Coronavirus News

OIG Says Providers Can Offer Rewards to Federal Healthcare Program Beneficiaries for Receiving COVID-19 Vaccine If Safeguards Are Met

By:  Kathie McDonald-McClure

On May 24, 2021, the HHS Office of Inspector General (OIG) posted a new Frequently Asked Question (FAQ) to the OIG COVID-19 FAQ webpage on the topic of rewarding Federal healthcare program beneficiaries for receiving a COVID-19 vaccination (the “Vaccine”).  The question posed was as follows:

Would the offer or provision of cash, cash-equivalent, or in-kind incentives or rewards to Federal healthcare program beneficiaries who receive COVID-19 vaccinations during the Public Health Emergency (PHE) violate the OIG’s administrative enforcement authorities? 

The OIG said it “is aware of a broad range of entities offering a wide variety of incentives and rewards (e.g., food and beverages, tickets to concerts and baseball games, cash)” to individuals who received the Vaccine.  The OIG recognized that healthcare providers, suppliers and managed care organizations had offered or provided or would have liked to offer or provide incentives or rewards to beneficiaries of Federal healthcare program (e.g., Medicare, Medicaid, TRICARE, CHIPs) in connection with receiving the Vaccine.

Applicable Law. Generally, the Federal Anti-Kickback Statute (AKS) and the Civil Monetary Penalty Law (CMP) prohibit providers from offering or providing remuneration to beneficiaries of Federal healthcare programs if such remuneration could induce a beneficiary’s selection of a particular provider for a service for which the provider or supplier receives Federal healthcare program reimbursement.  Providers and suppliers are reimbursed by Federal healthcare programs for administering the Vaccine.  As a result, if they offer or provide incentives and rewards to beneficiaries of Federal healthcare programs to receive the Vaccine, it implicates the AKS and CMP and the potential penalties that could be levied under these laws.

OIG’s Analysis & Opinion. The OIG first recognized that “effective, expeditious and widespread vaccine administration is crucial to the COVID-19 pandemic response.”  The question then was whether providers and suppliers who offer rewards or incentives to Federal healthcare program beneficiaries represented a sufficiently low risk of unlawful inducements under AKS and CMP.  The OIG did not delve into its usual expansive risk analysis and simply stated that the risk here was sufficiently low “[i]n the limited context of the COVID-19 public health emergency,” provided that the provider, supplier or managed care organization offering the incentive could meet six safeguards against unlawful inducements.

Safeguards That Must Be Met. Persons and entities who are subject to the AKS and CMP because they are reimbursed by Federal healthcare programs for the Vaccine must meet these six safeguards in order to offer incentives:

(1) the incentive or reward is furnished in connection with receiving the required [full] dose of the Vaccine (one or two doses, depending on vaccine type);

(2) (i) the FDA has approved or authorized the Vaccine as a “COVID-19 vaccine”, (ii) the Vaccine is administered in accordance with all applicable federal and state rules and regulations, and (iii) the provider or supplier meets the conditions for receiving Vaccine supply from the Federal government;

(3) the incentive or reward is not tied to or contingent upon any other arrangement or agreement between the entity offering the incentive or reward and the Federal healthcare program beneficiary;

(4) the incentive or reward is not conditioned on the recipient’s past or anticipated future use of other items or services that are reimbursable, in whole or in part, by Federal healthcare programs;

(5) the incentive or reward is offered without taking into account the insurance coverage of the patient (or lack of insurance coverage) unless the incentive or reward is being offered by a managed care organization and eligibility is limited to its enrollees; and

(6) the incentive or reward is provided during the COVID-19 PHE.

Entities Outside OIG’s Enforcement Authority. In concluding, the OIG noted that many incentives and rewards being offered to Federal healthcare program beneficiaries were offered or paid for by entities that were not affiliated with a healthcare industry stakeholder or governmental entity (e.g., restaurants).  The OIG said that incentives or rewards offered by such entities, in the absence of some other fraud scheme, were unlikely to be subject to OIG enforcement action.  The OIG further clarified that because the AKS and CMP related to items and services for which payment may have been made in whole or in part under a Federal healthcare program, similar rewards and incentives offered to commercially insured or uninsured individuals would not implicate the AKS or CMP.

To read the full FAQ, click here.

Kathie McDonald-McClure
Kathie McDonald-McClure leads the Firm’s Data Privacy & Security Service Team and is a member of the Health Care Service Team. She regularly advises on compliance with laws prohibiting kickbacks and regulating provider referrals. She counsels clients on chronic care and population health management initiatives aimed at reducing health care costs. She often advices on HIPAA, GDPR and state data breach laws and on electronic data collection and tracking practices. Other areas of advice include... Read More