Health Care Providers Should Verify Compliance, Audit Risks In Preparation For End of COVID Flexibilities |

Health Care Providers Should Verify Compliance, Audit Risks In Preparation For End of COVID Flexibilities

Physicians, hospitals, clinics and other health care providers should take any necessary steps to adjust their practices to ensure their defensibility under federal health care fraud laws when flexibilities allowed under the COVID-19 public health emergency declaration (COVID-19 Declaration) first issued on January 31, 2020 end in May 2023 as well as audit other potential compliance risks that may have arisen from staffing or other operational disruptions that occurred during the COVID-19 pandemic.

The Secretary of Health & Human Services (“HHS”) has announced the COVID-19 Declaration will expire at the end of the day on May 11, 2023. When the COVID-19 Declaration expires, physicians and other health care providers need to recognize and begin preparing for the end of the following special flexibilities and relief that HHS granted by the HHS Office of Inspector General (“OIG”) through various Policy Statements and Frequently Asked Questions (“FAQs”) while the COVID-19 Declaration remained in effect to provide flexibility and minimize burdens for the health care industry as it faced the challenges of the COVID-19 pandemic. Other agencies that issued flexibilities or other relief during the pandemic also have or are ending that relief, The termination of these flexibilities will immediately reactivate a host of federal, state and local rules suspended or softened during the COVID-19 pandemic even as the operations of agencies and the courts normalize. Amid these developments, health care providers, health care organizations and other businesses need to use care to avoid creating liability by continuing to use practices adopted under the flexibilities granted under the COVID-19 Declaration or other similar pandemic relief after that temporary relief expires.

OIG Policy Statement Regarding Physicians and Other Practitioners That Reduce or Waive Amounts Owed by Federal Health Care Program Beneficiaries for Telehealth Services During the 2019 Novel Coronavirus (COVID-19)Outbreak (“Telehealth Policy Statement”)

The Telehealth Policy Statement issued March 17, 2020, notified physicians and other practitioners that HHS would not impose administrative sanctions for reducing or waiving any cost-sharing obligations Federal health care program beneficiaries may owe for telehealth services furnished consistent with the then-applicable coverage and payment rules, as long as the provider met the conditions specified in the Telehealth Policy Statement. The Telehealth Policy Statement imposed several conditions upon its applicability. Since the Telehealth Policy Statement only applies while the COVID-19 Declaration remained in effect, reductions or waivers of Federal health care program enrollees’ cost-sharing obligations for telehealth services furnished after the expiration of the COVID-19 Declaration on May 11, 2023, will not receive prospective immunity from OIG administrative sanctions under the Telehealth Policy Statement.

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 (“OIG Blanket Waivers Policy Statement”)

The OIG Blanket Waivers Policy Statement issued April 3, 2020, announced OIG would not to impose certain administrative sanctions for certain remuneration related to COVID-19 covered by the Blanket Waivers of Section 1877(g) of the Social Security Act (Centers for Medicare & Medicaid Services (CMS) Blanket Waivers) issued by the Secretary, subject to the conditions specified in the Policy Statement. This relief will end on March 11, 2023.

The CMS Blanket Waivers applied to allow a health care provider to be reimbursed for the items and services and exempted from sanctions for such noncompliance, absent the government’s determination of fraud or abuse the following referrals and claims made where necessary to ensure sufficient health care items and services remained available to meet the needs of individuals enrolled in the Medicare, Medicaid, and CHIP programs and the health care providers furnishing those items and services in good faith were unable to comply with one or more of the specified requirements of section 1877 of the Social Security Act due to the consequences of the COVID-19 pandemic:

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.
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).
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).
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).
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.
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.
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.
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).
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).
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.
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).
The referral by a physician owner of a hospital that temporarily expands its facility capacity above the number of operating rooms, procedure rooms, and beds for which the hospital was licensed on March 23, 2010 (or, in the case of a hospital that did not have a provider agreement in effect as of March 23, 2010, but did have a provider agreement in effect on December 31, 2010, the effective date of such provider agreement) without prior application and approval of the

Providers that have or are billing for services in reliance on the blanket waiver should keep in mind that they only apply to financial relationships and referrals that are related to the COVID-19 outbreak in the United States. Any remuneration described in the blanket waivers must be directly between the entity and: (1) the physician or the physician organization in whose shoes the physician stands under 42 CFR 411.354(c); or (2) the immediate family member of the physician.

Also, the remuneration and referrals described in the blanket waivers must be solely related to COVID-19 Purposes, which means:

Diagnosis or medically necessary treatment of COVID-19 for any patient or individual, whether or not the patient or individual is diagnosed with a confirmed case of COVID[1]19;
Securing the services of physicians and other health care practitioners and professionals to furnish medically necessary patient care services, including services not related to the diagnosis and treatment of COVID-19, in response to the COVID-19 outbreak in the United States;
Ensuring the ability of health care providers to address patient and community needs due to the COVID-19 outbreak in the United States;
Expanding the capacity of health care providers to address patient and community needs due to the COVID-19 outbreak in the United States;
Shifting the diagnosis and care of patients to appropriate alternative settings due to the COVID-19 outbreak in the United States; or
Addressing medical practice or business interruption due to the COVID-19 outbreak in the United States in order to maintain the availability of medical care and related services for patients and the community.

Providers must not attempt to rely upon the CMS Blanket Waivers to justify any transaction after May 11, 2023. Furthermore, providers acting in reliance upon the CMS Blanket Waivers must not rely upon the CMS Blanket Waivers to bill for, and should take prompt action to correct billing for any services provided in reliance on the Blanket Waiver that don’t meet these or any other applicable conditions.

FAQs-Application of OIG’s Administrative Enforcement Authorities to Arrangements Directly Connected to the Coronavirus Disease 2019 (COVID-19) Public Health Emergency

HHS beginning April 10, 2020, also published informal, nonbinding guidance in the form of Frequently Asked Questions (“FAQs”) that discussed OIG’s views on the following arrangements when directly connected to the public health emergency and implicated OIG’s administrative enforcement authorities, including the Federal anti-kickback statute and Beneficiary Inducements CMP:

Would the offer or provision of cash, cash-equivalent, or in-kind incentives or rewards to Federal health care program beneficiaries who receive COVID-19 vaccinations during the public health emergency violate OIG’s administrative enforcement authorities?
What are the implications, under OIG’s administrative sanction authorities, of an ambulance provider or supplier waiving or discounting beneficiary cost-sharing obligations (required by the Medicare program) resulting from ground ambulance services paid for by the Medicare program under a waiver established pursuant to section 1135(b)(9) of the Social Security Act?
Can a federally qualified health center (FQHC) with a location in a rural area provide free space to a retail pharmacy that administers COVID-19 vaccinations to FQHC patients and the general public (including Federal health care program beneficiaries)?
Can a non-provider philanthropic entity contract to provide certain administrative services to a health care provider relating to the operation of COVID-19 vaccination sites and be compensated on a per-vaccine basis?
Can a Federally Qualified Health Center (FQHC), including an entity that receives grant funds or designation under section 330 of the Public Health Service Act, conduct free COVID-19 diagnostic testing that has been cleared or approved by the Food and Drug Administration (FDA), is subject to an FDA-issued Emergency Use Authorization, or is covered by the Medicare program, including for Federal health care program beneficiaries, at community health fairs and via mobile testing in underserved communities impacted by COVID-19?
Can a provider or supplier such as a hospital, pharmacy, or health system provide other providers and suppliers with free items and services related to COVID-19 vaccine storage, distribution, redistribution, and/or administration?
A Federally Qualified Health Center (FQHC) received from a private foundation a $15,000 COVID-19 relief grant designated for emergency cash assistance for financially needy individuals. Can the FQHC furnish cash-equivalent gift cards, in specified amounts, to address social determinants of health for financially needy individuals, including Federal health care program beneficiaries who meet certain criteria?
Can a home health agency’s (HHA) staff members furnish free blood draws-provided that such blood draws are within the scope of the staff’s licenses-to assisted living facility residents who are Federal health care program beneficiaries and are not patients of the HHA?
Can clinical laboratories offer free COVID-19 antibody testing to Federal health care program beneficiaries who are contemporaneously receiving other medically necessary blood tests during the COVID-19 public health emergency?
Can an oncology practice offer free or discounted lodging to its financially needy patients who are Federal health care program beneficiaries if, prior to the COVID-19 public health emergency, such patients would have had access to free or discounted housing at a nonprofit lodging facility while receiving chemotherapy or radiation treatment?
Can a physician group that contracts with a nursing home to provide care to its residents furnish protective face masks at no or reduced cost to the nursing home if it is experiencing supply shortages due to the COVID-19 outbreak?
During the time period subject to the COVID-19 Declaration, can a clinical laboratory that bills Federal health care programs for laboratory tests to diagnose COVID-19 pay a retail pharmacy a fee for certain costs that the retail pharmacy incurs related to testing collection sites?
Why does the “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” not incorporate sections II(B)(12)-(18) of the blanket waivers of the physician self-referral law as issued by the Secretary?
Can a hospital assist a Federally Qualified Health Center Look-Alike (FQHCLA) by suspending rental charges and forgoing the accrual of interest on a line of credit during the period subject to the COVID-19 Declaration to ensure the FQHCLA is able to continue to serve the medical needs of the community during the pandemic?
I am an eligible provider who received a distribution through the CARES Act Provider Relief Fund. Where do I sign my attestation?
Can mental health and substance use disorder providers accept donations from public entities (i.e., local, State, or Federal government entities), private charitable foundations, or health plans to fund cell phones, service or data plans, or both for patients who are financially needy or who do not own their own cell phone for the purpose of furnishing medically necessary services while in-person care is disrupted during the COVID-19 outbreak?
Can an oncology group practice provide free in-kind local transportation to and from an established patient’s home to an alternate practice location to receive medically necessary oncology care during the time period subject to the COVID-19 Declaration?
Can health care providers and practitioners furnish services, not to exceed their scope of practice, for free or at a reduced rate, to assist skilled nursing facilities (SNFs) or other long-term-care providers that are facing staffing shortages due to the COVID-19 outbreak?
Can a hospital provide access to its existing HIPAA-compliant, web-based telehealth platform for free to independent physicians on its medical staff to furnish medically necessary telehealth services during the time period subject to the COVID-19 Declaration?

As stated in the FAQs, the informal, nonbinding feedback provided “applies only to arrangements in existence solely during the time period subject to the COVID-19 Declaration” and that OIG may take a different position on arrangements that are the same or similar in nature that existed before the effective date of the COVID-19 Declaration or after the time such COVID-19 Declaration ends versus during the COVID-19 Emergency due to the emergency situation. Providers also are cautioned against to seek the advice of legal counsel about the potential risks and consequences of relying on FAQ or other COVID-19 relief where their proposed activity does not obviously meet all of the assumptions and requirements stated in the applicable FAQ or other guidance. In any event, providers should not rely on any relief provided by any of the FAQs after May 11, 2023.

Other Expiring Flexibilities

The expiration of the COVID-19 Declaration also will end relief granted during the COVID health care emergency by the Drug Enforcement Agency (“DEA”), the HHS Office of Civil Rights (“OCR”) and other agencies.

For example, the end of the COVID-19 Declaration will end COVID-19 flexibilities for prescribers and others granted by the DEA while the COVID-19 Declaration remained in effect, See here.

For example, health care providers and their patients may need to plan ahead to avoid unexpected medication and care disruptions that could arise when DEA temporary relief waving requirements for prescribers to register in each state to prescribe across state lines and relief allowing DEA-registered practitioners to issue prescriptions for controlled substances based on telemedicine consultations to patients for whom they have not conducted an in-person medical evaluation ends on May 11, 2023.

Likewise, health care providers also need to make any adjustments in their practices for handling and protecting protected health information needed due to the expiration in COVID-19-related flexibility granted by the HHS Office of Civil Rights (“OCR”) under the COVID-19 Declaration.

Specifically, OCR’s COVID-19 nonenforcement policies like the following also expire when the COVID-10 Declaration ends on May 11, 2023:

Beyond the expiration of these and other health care specific flexibilities, health care providers, like other businesses also should anticipate and take any necessary steps to confirm their ongoing compliance with any expired or expiring COVID-19 related relief and flexibilities granted on other federal and state employment, heath care, insurance, tax, and other laws in response to the COVID-19 Declaration or other state or local COVID-19 relief.

When reviewing existing practices for required or advisable adjustments in responses to the resolution of the COVID-19 Declaration or other COVID-19 relief, health care providers and other organizations also should assess their potential exposure from other known or potential deficiencies in their overall compliance while their operations were disrupted by the COVID-19 heath care emergency.

While federal and state agencies provided certain limited flexibility and relief in response to the COVID-19 pandemic, the majority of laws and regulations applicable to health care providers and other businesses remained in effect even as the pandemic shutdown and other disruptions disrupted staffing and other operations necessary reliably to monitor, enforce, document, keep records and perform other critical compliance functions. Accordingly, many health care and other businesses are finding themselves susceptible to whistleblower or other complaints, audits, or other investigations or enforcement actions made by agencies, disgruntled employees, contractors, patients, vendors, or others, or both. Conducting compliance and risk assessments with these additional requirements within the scope of attorney-client privilege may help identify and uncover opportunities to mitigate those exposures.

Enforcement Illustrates Advisability Of Caution

Health care providers are cautioned against overestimating the protection allowed by the COVID-19 flexibilities. Although the False Claims Act generally allows OIG and the Department of Justice (“DOJ”) up to 10 years to find and prosecute providers providing care or engaging in other prohibited referrals, kickbacks or other activities, recent enforcement activities make clear the agencies are serious about enforcement against providers acting beyond the scope of the relief. For instance, an investigation and enforcement against Dr. Musaddiq Nazeeri resulted in his agreement to pay the United States $86,506.30 to resolve civil liability for alleged violations of the False Claims Act based on DOJ charges that between February 10, 2021 and January 21, 2022, Dr. Nazeeri billed Medicare for certain services that were not supported by the medical record. During the above timeframe, Dr. Nazeeri submitted Evaluation & Management (E&M) claims when the only service rendered was the administration of the COVID-19 vaccine. In the DOJ announcement of the settlement, HHS OIG Special Agent in Charge Maureen R. Dixon warned, “Investigating violations of the False Claims Act is a top priority,”

Bottom line: health care providers and others involved in providing care, treatment, referrals or other activities covered by the STARK, Fraud & Abuse, or other requirements of Medicare or Medicaid in reliance on flexibilities granted by OIG during the COVID-19 Declaration should cease to rely upon those flexibilities no later than May 11, 2023. In addition, health care providers are well advised to review any activities conducted in reliance upon these flexibilities while the COVID-19 Declaration remained in effect to confirm that all conditions to qualify for those flexibilities were met or seek the assistance of legal counsel about whether and what corrective action is advisable.

More Information

We hope this update is helpful. For more information about these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.

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About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely-known for 35 plus years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

A Fellow in the American College of Employee Benefit Counsel, Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on health and managed care and employer benefits legal, public policy and operational concerns in the healthcare, employer benefits, and insurance and financial services industries. She speaks and publishes extensively on HIPAA and other related compliance issues.

Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns.

For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

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