Government Says Kickbacks Okay for COVID Vaccines (Within Reason)

A headline in The Post-Crescent, “CVS, Kroger offer vaccine incentives,” caught my eye today. The article said that these retail pharmacies are offering the chance to win huge cash and other prizes for customers getting the COVID vaccine. And, it seems this trend of rewarding patients for getting the COVID vaccine is becoming more and more popular.

For health care providers, the idea of offering patients cash incentives in return for using their services should raise big red flags. As health care providers are well aware, the Anti-Kickback Statute can lead to criminal penalties for providers who offer something of value to patients in exchange for obtaining services billed to the Federal government. This law is intended to prevent over-utilization of services by beneficiaries of Medicare, Medicaid, and other government health care programs. After all, if a doctor were to offer $100 to any patient coming in for a check-up and then bill the government $300 for each visit, the government would likely be paying out for a lot of unnecessary check-ups.

So with this in mind, how can pharmacies and other providers be offering free trips to the Super Bowl and million dollar prizes in exchange for people getting a shot that might get billed to the Federal government? The answer is that the Office of the Inspector General for the U.S. Department of Health and Human Services (which enforces laws like the Anti-Kickback Statute) released FAQs this week that essentially took the position that the public benefit of widespread vaccination is more important than the risks created by kickbacks for COVID vaccines.

In these FAQs, the OIG approved of providers giving incentives to patients in exchange for receiving the COVID vaccine, if the following six safeguards are met:

  1. the incentive must be furnished in connection with receiving a required dose of a COVID-19 vaccine;
  2. the vaccine must be authorized or approved by the FDA as a COVID-19 vaccine and be administered in accordance with all applicable rules, regulations, and conditions for receiving the vaccine supply from the Federal government;
  3. the incentive or reward can’t be tied to or contingent upon any other arrangement or agreement between the provider and the patient;
  4. the incentive or reward can’t be conditioned on the patient’s past or anticipated future use of other items or services paid for by the government;
  5. a patient’s insurance coverage, or lack thereof, can’t be taken into account (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 can only be provided during the COVID-19 public health emergency.

If a provider meets these requirements and offers an incentive or reward for COVID vaccination, the OIG has stated it would consider the arrangement “sufficiently low risk” such that it would be highly unlikely to take any enforcement action against the provider. (It never makes promises, of course.)

So, now that providers have the flexibility to get creative during this public health emergency, we may be seeing a lot more headlines about giveaways and prizes. And that means you might be able to get a life-saving vaccine AND a trip to Disneyland, all for free.

For more information on how the OIG’s recent FAQs impact Anti-Kickback Statute compliance, or for other health law questions, contact Attorney Lora L. Zimmer at [email protected] or 920-257-2214.

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Lora L. Zimmer

Health Law and Title IX Attorney at McCarty Law LLP
Lora focuses her practice in corporate and business transactions, with a particular focus on the business and regulatory needs of health care clients. In addition, Lora is a trained Title IX investigator, providing prompt, thorough investigations and objective reporting in response to alleged violations of schools’ sexual misconduct policies.