OIG Proposes New Anti-Kickback Law Safe Harbors
(November 10, 2014): The U.S. Department of Health and Human Services Office of Inspector General (“OIG”) recently published a Proposed Rule that would amend the safe harbor regulations under the Federal Anti-Kickback statute (“AKS”) as well as add new safe harbors. The Proposed Rule would also establish new exceptions to the Civil Monetary Penalty (“CMP”) statute related to the beneficiary inducement CMP. OIG will accept comments on the Proposed Rule by mail or electronically until December 2, 2014 at 5 p.m. (Eastern).
I. The Anti-Kickback Statute and Safe Harbor Regulations:
The AKS provides criminal penalties for individuals or entities that knowingly and willfully offer, pay, solicit, or receive remuneration in order to induce or reward the referral of business reimbursable under Federal health care programs. The types of remuneration covered specifically include, but are not limited to, kickbacks, bribes, and rebates, whether made directly or indirectly, overtly or covertly, in cash or in kind. Additionally, prohibited conduct includes not only the payment of remuneration intended to induce or reward referrals of patients, but also the payment of remuneration intended to induce or reward the purchasing, leasing, or ordering of, or arranging for or recommending the purchasing, leasing, or ordering of, any good, facility, service, or item reimbursable by any Federal health care program.
Due to the broad reach of the statute, interested parties expressed concern that some relatively innocuous commercial arrangements would be covered by the statute. This could, in turn, potentially subject entities to unwarranted criminal prosecution. As a result, Congress drafted certain “Safe Harbor” provisions. These regulations describe various payment and business practices that, although they potentially implicate the Federal AKS, are not treated as offenses under the statute.
II. Changes to the Anti-Kickback Statute:
The Proposed Rule would modify certain existing safe harbors under the AKS as well as add new safe harbors that provide new protections or codify certain existing statutory protections. These changes include:
- A technical correction to existing safe harbor for referral services;
- Protection for certain cost-sharing waivers, including pharmacy waivers of cost-sharing for financially needy Medicare Part D beneficiaries and waivers for state- or municipality-owned emergency ambulance services;
- Protection for certain remuneration between Medicare Advantage organizations and federally qualified health centers;
- Protection for discounts by manufacturers on drugs furnished to beneficiaries under the Medicare Coverage Gap Discount Program; and
- Protection for free or discounted local transportation services that meet specified criteria.
III. Changes to the Beneficiary Inducement CMP:
The Beneficiary Inducement CMP statute generally prohibits any person or entity from offering remuneration to a Medicare or Medicaid beneficiary if that remuneration is likely to influence the beneficiary’s selection of a provider. The Proposed Rule would also amend and narrow the definition of “remuneration” to include certain exceptions for the following:
- Copayment reductions for certain hospital outpatient department services
- Certain remuneration that poses a low risk of harm and promotes access to care;
- Coupons, rebates, or other retailer reward programs that meet specified requirements;
- Certain remuneration to financially needy individuals; an
- Copayment waivers for the first fill of generic drugs.
OIG also proposes to codify the gainsharing CMP. The gainsharing CMP prohibits a hospital from knowingly paying, either directly or indirectly, a physician to induce the physician to reduce or limit the services provided to Medicare or Medicaid beneficiaries under the physician’s direct care. The Proposed Rule would narrow the prohibition in light of today’s health care landscape, which focuses on “accountability for providing high quality care at lower costs.”
Health care providers should be interested in the Proposed Rule and make comments as necessary. The Proposed Rule makes pertinent changes to the AKS Safe Harbors and CMP laws that should give providers greater leeway to enter into beneficiary arrangements without fear that they will be subject to criminal penalties under the statutes. In a sense, the Proposed Rule follows OIG’s ongoing efforts to adopt regulations that promote lower costs and greater health care services while protecting patients and federal health care programs from fraud and abuse.
As a provider, if you have any questions about the current regulations found within the Anti-Kickback Statute or the proposed changes, please do not hesitate to give us a call today. We would be more than happy to assist you so that you remain compliant with all federal and statute regulations regarding potentially fraudulent activity.
Robert Saltaformaggio, Esq., serves as an Associate at Liles Parker, Attorneys & Counselors at Law. Liles Parker attorneys represent health care providers and suppliers around the country in connection with Medicare audits by RACs, ZPICs and other CMS-engaged specialty contractors. The firm also represents health care providers in HIPAA Omnibus Rule risk assessments, privacy breach matters, State Medical Board inquiries and regulatory compliance reviews. For a free consultation, call Robert at: 1 (800) 475-1906
 42 U.S.C. § 1320a-7b(b).
 42 U.S.C. § 1320a-7a.
 1128A(b)(1) of the Social Security Act.