On April 3, 2020, the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) issued a policy statement announcing that the OIG does not intend to impose administrative sanctions under the federal Anti-Kickback Statute (AKS) for certain remuneration-related Stark waivers issued by the Secretary in response to the COVID-19 Declaration and national emergency (OIG Policy Statement). OIG’s announcement was published in response to providers’ AKS concerns raised by the recent blanket waivers issued by the Centers for Medicare & Medicaid Services (CMS) related to certain financial relationships and referrals otherwise sanctioned by the Physician Self-Referral Law (Stark Law) (Blanket Waivers).
Although the OIG’s AKS enforcement discretion is certainly good news, there are important limitations to the OIG’s announcement. As is explained below, the OIG’s enforcement discretion is not retroactive and does not apply to referral relationships or arrangements with pharmaceutical or device manufacturers. The AKS broadly prohibits the offer or exchange of anything of value to induce or reward the referral of federal healthcare program business, unless an arrangement fits squarely within a safe harbor issued by OIG. Notwithstanding, the OIG’s April 3 Policy Statement provides protection for arrangements that do not satisfy the safe harbor requirements provided that the arrangement satisfies one of the permissible forms of remuneration allowed in Section II.B(1)-(11) of the Stark Law Blanket Waivers. Importantly, all conditions and definitions that apply to the Stark Law blanket waivers would need to be satisfied for a provider to receive protection from AKS liability. For more information on the Blanket Waiver conditions, view the AGG client alert on the Stark Law blanket waivers.
Notably, the OIG policy statement does not include in its scope all of the Blanket Waivers approved by the Secretary on March 30, 2020. Specifically, the OIG has not extended its enforcement discretion to the Stark Law waivers related to referral relationships (specifically Section II.B(12)-(18) of the Stark Law waivers). Rather, the OIG Policy Statement protects only the permissible forms of remuneration specified in Section II.B(1)-(11) of the Blanket Waivers. Nonetheless, the OIG stated that it would not impose sanctions with respect to remuneration that relates to referrals for services provided to federal healthcare program beneficiaries stemming from an arrangement protected under Section II.B(1)-(11) of the Stark Law blanket waivers.
Unfortunately, the OIG Policy Statement is distinct from the Secretary’s Blanket Waivers with respect to retroactivity – although the Stark Law waivers apply retroactively for conduct on or after March 1, 2020, the OIG policy statement applies only to conduct occurring on or after April 3, 2020, the date of the OIG’s policy statement.
Also significantly, the OIG made clear that direct financial relationships with pharmaceutical companies or device manufacturers are not protected by the OIG policy statement because those relationships are not covered by the Blanket Waivers. In addition, because the Blanket Waivers cover only provider relationships involving physicians, a provider arrangement involving non-physician providers (e.g., nurse practitioners or physician assistants) are not protected by the OIG Policy Statement and thus, may be subject to potential prosecution.
Although the OIG’s Policy Statement excludes certain arrangements provided Stark Law protection under the Blanket Waivers, it is important to note that the arrangement may not necessarily lead to an enforcement action by the OIG. Indeed, the OIG Policy Statement does not remove other AKS safe harbor protection that may apply to the arrangement. For example, and provided that the arrangement is intended to assure that sufficient health care items and services are available to meet the needs of individuals in the COVID-19 emergency area, the arrangement may not have the requisite intent to induce or reward referrals, which could insulate the arrangement from AKS liability. It is critical that providers document all the arrangements and relationships arising in response to providing services relating to the COVID-19 pandemic, and particularly the circumstances giving rise to the arrangement or relationship, and especially for those arrangements that are not covered by the OIG Policy Statement. Providers may also want to reach out to counsel in order to evaluate their arrangements and obtain advice on compliance measures necessary to assure proper documentation is present and maintained.
We also note that, as with the Blanket Waivers, the OIG policy statement expires at the end of the public health emergency. Providers should take measures to assure that any relationships/arrangements entered into during the pandemic that comply only with the Blanket Waivers and not the Stark Law more generally, are terminated or amended to assure that those arrangements comply with the Stark laws and the anti-kickback statutes.