On August 4, 2020, the Office of Inspector General for the United States Department of Health and Human Services (OIG) released an FAQ regarding whether a clinical laboratory may provide free antibody testing to federal health care program beneficiaries (e.g. Medicare/Medicaid beneficiaries). In its FAQ, the OIG acknowledged that providing such testing would implicate two federal anti-fraud statutes–the federal Anti-Kickback Statute (AKS) and the federal Civil Monetary Penalties Law (CMPL). However, so long as the laboratory implemented certain safeguards, the arrangement would pose a sufficiently low risk that OIG would not pursue an enforcement action.

Background

The federal AKS prohibits anyone from knowingly and willfully soliciting, offering, receiving, or paying any form of remuneration to induce referrals for any items or services for which payment may be made by any federal healthcare program (e.g., Medicare, Medicaid) unless the transaction is structured to fit within a regulatory exception.[1] The statute has been interpreted to cover any arrangement where “one purpose” of the remuneration is to obtain money for the referral of services or to induce further referrals of federal program business.[2] The CMPL prohibits, among other things, offering or providing inducements to a Medicare or Medicaid beneficiary that are likely to influence the beneficiary to order or receive items or services payable by federal healthcare programs from a particular provider, practitioner or supplier.[3]

Safeguards

However, so long as the following safeguards are in place, OIG acknowledged that the risk of fraud and abuse is relatively low:

1. the physicians ordering the laboratory tests, including the free COVID-19 antibody tests, would not receive any payments or anything else of value from the clinical laboratory in connection with the free antibody testing program;
2. the patients receiving the laboratory tests would not receive any payments or anything of value, other than the free COVID-19 antibody test, from the clinical laboratory in connection with the free antibody testing program;
3. the tests would be offered only to patients receiving other medically necessary blood tests as part of a medically necessary exam or treatment;
4. no payor, including the patient, a commercial insurance company, or a Federal health care program, would be billed for or pay any costs in connection with the COVID-19 antibody tests; and
5. the antibody tests are cleared or approved by the U.S. Food and Drug Administration (FDA) or are subject to an FDA-issued Emergency Use Authorization.

Thus, implementing these safeguards would protect organizations from federal enforcement actions. Please note the OIG’s FAQ applies only to free antibody testing performed during the duration of the Secretary of the U.S. Department of Health and Human Services’ Public Health Emergency Declaration. Additionally, prior to providing any free antibody testing services, laboratories should ensure that such arrangements are not prohibited by state law (e.g., state anti-kickback or beneficiary inducement laws).

The full FAQ is available at https://oig.hhs.gov/coronavirus/authorities-faq.asp

Husch Blackwell’s healthcare regulatory attorneys have extensive experience assisting laboratories in a multitude of areas, including opening new facilities, licensure and audits, laboratory services contracting, research, and PREP Act analysis. Please contact one of our Husch Blackwell healthcare attorneys directly for specific legal advice.

[1] 42 U.S.C. § 1320a-7b(b).

[2] United States v. Greber, 760 F.2d 68 (3d Cir. 1985).

[3] 42 U.S.C. § 1320a-7a(a)(5); 42 C.F.R. § 1003.100(a).