Client Alerts, News Articles & Blog Posts

Everything you need to know about BMD and the industry.

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.

BMD Appellate Win Clarifies Waiver of Contractual Right to Arbitrate

Brennan, Manna & Diamond, LLC attorneys David M. Scott, Lucas K. Palmer, and Krista D. Warren prevailed before the United States Court of Appeals for the Sixth Circuit regarding if/when a party waives a contractual right to arbitrate. Borror Property Management, LLC v. Oro Karric North, LLC, No. 20-3146 (the “Decision”).

Relief for Ohio Under the Federal American Rescue Plan Act

On March 11, 2021, President Biden signed the American Rescue Plan Act (the “Act”) — a $1.9 trillion COVID-19 relief package — a significant portion of which will be directed to the State of Ohio to support economic recovery, as outlined below.

Cleveland Manufacturer Violated OFAC Sanctions By Allowing Shipments To Iran - Know Your Customer and Know Their Customer

UniControl, Inc., a Cleveland, Ohio manufacturer of process controls, airflow pressure switches, boiler controls and other instruments, agreed to pay the Office of Foreign Assets Control “OFAC,” the financial enforcement agency of the U.S. Treasury Department, $216,464 to settle its liabilities for violations of the Iran Sanctions Program. OFAC stated that “this enforcement action highlights the importance of identifying and assessing multiple warning signs that indicate a foreign trade partner may be re-exporting goods to a sanctioned jurisdiction.”

Ohio Breach of Contract Statute of Limitations Shortened to 6 Years

On March 16, 2021, Governor DeWine signed into law S.B. 13 which shortens Ohio’s statute of limitations for filing lawsuits based on breach of contract. A statute of limitation is the time period within which a party must file a lawsuit before its claim expires as a matter of law.

Chinese Product Tariff Challenge Causes Flurry of Importer Lawsuits

A lawsuit filed late in 2020 at the U.S. Court of International Trade (“CIT”) challenging the U.S. Trade Representative’s (USTR) implementation of Section 301 “List 3” and “List 4” duties on products from China, HMTX Industries LLC et al. v. United States (Court No. 20-00177), has resulted in the filing of thousands of additional lawsuits brought by other affected importers. There are now 3,700+ companies added to the list, including Ford, Home Depot, Target, Tesla, and Walgreens, along with many other smaller importers.