OIG Releases Policy Statement Extending HHS Blanket Waiver Protection to Certain Federal Anti-Kickback Statute Violations During COVID-19 Pandemic

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On April 3, 2020, the Department of Health and Human Services’ Office of Inspector General (“OIG”) issued a policy statement of enforcement discretion (the “Policy Statement”) regarding sanctions under the Federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b, (“AKS”). The Policy Statement is designed to bring AKS enforcement in line with the Centers for Medicare and Medicaid Services’ (“CMS”) blanket waivers regarding sanctions under the physician self-referral law, 42 U.S.C. § 1395nn, (the “Stark law”), which were issued earlier in the week. This latest instance of coordination between the two agencies shows a shared concern that sufficient items and services are available for Federal health care program beneficiaries, and a shared effort to lower regulatory burdens for providers treating patients, during the pandemic.

Background. Both the AKS and Stark law prohibit the exchange of remuneration for patient referrals to Federal health care programs, but there are significant differences. The AKS is a criminal statute that requires knowing and willful behavior and applies to referrals from any person for any type of service. The Stark law is a civil, strict liability statute that applies to referrals of certain “designated health services” by physicians and the remuneration between those physicians (or their immediate family members) and entities that provide such designated health services.

On March 30, 2020, CMS issued blanket waivers with respect to sanctions under the Stark law for certain remuneration and referrals. Section II.B of the blanket waivers lists 18 types of financial arrangements that would otherwise violate the Stark law but for which sanctions would not be imposed under CMS’s exercise of enforcement discretion.^[1] These waivers are limited to the duration of the public health emergency and are only for payments and referrals that are solely related to “COVID-19 Purposes.”

OIG’s Policy Statement.  The Policy Statement provides that OIG will not impose sanctions under the AKS with respect to remuneration that is covered by Section II.B(1)-(11) of CMS’s blanket waivers. Such remuneration includes payment from a hospital to a physician that is above fair market value for services performed by the physician; payment by a physician to a hospital that is below fair market value for the lease of office space or equipment; and payment from a hospital to a physician that exceeds the limits under the medical staff incidental benefits and nonmonetary benefits exceptions to the Stark law. With respect to Section II.B(12)-(17) of the blanket waivers, the OIG invites providers to submit inquiries through its COVID-19 compliance portal, OIGComplianceSuggestions@oig.hhs.gov. The Policy Statement is silent on Section II.B(18) of the blanket waiver which suspends the writing and signature requirements for certain Stark law exceptions.

Importantly, the Policy Statement does not expand the CMS blanket waivers, which only apply to physicians, their immediate family members, physician organizations and entities furnishing designated health services, to all persons subject to the AKS, which applies to any person who offers, pays, solicits or receives remuneration in exchange for a referral. Instead, the OIG expressly points out that the enforcement discretion does not apply to “arrangements . . . that are not covered by the Blanket Waivers (e.g., direct financial relationships between pharmaceutical or device manufactures and physicians or between providers where there is no physician involved).”  In addition, the Policy Statement only applies to conduct occurring on or after April 3, 2020, while CMS’s blanket waivers are retroactive to March 1, 2020. 

OIG’s enforcement discretion under the Policy Statement is subject to the same terms and conditions that apply to CMS’s blanket waivers.  Most notably, remuneration and referrals must be solely related to a “COVID-19 Purpose.” CMS lists six criteria for determining a COVID-19 Purpose.  Generally, the criteria include any action taken in response to the COVID-19 outbreak and/or any arrangement to address a community need that exists as a result of  the COVID-19 outbreak.  In addition, parties relying on OIG’s enforcement discretion must make records relating to the use of the waiver available to OIG upon request. 

As with the blanket waivers, the Policy Statement only lasts until HHS declares the public health emergency no longer exits, or 90 days after the declaration (absent extension by HHS), whichever occurs first. The temporary nature of the enforcement discretion makes it incumbent on providers to structure their arrangements in a way that allows easy unwinding once the public health emergency is over.

 

[1] The Blanket Waiver document also provides a non-exhaustive list of more than 20 examples of arrangements that could fall within the scope of the waivers.  The list is a useful tool for determining whether certain conduct is covered.