United States: OIG Seeks Comment On Recently Published Proposed Rule Expanding Anti-Kickback Safe Harbors

Last Updated: October 10 2014
Article by Richard H. Deane Jr., Rebekah N. Plowman, Gerald M. Griffith, Lynsey Morris Barron, Lindsey Lonergan and Stephen G. Sozio

Most Read Contributor in United States, September 2019

The federal Anti-Kickback Statute ("AKS") criminalizes the solicitation or payment of remuneration in order to induce business that is reimbursable under the Medicare and/or Medicaid programs, such as kickbacks, bribes, and certain rebates. The U.S. Department of Health and Human Services Office of the Inspector General ("OIG") is also authorized to impose civil monetary penalties ("CMP") for such arrangements. Recognizing the breadth of this statute, which is aimed at targeting quid pro quo agreements, but which unfortunately caught within its swath a number of innocuous and legitimate business arrangements, Congress directed OIG to develop "safe harbor" exemptions for certain beneficial business arrangements that might otherwise implicate the AKS.

On October 2, 2014, OIG requested feedback on a proposed rule that would redefine the definition of "gainsharing" and add four new safe harbors. The OIG proposes to create a new safe harbor for pharmacies that waive Medicare Part D cost-sharing; however, the safe harbor is limited to cost-sharing waivers that are not advertised or routine. Additionally, the pharmacy must determine that the beneficiary has a financial need for the waiver. Further, in this proposed rule, the OIG has proposed a safe harbor for cost-sharing waivers for emergency ambulance services. OIG has proposed that this safe harbor be limited to government-owned and -operated ambulance providers that are Medicare Part B providers of emergency ambulance services. This safe harbor is not available for nonemergency ambulance transportation services. A safe harbor is also proposed for manufacturer discounts for drugs provided through the Medicare Coverage Gap Discount Program.

The proposed rule also includes the addition of a safe harbor to include protection for services that provide free or discounted local transportation to patients, which essentially codifies recent favorable OIG advisory opinions on proposed transportation programs. This is a welcome safe harbor, particularly for providers in rural or low-income areas who are well aware that lack of access to affordable transportation often prevents patients from receiving the care they need. The proposed safe harbor is limited to transportation for established patients but contemplates the possibility of transportation for a caregiver. To preclude the safe harbor from being used to generate business and referrals, OIG proposes that suppliers such as durable medical equipment companies or pharmaceutical manufacturers be exempt from this protection.

Of significant note is the OIG's proposal to narrow its interpretation of the CMP statute regarding "gainsharing" to reflect current best practices in medicine, which seek to align the incentives of hospitals and physicians to provide quality yet cost-effective care. Gainsharing refers to an arrangement where a hospital rewards physicians for their efforts to be cost-conscious by giving the physicians a percentage of whatever reduced patient care costs are attributable to those efforts. In most arrangements, in order to receive any payment, the clinical care must not have been adversely affected as measured by selected quality and performance measures. In addition, many plans require an independent consultant determine that the payment represents "fair market value" for the collective physicians' efforts. Currently, hospitals are prohibited from using gainsharing payments to knowingly induce a physician to "reduce or limit services" to federal program beneficiaries, lest the hospital's actions implicate the CMP statute.

If the OIG finds that a CMP is warranted, when determining the amount of the penalty, the OIG considers the following factors: (i) the nature of the payment designed to reduce or limit services and the circumstances under which it was made; (ii) the extent to which the payment encouraged the limiting of medical care or the premature discharge of the patient; (iii) the extent to which the payment caused actual or potential harm to program beneficiaries; and (iv) the financial condition of the hospital (or physician) involved in the offering (or acceptance) of the payment. After the issuance of multiple advisory opinions and other guidance on the gainsharing CMP over the years, the OIG has finally acknowledged that "not all changes in practice necessarily constitute a reduction in services." Thus, in its proposed rule, the OIG seeks comment on a new definition of "reduce or limit services" with an eye toward narrowing the scope of inducements that implicate the gainsharing CMP.

Providers who are interested in exploring gainsharing programs as a way to more closely align hospital and physician incentives may have a new option on the horizon, particularly if the OIG issues a final rule that reflects the realities of today's health care marketplace. Rather than taking a wait-and-see approach, it may be beneficial for providers across the country to respond to the OIG's request for comments with practical suggestions for how gainsharing programs can benefit the Medicare and Medicaid programs and be instrumental in population health management.

In order to avoid criminal and civil penalties, the OIG appears, in practice, to be increasingly requiring strict compliance with the safe harbors. The U.S. Department of Justice ("Department") has made it clear that, when prosecuting violations of the AKS, it intends to pursue not only organizations such as health care clinics or hospitals that have entered potentially unlawful arrangements, but also the specific employees the Department deems responsible for those arrangements. In light of the recent pronouncement from the Department's Criminal Division that it will now be closely reviewing all qui tam complaints brought under the federal False Claims Act, the Department has made clear its intention to make health care fraud, including through holding health care executives accountable for fraud, one of its highest priorities. It is advisable that any individual or entity concerned that a business arrangement may implicate the AKS—even if the entity believes it may be entitled to protection under a safe harbor—engage properly trained counsel to review the arrangement and advise whether it complies with federal law.

OIG is soliciting public comment on the proposed rule until December 2, 2014. Comments may be submitted electronically through the Federal eRulemaking Portal. Jones Day will continue to monitor these developments and is available to provide assistance to interested parties in providing comment to the OIG on this matter.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions