaries in the context of the ongoing COVID-19 pandemic.¹

In its latest response on the FAQ site, posted on May 8, 2020, the OIG addressed the question of whether a clinical lab that bills federal health care programs for lab tests to diagnose COVID-19 may pay a retail pharmacy a fee for certain costs that the pharmacy incurred related to testing collection sites. The OIG noted that such an arrangement would implicate the AKS because the clinical lab would pay remuneration to a referral source (i.e., the retail pharmacy), the implication being that one purpose of the payment is to induce the physician/retail pharmacy’s federal health care program referrals.

Nevertheless, according to the OIG’s FAQs, in the context of the COVID-19 public health emergency, the proposed arrangement between the clinical lab and retail pharmacy would be sufficiently low risk of violating the AKS if: (1) the retail pharmacy incurs costs in operating the testing collection sites; (2) the payment is fair market value² for the items and services furnished by the retail pharmacy in running the sites; and (3) the retail pharmacy is not submitting claims to federal health care programs—or directly or indirectly receiving other federal or state funding—that reimburse it, in whole or in part, for the items and services furnished by the retail pharmacy in running the sites for which the lab reimburses the pharmacy.

In prior updates to the COVID-19 FAQ site, the OIG has responded to questions from various providers concerning, among other topics, blanket waivers of the physician self-referral law, the validity of in-kind transportation assistance (such as reimbursement for ridesharing services) provided for free to established patients of an oncology practice, and the propriety of furnishing free or reduced rate services to assist skilled nursing facilities that are facing staffing shortages due to COVID-19.

OIG is urging health care professionals to submit questions within its jurisdiction to OIGComplianceSuggestions@oig.hhs.gov concerning how OIG would view an arrangement that implicates these authorities and is directly connected to the COVID-19 public health emergency. Any submission should provide sufficient facts to allow for an understanding of the key parties and terms of the arrangement at issue.

OIG is providing responses, on a rolling basis, to such questions on its FAQ site³. According to the OIG, its FAQ site: (a) is intended to provide informal feedback that applies only to arrangements in existence solely during the time period subject to the COVID-19 Declaration; (b) does not bind HHS or any other agency; and (c) any favorable answer will not result in prospective immunity from administrative sanctions or criminal liability, given the limited and uncertified nature of the facts presented.⁴

For assistance submitting to the OIG any questions raised by the exigent circumstances unique to COVID-19 public health emergency, please contact Seyfarth’s deep bench of health care attorneys. Please also see our recent client updates addressing the anticipated proposed changes to the Stark and AKS rules, posted here and here.

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1. See 42 U.S.C. §§ 1320a-7b(b), 1320a-7a(a)(5).
2. The OIG declined to express an opinion as to the fair market value for such items and services.
3. While the OIG has announced that it intends to review all questions, and develop and publicize appropriate responses thereto on its FAQ website, it has also stated that the submission of a question does not obligate it to take any action, including responding to the question, making the question public, or issuing public feedback.
4. OIG’s responses to FAQs are separate from its advisory opinion process, which remains available to interested parties. Unlike an FAQ, an OIG advisory opinion is legally binding on HHS and the requesting party concerning the application of its fraud and abuse authorities to the party’s existing or proposed business arrangement.