The Federal Government has Issued a Notice of Proposed Rulemaking Related to Safe Harbors to the Anti-Kickback Statute

On October 2, 2014, the Department of Health and Human Services’ (HHS) Office of the Inspector General (OIG) proposed several rule changes to the Federal Anti-Kickback Statute that would revise certain safe harbors as well as the civil monetary penalty (CMP) rules, offering greater protection against criminal prosecution and civil sanctions for certain payment practices and business arrangements.

Referral Services

The first proposed change is a technical correction, which the OIG intends to relieve any ambiguity that has been associated with the safe harbor for referral services. The modification will retain the language requiring fees for referral services to be “based on the cost of operating the referral service, and not on the volume or value of any referrals to or business otherwise generated by” the participants. However, the language will extend to preclude protection for business otherwise generated by “either party for the other party.”

Cost Sharing Waivers

The OIG has proposed an addition to the safe harbor for cost sharing waivers to further protect pharmacies waiving cost sharing responsibilities for Part D beneficiaries. This protection will only apply in circumstances in which the waiver is (1) not advertised, (2) not routine and (3) only occurs in good faith after either an effort to collect the copayment, or a determination that financial need exists.

Further, cost sharing waivers have been proposed for emergency ambulance services where certain conditions are met. The first proposed condition is a requirement that the ambulance company be owned or operated by a State and be a Medicare Part B provider. Therefore, private ambulance services would not be eligible for protection under the safe harbor.

Federally Qualified Health Centers and Medicare Advantage Organizations

An exception to the Anti-Kickback Statute has also been proposed with regard to Medicare Advantage plan beneficiaries and services provided by a federally qualified health center (FQHC). The safe harbor would protect any remuneration between a FQHC and a Medicare Advantage organization pursuant to a written agreement. The OIG is seeking comments on the various implications of the proposal. 

Medicare Coverage Gap Discount Program

An addition in the proposed changes would include protection for discounts provided under the Medicare Coverage Gap Discount Program. The safe harbor would apply to applicable drugs furnished to an applicable beneficiary so long as the manufacturer was a compliant participant in the Program. 

Local Transportation

Perhaps the most extensive proposed change is an entirely new safe harbor intended to protect transportation provided to Federal health care program beneficiaries. The new provision will protect both free and discounted transportation made available to patients requiring medically necessary items and services. Additionally, protected transportation will only be available if it is provided to established patients by entities that are not primarily engaged in supplying health care items. The OIG asserts that transportation provided by such entities poses too great a risk for abuse. 

However, the new safe harbor is still in early development and the OIG is soliciting comments on a myriad of issues concerning the proposed protection for transportation. The OIG intends for the comments to aid in determining which particular entities and arrangements should and should not be afforded protection under the safe harbor in order to ensure that the volume or value of services is not taken into account when offering the service. 

Civil Monetary Penalty Changes

Finally, the OIG has proposed changes to the Civil Monetary Penalty regulations in the areas of beneficiary inducements and gain sharing. In terms of beneficiary inducement, the OIG has initiated a change to the interpretation of the definition of remuneration that would include additional exceptions for (1) arrangements that promote access to care and pose a low risk of harm, (2) certain retailer reward programs, (3) cost-sharing for generic drugs, as well as (4) financial need based exceptions. 

With regard to gainsharing, the OIG has recognized that prohibiting hospitals from paying physicians to induce the physician to limit services to Medicare or Medicaid patients should not be without exceptions. Since the implementation of the statute, the OIG has approved 16 beneficial gainsharing arrangements through advisory opinions. Therefore, although the OIG does not have authority to create a statutory exception, it seeks to define and interpret the Gainsharing CMP in such a way as to protect beneficiaries and Federal health care programs while allowing for low risk programs that seek to provide high quality care at a lower cost. 

Comments must be submitted to the Office of Inspector General, Department of Health and Human Services, Cohen Building, 330 Independence Avenue SW., Washington, DC 20201 by no later than 5 p.m. Eastern Standard Time on December 2, 2014.

We suggest that parties with a vested interest in the outcome of any of the modifications to, or introduction of new, safe harbors submit comments. Contact Frier Levitt for assistance in preparing comments for submission to the OIG.

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