Pharmacy, Physician Dispenser, and Wholesaler ALERT: OIG’s Safe Harbor Proposed Rule Potentially Excludes Pharmacies, Physician Dispensers, and Wholesalers as Value Based Entity Participants

Value Based Care is the future of the United States healthcare system and the Office of the Inspector General (OIG) for the US Department of Health and Human Services is in full agreement. The OIG recently issued a Notice of Proposed Rulemaking that introduced updates to the Anti-Kickback Statute (AKS), significantly modernizing the regulatory landscape and encouraging the transition from fee-for-service reimbursement to a value-based model. The Proposed Rule aims to provide greater flexibility to healthcare providers to pursue “beneficial innovation and improved coordinated care” arrangements that focus on quality outcomes and lower costs, but potentially has a negative impact on pharmacies, Group Purchasing Organizations (GPOs), and wholesalers.

The proposed rule uses the term “VBE Participant” (Value Based Entity Participant), that defines which stakeholders within a Value-Based Entity (VBE)— such as a medical practice or Clinically Integrated Network (CIN)— may be eligible for Safe Harbor protection. An entity that meets the definition of VBE Participant may avail itself of the Safe Harbor protection, leaving entities not meeting the definition unprotected. The OIG is considering whether to exclude pharmacies, wholesalers, and PBMs, among other stakeholders, from the definition of VBE Participants and is currently soliciting “comments” from stakeholders.  

The exclusion of pharmacies, physician dispensing entities, and wholesalers from the definition of VBE Participant is due to a perceived fraud and abuse risk. The OIG must be educated as to the importance of pharmacies, wholesalers and related providers as contributing to value-based care. The consequence of not being “heard” in this process could mean that the rule is passed and these stakeholders would be forced to “sit out” from growing trends in value-based care. It is important for the OIG to hear your voice. 

Pharmacies, physician dispensers, and wholesalers must understand the impact associated with the OIG’s VBE Participant exclusionary position. This is your opportunity to educate the OIG about these matters and help shape the final regulations in ways that benefit Value Based Care. 

The deadline for comments is December 31, 2019, so parties interested helping shape the final regulations need to act quickly. Contact Frier Levitt today to have your voice heard.