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OIG Expands Kickback Safe Harbors While Expanding Bases for CMP

Posted in Fraud and Abuse, Home Healthcare, Hospitals and Institutions, Medicare and Medicaid, White Collar

The Office of Inspector General (OIG) for the U.S. Department of Health and Human Services has finalized its newest safe harbor rule that had been pending for two years. The rule, titled “Medicare and State Health Care Programs: Fraud and Abuse; Revisions to the Safe Harbors Under the Anti-Kickback Statute and Civil Monetary Penalty Rules Regarding Beneficiary Inducements,” attempts to provide flexibility in new cost-sharing arrangements by preventing certain initiatives by doctors, hospitals and pharmacies from being treated as fraudulent kickbacks by Medicare and Medicaid.

The OIG’s new rule amends the federal Anti-Kickback Statute and expands the safe harbors for patients covered in federal healthcare programs for the following activities:

  • Waiver by a hospital for cost-sharing imposed under a Federal healthcare program if certain conditions are met;
  • Waiver of cost-sharing amounts owed to a federally qualified health center;
  • Waiver by a pharmacy for cost-sharing imposed by a federal healthcare program under certain conditions;
  • Free or discounted local transportation services if certain conditions are met; and
  • Waiver of cost-sharing for emergency use of state or municipality-owned ambulance services to transport patients within a radius of 25 miles in urban settings and 50 miles in rural settings to physicians’ offices, hospitals, home health agencies, pharmacies and laboratories.

The rule also excludes the following from the definition of “remuneration” in connection with liability under the Civil Monetary Penalties [CMPs], Assessments and Exclusions law:

  • Differentials in cost sharing as part of a benefit design so long as the differentials are disclosed;
  • Items or services that improve a beneficiary’s ability to obtain items and services payable by Medicare or Medicaid and that pose a low risk of harm to such beneficiary by being unlikely to interfere with clinical decision making, raise patient safety issues, or lead to improper utilization;
  • Coupons, rewards or rebates that are available on equal terms to the general public; and
  • Free items to persons with financial need if they are not offered as part of any advertisement or solicitation or tied to the provision of other services.

On the flip side, the final rule allows for CMPs for not granting the OIG access to records in a timely manner, ordering or prescribing while already excluded from government health care programs, making false statements, omissions or misrepresentations when applying for enrollment, not reporting or returning overpayments and using false records or materials that are material to false or fraudulent claims. The OIG decline to make any change in the six-year statute of limitations for bringing exclusion actions.

The final rule was published in the Federal Register on December 7.

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