Can Lab Give Medical Group Free Telehealth Equipment for Non-COVID Treatment and Diagnosis? 


A local physician group in an underserved rural community wants to establish a telehealth capacity enabling it to examine and treat elderly patients who are observing social distancing or are in isolation or quarantine. The problem is that it can’t afford to buy or lease the necessary telehealth equipment. XYZ Laboratories has surplus telehealth equipment that it would love to donate to help the community. However, the group refers a lot of Medicare patients to the lab and XYZ is afraid that giving it free equipment would violate the Stark Law and Anti-Kickback Statute (collectively, the “kickback” laws).


Can XYZ donate the telehealth equipment to the physician group?

  1. Yes, because the arrangement meets the criteria for the current blanket kickback waivers
  2. Yes, because the kickback laws have been waived during the public health emergency
  3. No, because free telehealth equipment is remuneration banned by the kickback laws
  4. No, because the telehealth equipment may be used for services not related to diagnosis and treatment of COVID-19


  1. XYZ can provide the group the free telehealth equipment because the donation satisfies the waiver criteria.


During normal times, providing free telehealth equipment to a referring physician would get your lab into trouble under the kickback laws. However, the Blanket Waivers issued by CMS in response to the current Public Health Emergency (PHE) temporarily allow labs to offer remuneration to referring physicians as long as the arrangement is made in good faith and for the sole purpose of COVID-19 diagnosis and treatment.

The Blanket Waivers expressly list telehealth equipment allowing for medical care of patients who are social distancing, or in isolation or quarantine as a permissible arrangement. As a result, A is the right answer.


B is wrong because the normal kickback rules are still in effect during the PHE. The only exceptions are for the arrangements that satisfy the criteria set out in the Blanket Waivers, which the telehealth equipment freebies arrangement in this case does.

C is wrong because while giving the physician group free telehealth equipment would be illegal remuneration during times of normalcy, the normal rules can be set aside during a PHE. And that’s exactly what happened when CMS issued the Blanket Waivers.

D is wrong but it sounds right. The Blanket Waivers are, in fact, limited to good faith arrangements “related solely to” COVID-19. But the language is defined broadly as covering any health services in response to individual and community needs due to the COVID-19 outbreak, not just the actual diagnosis and treatment of COVID-19, including a telehealth arrangement allowing for social distancing and treatment of people in self-isolation.

Takeaway: Should You or Shouldn’t You?

The Blanket Waivers apply automatically if the arrangement meets the criteria and you don’t have to get pre-review and clearance from the OIG. However, the OIG reserves the right to review any arrangement and impose penalties if it determines that it doesn’t satisfy the requirements. The OIG is also willing to issue an Advisory Opinion if parties do want a green light before entering into the arrangement.



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