Practice Management Alert

Question: Hospitals and other healthcare entities in my city are experiencing a shortage of personal protective equipment (PPE) as COVID-19 cases keep rising. My physician group has a steady supply of masks; honestly, more than we need. Can I legally arrange to either donate or sell the masks at a low rate to a nursing home that is in particular need of PPE?

Texas Subscriber

Answer: Basically, such behavior would normally raise red flags for kickback violations. The Office of Inspector General’s (OIG’s) longstanding guidance shows that providing “free or discounted goods or services to an actual or potential referral source may violate the Federal anti-kickback statute,” the OIG website says. However, due to the COVID-19 pandemic and the need to keep communities as safe as possible plus the nationally recognized lack of PPE, the OIG is willing to let such charity slide.

“We recognize that sufficient access to personal protective equipment is crucial to protect patients and frontline health care workers during the coronavirus disease 2019 (COVID-19) public health emergency. OIG’s longstanding guidance makes clear that, depending on the facts and circumstances, providing free or discounted PPE like masks would ‘pose a low risk of fraud and abuse’ if certain provisions are met. Those provisions are:

• “the decision to furnish masks for free or at a reduced cost is directly connected to addressing the impact of the COVID-19 outbreak (e.g., the nursing home needs masks due to COVID-19 supply chain disruptions);
• “the masks are furnished only during the time period subject to the COVID-19 Declaration;
• “the provision of free or reduced-cost masks is not marketed by the physician group; and
• “the provision of the masks is not made contingent on the nursing home’s referrals to the physician group of any specified item or service, or any specified volume or value of past or anticipated referrals of items or services that may be reimbursable, in whole or in part, by a Federal health care program.”

The OIG says that the fact that such donations would be made in order to protect the donors — the clinicians working with vulnerable residents and staff — presents a lower risk of fraud and abuse, in and of itself.