OIG Issues AKS Policy Statement Following Stark Waivers

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The Office of Inspector General (“OIG”) recently issued guidance to reduce administrative burdens facing health care providers during the COVID-19 pandemic related to the Anti-Kickback Statute (“AKS”). The AKS is a criminal statute that prohibits persons or entities who knowingly and willfully offer, pay, solicit or receive remuneration to induce or reward the referral of business reimbursable under a federal healthcare program. Arrangements that fit within certain statutory or regulations safe harbors are considered protected from enforcement action. In response to the COVID-19 pandemic and the need to provide flexibility for providers, OIG has recognized that providers need unique protections from AKS enforcement. Accordingly, on Friday, April 3, 2020, OIG issued a policy statement, which can be found here, complementing the Stark waivers issued by CMS just the week before.

Specifically, OIG states that it will not seek to impose administrative sanctions under the AKS for remuneration covered by certain 1135 Stark blanket waivers. All of the conditions and definitions that apply to the Stark waivers will apply to OIG’s policy statement. CMS issued a total of 18 Stark waivers, and the OIG policy statement applies to the first 11 of those 18, as those waivers cover the situations that OIG believes are most likely to implicate the AKS. Those 11 waivers relate to:

  1. Remuneration from an entity to a physician (or an immediate family member of a physician) that is above or below the fair market value for services personally performed by the physician (or the immediate family member of the physician) to the entity.
  2. Rental charges paid by an entity to a physician (or an immediate family member of a physician) that are below fair market value for the entity’s lease of office space from the physician (or the immediate family member of the physician).
  3. Rental charges paid by an entity to a physician (or an immediate family member of a physician) that are below fair market value for the entity’s lease of equipment from the physician (or the immediate family member of the physician).
  4. Remuneration from an entity to a physician (or an immediate family member of a physician) that is below fair market value for items or services purchased by the entity from the physician (or the immediate family member of the physician).
  5. Rental charges paid by a physician (or an immediate family member of a physician) to an entity that are below fair market value for the physician’s (or immediate family member’s) lease of office space from the entity.
  6. Rental charges paid by a physician (or an immediate family member of a physician) to an entity that are below fair market value for the physician’s (or immediate family member’s) lease of equipment from the entity.
  7. Remuneration from a physician (or an immediate family member of 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 (or the immediate family member of the physician) from the entity.
  8. 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).
  9. Remuneration from an entity to a physician (or the immediate family member of a physician) in the form of nonmonetary compensation that exceeds the limit set forth in 42 CFR 411.357(k)(1).
  10. Remuneration from an entity to a physician (or the immediate family member of a physician) resulting from a loan to the physician (or the immediate family member of the physician):  
    1. with an interest rate below fair market value; or 
    2. on terms that are unavailable from a lender that is not a recipient of the physician’s referrals or business generated by the physician.
  11. Remuneration from a physician (or the immediate family member of a physician) to an entity resulting from a loan to the entity:  
    1. with an interest rate below fair market value; or   
    2. on terms that are unavailable from a lender that is not in a position to generate business for the physician (or the immediate family member of the physician).

Waivers 12 through 18, which cover, among other items, certain arrangements related to physician owners of hospitals and group practice referrals, are not specifically protected. OIG is accepting questions via email at OIGComplianceSuggestions@oig.hhs.gov relating to OIG’s application of administrative sanctions to remuneration covered under those remaining Stark waivers. In any email correspondence, OIG has asked for sufficient facts to identify key parties and terms of an arrangement. OIG’s policy statement applies to conduct occurring on or after April 3, 2020, whereas the Stark waivers have retroactive effect to March 1, 2020. The policy statement will terminate upon the termination of the Stark waivers, unless earlier terminated by OIG.

This policy statement is a welcome announcement from OIG in light of the Stark waivers issued by CMS. However, it is important for stakeholders to recognize that OIG’s policy statement piggybacks off the CMS Stark waivers, and thus only applies to arrangements that implicate the Stark law between designated health services (“DHS”) entities and physicians. Non-DHS entities that are in need of flexibility in light of the COVID-19 pandemic should reach out to OIG for further guidance regarding allowable arrangements. Additionally, OIG’s policy statement does not bind the Department of Justice (“DOJ”), which has authority to enforce the AKS both criminally and civilly through the False Claims Act (“FCA”). The FCA has a qui tam provision that allows private parties, often referred to as whistleblowers, to bring cases as well. All that said, it is reasonable to expect that DOJ would act consistently with OIG’s policy statement in the absence of a party’s egregious behavior.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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