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Healthcare Providers: Comparison of New OIG Waivers and Flexibilities under Anti-Kickback Statute in Response to COVID-19

On March 30, 2020, the Centers for Medicare & Medicaid Services (CMS) issued several temporary regulatory waivers to further enable the American healthcare system to respond to the COVID-19 pandemic with more efficiency and flexibility (the “Blanket Waivers”).

The official publication can be found here: Physicians and Other Clinicians: CMS Flexibilities to Fight COVID-19.

On April 3, 2020, the Office of Inspector General (OIG) issued a Policy Statement announcing that OIG would exercise its enforcement discretion to not impose administrative sanctions under the federal Anti-Kickback Statute (AKS) for eleven of the eighteen CMS Blanket Waivers when certain conditions are met. This policy is applicable on or after April 3, 2020 and will continue through the end of the public health emergency declaration. Importantly, OIG has retained the right to enforce the AKS regarding relationships that create fraud or abuse concerns.

The official publication can be found here: OIG Policy Statement Regarding Application of Certain Administrative Enforcement Authorities Due to Declaration of Coronavirus Disease 2019 (COVID-19) Outbreak in the United States as a National Emergency.

To receive enforcement discretion in the scenarios identified below, the following conditions must be met:

  • The providers are acting in good faith to provide care in response to the COVID-19 pandemic;
  • The government does not determine that the financial relationship creates fraud and abuse concerns; and
  • Providers seeking protection under this policy maintain sufficient documentation.

CMS Blanket Waivers covered by the OIG policy:

  • Remuneration from an entity to a physician that is above or below the fair market value for services personally performed by the physician to the entity;

Example: A hospital pays physicians above their previously contracted rate for furnishing professional services for COVID-19 patients in particularly hazardous or challenging environments.

  • Rental charges paid by an entity to a physician that are below fair market value for the entity’s lease of office space from the physician;

Example: To accommodate patient surge, a hospital rents office space or equipment from an independent physician practice at below fair market value or at no charge.

  • Rental charges paid by an entity to a physician that are below fair market value for the entity’s lease of equipment from the physician;

Example: A hospital’s employed physicians use the medical office space or supplies of independent physicians in order to treat patients who are not suspected of exposure to COVID-19 away from their usual medical office space on the campus of the hospital in order to isolate patients suspected of COVID-19 exposure.

  • Remuneration from an entity to a physician that is below fair market value for items or services purchased by the entity from the physician;

Example: A hospital or home health agency purchases items or supplies from a physician practice at below fair market value or receives such items or supplies at no charge.

  • Rental charges paid by a physician to an entity that are below fair market value for the physician’s lease of office space from the entity;

Example: A hospital provides free use of medical office space on its campus to allow physicians to provide timely and convenient services to patients who come to the hospital but do not need inpatient care.

  • Rental charges paid by a physician to an entity that are below fair market value for the physician’s lease of equipment from the entity;

Example: An entity provides free telehealth equipment to a physician practice to facilitate telehealth visits for patients who are observing social distancing or in isolation or quarantine.

  • Remuneration from a physician to an entity that is below fair market value for the use of the entity’s premises or for items or services purchased by the physician from the entity;

Example: An entity sells personal protective equipment to a physician or permits the physician to use space in a tent or other makeshift location, at below fair market value (or provides the items or permits the use of the premises at no charge).

  • Remuneration from a hospital to a physician in the form of medical staff incidental benefits that exceeds the limit set forth in 42 CFR 411.357(m)(5);

Example: A hospital provides meals, comfort items (for example, a change of clothing), or onsite childcare with a value greater than $36 per instance to medical staff physicians who spend long hours at the hospital during the COVID-19 outbreak in the United States.

  • Remuneration from an entity to a physician in the form of nonmonetary compensation that exceeds the limit set forth in 42 CFR 411.357(k)(1);

Example: An entity provides nonmonetary compensation to a physician or an immediate family member of a physician in excess of the $423 per year limit (per physician or immediate family member), such as continuing medical education related to the COVID-19 outbreak in the United States, supplies, food, or other grocery items, isolation-related needs (for example, hotel rooms and meals), child care, or transportation.

  • Remuneration from an entity to a physician resulting from a loan to the physician: (i) with an interest rate below fair market value; or (ii) on terms that are unavailable from a lender that is not a recipient of the physician’s referrals or business generated by the physician; and

Example: A hospital lends money to a physician practice that provides exclusive anesthesia services at the hospital to offset lost income resulting from the cancellation of elective surgeries to ensure capacity for COVID-19 needs or covers a physician’s 15 percent contribution for electronic health records (EHR) items and services in order to continue the physician’s access to patient records and ongoing EHR technology support services.

  • Remuneration from a physician to an entity resulting from a loan to the entity: (i) with an interest rate below fair market value; or (ii) on terms that are unavailable from a lender that is not in a position to generate business for the physician.

Example: A physician owner of a hospital lends money to the hospital to assist with operating expenses of the hospital, including staff overtime compensation, related to the COVID-19 outbreak in the United States.

It is important to remember that AKS is an intent-based statute. As such, the enforcement leniency will not apply to situations that raise fraud or abuse concerns or conduct intended to induce referrals.

Finally, while flexibility and leniency have been provided under Stark and AKS, no similar guidance or publication has been provided under the Eliminating Kickbacks in Recovery Act (EKRA). EKRA makes it a crime to knowingly and willfully solicit, receive, pay or offer any remuneration in order to induce referrals to specific entities, including all clinical laboratories. As such, all health care providers taking advantage of the Stark and AKS flexibility during this time should also review their relationships with clinical laboratories responsible for testing and diagnosing COVID-19 to ensure compliance with EKRA.

See the this chart for a comparison of CMS Blanket Waivers and the OIG Enforcement Discretion Policy. Our recent Client Alert discussing the initial Stark Blanket Waivers can be found here.

BMD will continue to educate healthcare providers as additional waivers and guidance on COVID-19 are issued. For questions, please contact Jeana M. Singleton at jmsingleton@bmdllc.com or 330-253-2001, or any member of the BMD Healthcare and Hospital Law group.

New York, Kansas, Massachusetts, and Delaware Become the latest States to Adopt Full Practice Authority for Nurse Practitioners

While the COVID-19 pandemic certainly created many obstacles and hardships, it also created many opportunities to try doing things differently. This can be seen in the instant rise of remote work opportunities, telehealth visits, and virtual meetings. Many States took the challenges of the pandemic and turned them into an opportunity to adjust the regulations governing licensed professionals, including for advanced practice registered nurses (APRNs).

Explosive Growth in Pot of Gold Opportunity for Bank (and Other) Cannabis Lenders Driving Erosion of the Barriers

Our original article on bank lending to the cannabis industry anticipated that the convergence of interest between banks and the cannabis industry would draw more and larger banks to the industry. Banks were awash in liquidity with limited deployment options, while bankable cannabis businesses had rapidly growing needs for more and lower cost credit. Since then, the pot of gold opportunity for banks to lend into the cannabis industry has grown exponentially due to a combination of market constraints on equity causing a dramatic shift to debt and the ever-increasing capital needs of one of the country’s fastest growing industries. At the same time, hurdles to entry of new banks are being systematically cleared as the yellow brick road to the cannabis industry’s access to the financial markets is being paved, brick by brick, by the progressively increasing number and size of banks that are now entering the market.

2021 EEOC Charge Statistics: Retaliation & Impact of Remote Work

The U.S. Equal Employment Opportunity Commission (EEOC) released its detailed information on workplace discrimination charges it received in 2021. Unsurprisingly, for the second year in a row, the total number of charges decreased as COVID-19 either shut down workplaces or disconnected employees from each other. In 2021, the agency received a total of approximately 61,000 workplace discrimination charges - the fewest in 25 years by a wide margin. For reference, the agency received over 67,000 charges in 2020, and averaged almost 90,000 charges per year over the previous 10 years.

Ohio’s Managed Care Overhaul Delayed – New Implementation Timeline

At the direction of Governor Mike DeWine, the Ohio Department of Medicaid (ODM) launched the Medicaid Managed Care Procurement process in 2019. ODM’s stated vision for the procurement was to focus on people and not just the business of managed care. This is the first structural change to Ohio’s managed care system since the Centers for Medicare & Medicaid Services' (CMS) approval of Ohio’s Medicaid program in 2005. Initially, all of the new managed care programs were supposed to be implemented starting on July 1, 2022. However, ODM Director Maureen Corcoran recently confirmed that this date will be pushed back for several managed care-related programs.

Laboratory Specimen Collection Arrangements with Contract Hospitals - OIG Advisory Opinion 22-09

On April 28, 2022, the Department of Health and Human Services, Office of Inspector General (“OIG”) published an Advisory Opinion[1] in which it evaluated a proposed arrangement where a network of clinical laboratories (the “Requestor”) would compensate hospitals (each a “Contract Hospital”) for specimen collection, processing, and handling services (“Collection Services”) for laboratory tests furnished by the Requestor (the “Proposed Arrangement”). The OIG concluded that the Proposed Arrangement would generate prohibited remuneration under the federal Anti-Kickback Statute (“AKS”) if the requisite intent were present. This is due to both the possibility that the proposed per-patient-encounter fee would be used to induce or reward referrals to Requestor and the associated risk of improperly steering patients to Requestor.